40784 Federal Register / Vol. 74, No. 155 / Thursday, August 13, 2009 / Proposed Rules 

CONSUMER PRODUCT SAFETY 

COMMISSION 

16 CFR Part 1112 

[CPSC Docket No. CPSC–2009–0061] 

Audit Requirements for Third Party 

Conformity Assessment Bodies 

AGENCY: Consumer Product Safety 

Commission. 

ACTION: Proposed rule. 

SUMMARY: The Consumer Product Safety 

Commission (‘‘CPSC’’ or ‘‘Commission’’) 

is proposing to issue regulations 

establishing requirements for the 

periodic audit of third party conformity 

assessment bodies as a condition for 

their continuing accreditation. The 

proposed rule would implement section 

14(d) of the Consumer Product Safety 

Act (‘‘CPSA’’), as amended by section 

102(b) of the Consumer Product Safety 

Improvement Act of 2008 (‘‘CPSIA’’). 

DATES: Submit written or electronic 

comments on the proposed rule by 

October 13, 2009. Submit comments on 

information collection issues under the 

Paperwork Reduction Act of 1995 by 

September 14, 2009, (see the 

‘‘Paperwork Reduction Act’’ section of 

this document). 

ADDRESSES: You may submit comments, 

identified by Docket No. CPSC–2009– 

0061, by any of the following methods: 

Electronic Submissions 

Submit electronic comments in the 

following way: 

Federal eRulemaking Portal: http:// 

www.regulations.gov. Follow the 

instructions for submitting comments. 

To ensure timely processing of 

comments, the Commission is no longer 

accepting comments submitted by 

electronic mail (e-mail) except through 

www.regulations.gov. 

Written Submissions 

Submit written submissions in the 

following way: 

Mail/Hand delivery/Courier (for 

paper, disk, or CD–ROM submissions), 

preferably in five copies, to: Office of 

the Secretary, Consumer Product Safety 

Commission, Room 502, 4330 East West 

Highway, Bethesda, MD 20814; 

telephone (301) 504–7923. 

Instructions: All submissions received 

must include the agency name and 

docket number for this rulemaking. All 

comments received may be posted 

without change, including any personal 

identifiers, contact information, or other 

personal information provided, to 

http://www.regulations.gov. Do not 

submit confidential business 

information, trade secret information, or 

other sensitive or protected information 

electronically. Such information should 

be submitted in writing. 

Docket: For access to the docket to 

read background documents or 

comments received, go to http:// 

www.regulations.gov. 

FOR FURTHER INFORMATION CONTACT: 

Randy Butturini, U.S. Consumer 

Product Safety Commission, 4330 East 

West Highway, Bethesda, Maryland 

20814; 301–504–7562; e-mail: 

RButturini@cpsc.gov. 

SUPPLEMENTARY INFORMATION: 

I. Introduction 

Section 14(a)(1) of the CPSA (15 

U.S.C. 2063(a)(1)), as amended by the 

CPSIA (Pub. L. 110–314, 122 Stat. 3016), 

requires that the manufacturer 

(including the importer) and the private 

labeler, if any, of a product that is 

subject to an applicable consumer 

product safety rule under the CPSA, or 

any similar rule, ban, standard, or 

regulation under any other Act enforced 

by the CPSC, issue a certificate which 

certifies ‘‘based on a test of each product 

or upon a reasonable testing program, 

that such product complies with all 

rules, bans, standards, or regulations 

applicable to the product under this Act 

or any other Act enforced by the 

Commission’’ and specifies each rule, 

ban, standard, or regulation applicable 

to the product. This requirement applies 

to any such product manufactured on or 

after November 12, 2008. Section 

14(a)(4) of the CPSA gives the CPSC the 

authority to designate, by rule, one or 

more of these parties to issue the 

required certificate and to relieve the 

other parties enumerated in section 14 

of the CPSA from the requirement to 

furnish certificates. The CPSC issued a 

final rule in the Federal Register on 

November 18, 2008 (73 FR 68328) 

pertaining to such certificates of 

compliance. 

Section 14(a)(2) of the CPSA 

establishes a third party testing 

requirement for children’s products that 

are subject to a children’s product safety 

rule. In general, section 14(a)(2) of the 

CPSA states, in part, that every 

manufacturer or private labeler (if the 

children’s product bears a private label) 

of such products shall submit sufficient 

samples of the product, or samples that 

are identical in all material respects to 

the product, to an accredited third party 

conformity assessment body to be tested 

for compliance with such children’s 

product safety rule. Section 14(a)(3) of 

the CPSA establishes various time lines 

for accreditation and requires the 

Commission to publish notice of the 

requirements for accreditation of third 

party conformity assessment bodies to 

assess conformity with specific laws or 

regulations, and the Commission has 

published several notices of 

requirements in the Federal Register 

(see 73 FR 54564 (September 22, 2008) 

(Notice of Requirements for 

Accreditation of Third Party Conformity 

Assessment Bodies to Assess 

Conformity with part 1301 of Title 16, 

Code of Federal Regulations)); 73 FR 

62965 (October 22, 2008) (Notice of 

Requirements for Accreditation of Third 

Party Conformity Assessment Bodies to 

Assess Conformity With Part 1508, Part 

1509, and/or Part 1511 of Title 16, Code 

of Federal Regulations)); 73 FR 67838 

(November 17, 2008) (Notice of 

Requirements for Accreditation of Third 

Party Conformity Assessment Bodies to 

Assess Conformity With part 1501 of 

Title 16, Code of Federal Regulations); 

and 73 FR 78331 (December 22, 2008) 

(Notice of requirements for accreditation 

of third party conformity assessment 

bodies to assess conformity with the 600 

parts per million (‘‘ppm’’) and 300 ppm 

lead content limits in metal and metal 

alloy parts of children’s metal jewelry 

established by the Consumer Product 

Safety Improvement Act of 2008)). 

Section 14(d)(1) of the CPSA, as 

added by the CPSIA, requires the 

Commission to establish ‘‘requirements 

for the periodic audit of third party 

conformity assessment bodies as a 

condition for the continuing 

accreditation of such conformity 

assessment bodies’’ under section 

14(a)(3)(C) of the CPSA. 

This proposed rule, if finalized, 

would implement section 14(d)(1) of the 

CPSA. 

II. Description of the Proposed Rule 

The proposal would create a new part 

1112, titled ‘‘Audit Requirements for 

Third Party Conformity Assessment 

Bodies,’’ in Title 16 of the Code of 

Federal Regulations. 

A. Proposed § 1112.1—Purpose 

Proposed § 1112.1 would describe the 

purpose behind the new part 1112. In 

brief, proposed § 1112.1 would state that 

part 1112 ‘‘establishes the audit 

requirements for third party conformity 

assessment bodies pursuant to section 

14(d)(1) of the Consumer Product Safety 

Act (CPSA) (15 U.S.C. 2063(d)(1)).’’ 

Under section 14(d)(1) of the CPSA, 

compliance with the requirements in 

part 1112 would be a condition for the 

continuing accreditation of such third 

party conformity assessment bodies. 

Section 14(f)(2)(C) of the CPSA, 

‘‘Testing and Certification of Art 

Materials and Products,’’ states that a 

certifying organization as defined in 16 


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Federal Register / Vol. 74, No. 155 / Thursday, August 13, 2009 / Proposed Rules 40785 

CFR 1500.14(b)(8), Appendix A, ‘‘(or 

any successor regulation or ruling) 

meets the requirements of [section 

14(f)(2)(A) of the CPSA] with respect to 

the certification of art material and art 

products required under this section or 

by regulations prescribed under the 

Federal Hazardous Substances Act (15 

U.S.C. 1261 et seq.).’’ These certifying 

organizations certify that art materials 

conform to the requirements of ASTM 

D–4236 under the Labeling of 

Hazardous Art Materials Act (LHAMA), 

15 U.S.C. 1277, which provided that the 

provisions of ASTM D–4236 shall be 

deemed a regulation issued by the 

Commission. Those requirements are 

codified at 16 CFR 1500.14(b)(8). 

LHAMA and the standard it mandated 

provide certain requirements for art 

materials. Under these requirements, the 

producer or repackager of an art 

material must submit the product’s 

formulation or reformulation to a 

toxicologist who will review the 

formulation to determine if the art 

material has potential to produce 

chronic adverse health effects through 

customary or reasonably foreseeable 

use. If the toxicologist does determine 

that the art material has this potential, 

the toxicologist will recommend 

appropriate chronic hazard labeling, 

and the producer or repackager must 

use suitable precautionary labeling on 

the product. If the art material presents 

an acute hazard, the labeling also must 

contain an acute hazard warning. 

Under LHAMA, the producer or 

manufacturer of the art material must 

submit to the Commission a written 

description of the criteria the 

toxicologist uses to determine whether 

the producer/repackager’s product has 

the potential to produce chronic adverse 

health effects and a list of art materials 

that require chronic hazard warning 

labels. A conformance statement 

indicating that the product has been 

reviewed in accordance with the 

standard as required must appear either 

on the product, at point of sale, or on 

an invoice. Furthermore, the 

‘‘Guidelines for a Certifying 

Organization,’’ which can be found as 

Appendix A to 16 CFR 1500.14(b)(8), 

state, in part, that an ‘‘advisory board 

composed of not less than three or more 

than five toxicologists, at least one of 

whom is certified in toxicology by a 

nationally recognized certification 

board’’ should conduct periodic reviews 

of a toxicologist’s reviews and that, ‘‘In 

cases where there is a disagreement by 

participating producers or participating 

users, with the determination of the 

toxicologist(s), there should be a method 

whereby the toxicologist’s decision can 

be presented to the advisory board for 

arbitration.’’ 

Thus, because section 14(f)(2)(A) of 

the CPSA considers organizations that 

follow the guideline listed at Appendix 

A to 16 CFR 1500.14(b)(8) to be third 

party conformity assessment bodies and 

because the ‘‘Guidelines for a Certifying 

Organization’’ establish a mechanism 

for reviewing the toxicologist’s work 

(either periodically or in response to a 

disagreement), the proposed rule would 

not subject these certifying 

organizations to the audit requirements 

in part 1112. 

B. Proposed § 1112.3—Definitions 

Proposed § 1112.3 would define 

various terms used in part 1112. 

Proposed § 1112.3(a) would define 

‘‘accreditation’’ as: A procedure by 

which an authoritative body gives 

formal recognition that a third party 

conformity assessment body is 

competent to perform specific tasks. 

Accreditation recognizes a third party 

conformity assessment body’s technical 

competence and is usually specific for 

tests of the systems, products, 

components, or materials for which the 

third party conformity assessment body 

claims proficiency. 

The proposed definition is based on a 

description used by the International 

Organization for Standardization (ISO) 

in relation to ISO Standard ISO/IEC 

17025:2005, ‘‘General Requirements for 

the Competence of Testing and 

Calibration Laboratories’’ (see 

International Organization for 

Standardization, ‘‘Accreditation,’’ 

accessed on the Internet at http:// 

www.isoiec17025.com/wst_page4.html), 

except that it uses the term ‘‘third party 

conformity assessment body’’ instead of 

‘‘lab’’ and refers to ‘‘technical 

competence’’ instead of ‘‘technical 

capability.’’ The term ‘‘third party 

conformity assessment body’’ is used in 

section 14(a)(3)(C) of the CPSA. The 

Commission is aware that ISO/IEC 

17025, by reference, incorporates the 

definitions set forth in ISO/IEC 

17000:2004, ‘‘Conformity Assessment— 

Vocabulary and General Principles,’’ but 

ISO/IEC 17000’s definition of 

‘‘accreditation’’ incorporates several 

other definitions by implied reference. 

Therefore, the proposed rule would 

adopt a more explanatory definition 

rather than adopt a definition from ISO/ 

IEC 17000 whose terms necessitate 

additional definition themselves. 

Proposed § 1112.3(b) would define 

‘‘accreditation body’’ as ‘‘an entity that 

accredits or has accredited a third party 

conformity assessment body as meeting, 

at a minimum, the International 

Organization for Standardization (ISO) 

Standard ISO/IEC 17025:2005, ‘General 

Requirements for the Competence of 

Testing and Calibration Laboratories’ ’’ 

and any test methods or consumer 

product safety requirements specified in 

the relevant notice of requirements 

issued by the Commission and is a 

signatory to the International Laboratory 

Accreditation Cooperation—Mutual 

Recognition Arrangement. The proposed 

definition of ‘‘accreditation body’’ 

reflects the basic elements the 

Commission has specified in its notices 

of requirements for the accreditation of 

third party conformity assessment 

bodies. Additionally, the phrase ‘‘at a 

minimum’’ recognizes that some 

accreditation bodies may, as part of the 

accreditation process, demand that a 

third party conformity assessment body 

demonstrate its conformance with 

specific methods or programs in 

addition to demonstrating conformance 

with ISO/IEC 17025 and with any test 

methods identified in the relevant 

notices of requirements issued by the 

Commission. 

ISO/IEC 17025 incorporates by 

reference the definitions in ISO/IEC 

17000, and ISO/IEC 17000 defines 

‘‘accreditation body’’ as an 

‘‘authoritative body that performs 

accreditation.’’ However, for purposes of 

the proposed rule, the Commission 

believes that the proposed definition is 

more explanatory and, in this instance, 

more consistent with the notices of 

requirements for the accreditation of 

third party conformity assessment 

bodies. 

Proposed § 1112.3(c) would define 

‘‘audit’’ as ‘‘a systematic, independent, 

documented process for obtaining 

records, statements of fact, or other 

relevant information, and assessing 

them objectively to determine the extent 

to which specified requirements are 

fulfilled.’’ The proposed definition is 

almost identical to the definition of 

‘‘audit’’ in ISO/IEC 17000. Proposed 

§ 1112.3(c) also would explain that, for 

purposes of part 1112, an audit is 

composed of two parts: (1) An 

examination by an accreditation body to 

determine whether the third party 

conformity assessment body meets or 

continues to meet the conditions for 

accreditation (a process known more 

commonly as a ‘‘reassessment’’ and 

which the remainder of this preamble 

will refer to as a ‘‘reassessment’’); and 

(2) the resubmission of the ‘‘Consumer 

Product Conformity Assessment Body 

Acceptance Registration Form’’ (CPSC 

Form 223) by the third party conformity 

assessment body and the CPSC’s 

examination of the resubmitted CPSC 

Form 223 (which the remainder of this 

preamble will refer to as an 


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40786 Federal Register / Vol. 74, No. 155 / Thursday, August 13, 2009 / Proposed Rules 

‘‘examination’’ by the CPSC). For 

example, assume that a third party 

conformity assessment body is 

accredited as conforming to ISO/IEC 

17025 and to the testing pertaining to 16 

CFR part 1501 (which pertains to 

‘‘Method for Identifying Toys and Other 

Articles Intended for Use by Children 

Under 3 Years of Age Which Present 

Choking, Aspiration, or Ingestion 

Hazards Because of Small Parts’’). The 

‘‘reassessment’’ portion of the audit, in 

this example, would consist of the 

assessment or reassessment of the third 

party conformity assessment body by 

the accreditation body relative to ISO/ 

IEC 17025 and the testing pertaining to 

16 CFR part 1501. The ‘‘examination’’ 

portion of the audit would consist of the 

third party conformity assessment body 

re-registering at the CPSC through the 

completion of a new CPSC Form 223 

and the CPSC’s review of the 

information in the resubmitted form. If 

the third party conformity assessment 

body is a ‘‘firewalled’’ conformity 

assessment body or a governmentowned or government-controlled 

conformity assessment body, the CPSC’s 

examination may include verification to 

ensure that the entity continues to meet 

the appropriate statutory criteria 

pertaining to such conformity 

assessment bodies. (A ‘‘firewalled’’ 

conformity assessment body is a 

conformity assessment body that is 

‘‘owned, managed, or controlled by a 

manufacturer or private labeler,’’ and 

such conformity assessment bodies are 

subject to certain statutory requirements 

and are accredited by the Commission 

by order (see section 14(f)(2)(D) of the 

CPSA). Section 14(f)(2)(B) of the CPSA 

also allows a third party conformity 

assessment body to be ‘‘owned or 

controlled in whole or in part by a 

government’’ under certain statutory 

conditions or requirements. The 

statutory requirements for ‘‘firewalled’’ 

and government-owned or governmentcontrolled conformity assessment 

bodies are in addition to those 

pertaining to third party conformity 

assessment bodies generally.) 

Proposed § 1112.3(d) would define 

‘‘Commission’’ as meaning the 

Consumer Product Safety Commission. 

Proposed § 1112.3(e) would define 

‘‘quality manager’’ as an individual 

‘‘(however named) who, irrespective of 

other duties and responsibilities, has 

defined responsibility and authority for 

ensuring that the management system 

related to quality is implemented and 

followed at all times and has direct 

access to the highest level of 

management at which decisions are 

made on the conformity assessment 

body’s policy or resources.’’ This 

definition is patterned after the 

explanation of the quality manager’s 

role in ISO/IEC 17025, section 4.1.5. 

Proposed § 1112.3(f) would explain 

that, unless otherwise stated, the 

definitions of section 3 of the CPSA and 

additional definitions in the CPSIA 

apply for purposes of part 1112 of this 

title. Thus, for example, the CPSIA’s 

definition of ‘‘third party conformity 

assessment body,’’ which includes 

independent conformity assessment 

bodies, government-owned or 

government-controlled conformity 

assessment bodies (subject to certain 

requirements in section 14(f)(2)(B) of the 

CPSA), and ‘‘firewalled’’ conformity 

assessment bodies (subject to certain 

requirements in section 14(f)(2)(D) of 

the CPSA), would apply to part 1112, 

and the term ‘‘third party conformity 

assessment body’’ in part 1112 would be 

understood as including all three types 

of conformity assessment bodies. 

C. Proposed § 1112.5—Who Is Subject to 

These Audit Requirements? 

Proposed § 1112.5 would explain that 

the requirements in part 1112 apply to 

third party conformity assessment 

bodies operating pursuant to section 

14(a)(2) of the CPSA and would reiterate 

that third party conformity assessment 

bodies must comply with the audit 

requirements as a continuing condition 

of the Commission’s acceptance of their 

accreditation. However, as explained 

earlier in part II.A of this preamble, 

certifying organizations described in 

Appendix A to 16 CFR 1500.14(b)(8) 

(pertaining to LHAMA and the 

certification of art material and art 

products) are not subject to the audit 

requirements. 

D. Proposed § 1112.7—What Must an 

Audit Address or Cover? Who Conducts 

the Audit? 

As described earlier in part II.B of this 

document, proposed § 1112.3(c) would 

explain that, for purposes of part 1112, 

an audit is composed of two parts: (1) 

An examination by an accreditation 

body to determine whether the third 

party conformity assessment body meets 

or continues to meet the conditions for 

accreditation (the ‘‘reassessment’’ 

portion of the audit); and (2) the 

resubmission of the ‘‘Consumer Product 

Conformity Assessment Body 

Acceptance Registration Form’’ (CPSC 

Form 223) by the third party conformity 

assessment body and the CPSC’s 

examination of the resubmitted CPSC 

Form 223. If the third party conformity 

assessment body is a ‘‘firewalled’’ 

conformity assessment body or a 

government-owned or governmentcontrolled conformity assessment body, 

the CPSC’s examination may include 

verification to ensure that the entity 

continues to meet the appropriate 

statutory criteria pertaining to such 

conformity assessment bodies. 

Under proposed § 1112.7(a), the 

reassessment portion of the audit may 

cover the management systems, specific 

tests, types of tests, calibrations, or 

types of calibrations that are the subject 

of the third party conformity assessment 

body’s accreditation. For example, if an 

accreditation body accredited a third 

party conformity assessment body on 

the latter’s conformity with ISO/IEC 

17025 and additional method(s) or 

programs from the accreditation body or 

tests identified in the relevant notice of 

requirements issued by the Commission, 

the reassessment portion of the audit 

could have the accreditation body assess 

the third party conformity assessment 

body’s conformity with ISO/IEC 17025 

and assess whether the third party 

conformity assessment body is qualified 

to use the specific method(s) or 

programs from the accreditation body or 

the tests identified in the relevant notice 

of requirements. The examination 

portion of the audit conducted by the 

CPSC would consist of the third party 

conformity assessment body’s 

resubmission of a CPSC Form 223, the 

CPSC’s examination of the resubmitted 

form, and a check by the CPSC to see 

whether the third party conformity 

assessment body continues to meet the 

statutory requirements applicable to it. 

It is important to note that, with one 

exception, the proposed rule would not 

specify the precise scope of a 

reassessment by an accreditation body. 

The Commission recognizes that 

accrediting bodies often have the 

flexibility to determine whether a third 

party conformity assessment body 

continues to conform with its 

accreditation requirements and to 

decide what systems or test methods to 

examine as part of the reassessment 

process. Thus, the proposed rule would 

state that the reassessment portion of 

the audit ‘‘may’’ (rather than ‘‘must’’) 

cover the management systems, specific 

tests, types of tests, calibrations, or 

types of calibrations that are the subject 

of the third party conformity assessment 

body’s accreditation. Proposed 

§ 1112.7(a) would, however, expressly 

require each reassessment to examine 

the third party conformity assessment 

body’s management systems to ensure 

that the third party conformity 

assessment body is free from any undue 

influence regarding its technical 

judgment. Such an examination would 

be consistent with ISO/IEC 17025, 

section 4.1, ‘‘Organization,’’ and note 2 

to section 4.1.4 states that: 


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Federal Register / Vol. 74, No. 155 / Thursday, August 13, 2009 / Proposed Rules 40787 

If the laboratory wishes to be recognized as 

a third-party laboratory, it should be able to 

demonstrate that it is impartial and that its 

personnel are free from any undue 

commercial, financial and other pressures 

which might influence their technical 

judgment. The third-party testing or 

calibration laboratory should not engage in 

any activities that may endanger trust in its 

independence of judgment and integrity in 

relation to its testing or calibration activities. 

(See International Organization for 

Standardization, ISO/IEC 17025: 

2005(E), ‘‘General Requirements for the 

Competence of Testing and Calibration 

Laboratories,’’ at page 2.) Such an 

examination also would be consistent 

with section 14(f)(2)(D)(ii) of the CPSA, 

which requires ‘‘firewalled’’ conformity 

assessment bodies to have established 

procedures to ensure that: 

(I) Its test results are protected from undue 

influence by the manufacturer, private 

labeler or other interested party; 

(II) The Commission is notified 

immediately of any attempt by the 

manufacturer, private labeler or other 

interested party to hide or exert undue 

influence over test results; and 

(III) Allegations of undue influence may be 

reported confidentially to the Commission. 

Proposed § 1112.7(b) would require 

the third party conformity assessment 

body to have the accreditation body that 

accredited the third party conformity 

assessment body perform the 

reassessment portion of the audit. For 

example, if a third party conformity 

assessment body was accredited by an 

accreditation body named AB–1, then 

AB–1 would conduct the reassessment. 

If, however, the same third party 

conformity assessment body changes its 

accreditation, so that it becomes 

accredited by a different accreditation 

body named AB–2, then AB–2 would 

conduct the reassessment. 

The proposed rule contemplates that 

accrediting bodies performing a 

reassessment will conform to ISO/IEC 

17011, ‘‘Conformity Assessment— 

General Requirements for Accreditation 

Bodies Accrediting Conformity 

Assessment Bodies.’’ Certain provisions 

in ISO/IEC 17011, notably sections 7.11, 

‘‘Reassessment and Surveillance,’’ 7.12, 

‘‘Extending Accreditation,’’ and 7.13, 

‘‘Suspending, Withdrawing, or 

Reducing Accreditation,’’ may be 

particularly relevant when conducting a 

reassessment. 

As for the examination portion of the 

audit, proposed § 1112.7(c) would 

explain that the third party conformity 

assessment body must have the 

examination portion of the audit 

conducted by the Commission. The 

examination portion of the audit would 

consist of resubmission of CPSC Form 

223 by the third party conformity 

assessment body to the CPSC and the 

CPSC’s examination of the resubmitted 

form. As explained later in part II.E of 

this document, resubmission of the 

CPSC Form 223 would occur in two 

ways: (1) There would be a continuing 

obligation to ensure that the information 

submitted on CPSC Form 223 is current, 

such that a third party conformity 

assessment body would submit a new 

CPSC Form 223 whenever the 

information changes; and (2) in the 

absence of any changes that would 

necessitate the submission of a new 

CPSC Form 223, the third party 

conformity assessment body would reregister at the CPSC every two years 

using CPSC Form 223. 

Additionally, proposed § 1112.7(c) 

would contain specific requirements for 

the CPSC’s examination of ‘‘firewalled’’ 

and government-owned or governmentcontrolled conformity assessment 

bodies. For ‘‘firewalled’’ conformity 

assessment bodies, proposed 

§ 1112.7(c)(1) would state that the 

examination portion of the audit 

conducted by the CPSC may include 

verification to ensure that the 

‘‘firewalled’’ conformity assessment 

body continues to meet the criteria set 

forth in section 14(f)(2)(D) of the CPSA. 

Section 14(f)(2)(D) of the CPSA states 

that: 

Upon request, the Commission may 

accredit a conformity assessment body that is 

owned, managed, or controlled by a 

manufacturer or private labeler as a third 

party conformity assessment body if the 

Commission by order finds that— 

(i) Accreditation of the conformity 

assessment body would provide equal or 

greater consumer safety protection than the 

manufacturer’s or private labeler’s use of an 

independent third party conformity 

assessment body; and 

(ii) The conformity assessment body has 

established procedures to ensure that— 

(I) Its test results are protected from undue 

influence by the manufacturer, private 

labeler or other interested party; 

(II) The Commission is notified 

immediately of any attempt by the 

manufacturer, private labeler or other 

interested party to hide or exert undue 

influence over test results; and 

(III) Allegations of undue influence may be 

reported confidentially to the Commission. 

Thus, for example, under proposed 

§ 1112.7(c)(1), the CPSC could examine 

whether a ‘‘firewalled’’ conformity 

assessment body’s established 

procedures continue to exist and 

examine its mechanisms for confidential 

reporting of allegations of undue 

influence. For government-owned or 

government-controlled conformity 

assessment bodies, proposed 

§ 1112.7(c)(2) would state that the 

examination portion of the audit 

conducted by the CPSC may include 

verification that the government-owned 

or government-controlled conformity 

assessment body continues to meet the 

five criteria set forth in section 

14(f)(2)(B) of the CPSA. In brief, section 

14(f)(2)(B) of the CPSA states that the 

term ‘‘third party conformity assessment 

body’’ may include a governmentowned or government-controlled entity 

if: 

(i) Private labelers located in any nation are 

permitted to choose conformity assessment 

bodies that are not owned or controlled by 

the government of that nation; 

(ii) The entity’s testing results are not 

subject to undue influence by any other 

person, including another governmental 

entity; 

(iii) The entity is not accorded more 

favorable treatment than other third party 

conformity assessment bodies in the same 

nation who have been accredited under 

[section 14 of the CPSA]; 

(iv) The entity’s testing results are 

accorded no greater weight by other 

governmental authorities than those of other 

third party conformity assessment bodies 

accredited under [section 14 of the CPSA]; 

and 

(v) The entity does not exercise undue 

influence over other governmental 

authorities on matters affecting its operations 

or on decisions by other governmental 

authorities controlling distribution of 

products based on outcomes of the entity’s 

conformity assessments. 

Thus, for example, under proposed 

§ 1112.7(c)(2), the CPSC could examine 

whether a government-owned 

conformity assessment body has 

procedures in place to ensure that its 

testing results are not subject to undue 

influence by any other person. CPSC 

staff is considering whether to specify 

the types of documents governmentowned or government-controlled 

conformity assessment bodies should 

have to demonstrate compliance with 

section 14(f)(2)(B) of the CPSA; 

however, because such details may be 

more appropriately considered to be 

part of the accreditation or acceptance 

of accreditation processes rather than 

part of an ‘‘audit,’’ the Commission may 

amend the previously-published notices 

of requirements and/or include such 

information in any future notices of 

requirements. 

E. Proposed § 1112.9—When Must an 

Audit Be Conducted? 

Proposed § 1112.9(a) would state that, 

at a minimum, each third party 

conformity assessment body must be 

reassessed at the frequency established 

by its accreditation body for 

reassessments of the accreditation. For 

example, if the accreditation body 

would conduct a reassessment to 

reexamine a third party conformity 


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assessment body’s accreditation after 

two years, the minimum reassessment 

frequency for that third party 

conformity assessment body, under 

proposed § 1112.9(a), would be two 

years. 

Third party conformity assessment 

bodies are free to have themselves 

reassessed more frequently (such as 

annually or on any other predetermined 

schedule) and may wish to consider 

having reassessments conducted if a 

change has occurred that may affect 

their capabilities. For example, if a third 

party conformity assessment body 

desires to perform an additional 

method, it may wish to consider being 

reassessed at an earlier date so that the 

reassessment examines the third party 

conformity assessment body’s 

conformance with ISO/IEC 17025 and 

all methods covered by the 

accreditation(s). As another example, 

accreditation bodies themselves may 

have shorter intervals between initial 

accreditation and a reassessment or 

allow for another type of action called 

‘‘surveillance.’’ Section 7.11.3 of ISO/ 

IEC 17011 discusses various dates for 

reassessment and/or surveillance of a 

third party conformity assessment 

body’s accreditation. ISO/IEC 17011 

defines ‘‘surveillance’’ as a ‘‘set of 

activities, except reassessment, to 

monitor the continued fulfillment by 

accredited [conformity assessment 

bodies] of requirements for 

accreditation.’’ ‘‘Surveillance,’’ 

therefore, is distinct from 

‘‘reassessment.’’ Section 7.11.3 of ISO/ 

IEC 17011 directs accreditation bodies 

to design a plan for reassessment and 

surveillance and recommends that the 

first on-site surveillance be conducted 

‘‘no later than 12 months from the date 

of initial accreditation.’’ 

As for the examination portion of the 

audit conducted by the CPSC, proposed 

§ 1112.9(b)(1) would require each third 

party conformity assessment body to 

ensure that the information it submitted 

on CPSC Form 223 is current and to 

submit a new CPSC Form 223 whenever 

the information, such as the third party 

conformity assessment body’s address, 

telephone number, or ownership, 

changes. This will ensure that the 

information available to CPSC reflects 

the most current information for a 

particular third party conformity 

assessment body. In the absence of any 

changes that would necessitate the 

submission of a new CPSC Form 223, 

proposed § 1112.9(b)(2) would require 

the third party conformity assessment 

body to re-register at the CPSC every 

two years using CPSC Form 223. This 

re-registration requirement may help 

CPSC identify third party conformity 

assessment bodies that have gone out of 

business or discontinued testing of 

products subject to the CPSC’s 

jurisdiction and remove such third party 

conformity assessment bodies from its 

list of accredited third party conformity 

assessment bodies. 

If a third party conformity assessment 

body has registered more than once with 

the CPSC, has registered at different 

times, and has no changes in 

information that would warrant the 

submission of a new CPSC Form 223, 

the first examination portion of the 

audit, under proposed § 1112.9(b)(3), 

would be performed two years after the 

last registration date, and then every 

two years thereafter. For example, 

assume that a third party conformity 

assessment body registers in 2009 to test 

for lead paint and later registers in 2010 

to test for small parts. The examination 

portion of the audit would occur in 

2012, and subsequent examination 

portions of the audit would be at 2014, 

2016, etc. If the third party conformity 

assessment body has made changes that 

warranted the submission of a new 

CPSC Form 223, then, under proposed 

§ 1112.9(b)(4), the first examination 

portion of the audit would be performed 

two years after the submission of the 

new CPSC Form 223. 

F. Proposed § 1112.11—What Must a 

Third Party Conformity Assessment 

Body Do After an Audit? 

In general, once the accreditation 

body has conducted its reassessment of 

a third party conformity assessment 

body, the accreditation body will 

present its initial findings along with 

any supporting evidence to the quality 

manager for the third party conformity 

assessment body. The accreditation 

body may give the third party 

conformity assessment body’s personnel 

the opportunity to present any 

objections they have to the initial 

findings. The accreditation body may 

then adjust its findings in response to 

any valid objections. 

When the accreditation body presents 

its findings to the third party conformity 

assessment body, proposed § 1112.11(a) 

would require the third party 

conformity assessment body’s quality 

manager to receive the findings and, if 

necessary, to initiate corrective action in 

response to the findings. Proposed 

§ 1112.11(b) would require the quality 

manager to prepare a resolution report; 

the resolution report would identify the 

corrective actions taken and any followup activities. If immediate corrective 

action is necessary (as may be the case 

if the findings identify problems 

associated with incorrect procedures, 

invalid actions, or the creation or use of 

invalid data), proposed § 1112.11(b) 

would require the quality manager to 

document that he/she notified the 

relevant parties within the third party 

conformity assessment body to take 

immediate corrective action and also 

document the action(s) taken. 

Proposed § 1112.11(c) would require 

the quality manager to notify the CPSC 

if the accreditation body decides to 

reduce, suspend, or withdraw the third 

party conformity assessment body’s 

accreditation, and the reduction, 

suspension, or withdrawal of 

accreditation is relevant to the third 

party conformity assessment body’s 

activities pertaining to a CPSC 

regulation or test method. For example, 

assume that a third party conformity 

assessment body is accredited by its 

accreditation body to perform lead paint 

testing and to perform tests to detect the 

presence of a specific substance (which 

this example will refer to as Test 2), 

where the latter test is not done to 

determine whether children’s products 

conform to an applicable children’s 

product safety rule and also is not 

within the scope of the CPSC’s 

acceptance of the accreditation for the 

third party conformity assessment body. 

Assume further that the accreditation 

body finds the third party conformity 

assessment body to remain competent to 

conduct the lead tests, but withdraws 

accreditation with respect to Test 2. 

Under this example, the quality 

manager would not have to notify the 

CPSC that the accreditation body has 

withdrawn accreditation for Test 2 

because Test 2 was not relevant to the 

third party conformity assessment 

body’s testing of children’s products. 

In circumstances when a notification 

is required, the notification would be 

sent to the Assistant Executive Director, 

Office of Hazard Identification and 

Reduction, within five business days of 

the accreditation body’s notification to 

the third party conformity assessment 

body. This provision will help ensure 

that the CPSC is notified about third 

party conformity assessment bodies that 

have their accreditation suspended or 

withdrawn or have the scope of their 

accreditation reduced after a 

reassessment. If a third party conformity 

assessment body does not notify the 

CPSC as proposed § 1112.11(c) would 

require, such non-compliance may be 

grounds for withdrawal of acceptance of 

the accreditation by the Commission 

itself under section 14(e)(1)(B) of the 

CPSA for failure to ‘‘comply with an 

applicable * * * requirement 

established by the Commission’’ under 

the audit regulations. 

Proposed § 1112.11(d) would explain 

that the CPSC will notify the third party 


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conformity assessment body if the CPSC 

finds that the third party conformity 

assessment body no longer meets the 

conditions contained in CPSC Form 223 

or in the relevant statutory provisions 

applying to that third party conformity 

assessment body. The CPSC also will 

identify the condition or statutory 

provision that is no longer met and 

specify a time by which the third party 

conformity assessment body must notify 

the CPSC of the steps that it intends to 

take to correct the deficiency and when 

it will complete such steps. Proposed 

§ 1112.11(d) also would require the 

quality manager to document that he/ 

she notified the relevant parties within 

the third party conformity assessment 

body to take corrective action and also 

document the action(s) taken. 

Proposed § 1112.11(e) would describe 

the possible consequences if a third 

party conformity assessment body fails 

to remedy the deficiency in a timely 

fashion. In brief, proposed § 1112.11(e) 

would state that the CPSC ‘‘shall take 

whatever action it deems appropriate 

under the circumstances, up to and 

including withdrawing the CPSC’s 

accreditation of the third party 

conformity assessment body or the 

CPSC’s acceptance of the third party 

conformity assessment body’s 

accreditation.’’ 

G. Proposed § 1112.13—What Records 

Should a Third Party Conformity 

Assessment Body Retain Regarding an 

Audit? 

Proposed § 1112.13 would require a 

third party conformity assessment body 

to retain all records relating to an audit 

and all records pertaining to the third 

party conformity assessment body’s 

resolution of or plans for resolving 

nonconformities identified by the audit. 

Such nonconformities could be 

identified through a reassessment by an 

accreditation body or through an 

examination by the CPSC. The proposal 

also would require third party 

conformity assessment bodies to retain 

records relating to the last three 

reassessments (or however many 

reassessments have been conducted if 

the third party conformity assessment 

body has been reassessed less than three 

times) and to make such records 

available to the CPSC upon request. 

The Commission also proposes to 

require third party conformity 

assessment bodies to retain records 

relating to the last three reassessments 

because such records may reveal 

whether a pattern of problems with 

accreditation exists and how quickly 

such problems are addressed and 

resolved. 

III. Paperwork Reduction Act 

This proposed rule contains 

information collection requirements that 

are subject to public comment and 

review by the Office of Management and 

Budget (OMB) under the Paperwork 

Reduction Act of 1995 (44 U.S.C. 3501– 

3520). This part of the preamble to the 

proposed rule describes the provisions 

in this section of the document with an 

estimate of the annual reporting burden. 

Our estimate includes the time for 

reviewing instructions, searching 

existing data sources, gathering and 

maintaining the data needed, and 

completing and reviewing each 

collection of information. 

The Commission invites comments 

on: (1) Whether the collection of 

information is necessary for the proper 

performance of the CPSC’s functions, 

including whether the information will 

have practical utility; (2) the accuracy of 

the CPSC’s estimate of the burden of the 

proposed collection of information, 

including the validity of the 

methodology and assumptions used; (3) 

ways to enhance the quality, utility, and 

clarity of the information to be 

collected; and (4) ways to minimize the 

burden of the collection of information 

on respondents, including through the 

use of automated collection techniques, 

when appropriate, and other forms of 

information technology. 

Title: Audit Requirements for Third 

Party Conformity Assessment Bodies. 

Description: The proposed rule would 

require third party conformity 

assessment bodies to comply with the 

audit requirements. As part of these 

requirements, the proposed rule would, 

if finalized, require the third party 

conformity assessment bodies to 

complete an on-line form to begin the 

examination portion of the audit 

process. This form asks for certain 

identifying information pertaining to the 

third party conformity assessment body, 

information concerning whether the 

third party conformity assessment body 

is owned, managed, or controlled by 

manufacturers or private labelers of 

children’s products, whether the third 

party conformity assessment body is 

owned or controlled by a government 

entity, the laboratory accreditation 

certificate for the third party conformity 

assessment body, and, for ‘‘firewalled’’ 

conformity assessment bodies, training 

materials. Additionally, the proposed 

rule would require third party 

conformity assessment bodies to retain 

records relating to a reassessment and 

all records pertaining to the third party 

conformity assessment body’s resolution 

or plans for resolving nonconformities 

identified by the reassessment. The 

proposal also would require third party 

conformity assessment bodies to retain 

such records relating to the last three 

reassessments (or however many 

reassessments have been conducted if 

the third party conformity assessment 

body has been reassessed less than three 

times). Proposed § 1112.13 would 

require the third party conformity 

assessment body to make such records 

available to the CPSC upon request. 

Description of Respondents: Persons 

who are third party conformity 

assessment bodies pursuant to section 

14(a) of the Consumer Product Safety 

Act (CPSA) (15 U.S.C. 2063(a)). 

The CPSC estimates the burden of this 

collection of information as follows: 

TABLE 1—ESTIMATED ANNUAL REPORTING BURDEN

16 CFR Section Number of 

respondents 

Frequency 

of 

responses 

Total 

annual 

responses 

Hours per 

response Total hours 

1112.9(b)(1) ..................................................................... 150 1 150 1 150 

1112.9(b)(2) ..................................................................... 3 1 3 0 .25 0 .75 

1112.13 ............................................................................ 150 1 150 4 600 

Total .......................................................................... ........................ ........................ ........................ .......................... 750 .75 

There are no capital costs or operating and maintenance costs associated with this collection of information. 

Our estimates are based on the 

following information: 

• As of June 5, 2009, 153 third party 

conformity assessment bodies had 

registered with the CPSC. However, 

because the CPSC expects to receive 

additional registrations and because 

section 14(a)(3)(B)(vi) of the CPSA 


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requires the Commission to issue a 

notice of requirement for ‘‘all other 

children’s product safety rules,’’ it is 

anticipated that many more third party 

conformity assessment bodies will 

register. Therefore, the Commission 

tentatively estimates the number of 

third party conformity assessment 

bodies to be 300. 

• Under proposed § 1112.9(b)(1), 

third party conformity assessment 

bodies would be required to resubmit 

CPSC Form 223. At a minimum, 

assuming there are no changes to the 

information that a third party 

conformity assessment body has 

submitted previously in its CPSC Form 

223, the resubmission would occur 

every two years from the date of the 

previous submission. As all third party 

conformity assessment bodies have not 

submitted their first CPSC Form 223s at 

the same time, only some would be 

expected to resubmit a CPSC Form 223 

in any one year. The percentage of third 

party conformity assessment bodies that 

will resubmit a CPSC Form 223 in a 

given year cannot be determined at this 

time, so, for purposes of this analysis, 

the CPSC will assume that half of the 

third party conformity assessment 

bodies will resubmit a CPSC Form 223 

in any given year. Thus, the estimated 

number of respondents for proposed 

§ 1112.9(b)(1) is 150 (300 total third 

party conformity assessment bodies × 

0.5 resubmissions annually per third 

party conformity assessment bodies = 

150 resubmissions annually). 

Furthermore, the CPSC estimates the 

burden hour for each resubmission to be 

one hour, so the total burden associated 

with proposed § 1112.9(b)(1) would be 

150 hours (150 resubmissions × 1 hour 

per resubmission = 150 hours). 

• Under proposed § 1112.9(b)(2), 

third party conformity assessment 

bodies would be required to ensure that 

the information submitted on CPSC 

Form 223 is current and to submit a new 

CPSC Form 223 whenever the 

information changes. Based on current 

experience with third party conformity 

assessment bodies, the CPSC estimates 

that only one percent of third party 

conformity assessment bodies will 

revise or update their information, so 

the estimated number of respondents is 

3 (300 third party conformity 

assessment bodies × 0.01 revisions per 

conformity assessment body = 3 

revisions per year). 

• Under proposed § 1112.13, third 

party conformity assessment bodies will 

have to retain records pertaining to an 

audit and their resolution of or plans for 

resolving nonconformities identified 

through a reassessment by an 

accrediting body or through an 

examination by the CPSC. The proposal 

also would require third party 

conformity assessment bodies to retain 

records relating to the last three 

reassessments (or however many 

reassessments have been conducted if 

the number of reassessments is less than 

three). The number of third party 

conformity assessment bodies to be 

reassessed in a given year cannot be 

determined at this time, but, for 

purposes of this analysis, the CPSC will 

assume that half will be reassessed in 

any given year. Thus, the estimated 

number of respondents is 150 (300 third 

party conformity assessment bodies × 

0.5 reassessments annually per third 

party conformity assessment bodies = 

150 reassessments annually). As for the 

time required to retain such records, it 

is difficult to estimate such time with 

precision because the amount of time is 

likely to vary among the third party 

conformity assessment bodies. Third 

party conformity assessment bodies that 

are accredited in more than one field or 

that have scopes that include a large 

number of tests are likely to require 

more time to manage the records 

generated during an audit than those 

who are accredited in only one field or 

whose scopes are limited to only a few 

tests. It is also likely that third party 

conformity assessment bodies at which 

a large number of nonconformities are 

discovered during a reassessment audit 

will require more time to maintain the 

records since more records are likely to 

be generated in correcting the 

nonconformities. Nevertheless, the 

CPSC tentatively estimates that it will 

take 4 hours per third party conformity 

assessment body, so the overall 

recordkeeping burden will be 600 hours 

(150 reassessments per year × 4 hours 

per record per reassessment = 600 

hours). Most respondents probably will 

need less time to maintain records, but 

some can be expected to require more 

time due to factors such as the number 

of nonconformities found that might 

require the preparation of additional 

documents. 

The total burden, therefore, is 750.75 

hours, which the CPSC will round up to 

751 hours. 

In compliance with the Paperwork 

Reduction Act of 1995 (44 U.S.C. 

3507(d)), the CPSC has submitted the 

information collection requirements of 

this rule to OMB for review. Interested 

persons are requested to fax comments 

regarding information collection by 

September 14, 2009, to the Office of 

Information and Regulatory Affairs, 

OMB (see ADDRESSES). 

IV. Regulatory Flexibility Act 

The CPSC has examined the impacts 

of the proposed rule under the 

Regulatory Flexibility Act (5 U.S.C. 

601–612). The Regulatory Flexibility 

Act requires agencies to analyze 

regulatory options that would minimize 

any significant impact of a rule on small 

entities. Because the required 

information is minimal and the costs 

associated with the audits are low, the 

Commission certifies that the proposed 

rule would not have a significant 

economic impact on a substantial 

number of small entities. 

A. Objectives and Legal Basis for the 

Draft Proposed Rule 

Section 102(b) of the CPSIA requires 

the Commission to establish 

requirements for the periodic audit of 

the third party conformity assessment 

bodies in order for them to maintain 

their accreditation. The draft proposed 

rule would implement the CPSIA’s 

audit requirement. The purpose of a 

periodic audit is to ensure that an 

accredited third party conformity 

assessment body is still competent to 

perform the testing services for which it 

has been accredited. In the case of 

accredited third party conformity 

assessment bodies that are owned, 

managed, or controlled by a 

manufacturer (or ‘‘firewalled’’ 

conformity assessment bodies) or that 

are owned or controlled in whole or in 

part by a government entity, the audit 

requirements provide the Commission 

with an opportunity to ensure that the 

third party conformity assessment body 

continues to comply with the CPSIA’s 

requirements for ‘‘firewalled’’ and 

government-owned or governmentcontrolled conformity assessment 

bodies. 

B. Firms Subject to the Requirement for 

Periodic Audits 

The requirement for periodic audits 

will only affect those third party 

conformity assessment bodies that seek 

to be able to provide the CPSIA-required 

third-party conformity assessment 

services for manufacturers or private 

labelers of children’s products. Third 

party conformity assessment bodies that 

do not intend to offer third party 

conformance testing for children’s 

products are not affected by the 

requirements for accreditation or 

periodic audits. 

As of June 5, 2009, the CPSC had 

accepted the accreditations of 153 third 

party conformity assessment bodies. Of 

these, 40 are located within the United 

States. Of the third party conformity 

assessment bodies located in the United 


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States, six of the locations are owned by 

very large, foreign-based companies; 

nine are affiliated with large, United 

States-based companies; and the balance 

or 25 (about 63 percent) are affiliated 

with companies that could be small 

businesses according to the criteria 

established by the Small Business 

Administration (SBA), which for a 

testing laboratory (NAICS code 541380) 

is a company with less than $12.5 

million in annual revenue. 

It is likely that the number of third 

party conformity assessment bodies 

with CPSC-accepted accreditations will 

increase over the next several months or 

years as the CPSIA’s third party testing 

requirements are implemented or 

become effective. (The Commission, in 

a notice published in the Federal 

Register on February 9, 2009 (74 FR 

6396), announced a stay of enforcement 

pertaining to certain provisions of 

section 14(a) of the CPSA; those 

provisions, in general, required testing 

and issuance of certificates of 

compliance by manufacturers, and the 

stay is to remain in effect until February 

10, 2010. Additionally, section 

14(a)(3)(B) of the CPSA establishes a 

timeline for accreditation and directs 

the CPSC to publish ‘‘notices of 

requirements’’ for accreditation of third 

party conformity assessment bodies; as 

more notices of requirements issue, it is 

reasonable to expect that the number of 

third party conformity assessment 

bodies seeking accreditation will 

increase.) Therefore, it is not possible to 

state with certainty how many third 

party conformity assessment bodies will 

ultimately be accredited. CPSC staff 

believes that the number of third party 

conformity assessment bodies in the 

United States that are ultimately 

accredited for testing children’s 

products may reach 120. If 63 percent of 

these meet the SBA criteria for a small 

business, then about 76 small U.S. 

businesses would be affected by this 

proposed rule. 

C. Requirements of the Draft Proposed 

Rule and Possible Impacts on Small 

Businesses 

The notices of requirements issued by 

the CPSC for the accreditation of third 

party conformity assessment bodies 

state that, as a baseline requirement, 

third party conformity assessment 

bodies must be accredited by an 

accreditation body that is a signatory to 

the International Laboratory 

Accreditation Cooperation—Mutual 

Recognition Arrangement (ILAC–MRA). 

ILAC is an international cooperation of 

laboratory accreditation bodies that 

seeks to harmonize laboratory 

accreditation procedures so as to 

facilitate the acceptance of the testing 

results of accredited laboratories both 

within and across national boundaries. 

The ILAC–MRA includes requirements 

for the initial assessment of laboratories 

and periodic reassessments. 

Laboratories that do not submit to the 

periodic reassessments lose their 

accredited status. 

Under the proposed rule, the periodic 

audit of a third party conformity 

assessment body would consist of two 

parts. The first part would be a 

reassessment by the accrediting body to 

determine whether it continues to meet 

the conditions for accreditation. The 

second part of the audit would be the 

resubmission to the CPSC of CPSC Form 

223 and its review by the CPSC. 

All signatories to the ILAC–MRA have 

requirements for the periodic 

reassessment of accredited laboratories. 

The ILAC–MRA harmonized procedures 

for surveillance and reassessment of 

accredited laboratories (available on the 

Internet at http://www.ilac.org/

documents/ILAC_G10_1996_harm_

proced_for_surve_and_reass_of_accrd_

labs.pdf) recommend that the time 

between reassessments be no more than 

60 months provided that the accrediting 

body undertakes somewhat less 

comprehensive surveillance visits at 

least every 18 months. However, many 

accrediting bodies opt to undertake 

more frequent full reassessments rather 

than conduct surveillance visits. 

According to ISO/IEC 17011, if an 

accreditation body does not conduct 

surveillance visits, full reassessments of 

accredited laboratories must take place 

at least once every two years. 

The resubmission of CPSC Form 223 

is intended to give the CPSC an 

opportunity to ensure that the third 

party conformity assessment body is 

still accredited by an ILAC–MRA 

signatory and still complies with the 

requirements of section 102 of the 

CPSIA with respect to ‘‘firewalled’’ and 

government-owned or governmentcontrolled conformity assessment 

bodies. The CPSC is proposing that 

CPSC Form 223 be kept current or that, 

in the absence of any changes to the 

information that a third party 

conformity assessment body has 

previously submitted, be resubmitted 

every two years. 

The cost of the periodic audit 

includes the cost of the time of the 

accrediting body’s assessor to conduct 

the assessment, the cost of the assessor’s 

travel to the site, and the cost of lodging 

and meals while the assessor is 

conducting the reassessment. According 

to a representative of an accrediting 

body, a reassessment will typically take 

two to three days, and the cost charged 

to the third party conformity assessment 

body usually will be $3,000 to $4,000 

per field (e.g., chemical, electrical, or 

mechanical testing) in which the third 

party conformity assessment body is 

accredited. Therefore, a third party 

conformity assessment body that is 

accredited for testing conformance to 

both chemical and mechanical 

standards could expect an assessment or 

reassessment to cost $6,000 to $8,000. 

Another cost of a reassessment by an 

accrediting body is the cost of the time 

that third party conformity assessment 

body personnel spend cooperating with 

the assessors. This includes the time 

required to prepare or assemble 

documents needed by the auditors and 

to explain or demonstrate the 

procedures used at the third party 

conformity assessment body. No 

empirical estimates of this cost were 

found, but one might expect that the 

amount of time spent by third party 

conformity assessment body personnel 

during a reassessment would be close to 

the amount of time spent by the 

assessor. If the average reassessment 

takes 2.5 days (or 20 hours) and the 

wage of the employees involved is about 

$44 an hour, then the cost of the time 

of the third party conformity assessment 

body’s personnel spent cooperating with 

the reassessment would be about $880. 

(The median hourly wage of 

architecture and engineering 

occupations in testing laboratories 

(NAICS code 541380) is $31.65 (U.S. 

Department of Labor, Bureau of Labor 

Statistics, National Occupational 

Employment and Wage Estimates, May 

2008 (data extracted on June 17, 2009 

from http://www.bls.gov/data/). In 2008, 

wages and salaries represented about 

71.9 percent of total compensation for 

professional and related occupations in 

private industry (U.S. Department of 

Labor, Bureau of Labor Statistics, 

Employer cost for Employee 

Compensation (data extracted on June 

17, 2009)).) The cost could be higher if 

a reassessment took longer than 2.5 days 

or higher paid employees were involved 

in the reassessment. 

Another requirement would be the 

resubmission of CPSC Form 223, which 

must be done every two years. The cost 

to resubmit this form is probably low for 

most third party conformity assessment 

bodies, unless there have been 

significant changes in the third party 

conformity assessment body’s 

ownership or internal practices since 

the last time it submitted the form. On 

average, the CPSC estimates that it will 

take one hour to complete this form and 

submit it electronically. If the form is 

completed by a manager, the cost would 

average $68, assuming the median 


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hourly compensation for a general or 

operations manager in a testing 

laboratory. (The median hourly wage of 

a general or operations managers in 

testing laboratories (NAICS code 

541380) is $48.73 (U.S. Department of 

Labor, Bureau of Labor Statistics, 

National Occupational Employment and 

Wage Estimates, May 2008 (data 

extracted on June 17, 2009 from 

http://www.bls.gov/data/)). In 2008, 

wages and salaries represented about 

71.9 percent of total compensation for 

professional and related occupations in 

private industry (U.S. Department of 

Labor, Bureau of Labor Statistics, 

Employer cost for Employee 

Compensation (data extracted on June 

17, 2009)).) The cost could be somewhat 

higher than average for ‘‘firewalled’’ and 

government-owned or governmentcontrolled conformity assessment 

bodies. ‘‘Firewalled’’ conformity 

assessment bodies will need to provide 

the CPSC staff with the updated 

information and documents that 

describe the training that the 

‘‘firewalled’’ conformity assessment 

body employees receive for reporting to 

the CPSC any allegation of an attempt 

by a manufacturer, private labeler, or 

other interested party to hide or exert 

undue influence over test results. 

Government-owned or governmentcontrolled conformity assessment 

bodies might need to provide updated 

information to demonstrate that the 

government entity does not exert undue 

influence on the operation of the third 

party conformity assessment body or the 

testing results and that the third party 

conformity assessment body is not 

treated more favorably than other 

accredited third party conformity 

assessment bodies in the same nation. 

The draft proposed rule also would 

require that third party conformity 

assessment bodies keep the information 

on CPSC Form 223 current. Based on 

the experience to date, the CPSC staff 

expects that about one percent of the 

third party conformity assessment 

bodies will need to provide updates to 

the form during the year. These updates 

should take about 15 minutes to 

complete online. 

The periodic audits that would be 

required would cost third party 

conformity assessment bodies about 

$4,000 to $5,000 (rounded to the nearest 

thousand) per field in which the third 

party conformity assessment body is 

accredited. This cost includes the cost 

of the accrediting body’s assessors as 

well as the time of the third party 

conformity assessment body personnel 

that is spent on the audit, and other 

costs, such as the cost of providing the 

materials required of ‘‘firewalled’’ 

conformity assessment bodies. The time 

periods between audits will vary to 

some degree between accrediting 

bodies, but a typical period is about 

every two years. Therefore, the annual 

average cost of the periodic audits 

would be approximately $2,000 to 

$2,500 per field in which the third party 

conformity assessment body is 

accredited. Therefore, the annual cost to 

a third party conformity assessment 

body accredited in three fields (e.g., 

chemical, mechanical, and electrical) 

would be approximately $6,000 to 

$7,500. 

As noted earlier, the SBA considers a 

testing laboratory to be a small business 

if its annual revenue is less than $12.5 

million. According to the 2002 

Economic Census, a very high 

percentage of testing laboratories would 

be considered to be small businesses. In 

2002, almost 97 percent of all testing 

laboratories had revenue of less than 

$10 million, and almost 50 percent had 

revenue of less than $500,000 (see U.S. 

Department of Commerce, Bureau of the 

Census, 2002 Economic Census (release 

date November 15, 2005); accessed at 

http://factfinder.census.gov/servlet/ 

IBQTable?_bm=y&- 

ds_name=EC0254SSSZ4&- 

NAICS2002=541380 (June 4, 2008)). 

Also, about 63 percent of the third party 

conformity assessment bodies that have 

been accredited so far for testing 

children’s products appear to be small 

businesses. Therefore, it is likely that 

the proposed rule will impact a 

substantial number of small businesses. 

However, it is unlikely that the rule will 

have significant adverse impact on 

many third party conformity assessment 

bodies. The only third party conformity 

assessment bodies that will seek 

accreditation for testing children’s 

products are those that expect to receive 

substantial revenue from the testing 

required by the CPSIA. Those third 

party conformity assessment bodies that 

do not expect substantial revenue from 

the testing required by the CPSIA will 

not seek to be accredited for the testing 

or they will not renew their 

accreditation if they had initially sought 

accreditation, but the expected revenue 

did not materialize. 

D. Alternatives Considered to the Draft 

Proposed Rule 

Given that the CPSC is relying upon 

accrediting bodies that are signatories to 

the ILAC–MRA to accredit and reassess 

the third party conformity assessment 

bodies, there are no realistic alternatives 

to the draft proposed rule that would 

substantially lower the cost of the 

periodic audits. The frequency of the 

reassessments of the third party 

conformity assessment bodies is 

determined by the accrediting bodies, 

not the CPSC. The CPSC could reduce 

the frequency that CPSC Form 223 must 

be resubmitted. However, it probably 

takes a third party conformity 

assessment body an average of 1 hour to 

review and resubmit CPSC Form 223 

and any supplemental materials. 

Therefore, reducing the frequency that 

this form has to be resubmitted would 

not significantly lower the cost of the 

periodic audits. 

V. Environmental Considerations 

This proposed rule falls within the 

scope of the Commission’s 

environmental review regulations at 16 

CFR 1021.5(c)(2) which provide a 

categorical exclusion from any 

requirement for the agency to prepare an 

environmental assessment or 

environmental impact statement for 

product certification rules. 

VI. Effective Date 

The Commission is proposing that 

any final rule based on this proposal 

become effective 60 days after its date 

of publication in the Federal Register. 

List of Subjects in 16 CFR Part 1112 

Consumer protection, Third party 

conformity assessment body, Audit. 

For the reasons stated above, the 

Commission proposes to amend Title 16 

of the Code of Federal Regulations by 

adding a new part 1112 to read as 

follows: 

PART 1112—AUDIT REQUIREMENTS 

FOR THIRD PARTY CONFORMITY 

ASSESSMENT BODIES 

Sec. 

1112.1 Purpose. 

1112.3 Definitions. 

1112.5 Who Is Subject to These Audit 

Requirements? 

1112.7 What Must an Audit Address or 

Cover? Who Conducts the Audit? 

1112.9 When Must an Audit be Conducted? 

1112.11 What Must a Third Party 

Conformity Assessment Body Do After 

an Audit? 

1112.13 What Records Should a Third Party 

Conformity Assessment Body Retain 

Regarding an Audit? 

Authority: Public Law 110–314, Sec. 3, 122 

Stat. 3016, 3017 (2008); 15 U.S.C. 2063. 

§ 1112.1 Purpose. 

This part establishes the audit 

requirements for third party conformity 

assessment bodies pursuant to section 

14(d)(1) of the Consumer Product Safety 

Act (CPSA) (15 U.S.C. 2063(d)(1)). 

Compliance with these requirements is 

a condition for the continuing 

accreditation of such third party 

conformity assessment bodies pursuant 


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Federal Register / Vol. 74, No. 155 / Thursday, August 13, 2009 / Proposed Rules 40793 

to section 14(a)(3)(C) of the CPSA. 

However, this part does not apply to 

certifying organizations under the 

Labeling of Hazardous Art Materials Act 

even if such organizations are third 

party conformity assessment bodies. 

§ 1112.3 Definitions. 

The following definitions apply for 

purposes of this part: 

(a) ‘‘Accreditation’’ means a 

procedure by which an authoritative 

body gives formal recognition that a 

third party conformity assessment body 

is competent to perform specific tasks. 

Accreditation recognizes a third party 

conformity assessment body’s technical 

capability and is usually specific for 

tests of the systems, products, 

components, or materials for which the 

third party conformity assessment body 

claims proficiency. 

(b) ‘‘Accreditation body’’ means an 

entity that: 

(1) Accredits or has accredited a third 

party conformity assessment body as 

meeting, at a minimum, the 

International Organization for 

Standardization (ISO) Standard ISO/IEC 

17025:2005, ‘‘General Requirements for 

the Competence of Testing and 

Calibration Laboratories’’ and any test 

methods or consumer product safety 

requirements specified in the relevant 

notice of requirements issued by the 

Commission; and 

(2) Is a signatory to the International 

Laboratory Accreditation Cooperation— 

Mutual Recognition Arrangement. 

(c) ‘‘Audit’’ means a systematic, 

independent, documented process for 

obtaining records, statements of fact, or 

other relevant information, and 

assessing them objectively to determine 

the extent to which specified 

requirements are fulfilled. An audit, for 

purposes of this part, is composed of 

two parts: 

(1) An examination by an 

accreditation body to determine 

whether the third party conformity 

assessment body meets or continues to 

meet the conditions for accreditation (a 

process known more commonly as a 

‘‘reassessment’’); and 

(2) The resubmission of the 

‘‘Consumer Product Conformity 

Assessment Body Acceptance 

Registration Form’’ (CPSC Form 223) by 

the third party conformity assessment 

body and the Consumer Product Safety 

Commission’s (‘‘CPSC’s’’) examination 

of the resubmitted CPSC Form 223. If 

the third party conformity assessment 

body is owned, managed, or controlled 

by a manufacturer or private labeler 

(also known as a ‘‘firewalled’’ 

conformity assessment body) or is a 

government-owned or governmentcontrolled conformity assessment body, 

the CPSC’s examination may include 

verification to ensure that the entity 

continues to meet the appropriate 

statutory criteria pertaining to such 

conformity assessment bodies. 

(d) ‘‘CPSC’’ means the Consumer 

Product Safety Commission. 

(e) ‘‘Quality manager’’ means an 

individual (however named) who, 

irrespective of other duties and 

responsibilities, has defined 

responsibility and authority for ensuring 

that the management system related to 

quality is implemented and followed at 

all times and has direct access to the 

highest level of management at which 

decisions are made on the conformity 

assessment body’s policy or resources. 

(f) Unless otherwise stated, the 

definitions of section 3 of the CPSA and 

additional definitions in the Consumer 

Product Safety Improvement Act of 

2008, Pub. L. 110–314, apply for 

purposes of part 1112 of this title. 

§ 1112.5 Who Is Subject to These Audit 

Requirements? 

Except for certifying organizations 

described in 16 CFR 1500.14(b)(8), these 

audit requirements apply to third party 

conformity assessment bodies operating 

pursuant to section 14(a)(2) of the 

CPSA. Third party conformity 

assessment bodies must comply with 

the audit requirements as a continuing 

condition of the CPSC’s acceptance of 

their accreditation. 

§ 1112.7 What Must an Audit Address or 

Cover? Who Conducts the Audit? 

(a) The reassessment portion of an 

audit may cover the management 

systems, specific tests, types of tests, 

calibrations, or types of calibrations that 

are the subject of the third party 

conformity assessment body’s 

accreditation. Each reassessment 

portion of an audit also must examine 

the third party conformity assessment 

body’s management systems to ensure 

that the third party conformity 

assessment body is free from any undue 

influence regarding its technical 

judgment. 

(b) The third party conformity 

assessment body must have the 

reassessment portion of the audit 

conducted by the same accreditation 

body that accredited the third party 

conformity assessment body. For 

example, if a third party conformity 

assessment body was accredited by an 

accreditation body named AB–1, then 

AB–1 would conduct the reassessment. 

If, however, the same third party 

conformity assessment body changes its 

accreditation, so that it becomes 

accredited by a different accreditation 

body named AB–2, then AB–2 would 

conduct the reassessment. 

(c) The third party conformity 

assessment body must have the 

examination portion of the audit 

conducted by the CPSC. The 

examination portion of the audit will 

consist of resubmission of the 

‘‘Consumer Product Conformity 

Assessment Body Acceptance 

Registration Form’’ (CPSC Form 223) by 

the third party conformity assessment 

body and the CPSC’s examination of the 

resubmitted CPSC Form 223. 

(1) For ‘‘firewalled’’ conformity 

assessment bodies, the CPSC’s 

examination may include verification to 

ensure that the ‘‘firewalled’’ conformity 

assessment body continues to meet the 

criteria set forth in section 14(f)(2)(D) of 

the CPSA. 

(2) For government-owned or 

government-controlled conformity 

assessment bodies, the CPSC’s 

examination may include verification to 

ensure that the government-owned or 

government-controlled conformity 

assessment body continues to meet the 

criteria set forth in section 14(f)(2)(B) of 

the CPSA. 

§ 1112.9 When Must an Audit be 

Conducted? 

(a) At a minimum, each third party 

conformity assessment body must be 

reassessed at the frequency established 

by its accreditation body. 

(b) For the examination portion of the 

audit, which is conducted by the CPSC: 

(1) Each third party conformity 

assessment body must ensure that the 

information it submitted on CPSC Form 

223 is current and submit a new CPSC 

Form 223 whenever the information 

changes. 

(2) In the absence of any changes that 

would necessitate the submission of a 

new CPSC Form 223, the third party 

conformity assessment body must reregister at the CPSC every two years 

using CPSC Form 223. 

(3) If the third party conformity 

assessment body has registered more 

than once with the CPSC, has registered 

at different times, and has no changes in 

information that would warrant the 

submission of a new CPSC Form 223, 

the first examination portion of the 

audit should be performed two years 

after the last registration date, and then 

every two years thereafter. 

(4) If the third party conformity 

assessment body has made changes that 

warranted the submission of a new 

CPSC Form 223, then the first 

examination portion of the audit would 

be performed two years after the 

submission of the new CPSC Form 223. 


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40794 Federal Register / Vol. 74, No. 155 / Thursday, August 13, 2009 / Proposed Rules 

1 7 U.S.C. 24. 

2Section 101(6) of the Bankruptcy Code (11 

U.S.C. 101(6)) defines ‘‘commodity broker’’ as a 

‘‘futures commission merchant, foreign futures 

commission merchant, clearing organization, 

leverage transaction merchant, or commodity 

options dealer, as defined in section 761 of this 

title, with respect to which there is a customer, as 

defined in section 761 of this title.’’ 

3The regulations of the Commission can be found 

at 17 CFR Chapter 1. 

§ 1112.11 What Must a Third Party 

Conformity Assessment Body Do After an 

Audit? 

(a) When the accreditation body 

presents its findings to the third party 

conformity assessment body, the third 

party conformity assessment body’s 

quality manager must receive the 

findings and, if necessary, initiate 

corrective action in response to the 

findings. 

(b) The quality manager must prepare 

a resolution report identifying the 

corrective actions taken and any followup activities. If findings indicate that 

immediate corrective action is 

necessary, the quality manager must 

document that he/she notified the 

relevant parties within the third party 

conformity assessment body to take 

immediate corrective action and also 

document the action(s) taken. 

(c) If the accreditation body decides to 

reduce, suspend, or withdraw the third 

party conformity assessment body’s 

accreditation, and the reduction, 

suspension, or withdrawal of 

accreditation is relevant to the third 

party conformity assessment body’s 

activities pertaining to a CPSC 

regulation or test method, the quality 

manager must notify the CPSC. Such 

notification must be sent to the 

Assistant Executive Director, Office of 

Hazard Identification and Reduction, 

Consumer Product Safety Commission, 

4330 East West Highway, Bethesda, 

Maryland 20814, within five business 

days of the accreditation body’s 

notification to the third party 

conformity assessment body. 

(d) If the CPSC finds that the third 

party conformity assessment body no 

longer meets the conditions specified in 

CPSC Form 223 or in the relevant 

statutory provisions applicable to that 

third party conformity assessment body, 

the CPSC will notify the third party 

conformity assessment body, identify 

the condition or statutory provision that 

is no longer met, and specify a time by 

which the third party conformity 

assessment body shall notify the CPSC 

of the steps it intends to take to correct 

the deficiency and when it will 

complete such steps. The quality 

manager must document that he/she 

notified the relevant parties within the 

third party conformity assessment body 

to take corrective action and also 

document the action(s) taken. 

(e) If the third party conformity 

assessment body fails to remedy the 

deficiency in a timely fashion, the CPSC 

shall take whatever action it deems 

appropriate under the circumstances, up 

to and including withdrawing the 

CPSC’s accreditation of the third party 

conformity assessment body or the 

CPSC’s acceptance of the third party 

conformity assessment body’s 

accreditation. 

§ 1112.13 What Records Should a Third 

Party Conformity Assessment Body Retain 

Regarding an Audit? 

A third party conformity assessment 

body must retain all records relating to 

an audit and all records pertaining to 

the third party conformity assessment 

body’s resolution of or plans for 

resolving nonconformities identified 

through a reassessment by an 

accreditation body or through an 

examination by the CPSC. A third party 

conformity assessment body also must 

retain such records relating to the last 

three reassessments (or however many 

reassessments have been conducted if 

the third party conformity assessment 

body has been reassessed less than three 

times) and make such records available 

to the CPSC upon request. 

Dated: August 7, 2009. 

Todd A. Stevenson, 

Secretary. 

[FR Doc. E9–19443 Filed 8–12–09; 8:45 am] 

BILLING CODE 6355–01–P 

COMMODITY FUTURES TRADING 

COMMISSION 

17 CFR Part 190 

RIN 3038–AC82 

Account Class 

AGENCY: Commodity Futures Trading 

Commission. 

ACTION: Notice of proposed rulemaking. 

SUMMARY: The Commodity Futures 

Trading Commission (the 

‘‘Commission’’) proposes amending its 

regulations (the ‘‘Regulations’’) to create 

a sixth and separate ‘‘account class,’’ 

applicable only to the bankruptcy of a 

commodity broker that is a futures 

commission merchant (‘‘FCM’’), for 

positions in cleared over-the-counter 

(‘‘OTC’’) derivatives (and money, 

securities, and/or other property 

margining, guaranteeing, and securing 

such positions). In general, the concept 

of ‘‘account class’’ governs the manner 

in which the trustee calculates the net 

equity (i.e., claims against the estate) 

and the allowed net equity (i.e., pro rata 

share of the estate) for each customer of 

a commodity broker in bankruptcy. The 

Commission further proposes amending 

the Regulations to codify the 

appropriate allocation, in a bankruptcy 

of any commodity broker, of positions 

in commodity contracts of one account 

class (and the money, securities, and/or 

other property margining, guaranteeing, 

or securing such positions) that are 

commingled with positions in 

commodity contracts of the futures 

account class (and the money, 

securities, and/or other property 

margining, guaranteeing, or securing 

such positions), pursuant to an order 

issued by the Commission. 

DATES: Submit comments on or before 

September 14, 2009. 

ADDRESSES: You may submit comments, 

identified by RIN number, by any of the 

following methods: 

• Federal eRulemaking Portal: http:// 

www.regulations.gov. Follow the 

instructions for submitting comments. 

• Agency Web Site: http:// 

www.cftc.gov. Follow the instructions 

for submitting comments on the Web 

site. 

• E-mail: secretary@cftc.gov. Include 

the RIN number in the subject line of 

the message. 

• Fax: 202–418–5521. 

• Mail: David A. Stawick, Secretary of 

the Commission, Commodity Futures 

Trading Commission, Three Lafayette 

Centre, 1155 21st Street, NW., 

Washington, DC 20581. 

• Hand Delivery/Courier: Same as 

mail above. 

FOR FURTHER INFORMATION CONTACT: 

Robert B. Wasserman, Associate 

Director, Division of Clearing and 

Intermediary Oversight, 202–418–5092, 

rwasserman@cftc.gov; or Nancy 

Schnabel, Attorney-Advisor, Division of 

Clearing and Intermediary Oversight, 

202–418–5344, nschnabel@cftc.gov; 

Commodity Futures Trading 

Commission, Three Lafayette Centre, 

1155 21st Street, NW., Washington, DC 

20581. 

SUPPLEMENTARY INFORMATION: 

I. Net Equity 

A. Authority of Commission To Define 

‘‘Net Equity’’ and To Prescribe 

Procedures for Its Calculation 

The Commission is empowered by 

Section 20 of the Commodity Exchange 

Act (the ‘‘Act’’),1 (i) to define the ‘‘net 

equity’’ of a customer of a commodity 

broker 2 in bankruptcy, and (ii) to 

prescribe, by rule or regulation,3 the 

procedures for calculating such ‘‘net 


sroberts on DSKGBLS3C1PROD with PROPOSALS