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US$1 Million Penalty, Compliance Programme Required for Product Safety Violation

The Consumer Product Safety Commission has provisionally accepted an agreement assessing a $1.0 million civil penalty against a company to resolve charges that it knowingly failed to notify the CPSC of defects in its stainless steel trash cans. Any interested person may ask the CPSC not to accept this agreement or otherwise comment on its contents by 13 December.

According to the CPSC, the company received complaints from consumers that the plastic protective collar in the opening on the back of the trash cans can detach from the sharp metal handle, posing a laceration hazard. The company did not notify the CPSC of the hazard but instead approved a design change to address it. The company responded that as a small foreign company it was “completely unaware” of the reporting requirement and immediately complied once it learned of its potential obligation to report from its retailer customer.

Under the proposed settlement agreement the company will also have to create, maintain and enforce a compliance programme with respect to any consumer product it imports, manufactures, distributes or sells that includes the following elements.

  • written standards, policies and procedures, including those designed to ensure that information that may relate to or impact Consumer Product Safety Act compliance is conveyed effectively to personnel responsible for compliance, whether or not an injury is referenced
  • a mechanism for confidential employee reporting of compliance-related questions or concerns to either a compliance officer or another senior manager with authority to act as necessary
  • effective communication of company compliance-related policies and procedures to all applicable employees through training programmes or otherwise
  • senior management participation in a compliance committee responsible for the review and oversight of CPSC compliance matters
  • retention of all CPSA compliance-related records and availability of such records to CPSC staff upon request
  • procedures designed to ensure that information required to be disclosed to the CPSC is recorded, processed and reported in accordance with applicable law; that all reporting is timely, truthful, complete, accurate and in accordance with applicable law; and that prompt disclosure is made to company management of any significant deficiencies or material weaknesses in the design or operation of such internal controls
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