Following a year of unprecedented product recalls, Congress recently enacted the Consumer Product Safety Improvement Act of 2008 (CPSIA). The CPSIA affects, among others, all manufacturers, retailers, importers and distributors of children's products, toys and child care articles by imposing significant new safety standards, compliance requirements and enforcement mechanisms. All companies who fall into these categories should be aware of these sweeping changes.

Lower lead levels.

The CPSIA lowers the permissible concentration of lead in paint and other surface coatings, and sets new standards for prohibited lead concentrations in children's products (whether or not they contain paint). As of February 10, 2009, it is illegal to introduce into interstate commerce any children's product that contains more than 600 parts per million (ppm) of lead. Children's products are defined as consumer products designed or intended primarily for children 12 years of age or younger.

Phthalates prohibition.

Also effective February 10, 2009, the CPSIA prohibits specified concentrations of certain phthalates (plastic softeners) in children's toys and child care articles. Children's toys include consumer products designed or intended by the manufacturer for a child 12 years of age or younger for use by the child when the child plays. Child care articles are defined as consumer products designed or intended by the manufacturer to facilitate sleep or feeding of children age 3 or younger, or to help such children with sucking or teething.

Retroactive compliance.

The Consumer Product Safety Commission (CPSC) has interpreted the lead standards to be retroactive. More recently, a federal court determined that the phthalates restrictions also apply retroactively. As a result, the lead and phthalate restrictions apply to "to all products out in the stream of commerce on Feb. 10, 2009, sitting in container ships, in warehouses and on store shelves," even if manufactured before the effective date of the act.

The CPSIA also creates several new compliance requirements, including:

  • Mandatory testing- All regulated children's products, toys and child care articles must be tested for compliance with safety standards.
  • Third-party testing- Certain standards require testing from independent accredited third-party laboratories.
  • Certification- Issuance of certificates of conformity for regulated products.
  • Tracking Labels- Labels must be affixed to products to facilitate tracking and recalls.
  • Reporting- Expanded reporting requirements for non-complying products.

Stay of enforcement and exceptions.

Recognizing that the effective dates established by Congress were unworkable, the CPSC recently announced a stay of enforcement on the third-party testing and certification requirements until February 10, 2010. There are numerous exceptions to the stay, including the rules regarding lead paint for products manufactured after December 21, 2008, cribs and pacifiers manufactured after January 20, 2009, small parts for products manufactured after February 15, 2009, and metal components of children's jewelry manufactured after March 23, 2009.

Increased authority and penalties.

Congress has implemented a host of new CPSIA enforcement mechanisms, including:

  • Increased maximum civil penalties, now up to $15 million.
  • Increased criminal penalties.
  • Enforcement authority by state attorneys general.
  • Increased CPSC authority over recalls.
  • Enhanced authority to share noncompliance information with the public.

Prepare for the reforms.

The Consumer Product Safety Commission is accepting public comments, issuing interpretative guidelines and drafting regulations that will help define the scope and applicability of these broad reforms. Those affected by the CPSIA are advised to ensure that regulated products are in compliance before the effective dates, have products tested as required, prepare or obtain necessary general conformity certificates and implement tracking label protocols. Manufacturers and retailers are also encouraged to review and revise representations and warranty clauses, indemnification provisions and insurance requirements in contracts with suppliers, distributors and importers. Most importantly, stakeholders are urged to monitor the activities of the CPSC for updates and seek legal counsel for questions.