A scary trend is on the way, which may become a nightmare for customs and trade compliance professionals. The trend can lead to a job loss because those professionals may not be able to explain why their products were seized. This phenomenon is called “substantial product hazard” enforcement. This is a joint CBP-CPSC program, which resulted in publications of articles by CBP, including “CBP Stops Thousands of Unsafe Hair Dryers” and “CBP Turns Off Importation of Unsafe Holiday Lights.” In the case of hair dryers, CBP states the reason for seizure was because the hair dryers “were determined to constitute a ‘substantial product hazard’ under U.S. law, for failing to have adequate immersion protection.” This notice is a warning to trade compliance folks dealing with consumer goods that “substantial product hazard” prong is yet another check list on their ever-growing regulatory product review plate.
Substantial product hazard is defined in Sec. 15(a) of the Consumer Product Safety Act, 15 U.S.C. 2064(a), as well as, 16 C.F.R. 1115.2. The regulation states that the product will become a “substantial product hazard” if it fails to comply with “applicable consumer product safety rule.” 16 C.F.R. 1115.2(a)(1). Well, that is helpful, because the rules are somewhat concrete, and discussed extensively on CPSC website, as well as here, in LawCustoms publications. See Consumer Product Safety Commission Topics & Discussions. The more interesting is the second part of the definition. Under 16 C.F.R. 1115.2(a)(2), the product is deemed “substantial product hazard” if “[a] product defect which (because of the pattern of defect, the number of defective products distributed in commerce, the severity of the risk, or otherwise) creates a substantial risk of injury to the public.” In other words, the regulations states, that if a product, in the eye of the regulator (here Customs and CPSC) creates a substantial risk of injury, then it is a “substantial product hazard.” That is broad!
Fortunately, Customs provides clues that may lead to a more concrete compliance procedure. In the Hair Dryers publication, CBP mentions CPSC’s adoption of “industry voluntary standards” in its regulation. 16 C.F.R. 1115.2(b) also talks about “voluntary consumer product safety standards upon which the Commission has relied under section 9 of the CPSA.” Accordingly, customs and trade compliance must be on the look out for voluntary consumer product safety standards and CPSCs regulations. But even this procedure is not 100% proof, because the regulation still makes trade community responsible for determination of “unreasonable risk of serious injury.” Id.