CPSC Compliance Program Seminar panel 1 presentation on developing a compliance program for your business.

1. This presentation has not been reviewed or approved by the
Commission and may not reflect their views.

2. Develop a Program by Understanding What the Law
Requires

3.  Promotes robust design and testing of products during development
and in the manufacturing/assembly process
 Promotes early detection of potentially unsafe products
 Facilitates efficient and effective implementation of CPSC reporting
obligations and Corrective Action Plans, including recalls and reverse
logistics
 Avoid civil penalties:
 “Reasonable and effective program or system for collecting and analyzing
information related to safety issues.” 16 C.F.R. §1119.4(b).
 History of non-compliance. 16 C.F.R. §1119.4(b)(2).
 Protect consumers

4. Reporting requirements of Section 15(b) of CPSA (15 U.S.C. §2064)
A Firm is required to immediately report when it obtains information which
reasonably supports the conclusion that a consumer product:
 Fails to comply with an applicable consumer product safety rule or a
voluntary standard which is relied on under Section 9 (of the CPSA),
 Fails to comply with any other rule, regulation, standard or ban under
the CPSA or other acts enforced by the CPSC,
 Contains a defect which could create a substantial product hazard, or
 Creates an unreasonable risk of serious injury or death.

5.  Knowing violations:
(1) actual knowledge, or
(2) presumed knowledge
If the firm receives relevant information from various sources, but does
not have a process to organize it, analyze it and elevate issues within the
organization, it may constitute a knowing violation of 15(b).
 Important to develop a compliance program that ensures the right
people at your firm are informed of safety information and have the
authority to file a report.
 Important for a Firm to know WHO, WHAT, and WHEN

6.  Not just people to whom reports are made; includes individuals in
the reporting chain
 The Firm is deemed to have obtained reportable information when
[safety related information] has been received by an official or
employee who may reasonably be expected to be capable of
appreciating the significance of the information. 16 C.F.R.
§1115.11(a).
 Expected that the information will reach the CEO or the official
responsible for 15(b) compliance within 5 days. 16 C.F.R § 1115.14(b).
 Review your Firm’s organizational structure, roles and responsibilities.
Members could include Safety or Quality staff, Customer Service Personnel,
Risk Management staff, Engineers, General Counsel…

7.  Engineering, quality control or production data
 Information about safety-related production or design changes
 Product liability suits and/or claims for personal injury and damage
 Information from an independent testing laboratory
 Incident complaints from consumers or consumer groups
 Information received from the commission (360 reports) or other governmental agencies
 Requests to return a product or for replacement or credit; by distributors/retailers to the
manufacturer and requests from the manufacturer that the product be returned
 Warranty claims
 Product repairs or returns
 Premarket and production testing
 Compliance with applicable mandatory and voluntary safety standards
16 C.F.R. § 1115.12(f). 16 C.F.R. §1119.4(b).

8.  Death or grievous bodily injuries: Defect, noncompliance caused, may have caused,
contributed to the causing, or could cause mutilation, amputation/dismemberment,
disfigurement, loss of important bodily functions, debilitating internal disorders, severe burns,
severe electrical shocks, and injuries likely to require extended hospitalization. 16 C.F.R. §
1115.12(d).
 Marbles, small balls, balloons or small parts in a toy or game on which a child choked and
died, suffered serious injury, ceased breathing, or was treated by a medical professional; 16
C.F.R. § 1117.3 (MDRI)
 Section 37: Manufacturers: Three civil actions filed in federal or state court for death or
grievous bodily injury within a 24 months resulting in settlement or plaintiff’s judgment.
Report: 30 days.
 The CPSC “would expect to receive 15b reports long before the obligation to report
under Rule 37 arises since Firms frequently obtain reportable information before
settlements or judgments in their product liability lawsuits.” 16 C.F.R. § 1115.7.
 Think Globally: If the product is sold outside the U.S., information about its use, experience,
performance, design, or manufacture should be considered. 16 C.F.R. §1115.12(f).

9.  What is information that “reasonably suggests the existence of a defect”?
 Dictionary definition
 Regulation broadly defines:
 Defect resulting from manufacturing or production errors
 Defects from contents, materials, construction, finish, packaging,
warnings, and/or instructions
 Design defect that presents a risk of injury:
Examine utility, nature of the risk of injury, necessity, population
exposed, obviousness of the risk, adequacy of warnings and instructions
to mitigate the risk, role of consumer misuse and foreseeability of
misuse; commission’s expertise; case law interpreting federal health and
safety statutes; case law in products liability, other relevant factors
 16 C.F.R. § 1115.4

10. Does defect/noncompliance, because of the:
 Pattern of Defect, or
 Number of Defective Products Distributed, or
Even one defective product can present a substantial risk of injury if the
injury which might occur is serious and/or if the injury is likely to occur.
 Severity of the Risk, or
A risk is severe if the injury which might occur is serious and/or likely to
occur. In considering likelihood of injury, consider the number of injuries
reported, intended[ use] or reasonably foreseeable use or misuse of the
product, and population exposed (children, elderly, handicapped).
 other relevant factors
create a substantial risk of injury to the public. 16 C.F.R. §1115.12.(g).

11.  No
 Still need to evaluate whether the information reasonably
supports a conclusion that the product could create an
unreasonable risk of serious injury or death—if it is possible,
report. 16 C.F.R. § 1115.6(a).
 Do not wait for a serious injury or death to actually occur before
reporting. 16 C.F.R. §1115.6(a).

12.  Reports from experts
 Test reports
 Product liability lawsuits or claims
 Consumer or customer complaints
 Quality control data
 Scientific or epidemiological studies
 Reports of injury
 Information from other firms or governmental entities
 Other relevant information
 Judgment: “The CPSC will attach considerable significance if a firm learns that a
court or jury has determined that one of its products has caused a serious injury or
death and a reasonable person could conclude . . . that the product creates an
unreasonable risk of serious injury or death.” 16 C.F.R. §1115.6(a)

13.  A grievous bodily injury 16 C.F.R. §1115.12(d)
 Injury necessitating hospitalization requiring actual medical or
surgical treatment
 Fractures, lacerations requiring sutures, concussions, injuries to the
eye/ ear/internal organs requiring medical treatment, and injuries
necessitating absence from school or work of more than one day
 Evaluate chronic or long term health effects as well as immediate
injuries
 Assess the RISK of serious injury, not just actual injuries
16 C.F.R. §1115.6(c)

14. Always monitor to ensure compliance with standards.
 Mandatory Standard:
 If violate, report.
 If comply, still may need to report a defect: Compliance does not relieve
a firm from the need to report a defect that creates a sph, but will be
considered by staff in the determination of whether/what type of
corrective action is required. 16 C.F.R. §1115.8(b).
 Voluntary Standards: Compliance with a voluntary standard
may be relevant to the CPSC staff’s preliminary determination of
whether the product presents a substantial product hazard.

15.  Immediately: 24 hours (weekends, holidays excluded). 16 C.F.R.
§1115.14(e)
 Don’t wait to accumulate incident or injury reports: may arise upon
receipt of first information regarding a potential hazard, noncompliance
or risk. 16 C.F.R. §1115.14(c).
 10 days for investigation. 16 C.F.R. 1115.14(d)
 A firm is assumed to have received and considered all information
which would have been available to it had it conducted a reasonable,
expeditious and diligent investigation regardless of the information it
actually has in its possession. 16 C.F.R. §1115.14(d)

16. Noah AnStraus and Lauren Kleinman
Trial Attorneys
Office of General Counsel
Division of Compliance
This presentation has not been reviewed or approved by the
Commission and may not reflect their views.

17. Create a system to collect, consolidate and ensure information is
properly analyzed.

18.  Training – Don’t just talk about it, do it!
 New employee training
 Bi-annual or annual refresher training
 Practice and Audit; Incorporate Lessons Learned
 Allows for review and evaluation of the compliance program to facilitate
its continuous improvement
 Ensures that training is effective and not just a box to check

19.  Tailor the program to your firm’s specific needs
 Make sure all employees and other relevant parties (e.g.
suppliers, distributors) are aware of and understand the
program
 The program is not a static document – it needs to grow and
evolve with your firm

20. Have a recall plan in place to enable quick action. The ISO standards
below may provide additional guidance:
 ISO 10377 Consumer Product Safety Guidelines
 ISO 10393 Consumer Product Recall Guidelines
 ISO 19600 Compliance Management Systems Guidelines
 ISO 31000 Risk Management: Principles and Guidelines

21.  Make safety a priority at the design stage; consult CPSC’s Handbook for
Manufacturing Safer Consumer Products for guidance and best practices and
conduct usability testing as part of the development process
 Conduct adequate and relevant premarket and production testing to ensure
products meet or exceed safety requirements in relevant mandatory and
voluntary safety standards
 Exercise due care when relying on a supplier by taking affirmative steps, such
as:
 Including contractual provisions requiring compliance with specifications and quality
programs
 Visiting manufacturing locations
 Spot-checking products for ongoing compliance with safety requirements
 Conduct regular audits to confirm compliance within your firm and among
your suppliers

22.  Establish systematic procedures for collecting the information to be reviewed and
evaluated for potential safety issues
 Consider multiple sources of information
 Types of incident information to collect:
 Date of report
 Consumer contact information (name, address, email, and phone)
 Product name, make, model, serial number, date code, and any other identifying
information on the product or packaging
 Incident details such as:
 Date of incident
 Circumstances surrounding incident
 Injury/medical attention, medical records if appropriate, and photographs
 Collection of incident sample, if available

23. Establish a central database to track information; ensure early issue
identification and closing open issues:
 Set up a system to capture all incidents and route potential safety related
incidents to the compliance team
 Make sure that your databases speak to one another
 Ensure that employees are trained to recognize safety related issues, so
they are prepared to elevate these issues to management as soon as they
see them
 Have a system in place to regularly analyze what is contained in the
Database to make certain that issues are identified and addressed as soon
as possible

24.  Safety issues will eventually surface, but it is best to get ahead of
them
 Make employees comfortable in reporting safety issues; create a
confidential path for sensitive issues
 Ensure that information gets to the right people in your
organization based on its structure and roles and responsibilities

25.  Maintain a culture that emphasizes and values product safety,
compliance with CPSC safety requirements and voluntary
standards, and a comprehensive quality assurance program
 Oversight of compliance by the firm’s responsible official will
facilitate prompt disclosure to senior management of any
deficiencies and allow for consistent decision making
 Develop a mechanism for elevating product safety reports to
senior management

26.  Understand your legal responsibility to report information to the
CPSC about the product if it:
 (i) fails to comply with a CPSC rule, regulation, standard or ban
 (ii) contains a defect which could create a substantial product hazard
 (iii) creates an unreasonable risk of serious injury or death
 Keep up with the CPSC’s new and updated regulations through
e-mail notification: www.cpsc.gov/email

27.  Step-by-step guidance for conducting a recall can be found in the
Recall Handbook: https://www.cpsc.gov/Business--
Manufacturing/Recall-Guidance.
 Understand the system(s) of product distribution and the potential
challenges in executing a recall and develop an implementation plan.
Ensure the plan is updated.
 Common reverse logistic mistakes:
 SKUs were reused; consider how lot or batch controls or model and serial numbers
are used to identify products
 computer systems did not communicate with each other
 no one individual was identified as the point person for the recall
 inventory reports for recalled SKUs were not regularly conducted
 sales reports for recalled SKUs were not regularly conducted
 register prompts were unclear

28.  Establish a records retention system
 CPSC staff recommends keeping all compliance-related records for at
least five years
 If you are upgrading systems, make sure you can access legacy data
 Retention of documents can help identify actions to ensure
future safety and compliance
 In the event of a product recall, documentation helps CPSC
understand the efforts you made to provide safe consumer
goods, what went wrong and how it has been corrected

29. 29
This presentation has not been reviewed or approved by the
Commission and may not reflect their views.
Compliance Program Seminar
Reverse Logistics and Adequate Notice
November 1, 2018

30.  Public Notice
 Remedy
 Communication with consumers, retailers, distributors,
and other parties
 Destruction or remediation of recalled products
30

31.  Reverse logistics is the process of planning, implementing, and
controlling the efficient and effective flow of goods from their
typical final destination for the purpose of recovery or proper
disposal
 Physically recovering and properly disposing of products in the
event of a recall or stop sale is just one aspect of a good reverse
logistics plan
 A Compliance Program should be comprehensive and anticipate
potential reverse logistics issues that may arise
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32.  Develop a reverse logistics and recall plan before you need it
 Rehearse your plan and conduct mock recalls
 Identify gaps and define exactly what will happen and who is
responsible for each part of the plan to allow for effective plan
execution
 Update to reflect changes in the supply chain
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33.  Alert the entire supply chain
 Provide specific instructions for disposition of recalled
products
 Provide a recall point of contact
 Ensure everyone knows exactly what to do, their role,
and who to contact
 Notifications should happen leading up to and
including recall announcement date
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34. When developing a reverse logistics plan, consider:
 Communication avenues
 Central location quarantine vs retail destruction
 Computer system limitations
 Auctioning and selling off
 Disposal/recycling procedures
34

35. Tanya Topka, Team Lead
U.S. CPSC, Office of Compliance, Defects Investigation Division
301-504-7594
ttopka@cpsc.gov
35

36. COMPLIANCE PROGRAMS - REGULATED RODUCTS
Carolyn Manley
Team Lead, Regulated Children’s Products
Regulatory Enforcement Division
Office of Compliance and Field Operations
This presentation has not been reviewed or approved by the
Commission and may not reflect their views.

37. Purpose of Compliance Program
 What is the purpose of developing a compliance program?
For a company to develop internal safe guards to ensure their
products comply with regulations.

38. Developing a Compliance Program:
Knowing the Statute and Requirements
38
 Federal Hazardous Substances Act (FHSA)
Small parts, labeling for toys and games, lead in paint, lead
content, art materials
 Consumer Product Safety Act (CPSA)
Phthalates, ASTM F-963, durables, tracking label, certification
 Flammable Fabrics Act (FFA)
 Poison Prevention Packaging Act (PPPA)
 Refrigerator Safety Act (RSA)
 Virginia Graeme Baker Pool & Spa Safety Act
 Children’s Gasoline Burn Prevention Act (CGBPA)

39. Common Problems
These common problems can be avoided:
 Products not meeting mandatory standards
 Products being detained at the port
 Products not tested to the applicable requirements
 No Children’s Product Certification or General Certificate of
Conformity
 Appropriate Test Reports

40. Developing a Compliance Program:
Small Parts Requirements
(Toys for children under 3 years of age)
40
 Toys and other articles for children under 3 years of
age must not contain any small parts before and
after use and abuse testing
 Small parts are articles that fit into small parts
cylinder.

41. Which requirements apply?
Age 19+ months
-Lead content
-Lead and other heavy metals
surface coating
-Phthalates
-Small parts
-ASTM Battery operated toy
-ASTM Sound producing toy
-Tracking label
-Certification

42. Which requirements apply?
Age 19~35 months, 29 pieces,
larger size blocks that will not
fit into small parts cylinder
Age 3+ years, 102 pieces,
smaller size blocks that fit
into small parts cylinder
-Lead content
-Phthalates
-Small parts
-Tracking label
-Certification
-Phthalates
-Lead content
-Small parts warning label
-Tracking label
-Certification

43. Developing a Compliance Program:
Requirements for Labeling for Toys and Games
(Toys for children 3 years of age and above)
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Small parts: age 3-
less than 6
Balloons: all latex balloons
Small ball: age 3 and older
Toy contains a small ball: age 3 -
less than 8
Marble: age 3 and older
Toy contains a marble: age 3- less
than 8

44. Developing a Compliance Program:
Requirements for Labeling for Toys and Games
(Toys for children 3 years of age and above)
Before the firm instituted
a compliance program
After the firm instituted
a compliance program

45. Developing a Compliance Program:
Durable Infant and Toddler Products
What is a durable infant or toddler product?
Section 104 (b) of the Consumer Product Safety
Improvement Act – Danny Keysar Child Product Safety
Notification Act (Danny’s Law)
 “Durable infant or toddler product” is defined as a
durable product intended for use, or that may be
reasonably expected to be used, by children under the
age of 5 years.
 The products listed in the Commission’s regulations at
16 CFR 1130.2.
45

46. LIST OF DURABLE INFANT OR TODDLER PRODUCTS
ASTM
• Gates and Enclosures

47. Common Problems with Durables
 Ensuring that third-party testing laboratories
are CPSC-accepted and accredited to test to the
mandatory standards.
 Ensuring that third-party testing is being
conducted to the most up-to-date version of the
standards approved by the Commission.
 Ensuring that durables have a registration form
attached to the product.
 Ensuring that the products and their packaging
are labeled in accordance with the registration
and tracking label requirements.

48. EXAMPLE OF REGISTRATION FORM
Purpose statement
Postage paid
Manufacturer’s U.S.
mailing address
Manufacturer’s U.S. contact information:
address and registration website
If no registration website, email is
required.
Consumer address
and contact info
Pre-printed
product info.
Consumer
keeps
Consumer
mails out
ABC
ABC
123
123
Jan 1, 2018
Jan 1, 2018

49. The Overlap Between Tracking Label Requirement
and Registration Requirement

50. Developing a Compliance Program:
Lead Limit Requirements
 Lead content: cannot exceed 100 ppm in children’s
products
 Lead in paint: cannot exceed 90 ppm for surface
coating on children’s products
 Commission has determined that certain materials
would not contain lead, and therefore, do not
require lead content testing. Some of the materials
that do not contain lead are: wood, paper, most
textiles and natural fibers (dyed and undyed),
plant and animal-derived materials, and certain
precious metals. A complete list of materials can be
found at 16 C.F.R. § 1500.91(d).

51. Developing a Compliance Program:
PPPA - Special Packaging Requirements
 Special Packaging is packaging that is designed or constructed to be significantly
difficult for children under five years of age to open or obtain a toxic or harmful
amount of the substance contained therein within a reasonable time and not difficult
for normal adults to use properly..” 15 U.S.C. § 1471(4)
 32 Substances requiring Special Packaging are listed at 16 C.F.R.
§ 1700.14 (a)(1-13, 15-33)
 Performance specifications for Special Packaging can be found in 16 C.F.R. §
1700.15.
 How to test: the Testing Protocol for Special Packaging is at 16 C.F.R. § 1700.20.
 Manufacturers and importers of certain general use products (i.e., non-
children’s products) for which consumer product safety rules apply, must
certify, in a written General Certificate of Conformity (GCC) based on testing or
a reasonable testing program, that their products comply with those applicable
rules.
51

52. Remember:
52
Know Your
Products
&
Regulations
Test Your Products
&
Develop a
Compliance
Program
Contact
CPSC

53. Remember: Resources

54. Questions?
Carolyn Manley
301-504-7607
Cmanley@cpsc.gov