CPSC Supplemental Notice Rushed, Commenters Say; Importer Definition Problematic
Trade groups are telling the Consumer Product Safety Commission that its supplemental notice of proposed rulemaking on new electronic filing procedures for certificates of compliance is premature, since the beta pilot for importers e-filing CPSC certificates and the CPSC Product Registry only began late last year.
When the agency does publish a final rule, they argue, 120 days is not nearly long enough to program systems to input the data elements, and manually entering data is not feasible. Many commenters said enforcement should begin a year after the rule is published; a joint comment by the National Foreign Trade Council and the U.S. Chamber of Commerce suggested a six-month period to prepare.
The supplemental notice of proposed rulemaking, issued by the CPSC Dec. 8, modifies a proposed rule on e-filing the commission issued in 2013 that sparked controversy at the time and resulted in a series of CPSC pilot programs to develop the agency's long-awaited partner government agency (PGA) message set, including the ongoing "beta" pilot. A major change since the initial proposal is a new "product registry" approach that allows entry filers to refer to a certificate of compliance in a central registry, rather than filing all relevant data elements for each entry.
Among other changes, the supplemental proposal "broadens" the definition of importer to include any entity that CBP allows to be importer of record. It also makes changes to who is required to submit a certificate, and cuts the required data elements under the proposal from 10 to eight by eliminating two of the three new data elements required under the 2013 proposal. It said the new requirements would take effect 120 days after publication of any final rule.
The Retail Industry Leaders Association said this proposed rule is significantly better than the one proposed in 2013, and does a better job of coordinating with CBP.
Still, RILA wrote in a comment recently published on regulations.gov: "Beta testing as part of the CPSC e-filing Beta Pilot is currently ongoing and has identified significant early challenges that will take substantial time to address and resolve. RILA is concerned that the timing of this SNPR is premature and will not benefit from lessons learned from the ongoing pilot." One pilot participant has not been able to send a complete message set to their import broker or to CBP because of problems in ACE.
The group added: "Participation in the Beta Pilot is by nature an iterative process with course corrections along the way and potential pivots in response to real world experience and feedback that would allow CPSC and e-filing stakeholders to come up with alternative solutions or approaches."
RILA suggested that the effective date be 18 months after the final rule is published, calling the 120-day timeline "grossly inadequate."
In order to comply, RILA wrote that retailers would need to establish a way to upload information to the product registry and to file message data sets, either for all the data on the CPSC certificate or with an indicator number for the certificate. "The current databases do not contain all the fields requested by the CPSC. Beyond the importers themselves, self-testers (such as toy companies), labs and brokers will all have potential IT development to support the e-filing program."
However, RILA said for companies participating in the pilot, the preparatory work they did for that would allow a one-year period between publication and enforcement.
Many commenters, including RILA, said that the requirement to submit disclaims on products exempted from the need to file a certificate is burdensome. The group said CPSC should publish a list of products that are exempted.
RILA suggested that instead of requiring that each certificate include an attestation that it's accurate, there should be an attestation at time of log-in, or even once or twice a year. "Retailers and other larger importers will be using an [application programming interface] API solution to upload the data in bulk. To then have to go back and manually certify each of those entries would result in having to dedicate a full-time employee or invest in outsourcing the responsibility to a third party solely for the purpose of clicking checkboxes for hours on end."
RILA also said the term "up to 24 hours" for advance submission of certification seems to be a mistake, since the ACE portal allows transmission up to five days before arrival. Instead, the CPSC should say as late as 24 hours before arrival.
RILA and many other commenters reacted with alarm to how the new proposal defined "importer," which is different from both CPSC's definition in 2013 and from CBP's definition.
Importers could be brokers, owner, purchaser, consignee, importer of record or "party that has a financial interest in the product or substance being offered for import and effectively caused the product or substance to be imported into the United States."
The American Apparel and Footwear Association said on that issue: "With the proposed definition, CPSC is blurring the lines regarding who should provide the [General Certificate of Conformity] and leaving the interpretation up to the individual parties and their contractual relationships. This may, in fact, result in less clarity and increased time to obtain certificates for agency review, when the agency is not aware of who the certificating party will be for a particular shipment. Alternatively, this lack of clarity could result in multiple certificates from multiple parties, resulting in confusion, duplicative data, and potential delays."
AAFA also expressed concern that CPSC was abandoning its testing exemption for most adult apparel.
The National Association of Manufacturers said this version of a proposed rule "was promulgated prior to completion of the Commission’s own beta testing or analysis of such results. It also was proposed without consultation with CBP, which is required under [the] Consumer Product Safety Improvement Act. In addition, the proposal provides no record to establish that the current regulations are ineffective or not compliant with the CPSIA’s statutory requirements. Finally, the cost estimates and time to implement are inadequately substantiated." It complained that CPSC said the cost to comply is negligible, and said there is no evidence to support that assertion. The group also said it "is concerned that the SNPR may create undue operational burdens for manufacturers, private labelers and importers when it comes to duplicative, non-correlated certifications for products."
NAM said the effective date should be at least a year after the final rule's publication.
NAM said the current de minimis carve-out for CPSC should continue, since individual consumers have no way to submit this sort of data, and it said the "financial and logistical burden" to the mail service and express carriers to share this data would require new tracking systems to be developed.
"The NAM respectfully requests that CPSC revise the proposed amendments to 16 CFR 1110 to reconsider the inclusion of consumer-based importation of individual or small-shipment numbers via international mail, and to expressly state a lowered de minimis level that allows a more limited small-shipment commercial number without triggering the provisions of the rule."
Likewise, the Toy Association in its comments highlighted the supplemental proposed rule’s lack of any exception for de minimis shipments. Under the new proposal, CPSC noted the risk and increased volume of direct-to-consumer shipments, and said brokers could file the certificate data via entry type 86.
However, the way that the supplemental proposal is worded means consumers would be on the hook for entering data, without the capability of doing so. The rule creates an exception for goods purchased by a consumer for their own enjoyment, but does not exempt goods purchased by consumers as a gift, the Toy Association said. That would “negatively impact the purchase and importation of toys” because it “poses an imposition on the consumer for which they do not have access to or a means of determining the certification information,” it said.
The trade group also noted the difficulties that could be posed for international mail shipments because of the lack of any de minimis provision. It said the additional burden for mail shipments wouldn’t be justified by any meaningful safety improvements because “there would be no means of determining non-conformance to the certification requirement when the product is shipped to an individual address through a channel that does not have the means to verify compliance.”
The Toy Association said the commission should create a new, CPSC-specific de minimis level that is lower than the $800 de minimis for other goods and “allows a more limited small-shipment commercial number than what is currently permitted, without triggering the provisions of the rule.”
On the other hand, PeopleForBikes, which represents U.S. manufacturers, suppliers and distributors of bicycle products, praised the supplemental proposed rule’s lack of a de minimis carve-out. “Too many low-quality and inadequately tested products are currently being imported into the U.S. under de minimis, creating unreasonable and unacceptable safety risks for consumers,” it said. With mandatory standards anticipated for lithium-ion batteries, companies that import the batteries “will need to demonstrate their compliance, and the filing of certificates of compliance will enable effective enforcement of these requirements by the CPSC,” PeopleForBikes said.
A joint comment from the National Foreign Trade Council and the U.S. Chamber of Commerce said the proposed rule's broad definition of "importer" creates "an ambiguity regarding the ultimate responsibility for generating and filing the certificate. This ambiguity places an expansive range of entities at risk of being penalized if a certificate is not properly filed." The groups said the agency should use the definition of importer it proposed in the 2013 proposed rule.
"To the extent that the CPSC and others are concerned that the importer of record may not be in a position to actually issue a certification, there are better solutions to that problem than simply adopting a broad definition of 'importer,'" they wrote. "For example, CPSC could adopt an alternative solution specifying that (1) the importer of record must be the one to actually file the certificate, but (2) another specified entity is responsible for preparing the certificate, which could either be (i) an entity that by mutual agreement is responsible for preparing the certificate, or (ii) in the absence of agreement, a hierarchy of entities within the proposed definition of importer."
The groups said there should be at least six months between the rule's publication and effective date.
The Consumer Technology Association said that many products that aren't covered by CPSC would have to be submitted with disclaimer message sets that say that although some products of this kind have button cell or coin cell batteries, this shipment does not. That is an "enormous unnecessary burden" to importers, CTA argued, and asked CPSC to exclude products covered by 16 CFR Part 1263 (on button cell and coin cell batteries) from the rule.
UL Solutions praised CPSC for saying that a general certificate of conformity is only required for finished consumer products subject to a Consumer Product Safety Act rule or regulation enforced by CPSC. "We also support CPSC’s efforts to make this process as efficient as possible for users by listing the applicable rules/requirements in the eFiling system in a way that allows users to easily select the relevant code for their certificate."