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$600,000 Penalty for Drawstrings in Children’s Outerwear

Thursday, April 10, 2014
Sandler, Travis & Rosenberg Trade Report

The Consumer Product Safety Commission announced April 8 that it has provisionally accepted an agreement under which a New Jersey company will pay a $600,000 civil penalty to settle charges that it knowingly failed to report its sale of children’s upper outerwear garments with drawstrings. The company has also agreed to (a) implement and maintain a program designed to ensure compliance with the laws and regulations enforced by the CPSC, (b) maintain and enforce a system of internal controls and procedures designed to ensure that information required to be disclosed to the CPSC is recorded, processed and reported in accordance with applicable law and that all reporting made to the CPSC is timely, truthful, complete and accurate, and (c) take steps to ensure that prompt disclosure is made to company management of any significant deficiencies or material weaknesses in the design or operation of such internal controls. The company was fined $35,000 in 2009 for similar violations.

The CPSC considers children’s upper outerwear with drawstrings at the hood or neck to be defective and to present a substantial risk of injury to young children. Federal law requires manufacturers, distributors and retailers to report to the CPSC within 24 hours after obtaining information reasonably supporting the conclusion that a product contains a defect that could create a substantial product hazard, creates an unreasonable risk of serious injury or death, or violates any consumer product safety rule or any other rule, regulation, standard or ban enforced by the CPSC.

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