Consumer Product Safety and US Customs Cooperation

As the watchdog of our country’s borders, US Customs has the authority to enforce, and otherwise maintain the integrity of, other federal agency regulations with respect to imported merchandise.

While the Consumer Product Safety Commission (CPSC) is responsible for the oversight of some better known laws, including the Flammable Fabrics Act (addressing inter alia, sleepwear and mattresses) and the Consumer Product Safety Act (CPSA) (dealing with, inter alia, children’s products and lighters), it is likewise overseeing some lesser known laws which I find to be interesting, such as the Refrigerator Safety Act and the Children’s Gasoline Burn Prevention Act.

Like US Customs, CPSC has specific statutory authority under 15 USC §2066 and 15 USC §1273 for sampling imports in order to ensure compliance with consumer product safety rules. Where a violation of its regulations is suspected, it likewise may issue a notice of detention (if the circumstances so require) describing the alleged violation and its governing statute.

CPSC will issue this notice to the importer who then deals directly with CPSC. Copies are provided to the importer’s Customs broker and US Customs as well. Detained merchandise remains under US Customs custody whether US Customs has issued its own detention notice or not.

Typically, the recipient of a notice has 5 business days within which to provide the requested information to CPSC in order to resolve the detention. While extensions may be granted, CPSC makes an effort to resolve detentions within 30 days.

Of all of the laws that CPSC regulates, where a violation of the CPSA occurs (and only the CPSA), a hearing may be sought by the importer, owner, or consignee under the Administrative Procedures Act. During this time however, i.e., pending the completion of the hearing, the merchandise must remain under government custody at the expense of the importer, owner, or consignee, which in everyday language, typically amounts to fees for warehousing and other incidental charges, such as the use of a forklift, a forklift supervisor, etc. Charges will vary based on the quantity and type of merchandise at issue.

When requested, CPSC may grant a conditional release of the merchandise for examination and testing so long as it remains under the US Customs bond. While "conditionally released" the goods may not be distributed.

Of course, where the cargo is not returned prior to the termination of the conditional release period, there is always the risk that US Customs might issue a Redelivery Notice which could ultimately lead to seizure, destruction or exportation of the merchandise.

Or, in the event the goods are not redelivered, an importer would likely be facing an assessment of liquidated damages. US Customs must issue this notice however, within 30 days after the end of the conditional release period.

Lastly, an importer may request that the detained merchandise be exported or destroyed. Of course, destruction means that not only has the importer/owner forfeited the money for the cost of the merchandise, but it also has to pay out-of-pocket for its destruction, and carry out the operation under Government supervision.

Needless to say, when an alleged violation remains unresolved, big brother (i.e., some branch of the government) will be watching, until a resolution has been found, a penalty (or liquidated damages claim) has been paid, or the merchandise has been destroyed.

In my experience I have noticed that all too often, importers believe that “no news is good news.” As a practitioner, I recognize that no news can actually be a prelude to really bad news with expensive consequences.

It would therefore, be prudent to routinely review importation practices and protocols, and obtain periodic advice and counsel on existing practices to ensure compliance with existing laws or newly implemented regulations. As always with new endeavors, the prudent approach would be to obtain expert advice.

Questions/comments? Post below or email me at clark.deanna@gmail.com

Hooray for Spanish Designers Toni Francesc and Jose Miro!

It is rare to find an intersection between my professional and personal interests, and my favorite country (aside from the U.S. of course!). Last week I had the opportunity to attend an event that brought it all together – the law, fashion, and Spain!

The NY Chapter of the Organization of Women in International Trade collaborated with the Spain-US Chamber of Commerce and the organization, Catalonia Trade & Investment, for a panel discussion on breaking into the U.S. market, which was hosted at SUNY’s Fashion Institute of Technology, the fourth collaborator of this event.

With the fashion momentum sweeping over the Big Apple thanks to Mercedes Benz Fashion Week, during the panel I had the pleasure of joining two world renowned designers from Spain to view the Spring/Summer 2011 collection of Toni Francesc and the Fall 2010 collection of Jose Miro as presented at Cibeles Madrid Fashion Week.

Toni’s collection “Urban Forest” was breathtaking. It was predicated on the earth elements, with wood being the primary symbol of the collection. There were actually multiple designs where the wood was incorporated into the dress itself making for some very innovative fashions. Toni sought to express the different moods that we as people have, likening them to elements, and used different fabrics and cuts to suggest for example, the flow and energy of water.

Belts as shoulder straps or as a non-functioning decorative accessory, soothing colors, flowing fabrics and beautiful textures, some of which reminded me of stones, were all a part of this dynamic collection.

Jose Miro’s equally gorgeous and impressive Spring/Summer 2010 collection was likewise very feminine, with beautiful combinations of sheer and gathered fabric, many of which evoked an image of a flower or a large bow, accessorized with color coordinated shoes and butterfly hairclips. I loved it!

Jose described his company’s development of a line of high end shoes – a business move that would complement his thriving apparel line – as well as further expanding the manufacturing of his merchandise using organic materials, with a focus on preserving the environment.

He also talked about e-commerce and the benefits of having an online store so that new designs can be ordered and made in real time, in addition to the ability to circumvent the use of a middleman as it is a transaction directly between the buyer and seller.

Not only is that good for business, but it is also good in terms of dealing with US Customs and avoiding “first sale” and middlemen issues.

As for breaking in to the U.S. market, both designers believed that entry into the NYC market was the entry point into expansion across the country. Hence their participation in the events of NYC’s 2010 Fashion Week!

Questions/comments? Post below or email me at clark.deanna@gmail.com

International Trade, Bananas and Costa Rica

Riding along the carreteras in Costa Rica gives the impression that this country has a thriving economy. Its tourism industry is well organized, has no shortage of nature activities to offer, and even when the weather isn’t the sunniest, there are still many of us eager to take on the class 3 and 4 rapids of the Rio Pacuare (a journey I highly recommend!)

Tourism aside, one ubiquitous feature on the Costa Rican highways is all of the containers. It seems that every time I look up, a container truck is rolling past me. Hamburg Sud, Maersk, tex, Genstar, Crowley, Triton, Florens, and so on and so forth. According to my driver, highway 32 takes us directly to Puerto Limon, one of the main ports on the Carribbean Sea side of the country.

Across the landscape I have seen coffee, sugar cane, rice, pineapples, and of course, bananas (pronounced “bananos” in Costa Rica), growing. Del Monte trucks are abundant on the roads too, and I had the pleasure of visiting one of its banana plantations and witnessing the harvest and processing of bananas for export. While labor intensive, it was otherwise a relatively simple operation.

The first thing to notice was that all of the banana trees had large blue bags on them. Turns out these bags cover the bananas to protect them from birds. While the birds do not eat the fruit, should they land on them, the skin would be compromised due to their claws. Pests were not an issue as they sprayed the plantation with pesticides (and coincidentally, even the airplane that did the spraying was also yellow!).

The processing itself entailed a worker cutting the entire branch of bananas off of the tree which was then placed on a hook on a portable cable. When enough had been hung on the cable, a man would wrap a harness around his waist and then walk briskly towards the processing center along a designated path, with the bananas whizzing along behind him.

Upon arrival, the banana branches were lined up until they got to another man who quickly cut off bunches of hard green bananas with a giant machete, and placed them on a turn belt. The bananas then went into a water bin where they were rinsed and sorted through by women. After traveling through this water system, a man then retrieved the bananas and placed them onto a drying belt, where they were ultimately packaged by women.

Bananas that are “blemish-free” make the cut to be exported. Those not quite so cosmetically perfect get sent to a secondary plant for processing into products such as baby food (at least this is what my guide told me).

Hearing this got me thinking about how we (as a population) in America prefer to have in-store products look as if they have been airbrushed, that is, unless it is picture perfect and dirt free, we question its quality, seemingly forgetting that food is grown in soil (and therefore, in contact with dirt).

I remember my days in Malta where the produce truck would pass through the neighborhood for a couple of hours, a few days a week, and I had to go and track it down if I wanted to eat. There were plenty of wonderful fruits and vegetables that I consumed that did not look “perfect” and which required me to wash the dirt off of them.

I recognize there are legitimate reasons for the United States importing “bird claw-free” bananas, but it begs the question - Why is it that we are so easily swayed in our opinion based on appearances?

Questions/comments? Post below or email me at clark.deanna@gmail.com

Join Me for a Panel Discussion With Apparel Designers From Spain During Fashion Week

“Panel on Spanish Apparel Designers in New York City” featuring
Toni Francesc, Designer of Toni Francesc brand; Jose Miro, Designer of Jose Miro brand; and other industry experts.

Register now for the September 16th meeting of the Organization of Women in International Trade, New York Chapter (OWIT-NY)

IN COLLABORATION WITH

The Spain-US Chamber of Commerce, The Catalonia Trade & Investment Agency (Acc1o), and the Fashion Institute of Technology (FIT)

This event will provide case studies on how Spanish apparel companies have successfully entered the New York City market, and illuminate the significant economic impact of the global apparel trade in New York City.

Discussion topics may include, but are not limited to: strategies for New York market entry, perspectives on the New York apparel marketplace, and Spanish fashion trends.

Time: Networking and refreshments at 6:00pm.
Program commences at 6:30pm.

Location: Fashion Institute of Technology, Seventh Avenue at 27th Street, New York, New York. Event being held in the "Boardroom" C-building 9th floor.

*** Cost ***:$20 for OWIT/Spain-US Chamber of Commerce members, students, and government employees; $25 for non-members.

To attend, please register on-line Click Here. Online registration is available up to 24 hours before the event. If you miss the on-line registration, you can choose to pay by cash or check at the door provided there is still space available. Please note that the event is limited to 60 people.

For the latest copy of the OWIT International newsletter, where OWIT-NY is prominently featured please go to www.owit.org and login to the member area.

Great new membership benefits:
20% discount off all of World Academy Seminars and consulting services.
20% discount off membership to the Manhattan Chamber of Commerce - this offer is only valid until September 30th.

Finally, don't forget to follow us on Twitter.com/OWITNY.

I will be there and look forward to seeing you at the next OWIT-NY event!

Questions/comments? Post below or email me at clark.deanna@gmail.com

Red Hook and Containers

There is an area of Brooklyn called Red Hook that historically, was one of New York City’s main waterfronts and ship servicing areas. Today it remains an area of activity more incidental to shipping, for example, warehousing, than that of berthing activity, though there is some, albeit, on a much smaller scale than before.

I was recently in Red Hook sitting on a small fishing pier that has a great view of the New York Harbor with all of its tugboats, container ships, and of course, Lady Liberty. While walking there, my friend and I passed a 40 ft. container sitting on a chassis, and being the “trade nerd” I am (as described by a commenter to a post I wrote last month), I began describing the differences in containers - the metal boxes cargo is transported in whether by steamship, train or truck – the nuances between them, e.g., refrigerated, insulated, etc., a 40 ft. versus a 20 ft. container, and containerization generally. I also shared other tidbits of information such as the concept of “free time,” which is a certain number of days following the arrival of a container for the purchaser/consignee of the shipment to unload the cargo and return the container to the carrier’s marine terminal.

This particular container had numerous structural deficiencies including small holes and lots of dents. Notably, the wheels of the chassis looked so old I wondered how they could be operable, which caused me to think that this container could be used for temporary storage and raised a host of warehouseman liability issues in my mind.

I described the risk to cargo during an ocean carriage situation if the moisture in a container became too high, citing examples I have dealt with in cargo claim cases, including that of rusty machinery and rotten mung beans.

As I pointed out the container number, my friend asked what some of the other words and numbers on the exterior of the container meant, and we went through what some of the terms meant, including “tare weight,” payload and cubic capacity. To see this information on some common cargo shipping container sizes, click here.

Questions/comments? Post below or email me at clark.deanna@gmail.com

“Common Cultivars,” “Common Food Crops,” the Lacey Act and a Proposed Rule to Define These Terms

As amended, the Lacey Act now makes it unlawful to

1) Import, export, transport, sell, receive, acquire, or purchase in interstate or foreign commerce any plant, taken in violation of any federal, state, tribal, or foreign law that protects plants (with some limited exceptions), and

2) Make or submit any false record, account, or label for, or any false identification of, any plant covered by the Act, and

3) Import certain plants and plant products without an import declaration.

I remember when the 2008 amendments to the Lacey Act first went into effect and the conversations that came up around importer compliance:

“Will a declaration be required for my importation of cotton t-shirts?”

“Is the enclosed paper packing that cushions my merchandise going to require a Lacey Act declaration upon importation?”

The importing community really did not know how to make heads or tails out of these new laws, in large part, because there was little to no regulatory guidance as to their application. Let me rewind and explain what the Lacey Act is.

The Lacey Act, circa 1900, is the oldest wildlife statute in the U.S. Its mandate is to combat the illegal trafficking of plants, fish and wildlife.

As detailed above (in bold), with the new amendments, beginning in 2008, it became illegal to do certain acts involving plants and plant products. Part of this mandate therefore, included a requirement to make an import declaration stating

1) the scientific name of the plant
2) the value of the importation, and
3) the name of country from which the plant was harvested.

Fortunately, there were exceptions to this requirement, namely, if your merchandise was considered either a (1) “Common Cultivar” or, (2) “Common Food Crop.”

The problem has been however, that there has been no definition to describe what these two terms actually mean. (An administrative law issue not unlike that discussed in my previous article dated August 5, 2010.)

The obvious dilemma for the importing community has been one involving the judgment call made in deciding whether a declaration was necessary or not. After all, determining what a plant is may be relatively simple, but how many folks have ever heard if the term “common cultivar?”

To (finally) address this problem, both the U.S. Dept. of Interior’s Fish and Wildlife Service, together with the U.S. Dept. of Agriculture’s Animal and Plant Health Inspection Service (APHIS) set forth a proposed definition last week for these terms.

The proposed definitions, found in the Federal Register notice 75 FR 46859, are as follows:

Common cultivar. A plant (except a tree) that:
(a) Has been developed through selective breeding or other means for specific morphological or physiological characteristics; and
(b) Is a species or hybrid that is cultivated on a commercial scale; and
(c) Is not listed:
(1) In an appendix to the Convention on International Trade in Endangered Species of Wild Fauna and Flora (27 UST 1087; TIAS 8249);
(2) As an endangered or threatened species under the Endangered Species Act of 1973 (16 U.S.C. 1531 et seq.); or
(3) Pursuant to any State law that provides for the conservation of species that are indigenous to the State and are threatened with extinction.

Common food crop. A plant that:
(a) Has been raised, grown, or cultivated for human or animal consumption, and
(b) Is a species or hybrid that is cultivated on a commercial scale; and
(c) Is not listed:
(1) In an appendix to the Convention on International Trade in Endangered Species of Wild Fauna and Flora (27 UST 1087; TIAS 8249);
(2) As an endangered or threatened species under the Endangered Species Act of 1973 (16 U.S.C. 1531 et seq.); or
(3) Pursuant to any State law that provides for the conservation of species that are indigenous to the State and are threatened with extinction.

If you would like to make comments on these proposed definitions, here is your chance to participate in the creation of administrative law. You may do so electronically at the Federal eRulemaking Portal or

send two copies by regular mail of your comment to Docket No. APHIS-2009-0018, Regulatory Analysis and Development, PPD, APHIS, Station 3A-03.8, 4700 River Road Unit 118, Riverdale, MD 20737-1238, stating that your comment refers to Docket No. APHIS-2009-0018.


Questions/comments? Post below or email me at clark.deanna@gmail.com

Consumer Safety Product Commission (CPSC) and Children's Products

Last week I received an inquiry from a self-described “rookie” apparel importer regarding the use of a bonded warehouse for certain importations. Along with the inquiry came links to a couple of websites that showcased the women’s wear (very cute btw) at issue.

I thought about the myriad of U.S. Customs issues raised by his inquiry alone, and since it dealt with apparel, my mind wandered over to the Flammable Fabrics Act (and Consumer Product Safety Commission (CPSC) oversight of compliance with that statute), and I wondered to what extent he was familiar with other government agency laws.

The relevance of this awareness as an importer, is that since U.S. Customs enforces U.S. laws at the border on behalf of other federal agencies, importers must be knowledgeable about - and in compliance with - these laws.

While there are numerous CPSC regulations covering many specific products, from baby bouncers and walkers, to felt-tip marking devices, to mattresses, there are certain CPSC rules that cover broad product categories, such as those regarding children’s products, including the regulation of lead paint, lead content, small parts, and children’s metal jewelry. Some currently applicable details behind each of these rules are as follows:

Lead paint on children’s products (16 CFR Part 1303)
Maximum Allowable Limit: 90 ppm
Must be Certified as Compliant if Product Made on/after This Date: 8/14/09
What Needs to be Tested: Any type of surface coating
Current Stay of Enforcement of Testing and Certification Requirement?
NO - SUBJECT TO ENFORCEMENT

Small parts (16 CFR Part 1501)
(only pertains to products intended for use by children under 3 y.o.)
Maximum Allowable Limit: n/a
Must be Certified as Compliant if Product Made on/after This Date: 2/15/09
What Needs to be Tested: Size of small components
Current Stay of Enforcement of Testing and Certification Requirement?
NO - SUBJECT TO ENFORCEMENT

Lead in metal components of children’s metal jewelry (CPSIA §101)
Maximum Allowable Limit: 300 ppm
Must be Certified as Compliant if Product Made on/after This Date: 8/14/09
What Needs to be Tested: Testing of accessible parts
Current Stay of Enforcement of Testing and Certification Requirement?
NO – SUBJECT TO ENFORCEMENT

Total lead content in metal children’s products and in non-metal children’s products (CPSIA §101)
Maximum Allowable Limit: 300 ppm [scheduled for reduction to 100 ppm on Aug. 14, 2011]
Must be Certified as Compliant if Product Made on/after This Date: Feb. 10, 2011
What Needs to be Tested: Testing of accessible components (RULE SUBJECT TO CHANGE)
Current Stay of Enforcement of Testing and Certification Requirement?
YES – THROUGH FEB. 9, 2011

One oddball aspect to administrative law, i.e., where a federal agency promulgates (i.e., creates) regulations interpreting a statute (law), is that in order to get a final regulation, the proposed rule must undergo a “notice and comment” period. As these new children’s product rules came out of a 2008 law – the Consumer Product Safety Improvement Act of 2008 (CPSIA) – the creation of regulations is still ongoing, causing confusion in the trade community as to what ought to be followed.

For example, the CPSC is in the process of coming up with an “interpretive rule” on the meaning of the term “children’s product.” In other words, compliance is being sought across products for which no finalized definition exists, which begs the question – how can importers know how to be compliant? And how does U.S. Customs actually know what to enforce?

Lastly, if it weren’t confusing enough, the rules keep changing as we await a final rule. For example, this last category of each section above, “Stay of Enforcement of Testing and Certification Requirement” refers to the following.

There is a “stay” with regards to lead content in children’s metal consumer products (with the exception of metal jewelry) and non-metal consumer products. This means that while children’s products must be in compliance with CPSC lead content rules, the enforcement against non-compliance with the lead content rule for children’s consumer products is not currently in effect because it is “stayed.”

To keep track of CPSIA updates, click here.

Questions/comments? Post below or email me at clark.deanna@gmail.com

Citations:

74 FR 68593, (12/28/09).

“The Commission plans to keep the stay in effect for total lead content in metal children’s products and in nonmetal children’s products tested pursuant to CPSC–CH–E1001–08, Standard Operating Procedure for Determining Total Lead (Pb) in Children’s Metal Products or CPSC–CH– E1002–08, Standard Operating Procedure for Determining Total Lead (Pb) in Non-Metal Children’s Products, (section 101 of the CPSIA) until February 10, 2011. With regard to lead content, the Commission has determined that testing of children’s products for lead content by a recognized third party testing laboratory and certification based upon that testing should begin on products manufactured after February 10, 2011 to allow component testing to form the basis for certifications for lead content and permit the staff to complete an interpretative rule on the meaning of the term ‘‘children’s product.’’ 74 FR 68588, pg. 68591 (12/28/09).