1. U.S. Product Safety Landscape AAPN’s Tariffs, Trade & Textiles in the Americas Washington, DC, October 23, 2012 Copyright © 2012 BJ Shannon All Rights Reserved A LSTON & B IRD LLP

2. U.S. Product Safety Landscape Timeline Important Questions CPSIA Overview - Standards - Testing - Certification FFA Requirements Online Resources State Regulation (Prop 65)

3. Timeline In 1972…. “American Pie” and “A Horse with No Name” were number 1 hits Congress passed the Consumer Product Safety Act (CPSA)

5. 2007: The year of the recall Over 30 million toys were recalled Also milk, toothpaste, pet food, candles, jewelry

6. 2008: Congress acts Congress amended the CPSA with the Consumer Product Safety Improvement Act of 2008 (CPSIA) The CPSIA imposed new substantive safety rules and procedural requirements and also necessitated the development of many new regulations.

7. 2009-2010: Hold the presses! Neither CPSC nor industry was prepared for rapid implementation of a sweeping new law CPSC issued and extended several stays of implementation

8. In the meantime…. Textiles and apparel enjoyed a period of being largely unaffected by the new law - CPSC temporarily stayed most third party testing and certification requirements applicable to textiles - CPSC concluded that most textile materials do not contain lead

9. 2011: The year of enforcement Per CPSC Chair Inez Tenenbaum In 2010 and 2011, CPSC stopped the import of 6.5 million units of 1,700 different children’s products Companies paid millions in fines

10. Important CPSIA questions What does the CPSIA require? What does this mean for apparel? What about the Flammable Fabrics Act (FFA)? - Adults’ and children’s apparel - Exemptions from the FFA - Exemptions from testing What is the role of U.S. importers? What is the best way to stay up to date?

11. What does the CPSIA require? The CPSIA requires that the manufacturer of any product which is subject to a consumer product safety rule under the CPSIA or any similar rule, ban, standard, or regulation under any other statute enforced by the CPSC certify the product’s compliance with the standard, based on a test of each product or a reasonable testing program.

12. Testing and certification Consumer Products (non-children’s) - Reasonable testing (on each product or pursuant to a reasonable testing program) - General Certificate of Conformity (showing compliance with applicable consumer product safety rules)  Not the same as an FFA Continuing Guarantee! Children’s Products (12 years or younger) - Third party testing (by a CPSC-accredited laboratory) - Children’s Product Certificate (showing compliance, based on third party testing, with applicable rules) - Tracking labels (permanently affixed to the product and its packaging, to allow identification of the manufacturer, date and place of manufacture, and cohort information)

13. Children’s products: 3 rd party testing Lab must be a CPSC accredited third party conformity assessment body accredited by: - Laboratory - Location - CPSC standard

14. Finding a laboratory

15. Frequency of testing Initial third party testing of children’s products Periodic testing - Periodic testing plan (at least every year) - Production testing plan (at least every 2 years) - Testing by an ISO/IEC 17025:2005(E) accredited lab (at least every 3 years)

16. Issuance of a certificate General Certificate of Conformity/Children’s Product Certificate - Issued by the U.S. manufacturer or the U.S. importer - Certificate must:  Accompany the shipment  Be furnished to each retailer and distributor - May be paper or electronic - Must be in English

17. Contents of a certificate Identification of the product Citation to each applicable product safety rule Name of manufacturer (or importer) - Name, mailing address, telephone number Contact information for the custodian of the records - Must be an individual - Name, mailing address, telephone number, email address Date of manufacture (month and year) Place of manufacture (city and country, factory-specific) Date and place of testing Identification of third-party laboratory, if any - Name, mailing address, telephone number

18. What does this mean for apparel? Consumer product safety rules applicable to apparel include: - FFA - Lead limits for all children’s products  Lead in substrate (100 ppm)  Lead in surface coatings (90 ppm) - Phthalate limits for children’s toys and child care articles, including sleepwear (0.1 percent) - Drawstring rules (children’s upper outerwear)

19. The FFA: What’s old is new again Flammable Fabrics Act (FFA) dates back to 1953 Fabrics and apparel made from fabric have long been subject to the same flammability standards Most fabrics are known to be safe without testing But now we need to certify to compliance

20. Four examples

21. Women’s silk blouse Is the blouse subject to the FFA? - Only certain hats, gloves, footwear, and interlining fabrics are categorically exempt - The blouse is subject to the FFA Is the blouse fabric exempt from testing? - Plain surface fabrics, regardless of fiber content, weighing 2.6 ounces per square yard or more, are exempt from testing - All fabrics, with both plain and raised-fiber surfaces, regardless of weight, made entirely from acrylic, modacrylic, nylon, olefin, polyester, wool, or any combination therefor are exempt from testing - The silk blouse, assuming a fabric weight of less than 2.6 oz/sq. yd, is not exempt from testing under the FFA

22. Men’s cotton corduroy pants Are the pants subject to the FFA? - The pants are subject to the FFA Is the pants fabric exempt from testing? - The fabric has a raised surface so it is not exempt based on weight - Because the pants are cotton, the fabric is not exempt based on fiber content

23. Men’s wool sweater Remember: Most apparel fabric is exempt from FFA testing Men’s wool sweater - Sweater is subject to the FFA - But exempt from testing due to wool fiber content - CPSC’s Position: GCC still required!

24. Women’s gloves Certain articles are not subject to the FFA at all Women’s gloves - Not more than 14 inches in length and not affixed to/do not form an integral part of another garment - Not subject to the FFA - No testing and no GCC Similar rules for hats, footwear, and interlinings

25. Example: children’s products Children’s sleepwear is subject to specific FFA flammability testing regulations Third party testing is required Other product safety rules? - Phthalate testing is required if the feet have plasticized components - Buttons could be subject to lead/lead in paint testing Children’s Product Certificate Tracking label

26. What is the role of U.S. importers? For products manufactured outside the U.S., the importer is the “manufacturer” - Responsible for CPSIA certification  No requirement to file with CPSC or U.S. Customs and Border Protection (CBP)  Must be available as soon as the product or shipment itself is available for U.S. inspection  Must be furnished to retailers/distributors - Recordkeeping responsibilities  Generally 3 years  Traceability CPSC exercises independent seizure authority - Seized goods remain in CBP custody CPSC and CBP are conducting joint product safety audits

27. How do I stay up to date?

28. Monitoring the database The CPSIA also mandated the creation of a Publicly Available Consumer Product Safety Information Database Contains reports of harm or risk of harm, recall notices, etc. Reports may be submitted by: - Consumers (users of products, family members, relatives, parents, guardians, friends, attorneys, investigators, professional engineers, agents of a user of a product, observers of a user of a product) - Government agencies - Health care professionals - Child service providers - Public safety entities Manufacturers may sign up to receive reports at www.SaferProducts.gov www.SaferProducts.gov

29. What about state laws? CPSIA does not pre- empt many state laws Many states also have consumer product safety laws that affect adults’ or children’s apparel - California (Prop 65) - Washington (Children’s Safe Product Act) - Also Maine, Illinois, etc.

30. What Prop 65 is not Prop 65 is not new - Safe Drinking Water and Toxic Enforcement Act of 1986 Prop 65 is not preempted by CPSIA Prop 65 is not limited to children’s products Prop 65 limits are not based on content, but on exposure levels Prop 65 is not a ban, but requires warning labels

31. When a warning is required CA publishes and updates a list of chemicals that cause cancer or birth defects (over 800) - Including  Lead  Phthalates Labeling is not required if: - The product does not contain listed chemicals - Exposure is low enough to pose no significant risk of cancer or is significantly below levels observed to cause birth defects or other reproductive harm - Levels are below “safe harbor” levels (available for ~ 300 chemicals)  Levels from prior settlements may be a guide

32. Warning label requirements If labeling is required: - Available before exposure - Reasonable, clear - Prominent, conspicuous - Language: This product contains chemicals known to the State of California to cause cancer, birth defects, or other reproductive harm. - Noncompliant language:  “This product complies with Proposition 65.”  “This product may contain chemicals known to the State of California to cause cancer, birth defects, or other reproductive harm.”

33. Prop 65 enforcement Enforcers - CA Attorney General, district attorneys, certain city attorneys - NGOs, other groups - Private citizens First steps: “Notice of Violation” (“60-day notice”) Remedies from CA courts - Injunctions - Civil Penalties up to $2500 per violation per day More common result – Private settlement - Average settlement in 2008: $125,000 Notable product trends: - Handbags - Apparel/Shoes - Zipper pulls

34. BJ Shannon Alston & Bird LLP 950 F Street, NW Washington, D.C. 20004 202.239.3344 bj.shannon@alston.com