The Canada Consumer Product Safety Act ("CCPSA")

Transcription

1 The Canada Consumer Product Safety Act ("CCPSA") Presented at: Trade Representatives Seminar TFO Canada May 30, 2011 Presented by: Mr. Jesse I. Goldman Partner, International Trade and Investment Group at Bennett Jones LLP One First Canadian Place, 34 th Floor Toronto, Ontario, Canada Tel: Prepared by: Jesse I. Goldman and Laura A. Murray

2 Outline 1. Overview of the CCPSA 2. Prohibitions 3. Reporting Obligations 4. Record Keeping Obligations 5. Enforcement Powers 6. Shifting Liability to Foreign Exporters 7. Compliance Strategy Checklist 2

3 Overview of the CCPSA The CCPSA will come into force on June 20, 2011 Key Objective - strengthen laws to better protect the health and safety of Canadians 3

4 Overview of the CCPSA Applies to "consumer products" (e.g., toys, apparel, and furniture) Products regulated under other legislative schemes (e.g., food) are exempt Applies to Canadian manufacturers, sellers, advertisers, and importers, but will also have implications for foreign exporters Key Changes Prohibition on unsafe and potentially unsafe products Prohibition on misleading advertising Reporting and record keeping obligations Mandatory recalls, increased fines, and penalties Existing prohibitions under the Hazardous Products Act ( HPA ) will continue 4

5 Prohibitions Prohibition against the manufacture, importation, advertisement or sale of consumer products that pose an unreasonable danger to human health or safety Prohibition on false and misleading packaging, labelling or advertising in connection with claims relating to the safety of a consumer product Proposed Exemption Regulations allow non-compliant products to enter into the market if the product will not be sold to general public Products exported to Canada for exhibition and participation in trade shows Products brought into compliance after entry into Canada Products exported to Canada for further manufacturing and subsequent re-export 5

6 Record Keeping Obligations Mandatory Record Keeping: Manufacturers, importers, and sellers must maintain accurate records of their product sources and customers Required Information: Name and address of supplier from whom they obtained the products Information on where and to whom products are sold Implications for Foreign Exporters: Canadian Government will be able to trace products back to foreign exporters so that unsafe or recalled products can be stopped and/or refused entry at the border Canadian importers may impose corresponding record keeping obligations on their foreign suppliers 6

7 Reporting Obligations Mandatory Reporting: Manufacturers, importers, and sellers will be required to report incidents and defects involving their products that are sold in Canada What must be reported? Death or serious adverse effects on health (illness or injury) Defects that may reasonably be expected to result in death or serious adverse effects on health Incorrect or insufficient information on label or instructions that may reasonably be expected to result in death or serious adverse effects on health Product recalls initiated in another jurisdiction What will be the timeframes for reporting? Two days: must report within two days after becoming aware of an incident or defect Ten days: must provide a written report within 10 days after becoming aware of an incident or defect 7

8 Reporting Obligations What information must be reported? Within two days: all information available Within 10 days: more detailed information Number of people affected and details of any injuries Product serial and model numbers Information on dates of sale, importation, and distribution A risk assessment and proposed corrective measures What are the implications for foreign exporters? Canadian importers/purchasers will facilitate their own compliance by requiring foreign exporters to report and maintain detailed records on all product defects and health and safety incidents involving their products 8

9 Enforcement Powers Mandatory Recalls for Unsafe Products Ministerial Orders for Test/Study Results Administrative Monetary Penalties for Non-Compliance Penalties based on gravity of violation, ranging from $1,000 to $25,000 Each day is considered a new violation Criminal Prosecutions Inspection Powers, Seizure, and Dentention 9

10 Shifting Responsibility and Liability to Foreign Exporters Canadian importers will respond to the CCPSA by insisting on contractual conditions that shift responsibility and liability up supply chain to foreign exporters Canadian importers may impose contractual conditions requiring foreign suppliers to: share in the costs of monetary penalties, legal fees, and/or administrative costs associated with having the goods inspected and/or refused entry at the Canadian border compensate importers for lost profits associated with re-exporting banned merchandise conduct product performance testing permit on-site inspection by the importer or a third-party and provide evidence of inspection on request cooperate fully with investigations by the Canadian Government by supplying information provide refunds and/or cancellation of orders in the case of recalled or banned merchandise Foreign exporters should protect themselves by insisting on contractual conditions that similarly shift liability up the supply chain to their suppliers 10

11 Compliance Strategy Checklist Establish and implement testing procedures and performance standards to ensure products exported to Canada do not have the potential to cause death, injury, or illness Review product packaging and labelling on products exported to Canada to ensure there are no misleading claims relating to product safety Implement record keeping systems to ensure information is available on any defects and/or health and safety incidents involving consumer products, if requested by Canadian importers. Review supply agreements with suppliers and/or manufactures and consider the inclusion of conditions that shift liability up the supply chain in circumstances of defective products 11

12 Concluding Remarks The CCPSA will result in prohibitions on products that pose potential safety hazards, additional enforcement mechanisms, and new reporting and record keeping obligations Foreign exporters will be affected by the upcoming changes to Canada's consumer product safety regulation Products posing potential safety hazards may be precluded entering the Canadian market Canadian importers may shift their responsibilities up the supply chain by imposing reporting and record keeping obligations on foreign exporters Canadian importers may also insist on contractual conditions that impose liability on foreign exporters for non-compliant products and provide for refunds in the case of banned or recalled merchandise Foreign exporters should prepare now by implementing compliance strategies and considering contractual mechanisms to protect themselves from liability 12

13 THANK YOU Jesse I. Goldman Partner, International Trade and Customs Group Bennett Jones LLP One First Canadian Place, 34 th Floor Toronto, Ontario M5X 1A4 Tel.: Toronto Office 3400-One First Canadian Place Toronto, ON M5X 1A4 Calgary Office 4500 Bankers Hall East 855 2nd Street S.W. Calgary, AB T2P 4K7 Edmonton Office 1000 ATCO Centre Street Edmonton, AB T5J 3T2 Ottawa Office 1900 World Exchange Plaza 45 O Connor Street Ottawa, ON K1P 1A4 13