Consumer Safety: Better Information and Planning Would Strengthen CPSC's Oversight of Imported Products
Published: 2009-08-14T00:00:00

Fast Facts:

Highlights:
section_title: Why GAO Did This Study
paragraphs: The growing volume of consumer products imported into the United States has strained the resources of the Consumer Product Safety Commission (CPSC), challenging the agency to find new ways to ensure the safety of these products. The Consumer Product Safety Improvement Act (CPSIA) mandated that GAO assess the effectiveness of CPSC's authorities over imported products. GAO's objectives were to (1) determine what is known about CPSC's effectiveness in using these authorities, (2) compare CPSC's authorities with those of selected U.S. agencies and international entities, and (3) evaluate CPSC's plans to prevent the entry of unsafe consumer products. To address these objectives, GAO analyzed CPSC and other agencies' and entities' authorities, reviewed literature on consumer product safety, and compared CPSC's planning efforts with criteria for effective planning practices.
section_title: What GAO Found
paragraphs: GAO found broad consensus that CPSC's authorities over imported consumer products have the potential to be effective. However, CPSC has made limited progress in measuring the effectiveness of its authorities, and CPSC's ability to implement these authorities has been constrained by competing priorities and limited resources, as well as by delays in implementing key provisions of CPSIA. CPSC's presence at U.S. ports is limited and, in order to identify potentially unsafe products, it must work closely with U.S. Customs and Border Protection (CBP), which faces pressure to quickly move shipments into commerce. CPSC does not have access to key CBP import data it could use to target incoming shipments for inspection, and it has not updated its agreements with CBP to clarify each agency's roles and responsibilities. CPSC's activities at U.S. ports could be strengthened by better targeting incoming shipments for inspection and by improving CPSC's coordination with CBP. Otherwise, CPSC may not be able to carry out key inspection activities efficiently or to effectively leverage its enforcement priorities with CBP. Select federal agencies and foreign governments provide lessons for strengthening CPSC's implementation of its authorities, particularly with respect to border surveillance and information sharing among countries. Both USDA and FDA have more robust border surveillance activities than CPSC because they obtain more data on incoming shipments, have more staff working at U.S. ports, use more developed programs to target risks, and use information technology systems that are integrated with other agency-based and CBP systems to effectively leverage their enforcement priorities with CBP. Other agencies have found that timely CBP import data integrated with other agency surveillance data is useful in screening incoming shipments for potential safety violations. In addition, officials at FDA and USDA have found that efforts to educate overseas industries and governments on U.S. safety standards could reduce the number of unsafe products that reach U.S. consumers. GAO also found broad consensus that continued coordination and information sharing among governments and multilateral organizations can improve the effectiveness of product safety frameworks. CPSC has increased its efforts to coordinate with these other entities, particularly China, but lacks a comprehensive plan for international engagement. CPSC has established annual plans, but lacks a long-term plan with key goals to prevent the entry of unsafe products. CPSC has not yet updated its agencywide Strategic Plan to reflect new authorities granted in CPSIA. This may inhibit CPSC's ability to appropriately allocate any potential increases in agency resources or to address the safety of imported products through international means. An updated Strategic Plan may also help to ensure that CPSC has the requisite compliance and analytical staff to support the full range of CPSC's international efforts.

section_title: Letter
paragraphs: The growing volume of consumer products—such as toys, household  appliances, and children’s apparel—imported into the United States has  strained the resources of the Consumer Product Safety Commission  (CPSC) and is challenging the agency to find new ways to ensure the  safety of these products. From 1998 to 2007, the value of consumer  products imported into the United States increased about 101 percent,  with products from China (which includes Hong Kong) nearly quadrupling  over that same period to constitute about 42 percent of all imported  consumer goods. In addition to the growing value of imports, the number  and variety of consumer products have been increasing. Consumer  products are becoming more technically complex and sophisticated, and  they increasingly are not “from” any one place but rather consist of parts  and components from any number of countries.
Increasing imports of consumer products gained national attention in  2007. During that year, CPSC announced 473 recalls, the most in 10 years,  and 389 of the recalls (or about 82 percent) involved products imported  into the country. As a result, 2007 became known to some as “the year of  the recall.” The number of product recalls in fiscal year 2008 was even  higher. These record numbers of recalls have raised the issue of whether  CPSC can ensure the safety of products that are increasingly  manufactured overseas.
While the number of consumer products imported into the United States  has been increasing, CPSC has become progressively smaller in terms of  staff and resources. The commission has not had a full slate of five  commissioners since 1986 and has not been authorized to fund more than  three commissioner positions since 1993. In fiscal year 2008, CPSC had 396  full-time employees, compared with 480 full-time employees in fiscal year  1997. CPSC’s fiscal year 2008 appropriation totaled about $80 million, and  CPSC’s fiscal year 2009 appropriation was not passed until March 2009— about 6 months into the fiscal year 2008—due to a congressional  continuing budget resolution.
In response to the high-profile recalls of imported products in 2007, as well  as concerns that CPSC was inadequately staffed and funded to enforce  existing product safety laws, Congress passed the Consumer Product  Safety Improvement Act (CPSIA), which became law on August 14, 2008.  CPSIA was intended to update and strengthen CPSC by authorizing  expanded funding, mandating increased staffing subject to available  appropriations, and enhancing existing CPSC authorities, including those  regarding product safety standards, recalls, reporting, and administrative  penalties. In addition, CPSIA introduced several new statutory tools to  address the safety of imported products. Because Congress was concerned  that there may be remaining gaps in U.S. product safety law or unforeseen  consequences of CPSIA with respect to imported products, CPSIA  mandated GAO to review a range of issues regarding CPSC’s authorities to  prevent the entry of unsafe products into the United States. Because  CPSIA was recently passed, and CPSC has not had time to implement it  fully, we responded to the mandate by (1) determining how CPSC assesses  the effectiveness of its authorities in preventing the entry of unsafe  consumer products and determining what is known about CPSC’s  effectiveness in using these authorities, (2) comparing certain aspects of  CPSC’s authorities with those of selected U.S. agencies, (3) comparing  CPSC’s authorities with those of selected international entities, and   (4) evaluating CPSC’s plans to prevent the entry of unsafe consumer  products in the future.
To determine the effectiveness of CPSC’s import safety authorities, we  examined CPSC data and interviewed CPSC officials to learn how the  agency measures and assesses its own effectiveness. We conducted  extensive document reviews on consumer product safety generally and  import safety specifically. We interviewed legal professionals and  consumer and industry representatives to obtain their perspectives on the  effectiveness of CPSC’s authorities. We also interviewed officials from  other federal agencies involved in product safety at the international level,  including U.S. Customs and Border Protection (CBP), the Office of the  United States Trade Representative (USTR), and the Departments of State  and Commerce. We visited a U.S. port of entry to observe CPSC import  surveillance activities and CPSC’s interaction with CBP staff at the port.  We also visited CPSC’s Product Testing Laboratory in Gaithersburg,  Maryland, to observe laboratory testing that supports import safety  activities. Furthermore, we conducted a comparative analysis of CPSC’s  authorities to prevent the entry of unsafe consumer products to similar  authorities of selected U.S. federal agencies and selected countries. For  our comparative analysis of U.S. federal agencies, we selected agencies  that regulate the safety of products used by consumers and that possess  recent, relevant experience with import safety. Specifically, we selected  the U.S. Department of Agriculture (USDA), the Department of Health and  Human Services’ Food and Drug Administration (FDA), and the  Department of Transportation’s National Highway Traffic Safety  Administration (NHTSA). We conducted interviews with agency officials  and reviewed agency statutes, regulations, and other documents. For our  comparative analysis of other countries’ product safety authorities, we  selected Australia, Canada, China, the European Union (EU), and Japan  for review. We developed a set of questions concerning consumer product  safety authorities, practices, and procedures and worked through the U.S.  Department of State to distribute the questions to appropriate contacts at  U.S. embassies overseas and, in some cases, to foreign embassies in  Washington, D.C. We conducted interviews with product safety officials  from Canada, the EU, and Japan, and with U.S. officials at the embassies in  Australia, Canada, and China. We received written responses to our  questions from the U.S. embassies in Australia, Canada, and China; from  officials with the Embassy of Japan in Washington, D.C.; and from  consumer product safety officials in the EU. We also reviewed documents  regarding product safety in the selected countries and reports on  consumer product safety prepared by the Organization for Economic  Cooperation and Development (OECD). To evaluate CPSC’s plans to  prevent the entry of unsafe products in the future, we reviewed CPSC’s  2010 Performance Budget Request and compared CPSC’s planning efforts  with guidance GAO has developed to assess implementation of the  Government Performance and Results Act. Appendix I provides a more  detailed description of our objectives, scope, and methodology.
We conducted this performance audit from October 2008 to August 2009,  in accordance with generally accepted government auditing standards.  Those standards require that we plan and perform the audit to obtain  sufficient, appropriate evidence to provide a reasonable basis for our  findings and conclusions based on our audit objectives. We believe that  the evidence obtained provides a reasonable basis for our findings and  conclusions based on our audit objectives.
subsections: section_title: Background
paragraphs: CPSC was created in 1972 under the Consumer Product Safety Act to  regulate consumer products that pose an unreasonable risk of injury; to  assist consumers in using products safely; and to promote research and  investigation into product-related deaths, injuries, and illnesses. The  Consumer Product Safety Act consolidated existing federal safety  regulatory activity related to consumer products within CPSC. As a result,  in addition to general responsibilities for protecting consumers against  product hazards, the duties and functions under the following four statutes  were transferred to CPSC:   the Flammable Fabrics Act, which among other things, authorizes CPSC to  prescribe flammability standards for clothing, upholstery, and other  fabrics;  the Federal Hazardous Substances Act, which establishes the framework  for the regulation of substances that are toxic, corrosive, combustible, or  otherwise hazardous;  the Poison Prevention Packaging Act of 1970, which authorizes CPSC to  prescribe special packaging requirements to protect children from injury  resulting from handling, using, or ingesting certain drugs and other  household substances; and  the Refrigerator Safety Act of 1956, which mandates CPSC to prescribe  safety standards for household refrigerators to ensure that the doors  thereof can be opened easily from the inside.
CSPC has also subsequently been charged with administering the Virginia  Graeme Baker Pool and Spa Safety Act, which establishes mandatory  safety standards for swimming pool and spa drain covers, as well as a  grant program to provide states with incentives to adopt pool and spa  safety standards. In addition, CPSC has been charged with administering  the Children’s Gasoline Burn Prevention Act, which establishes safety  standards for child-resistant closures on all portable gasoline containers.
Thus, CPSC’s jurisdiction is extremely broad, covering thousands of types  of products. According to CPSC, this jurisdiction covers over 100,000  different manufacturers and generally includes all consumer products  except food, drugs, and cosmetics, which are regulated by FDA;  pesticides, which are regulated by the Environmental Protection Agency;  automobiles and other on-road vehicles, which are regulated by the  Department of Transportation; flotation devices, which are regulated by  the Coast Guard; and firearms, tobacco, and alcohol, which are regulated  by the Department of Justice.
The Consumer Product Safety Act established CPSC as an independent  regulatory commission. The rationale for establishing independent  commissions such as CPSC includes these assumptions: (1) long-term  appointment of commissioners would promote stability and develop  expertise, (2) independent status would insulate the commissioners from  undue economic and political pressures, and (3) commissioners with  different political persuasions and interests would provide diverse  viewpoints. The act provides for the appointment by the President of five  commissioners for staggered 7-year terms. However, no more than three  commissioners have served at one time since 1986, and the commission  has been led by two commissioners since 2006. One of these  commissioners is designated the Chairman, who directs all the executive  and administrative functions of the agency.
CPSC was designed as a complement to tort law, under which one may  seek compensation for harm caused by another’s wrongdoing. The threat  of legal action under tort law plays an important role in assuring that  companies produce safe products. However, tort law is primarily a  postinjury mechanism, and foreign manufacturers are usually outside of  the U.S. tort law system. Therefore, CPSC has certain authorities intended  to prevent unsafe consumer products from entering the market in the first  place.
subsections: section_title: CPSC Protects Consumers Primarily through Product Safety Standards
paragraphs: Under several of the acts that it administers, CPSC primarily protects  consumers from unreasonable risk of injury or death by issuing  regulations that establish performance or labeling standards for consumer  products. These standards are often referred to as “mandatory  standards.” CPSC issued 38 mandatory standards between 1990 and 2007.  If CPSC determines that there is no feasible standard that would  adequately protect the public from danger, CPSC may issue regulations to  ban the manufacture and distribution of the product.
Many consumer products are subject to voluntary standards. These  voluntary standards, which are often established by private standard- setting groups, do not have the force of law. However, many voluntary  standards are established with input from consumer groups and industry  and, as a result, are often referred to as “consensus standards.” In addition,  the 1981 amendments to the Consumer Product Safety Act require CPSC  to defer to a voluntary standard—rather than issuing a mandatory  regulation—if CPSC determines that the voluntary standard adequately  addresses the hazard and that there is likely to be substantial compliance  with the voluntary standard. Between 1990 and 2007, CPSC worked with  industry and others to develop 390 voluntary standards related to  consumer products.
section_title: Import Safety Responsibility within CPSC
paragraphs: CPSC’s policy on imported products states that the commission will seek  to ensure that importers and foreign manufacturers, as well as domestic  manufacturers, distributors, and retailers, carry out their obligations and  responsibilities under the five acts. The commission will also seek to  establish, to the maximum extent possible, uniform import procedures for  products subject to the acts the commission administers.
Two CPSC staff offices have primary responsibility for carrying out this  policy: the Office of International Programs and Intergovernmental Affairs  and the Office of Compliance and Field Operations. The Office of  International Programs and Intergovernmental Affairs was created in 2004  to provide CPSC with a more comprehensive and coordinated effort at the  international, federal, state, and local levels in developing and  implementing consumer product safety standards. The office conducts  activities and creates strategies aimed at ensuring greater import  compliance with recognized American safety standards. A major emphasis  of this program is encouraging foreign manufacturers to establish product  safety systems as an integral part of the manufacturing process. The office  is also involved in coordinating international consumer product safety  efforts with such U.S. federal agencies as the Departments of Commerce  and State. It also ensures that CPSC regulatory efforts are consistent with  U.S. international trade obligations by coordinating with the United States  Trade Representative. As of July 2009, the office was staffed by four full- time employees.
The Import Surveillance Division within the Office of Compliance and  Field Operations was created in March 2008 and has primary responsibility  for CPSC’s product surveillance program at ports of entry. CPSC, in  cooperation with other appropriate federal agencies, is required to  maintain a permanent product surveillance program for preventing the  entry of unsafe consumer products into the commerce of the United  States. Previously, CPSC operated the import surveillance program  through product safety investigators staffed in multiple regions throughout  the country who included among their investigative responsibilities ports  of entry in their particular regions. Over the years, the numbers of CPSC  regional offices and product safety investigators have been reduced. CPSC  states that these product safety investigators continue to support the  import surveillance program, operating in 48 locations throughout the  country. The Import Surveillance Division marks the first permanent, full- time presence of CPSC investigators at key ports of entry, according to  CPSC. As of July 2009, the division was staffed by 11 full-time employees— 9 compliance investigators located at seven ports of entry and a Director  and Supervisory Compliance Investigator located at CPSC headquarters in  Bethesda, Maryland. The compliance investigators are supported by  compliance officers, technical staff, attorneys, and other staff at CPSC  headquarters. There are over 300 ports of entry in the United States.
section_title: CPSC Works Closely with CBP at Ports of Entry
paragraphs: CBP notifies CPSC and other regulatory agencies with import safety  responsibilities of the arrival of imported products and provides  information about those products.  Under several of the acts that CPSC  administers, CPSC identifies potentially unsafe products and requests that  CBP set them aside for CPSC examination. CPSC has implemented  programs at some ports for CBP to target certain categories of products  based on their Harmonized Tariff Schedule (HTS) codes. CBP has import  specialists at major ports who specialize in certain commodities, including  consumer products. They analyze manifest, entry, and other import data to  identify shipments for CPSC review. In some instances, CBP will  independently identify shipments for CPSC examination. Once samples  are delivered to or taken by CPSC for examination, CPSC may detain the  shipment pending further examination and testing, conditionally release  the shipment to the importer’s premises pending examination and testing,  or release the shipment to the importer outright. Compliance investigators  examine the sample to determine whether it    complies with the relevant mandatory standard(s);  is accompanied by a certification of compliance with the relevant  product safety standard that is supported by testing, in some instances  by a third party;  is or has been determined to be an imminently hazardous product;    has a product defect that presents a substantial product hazard; or  is produced by a manufacturer who failed to comply with CPSC  inspection and recordkeeping requirements.
If compliance investigators decide that further testing of a sample is  necessary, they will send the sample to the CPSC Product Testing  Laboratory or to a CBP laboratory. If the sample is found to violate any  of the above criteria, CPSC is authorized to refuse admission of the  shipment. Consumer products that are refused admission will be  destroyed unless the Secretary of the Treasury allows the product to be  exported.  CPSC may instead instruct CBP to seize shipments upon  finding a prohibited act, which according to CPSC is the most common  outcome when a violation is discovered. The importer may be subject to  civil or criminal penalties.  See figure 1 for an overview of CBP andpections at ports of entry.  CPSC’s current process for conducting ins CPSC relies on CBP to carry out key import surveillance activities at ports  of entry. In addition to its numerous antiterrorism and trade  responsibilities, CBP faces pressure from the international trade  community to quickly move compliant shipments into commerce. Factors  such as the high volume of containers, financial incentives for  longshoremen to unload ships quickly, and the limited amount of time  CBP has to identify and examine cargo contribute to the challenges CBP  faces in facilitating commerce. In addition, CBP enforces regulations for  45 other federal agencies. Importers place pressure on CBP to correctly  identify violations because the cost of storing CBP-detained products at  privately run container examination stations is high. CPSC surveillance  SC surveillance  activity with CBP at ports of entry has fluctuated in recent years. For  activity with CBP at ports of entry has fluctuated in recent years. For  example, as shown in figure 2, the number of samples that CPSC collecte example, as shown in figure 2, the number of samples that CPSC collecte for examination dropped from 1,348 in fiscal year 1999 to 710 and 514 in  for examination dropped from 1,348 in fiscal year 1999 to 710 and 514 in  fiscal years 2002 and 2003 and has still not reached the 1999 level, despite fiscal years 2002 and 2003 and has still not reached the 1999 level, despite an increa an increase in imports of products under CPSC jurisdiction of about 101  percent. se in imports of products under CPSC jurisdiction of about 101  percent.
section_title: CPSC’s Authorities Have the Potential to Be Effective, but Implementation Is Limited by Incomplete Information on Imported Products and Resource and Practical Constraints
paragraphs: Consensus exists that CPSC’s authorities have the potential to be effective  in preventing the entry of unsafe products into the United States. Although  CPSC has made limited progress in measuring the effectiveness of its  authorities over imported products, the agency believes that new  authorities granted in CPSIA should increase compliance with mandatory  standards and enhance its ability to monitor compliance with voluntary  standards at ports of entry. Private industry sources and others we  interviewed generally said that CPSC’s authorities are potentially effective  but that implementation is limited by competing priorities and resource  and practical constraints.
subsections: section_title: Consensus Exists That CPSC Has Broad Authority over Imported Products, but CPSC’s Assessment of Effectiveness Has Been Limited
paragraphs: There is consensus among those we interviewed that CPSC has broad  authority to prevent the entry of unsafe consumer products into the United  States, particularly in light of new authorities that strengthen its ability to  enforce mandatory standards and protect consumers from unsafe  products subject to voluntary standards at ports of entry. As described  above, CPSC primarily protects consumers from unreasonable risk of  injury by promulgating mandatory standards and working with private  standard-setting organizations to promulgate voluntary standards, and  CPSC has broad authority to enforce those standards at ports of entry. In  particular, CPSC and other product safety experts believe CPSC’s  enforcement of mandatory standards at ports of entry will be strengthened  because now all products subject to a mandatory standard under any law  administered by CPSC must be accompanied by a certification of  compliance that is supported by product testing. In addition, every  manufacturer or private labeler of a product subject to a children’s  product safety rule must have samples of the product tested by an  accredited third-party laboratory for conformance with the applicable  mandatory standard. For many years, CPSC focused import surveillance  activities on enforcement of certain mandatory standards for consumer  products, primarily toys, fireworks, and lighters. The new testing  requirement puts greater burden on industry to ensure that products  comply with mandatory standards. If implemented properly, CPSC should  be able to use the testing and certification requirements to strengthen  surveillance of regulated products at ports of entry.
Furthermore, CPSC believes its ability to monitor compliance with  voluntary standards at ports of entry will be strengthened by new  authority to create a “substantial product hazard list.”  As described  above, many consumer products are produced according to voluntary  standards. In addition, many products are subject to no standards. CPSC  primarily protects consumers from unsafe products subject to voluntary or  no standards by declaring them “substantial product hazards” when the  products have a defect that creates a substantial risk of injury. However,  CPSC faces difficulty at ports of entry identifying defects in products  subject to voluntary or no standards because defects are not always  apparent until the product has been used by the public. With  implementation of the substantial product hazard list, CPSC will be able to  target new shipments and refuse admission of products subject to  voluntary standards that it has already determined have a defect  constituting a substantial risk of injury.
Despite this broad authority, CPSC has made limited progress in  measuring the effectiveness of its authorities to prevent the entry of  unsafe consumer products. CPSC measures the performance of its import  surveillance program by the number of product samples collected and by  the number of samples ultimately found to be unsafe and therefore seized.  CPSC is now considering altering this metric so that it will track all  shipments that CPSC investigators examine, rather than just those samples  collected and tested. Furthermore, CPSC measures the performance of its  Office of International Programs and Intergovernmental Affairs by the  number of outreach events conducted. These metrics provide measures of  the output of program staff but do not necessarily provide accurate  measures of the effectiveness of the programs. In the 1990s, CPSC used  industry compliance with mandatory standards as an alternative basis for  measuring the agency’s effectiveness, what it termed the Comprehensive  Plan. The plan was designed to examine the compliance of these products  with mandatory standards on a periodic basis and then identify problem  areas for focusing limited agency resources. CPSC did not continue the  Comprehensive Plan after the mid-1990s because the data indicated that  compliance was high, and CPSC believed that the plan did not help it  address problems with noncompliant products. CPSC sought information  from the public in 2008 to develop a new methodology that would replace  the Comprehensive Plan. CPSC reported receiving two responses, but  commission staff stated that they did not pursue further work because the  responses did not address their needs for developing new performance  measures. While CPSC recognizes the need for outcome-oriented  performance measures and has taken steps to develop new measures,  without these measures, CPSC may not be able to determine how effective  its authorities are for preventing the entry of unsafe products.
section_title: Implementation of CPSC’s New Authorities to Prevent Entry of Unsafe Products into the United States Has Been Delayed
paragraphs: While CPSC has broad authority to prevent the entry of unsafe consumer  products into the United States, there have been delays in implementing  new authorities CPSC received in CPSIA. According to CPSC, the agency  has more than 40 rulemakings to conduct under CPSIA, including  approximately 20 rulemakings to initiate or complete by August 2010,  which has contributed to the delay in implementing the act. In particular,  the two new authorities discussed above—certain testing and certification  requirements and the substantial product hazard list—have not been  implemented. CPSC issued a stay of enforcement of certain testing and  certification requirements until February 10, 2010, delaying  implementation of these standards and raising questions among  manufacturers subject to this requirement. CPSC stated that it did not  complete the rulemaking process because it was unable to respond to  innumerable inquiries from industry seeking relief from the testing  requirement at a time when the agency faced severe resource limitations  because it was operating under the prior year’s budget. In addition, to date  CPSC has not conducted rulemaking to implement the substantial product  hazard list. The effectiveness of CPSC’s new authorities will not be clear  until CPSC completes its rulemaking and demonstrates the ability to  enforce these regulations.
Another factor contributing to delays in implementation of new authorities  is the need for CPSC to balance its mission to protect consumers with  industry interests. CPSC’s mission is to protect the public from  unreasonable risk of injury associated with consumer products, and CPSC  is also required to work with industry to develop product safety standards,  collect information about unsafe products, and conduct recalls. Private  companies have expressed concerns about CPSC’s implementation of  CPSIA, particularly the expanded testing and certification requirements,  which, as noted earlier, helped contribute to CPSC’s decision to delay  enforcement of these provisions. In public comments on CPSIA, several  industry representatives commented that the certification requirements  are duplicative and could cause them to incur tremendous costs due to the  complexity of their business operations. For example, industry  representatives stated that large manufacturers produce hundreds of  thousands of variations of their products that may require testing and  certification, while small manufacturers may have limited product lines  across which to spread costs.
In addition to industry concerns, CPSC has also faced concerns from  consumers that CPSC’s implementation of CPSIA has not, at times,  fulfilled the consumer protection goals of the act. In one recent example,  consumer groups challenged CPSC’s advisory opinion that CPSIA’s  provisions prohibiting the sale of children’s products that contain certain  chemicals called phthalates did not apply retroactively to inventories  existing prior to the effective date of the prohibitions. These groups were  concerned that if the phthalate prohibitions were not applied retroactively,  consumers would continue to be exposed to unsafe products in the  marketplace. The consumer groups filed suit in a federal district court  seeking a declaratory judgment that CPSC’s advisory opinion, which was  issued at the request of certain wholesale and retail entities, was contrary  to CPSIA, and thus violated the Administrative Procedure Act. The district  court held that the phthalate prohibitions in CSPIA unambiguously applied  to existing inventory and set aside CPSC’s opinion.
According to some industry representatives we interviewed, retailers are  taking the lead in product testing and certification in response to  industry’s uncertainty over how CPSC will enforce CPSIA provisions.  These representatives believed that retailers are ahead of CPSC in this  regard. For example, one industry group said that although CPSC has  stayed enforcement of many of its certification requirements, retailers still  require suppliers to provide certifications, and some retailers had more  stringent lead standards than CPSIA. According to industry groups, U.S.  companies, particularly retailers, have an incentive to institute and enforce  stringent product safety standards because selling products that cause  injury or death can have negative impacts on their brands. The U.S. tort  system that exposes companies selling unsafe products to lawsuits also  helps to ensure that companies comply with product safety standards. To  respond to industry concerns about how to comply with safety standards  under current and prior consumer product safety laws, some industry  groups have also developed or are developing their own testing and  certification programs. CPSC indicated that while these types of  programs can help improve compliance with safety standards, there are  limits to how well this type of industry self-regulation can be used to  protect consumers. They indicated that there is a trade-off between  consumer protection and industry cooperation; if the requirements are too  onerous, companies might not participate in these voluntary programs.  Balancing the interests of both consumer and industry participants adds  complexity in completing CPSC’s implementation of CPSIA.
section_title: CPSC Needs Better Targeting Information to Strengthen Enforcement with CBP at Ports of Entry
paragraphs: CPSC needs better targeting information to strengthen its ability to  identify risks from imported products and communicate inspection  priorities to CBP. CPSC and CBP have a cooperative relationship at ports  of entry. That is, while CPSC relies on CBP to carry out key import  surveillance and targeting activities at ports, CBP relies on CPSC to  communicate the greatest risks and its inspection priorities among  consumer products. However, CPSC has not developed formal systems for  assessing risks and focusing inspection activities with CBP. Furthermore,  CPSC does not have access to information that would enable the agency to  effectively target potentially unsafe imported products for inspection.
subsections: section_title: Updated MOU with CBP Would Be Useful as CPSC Develops Its Risk Assessment Methodology
paragraphs: In the past, CPSC has generally used informal systems to target risks from  imported products and to conduct operations with CBP at ports of entry  with some positive results. CPSC has generally been effective using its  informal systems to target certain products for inspection, according to  several product safety experts we interviewed. For instance, CPSC has  targeted imported fireworks for increased inspections during the summer  months. CPSC has also had positive results from its participation in  Operation Guardian, a multiagency effort to combat the increasing  importation of substandard, tainted, and counterfeit products that pose a  health and safety risk to consumers. Another program that CPSC stated  has produced positive results is an expansion of the CBP Importer Self- Assessment Program that was initiated in October 2008. The expansion,  known as the Importer Self-Assessment Product Safety Pilot, aims to  prevent unsafe imports from entering the United States by requiring  volunteer companies to meet specified internal monitoring criteria in  exchange for priority in testing, reductions in the testing conducted, and  access to CPSC training programs. However, as discussed above, CPSC  targeted relatively few imported consumer products for inspection under  its informal system.
CPSIA requires CPSC to establish a formal risk assessment methodology  that will require updating the terms of the relationship between the  agencies. CPSC and the former U.S. Customs Service (now CBP)  established a memorandum of understanding (MOU) in 1990 that serves as  the foundation for the working relationship of the agencies for  enforcement of CPSC’s authorities over imported products. For example,  the MOU provides for “the joint conduct of a mutually agreed number of  high-visibility, intensive inspection operations annually.” This provision is  consistent with CPSC’s informal system for targeting risks. The MOU is  now out of date and does not reflect anticipated changes to CPSC’s  relationship with CBP required under CPSIA. CPSIA requires CPSC, by  August 2010, to develop a methodology for identifying shipments of  imported consumer products that are likely to violate import provisions  enforced by CPSC. A CPSC official told us that, as part of the agency’s  work to develop this risk assessment methodology, CPSC plans to create a  flowchart of the current product-entry process to identify gaps in any  current CPSC authorities to stop unsafe products at the ports. The official  noted that CPSC anticipates completing the flowchart later this year.  Updating the 1990 MOU between CPSC and CBP and thereby revisiting the  roles and responsibilities of each agency would be a useful way for CPSC  to identify gaps in the current product entry process and speed completion  of its risk assessment methodology.
section_title: Better Advance Shipment Data Would Strengthen CPSC’s Targeting Efforts
paragraphs: During interviews with CPSC staff and our visit to a U.S. port of entry to  determine how CPSC prevents the entry of unsafe products into the  United States, we found that CPSC does not have access to CBP data that  would provide CPSC with information about products in a shipment  before it arrives in the United States. CPSC has access to entry summary  data, which CBP generally receives shortly before a shipment enters the  United States or, in some cases, as many as 10 days after the shipment has  been released into commerce. However, CPSC does not have access to  manifest data, which is provided to CBP 24 hours before a shipping vessel  bound for the United States is loaded at a foreign port. CPSC and CBP  established a second MOU in 2002, which superseded the 1990 MOU,  specifying procedures and guidelines for information sharing between the  agencies with a particular focus on CPSC access to CBP data systems. The  2002 MOU was intended to allow CPSC access to both entry summary and  manifest data. According to a CPSC official, CBP has not provided CPSC  with access to manifest data because it believed the data were not specific  enough for CPSC purposes. For instance, the manifest data generally do  not include the name of the importer and may not have specific  Harmonized Tariff Schedule codes to help CPSC identify the merchandise  in the shipment. However, CPSC still believes that manifest data will help  the agency improve its targeting, as it will give CPSC more timely  information on shipments and potentially more specific information as  CPSC seeks to revise the Harmonized Tariff Schedule codes to better align  them with the categories of products they regulate. CBP also  acknowledged that, while CPSC can use the entry summary data to target  future shipments for inspection, CPSC cannot place inspection holds on  shipments that are about to depart for or are in transit to the United States  without the manifest data. In comparing CPSC border surveillance  activities with those of other federal agencies that regulate the safety of  products used by consumers, we found that FDA has a stronger capability  to target imports using CBP data (discussed further below). FDA receives  advance shipment data from CBP of all entries containing food under FDA  jurisdiction that arrive at ports, which FDA then screens electronically  against criteria it developed to detect potential violations.
CPSC and CBP state that they have been working together to resolve  information-sharing issues. Specifically, in February 2007, CPSC applied  for access to the International Trade Data System (ITDS), which CBP  intends to be a single source for import and export documentation that is  to provide participating agencies quicker access to data and improved  ability to identify potentially unsafe shipments of consumer products. As  part of the application process, CPSC has submitted to CBP for review an  operations plan (a “Concept of Operations” or “ConOps”) and an update to  the 2002 MOU with guidelines for the exchange of information. The  agencies have had follow-up discussions on these plans; however, CBP has  reported that implementation of ITDS has been delayed. As a result,  CPSC’s efforts to access more complete import data to help it better target  incoming shipments have also been delayed. CPSC staff said that they  anticipate this work will not be completed until at least 2011.
In addition to this effort, CPSIA requires CPSC and CBP to improve  information sharing and coordination. Specifically, CPSIA requires CPSC  to develop, by August 2009, a plan for sharing information and  coordinating with CBP. According to CPSIA, the proposed plan is to  consider, at a minimum, the number of CPSC staff that should be stationed  at U.S. ports and the nature and extent of cooperation between CPSC and  CBP at the ports. The plan is also to discuss the nature and extent of  cooperation between CPSC and CBP at the National Targeting Center or  its equivalent. CPSC has not completed this plan, and it is unlikely to do  so until it updates information-sharing agreements with CBP.
A CPSC official told us that as part of developing this plan for sharing  information with CBP, CPSC is seeking to assign a staff member to a  planned CBP targeting center that would focus on health and safety issues.  This targeting center, which would be equivalent to the National Targeting  Center, would seek to identify shipments of imported products that should  be stopped at the ports for further screening and review. A CPSC official  said that, in assigning a staff person to this targeting center, the agency  would have access to CBP’s Automated Targeting System. However,  creation of the health and safety planned targeting center has been  delayed, so CPSC has not been able to place staff at the center or access  CBP targeting information, delaying its ability to better target imported  products. A CPSC official explained that the analytical approach that FDA  took by creating its own system for analyzing data would require a  considerable investment of both time and money. CPSC prefers the option  of working with CBP through the planned targeting center to leverage this  analytical capability. CPSC believes this option would be more efficient  than developing its own system to analyze data.
section_title: CPSC’s Enforcement of Import Safety Authorities Is Limited by Resource and Practical Constraints
paragraphs: CPSC’s enforcement of its authorities to prevent the entry of unsafe  products into the United States is limited by resource and practical  constraints. Specifically, CPSC has few staff at ports of entry and limited  analytical and laboratory support. Furthermore, although CPSC has  authority to destroy products refused admission, it lacks a source of  funding to immediately pay for the costs of destruction. In addition, while  CPSC has authority to condition the importation of consumer products  based on compliance with CPSC inspection requirements, there are  practical constraints on the agency’s ability to conduct inspections of  foreign manufacturing plants.
CPSC’s ability to inspect shipments for potential violations at ports of  entry is limited by resource constraints, such as few staff at ports and  limited analytical and laboratory support. In passing CPSIA, Congress  recognized the need to strengthen CPSC’s resources, including  requirements that CPSC increase the number of full-time employees to at  least 500 by fiscal year 2013 and that CPSC hire additional personnel to be  assigned to U.S. ports of entry. As noted above, CPSC had 9 compliance  investigators stationed at 7 ports as of July 2009, as well as 100 product  safety investigators in 48 other locations across that country that may help  to conduct periodic inspections at ports of entry. CBP staff indicated that  having a CPSC compliance investigator collocated at ports has been  useful, and during our visit to a U.S. port of entry we saw the cooperative  relationship between agency officials. Furthermore, a CPSC official said  that currently there is limited analytical support at CPSC headquarters to  assist in import surveillance work. According to CPSC, the agency cannot  establish a greater presence at U.S. ports without having the requisite  analytical support. CPSC also has limited laboratory support for testing  potentially unsafe products and has faced significant backlogs at various  times. As of April 2009, CPSC had 28 engineers and scientists at its  laboratory. CPSC’s laboratory facility is located across the country from  where a large percentage of imported goods enter the United States.  Moreover, fireworks, which are heavily targeted for inspection, must be  tested at a separate facility under current procedures. As a result of these  conditions, testing backlogs have inhibited import surveillance efforts. In  May 2009, CPSC announced that it had secured and was in the process of  outfitting a new laboratory with enhanced testing facilities. CPSC also  announced that certain support staff from CPSC headquarters would be  collocated at the lab to assist the laboratory staff. However, the new  facilities still cannot accommodate fireworks testing. Moreover, the new  facility does not provide CPSC with a presence on the West Coast, where  many consumer products enter the United States. As discussed below, in  comparing CPSC’s resources supporting border surveillance with those of  other federal agencies that regulate the safety of products used by  consumers, particularly FDA and USDA, we found that CPSC’s resources  are much less than those of these other agencies.
According to CPSC and CBP, CPSC can refuse entry for products that  violate U.S. laws, but CPSC does not have immediate funding available to  subsequently destroy these products if the importers do not destroy or  export these products at their own expense. Instead, CPSC generally asks  CBP to seize unsafe products, and CBP is authorized to access the U.S.  Department of the Treasury’s Forfeiture Fund to cover the cost of product  destruction. The Treasury Forfeiture Fund is also available to CBP for  other enforcement purposes, so that any money CBP uses for destroying  seized products reduces the amount of money available to CBP for other  purposes. Moreover, CBP is concerned that the costs of product  destruction are likely to increase as CPSC fully implements CPSIA.  Although CBP requires that formal entries be covered by a bond, which is  another funding source that may be used to cover the cost of product  destruction, we found that CBP has not pursued bonds for that purpose  because they may not cover the full cost of destruction. CPSC officials  also noted that bonds are not immediately available for product  destruction but may only be recovered to reimburse destruction costs.  However, a new mandate in CPSIA requires CPSC to work with CBP to set  bond amounts sufficient to cover these costs. CBP and CPSC’s efforts to  implement this requirement are still in process. Given the limited  resources immediately available for product destruction, CBP indicated  that CPSC and other federal agencies might explore other funding sources  for this purpose. However, we previously found that estimating the cost of  destroying consumer products is difficult given the wide range of products  CPSC oversees, making it challenging to determine the appropriate size of  a dedicated fund. In addition to setting aside enough funds for product  destruction, CPSC would have to consider establishing parameters on the  use of any funding source it administers.
While CPSC has broad authority to conduct inspections of manufacturers  and importers, significant resource and practical constraints limit its  ability to conduct traditional inspections of foreign manufacturing plants.  CPSC is required by rule to condition the import of a consumer product on  the product manufacturer’s compliance with CPSC inspection and  recordkeeping requirements. CPSC does not conduct inspections in  foreign countries, and CPSC and many product safety and international  trade experts cite several constraints on its ability to do so. Specifically,  these parties state that U.S. inspectors would likely need the consent of  both the foreign manufacturer and the foreign government to conduct an  inspection. Other experts stated that such consent from a foreign  government, if granted, may be accompanied by a request for the same  rights to inspect U.S. manufacturing plants. Another constraint on  inspections of foreign manufacturers is that such a program would need to  be prohibitively large in order to be effective, perhaps larger than CPSC’s  domestic inspection program. As noted earlier, CPSC had about 100  product safety investigators in 48 locations to conduct its domestic  inspections as of July 2009. Also, it is not clear what CPSC would look for  when inspecting foreign manufacturing plants given that CPSC evaluates  the final product for compliance with product safety regulations rather  than the production process. As noted above, CPSC may condition the  import of consumer products on cooperation with inspections. However,  ensuring that the specific manufacturer’s products do not enter the United  States would be difficult without detailed knowledge of individual  companies’ supply chains, which could be gained through inspection of  the manufacturer’s records. Due to these legal and practical constraints,  CPSC stated that expanding its international education and outreach  activities rather than conducting inspections of foreign manufacturing  plants would more effectively prevent the entry of unsafe consumer  products.
section_title: Authorities of Select Agencies Are Comparable to CPSC’s, but FDA and USDA’s Border Surveillance Activities and Overseas Presence Provide Useful Information for Strengthening CPSC’s Implementation of Its Authorities
paragraphs: CPSC’s regulatory authority to prevent the entry of unsafe imports is  generally comparable to that of certain other federal agencies with  substantial responsibility over the safety of products entering the United  States. However, various border surveillance activities of FDA and  USDA—particularly with respect to obtaining advance shipment data,  allocating staff resources to border operations, and targeting capabilities,  as well as efforts to work with foreign governments to educate foreign  manufacturers about U.S. safety standards—provide useful information  for strengthening CPSC’s efforts to prevent the entry of unsafe products.
subsections: section_title: CPSC’s Authorities to Prevent the Entry of Unsafe Products Are Generally Comparable to Those of Other Federal Agencies
paragraphs: CPSC’s authorities to prevent the entry of unsafe products are generally  comparable to the authorities of four other federal agencies: FDA, which  oversees, among other things, food, drugs, and medical devices; NHTSA,  which, through delegated authority of the Secretary of Transportation,  oversees motor vehicles and equipment; Food Safety and Inspection  Service (FSIS), an agency of USDA that oversees egg products, poultry,  and meat; and Animal and Plant Health Inspection Service (APHIS), an  agency of USDA that oversees plants and animals. CPSC’s authorities  provide it with similar or stronger authority to require or engage in certain  activities compared with the authorities of the other agencies we studied.
Safety standards: All of these agencies have authority to regulate and  enforce product safety standards or bans relevant to products under their  jurisdiction.
Border surveillance: All of these agencies except NHTSA appear to have  specific authority to conduct border surveillance activities and broad  authority to refuse entry to items that fail to comply with relevant  standards, among other things. NHTSA officials told us that, like CPSC,  NHTSA requests that CBP detain and seize products at the border on its  behalf.
Product certification/testing: Similar to FDA, manufacturers must certify  to CPSC that their products comply with relevant standards, and this  certification must be based on a reasonable testing program or, in the case  of certain children’s products, the tests must be performed by third  parties. Under FSIS, containers of eggs, egg products, poultry, and meat  must be labeled as having passed inspection. Although NHTSA authorities  require manufacturers of vehicles and equipment to certify that products  comply with applicable federal safety standards, these certifications are  not required to be based on testing.
Temporary hold at ports: CPSC, FDA, FSIS, and APHIS have the authority  to temporarily hold shipments at U.S. ports for inspection.
Foreign inspection: Like FDA and FSIS, CPSC is not expressly prohibited  from requesting consent to inspect foreign facilities. Specifically, CPSC  may request inspection of foreign manufacturing or distribution facilities,  third-party testing laboratories, or conveyances used to transport  consumer products in commerce. As discussed above, CPSC does not  conduct foreign inspections. Both FSIS and FDA have been successful in  obtaining access to foreign facilities for the purpose of inspections or  audits where incentives are strong for foreign entities to grant this access.  For example, access is generally provided for requests that are tied to  applications or audits before products may be eligible for import into the  United States. FDA officials told us that in practice, if a foreign firm  refuses to permit such an inspection, FDA can sometimes refuse  admission of products offered for import into the U.S.  For example, the  refusal to permit an inspection could lead to a product not receiving a  required pre-market approval or the refusal to permit an inspection,  combined with other information, could support a determination of the  appearance of a violation. According to NHTSA, it does not have the  authority to inspect foreign facilities for the manufacture of vehicles and  vehicle equipment imported into the United States.
Consent to local court jurisdiction: Based on our interviews with officials  at the federal agencies we studied, none of the agencies requires foreign  manufacturers to consent to the jurisdiction of local courts with respect to  enforcement actions. Some agencies, including CPSC, told us they do not  see a need for this requirement, as they have been able to effectively carry  out their enforcement duties under existing authorities. For example,  foreign manufacturers seeking to offer motor vehicles for import into the  United States are required by statute to designate a U.S. resident or firm as  its agent to receive service of notices and process in administrative and  judicial proceedings, and service on the agent is deemed to be service on  the foreign manufacturer or importer. Also, FSIS told us that they expect  foreign governments to carry out enforcement actions for their  manufacturers that are certified to export to the United States. CPSC  noted that it has satisfied its enforcement objectives by pursuing the  domestic partners—manufacturers, importers, and retailers—of the  foreign manufacturer without needing to resort to adjudicative  proceedings. For example, in June 2009, CPSC reached a $2.3 million  settlement with Mattel, Inc., regarding the importation of toys made in  China that violated a federal ban on paint containing lead. Furthermore,  CPSC also has the ability to settle enforcement actions with foreign  parties. For example, in July 2009, CPSC reached a $50,000 settlement with  a Hong Kong corporation with offices in the United States regarding the  importation of toys manufactured in China that also violated the  commission’s lead paint ban. Finally, CPSC staff we interviewed stated  that the agency prefers to expand its international education and outreach  programs rather than require foreign manufacturers to consent to U.S.  jurisdiction to effectively prevent the entry of unsafe products, although  they acknowledged that consent to jurisdiction or a requirement of a U.S.  agent for service of process would be helpful. Appendix II contains a  more detailed discussion of the elements of establishing personal  jurisdiction in U.S. courts.
The requirements of the Consumer Product Safety Act appear to demand  more from manufacturers than NHTSA with respect to preventing the  entry of unsafe imports. NHTSA’s key authorities to ensure the safety of  imported goods are to prescribe mandatory vehicle safety standards and to  require foreign and domestic manufacturers to certify compliance with  these standards. However, these certifications are not required to be based  on a testing program, unlike CPSC’s new certification requirements for  children’s products, nor are the results of any testing required to be  reported to NHTSA as a condition to entry. Appendix III contains a more  detailed description of the agencies’ key authorities for preventing the  entry of unsafe products.
Where key differences exist in these agencies’ authorities, they appear to  be due to differences in the types of products under an agency’s  jurisdiction and the particular risks that are presented. As such, these  differences are not directly applicable to CPSC as it improves its ability to  ensure the safety of imported goods.
FSIS’s foreign country equivalency: A major feature of FSIS’s framework  for ensuring the safety of imported meat, poultry, and egg products is a  requirement that foreign countries have a certified food safety system  equivalent to that of the United States. As of fiscal year 2008, 34 foreign  countries were eligible to import these products into the United States.  According to an FSIS budget document, the United States invests  substantial resources, over $800 million in fiscal year 2008, in the  inspection of domestic products. The amount of funds spent on domestic  inspection is relevant given that the concept of foreign equivalency is  predicated on there being a domestic inspection program. As such, it is  unclear how FSIS’s country equivalency program could be adapted for  CPSC given that CPSC does not have comparable resources for the  inspection of domestic products, with a budget of about $80 million in  fiscal year 2008 for all of its activities. Furthermore, the concept of  equivalency for meat, poultry, and egg products is established in a 1994  multilateral trade agreement, to which the United States is a signatory.  According to the United States Trade Representative, it is not clear  whether any WTO Agreement to which the United States is a party  specifically precludes application of an equivalency requirement to  consumer products.
FDA’s preapproval of certain drugs and medical devices: In addition,  FDA requires drug manufacturers to obtain prior approval for marketing  certain drugs in the United States and for selling certain medical devices.  However, FDA’s prior approval requirement would be inefficient for CPSC  given the diversity of products it oversees and the frequency with which  these products change or are updated. CPSC oversees thousands of types  of consumer products, and many of the products it oversees, especially  toys, change or are updated every year.
Other key statutory differences across agency authorities need not be  addressed by providing CPSC with new authorities because CPSC officials  have told us they already consider CPSC to have similar authorities.
Agreements with foreign governments and overseas presence: FDA is  authorized to participate through appropriate processes with  representatives of other foreign countries to reduce the burden of  regulation, harmonize regulatory requirements, and achieve appropriate  reciprocal arrangements, including international agreements such as  mutual recognition agreements, agreements to facilitate commerce in  devices, and memorandums of understanding, among other things. As  discussed below, CPSC already has MOUs with foreign governments,  including China and the EU, and is finalizing plans for its first overseas  office in Beijing, China, in 2010.
section_title: Other Federal Agencies’ Border Surveillance and Overseas Activities to Prevent the Entry of Unsafe Products May Be Useful for CPSC to Consider
paragraphs: As CPSC considers ways to improve its ability to prevent the entry of  unsafe imports, various agencies’ border surveillance and outreach  activities to foreign governments and industry provide useful information.  FDA, FSIS, and APHIS have expansive border surveillance activities based  on the amount of data obtained on incoming shipments, number of staff  supporting border surveillance operations, and targeting programs and  information technology systems that help to integrate data from various  sources for use in making border entry decisions. These capabilities  enable these agencies to screen incoming shipments for a greater number  of risks than CPSC does. According to data provided by CPSC, the agency  has generally focused on relatively few categories of consumer products  since 2001, specifically toys, fireworks, lighters, and electrical products  (such as holiday lights and extension cords).
FDA and FSIS have better access to data for screening incoming  shipments than CPSC. FDA receives shipment data from CBP for all  entries under FDA jurisdiction that are imported or offered for import,  which FDA then screens electronically against criteria it developed to  detect potential violations, including information from domestic  surveillance and outreach to foreign governments. In addition, the Public  Health Security and Bioterrorism Preparedness and Response Act of 2002  requires that FDA be given advance notice on shipments of imported food.   FDA allows importers to provide this data no more than 30 days in  advance of the date of arrival. This advance information helps FDA  determine whether the food potentially poses a bioterrorism or other  significant health risk such that FDA should deploy resources to the port  of arrival so that an inspection can be conducted before the product enters  the United States. FDA officials told us that this information has been so  important in screening food shipments for potential violations that they  are considering expanding prior notification requirements to all products  the agency oversees. FSIS requires by regulation that various information  accompany shipments of meat, poultry, and egg products in order to be  considered for admission into the United States, including a foreign health  certificate. As discussed earlier, while CPSC receives entry summary data  regarding shipments already released into commerce, CPSC does not  receive data on incoming shipments prior to their arrival at U.S. ports of  entry, though CBP receives such data as much as 24 hours before the  shipment is loaded in the foreign port. Without advance shipment data,  CPSC lacks information that other agencies have found useful in screening  incoming shipments for potential safety violations.
FDA and USDA have significantly more staff supporting border  operations than CPSC. Federal agencies assign staff resources to border  operations to identify and refuse admission to potentially unsafe imported  products. NHTSA has no staff dedicated to border operations, but instead  relies on CBP to screen incoming shipments and third-party laboratories  to test pulled shipments. However, FDA, FSIS, and APHIS assign  significantly more staff resources to border operations. According to FSIS  officials, the agency physically examines 100 percent of meat, poultry, and  egg product shipments presented for import with about 75 inspectors  located at approximately 150 facilities near 35 border entry points. In  addition, FSIS employed 20 import surveillance officers as of fiscal year  2009. APHIS officials told us 100 percent of plants and animals are  inspected in cooperation with CBP. Because of the high percentage of  shipments that are inspected, staff resources are accordingly greater. For  example, about 1,800 port staff had been assigned to inspect fruit and  plants at 139 ports of entry as of 2003. FDA examines approximately 1  percent of food presented for import and has requested about $382 million  for fiscal year 2010 for activities that support import safety. This amount  would fund approximately 700 staff supporting import examinations alone,  including port operations, of which 78 percent would be field based. FDA  personnel cover most ports of entry into the United States, including 297  ports in fiscal year 2008, but for the ports where FDA does not maintain a  normal presence, it coordinates with CBP to ensure it is notified of  relevant incoming shipments for which examination and/or sampling may  take place. FDA’s border inspection activities are supported by  compliance programs for agency field staff to use in carrying out  inspections, sample collections, and analyses, among other things. For  food safety alone, there are approximately 25 compliance programs and 12  that cover different imported foods. While FDA, FSIS, and APHIS have  significant resources devoted to the port and overseas activities, they still  face significant challenges in ensuring that products entering the United  States are safe for consumers. As discussed earlier, CPSC has 9  compliance investigators at seven ports of entry, as well as about 100  product safety investigators located across the United States who work  episodically to support the import surveillance program. Although the  missions of FDA, USDA, and CPSC differ, CPSC’s staff resources  supporting border surveillance are much less than the staff resources of  these other agencies and may not be adequate to prevent unsafe products  from entering the United States.
FDA and USDA have more sophisticated information technology systems  and analytical support to target potential risks at border entry points. FDA,  FSIS, and APHIS invest significant resources in information technology  systems that support border surveillance efforts. To oversee inspection of  plants and animals, CBP created positions in each of its 20 district offices for  agriculture liaisons. These liaisons not only advise CBP on border  surveillance operations but also report back to APHIS on risks detected at the  border for the purpose of expanding targeting operations. These liaisons have  access to CBP’s Automated Targeting System, a computer system that stores  detailed information from cargo manifests and other documents that shipping  companies are required to provide before shipments arrive at ports for  inspection. This system allows border staff to focus inspections on higher  risk cargo. FSIS invests substantially—nearly $1 billion—in data  infrastructure systems to assist its border inspections by linking inspection  data with other public health information that is designed for FSIS to quickly  and accurately identify trends and vulnerabilities affecting meat, poultry, and  egg products. In addition, FSIS has developed a centralized computer  system—the Automated Import Information System (AIIS)—that links all  ports and tracks prior inspection results from each country and each foreign  establishment for use in generating the type of inspection required on  incoming shipments. FDA also uses an electronic environment— Operational and Administrative System for Import Support (OASIS)—to  screen shipments presented for entry for relative risks and for making entry  or inspection decisions. OASIS links with other data systems within FDA to leverage the latest information relating to public health. Also, FDA staff  manually enter criteria into OASIS from sources such as import alert  documents so that products can be flagged as they enter U.S. custom territory for the appearance of violations. According to FDA officials, there  are currently about 270 import alerts in effect. FDA officials also told us that  the overseas audits and direct communication with foreign governments  provide useful information in helping border surveillance agents make entry  determination decisions. As discussed earlier, CPSC targets few produ border inspections and has not developed formal systems for assessing risk and providing port staff with risk management tools.
Whereas border surveillance efforts are geared toward intercepting  potentially unsafe products at U.S. borders, outreach activities focused  overseas may prevent potentially unsafe products from being shipped to  U.S. ports. To this end, FDA and USDA assign staff to permanent positions  in foreign countries and send staff overseas on a temporary basis to  conduct educational workshops, as well as to conduct audits and  inspections. Furthermore, some agencies have established cooperative  agreements with foreign agencies to facilitate product safety.
FDA and APHIS overseas outreach efforts help inform agencies about  unsafe products. APHIS has more than 80 people around the world  working with foreign embassies on plant and animal health issues. FDA  announced the opening of offices in three cities in China in November  2008, and it has also announced plans to place technical experts and  inspectors in four other regions, including Europe, India, Latin America,  and the Middle East. These staff would be supported by approximately 8  staff in FDA headquarters in the United States. In addition, FDA has plans  to hire 20 locally employed staff. FDA staff told us that an in-country  presence is useful in preventing the entry of unsafe products because it  improves the information border agents have to make entry decisions and  allows the agency to train foreign establishments about compliance  requirements. As discussed in more detail later, CPSC states that, with  increased resources, it plans to open its first overseas office in Beijing,  China, to facilitate safety efforts with one of the largest exporters of  consumer products to the United States.
FDA and FSIS conduct temporary visits, audits, or investigations in  foreign countries that help to build foreign awareness of U.S. product  safety laws. FSIS conducts on-site audits of foreign manufacturers as part  of its systems equivalence determinations of foreign countries’ food safety  systems. FDA officials told us that the audits and announced inspections it  conducts of overseas manufacturers are very useful in training these  manufacturers about U.S. standards. Furthermore, FDA has reported that  it has engaged in a variety of efforts with foreign governments to build  foreign capacity and provide technical assistance. For example, they  report holding regional workshops in Peru and China, participating in a  multilateral food safety meeting geared toward developing a rapid alert  system, and auditing Chinese government inspectors during their review  of 13 Chinese firms to detect drug residues in aquaculture products. As  discussed earlier, CPSC does not conduct foreign inspections. However,  CPSC staff have conducted visits to foreign manufacturing plants with the  permission of the foreign government. CPSC also has plans for conducting  three outreach and training events each for foreign government officials  and foreign manufacturers in fiscal year 2010, but the agency is limited in  its outreach efforts due to limited numbers of staff.
FDA and FSIS have actively engaged with foreign governments on food  safety. FDA has actively engaged with foreign governments to develop  cooperative arrangements and agreements, including a substantial number  of international government-to-government agreements. FDA’s Web site  indicates a total of 63 MOUs or other cooperative agreements with about  25 different foreign countries. FSIS has also negotiated government-to- government agreements as part of the food safety system equivalency  determination process. Specifically, some countries have negotiated  alternative sanitary measures to obtain this certification. As of July 2009,  CPSC has established MOUs for the purpose of consumer product safety  with 16 foreign agencies, as discussed later, but this activity has occurred  fairly recently and over the last few years.
section_title: Information Sharing and Cooperation among Countries Provide Way to Bridge Differences and Strengthen CPSC’s Implementation of Its Authorities, but CPSC Lacks a Comprehensive Plan to Guide Its Work
paragraphs: Australia, Canada, the EU, Japan, and the United States have some similar  authorities for consumer product safety, but institutional structures to  implement these authorities vary from country to country, reflecting  unique national approaches. Countries also share similar challenges—such  as inconsistent laws and standards and ineffective cooperation and liaison  among agencies involved in consumer product safety— and national  governments’ efforts to address import safety challenges have intensified  in light of the growing volume of imports and recent consumer safety  incidents. Among officials we interviewed, there is broad consensus that  continued cooperation among governments, regulators and multilateral  organizations can improve consumer product safety policy and  enforcement consistency and, ultimately, the effectiveness of import  safety frameworks. CPSC’s Office of International Programs and  Intergovernmental Affairs participates in numerous activities with other  countries and multilateral organizations. However, CPSC does not have  comprehensive plans to guide its work with these countries and  multilateral organizations due to resource constraints and other priorities,  according to CPSC officials.
subsections: section_title: While Similarities in Import Safety Authorities and Challenges Exist among Certain Countries, Their Institutional Structures and Implementation Reflect Unique National Approaches
paragraphs: Import safety authorities in Australia, Canada, the EU, Japan, and the  United States reflect certain shared values and experiences. According to  the OECD, a fundamental objective of consumer product safety policy is to  prevent consumers from suffering harm as a consequence of using  products that present an unreasonable risk of injury. While these countries  have similar authorities, however, the implementation of those authorities  may be different. For example, all the countries monitor both domestically  manufactured and imported products, and all conduct some type of  product testing and/or sampling. However, some of the countries monitor  goods on their own initiative, while others operate on the basis of  complaints that they receive about particular goods and products.
According to the officials representing the countries we reviewed, none of  those countries has the authority to conduct an extraterritorial inspection  of the facilities of a foreign manufacturer that exports products to that  country. In most cases, these officials stated that the countries have been  more successful in working with the exporting country and its  manufacturers in order to correct problems that may arise. These officials  also stated that none of the countries we reviewed has the authority to  require foreign manufacturers to consent to local jurisdiction. U.S.  Embassy and Australian government officials indicated that, under current  law, Australia could ask foreign jurisdictions to enforce Australian  consumer product safety laws; however, the Australian government  prefers other methods, such as approaching manufacturers directly to  raise safety concerns.
The approach countries take to consumer product safety begins  fundamentally with how they define “safe” and “unsafe” products. The  definitions vary considerably from country to country, as indicated in  appendix IV. According to a report by the OECD, most countries apply  broad principles to determine whether a product can be defined as safe.  For example, according to this report, in some countries (Japan, the  United States, and the EU) all products must meet a positive standard— that is, they should be safe for consumers to use or consume prior to  market distribution. Businesses selling unsafe goods may be subject to  regulatory action, regardless of whether the product has caused a specific  accident, injury, or harm to a consumer. In other countries (Australia and  Canada), according to the OECD report, products must not breach a  negative standard—that is, once the goods are placed on the market they  should not carry an unreasonable risk of injury or death. The report notes  that producers are held liable for the negative effects of their products  once placed on the market.
According to officials, some variations exist with other authorities. They  noted that in most of the countries we reviewed only a relatively small  number of imported consumer products are subject to mandatory  standards. However, according to a senior representative of an industrial  association in Europe, the wide variety of product standards among  countries, combined with variable concepts and legal interpretations  applied by governments makes it difficult for industry to ensure safety and  for countries to coordinate enforcement efforts. There are also differences  in the case of product certification. Officials stated that neither Australia  nor Canada requires certification for imported products. According to  Japanese government officials, certain imported and domestic products in  Japan are subject to product testing and cannot be sold in Japan without  certification to prescribed standards. In the EU, according to official  documentation, businesses must carry out conformity and safety  assessments of their products in accordance with the General Product  Safety Directive (GPSD), and businesses are required to certify that their  products are safe, as defined under GPSD. The documentation indicates  that for some products self-declaration is sufficient, but other products  require third-party verification.
According to the OECD report on consumer product safety, institutional  structures for product safety can also vary from country to country, which  can sometimes create challenges for coordination within and among  countries and, in many cases, accounts for differences in enforcement and  implementation of authorities. The report states that in Canada, consumer  product safety policy, development, enforcement, information, and  education functions are in one organization, Health Canada, with the  provinces retaining some enforcement responsibilities. In the United  States, CPSC is the primary agency responsible for implementing and  enforcing federal consumer product safety laws and establishing  consumer product safety policy. The OECD report further notes that some  countries have institutional arrangements that separate policy and  enforcement functions. In Japan, for example, policy responsibility is  spread across the government in a range of departments, with a central  coordinating function in a central policy agency (the Cabinet Office).  Certain other countries, such as Australia, have regionally focused policy  and enforcement structures for consumer product safety that reflect a  division of powers and responsibilities between the national government  and states, provinces or regions. In the EU, policy responsibilities lie with  the European Commission, the executive arm of the EU responsible for  defining and implementing its policies and running its programs. However,  individual EU member countries are responsible in their respective  territories for enforcement—market surveillance, product monitoring and  testing, and possible restrictive or corrective actions.
Countries also share similar challenges as they respond to changing  demands in the international market place. Similar to the United States,  national governments’ efforts to address import safety problems have  intensified in light of the growing volume of imports entering each country  and recent consumer safety incidents. According to the OECD report,  many countries face enforcement challenges at both domestic and  international levels, including  inconsistent laws, regulations, standards, and sanctions within  countries and across borders;  ineffective cooperation and liaison among agencies involved in  consumer product safety enforcement; and  insufficient sharing of injury information across borders.
Governments have taken a variety of actions to address these challenges,  including enacting new laws and regulations and, in some cases, they have  created new organizations to address new consumer safety challenges. See  appendix IV for more information.
section_title: Engagement among Countries Provides Ways to Address Shared Import Safety Challenges
paragraphs: Officials in Australia, Canada, the EU, Japan and the United States indicate  that a mix of bilateral (country-to-country) and multilateral (involving  multiple countries) exchanges and agreements among importing and  exporting countries has been useful in addressing import safety  challenges. The CPSC and its counterparts in other countries have taken a  particularly active role in engaging China on consumer safety issues to  create more transparent and cooperative relationships.
According to the OECD’s 2008 Report on Consumer Product Safety,  bilateral engagement helps facilitate an exchange of information regarding  consumer product safety issues and provides a mechanism for  coordinated action against unsafe products. In the United States, CPSC’s  Office of International Programs and Intergovernmental Affairs  administers MOUs between CPSC and consumer product safety entities in  other countries, maintains regular contact with key exporting countries,  and attends meetings and discussions sponsored by multilateral  organizations. According to CPSC, as of June 2009, the office had  established MOUs for the purpose of consumer product safety with 16  foreign agencies in Brazil, Canada, China, the EU, Israel, South Korea,  Peru, Chile, Costa Rica, India, Japan, Mexico, Taiwan, Egypt, Columbia,  and Vietnam. CPSC’s Office of International Programs also conducts  training sessions in various countries to explain U.S. import safety  processes and procedures. According to CPSC, staff hold monthly  teleconferences with the agency’s counterparts in Canada, China, and the  EU, and every two months CPSC holds a three-way teleconference with  Mexico and China to provide additional opportunities for engagement. In  2008, CPSC created a Chinese-language page on the CPSC Web site and,  not long after, a Vietnamese-language page to help facilitate information  sharing. The pages provide information about U.S. product safety  requirements, including relevant regulations and standards for products  bound for the U.S. market, as well as information about the new CPSIA.
Over the last few years, CPSC has increased its bilateral engagement with  China. According to CPSC, the first U.S.-China Product Safety Summit was  held in Beijing in 2005 and culminated in a joint Action Plan on Consumer  Product Safety. CPSC and its counterpart in China, the General  Administration for Quality Supervision, Inspection, and Quarantine  (AQSIQ), established four working groups focused on fireworks, toys,  lighters, and electrical products. According to CPSC, a third summit will  be held in October 2009 and will build on the previous two, with the goal  of institutionalizing a culture of product safety among Chinese consumer  product manufacturers and exporters. In 2005, CPSC established a China  Program Plan as a way of managing CPSC’s various China-related  activities and as the basis for an overall strategy to promote the safety and  compliance of Chinese consumer products exported to the United States.  Although the plan is to be updated on an annual basis to account for  changing conditions and new opportunities for progress, CPSC has not  updated the China Program Plan since 2007. According to a senior CPSC  official, the fiscal year 2008 and 2009 plans were essentially the same as  the 2007 plan. He stated, however, that a revised China Program Plan for  2010 will be submitted to the reconstituted commission and will be  published when approved.
Other countries have also established bilateral agreements with China.   The European Commission engages in international contacts and  cooperation and has, for instance, agreed on a Memorandum of  Understanding with China's AQSIQ. According to the EU, one of the key  initiatives launched by the EU and China has involved the RAPEX system,  the EU’s Rapid Alert System for nonfood consumer products. In May  2006, according to EU documentation, the European Commission decided  to provide China’s AQSIQ with access to the RAPEX system—specifically  its notifications on products coming from China.  EU officials report that  China agreed to investigate all reported cases of dangerous products of  Chinese origin and report back to the EU on the results, including  withdrawals of export license and other corrective actions.  Also, EU  officials state that certain individual EU Member States have established  limited bilateral contacts with China. According to Health Canada, Canada  signed an agreement with China on import safety in 2007. A summit  between China, the EU, and the United States occurred in November 2008  to strengthen consumer product safety trilateral cooperation, according to  U.S. and EU documents. As a key exporting nation, China has revised  some of its own laws, regulations, and procedures in response to high- profile recalls of Chinese-made goods and the consequent international  engagement on these issues, according to a senior CPSC official. He  indicated that an example of such a change occurred in March 2009, when  the Chinese National Institute of Standardization approved Administrative  Guidelines for Safe Consumer Product Manufacturing that emphasizes the  role of manufacturers in ensuring consumer product safety. In addition,  the CPSC official stated that China’s AQSIQ had reported to CPSC that it  has increased significantly the inspection of paint on export toys and  closed down many factories that failed to implement a government  requirement of selecting paint suppliers for toys only from a government- approved list.
Multilateral engagement on consumer product safety issues provides other  ways to encourage sharing of information and lessons learned on  consumer product safety among a larger group of nations. Organizations  such as OECD, the Asia-Pacific Economic Cooperation (APEC), and the  International Consumer Product Safety Caucus provide additional  frameworks for cooperation. U.S. and other officials believe that  continued cooperation and coordination among governments and  regulators can improve policy consistency and enforcement and,  ultimately, the effectiveness of consumer product safety frameworks,  particularly since consumer safety enforcement challenges are shared by  most nations.
On October 23, 2008, the OECD’s Committee on Consumer Policy hosted  its first Roundtable on International Consumer Product Safety, with an  aim to examine consumer product safety trends and challenges at both  domestic and international levels. The Director of CPSC’s Office of  International Programs and Intergovernmental Affairs attended this  meeting, as did other OECD member nation representatives. The final  report identified a number of key issues shared by member nations and  initiatives for the future. CPSC representatives have also participated in  APEC discussions concerning consumer product safety. In 2007, APEC  leaders agreed on the need to develop a more robust approach to  strengthening food and consumer product safety standards and practices  in the region, using scientific, risk-based approaches and without creating  unnecessary impediments to trade, according to APEC documents. APEC  members reconvened in 2009 to determine future work on consumer  product safety. CPSC’s Chairman and three staff participated in an APEC  regulators’ dialogue on toy safety in August 2009 in Singapore aimed at  strengthening information exchange among APEC members’ product  safety officials.
The International Consumer Product Safety Caucus is another platform  that facilitates the exchange of information on consumer product safety  issues in the area of governmental policy, legislation and market  surveillance, with a view to strengthening collaboration and cooperation  among governments and regulatory agencies around the world. Current  active members include Australia, Canada, China, the EU, Korea, Japan,  and the United States (represented by CPSC). The caucus meets at least  twice a year.
section_title: CPSC Has Not Developed Long-term Plans for International Activities
paragraphs: While CPSC participates in numerous activities with other countries and  multilateral organizations to establish and strengthen coordinated actions  against unsafe consumer products, and has established MOUs with 16  foreign agencies for this purpose, CPSC does not have plans covering its  work with these countries and multilateral organizations—except for  China. According to CPSC, this is due to resource limitations in CPSC’s  Office of International Programs and Intergovernmental Affairs (as  discussed earlier, the office has four staff) and because of its focus on  China as the single largest source of foreign-made products. A senior  CPSC official stated that with the creation of an additional staff position in  the Office of International Programs, the office plans to expand its  program planning to better address other countries. However, without a  long-term plan that incorporates all the office’s activities, it is difficult to  accurately assess current and future resource needs and take best  advantage of opportunities for future coordination and cooperation among  importing and exporting nations that CPSC considers integral to  preventing the entry of unsafe products. Long-term planning is particularly  important for CPSC’s Office of International Programs and  Intergovernmental Affairs because of the diverse nature of its  responsibilities and to ensure consistency in CPSC’s policies.
section_title: CPSC Has Established Annual Goals and Short-term Plans to Prevent the Entry of Unsafe Products, but Lacks a Long-term Plan for the Future
paragraphs: CPSC has established annual goals and short-term plans to prevent the  entry of unsafe products but lacks a long-term plan to address the agency’s  growing role in import safety. Without a long-term plan, CPSC is not fully  prepared to use new authorities granted in CPSIA, nor is it able to  effectively address the safety of imported products through international  means or to appropriately allocate any potential increases in agency  resources.
subsections: section_title: CPSC Has Established Short-term Plans and Annual Goals for Import Safety
paragraphs: In May 2009, CPSC submitted a 2010 Performance Budget Request to  Congress, which contains a section called the Import Safety Initiative. This  initiative has three key principles: (1) assure that product safety is built  into manufacturing and distribution processes from the start, (2) increase  enforcement at the border to stop dangerous goods from entering the  country, and (3) enhance surveillance of the marketplace to remove  unsafe products from store shelves. These three principles are consistent  with principles established on a governmentwide basis in 2007. In  particular, the principles are consistent with those established by the  Interagency Working Group on Import Safety, of which CPSC was a part.  The working group issued an Action Plan for Import Safety in November  2007 that established three organizing principles: (1) prevention, which  means to prevent harm in the first place by working with the private sector  and foreign governments to adopt an approach to import safety that builds  safety into manufacturing and distribution processes; (2) intervention,  which means to act swiftly and in a coordinated manner when problems  are discovered to seize, destroy, or otherwise prevent dangerous goods  from advancing beyond the point of entry; and (3) response, which means  to take swift action to limit potential exposure and harm to the American  public in the event an unsafe import makes its way into domestic  commerce.
As part of the governmentwide strategy, CPSC developed its Import Safety  Initiative, which contains annual goals that are consistent with the  initiative’s key principles, but it is a short-term plan. For example, to help  assure that product safety is built into manufacturing and distribution  processes from the start, CSPC states that it plans to conduct three  outreach and training events for foreign government officials in 2010 and  three outreach and training events for foreign manufacturers. CPSC also  has a short-term plan for how it will manage its various China-related  activities and states that, for 2010, staff will review and update this plan.  To increase enforcement at the border, CPSC states that it plans to  increase the number of full-time staff working at U.S. ports and to increase  the number of sample products screened at the ports. CPSC’s Import  Safety Initiative also links goals to requests for increased resources. For  example, CPSC states that, with increased resources, it plans to increase  its presence at U.S. ports of entry and open its first overseas office in  Beijing, China.
CPSC officials have described to us other short-term plans that they  developed to respond to requirements and authorizations in CPSIA. For  example, as discussed earlier in this report, CPSC’s decision to assign  additional full-time staff to ports responds to Section 202 of CPSIA, which  requires CPSC to hire personnel to be assigned to duty stations at U.S.  ports of entry, or to inspect overseas manufacturing facilities, subject to  the availability of appropriations. In its Import Safety Initiative, CPSC  requests funding for 10 additional staff to be assigned to ports in 2010. A  CPSC official with whom we spoke said that he expects the number of  staff assigned to ports to grow from its current level of 9 to about 50 over  the next few years. However, CPSC has conducted limited analyses of how  it plans to assign additional staff to ports in the coming years, and  standard operating procedures that describe compliance investigators’  roles and responsibilities at ports of entry have not been updated since  1989. CPSC officials acknowledged the need to update these procedures.  CPSIA also requires CPSC, as discussed earlier in this report, to develop a  methodology for identifying shipments of imported consumer products  that are likely to violate import provisions enforced by CPSC due by  August 2010. CPSC, as noted earlier, has taken steps to develop a plan for  sharing information and coordinating with CBP, but it is unlikely that  CPSC will complete this plan by August 2009, as required under CPSIA,  because of delays in updating its agreements with CBP.
section_title: CPSC Has Recognized the Need for U.S. Consumer Product Safety Policy to Comply with WTO Obligations and International Trade Agreements
paragraphs: In undertaking its planning efforts, CPSC has recognized the need for U.S.  consumer product safety policy to comply with World Trade Organization  (WTO) obligations and international trade agreements—a positive  recognition on CPSC’s part. A CPSC official involved in international  education and outreach activities said that, in working to address U.S.  concerns about the safety of imported products, it is also critical to  comply with WTO rules. The official said there are statutory  requirements—namely, the Trade Act of 1979—mandating U.S. standards  for complying with international trade agreements. He said that CPSC has  had a productive working relationship with USTR in the past, and that  CPSC is looking to formalize its working relationship with USTR in the  future by developing internal standard operating procedures for consulting  with USTR. The official said that the procedures would be useful to CPSC  in identifying issues that should have USTR’s input before they are  finalized. CPSC has also recognized the importance of international trade  agreements through its work with international groups, such as OECD, as  discussed previously in this report. In particular, CPSC has recognized that  the WTO Agreements on Technical Barriers to Trade—which establishes  rules for preparing, adopting, and applying technical regulations,  standards, and conformity assessment procedures—serves to encourage  uniformity and predictability in national consumer product safety regimes.
section_title: CPSC Lacks a Long-term Plan to Prevent the Entry of Unsafe Products
paragraphs: Although CPSC has established short-term plans and annual goals to  prevent the entry of unsafe products, the agency has not developed a long- term plan for addressing its import safety work. In particular, CPSC has  not updated its agencywide Strategic Plan, which was issued in 2003 and  was due for revision in 2006. According to the Government Performance  and Results Act, strategic plans help agencies establish long-term goals,  including identifying the resources needed to accomplish these goals. The  act calls for federal agencies to develop multiyear strategic plans and  update them at least every 3 years. CPSC’s Strategic Plan does not reflect  its import safety work, its plans for international education and outreach  activities, its plans to use new authorities granted in CPSIA to prevent the  entry of unsafe products, or its plans to respond to mandates in CPSIA to  improve its risk assessment and coordination with CBP. CPSC has  recently begun efforts to update its Strategic Plan by requesting public  comments on revisions to the plan.
In addition to lacking a long-term plan to prevent the entry of unsafe  products, CPSC does not have outcome-oriented performance measures to  assess the effectiveness of its import safety work. One of CPSC’s goals for  2010 is to develop measures of import safety success, according to CPSC’s  Import Safety Initiative. CPSC reports that, in 2008, staff researched and  evaluated information for an enhanced surveillance system, making  contact with FDA, CBP, and Internal Revenue Service staff to discuss  methods and requirements of their systems. As discussed earlier in this  report, CPSC has also requested public input concerning the development  of consumer product safety metrics, but it received only two responses,  neither of which addressed CPSC’s need for developing new performance  measures.
CPSC has established short-terms plans and annual goals for its import  safety work, but it does not have goals for these activities beyond 2010.  Without a long-term plan for import safety that contains key goals and  performance measures, CPSC may be unable to replicate or enhance its  short-term efforts over the longer term. For example, CPSC may find  insufficient staff to cover meetings and seminars needed to work with  foreign governments and foreign manufacturers over the long-term to  build product safety into manufacturing and distribution processes from  the start. CPSC may also find it difficult to analyze any data it collects  through surveillance of the marketplace to strengthen and improve its  targeting decisions at the ports. Finally, CPSC may face challenges in  ensuring that any further resources it devotes to increasing its port staff  and operations are also accompanied by appropriate growth in its  analytical and other support staff to help ensure a comprehensive and  balanced approach to product safety.
section_title: Conclusions
paragraphs: Broad agreement exists among CPSC staff, legal experts, industry  representatives, and consumer advocates that CPSC’s authorities to  prevent the entry of unsafe products into the United States have the  potential to be effective, but only if they are implemented more fully. With  delays in some rulemakings, such as testing and certification  requirements, it remains unclear whether CPSC will be able to implement  its authorities effectively. Furthermore, CPSC faces significant challenges  due to competing priorities and resource constraints. CPSC has taken  positive steps to shift its approach to import product safety from one  focused on responding to problems after products have entered the  marketplace to an approach focused on preventing harmful products from  ever reaching consumers. To implement this preventive approach, CPSC  states that it is taking steps to enhance surveillance activities, increase  enforcement at the ports, engage foreign governments, and educate  foreign manufacturers on U.S. standards for consumer product safety.
Our work demonstrates that CPSC needs to strengthen its surveillance  activities, particularly its ability to target potentially unsafe products for  further screening and review at U.S. ports. CPSC has yet to obtain access  to advance shipment data, which FDA’s experience suggests could be  useful in targeting incoming shipments. In addition, CPSC’s agreements  with CBP are outdated, which hinders CPSC and CBP’s ability to target  imports under CPSC’s jurisdiction. CPSIA requires that CPSC and CBP  work together to develop a methodology to assess the risks of various  imported products and to cooperate on CPSC’s participation in a CBP  targeting center. These joint efforts are a key element for improving  CPSC’s ability to target shipments for screening and review at the ports  and to ensuring consistent enforcement of CPSC’s authorities across the  United States. Because CPSC relies heavily on CBP for enforcement at the  ports, it is imperative for CPSC and CBP to resolve issues concerning their  agreements for sharing information and update their procedures for  operating at the port. CPSC’s targeting efforts could be strengthened  further through expanded engagement with foreign governments and  education of foreign manufacturers on U.S. consumer product safety  standards. Such outreach could inform industry of its responsibility for the  safety of consumer products entering the United States and provide CPSC  with information on manufacturing in the respective countries to assist the  agency’s development of a risk assessment methodology for imported  products. Without improving its ability to target potential risks across a  broad range of product categories, it is unclear how CPSC will succeed in  preventing unsafe consumer products from entering the United States.
CPSC’s inspection of foreign manufacturing plants faces practical  constraints and would likely require tremendous resources to implement.  CPSC believes strong cooperative relationships between countries to build  strong frameworks for consumer product safety are a more effective  approach for the United States. As part of its approach, CPSC is in the  process of developing such relationships, and current MOUs between  CPSC and certain foreign countries primarily address information sharing.  CPSC officials state that expanding CPSC’s education and outreach rather  than inspection of foreign plants could serve to more effectively prevent  the entry of unsafe consumer products. Similarly, officials from the U.S.  agencies, with the exception of FDA, and countries we reviewed, stated  that they do not conduct inspections of foreign manufacturing plants. In  most cases, officials we interviewed stated that the countries have been  more successful in working with exporters in order to correct problems  that may arise. Therefore, we are not recommending any additional  authorities be granted to CPSC at this time.
Efforts to expand U.S. jurisdiction to foreign manufacturers for purposes  of enforcement action also present unique practical considerations. It may  be argued that if foreign manufacturers were required to consent to U.S.  jurisdiction, CPSC’s enforcement ability would be strengthened because  CPSC would have one less hurdle to overcome in pursuing enforcement  actions. Nevertheless, CPSC staff stated that, at this time, CPSC does not  see the need for this requirement in order to effectively carry out its  enforcement duties. To date, CPSC has been able to satisfy its  enforcement objectives by pursuing the domestic partners—broadly  defined to include those companies along the supply chain to the  retailer—associated with the foreign manufacturer. CPSC also has the  ability to settle enforcement actions with foreign parties. FDA and USDA  officials have found that their efforts to educate overseas industry and  governments on U.S. safety standards and the particular risks being  screened for at the border could reduce the number of unsafe products  that reach U.S. consumers. Similarly, CPSC staff we interviewed stated  that expanded international education and outreach, rather than expanded  enforcement jurisdiction, would more effectively prevent the entry of  unsafe products, although they acknowledged that consent to jurisdiction  or a requirement of a U.S. agent for service of process would be helpful.  Due to the practical considerations associated with requiring foreign  manufacturers to consent to U.S. jurisdiction for purposes of CPSC  enforcement actions, we make no recommendations for additional CPSC  authorities at this time.
CPSC’s short-term plans to prevent the entry of unsafe products are  consistent with a governmentwide approach taken by the Interagency  Working Group on Import Safety in 2007. That group, of which CPSC was a  part, established three organizing principles—prevention, intervention, and  response—that represent, in our view, a comprehensive approach to import  safety. However, CPSC lacks a long-term plan to prevent the entry of unsafe  products. CPSC has not updated its September 2003 Strategic Plan, even  though the Government Performance and Results Act requires this plan to be  updated at least every 3 years. Although CPSC has initiated steps to update its  Strategic Plan by requesting public comments, it is important for CPSC to  work expeditiously to follow through on its efforts. In addition, while CPSC  recognizes the need for outcome-oriented performance measures and has  taken steps to develop new measures, it does not currently have such  measures in place for its import safety work. Without a long-term plan that  contains key goals and measures, CPSC may find it difficult to address its  challenges in implementing the new authorities granted in CPSIA to prevent  the entry of unsafe products, such as decisions about where and how to  allocate any future increases in agency resources.
section_title: Recommendations for Executive Action
paragraphs: First, to ensure that CPSC is able to exercise its full authority to prevent  the entry of unsafe consumer products into the United States, we  recommend that CPSC ensure expeditious implementation of key  provisions of CPSIA, including establishing the substantial product hazard  list and implementing testing and certification requirements that are  subject to stay of enforcement until February 2010, and complete its  rulemaking as required under the act.
Second, to strengthen CPSC’s ability to prevent the entry of unsafe  products into the United States, we recommend that the Chairman and  commissioners of CPSC take several actions to improve the agency’s  ability to target shipments for further screening and review at U.S. ports of  entry as follows:  1.  To ensure that it has appropriate data and procedures to prevent entry  of unsafe products into the United States, we recommend that CPSC  update agreements with CBP to clarify each agency’s roles and to  resolve issues for obtaining access to advance shipment data; and  2.  To improve its targeting decisions and build its risk-analysis capability,  a.  work with CBP, as directed under CPSIA through the planned  targeting center for health and safety issues, to develop the  capacity to analyze advance shipment data; and  b.  link data CPSC gathers from surveillance activities and from  international education and outreach activities to further target  incoming shipments.
Third, to provide better long-term planning for its import safety work and  to account for new authorities granted in CPSIA, we recommend that  CPSC expeditiously update its agencywide Strategic Plan. In updating its  Strategic Plan, we recommend that CPSC consider the impact of its  enhanced surveillance of the marketplace and at U.S. ports as discussed  above and determine whether requisite analytical and laboratory staff are  in place to support any increased activity that may occur at U.S. ports.  Furthermore, we recommend that CPSC’s Strategic Plan include a  comprehensive plan for the Office of International Programs and  Intergovernmental Affairs to work with foreign governments in bilateral  and multilateral environments to  1.  educate foreign manufacturers about U.S. product safety standards  and best practices, and  2.  coordinate on development of effective international frameworks for  consumer product safety.
section_title: Agency Comments and Our Evaluation
paragraphs: We provided a draft of this report to CPSC, CBP, USTR, and the  Departments of Agriculture; Commerce; Health and Human Services;  State; and Transportation; and to EU and Canadian officials for review and  comment. CPSC, CBP, USTR, Agriculture, Health and Human Services,  Transportation, and EU and Canadian officials provided technical  comments, which we incorporated as appropriate. CPSC stated that it  concurs with our recommendations.
We are sending copies of this report to interested congressional  committees and the Chairman and commissioners of CPSC. We are also  sending copies to the Secretaries of Agriculture, Commerce, Homeland  Security, Health and Human Services, State, and Transportation, the  United States Trade Representative, and other interested parties. The  report also is available at no charge on the GAO Web site at  http://www.gao.gov.
If you or your staff members have any questions about this report, please  contact me at (202) 512-8678 or cackleya@gao.gov. Contact points for our  Offices of Congressional Relations and Public Affairs may be found on the  last page of this report. GAO staff who made major contributions to this  report are listed in appendix V.
section_title: Appendix I: Objectives, Scope, and Methodology
paragraphs: To determine the effectiveness of the Consumer Product Safety  Commission’s (CPSC) import safety authorities, we examined CPSC data  and interviewed CPSC officials to learn how the agency measures and  assesses its own effectiveness. We also conducted extensive document  reviews on consumer product safety generally and import safety  specifically. We interviewed legal professionals and consumer and  industry representatives to obtain their perspective on the effectiveness of  CPSC’s authorities. We also interviewed officials from other federal  agencies involved in imported product safety, including U.S. Customs and  Border Protection (CBP), the Office of the United States Trade  Representative (USTR), and the Departments of State and Commerce. We  visited a U.S. port of entry to observe CPSC import surveillance activities  and CPSC’s interaction with staff from CBP. We also visited CPSC’s  Product Testing Laboratory in Gaithersburg, Maryland, to observe  laboratory testing that supports import safety activities.
To compare CPSC’s authorities with respect to the safety of imported  products with the authorities of select federal agencies, we identified key  federal agencies with import regulatory authority over other types of  consumer goods. These agencies are the Food and Drug Administration  (FDA), which oversees the safety of imported food, drugs, cosmetics, and  medical devices; the United States Department of Agriculture’s (USDA)  Food Safety and Inspection Service (FSIS), which oversees the safety of  imported egg products, meat and poultry; USDA’s Animal Plant Health  Inspection Service (APHIS), which oversees the safety of imported plants  and animals; and the National Highway Traffic Safety Administration  (NHTSA), which oversees the safety of imported motor vehicles and  equipment. We interviewed officials from each of these agencies, had them  identify the primary statutory authorities for ensuring the safety of imports  under their jurisdiction, and discussed various agency activities supporting  import safety. For FDA, the primary statutory authority is the Federal  Food, Drug, and Cosmetic Act. For USDA, the primary statutory  authorities are the Federal Meat Inspection Act, the Poultry Products  Inspection Act, the Egg Products Inspection Act, the Animal Health  Protection Act, and the Plant Protection Act. For NHTSA, the primary  statutory authority is the National Traffic and Motor Vehicle Safety Act,  which has been classified, as amended, at Subtitle VI of Title 49 of the U.S.  Code.
For our comparative analysis of the product safety authorities of foreign  countries, we selected countries that are members of the International  Consumer Product Safety Caucus, which is an international forum  consisting of product safety officials from member governments to  facilitate the exchange of information on consumer product safety.  Specifically, we selected Australia, Canada, China, the European Union  (EU), and Japan. We developed a set of questions concerning consumer  product safety authorities, practices, and procedures and worked through  the U.S. Department of State to distribute the questions to appropriate  contacts at U.S. embassies overseas and, in some cases, to foreign  embassies in Washington, D.C. We interviewed desk officers for the  selected countries from the Departments of State and Commerce in  Washington, D.C., and relied on the Department of State to advise us on  the recommended approach to take with each country. We reviewed  foreign laws and regulations, as well as other documents regarding  product safety, provided by U.S. Embassy officials in the selected  countries. We did not independently analyze the laws, regulations, or  procedures of these countries; instead, we relied on third-party  assessments of each country’s consumer product safety framework. We  received written responses to our questions from and conducted  interviews with the U.S. embassies in Australia, Canada, and China. U.S.  embassy officials told us that their responses were coordinated with  country officials knowledgeable of the respective country’s laws,  regulations, and procedures. We received written responses to our  questions from officials with the Embassy of Japan in Washington, D.C.  We received written answers to our questions from consumer product  safety officials in the EU. We also received information from the supreme  audit institutions in these countries regarding their work on consumer  product safety. We conducted interviews with consumer product safety  officials from Canada, the EU, and Japan at a conference of the  International Consumer Product Health and Safety Organization (ICPHSO)  in Orlando, Florida. We reviewed publicly available documents on the Web  sites of consumer product safety agencies in each country. We also  reviewed and utilized documents provided by the Organization for  Economic Cooperation and Development (OECD), including OECD  member country responses to a 2008 questionnaire concerning consumer  product safety. Department of State officials reviewed a draft of our  country summaries and provided comments, which we incorporated.
To evaluate CPSC’s plans to prevent the entry of unsafe products in the  future, we reviewed CPSC’s 2010 Performance Budget Request and  compared CPSC’s planning efforts to guidance GAO has developed for  implementation of the Government Performance and Results Act. We  examined other CPSC data and interviewed CPSC officials to learn about  CPSC’s future plans. We also interviewed legal professionals and  consumer and industry representatives to obtain their perspectives on  CPSC’s future plans.
We conducted this performance audit from September 2008 to August  2009, in accordance with generally accepted government auditing  standards. Those standards require that we plan and perform the audit to  obtain sufficient, appropriate evidence to provide a reasonable basis for  our findings and conclusions based on our audit objectives. We believe  that the evidence obtained provides a reasonable basis for our findings  and conclusions based on our audit objectives.
section_title: Appendix II: Personal Jurisdiction Over Foreign Manufacturers for CPSC Enforcement Purposes
paragraphs: The Consumer Product Safety Improvement Act contained a mandate  requiring that GAO make a recommendation as to whether foreign  manufacturers should be required to consent to the jurisdiction of U.S.  courts with respect to enforcement actions by the commission. We raised  this issue in our interviews with officials at the Consumer Product Safety  Commission (CPSC), the United States Department of Agriculture, the  Food and Drug Administration, and the National Highway Traffic Safety  Administration, as well as officials representing most of the international  entities we selected for study—Australia, Canada, the European Union,  and Japan. CPSC staff stated that, at this time, CPSC does not see the need  for this requirement in order to effectively carry out its enforcement  duties.
CPSC has authority to institute administrative or civil enforcement actions  against manufacturers, distributors, importers, and retailers. CPSC may  opt to negotiate a settlement or consent agreement rather than instituting  an adjudicative proceeding in a federal or administrative court. Enforcing  product safety standards on foreign manufacturers through an  adjudicative proceeding could theoretically pose practical challenges. For  example, one important prerequisite to maintaining an action against any  defendant in a U.S. state, federal, or administrative court is that the court  must have the ability to exert personal jurisdiction over that party. A  court’s exercise of personal jurisdiction over a party must satisfy the  fundamental notions of fairness mandated by the Due Process Clause of  the Fifth or Fourteenth Amendments. In the case of a defendant physically  located outside the territorial jurisdiction, such as a foreign manufacturer,  personal jurisdiction can be established if sufficient contacts exist  between a defendant and the territorial jurisdiction where the court sits,  and the defendant receives fair notice of the suit. Both requirements are  fact-specific and must ultimately be decided by a court, if challenged by  the defendant. By requiring foreign manufacturers to consent to U.S.  jurisdiction for purposes of CPSC enforcement actions, CPSC’s  enforcement process could possibly be expedited in that it would  eliminate a personal jurisdictional challenge to the enforcement action.
However, as noted above, CSPC did not see a need to take such action at  this time.
CPSC noted that it can pursue each of the actors in the supply chain, from  the manufacturer to the retailer, foreign or domestic. Despite the  challenges that could theoretically arise in instituting an enforcement  action against a foreign actor, to date, pursuing the domestic partners of  such actors has satisfied CPSC’s enforcement objectives. Further, CSPC  has the ability to settle enforcement actions with foreign parties. In the  event a settlement cannot be reached voluntarily, any formal action  against a foreign corporation must be served following the Convention on  the Service Abroad of Judicial and Extrajudicial Documents in Civil or  Commercial Matters (“Convention”). CPSC also has the authority to file  suit against a foreign manufacturer for civil penalties for violations of  certain provisions of its statutes, if it can effect service by the Convention  or otherwise, and establish that the court has jurisdiction. For example,  the Department of Justice on behalf of CPSC recently filed suit against a  foreign manufacturer in the U.S. District Court for the District of  Minnesota, which was settled in July 2009. CPSC staff we interviewed  believe that expanded international education and outreach programs, as  opposed to requiring foreign manufacturers to consent to jurisdiction, are  preferable tools to effectively prevent the entry of unsafe consumer  products, although they acknowledged that consent to jurisdiction or a  requirement of a U.S. agent for service of process would be helpful. In  addition, each of the U.S. federal agencies and international entities that  we interviewed stated that they do not require consent by foreign  manufacturers to local jurisdiction with respect to enforcement actions.  Therefore, we are not recommending any action at this time.
section_title: Appendix III: Key Authorities of Select Federal Agencies
paragraphs: We compared the Consumer Product Safety Commission’s (CPSC) key  authorities for preventing the import of unsafe consumer products to  those of three federal agencies—the Food and Drug Administration (FDA),  the National Highway Traffic Safety Administration (NHTSA), and the  United States Department of Agriculture (USDA). Table 1 describes some  of the statutory and regulatory provisions of such agencies with respect to  various regulatory activities, such as inspecting shipments that are  presented for import into the United States. In acknowledgement of the  ongoing efforts of the Interagency Working Group on Import Safety, in  which these four agencies participate, we present these authorities  according to the same principles that are the foundation of the group’s  strategic framework—prevention and intervention. Although the group  uses a third principle—response—we generally did not evaluate agencies’  authorities to respond after an unsafe import enters U.S. commerce  because the scope of our work was limited to those authorities to prevent  their entry.  .
section_title: Appendix IV: Key Authorities of Selected International Entities
paragraphs: We compared consumer product safety authorities, practices, and  procedures for Australia, Canada, China, the European Union (EU), Japan  and the United States. Figure 3 identifies the authorities and activities we  compared, as well as any future plans for changing the organizations,  structures, and/or mechanisms for consumer product safety in the  respective countries. Following the figure is a more detailed discussion of  the authorities, practices, and procedures. The information in this  appendix is based on information we received through U.S. Embassies in  these countries, foreign embassies in Washington, D.C., and interviews  with country officials. We reviewed documents regarding product safety  provided by U.S. Embassy officials in the selected countries. We did not  independently analyze the laws or procedures of these countries; instead,  we relied on third-party assessments of each country’s consumer product  safety framework.
subsections: section_title: Australia
subsections: section_title: Environment for Consumer Product Safety in Australia
paragraphs: Currently, the dominant issue concerning consumer product safety in  Australia is the reorganization of its policy framework. On October 2, 2008,  the Council of Australian Governments agreed to a new policy framework  for implementation in 2010, comprising a single national consumer law  and streamlined enforcement arrangements. This more centralized  approach to consumer product safety replaces the current system in which  the federal, state, and territory governments all share responsibility for  consumer policy and enforcement.
Key organizations: Currently, responsibility for product safety regulation  in Australia is shared between the federal, state, and territory  governments. The Australian Treasury is the agency responsible for  developing consumer policy, and the Australian Competition and  Consumer Commission monitors and enforces compliance with product  safety laws. In addition, state and territory governments each have their  own fair trading agencies that enact and enforce state-based consumer  product safety legislation. Such legislation is similar, but not identical, to  federal government legislation, which sometimes leads to legislative  inconsistencies between jurisdictions.
Resources: Australia has 30 policy staff working in the Product Safety  section of the Australian Competition and Consumer Commission and  enforcement staff numbering around 150 around Australia. There is no  separate international office for consumer product safety. The total  combined resources allocated by the Australian Commonwealth (federal),  state and territory governments to enforcement in this area of consumer  product safety are estimated to be about A$5 million annually.
Consumer advocacy: Consumer advocacy groups have emerged in  Australia over the last 40 years in response to growing interest in product  safety issues. Groups such as the Australian Consumers Association  supply information on safety issues to consumers and lobby federal, state  and territory governments to address the most serious product-related  hazards.
section_title: Regulatory Framework/System
paragraphs: Laws and regulations: Currently, Australia’s general consumer product  safety system is based on the product safety provisions contained in the  Trade Practices Act 1974 and on equivalent provisions in Fair Trade Acts  in Australia’s eight states and territories. The administration and  enforcement of these provisions, along with other nonregulatory activities  conducted by the federal, state, and territory governments, are also part of  the system.
The Trade Practices Act 1974 contains general product safety provisions,  as well as a product liability regime that enables consumers to seek a  range of remedies, including damages for loss or damage caused by a  defective product. The act provides the Australian government minister  responsible for consumer affairs the power to intervene in markets to  ensure product safety, including such activities as    prescribing consumer product safety and consumer product    declaring products unsafe and banning them;  investigating products to determine whether they will or may cause  injury and/or issuing a warning notice of the risk of using the product;    ordering the compulsory recall of products; and    obtaining information, documents, and other evidence related to the  administration of the safety provisions of the Trade Practices Act.
While in law the general regime applies to all consumer products, in effect  this system provides the general legal safety net for products not  otherwise protected by specific legislation that addresses more hazardous  products.
Definition of safe products: Australia currently has no definition of safe or  unsafe products. However, current law allows the Minister for Consumer  Affairs to ban or compulsorily recall consumer products in cases where  the products will or may cause injury.
Standards: The Trade Practices Act provides the Australian government  minister responsible for consumer affairs with the power to establish  mandatory standards for a product where it can be demonstrated that it  has the potential to cause injury. Standards Australia, an independent,  nongovernmental organization, is the sole recognized body for standards  development. Only a small number of imported consumer products are  subject to mandatory standards, and over half of the standards apply to  products that may pose a danger to children. State and territory legislation  also allows for the issuance of mandatory standards. At times, the  Australia Competition and Consumer Commission, the Treasury, and the  state and territory fair trading representatives have participated in  Standards Australia processes.
Detection, reporting, and removal of unsafe products: The current  regulatory system relies on governments (federal, state, and territory) to  identify and regulate specific product hazards. According to Australia’s  Ministerial Council on Consumer Affairs, the ability of these governments  to address potential safety hazards across a great range of products is  affected by limitations on their resources and by the time and effort  required to implement, enforce, and review product-specific regulations.  Currently, the vast majority of product recalls are undertaken voluntarily  by businesses that have become aware of a safety problem concerning one  of their products. The Trade Practices Act and many of the state and  territory Fair Trading Acts contain provisions that allow governments to  order compulsory product recalls when necessary.
Business responsibility: Businesses promote product safety through  industry sector associations, which often undertake such self-regulatory  activities as business education, the development of industry codes of  conduct, and engagement with law enforcement and standards  development bodies on enforcement and policy issues. Currently there is  no formal requirement for suppliers to monitor the safety of the products  they sell, once those products are released to the marketplace. Under the  current regulatory system, businesses are required to report voluntary  recalls to the Australian government minister responsible for consumer  affairs and to the Office of Fair Trading in some other jurisdictions. The  Ministerial Council on Consumer Affairs has proposed that suppliers be  required to monitor the ongoing safety of the products they sell and report  to the government any products that are under investigation for possible  safety risks, have been associated with serious injury and death, or have  been the subject of a successful product liability claim.
Policy enforcement and compliance: The Australian Competition and  Consumer Commission is responsible for enforcing the Trade Practices  Act’s product safety regime. To ensure that suppliers subject to mandatory  standards and bans are responding appropriately, the commission may  compel the provision of information, require evidence under oath,  undertake random market surveys, enter premises, and seize documents.  In situations where suppliers have failed to comply with mandatory  standards or bans, the commission can seek orders in the Federal Court  requiring such suppliers to recall the noncomplying products. Additionally,  the commission may institute civil proceedings or criminal proceedings  under the Trade Practices Act. State and territory governments have  enforcement powers similar to those of the Competition and Consumer  Commission under their own legislation. The relevant state and territory  Fair Trading Acts contain criminal liability provisions similar to those in  the Trade Practices Act.
section_title: Future Plans
paragraphs: On October 2, 2008, the Council of Australian Governments agreed to a  new consumer policy framework as proposed by the Ministerial Council  on Consumer Affairs. According to the Australian government, the new  framework consists of a single national consumer law and streamlined  enforcement arrangements. Australia’s states and territories are expected  to adopt the new Trade Practices Act in its entirety in 2010, providing a  harmonized product safety regime with greater federal government  control. The council recognized that while Australia’s current consumer  policy framework has strengths, it is in need of significant improvements  to overcome existing inconsistencies, gaps, and duplication in Australia’s  consumer legislation and its enforcement. The reforms have the following  three key elements:  the development of a consumer law (called the Australian Consumer  Law) to be applied both nationally and in each state and territory,  which is based on the existing consumer protection provisions of the  Trade Practices Act 1974, and which includes a new national provision  regulating unfair contract terms, new enforcement powers and, where  agreed, changes based on best practices in state and territory laws;  the implementation of a new national product safety regulatory and  enforcement framework, as part of the national consumer law; and  the development of enhanced enforcement cooperation and  information-sharing mechanisms between national and state and  regulatory agencies.
section_title: Canada
subsections: section_title: Environment for Consumer Product Safety in Canada
paragraphs: Changing consumer demands, new technologies, and the increasing  complexity of global supply chains are the major influences behind  Canada’s current efforts to modernize its regulatory tools for consumer  product safety. According to the Canadian government, the authorities  governing food, health, and consumer products in Canada derive from  legislation developed in the 1950s and 1960s and, as a result, they are out  of step with modern realities and needs. For example, the Canadian  government lacks sufficient authority to issue a mandatory recall of a  health or consumer product if it poses a serious or imminent risk to health  and safety or to compel manufacturers to take steps to reduce the risk  associated with a product. In addition, according to the Canadian  government, fines and penalties are low compared with those of other  countries. New legislation will update and strengthen Canada’s consumer  product safety framework.
Key organizations: Currently, Health Canada regulates the import, sale,  and advertisement of hazardous products or substances. Health Canada    supports the development of safety standards and guidelines;    enforces legislation by conducting investigations, inspections, seizures,  tests and conducts research on consumer products;    provides importers, manufacturers, and distributors with hazard and    publishes product advisories, warnings, and recalls; and    promotes safety and the responsible use of products.
The Canada Border Services Agency is responsible for stopping goods at  the border. The agency has a service agreement with Health Canada under  which it seeks to prevent prohibited products from entering Canada and  facilitates additional targeted inspections of these products, as well as  shipments of products from companies with histories of poor compliance.  In addition, the agency’s Single Window Initiative will give the department  access to import and export data that will help to efficiently approve  shipments of low-risk products from low-risk suppliers or, alternatively,  tag suspicious ones before they have left their point of export.
Other organizations include the Standards Council of Canada, the  Canadian Standards Association, the Canadian General Standards Board,  and the Underwriters’ Laboratories of Canada. Also, Canada’s Provincial  governments have jurisdiction over the adoption of the National Building  Code, which includes certification requirements for electrical, gas, and  plumbing products.
Resources: Canada’s consumer product safety agency, within Health  Canada, consists of 130 employees who serve as laboratory, compliance,  and policy development staff.
Consumer advocacy: Consumer advocacy groups in Canada are  particularly concerned with consumer safety issues related to children’s  products and food products. Some advocacy groups in Canada include the  Canada Toy Testing Council, the Consumers’ Association of Canada,  Consumers Council of Canada, and the Public Interest Advocacy Centre.
section_title: Regulatory Framework/System
paragraphs: Laws and regulations: The Canadian government’s key legislation  governing consumer product safety is the Hazardous Products Act. Part 1  of the act lists consumer products that are either restricted through  regulation or outright prohibited from being advertised, sold, or imported  into Canada. There are approximately 30 products and product categories  that are regulated, and some 25 others that are prohibited. All imported  products are subject to the D Memoranda, which incorporates legislation,  regulations, policies, and procedures used by the Canada Border Services  Agency. Canada’s Chemical Management Plan also has an impact on  consumer product safety.
Definition of safe product: Canada has no specific definition under the  Hazardous Products Act. However, a new act, currently awaiting Canadian  Senate approval as of June 2009, will include a definition of “danger to  human health or safety,” which will support a general prohibition.
Standards: Some consumer product standards are mandatory legal  requirements, others are industry standards developed on a voluntary  basis, and some are purely market driven as a particular technology  becomes the industry standard. Approximately two-thirds of standards in  Canada are voluntary. Federal and provincial legislation may impose  mandatory standards for products, typically where health or safety issues  are regarded as requiring regulation. Standards can also be written into the  legislation itself; such is the case with certain specifications in toy  regulations under the Hazardous Products Act. The Standards Council of  Canada is the national coordinating body for the development of voluntary  standards through the National Standards System.
Detection, reporting, and removal of unsafe products: The current  Canadian product safety regulatory system follows a reactive approach.  When a product has been deemed to pose a risk to users—usually over a  period of time, with reported injuries and/or deaths associated with the  product’s use—a risk assessment is carried out. The regulatory process  involves many steps, including consultation with public, industry, and  technical experts. The end result is either that the product remains  available for sale in the Canadian marketplace or that Health Canada  imposes a legal ban on the product under the Hazardous Product Act.
Business responsibility: Currently, there is no mandatory reporting for  businesses, and Health Canada relies largely on negotiating with suppliers  to voluntarily recall or take other corrective measures to address a  product that poses an unreasonable danger to the health or safety of  consumers. The new Consumer Product Safety Act (discussed below) will  give inspectors the ability to order a suppler to take corrective measures.
Policy enforcement and compliance: Canadian authorities have the ability to  seize products, prosecute violations through a criminal code, and impose civil  money penalties. The maximum amount of a civil money penalty is $1 million  per violation, although penalties of $25,000 are most common.
section_title: Future Plans
paragraphs: On June 12, 2009, Canada’s new Consumer Product Safety Act was passed  by the House of Commons and, as of the end of June 2009, is awaiting final  action by the Canadian Senate. The Consumer Product Safety Act would  replace Part I of the Hazardous Products Act and includes a new  regulatory regime. The act focuses on three key areas:    Working to address problems before they happen: The legislation  introduces a general prohibition against the manufacture, importation,  advertisement or sale of consumer products that pose an unreasonable  danger to human health or safety. It strengthens compliance promotion  and enforcement activities through increased fines up to $5 million for  some offenses and fines that are left to the discretion of the courts where  the offense is committed knowingly or recklessly.
Targeting the highest risk: The act provides the authority to require  suppliers to conduct safety tests upon a minister’s orders and to provide  the results where there are indications of a problem. The legislation will  also require suppliers to notify Health Canada of serious incidents or  defects and to provide detailed reports about the incidents.
Rapid response: The act allows the Canadian government to take more  immediate responsive action to protect the public when a problem occurs.  It would authorize inspectors to order mandatory recalls and other  corrective measures to address unsafe consumer products and would  require suppliers to maintain accurate records to enable quick product  tracking. In addition, to further improve the government’s ability to  respond effectively, Health Canada would double the number of product  safety inspectors.
section_title: European Union
subsections: section_title: Environment for Consumer Product Safety in the EU
paragraphs: In 2007, in response to massive recalls of consumer products worldwide,  the European Commission (EC) conducted an internal review of the  European Union (EU) product safety framework.  The review concluded  that the community regulatory system (discussed below), including the  General Product Safety Directive, was capable of providing to European  citizens a high level of protection against unsafe consumer products, as  long as the rules of the system were properly applied. The review  identified areas for improvement and ways of perfecting their system. The  review stated that the adoption of the “Commission Decision” on magnets  in toys; the revision of the “European Directive” on the safety of toys;  and the issuance of rules called the “New Legislative Framework” for the  marketing of goods; would also raise the existing level of protection. It  also identified some areas for further attention. These findings were  subsequently referred to in an official EU report on the implementation of  the relevant legislation.
Key organizations: The EC Directorates General for Health and  Consumers (consumer product safety), Enterprise and Industry (safety of  regulated products) and Taxation and Customs Union (import safety) put  forth legislation aimed at further ensuring the safety of products. The  Directorate General for Health and Consumers, referred to as DG SANCO,  is an EU branch that is somewhat equivalent to CPSC in driving consumer  product safety matters both within Europe and internationally. However,  EU member states (currently 27 individual countries) are responsible for  implementation and enforcement of EU legislation. Each member state  has established its unique structures for handling product safety given  their cultural history and industrial background.  The European  Commission coordinates their approaches and ensures their cooperation.
Resources: Because of the very different role of the EC as compared to  CPSC in product safety enforcement, EU officials had difficulties  providing us with useful figures on resources and stated they risked  being seriously misleading if the member states’ role was not taken into  consideration. They did not have conclusive data for the member states.   Different commission departments also perform part of their functions  related to consumer product safety, such as reviewing European  legislation in certain sectors relevant for consumer safety, which would  make sense to include in their “central function” resources. While the  “Product and Service Safety” unit in DG SANCO is generally comparable to  CPSC in terms of policy function, it does not include actual  implementation and enforcement at the level of the individual member  states. Many staff from the Product and Service Safety unit play a role in  the “international” (versus “European”) area, but also have other  responsibilities. DG SANCO determines who represents the EU at  the international level by the subject-matter expertise for product safety.
section_title: Regulatory Framework in the EU
paragraphs: Laws and regulations: The General Product Safety Directive sets out the  basic consumer product safety requirements and defines a “consumer  product,” and Article 2(b) and (c) of the directive defines “safe” and  “unsafe” product. A “dangerous product” is any product that does not meet  the definition of a “safe” product.
Definition of safe product: The directive defines a “safe product” as any  product which—under normal or reasonably foreseeable conditions of use  including duration and, where applicable, putting into service, installation  and maintenance requirements—does not present any risk or only the  minimum risks compatible with the product’s use. Such a product is  considered to be acceptable and consistent with a high level of protection  for the safety and health of persons taking into account the following  points in particular:  the characteristics of the product, including its composition,  packaging, instructions for assembly and, where applicable,  instructions for installation and maintenance;  the effect on other products, where it is reasonably foreseeable that it  will be used with other products;  the presentation of the product, the labeling, any warnings and  instructions for its use and disposal, and any other indication or  information regarding the product; and  the categories of consumers at risk when using the product, in  particular children and the elderly.
In addition, the feasibility of obtaining higher levels of safety or the  availability of other products presenting a lesser degree of risk shall not  constitute grounds for considering a product to be “dangerous.”
In response to inconsistencies and identified weaknesses in the EU  legislative framework for product safety, the EU issued additional  regulations on marketing of products within the member states. Adopted  in July 2008, this new framework aims to strengthen accreditation and  market surveillance across member states and to remedy existing  weaknesses of the legislative framework.  It will apply from 2010.  Guidance will be issued on its relation with the General Product Safety  Directive.
Standards: The EU product safety system is based on voluntary standards.
However, products that are manufactured to harmonized standards  developed by recognized European standardization bodies (CEN,  CENELEC, and ETSI) on the basis of a mandate (formal request) by the  EC and ultimately referenced on the “Official Journal” of the EU benefit  from a presumption of conformity with the safety requirements of the  relevant legislative framework that are covered by those standards. The  EU considers their safety requirements to be the backbone of its system.  The safety requirements are expressed in sectoral (industry or product- specific) directives, conformity assessment measures and, in certain  sectors, the availability of European standards. The General Product  Safety Directive fills in the gaps when no sectoral Directive exists. For  example, the EU has specific sectoral directives on toys, and some  industrial products, such as electrical products, machinery, and pressure  equipment. Businesses must carry out conformity and safety assessments  of their products in accordance with the General Product Safety Directive  and/or specific legislation applicable to their products. Businesses are  required to certify that their products are safe, as defined under the  directive. For some products self-declaration is sufficient, but other  products require third-party verification.
Detection, reporting and the removal of unsafe products: The EU and its  member states have the authorities to require mandatory recalls, and  companies can negotiate voluntary recalls as necessary, similar to U.S.  recalls. Under the General Product Safety Directive and applicable  product-specific legislation, national authorities can ban the marketing of  a dangerous product, order or organize its actual and immediate  withdrawal, alert consumers to the risks it presents, order or coordinate  its recall from consumers, and order or organize its destruction in suitable  conditions. Businesses are required to report to the authorities if they  detect that they have a dangerous product. Businesses also must remove  unsafe products from markets and are under legal obligation to stop,  withdraw, and/or recall their distribution. Businesses are required to  repair or replace products and/or refund consumers the cost under certain  criteria.
Policy enforcement and compliance: DG SANCO has no inspection and no  jurisdictional authority. Member-state authorities can review technical  product files that all businesses are required to maintain to certify general  conformity with product standards. Within the common market, the  regulations apply to the importer, distributor, manufacturer, and retailer.  Imported products must meet the same requirements as domestic  products. Member states must have authorities to carry out appropriate  sampling and safety testing of domestically manufactured or imported  products and to follow-up on consumer complaints.
According to the EC report on its consumer product safety framework, the  EU considers its customs controls to be reactive—no proactive obligation  exists for the customs authorities to carry out controls for unsafe products  at the EU borders on their own initiative. In response, the EU issued a  “Council Regulation” to provide customs authorities with the legal basis  and equally applicable and comparable procedures in all member states to  suspend, for no more than 72 hours, the release of products which they  suspect pose a serious risk to health and safety.
Consumer advocacy: A unique feature of the EU approach to consumer  product safety is the funding support they provide to consumer  representation groups through grants. As part of this approach, the  consumer groups help define priority/future issues that require additional  research and contribute to standard-making, and consumer groups can  apply for grants to survey and educate consumers on these emerging  issues.
section_title: Japan
subsections: section_title: Environment for Consumer Product Safety in Japan
paragraphs: Japan’s Consumer Product Safety Law regulates the manufacture and sale  of specific products to prevent harm and injury to consumers, to secure  the safety of consumer products, and to promote voluntary activities of  private business for the benefit of general consumers. Japan’s consumer  product safety policies and procedures have been developed,  implemented, and enforced by a wide variety of government agencies and  organizations. As with some of the other countries we reviewed, Japan  recently reorganized its approach and mechanisms for consumer product  safety and food safety with the creation of the new Consumer Affairs  Agency, as follows:    Key organizations: The Ministry of Economy, Trade, and Industry (METI)  is the key government organization responsible for developing consumer  product safety policy in Japan. The National Institute of Technology and  Evaluation conducts on-the-spot inspections of enterprises in accordance  with METI’s instructions and analyzes the cause of accidents based on  accident information to prevent future problems. The Consumer Policy  Council, the Quality-of-Life Policy Council, and the National Consumer  Affairs Center of Japan also have roles in advising and supporting the  government on consumer-related issues in Japan. The Japan Cabinet  Office carries out general coordination of basic consumer policies among  related ministries and agencies.
Resources: According to Japanese officials, 33 staff members are devoted  to consumer product safety, as part of the Product Safety Division of  METI. However, other staff located in other agencies, as indicated above,  also work on these issues.
Consumer advocacy: According to U.S. Embassy officials in Tokyo,  consumer product safety issues receive considerable attention in the local  press and the Japanese government, and consumers view consumer  product safety as a major priority. A survey conducted by the cabinet  office in 2005 found over 2,800 consumer groups active in Japan. Seven  nonprofit consumer groups have been officially accredited by the  Japanese government. They are    Consumer Organization of Japan,    Kansai Consumers Support Organization,    Japan Association of Consumer Affairs Specialists,    Kyoto Consumer Contract Network,    Hyogo Consumers Net, and    Saitama Organization to Abolish Damage to Consumers.
section_title: Regulatory Framework/System
paragraphs: Laws and regulations: Domestic and imported consumer products are  regulated by the following laws in Japan:  the Consumer Product Safety Law,  the Household Goods Quality Labeling Law,  the Law for the Control of Household Goods Containing Harmful  Substances,  the Chemical Substances Control Law, and  the Electrical Appliance and Material Safety Law.
Other laws relating to consumer protection include  the Product Liability Act,  the Consumer Contract Act,  the Consumer Basic Act, and  the Whistleblower Protection Act.
Under Japan’s Consumer Product Safety Law, METI collects and makes  public information on serious accidents involving consumer (household)  products. The law requires manufacturers, marketers, and/or importers to  report actual serious accidents to METI, which in turn informs the public.  Manufacturers, marketers, and/or importers are also required to inform  the public of the product safety issues involved. Major national consumer  centers compile complaints from consumers, including product safety  complaints. Depending on the product type, relevant ministries maintain  regulations covering consumer products, including ensuring that products  meet appropriate standards and labeling and certification requirements.  Some ministries may require foreign manufacturers to register foreign  manufacturing sites with the local government.
Definition of safe product: Article 1 of the Consumer Product Safety Law  defines products as unsafe if they cause threat to consumers’ life or health.  In addition, Article 2, Section 2, of the Product Liability Act provides that a  defective product is to be considered as unsafe, taking into account the  nature of the product, the ordinarily foreseeable use of the product, the  time when the manufacturer delivered the product, and other  circumstances.
Standards: Product requirements in Japan fall into two categories:  technical regulations (or mandatory standards) and nonmandatory  voluntary standards. Compliance with regulations and standards is also  governed by a certification system in which inspection results determine  whether or not approval (certification/quality mark) is granted. To affix a  mandatory quality mark or a voluntary quality mark requires prior product  type approval and possibly factory inspections for quality control  assessment. Certain regulated products must bear the appropriate  mandatory mark when shipped to Japan in order to clear Japanese  Customs. Safety standards are specific to types of products and fall under  the jurisdiction of the relevant ministry.
Policy enforcement and compliance: Generally, the importer of record is  responsible for ensuring the quality and safety of imported consumer  products in Japan. If a product is deemed harmful or defective, the  importer is responsible for working with local authorities and consumer  outlets to take necessary measures. The government may take action  against the importer, such as conducting on-site inspection of business  offices, plants, stores, and/or warehouses; ordering mandatory product  recalls; suspending business operations for a certain period of time; or  imposing penalties including fines and/or imprisonment.
section_title: Future Plans
paragraphs: On May 29, 2009, the Japanese Diet approved bills establishing the  Consumer Affairs Agency, which will administer consumer protection  issues in Japan. The agency will begin operating in the fall with about 200  staff from the Cabinet Office; the Fair Trade Commission; the Ministry of  Economy, Trade and Industry; the Ministry of Agriculture, Forestry and  Fisheries; and the Ministry of Health, Labor and Welfare. In addition, 60  temporary staff will be appointed from attorneys, consumer affairs  consultants, and academics. The Consumer Affairs Agency will be placed  under the Cabinet Office, and Consumer Affairs Centers nationwide will  be established to provide information about product-related accidents and  complaints. In addition, the Consumer Affairs Committee will be  established at the same time to monitor the Consumer Affairs Agency. The  committee—an independent body— will have authority to request  information and reports from ministries and make recommendations for  crisis management, through the Prime Minister, in the event of consumer  incidents.
section_title: China
subsections: section_title: Environment for Consumer Product Safety in China
paragraphs: China imports relatively few manufactured products compared with its  exports. Consumer products that are imported tend to come from more  developed and more regulated markets in Europe, Japan, and the United  States. Therefore, China faces proportionally fewer challenges with regard  to import products. Further, the costs of testing products and certifying  them for sale, as well as the costs of shipping and tariffs, make it difficult  for imported products to compete with Chinese domestic products in  similar product categories.
Recent high-profile cases in China involving food and product safety have  affected China’s export reputation. These cases appear to have prompted  the government to raise the priority of food and product safety.
Laws and regulations: China’s fundamental law on product safety is The  Law of the People’s Republic of China on Product Quality, which was  written in 1993 and revised in 2000. This law preceded the establishment  of China’s leading quality and safety agency, the General Administration  for Quality Supervision, Inspection, and Quarantine (AQSIQ). The law sets  a very low standard for corporate liability by defining the amount of  damages and fines that can be collected through lawsuits. It also applies  some penalties to entities that can claim ignorance of the law. The law  makes no reference to foreign manufactures or domestic goods.
China’s main regulatory code pertaining to imported consumer goods is  found in AQSIQ’s Regulations for Compulsory Product Certification.  Issued in 2001, this regulation created a uniform standard for imported  and domestically manufactured goods, as well as a certification mark  known as China Compulsory Certification (CCC) or 3C. The regulation  applies to a catalogue of products that must be approved by AQSIQ prior  to general sale in China. The standards for individual products are defined  separately by national and industry standards. CCC testing is conducted  mostly by enterprises owned in whole or in part by AQSIQ; foreign testing  companies have not been approved to conduct CCC tests, but neither have  they been explicitly excluded.
The Law of the People’s Republic of China on Import and Export  Commodity Inspection is the main law pertaining to import and export  inspections. The law dates to 1989 and provides for fee-based inspections  at port, as well as preshipment inspections that may be conducted in a  foreign country. The law empowers the provincial-level organizations of  AQSIQ—known as Customs, Inspection and Quarantine (CIQ)—to  conduct inspections. The law also provides for an appeal process in case  the importer or exporter disagrees with the result of an inspection. The  law sets penalties for evading the inspection process, trading in  counterfeit goods, and corrupt practices. However, recent problems with  food and product safety demonstrate that the local inspection offices  responsible for both food and product testing may lack robust technical  abilities and the capacity to deal with the current volume of trade.
Key organizations: AQSIQ is China’s leading quality and safety agency.
Standards are issued by the Standards Administration of China, a division  of AQSIQ, which also represents China in international standards  organizations. The Certification and Accreditation Administration of the  People’s Republic of China (CNCA), which is also technically part of  AQSIQ, is responsible for certifying and accrediting functions related to  CCC tests. Numerous testing companies, almost all partially owned by  AQSIQ, carry out testing for the CCC system. A catalogue of China’s  specific products required to obtain CCC approval can be found on  CNCA’s Web site. In 2009, CNCA revoked a provision to allow the limited  importation of any product not certified with a CCC mark. Unlike similar  approvals for the United States, foreign manufacturers applying for CCC  approval must pay all costs, including travel and lodging expenses of  Chinese inspectors traveling to the foreign country for factory inspections.
Routine inspections, factory checks, recalls, and other regulatory actions  are carried out mostly by AQSIQ’s provincial representative offices, CIQ.  China also has a product recall entity know as the Defective Product  Administrative Center, a part of AQSIQ, which is responsible for the  oversight of product recalls. The center is technically responsible for  consumer products, but its primary focus is on automobile safety. The  local CIQ offices are responsible for overseeing recalls at the local level.  The national system for product recalls is still undeveloped.
Standards: China has a comprehensive body of regulatory standards that  fall into four categories: National Standards, Industry Standards, Local  Standards, and Enterprise Standards. Each category includes aspects of  product safety. The governing law for these categories dates to 1988 and  applies to a range of industries and fields, not just consumer products.  Some of these regulatory standards are more clearly spelled out in  product-specific codes published on the CNCA Web site.
Under China’s system, there are both mandatory and voluntary standards.  Mandatory standards are those intended to safeguard human health,  personal property, and safety and those enforced by laws and  administrative regulations. All others are voluntary standards. Similarly,  under the CCC product certification system, some products are not  subject to compulsory certification but can be certified on a voluntary  basis. The voluntary process is known as the China Quality Certification  Center’s Voluntary Product Certification System. It applies to products  that are not included in an itemized catalogue of products subject to  mandatory certification. The system is also an AQSIQ function, and this  certification is limited to Chinese companies only.
Policy enforcement and compliance: CIQ offices are responsible for local  enforcement actions. Local CIQ offices have responsibility for inspecting  and certifying factories, issuing and revoking manufacturing licenses,  issuing or revoking export permits, conducting preshipment export  inspections, and clearing or refusing goods for importation into China.  Local CIQ offices have their own laboratory facilities but often call upon  AQSIQ headquarters for policy guidance and technical support. Local CIQ  offices also have the authority to initiate a mandatory recall, although  China’s recall system is still developing. As of July 2009, China’s recall  provisions emphasized the cessation of manufacturing and sale of  dangerous goods and included no methodical system for the physical  collection of goods already sold. According to U.S. Embassy officials in  Beijing, draft regulations in China on product recalls represent a positive  step for improved product safety.
Authority to inspect foreign manufacturing plants: China  unambiguously holds and maintains the authority to inspect foreign- owned plants operating in China, and such inspections are conducted by  AQSIQ and the Ministry of Health. However, for any plant operating only  for the purpose of export manufacturing (i.e., no sales in China), AQSIQ  takes a less rigorous approach to regulation. Such plants are not required  to undergo the same assessments as plants manufacturing for local  consumption.
U.S. Embassy officials in Beijing stated that they are unaware of any  memorandum of understanding that AQSIQ may have to facilitate foreign  inspections. However, the CCC system requires factory inspection to be  conducted by a certification body that has been accredited by CNCA. Only  one non-Chinese certification and testing body, Underwriters  Laboratories, has been accredited to conduct follow-up factory  inspections in the United States for CCC approval. CNCA has similar  arrangements with other countries.
section_title: Appendix V: GAO Contact and Staff Acknowledgments
subsections: section_title: Staff Acknowledgments
paragraphs: In addition to the individual named above, Debra Johnson, Assistant  Director; Meghana Acharya; Philip Curtin; Elizabeth Guran; Ronald Ito;  Marc Molino; Omyra Ramsingh; Linda Rego; Jennifer Schwartz; Jay Smale;  and Kathryn Supinski made key contributions to this report.  Important  contributions also were made by Loren Yager, Director, International  Affairs and Trade; Richard Stana, Director, Homeland Security and Justice;  and Christine Broderick, Assistant Director, International Affairs and  Trade.