On March 24, 2012, the Canadian federal government published draft regulations for comment relating to the imposition of administrative monetary penalties for certain violations of Canada's new Consumer Product Safety Act.
The Administrative Monetary Penalties (Consumer Products) Regulations relate to violations of ministerial orders relating to the recall or taking measures (such as to stop importing or selling) consumer products. Using a system of points to assess the gravity of the violation of the ministerial order and the number of violations, the regulations would establish penalty ranges of Cdn. $10,000 to Cdn. $25,000 for commercial organizations.
It should be noted, however, that these are not the only potential penalties for organizations in the supply-chain of consumer products in Canada. All organizations in the supply chain have day-to-day responsibilities under Canada's Consumer Product Safety Act. In particular, from a data governance perspective, organizations should be aware that if they are engaged in the manufacture, importation, advertising, sale (distribution and retail) or testing of consumer products, they have specific record-keeping and reporting obligations.
Section 13 of the Consumer Product Safety Act requires retailers to maintain records of the name and address of the person from whom they obtained a consumer product and the location and period during which the product was sold. Other organizations must maintain records containing the name and address of the person from whom they obtained the product or to whom they sold it, or both. These records must be kept for 6 years after the end of the year to which they relate (accordingly, most organizations will likely use a 7-year retention period subject to certain exceptions for longer retention). These records must be kept in Canada unless an exemption is obtained.
Section 14 of the Consumer Product Safety Act requires manufacturers, importers and sellers of consumer products to make reports regarding any "incidents" relating to those products of which they become aware and to provide the Minister of Health with information regarding such incidents. An "incident" includes among other things (a) an occurrence in Canada or elsewhere that resulted or may reasonably have been expected to result in an individual's death or in serious adverse effects on their health, including a serious injury; (b) a defect or characteristic that may reasonably be expected to result in an individual's death or in serious adverse effects on their health, including a serious injury; (c) incorrect or insufficient information on a label or in instructions — or the lack of a label or instructions — that may reasonably be expected to result in an individual's death or in serious adverse effects on their health, including a serious injury; or (d) a recall or measure that is initiated for human health or safety reasons.
A person who contravenes these obligations may be prosecuted for a criminal offence and be liable to a maximum fine of Cdn. $5,000,000 or to imprisonment for a maximum term of two years or to both. Directors and officers may be personally liable if they directed, authorized, assented to, acquiesced in or participated in the commission of the offence.
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