The U.S. Consumer Product Safety Commission (CPSC) announced last week that TGH International Trading Inc. (TGH), of Los Angeles, Calif., has agreed to pay a $31,500 civil penalty to settle allegations that the company knowingly imported and sold toys that did not meet the requirements of the Federal Hazardous Substances Act (FHSA).

This settlement and a subsequent comment by CPSC Chairman Inez Tenenbaum serve notice that not only large businesses, but small ones as well, must be aware of the act’s requirements, since participation in the sale or distribution of products that do not comply can result in significant civil and criminal liability.

"CPSC's new authority to seek higher civil penalties does not mean we will ignore serious violations by small businesses," said Tenenbaum. "We will continue to take enforcement action against any business, large or small, that violates the Commission's product safety laws and regulations."

To comply with the act, businesses should ensure that the appropriate testing is completed for existing and developing products and that the appropriate testing certificates accompany all shipments and are provided to distributors and retailers. Businesses should also ensure that required reporting obligations are being fulfilled and should assign responsibility for compliance internally to high-level employees. Businesses must also stay informed of subsequent Consumer Product Safety Commission regulations interpreting the act.