THE CANADA CONSUMER PRODUCT SAFETY ACT. Moving Towards Uniformity in Compliance: Guidelines from the American Model
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1 THE CANADA CONSUMER PRODUCT SAFETY ACT Moving Towards Uniformity in Compliance: Guidelines from the American Model Daniel L. Kiselbach, Partner International Trade, Customs and Commodity Tax Group Miller Thomson LLP # Howe St., Vancouver, BC, V6Z 2M
2 Page 1 The Canada Consumer Product Safety Act - Moving Towards Uniformity in Compliance: Guidelines from the American Model 1 Introduction Consumer product safety has received much attention in Canada and the United States over the past few years. Public reaction to reported cases involving unsafe imported goods has led to the introduction of new laws and policies designed to protect the public. The purpose of this paper is to provide an overview of common features of the consumer protection laws and policies of Canada and the United States, how to ensure compliance with these new laws and policies, and other product safety related issues. Overview of Canada Consumer Product Safety Act Provisions and Policies and Comparison with Parallel American Provisions. Legislation The Canada Consumer Product Safety Act 2 shares several features with the U.S. Consumer Protection Act. 3 A chart comparing some similar aspects of the Canadian and American legislation is attached as Appendix A. Similarities include the following: 1. Both prohibit certain activities, such as the manufacturing, importation, advertisement and sale of unsafe consumer products, and set out provisions designed to protect the public from harmful products; 2. Both are designed to protect against or deal with the manufacturing, importation and distribution of unsafe products through such activities as product testing, preparing and maintaining documents that facilitate tracing of consumer products and product incident reporting; and 3. Both provide officials with various administrative and enforcement tools, such as inspecting, reporting and remedial measures, injunctions and penalties The author gratefully acknowledges the contributions of several people who assisted in the review and the publication of this paper, in particular: Audrey Lim, Articled Student, Miller Thomson, Kelsey Thompson, Associate, Miller Thomson, Wendy Hulton, Partner, Miller Thomson, Jennifer Bishop, Partner, Miller Thomson, Oleh Ilnyckyj, Partner, Miller Thomson, Insurance Litigation Group (in respect of the segment on class actions); Carol Osmond, Vice President, Policy, IE Canada, Joel Junker, Joel Junker & Associates, Seattle, Washington and Marc Schoem, Deputy Director, Office of Compliance and Field Operations, US Consumer Product Safety Commission, Washington, DC. Any errors or omissions are solely the responsibility of the author. This paper is not intended to be used or construed as legal advice. S.C. 2010, c. 21 assented to 15 th December Codified at 15 U.S.C. ss as amended by the Consumer Product Safety Improvement Act Of 2008, 122 STAT
3 Page 2 Health Canada Policy on Mandatory Reporting Manufacturers, Importers and Retailers The government of Canada has issued draft policy documents. The final version of these documents will be used to interpret specific requirements set out in the Canada Consumer Product Safety Act. Health Canada has issued a draft policy document titled: Draft Guidance on Mandatory Incident Reporting under the Canada Consumer Product Safety Act Section 14 Duties in the Event of an Incident (attached as Appendix B ). 4 This document provides guidance on how to interpret section 14 of the Canada Consumer Product Safety Act. Section 14 sets out the duties of persons who manufacture, import or sell consumer products for commercial purposes. The document indicates, amongst other things, that: 1. A person who manufactures, imports or sells consumer products in Canada for commercial purposes is responsible for reporting incidents to Health Canada An incident is defined as: (a) (b) (c) (d) an occurrence in Canada or elsewhere that resulted or may reasonably have been expected to result in an individual s death or in serious adverse effects on their health, including a serious injury; a defect or characteristic that may reasonably be expected to result in an individual s death or serious adverse effects on their health, including a serious injury; incorrect or insufficient information on a label or in instructions or the lack of a label or instructions that may reasonably be expected to result in an individual s death or serious adverse effects on their health, including a serious injury; or a recall or measure that is initiated for human health or safety reasons by a foreign entity specified government, public body or institution A person who manufactures, imports or sells a consumer product in Canada who receives information respecting an event must determine whether the event is related to the consumer product and falls within the mandatory reporting criteria set out in paragraphs 14(a) to 14(d) of the Canada Consumer Product Safety Act A related event may involve a consumer product that shares a component, accessory or part with a product involved in an incident For an event to be an incident, it must be linked to the normal or foreseeable use of a consumer product The latest version of this policy is dated Draft Guidance on Mandatory Incident Reporting under the Canada Consumer Product Safety Act Section 14 Duties in the Event of an Incident, supra, p. 2. Ibid, p. 4 and ss. 14(1)(a) (b) of the Canada Consumer Product Safety Act. Ibid, pp. 4 to 5 and ss. 14(2) of the Canada Consumer Product Safety Act. Ibid, p
4 Page 3 6. A manufacturer, importer or retailer who becomes aware of an incident is required to provide information to the Ministry and, if applicable, the person from whom they received the product, within two days after the day on which they became aware of the incident The manufacturer, importer or retailer is required to provide a written report to the Minister within 10 days after the day on which they become aware of the incident, providing information about the incident, the product, the products that they manufacture or import that could be involved in a similar incident and any measures that have been taken or proposed in respect of those products. 11 Some concerns have been expressed with respect to the notification and reporting requirements set out in the Canada Consumer Product Safety Act, these include the following: 1. The policy could provide more clarity on Health Canada s interpretation of the requirements for mandatory reporting. In particular, the policy could provide more guidance as to when an event may be determined to be a reportable incident. The policy could also provide clarification as to when an incident is related to an incident. 2. The obligation to report an incident within two days of becoming aware of it may be very difficult to fulfill in some cases. 3. There is some concern that unsubstantiated consumer reports (for example, those posted on the new U.S. Consumer Product Safety Commission s public database) could trigger reporting requirements. At present, it appears that Health Canada s position is that the duty to report is triggered where a product is involved in an incident associated with the foreseeable use or misuse of the product. Some have suggested that the duty to report should be triggered only where the incident involves an unreasonable risk to human health and safety. Health Canada Policy on Preparing and Maintaining Documents Health Canada has issued a draft policy document titled: Guidance on Preparing and Maintaining Documents under the CCPSA Canada Consumer Product Safety Act (CCPSA) Section 13 (attached as Appendix C ). This document provides guidance on how to interpret section 13 of the Canada Consumer Product Safety Act. Section 13 provides that any person who manufactures, imports, advertises, sells or tests a consumer product for commercial purposes must prepare and maintain documents. The purpose of this provision is to improve the traceability of non-compliant products when required. The document indicates, amongst other things, that: Ibid, p. 5. Ibid, p. 6. Ibid, p
5 Page 4 1. The requirements for retailers differ from other persons. Retailers must keep documents having the name and address from whom they obtained a consumer product and the location where they sold the product; Manufacturers, importers, advertisers, retailers and testers must prepare and maintain documents indicating the name and address of the person from whom they obtained a consumer product, and the name and address of the person to whom they sold the product; A person must keep documents for six years after the end of the year to which they relate (unless regulations specify another time period); Documents must be kept in their place of business in Canada or at any place prescribed by regulation (unless the Minister grants an exemption); An inspector may request access to documents that are required to be maintained; An exemption is being considered in respect of donated products; 17 and 7. If a person who manufacturers, imports or sells a consumer product in Canada believes that information provided constituted confidential business information, they can so indicate this to Health Canada at the time that the person provides the information. 18 The Minister may issue a notice ordering a person who manufactures or imports a consumer product to compile information that the Minister considers necessary to verify compliance or prevent non-compliance and to provide the Minister with documents that contain information as a result of tests or studies the Minister requires in order to verify compliance or prevent non-compliance with the Canada Consumer Product Safety Act or Regulations. 19 A company that has a system for complying with the mandatory reporting and recall requirements of the Canada Consumer Product Safety Act will need to prepare and maintain additional documents relating to reported events, the determination of whether or not those events constitute incidents, investigations and documents relating to notices and reports that are issued Guidance on Preparing and Maintaining Documents under the CCPSA Canada Consumer Product Safety Act (CCPSA) Section 13, heading In the Case of a Retailer, p. 3 and subparagraph 13(1)(a)(i) of the Canada Consumer Product Safety Act. Ibid, heading In the Case of a Manufacturer, Importer, Advertiser, Seller or Tester, p. 3 and subparagraph 13(1)(a)(ii) of the Canada Consumer Product Safety Act. Ibid, heading Period for Document Retention, p. 4 and subsection 13(2) of the Canada Consumer Product Safety Act. Ibid, heading Keeping and Providing Documents in Canada, p. 4 and ss. 13(3) and (4) of the Canada Consumer Product Safety Act. Ibid, heading Keeping and Providing Documents in Canada, p. 4 and s. 13 of the Canada Consumer Product Safety Act. Ibid, supra, heading Exemptions. Section 16 of the Canada Consumer Product Safety Act indicates that the Minister may disclose confidential business information to a person or government that carries out functions relating to the protection of human health or safety or the environment in relation to a consumer product without the consent of the person to whose business or affairs the information relates. See section 12 of the Canada Consumer Product Safety Act
6 Page 5 Managing Imports and Exports Taking Steps to Reduce the Risk of Recalls and Deal with Recalls The consequences of a recall can be significant. Possible results may include: damage to the product brand; loss of future sale; damage to the company s reputation; and the introduction of more stringent regulations and policies governing the product in question. Measures taken at the outset to reduce the risk of recalls and to prepare for the possibility of recalls will minimize the costs of a recall and the reputation risk associated with a recall. One of the most important aspects of risk management is knowledge of product standards and how the product will be used. The following is a checklist of considerations that may assist in managing imports and exports in order to reduce the risk of recalls: Design: complete a product design risk assessment (e.g., determine who are the likely users of the product and the potential risks, if any, associated with the intended or foreseeable use/misuse of the product); 2. Testing: (a) (b) (c) determine whether or not national or international testing or certification standards are applicable (e.g., CSA standards for hockey helmets). The Standards Council of Canada (SCC) plays a significant role in accrediting the organizations that conduct the actual testing and certification of a range of products; 21 determine whether or not the product requires third party testing by an accredited testing agency (such as UL or CSA) and locate an approved testing facility; test and produce the product in accordance with applicable standards; and (d) determine whether certification listing and labelling requirements are applicable. 3. Manufacturing: adopt an appropriate quality assurance system and best manufacturing practices in order to monitor the production quality of goods and components (e.g., to prevent production mistakes/defects and implement corrective action); 4. Record keeping: establish a system to track the date and location respecting the production of products, components, batches or lots as appropriate (e.g., use of tracking labels on products to identify the production factory, production lot, etc.); See also the Recall Checklist published by the Office of the Compliance at the U.S. Consumer Product Safety Commission (attached as Appendix D ) and the International Standard ISO produced by the International Organization for Standardization relating to consumer product safety. See Features, Yard Sale Safety Below Standards online: Standards Council of Canada <
7 Page 6 5. Mandatory incident reporting: establish a system to ensure that complaints and information from various sources is received by manufacturers, importers and retailers of consumer products in Canada and that a system is established for determining whether or not a complaint or an event constitutes an incident that must be reported pursuant to section 14 of the Canada Consumer Product Safety Act. Health Canada s policy document titled, Consultation on the Mandatory Reporting Policy of the Proposed Canada Consumer Product Safety Act indicates that persons may receive information on an event through a variety of sources, including notification by a consumer, by a government, by the person from whom they received the consumer product, by a non-government organization, experts, test reports, and so forth. Steps should be taken to manage and act upon this information as required in order to be compliant with the mandatory incident reporting requirements. 6. Recalls: establish an appropriate product recall protocol and identify a recall coordinator for the company. The objectives of a recall include: (a) (b) (c) locating defective products quickly; removing defective products from the distribution chain and from consumers; and communicating information in a timely way to the public about the defect, hazard and corrective action to be taken. A recall protocol should address issues such as identification of product incidents, how to report a product incident that will lead to a recall, how to locate products that are the subject of a recall, how to stop shipments of recalled products, and how to identify product owners through for example, product registration and customer service records. 22 Health Canada has produced a document intended to assist importers, manufacturers, distributors, wholesalers or retailers of consumer products to complete an effective recall of unsafe consumer products Supply contracts: enter into a supply contract that addresses issues such as: (a) (b) (c) product design, testing, manufacturing, and quality assurance; the nature of any support that is to be provided by the vendor to the purchaser respecting mandatory incident reporting and recall requirements; liability and indemnity respecting: (i) reliance damages relating to wasted expenditures (e.g., recovery of purchase costs, costs of delivery, and duties and taxes for products that can not be sold); Health Canada Information respecting recalls is set out at the Health Canada Consumer Product Safety Website at U.S. recall information is included in US Consumer Product Safety Commission, Recall Handbook at and in the US Consumer Product Safety Commission, Recall Checklist at Health Canada, Recalling Consumer Products - A Guide for Industry - April 2005 (attached as Appendix E )
8 Page 7 (ii) (iii) (iv) (v) any compliance costs relating to implementation of a recall (e.g., costs of dealing with regulatory agencies and the return or destruction of goods); any fees or penalties assessed by a regulatory agency; any consumer claims or complaints; and consequential damages (e.g., cancelled contracts and damage to reputation of retail brand of purchaser); (d) (e) (f) (g) warranty respecting products; resolution of disputes (e.g. final/binding arbitration clause and exclusionary clause); force majeure clause; and governing law clause. 8. Obtain product recall/liability insurance. How to Ensure Compliance Without Sacrificing Trade Having systems and processes in place designed to ensure regulatory compliance is critical to maintaining a successful business. Companies seeking to take steps to ensure compliance with consumer product safety legislation and policies may analyze compliance in three separate stages. Pre-Contract Due Diligence 1. Consider all of the issues that must be dealt with prior to entering into a supply contract to source goods. Steps to consider include: (a) (b) (c) conduct due diligence research and investigation respecting any prospective manufacturer relating particularly to product quality and history of compliance with foreign consumer product regulations and standards; obtain information respecting the raw materials/inputs that the prospective manufacturer may incorporate into the production of a finished consumer product; and receive regular updates respecting the laws and policies that apply with respect to standards, reporting, recalls and related matters
9 Page 8 Contract Negotiations/Agreements 2. In supply contract negotiations address the issue of how parties to a supply contract will cooperate in order to comply with legislation or policies concerning: requirements dealing with the identification of product incidents; measures that might be required to ensure public safety; the implementation of a product recall; indemnification; and insurance coverage. Post-Contract Audit/Verification 3. Take steps to ensure that the supply of goods is in compliance with regulatory requirements. Such steps may include for example: (a) (b) conducting periodic audits of the production of goods to ensure that actual production is in compliance with regulatory requirements (e.g., raw materials, labels, and certification standards testing); and maintain proper records essential to the tracing of products, taking of remedial measures and implementing recalls, including for example: (i) (ii) (iii) production records (lot numbers, product codes, volume of units, component parts, and other information that would help identify when/where the product was manufactured); distribution records (location of each product by product line, production run, quantity shipped or sold, dates of delivery and destinations); and quality control records (results of testing and evaluation can assist with identifying possible defects and limiting the scope of recall). Cross Border Document Maintenance, Production Obligations and Sealing Orders Document Disclosure and Maintenance As noted above, Health Canada has issued a draft policy document dealing with document disclosure and document maintenance titled: Guidance on Preparing and Maintaining Documents under the CCPSA Canada Consumer Product Safety Act Section 13. Inspectors may require the production of documents specified in section Both retailers and others must produce and maintain prescribed documents. 25 Retailers must maintain documents indicating the name and address of the person from whom they obtained the product and the locations where and the period during which they sold the product. 26 The guidance document indicates that retailers are not required to keep records relating to every See subsection 13(3) of the Canada Consumer Product Safety Act. See paragraph 13(1)(b) of the Canada Consumer Product Safety Act. See subparagraph 13(1)(a)(i) of the Canada Consumer Product Safety Act
10 Page 9 consumer transaction or the personal information of consumers. 27 period is six years after the date of the year to which they relate. 28 The document retention The policy document indicates that additional record-keeping requirements for certain products will be transferred from the Hazardous Products Act 29 and incorporated into the Regulations made under the Canada Consumer Product Safety Act. 30 Sealing Order The Canada Consumer Product Safety Act defines the term: confidential business information as meaning business information: 1. That is not publicly available; 2. In respect of which the person has taken measures that are reasonable in the circumstances to ensure that it remains not publicly available; and 3. That has actual or potential economic value to the person or their competitors because it is not publicly available and its disclosure would result in a material financial loss to the person or a material financial gain to their competitors. 31 The Canada Consumer Product Safety Act indicates that the Minister may disclose confidential information to a person or government that carries out functions relating to the protection of human health or safety or the environment in relation to a consumer product without consent in certain circumstances. 32 Further, confidential business information may be disclosed by the Minister if the disclosure is essential to address a serious and imminent danger to human health or safety. 33 Manufacturers, importers and retailers have voiced concerns respecting the power of the Minister to disclose certain documents and information. 34 Some have raised concerns that sensitive business information may be disclosed by the federal government in connection with an Access to Information Act request. 35 For manufacturers, importers and retailers seeking to keep information confidential, one remedial option might be to obtain a sealing order to protect against disclosure. In some cases, a person may apply for a sealing order in order to keep documents out of the public court record. The document remains filed under seal and is unavailable to the public. Sealing orders are not readily granted given the public nature of Canada s court system. There is therefore a high threshold for obtaining a sealing order in Canada to protect information. It is See p. 3, sub heading 3.1 Responsibilities of a Person, sub-sub-heading In the Case of a Retailer. See subsection 13(2) of the Canada Consumer Product Safety Act. R.S.C., 1985, c. H-3. See Appendix A to the policy document. See section 2 of the Canada Consumer Product Safety Act. See section 16 of the Canada Consumer Product Safety Act. See section 17 of the Canada Consumer Product Safety Act. See letter dated February 9, 2010 from the Canadian Consumer Product Safety Coalition to the Director General Consumer Product Safety Directorate. R.S.C., 1985, c. A
11 Page 10 generally difficult for commercial litigants to obtain a sealing order to protect sensitive documents, unless there is a broad public interest in maintaining confidentiality. Information belonging to third parties may be more likely to be protected under a sealing order. In Sierra Club of Canada v. Canada (Minister of Finance), 36 granting sealing orders. Such an order will be granted where: the Court set out a test for 1. It is necessary in order to prevent a serious risk to an important interest, including a commercial interest, in the context of litigation because reasonable alternative measures will not prevent the risk; 2. The salutary effects of the order outweigh its deleterious effects. To meet the first branch of the test, further questions must be asked: 1. Is the potential risk to the interest sought to be protected real and substantial? 2. Are there no available reasonable alternative measures to protect the interest at risk? 3. If the interest is a commercial interest, is it an important commercial interest that can be expressed as a public interest? To meet the second branch of the test, the courts will evaluate the positive and negative effects of granting a sealing order, and in particular three core values that underlie the freedom of expression: (1) seeking the truth and the common good; (2) promoting selffulfilment of individuals by allowing them to develop thoughts and ideas; and (3) ensuring open participation in the political process. The Application of International Comity Principles in Multi- Jurisdictional Class Actions The Canadian Legal Landscape Canadian class actions often follow earlier class actions regarding similar products in the U.S. The Canada Consumer Product Safety Act does not deal with class actions. The areas of product principles are to some extent unsettled liability suits, class actions and international comity. 37 Defendants to class action lawsuits have an interest in obtaining a result that precludes future actions from being commenced in other jurisdictions. However, the preclusive effect of class action judgments or settlements remains an unsettled issue at this time. Canada does not have a single class action statute or law. There are provincial class action statutes governing proceedings in each provincial jurisdiction. 38 The legal landscape is further SCC 41, [2002] 2 S.C.R See, for example, Tim Buckley, Robert E. Charbonneau & Julia Mercier, Cross-Border Class Actions in Canada, Lexpert (Thomson, Reuters: July 2009). See, for example, the Ontario Class Proceedings Act, 1992, S.O c. 6 and the British Columbia Class Proceedings Act, RSBC 1996 C
12 Page 11 complicated by the fact that Canadian law incorporates common law in nine provinces and three territories of Canada and the distinct civil law in the province of Quebec. The federal government has also provided rules for class actions, which only apply in the Federal Court. 39 Canadian provincial superior courts do not have a system to supervise multi-province litigation. However, ad hoc arrangements have been designed in a limited number of cases. 40 In the absence of ad hoc agreements, the result could be parallel or competing actions in multiple provinces. Canadian law does not provide a straightforward method for the management of competing claims against the same defendant in different provinces. Certification of class actions in Canada is relatively more common than in the United States, as the certification requirements in Canada do not include requirements for predominance of common issues of fact and law and typicality of claims. As a result, conventional proceedings in the United States are often litigated as class actions in Canada. Enforcement of International Class Action Settlements and Judgments The preclusive effect of an international class action was considered by the Ontario Court of Appeal in Currie v. McDonald s Restaurants of Canada Ltd. et al. 41 In Currie a resident brought a class action in Ontario in the face of the settlement of a class action brought on behalf of American and international class members, which was approved by a court in Illinois. The Ontario Court of Appeal indicated that the failure of persons to opt-out of a foreign class action may be regarded as a form of passive attornment sufficient to support the jurisdiction of the foreign court. This is the case if: 1. There is a real and substantial connection linking the cause of action to the foreign jurisdiction; 2. The rights of non-resident class members are adequately represented; and 3. Non-resident class members are accorded procedural fairness, including adequate notice. The Court distinguished between the position of two types of class action members namely: those who engage in cross-border transactions with foreign entities and who would reasonably expect that legal claims arising from the transaction would be properly litigated in the foreign jurisdiction; and those in the position of the plaintiffs in Currie who had done nothing to invite or invoke Illinois jurisdiction. The Ontario Court of Appeal refused to dismiss the class action brought in Ontario because of the inadequacy of notice of opt-out rights provided to Canadian class members in the American action See the Federal Courts Rules, Part 5.1 Class Proceedings. See, for example, Baxter v. Canada (Attorney General) (2006), 83 O.R. (3d) 481 (S.C.). 74 O.R. (3d) 321 (C.A.)
13 Page 12 SUMMARY The Canada Consumer Product Safety Act shares several features with legislation in the U.S. These include: prohibitions respecting the importation of unsafe consumer products; requirements to produce and maintain documents to facilitate tracing; product incident reporting; the power to order remedial measures and recalls; and the imposition of penalties for non-compliance. Liability for non-compliance with the Canada Consumer Product Safety Act may trigger civil and criminal penalties. In addition, several statutes provide consumers with class action law suit rights. Canadian class actions often follow earlier class actions regarding similar products in the US. More than ever before, it is important for businesses engaged in the manufacturing, importing, advertising and sale of consumer products to keep up-to-date with all applicable laws and policies
14 APPENDIX A OVERVIEW OF THE AMERICAN REGULATORY AND ENFORCEMENT POLICIES TO ENSURE COMPLIANCE & PARALLEL PROVISIONS IN THE CANADA CONSUMER PRODUCT SAFETY ACT CANADA UNITED STATES Narrative Canada Consumer Product Safety Act, S.C. 2010, c.21 ( CCPSA ) Consumer Product Safety Act, 15 USC 2057 / Consumer Product Safety Improvement Act 2008, 122 STAT 3016 ( CPSIA ) Legislative Objective Section 3: protecting the public by addressing dangerous to human health or safety posed by consumer products in Canada the creation of a regulatory system regarding consumer products that is complimentary to the system regarding the environment application of effective measures to encourage compliance Section 2: a product, including its components, parts or accessories, that may reasonably be expected to be obtained by an individual to be used for non-commercial purposes, including for domestic, recreational and sports purposes, and includes its packaging Section 2: protection of public against unreasonable risks of injury associated with consumer products assist consumers in evaluating comparative safety of consumer products, development of uniform safety standards for consumer products and a minimization of conflicting state and local regulations the promotion of research and investigation into the cause and prevention of product related deaths, illness and injuries Section 3(5): any article or component produced or distributed for sale or personal use for use in or around permanent or temporary household or residence, a school, in recreation, or otherwise, or for personal use, consumption or enjoyment of a consumer in or around a permanent or temporary household or residence, a school, in recreation, or otherwise Section 8: the Commission may promulgate a rule
15 2 CANADA UNITED STATES Narrative declaring a banned hazardous product Definition of Danger/Risk of Injury Section 2: danger to health or human safety means any unreasonable hazard existing or potential posed by a consumer product during or as a result of normal or foreseeable use that may be reasonably be expected to cause a death of an individual exposed to it or have an adverse effect on that individual s health Section 3(14): risk of injury means a risk of death, personal injury, or serious or frequent illness Prohibitions Section 5: no person shall manufacture, import, advertise or sell a consumer product listed in Schedule 2 (Schedule 2 lists prohibited goods including, for example, kite strings made of a material that conducts electricity ) Section 6: a person shall manufacture, import, advertise or sell a consumer product that does not meet the requirements set out in the regulations Section 7: no manufacturer or importer shall manufacture, import, advertise, or sell a consumer product that: (a) is a danger to human health or safety; (b) is the subject of a recall order; or (c) is the subject of a measure that has not been carried out Section 8: no person shall advertise or sell a consumer Section 17: any consumer product offered for importation into the U.S. shall be refused admission if such product (1) fails to comply with an applicable consumer product safety rule; (2) is not accompanied by a certificate required by the Act or any other act enforced by the Commission or is accompanied by a false certificate; (3) has been determined to be an imminently hazardous consumer product; (4) has a product defect which constitutes a substantial product hazard; (5) is a product which was manufactured by a person who the Commission has informed is not in compliance with all inspection recordkeeping Section 17(c): the Commission may defer a final determination as to the admission of a product and may
16 3 CANADA UNITED STATES Narrative product that they know: (a) is a danger to human health or safety; (b) is the subject of a recall order; or (c) is the subject of a measure that has not been carried out Section 9: no person shall package or label a consumer product: (a) in a manner that may be reasonably expected to create an erroneous impression regarding the fact that it is not a danger to human health or safety; or (b) in a manner that is false, misleading or deceptive regarding its certification relating to its safety or compliance with a safety standard or the regulation permit such product to be delivered from customs custody under bond for the purpose of permitting the owner or consignee an opportunity to modify the product Section 19: it is unlawful for any person to (1) sell, offer for sale, manufacture for sale, distribute in commerce or imported into the U.S. any consumer product or any product or substance regulated under the Act or other act enforced by the Commission and is not in conformity with an applicable consumer product safety rule, regulation, standard or ban; (2) sell, offer for sale, manufacture for sale, distribute in commerce or imported into the U.S. any consumer product, or other product or substance that is (B) subject to voluntary corrective action taken by the manufacturer; (C) to an order specified under the Act; or (D) a banned hazardous substance; (3) fail or refuse to permit access to or copying of records or refuse to establish or maintain records or fail or refuse to make reports or provide information, etc. (4) fail to furnish information; (5) sell, offer for sale, or distributing for commerce or imported into the U.S. any consumer product bearing a registered safety certificate mark owned by an accredited conformity assessment body which is used in a manner unauthorized;
17 4 CANADA UNITED STATES Narrative (6) make a misrepresentation to an officer or employee of the Commission to the scope of consumer product subject to an action or in the course of an investigation under the Act; (7) exercise or attempt to exercise undue influence on a third party conformity assessing body with respect to the testing or reporting of the results of testing of any product for compliance; Test Studies and Compilation of Information Section 12: the Minister may, by written notice, order any person who manufactures or imports a consumer product for commercial purposes to: (a) conduct test or studies on the product; (b) compile any information that the Minister considers necessary to verify compliance; (c) provide him or her with the documents that contain information of the results of the tests or studies Section 14(a)(2): importing for consumption or warehousing or distributing in commerce any children s product that is subject to a children s product safety rule, every manufacturer of such children s product shall, amongst other things, submit sufficient samples of the children s product to a third party conformity assessment body, accredited to be tested for compliance with such children s product safety rule and based on such testing issue a certificate that certifies that such children s product complies with the children s product safety rule based on the assessment of a third party conformity assessment body Preparing and Maintaining Documents Section 13: any person who manufactures, imports, advertises, sells or tests a consumer product for commercial purposes shall prepare and maintain: (a) documents that indicate: (i) in the case of a retailer, the name and the address of the person from whom they obtain the Section 16(b): any person who is a manufacturer, private labeller or distributor of a consumer product shall establish and maintain such records and make such reports and provide information as the Commission may require for the purposes of implementing the Act or to determine compliance with the rules or orders prescribed under the Act, pending identification of manufacturers,
18 5 CANADA UNITED STATES Narrative product and the location where and the period during which they sold the product; and (ii) in the case of any other person, the name and address of the person from whom they have obtained the product or to whom they sold it; (b) describe documents; Under section 13 of the CCPSA a retailer must prepare and maintain documents on who they obtained the product from and the location where and the period during which they sold the product. Any person who manufacturers imports, advertises, sells or tests a consumer product for commercial purposes who is not a retailer must prepare and maintain documents on who they obtained the product from or to whom they sold it (or both if applicable). importers, retailers and distributors Section 6A: the Commission shall establish and maintain a database on the safety of consumer products and other products or substances regulated by the Commission as publicly available, searchable and accessible through the internet website of the Commission Section 6A(a)(6): the Commission shall not disclose under this section the name, address or other contact information of any individual or entity that submits to the Commission, a report without express written consent of the person (See also Health Canada Consumer Product Safety Guidance on Preparing and Maintaining Documents) Incident Report/Notice Section 14(1): Causes injury to a person, a defect, incorrect or insufficient information on label or instructions, recall or other measure. Section 14(2): Must report and provide all information to the Minister any incident related to the incident within two days after they become aware of it. Section 14(3): must provide report within ten days Section 15(1): incident means with respect to a Section 15: the term substantial product hazard means: (1) the failure to comply with an applicable consumer product safety rule, similar rule, regulation, standard or ban, which creates a substantial risk of injury to the public; or (2) a product defect which creates a substantial risk of injury to the public Section 15(b): every manufacturer of a consumer
19 6 CANADA UNITED STATES Narrative consumer product: (a) occurrence in Canada or elsewhere that resulted or may reasonably have been expected to result in an individual s death or serious adverse effects on their health, including serious injury; (b) a defect or characteristic that may reasonably be expected to result in an individual s death or serious adverse effects on their health, including serious injury; (c) incorrect or insufficient information on a label or instructions or the lack of a label or instructions that may reasonably be expected to result in an individual s death or serious adverse effects on their health, including serious injury; or (d) a recall or measure that is initiated for human health or safety reasons product or substance for which the Commission has jurisdiction distributed in commerce and every distributor or retailer of such product, who obtains information which reasonably supports the conclusion that such product: (1) fails to comply with an applicable consumer product safety rule or with a voluntary consumer product safety standard; (2) fails to comply with any other rule, regulation, standard or ban (3) contains a defect which could create a substantial product hazard; (4) creates an unreasonable risk of serious injury or death, shall immediately inform the Commission of such failure to comply, of such defect, or such risk, unless such manufacturer, distributor, or retailer has actual knowledge that the Commission has been adequately informed of such defect, failure to comply or such risk Duty to Report Section 14(2): Must report and provide all information to the Minister any incident related to the incident within two days after they become aware of it. Section 14(3): must provide report within ten days Section 15(b): every manufacturer of a consumer product or substance for which the Commission has jurisdiction distributed in commerce and every distributor or retailer of such product, who obtains information which reasonably supports the conclusion that such product: (1) fails to comply with an applicable consumer product
20 7 CANADA UNITED STATES Narrative Health Canada Draft Guidance on Mandatory Incident Reporting under the Canada Consumer Product Safety Act Section 14, Duties in the Event of an Incident It is the responsibility of a person who manufactures, imports or sells consumer products in Canada for commercial purposes to ensure compliance with the CCPSA s mandatory reporting requirements safety rule or with a voluntary consumer product safety standard; (2) fails to comply with any other rule, regulation, standard or ban (3) contains a defect which could create a substantial product hazard; (4) creates an unreasonable risk of serious injury or death, shall immediately inform the Commission of such failure to comply, of such defect, or such risk, unless such manufacturer, distributor, or retailer has actual knowledge that the Commission has been adequately informed of such defect, failure to comply or such risk Mandatory Incident Reporting Inspection Section 21: An inspector may for the purpose of verifying compliance or preventing non-compliance at any reasonable time enter a place including a conveyance in which they have reasonable grounds to believe that a consumer product is manufactured, Section 16: officers and employees designated by the Commission are authorized to enter reasonable times any factory, warehouse or establishment in which a consumer product is manufactured or held in connection with distribution in commerce and to inspect at
21 8 CANADA UNITED STATES Narrative imported, packaged, stored, advertised, sold, labelled, tested or transported, or a document relating to the administration of this Act or Regulations is located reasonable times and in a reasonable manner such conveyance or those areas of such factory, warehouse or establishment, where products are manufactured held or transported Penalties Section 26(1): a seized thing at her election forfeited to Her Majesty in Right of Canada if: (a) within 60 days after the seizure no person is identified as its owner or person who is entitled to posses it; or (b) the owner or person who is entitled to possess it within 60 days after the day on which they are notified does not claim it Section 27(1): if a person is convicted of an offence under the Act, the court may order that a seized thing by means of or in relation to which the offence was committed be forfeited Section 40(1): the Minister may make an interim order that contains any provision that may be contained in a regulation under the Act if he or she believes that imminent action is required to deal with a significant danger to human health or safety Section 41(1) and (3): contravention of provisions of the Act or its regulations, or an order made under the Act results in liability for a fine and/or possible imprisonment. Section 17(e): products refused admission into the customs territory of the U.S. shall be destroyed unless the Secretary of the Treasury permits the export of the product in lieu of destruction Section 20: any person who knowingly violates section 19 (the prohibited act section) shall be subject to a civil penalty not to exceed $100,000 for each violation. Specified violations shall constitute a separate offence with respect to each consumer product involved and the maximum civil penalty shall not exceed $15 million for any related series of violations Section 21: a violation of section 19 of the Act is punishable by (1) imprisonment for not more than 5 years for knowing and wilful violation of that section; (2) fine; or (3) both Section 21(c)(1): a penalty may include the forfeiture of assets Section 41(3): a person who contravenes sections 8,
22 9 CANADA UNITED STATES Narrative 11 or 20 or knowingly or recklessly contravenes another provision of this Act is liable: (a) on conviction on indictment to a fine in the amount at the discretion of the court to imprisonment for up to 5 years or both; (b) on summary conviction for a first offence to a fine of not more than $500,000 or imprisonment for a term of not more than 18 months or both; or (c) for a subsequent offence to a fine of not more than $1 million or imprisonment for a term of not more than 2 years or both Section 49 - Commission of violation: every person who contravenes a recall or measures order commits a violation and is liable to a penalty established under the Regulations relating to AMPS Section 52: a designated person may issue an AMPS notice of violation Section 54(1): the Minister may enter into an AMPS compliance agreement providing for a reduction in whole or part of a penalty Directors and Officers Section 42: a director, officer or agent who participated in the offence is a party, is liable on conviction and punishment provided for by the Act Section 21(b): a director, officer or agent of a corporation who knowingly and wilfully authorize, orders or performs any of the acts or practices constituting a violation of section 19 shall be subject to penalties
23 10 CANADA UNITED STATES Narrative Injunctions and Orders Section 36(1): The Minister may apply to the court for an injunction to refrain from committing an offence under the Act. if on the application of the Minister it appears to a court of competent jurisdiction that a person has done or is about to do or is likely to do an act or thing that constitutes or is directed towards the commission of an offence under the Act, the court may issue an injunction ordering the person who is named in the application to: (a) refrain from doing an act or thing; or (b) do an act or thing; Section 40(1): a person who contravenes a provision of the Act other than sections 8, 10, 11 or 20, the provision of the Regulations or an order is guilty of an offence and is liable: (a) on conviction on indictment to a fine of not more than $5 million or imprisonment of not more than 2 years or both; Section 22: the U.S. district courts shall have jurisdiction to take the following action (1) restrain any violation; (2) restrain a person from manufacturing, for sale, offering for sale, distributing in commerce, or importing into the U.S., a product in violation of an order in effect; (3) restrain any person from distributing in commerce a product which does not comply with a consumer product safety rule; Section 23: any person who shall sustain injury by reason of any knowing violation of a consumer product safety rule may sue any person who knowingly violated such rule or order in the district court of the U.S. Section 24(a): any interested person may bring an action in any U.S. district court for the district in which the defendant is found or transacts business to enforce a consumer product safety rule or an order under section 15 and to obtain appropriate injunctive relief (b) on summary conviction for a first offence to a fine of not more than $250,000 or imprisonment to not more than 6 months or both; or (c) for a subsequence offence to a fine of not more than $500,000 or imprisonment for not more than 18 months or both;
24 11 CANADA UNITED STATES Narrative Recalls and Measures Section 31(1): if the Minister believes on reasonable grounds that a consumer product is a danger to human health or safety, he or she may order the person who manufactures, imports or sells a product for commercial purposes, to recall it Section 32: The Minister has the power to order any vendor along the product supply chain to stop the manufacturing, importation, testing, selling, advertising, or any other measure, of a consumer product. Section 32(1): the Minister may order a person who manufactures, imports, advertises or sells a consumer product to take any measure referred to in subsection 32(2) if: (a) that person does not comply with an order made with respect to the product; (b) the Minister has made an order with respect to the product; (c) the Minister believes on reasonable grounds that the product is a subject of a measure or recall undertaken voluntarily by the manufacturer or importer; and Section 15(c)(1): if the Commission determines that a product distributed in commerce presents a substantial product hazard and that notification is required in order to adequately protect the public from such substantial product hazard or if the Commission determines a product to be an imminently hazardous consumer product, has filed an action, the Commission may order the manufacturer or any distributor or any retailer of the product to take one or more actions, including (A) to cease distribution of the product (B) and notify all persons that the transport, store, distribute or otherwise handle the product or to which the product has been transported, sold, distributed or otherwise handled to cease distribution of the product (C) to give public notice of the defect or failure to comply (D) to mail notice to each person who is a manufacturer, distributor or retailer of the product or to whom the person required to give notice knows such product was delivered or sold (d) the Minister believes on reasonable grounds there is a contravention of the Act or Regulations in relation to the product Section 32(2): the measures include: (a) stopping the manufacturing, importation, packaging, storing, advertising, selling, labelling, testing or
25 12 CANADA UNITED STATES Narrative transportation of the consumer product or causing any of those activities to be stopped; and (b) any measure that the Minister considers necessary to remedy the non-compliance with the Act or Regulations Section 32(3): the order shall be provided in the form of a written notice Section 35: a recall order or an order for taking measures shall be reviewed on the written request from a person who was ordered to recall or take a measure Section 16: the Minister may disclose confidential business information to a person or government that carries out functions relating to the protection of human health or safety or the environment in relation to consumer product without consent if the person to whom or government to which the information may be disclosed agrees in writing to maintain the confidentiality of the information Section 29(f)(1): the Commission may make information obtained by the Commission available to federal, state, local or foreign government agencies upon the prior certification of an appropriate official of such agency and such material will be maintained in confidence and will be used only for official law enforcement or consumer protection purposes Whistle Blower Protection Section of the Criminal Code of Canada: No employer or person acting on behalf of an employer or in a position of authority in respect of an employee of the employer shall take a disciplinary measure against, demote, terminate or otherwise adversely affect the employment of such an employee, or threaten to do so, (a) with the intent to compel the employee to abstain from providing information to a person whose duties include the enforcement of federal or provincial law, Section 40: no manufacturer, private labeller, distributor or retailer may discharge an employee or otherwise discriminate against an employee with respect to compensation, terms, conditions, or privileges of employment because the employee, whether at the employee s initiative or at the ordinary course of the employee s duties, provided information relating to any violation of or any act or omission, the employee reasonably believes to be a violation of any provision of
26 13 CANADA UNITED STATES Narrative respecting an offence that the employee believes has been or is being committed contrary to this or any other federal or provincial Act or regulation by the employer or an officer or employee of the employer or, if the employer is a corporation, by one or more of its directors; or the Act (b) with the intent to retaliate against the employee because the employee has provided information referred to in paragraph (a) to a person whose duties include the enforcement of federal or provincial law
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