Originally published in Blakes Bulletin on International
Trade & Investment – China Focus, January
Earlier in 2008, the Canadian government introduced legislation
that would impose onerous requirements on companies that import
consumer products from Chinese and other foreign suppliers. This
legislation, referred to as the Consumer Products Safety
Act, followed several recent high-profile recalls affecting
toys, food, toothpaste and pharmaceuticals, many of which were
imported from China. As a result of the proposed legislation,
Chinese and other non-Canadian suppliers would have been faced with
an increasing number of requests for detailed product information,
including documentation of safety testing, from Canadian importers
and distributors. Although the Consumer Products Safety
Act, also referred to as Bill C-52, did not become law because
of the recent Canadian election, the government's election
platform indicates that protecting Canadians from unsafe imported
products remains a high priority. Accordingly, the government is
likely to re-introduce a bill in Parliament in the coming
Although it is unknown at this point whether the bill, when
introduced, will be identical to or amended from what was
originally put forward, prudence suggests that now may be a good
opportunity for importers and their Chinese and other foreign
suppliers that may be affected by the eventual legislation to
consider how they may play a role in shaping the legal framework
for such consumer product law. In the meantime, it may be wise for
importers, manufacturers and suppliers and others potentially
affected by the legislation to begin implementing compliance
mechanisms so that when the legislation comes into effect, they
will have established appropriate best practices and due diligence
mechanisms to avoid any future liability.
CERTAIN OBLIGATIONS LIKELY TO RESURFACE IN NEW
Although no one can be certain exactly what the new legislation
will contain, there are certain broad prohibitions and obligations
that are likely to be included in any new bill when re-introduced
in this session of Parliament.
Consistent with the government's election platform, any new
consumer products safety legislation is likely to prohibit
Canadians from importing, manufacturing, advertising or selling
consumer products that are identified as posing a danger to human
health or safety. There likely will be mandatory recall provisions
empowering the government to prohibit in Canada the importation,
manufacture, advertisement or sale of products that pose health or
safety risks to consumers. The legislation may also require those
who sell consumer products in Canada to advise the government of
any deaths, injuries, serious adverse effects or recalls occurring
in Canada and abroad related to the product. These obligations
could be onerous for importers, manufacturers and distributors as
they will essentially be required to continuously monitor the
products they sell, both in Canada and elsewhere in the world.
Under the previously introduced legislation, the Minister of
Health was given the power to order importers and Canadian
manufacturers to conduct testing on consumer products and to
provide documents, within a pre-determined time-frame, containing
the results of such tests. These burdensome obligations may
resurface in the new legislation. Considering that international
suppliers may not be required to comply with equivalent standards
in their home country, there is no guarantee that such information
or records even exist.
Any new legislation is likely to impose steep penalties on
importers and manufacturers who knowingly expose Canadians to
danger, as well as on directors, officers, or agents who have
directed, authorized or acquiesced in such corporate activity.
Given the level of criticism in the marketplace on Chinese
imports in light of recent recalls, it is important that Chinese
suppliers understand the responsibilities the new legislation may
impose on Canadian importers. Prudent Chinese suppliers may want to
consider reviewing their safety testing procedures and consider
engaging in increased safety information-sharing with Canadian
importers if they have not already done so. Providing Canadian
importers with documentation regarding safety testing and informing
them of any product recalls will not only help to shield their
Canadian importers from liability, but it may help maintain and
strengthen existing business relationships.
The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.
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