Toy Safety Certification Program SM As of October 7, 2008

Genesis of the TSCP What is Needed Restore the reputation of and consumer confidence in the toy industry Address problems earlier in the production process Reduce redundancies New U.S. Federal Law Every manufacturer shall have their toy products tested by a qualified lab and certify that the product meets safety standards TIA Board Decisions Supported U.S. federal law for mandatory testing Implement private sector certification system (TSCP)

Purpose of the TSCP Objective To develop a sustainable system to enhance both the reality and the public’s confidence that toys sold in the U.S. market are safe Provide Definition How many units must be tested? How is the testing to be done? What is the criteria for testing frequency? Who can certify that products meet requirements?

Development of the TSCP August 2007 – TIA engaged ANSI to coordinate a public- private partnership to develop conformity assessment guidance February 2008 – Resulting document was published for public comment March 2008 – Written comments reconciled at two-day meeting attended by key representatives from the toy safety community   April 2008 – Meetings in Hong Kong, Beijing and Brussels May 2008 – Resulting program is more effective, realistic and credible – but still a work in progress June 2008 – Presented at ICTI Annual Meeting Summer/Fall 2008 – Refining program and identifying opportunities to minimize redundancies

Program Requirements Applicants are responsible for: Hazard and risk assessment for toy product design Factory process control audits by an independent audit body Production sample testing by an accredited laboratory to validate that the factory is producing toys that meet U.S. safety standards Will be verified by ANSI-accredited Certification Bodies Upon successful completion of applicable requirements the toy is certified and the product or packaging may bear a toy safety mark

CPSC Implementation Timetable

TSCP Part 1 First focus on testing to meet the more immediate need for compliance with federal legislation Labs meeting CPSC 3rd Party Conformity Assessment Body Accreditation Requirements would offer testing compatible with TSCP All applicable F963 and CFR Testing Follow up testing required in TSCP Part 2 or if CPSC requires higher frequency sooner No TSCP mark issued Capacity building and testing before expansion to all program elements Benefits include quicker TSCP certification, priority for factory audits, test results already in the system, easy access for retailers to confirm compliance

TSCP Part 2 Added Prevention Program: Design Analysis and Factory Process Control Audit added to Testing Better ensures toy safety Full certification for product complying with TSCP requirements Use of TSCP mark Full TSCP Program (No longer Parts 1 and 2)

Hazard Analysis/Risk Assessment Design issues were the cause of many toy safety recalls Must be performed by qualified staff or third party Under the direction of a company official Must use systematic analysis tools such as those contained in ISO/IEC Guide 50 and/or 51 Handbook for Manufacturing Safer Consumer Products (US CPSC, July 2006)‏ Risk Assessment Guidelines for Non-Food Consumer Products (European Commission)‏ Company official must provide attestation to Certification Body

Process Control Audit Poor process controls caused many toy safety recalls Conducted by audit firm accredited to ISO 17021 by a member of the International Accreditation Forum (IAF)‏ Auditor(s) having specific training in TSCP audit Each audit question will be rated as Acceptable, Needs Improvement, or Unacceptable Corrective Action Plan (CAP) must be submitted for all audit findings Follow-up visits will be conducted based on CAP and severity of the findings Unannounced follow-up audits will be conducted on an approximately annual basis

Process Control Audit Content Quality Management System Resource Management Incoming Material Control Process and Production Control Final Product Control and Traceability

Process Control Audit Evaluation Findings of Critical, Major or Minor Issues Factory ratings based on amount and severity of issues Tier 1 – Substantial compliance with all requirements Tier 2 – Basic process control with improvements needed Tier 3 – Factory lacks basic process control system

Testing Frequency FREQUENCY A – TIER 1 FACTORIES Complete testing annually or every 1 million units Intermediate test focused on heavy metals FREQUENCY B – TIER 2 FACTORIES Minimum semiannually or every 500,000 units ISO 9001 factories can begin at Tier 2 pending an audit FREQUENCY C – TIER 3 FACTORIES Minimum quarterly or every 150,000 units Can be less when production is less than 1,000 units a year CPSC testing frequencies have not yet been specified TSCP frequencies will be modified to be consistent with any future CPSC requirements

Role of Toy Companies TSCP will build upon, not replace, manufacturer accountability Are responsible for meeting federal and CPSC requirements Maintain own “culture of safety” Design assessments, factory evaluations and toy testing should already be a part of doing business

Oversight Oversight Council / Board of Governors Advise TIA’s Board regarding development, implementation, penetration and effectiveness of program Industry and public interest representatives Technical Committee Will advise Oversight Council and TIA Board on technical aspects of the program

Outreach U.S. Consumer Product Safety Commission U.S. Legislators and State Government Officials Chinese and HK Officials and Industry (implementation) European Union Officials and Industry (compatibility) Companies Manufacturing in Other Locations Small Companies Retailers Consumer Groups

Value of TSCP Will improve toy safety, reduce criticisms and help increase consumer confidence Provides a mechanism for instant and centralized access to test reports, factory status, certified product Offers a one-stop shop for multiple retailers Expected CPSC recognition that TSCP certification demonstrates due diligence (i.e. fireworks program) Exceeding federal requirements through TSCP offers toy companies a way to differentiate themselves TSCP product and factories will be considered less risky and therefore subject to less retailer, government oversight Costs and redundancies will be reduced over time Other toy safety certification programs will not be able to offer what this industry initiative can

Next Steps TSCP still in development Building out information systems platform Refine TSCP requirements based on: Evolving CPSC requirements Continued testing of requirements Further discussion with international partners Opportunities to minimize redundancies Begin TSCP Part 1 December 2008 follow-up meetings in China

Toy Safety Certification Program SM For additional information, contact: eborrelli@toyassociation.org or crogers@toyassociation.org