CPSC Overview of Current Certificates Requirements, Proposed Changes, and Industry Presentations

U.S. Consumer Product Safety
Commission
1
CPSC Staff Workshop on Electronic Filing of
Certificates as Included in Proposed Rule on
Certificates of Compliance
September 18, 2014
This presentation was prepared by CPSC staff, has not been reviewed or approved by,
and may not reflect the views of, the Commission.

For those of you in the room, please mute electronics and phones.
For those of you watching on the web, you can email questions for the speakers to:
efiling@cpsc.gov.
The transcript for today’s workshop will be added to the docket at:
www.regulations.gov Docket number: CPSC–2013–0017
The PowerPoint presentations will also be available at:
http://www.slideshare.net/USCPSC

U.S. Consumer Product Safety
Commission
3
Section 14 of the CPSA & 16 C.F.R. Part 1110
Jacqueline Campbell, CPSC EXHR
This presentation was prepared by CPSC staff, has not been reviewed or
approved by, and may not reflect the views of, the Commission.

Presentation Overview
 Statutory Requirements
 What is a Certificate, When is It Needed, and Who
Issues It?
 Content, Form, Availability, and Filing Requirements
for Certificates
 Regulatory Requirements
 Existing 16 C.F.R. part 1110 Rule
 Proposed Amendments to 16 C.F.R. part 1110
 Electronic Filing of Certificates for Imported Products
4

Statutory Requirements for
Certificates
5

Section 14(a) of the CPSA
• Consumer products must be tested and certified as
compliant with any applicable consumer product safety rule
under the CPSA or similar rule, ban, standard, or regulation
under any other law enforced by the Commission.
6

Statutory Authority
 Section 14(a)(1) of the CPSA
 Certification of non-children’s products based on a test of
each product or a reasonable testing program.
 Section 14(a)(2) of the CPSA
 Certification of children’s products based on testing
conducted by a CPSC-accepted third party laboratory.
 Sections 14(a) & (g) of the CPSA
 Provides certificate content and availability requirements.
 Section 3 of the CPSIA
 Authority to implement the CPSIA and the amendments
made by the CPSIA.
7

What Is a Certificate, When Is It
Needed, and Who Issues It?
8

What Is a Certificate?
 A certification that a consumer product or other substance
regulated by the Commission:
9
 has been tested, and
 Non-children’s products – a test of each product or a reasonable
testing program
 Children’s products – testing conducted by a third party conformity
assessment body (laboratory)
 complies with all applicable safety rules, bans, standards, and
regulations.

All Certificate Types
10
 General Conformity Certificate (GCC)
 Children’s Product Certificate (CPC)
 16 C.F.R. part 1107
 Component Part Certificate
 16 C.F.R. part 1109

Required Certificate Types
11
 General Conformity Certificate (GCC)
 Non-children’s products only
 Based on a test of each product or a reasonable testing program (14(a)(1) of
the CPSA)
 Must comply with 16 C.F.R. part 1110
 Children’s Product Certificate (CPC)
 Products intended primarily for children 12 years of age and younger
 Based on testing conducted by a CPSC-accepted third party laboratory
(14(a)(2) of the CPSA)
 Requires periodic and material change testing
 Must comply with 16 C.F.R. part 1110

What Products Require Certificates?
12
 Regulated consumer products.
 A product subject to a consumer product safety rule under
the CPSA or similar rule, ban, standard, or regulation under
any other law enforced by the Commission.
 Imported for consumption or warehousing, or distributed
in commerce.
 CPSA defines “distribute in commerce” to mean “to sell in
commerce, to introduce or deliver for introduction into
commerce, or to hold for sale or distribution after
introduction into commerce.”

When Is a Certificate Not Required?
13
 No product safety rule, standard, or ban applies
 Products subject to a rule under section 15(j) of the CPSA
 Drawstrings on children’s upper outerwear
 Immersion protection on hand held hairdryers
 Products not imported for consumption or warehousing or not
distributed in commerce
 Foreign Trade Zone
 Samples
 Trade Show Exhibit
 Component parts not for individual sale.

Who Issues a Certificate and When?
14
WHO?
Manufacturers (including importers) and private
labelers.
WHEN?
 Before importing products for consumption or
warehousing or distributing products in commerce.

Statutory Certificate Requirements
15
Content
 14(a) and (g)(1) of the CPSA
 English Language
 14(g)(2) of the CPSA
Availability
 Electronic Filing of Certificates for Imported
Products

Certificate Requirements: Content
16
• Identification of the product(s);
• List each applicable consumer product safety regulation;
• Identify;
• The manufacturer (including importer) or private labeler issuing the
certificate.
• The third party conformity assessment body on whose testing the
certificate depends, if applicable.
• Date(s) and place(s);
• Where the product was manufactured.
• Where the product was tested for compliance with each safety rule.
• Each party’s name, full mailing address, telephone number; and
• Contact information for the individual maintaining records of
test results.

Certificate Requirements: Language
17
 Legible
 All required content in English
May contain the same content in another
language

Certificate Requirements: Availability
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Required certificates must:
 accompany the product or shipment of products
covered by the certificate;
 be furnished to each distributor or retailer of the
product; and
 be furnished by the issuer to the Commission, upon
request.

Electronic Filing Requirements
 In consultation with CBP, the CPSC, by rule, may
provide for the electronic filing of certificates up
to 24 hours before arrival of an imported
product.
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 Issuer must furnish certificates to CBP and to
CPSC, upon request.

Regulatory Requirements
for Certificates
20

Existing 16 C.F.R. Part 1110 Rule
21

Background on Part 1110
 Consumer Product Safety Improvement Act of 2008 (CPSIA) was
enacted on August 14, 2008.
 The Commission issued a rule on “certificates of compliance,” 16
C.F.R. part 1110, on November 18, 2008 (73 FR 68328).
 Existing part 1110 rule sets forth certificate requirements, such as:
 limiting the parties who must issue a certificate;
 allowing certificates to be in hard copy or electronic form;
 clarifying requirements for an electronic form of certificate;
and
 providing certificate content requirements that follow the
statute.
22

Product Testing & Certification Rules
 16 C.F.R. part 1107
 Testing and Labeling Pertaining to Product
Certification
 16 C.F.R. part 1109
 Component Part Rule
 16 C.F.R. part 1110
 Certificates of Compliance
23

 16 C.F.R. part 1107: Testing and Labeling Pertaining
to Product Certification
 Sets forth requirements for certification,
material change, and periodic testing of
regulated children’s products.
24

 16 C.F.R. part 1109: Component Part Rule
 Provides for component part testing and reliance on
another party’s testing or certification.
 Component Part Certificate
 voluntary (never required)
 can be used to support a GCC or a CPC
 can be issued by any party as long as it complies with 16
C.F.R. part 1109
 NPR proposes certificate must meet the form, content,
and availability requirements described in 16 C.F.R. part
1110
25

Proposed Amendments to
16 C.F.R. part 1110
26

2013 NPR to Amend Part 1110
27
 On May 13, 2013, the Commission issued a NPR to amend the
existing 1110 rule (78 FR 28080).
 The NPR proposed to:
 Clarify certificate requirements in light of the testing and component
part rules, and
 Define and use new terms
 Describe how certificates must be integrated and consistent with these new rules
 Implement electronic filing of certificates.
 Section 14(g)(4) of the CPSA allows the Commission, in consultation with the
Commissioner of Customs, to require that certificates for imported products be
filed electronically with CBP up to 24 hours before arrival of an imported
product.

Who Must Certify Products
Manufactured Outside of the U.S.?
 CPSA requires that certificates be issued by a
manufacturer, importer, or private labeler (as defined
by the CPSA).
 Existing 1110 rule requires certificates for imported
products to be issued by the importer.
 NPR would continue to require certificates for imported
products to be issued by the importer.
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 Except for products delivered directly to a consumer.

Proposed Amendments:
Certificate Availability
 Proposed rule implements “accompany” requirements for imported
products:
 Importers must file certificates electronically with CBP at the time of filing the
CBP entry or the time of filing the entry and entry summary, if both are filed
together.
 For all other purposes of providing a certificate, NPR maintains that
certificates may be paper or electronic (i.e., URL) for:
29
 Request by CPSC or CBP; or
 Furnishing to Retailers or Distributors.
 Proposed rule also sought comment on allowing filing of certificates at
a time earlier than entry (at manifest).

Electronic Filing of
Certificates for Imported
Consumer Products
Proposed 16 C.F.R. 1110.13(a)(1)
30

Why Electronic Filing?
 CPSC proposes to receive data elements from certificates into our
RAM system, which can be used to:
31
 Expedite clearance;
 Identify high risk cargo for inspection;
 Conduct post-importation enforcement;
 Generate reports to assist with:
 Risk assessment; and
 Setting agency priorities and goals;
 Meet objectives of EO 13659, Streamlining the Export/Import Process
for America’s Businesses.

Proposed Electronic Filing:
Technology
32
 The NPR mentions two data types:
 PDF file
 Data elements
 The NPR stated that the Commission prefers data
elements so that the information can be uploaded and
searchable in a database.

Proposed Electronic Filing:
Technology
NPR recognized electronic filing of certificates
would require:
33
 Implementation in phases
 Software upgrades
 CBP’s technology requires CBP’s assistance and
cooperation to implement

Conclusions
 The statute imposes basic certificate requirements.
 The NPR proposes several amendments to the current
1110 rule, including filing electronic certificates with
CBP at entry.
 The Commission is considering the process and
requirements for electronic filing.
34

CPSC Electronic Filing of Certificates
Workshop
Nancy MacPherson, Director External Relations

Key Concerns
1. The proposed requirement uses assumptions on the number of import
transactions that significantly underestimate the impact of having to upload
each certificate 24 hours in advance of import.
2. The proposed rule does not address import processes that utilize a Foreign
Trade Zone (FTZ).
3. The apparent lack of process flexibility in the proposed rule discounts current
processes and IT systems that already permit the CBP and CPSC immediate
access to the certificate data 24 hours in advance of import.
4. Changes do not “streamline the Export/Import process for America’s
businesses” as per Executive Order 13659 which is intended to “reduce supply
chain barriers” and “to modernize and simplify the way agencies interact with
traders.” They might simply create a bigger data ‘haystack’ in which to find the
violative ‘needle’.

LEGO® US Import Overview
Dallas DC is a Foreign Trade Zone (FTZ)
2013 Activity
1,500,000 Avg. # sets packed in the LEGO factory in
Monterrey, Mexico and shipped to the DC near Dallas
80-160 Trucks per week between factory and DC
100-150 Trucks per week leaving DC with customer shipments
(The point of import from the FTZ)
1150 Avg. # unique SKUs shipped per week to customers
1500 Peak # unique SKUs shipped per week in high season

As compared to…..
CBP estimated that ‘‘in 2005, more than 70 to 85 percent of all importers
imported fewer than 12 shipments.’’ Additionally, “This (referencing cost)
estimate is based on the assumption that one certificate of conformance
would be required per shipment.
NPR CPSC-2013-0017 SEC VI, B (Reporting and Recordkeeping)
• LEGO A/S usually processes one import transaction per week in accordance
with FTZ regulations
• Each entry could include up to 1500 different certificates given 1 per SKU and
up to 15000 data elements….each week.

Import Flow of Goods and Entry Documents

The current LEGO Certification process
ensures certificates ‘accompany’ the
product, are immediately available to
CBP and can also be accessed 24 hours
ahead of import without any
duplicative uploading of data.

Recommendations
1. Provide flexibility to accommodate various supply chain
models. The proposed rule describes one option, but that
should not be the only option. If there are alternative means
for providing CBP access to the certificates they should be
allowed.
From PR: “CPSC is considering allowing, but not requiring certificates to be filed in
advance”
2. Ensure that FTZ processes, including ‘when’ an item is
imported, are recognized and integrated into any rule
changes.

Proposed Joint Presentation of the Retail Industry
Leaders Assoc. & the National Retail Federation
Before the U.S. Consumer Product Safety Commission
Workshop on Proposed 16 CFR Part 1110 Electronic Filing of
September 18, 2014
Kathleen McGuigan, Senior Vice President, Legal &
Regulatory Affairs, RILA: kathleen.mcguigan@rila.org
Jon Gold, Vice President, Supply Chain and Customs
Policy, NRF: goldj@nrf.org

CPSC Workshop on
Electronic Filing of
Sean T. Murray, Esq.
Representing the NAFTZ
September 18, 2014

National Association of Foreign-Trade
Zones
• Represents the interests of U.S. Foreign-Trade Zone
(FTZ) grantees, operators, and users
• Composed of public and private member representatives
across the United States
• FTZs handle a significant volume of U.S. international
trade
– Approximately 12.4% of all imports move through FTZs
– Calendar Year 2013 data:
• Shipments into FTZs totaled $835 billion (including $290.3 bn
foreign and $545.5 bn domestic status merchandise)
– Warehouse/distribution operations received over $264 billion in
merchandise
– FTZ production operations received over $571 billion in
merchandise
• Over $79 billion in exports from FTZs
• 3,050 firms employing 390,000 persons used FTZs

Response to CPSC Certificates of
Compliance Proposed Rule
• FTZs have unique trade function; also unique procedures
– Used to store/stage merchandise that never enters the U.S.
Customs Territory
– With specific U.S. FTZ Board approval, used by manufacturers
to produce goods in the U.S. using foreign components
– Used as “safety valve” for addressing damaged, scrap,
unknown products
• FTZ users need procedures that do not impose unnecessary
burden on the FTZ unique operations

Response to CPSC Certificates of
Compliance Proposed Rule
• We request that FTZs be specially recognized so that the
CPSC rules
– Do not apply to merchandise admitted into and held in an FTZ
– Do not apply to component parts of finished products that are
produced in an FTZ
– That the CBP-recognized FTZ inventory control systems be
accepted for CPSC purposes
– That CPSC documentation only be required to be filed with the
CBP Form 7501 Entry Summary for merchandise entered for
consumption from an FTZ
– That CPSC documentation not be filed for exports from FTZs

Unique FTZs Operations – Weekly
Entry
• 19 U.S.C. § 1484(i) authorizes FTZ operators/ users to
file weekly estimated Customs entries for a business
week’s shipments into the U.S. Customs territory instead
of one Customs entry per shipment
– FTZs establish a 7-day zone shipping week and obtain CBP
approval to file an estimated CBP Form 3461
• NAFTZ believes that the large majority of activated FTZ
operators and users utilize weekly entry procedures
• Submitting CPSC certificates of compliance at the time of
entry or at the time of entry summary is problematic
under Weekly Entry
– The CBP Form 3461 for Weekly Entry is just an estimate used
for purposes of securing a CBP release to enter merchandise
over the upcoming 7-day zone week; it is not related to actual
shipments or merchandise from the FTZ

Unique FTZs Operations – Inventory
Control and Recordkeeping
• FTZ companies can choose to manage their
inventory for purposes of reporting to CBP using
either a specific identity (lot) methodology or a
unique identifier number (UIN) (record identity)
methodology
– Many FTZ companies ship commercially
interchangeable merchandise that is managed by a
UIN methodology and reported on a FIFO basis, not on
the actual country of manufacture of the physical
merchandise in the particular shipment
– Track using inventory control and recordkeeping
system (ICRS)
– Use of inventory control methodology and Weekly
Entry poses challenge to tying CPSC certificates of
compliance to physical shipments

Unique FTZs Operations – Scrap,
Waste, Repair, Reconditioning
• CPSC should continue to recognize FTZs as a place
to bring merchandise into compliance before
Customs entry

General Comments
• Filing CPSC Certificates of Compliance at entry will
place a burden on industry
– Uploading process would be a significant burden to many
importers
– Estimated cost burden for importers required to file
certificates of compliance is significantly undervalued
– Need to keep business-proprietary information private
PLF/PP/113243

Role of the Customs Broker
56
• Trade Facilitator
• No financial interest in the imported goods
• Definition of Importer (party whose actions caused the
goods to be imported) versus Importer of Record
• Identification of shipments requiring CPSC Reporting
(HTS# flags)
─Prioritize HTS # requirements, e.g. High Priority assigned
to child safety seats and data required at entry release
─Low(er) Priority goods – fewer data elements and possible
post entry reporting

Reporting Challenges
57
• Amount of and availability of data to be reported
• Cost to Broker, Carrier and Importers including small &
medium sized enterprises and individuals:
─ Cargo Holds – significant increase
─ Demurrage, CES warehouse costs
─ Cargo Abandonment – product destruction costs
─ Cost to report additional data

Reporting Challenges
58
• Cost estimate for UPS Express shipments for 1 year –
significant impact to the importing community
─ Held shipments would overwhelm existing storage capacity
(estimated impact 75% of current shipments)
─ Large staffing increases to handle held package volume
• Additional document requirements - brokerage
• US Consumer is impacted through added costs to ship
and shipping delays

Opportunities
59
• Transaction by Transaction Based Program
─Implement a de minimis rule for products subject to
compliance certificates
─Provide relief in reporting requirements for low priority
merchandise, personal shipments (not entering the
commerce of the USA)
─Opportunity to develop a Trusted or Known Importer Program
─Blanket Certificates of Compliance (COC)
─Certificates of Compliance issued by foreign manufacturer

CPSC Certificates of Compliance Section 1110 Rule
Workshop
Presented by:
Alan P. Kaufman
Senior Vice-President, Technical Affairs
September 18, 2014 | Bethesda, Maryland

Toy Industry Association (TIA)
 Trade association for North American-based manufacturers, importers,
licensors and toy retailers (regular members)
 Associate members include inventors, designers, testing labs
CPSC Certificates of Compliance Workshop| September 18, 2014 61
 Formed in 1916
 Long History of Dedication to Child Safety
 Over 750 members
 Members represent approx 85% of the U.S. market

Toy Industry Association
Toy Companies, Licensors, Inventors and Designers, Manufacturers Reps, Retailers

A Snapshot of the U.S. Toy Industry
Average price of a toy is less than US$9.00
An estimated 3 Billion+ units sold each year
US$22+ Billion in direct toy sales (2013)
Estimated 512,775 FTE toy industry jobs in the United States
Total annual economic impact of US$69 Billion

Stakeholder’s Current Certificate and Import
Procedures
 Current 1110 Rule/Toy Importer practices
– Original 1110 rule allowed flexibility in requirements for
certificates of conformity
• Each importer developed system best suited to their operations
and supply chains
• No issues have been raised by CPSC to date with current
systems companies have in place
• Current systems adequately meet needs of CPSC and importers;
importers have adapted to current level of administrative
burden

Procedures (cont.)
 Issues with proposed changes to the 1110 rule:
– No evidence that proposed changes would improve safety
– Would add significant costs for industry
– Current CPSC targeting methodology adequately identifies higher-risk
imports
– Port staffing and expertise is current limiting factor, not inability to
target
– No evidence that electronic submission of CoCs would improve
targeting efficiency or safety of imported product

Procedures (cont.)
 Benefits of current 1110 Rule “On Demand” Certificate System
– Allows for certificates to be produced on request to either CPSC or
CBP no later than 24 hours after request
– This meets needs of CPSC and CBP while minimizing importer
burden
– Due to varying supply chain management systems, requiring a
“one-size-fits-all” system of filing at entry is not workable for the
industry at large

Stakeholders’ Anticipated Challenges in Meeting
an Electronic Filing Requirement
 Costly Changes to Current Requirements-Underestimated by CPSC
– Requiring certificates to be filed at entry will be extremely costly
for the toy industry
• Linking certificates to cargo containers will require costly
database reconfigurations for companies
• Consolidated freight will present special challenges-possibility
of multiple importers for same container
• Systems that have worked well since 2008 will need to be
totally revamped under the proposed rule, with no anticipated
advancement in safety

an Electronic Filing Requirement (cont.)
 CPSC’s Regulatory Flexibility Act (RFA) analysis contemplates “typical”
shipping systems which are anything but typical
– Dramatically underestimates the number of shipments and
certificates companies are responsible for maintaining
– Ignores the extreme seasonality of toy and consumer product
imports, with a majority occurring in the last calendar quarter of
the year
– RFA estimate is that importers ship fewer than 12 shipments
annually, but this low figure is applicable to only the smallest toy
importers; several TIA members import more than 12 shipments
per day.

– Consolidated cargo co-loads product from multiple importers; this
will further complicate certificate submission, as release of all
cargo is dependent upon all importers timely submitting
certificates
– Regardless of the number of shipments, each container may
contain many different products requiring potentially hundreds (
considering component part certificates) of different certificates be
submitted at entry
– This means that the RFA estimate will need to be revised
exponentially upward, and thus the costs associated with filing
entries will likewise increase many-fold

 Methods of Importation Vary
– The proposed rule does not contemplate costs and challenges
associated with imports coming across our borders by truck or rail,
rather than on cargo ships • Trailers may be filled with many
different product lines at a factory and placed on trucks that leave
for import when full
• Trailers could contain any different number of products and
each would require a certificate (or multiple certificates) to be
filed
• Multiple trucks with multiple products are shipped every day
using this method; this will potentially cause a logistical
nightmare entering certificates of specific products in each
truck into CBP’s system

 CBP is Not Yet Able to Handle the Influx of Data Proposed in Rule
– As stated in the proposed rule, CBP’s systems do not yet have the
capability to handle all CPC’s to be filed at entry
– It is premature for CPSC to require such a mandate when the
agency charged with controlling the data portal is not ready for
such information to be filed, and may not be for some time (if ever)
– TIA urges CPSC to develop a multi-stakeholder group that includes
industry, CBP, CPSC, import specialists and other interested parties
to guide the agency on this regulation and others

Issues to be resolved from CBP’s DIS and PGA
Message Set Tests in ACE
 Does CBP have the bandwidth to handle the volume of data that will
be generated by supplying CPC’s and GCC’s at entry, especially if
importers only have the capability to submit PDF files which often can
be large?
 When will CBP’s ACE system be ready to handle such data?
 What is the timeline for implementation of the “single-window”
system contemplated in EO 13659?

CPSC’s RAM Pilot
 TIA is supportive of the RAM program and urges the CPSC to expand
the program beyond the pilot program
 What criteria are CPSC using to target shipments for inspection?
– The toy industry is happy to provide any information to the agency
that will lead to more targeted inspection
• Industry is concerned about sharing confidential business
information with CPSC in a manner (e.g. unsecured website)
that could jeopardize relationships of importers with their
supply chains, especially if safety benefit is marginal

Thank You!
 Questions?
Al Kaufman
(646) 520-4868
akaufman@toyassociation.org

www.anderinger.com
© 2013 A.N. Deringer, Inc.
CPSC - ITDS
Heritage of Trust Since 1919
• Who should be responsible for filing the certificate?
• Definition of Importer
• Exclusion of Customs Brokers
• How and when must certificates be made available?
• Time of submission and format
• ITDS/PGA message set/DIS
• HTS# Flags
• Supply Chain
• Northern Border vs. AV shipments
• Wait times

Electronic Filing of Certificates of
Compliance
Presentation of the Bicycle Product Suppliers Association
At the CPSC Workshop
Erika Z. Jones
ejones@mayerbrown.com
September 18, 2014
CPSC Docket 2013-0017
Mayer Brown is a global legal services provider comprising legal practices that are separate entities (the "Mayer Brown Practices"). The Mayer Brown Practices are: Mayer Brown LLP and Mayer Brown Europe-Brussels LLP, both limited liability partnerships established in Illinois USA;
Mayer Brown International LLP, a limited liability partnership incorporated in England and Wales (authorized and regulated by the Solicitors Regulation Authority and registered in England and Wales number OC 303359); Mayer Brown, a SELAS established in France; Mayer Brown
JSM, a Hong Kong partnership and its associated legal practices in Asia; and Tauil & Chequer Advogados, a Brazilian law partnership with which Mayer Brown is associated. Mayer Brown Consulting (Singapore) Pte. Ltd and its subsidiary, which are affiliated with Mayer Brown, provide
customs and trade advisory and consultancy services, not legal services. "Mayer Brown" and the Mayer Brown logo are the trademarks of the Mayer Brown Practices in their respective jurisdictions.

Bicycle Product Suppliers Association
• BPSA is an association of over 70 manufacturers,
importers and suppliers of bicycles, parts, accessories and
services who serve the specialty bicycle retailer.
• BPSA members are interested in this proposed rule
because they manufacture, import and sell three
categories of regulated products required to have COCs:
– Bicycles
– Bicycle Helmets
– Clothing
• In addition, BPSA is interested because the proposal
suggested possible expansion to replacement parts.

Summary of BPSA Position on the Proposal to Require
Electronic Filing of COCs
• The CPSC has underestimated the costs of compliance
with the proposal.
• The proposed tracking requirements would be difficult to
manage.
• Mandatory electronic filing is premature.
– Current CBP capabilities require manual uploading of PDFs of
each certificate into the automated system.
– This is labor-intensive and introduces potential for error.
– And, it is unclear if CBP’s system will accept PDFs of CPSC GCCs.
• Practicability problems increase significantly if
replacement parts are included.

Costs of Compliance Have Been Significantly
Underestimated
• CPSC estimated 1,900 bicycle models sold annually, based
on an extrapolation of its estimate of children’s bike
models.
• However, BPSA estimates 7,170 bicycle models are being
sold in 2014 through the independent distributor (IBD)
channel (this has increased since 2013).
– Many more models are sold through mass market channels.
• If a COC is issued only once a year for these models, using
CPSC’s time and labor estimates, the annual incremental
cost for IBD bicycles alone exceeds $450,000 – and far
more when mass market bicycles, helmets and clothing
are included.

Cost of Compliance, Continued
• And, BPSA respectfully submits that CPSC’s time and labor
estimates are too low.
• Many bicycle models receive new COCs more than once
annually due to changes in components or other reasons.
• The CPSC’s estimate does not take into account the
substantially increased manual labor required to upload
the certificates to CBP’s website under the current system
design.

The Proposed Tracking Requirements Would Be
Difficult to Manage
• CPSC proposed to require (among other things) that the
GCC identify the scope of finished products for which the
GCC applies, such as by start date, start and end date, lot
number, starting serial number or serial number range or
other means.
• This appears to go far beyond the existing requirement to
identify the month and year of manufacture.
• This proposal is complicated further if extended to the
hundreds of thousands of models of components and
aftermarket parts, which are rarely serialized or date
coded now.
• The bicycle industry supply chain is not equipped for this.

Mandatory Electronic Filing is Premature
• It is BPSA’s understanding that CBP’s “ACE” system is not
equipped to accept the data elements from CPSC’s 1110
rule at this time.
• Thus, the only process for filing electronic certificates
would apparently be a labor-intensive, manual upload of
PDFs of each certificate.
• It is not clear that CBP will even accept PDF attachments.
• This imposes great costs and introduces potential for
human error, with no commensurate improvement in
consumer product safety.

Conclusion
• CPSC should not require electronic filing of GCCs with CBP.
• To BPSA’s knowledge, CBP’s system is not yet ready to
accept true electronic filings of GCCs, and would instead
require labor-intensive manual uploads.
• The current system of making GCC’s available on request
is working well.
• The additional costs of mandatory electronic filing have
not been justified, nor is there any evidence that such a
requirement will improve safety.

CPSC WORKSHOP ON
RULE 1110
SEPTEMBER 18, 2014

MEMBERS
EXPRESS ASSOCIATION OF AMERICA

RESOURCES
• Over 1.2 Million Employees
• $200 Billion in Revenues Annually
• 30 Million Shipments Delivered Daily
• Over 220 Countries and Territories
Served

INTEGRATED END-TO-END PROCESS
Image Capture at
Origin (Shipper
documents)
Manifest Creation
Advanced
Manifest Review
Downloads to:
AMS/ATS
Clearance Site
Broker
Shipment creation
( AWB /
Automation)
Entry Prep &
Submission
Selected
Held
ACAS
Released
Domestic
Network
Caged
- Indicates Physical Package Scan
Customer
Location
Origin
Station
Export Import Domestic
Station
Operations
POD
Scanning at Arrival
Very “tight” cycle with demanding deadlines
– entire process complete in 24 hours

RULE 1110 – KEY ISSUES
• Trade Act 2002 – party with the best
information on the shipment should be
responsible for providing it
• For product safety issues, party with best
information is the importer, owner of goods
• Importer of record is a nominal consignee, a
convenience for completing the financial
aspects of the transaction
• For products sold online, seller is responsible
party
• Brokers cannot certify if product is in
compliance
• EXPRESS ASSOCIATION OF AMERICA
Importers do not want carriers representing

OPTIMUM
SOLUTION
• CPSC provide list of products requiring certificate
• Submit certificates electronically
• When importer obtains certificate, load it into
Document Imaging System (ITDS)
• Provide certificate post-release for otherwise
compliant shipments
• Continue to provide certificate on demand, not
with every shipment
• If IOR has to hold goods pending receipt of
certificate, costs and time delays increase –
potentially hundreds of items

LONGER TERM
• CPSIA = CPSC has trade facilitation mission
• Private sector cannot carry out enforcement actions
• Establish ongoing dialogue with trade to address
issues and find best solutions
• Leverage relationship with CBP to create
Working Group under COAC auspices
• Identify information CPSC really needs – improve
risk targeting
• Executive Order on ITDS – Government needs
common approach to risk management
• Identify trusted traders and provide meaningful
benefits

QUESTIONS?
Michael C. Mullen
Executive Director
Tel: 703 759-0369
Michael.mullen@expressamerica.org

CPSC Overview of Current Certificates Requirements, Proposed Changes, and Industry Presentations

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