Background

The Consumer Product Safety Commission has provisionally accepted an agreement in which a Canadian company will pay a $16.0 million civil penalty to settle charges that it knowingly failed to immediately report product defects to the CPSC. Any interested person may ask the CPSC not to accept this agreement, or otherwise comment on its contents, no later than Dec. 4.

The CPSC states that, in addition to imposing a monetary penalty, the settlement agreement requires the company to maintain internal controls and procedures designed to ensure compliance with the Consumer Product Safety Act, including specified enhancements to its compliance program. Further, the company has agreed to submit three annual reports regarding its compliance program, internal controls, and internal audits of the effectiveness of its compliance policies, procedures, systems, and training. 

The CPSC has agreed to suspend all but $4 million of the penalty based on the accuracy, truthfulness, and completeness of documents provided by the company and its sworn representations that paying a higher penalty would cause it significant financial hardship and compel it to cease operations.

For more information on how you can avoid product safety compliance violations, please contact Beth Ring at (212) 549-0133 or Ned Steiner at (202) 730-4970.

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