Background

The Consumer Product Safety Commission has provisionally accepted a settlement in which a company has agreed to a $5 million penalty to resolve charges that it knowingly imported all-terrain vehicles without the CPSC-approved ATV action plan required by federal law. However, the CPSC will suspend all but $1.25 million of this penalty based on the company’s sworn representations that paying a penalty exceeding that amount would cause it financial hardship and compel it to cease business operations.
The settlement also requires the company to maintain a compliance program to ensure that it complies with the Consumer Product Safety Act and maintains internal controls designed to ensure timely, complete, and accurate reporting to the CPSC. The company will file annual reports on the efficacy of these programs for three years.

Comments on the settlement agreement are due no later than Sept. 13.

One CPSC commissioner decried the settlement as offering “lenient” terms to a subsidiary of a Chinese parent company that has “cash reserves in the hundreds of millions of dollars.” He added that this company “knowingly, and perhaps willfully,” violated the law and should therefore have been subjected to a criminal inquiry.

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