CPSC Proposes Significant Changes to Rule Governing Certificates of Compliance
The Consumer Product Safety Commission (CPSC or Agency) recently published a Supplemental Notice of Proposed Rulemaking (SNPR) (88 Fed. Reg. 85760 (December 8, 2023)) to revise the existing rule on Certificates of Compliance (CoC or certificates), 16 CFR § 1110 (Rule 1110). The last time CPSC proposed changes to Rule 1110 was in 2013, when the Agency received more than 500 comments responding to its Notice of Proposed Rulemaking (2013 NPR), many voicing specific legal and other objections to the proposed changes. A decade later, CPSC is reviving the CoC rulemaking process. This SNPR proposes a number of significant changes to Rule 1110, including the addition of an electronic filing (eFiling) requirement for all imported CPSC-regulated products or substances, an expanded definition of “importer” to include the importer of record and certain other entities, and new CoC content and recordkeeping requirements.
Given the staggering number of imported consumer products and the expansive scope of proposed changes, the SNPR warrants close attention by anyone making CPSC-regulated products abroad for distribution in the United States or direct shipments to U.S. consumers. Comments are due February 6, 2024.
Key Proposed Changes
- Mandatory eFiling for Imported Goods. Under the existing Rule 1110, importers must ensure that a CoC “accompany” a regulated product or product shipment, meaning that the certificates must be available to the CPSC at the time imported products are available for inspection. Likewise, domestic manufacturers must make certificates available to the CPSC immediately “upon request” before the product is introduced into commerce. In practice, many importers and manufacturers email certificates in PDF format when requested. This will no longer be permitted. CPSC proposes to change this long-established practice to a requirement that all certificates covering imported consumer products be eFiled with CBP. Specifically, the SNPR will require importers to enter required certificate data elements with ACE at the time the entry is filed or when the entry and entry summary are filed, if filed together. This requirement would apply to all imported products regulated by CPSC. As proposed, this includes de minimis shipments and products imported from foreign trade zone (FTZ). The requirement that certificates be made available for inspection to CPSC or CBP “upon request” remains (with a proposed clarification that “immediately” means within 24 hours), but this obligation is not a substitute for eFiling the CoC.
- Imported Products Shipped Directly to Consumers. The 2013 NPR had proposed a separate “accompany” requirement for imported finished products that are delivered directly to U.S. consumers. The SNPR nixes that proposal and instead states that those certificates will be collected electronically. For finished products that are imported by mail, the finished product certifier will have to enter the certificate data elements into CPSC’s Product Registry prior to the product arriving in the U.S.
- Entities Responsible for Certifying Imported Products. The SNPR broadens the definition of “importer” to include not only any entity that the U.S. Customs and Border Protection (CBP) allows to be an importer of record (IOR), as proposed in the 2013 NPR, but other entities as well, including private labelers, consignees, owners, purchasers, and others with “financial interest in the product.” A customs broker can also be an importer “when appropriately designated by the owner, purchaser, or consignee of the product or substance.” The SNPR clarifies that for purposes of testing and certification, “CPSC will not typically consider a consumer purchasing or receiving products for personal use or enjoyment to be an importer.”
- Entities Responsible for Certifying Domestic Products. The SNPR maintains the 2013 NPR proposal that, unless otherwise required in a specific rule, the manufacturer must issue the certificate except for consumer products or substances that are privately labeled. Because the manufacturer’s name does not appear on privately labeled products, CPSC reasoned that placing the certification obligation on the private labeler “is both pragmatic and appropriate.” Nevertheless, the SNPR gives private labelers the option to rely on a manufacturer’s testing or certification.
- Optional Electronically Available Certificates. The SNPR states that the requirements that a CoC be “furnished” to each distributor or retailer of the finished product and be “available for inspection immediately” upon request by CPSC and CBP may be satisfied with an “electronic certificate.” Such an electronic certificate must be “identified prominently on the finished product, shipping carton, or invoice by a unique identifier [that] can be accessed via a World Wide Web uniform resource locator (URL) or other electronic means, provided that the certificate, the URL or other electronic means, and the unique identifier are accessible … on or before the date the finished product is distributed in commerce.”
- Replacement Parts Defined. In response to multiple comments to the 2013 NPR expressing confusion about “replacement parts” and “component parts,” the SNPR defines the terms and clarifies certificate of compliance requirements. Certificates are required for regulated “replacement parts” that are “imported for consumption or warehousing, or are distributed in commerce, and that are packaged, sold, or held for sale to, or use by, consumers.” Such replacement parts are considered “finished products” and included in the proposed finished product definition. For example, a handlebar stem for a bicycle sold to consumers as a replacement part must be tested and requires a certificate. Likewise, parts of toys, such as doll accessories, sold to consumers as separate finished products, must be separately tested and certified. However, not all replacement parts are finished products requiring testing and certification. For example, doll accessories that are imported for manufacturing purposes or intended to be combined with a doll for sale are not deemed “finished products” and do not require a separate certificate apart from the certificate for the finished doll.
- Component Parts Defined. “Component parts” are defined as “intended to be used in the manufacture or assembly of a finished product” and “not intended for sale to, or use by, consumers as a finished product.” Component part certificates are voluntary and are not required to accompany an imported component part, be furnished to retailers and distributors, or eFiled.
- One Product per CoC. The SNPR maintains the 2013 NPR proposal that each CoC describe a single product. According to CPSC, “[o]ne product per certificate allows the RAM [CPSC’s Risk Assessment Methodology] to conduct risk analysis on unique products in a shipment, which allows better targeting of potentially violative products and avoids delaying delivery of products in a shipment that do not warrant examination.”
- CoC Content. Currently, Rule 1110 requires seven data elements on all certificates: (1) information identifying the product; (2) list of all applicable rules which the product meets; (3) name, mailing address, and telephone number of importer or domestic manufacturer; (4) name, email, mailing address, and telephone number of individual maintaining test results; (5) date and place of manufacture; (6) date and place of product testing; and (7) name, mailing address, and telephone number of third party lab for any required testing. The SNPR proposes additional required details for some of the seven data elements, including, for example:
- Data element (1) must include at least one unique product identifier from a list of seven options (GTIN, model number, registered number, serial number, SKU, UPC, or alternate identifier), as well as a “sufficient description to match the finished product to the certificate”;
- The SNPR adds an email address requirement to data element (3), and specifies that mailing address means street address, city, state or province, country or administrative region, and if no street address is available, requires a GPS coordinate or “a location identification typical of the country of origin”;
- Data element (5) as proposed must include not just date and place of manufacture, but also the manufacturer’s name, street address, city, state or province, country or admin region, email address, and telephone number where finished products are manufactured, produced, or assembled; and
- Data element (6) must include the most recent date of testing, together with expanded contact information for each testing body, including full mailing address, email, and telephone number (similar to contact information for importer/manufacturer and manufacturing facilities).
- New Attestation of Compliance Requirement. In addition to the seven existing data elements, CPSC has proposed a new requirement: each CoC must also include an attestation of compliance. The SNPR provides specific language for the attestation, which includes an express acknowledgement that “it is a United States federal crime to knowingly and willfully make any materially false, fictitious, or fraudulent statement, representation, or omission on this certificate.”
- New Recordkeeping Requirement. The current rule does not include specific recordkeeping requirements. The SNPR proposes an effective five-year record retention period for both children’s product certificates and general certificates of conformity. According to the 2013 NPR, which also included this proposal, a five-year retention period “may, for example, aid both the certifier and the Commission in the event of an investigation or product recall.”
The SNPR proposes an effective date that is 120 days after publication of the final rule in the Federal Register. According to CPSC, importers will require this time to update their systems and software in order to use CPSC’s Product Registry, and CPSC asserts that this relatively short timeframe is consistent with the experience of eFiling Beta Pilot participants who initially tested the eFiling system.
Interested parties may submit comments on all aspects of the SNPR, including, for example, the expanded definition of “importer,” issues presented by requiring eFiling of certificates with CPB at the time of entry, concerns with the additional detail required on the certificates (including the potential disclosure of proprietary information), financial, technical and other burdens of compliance should the proposed new requirements be adopted, and the feasibility of the proposed 120-day effective date. The proposed rule will have a significant impact across the entire consumer product spectrum, and those interested in commenting should consider both any benefits and efficiencies, as well as costs and other impacts.