United States: Consumer Product Safety Commission Issues Statement Of Policy Concerning The Tracking Label Requirements Of The CPSIA

On July 21, the Consumer Product Safety Commission (CPSC) issued its Statement of Policy regarding the tracking label requirements under the Consumer Product Safety Improvement Act (CPSIA). Section 103 of the CPSIA requires that, beginning August 14, 2009, manufacturers—including importers—of all children's products place permanent, distinguishing marks on the product and its packaging, to the extent practicable, that provide certain information for the manufacturer and the ultimate purchaser to ascertain the source of the product. This information is designed to be used by manufacturers and consumers to identify products that are subject to a recall.

Under its Statement of Policy, the CPSC will not require a uniform "one size fits all" labeling system at this time. The only requirement is that the information required under Section 103 be ascertainable from the distinguishing marks made on the children's product and its packaging. How manufacturers choose to display these marks is left to their reasonable judgment. While the CPSC may revisit the possibility of requiring a more uniform system in the future, it will address that change in policy through a formal rulemaking process and apply it prospectively.

Also, while Section 103 of the CPSIA is entitled "Tracking Labels for Children's Products," the focus of the statutory text is "distinguishing marks." The key for manufacturers, therefore, is to ensure that the information required under Section 103 is identified in a visible and legible manner on the product and its packaging. Marks that satisfy certain aspects of Section 103 may already be included under other regulatory provisions, such as Customs country of origin labels. It is not necessary, at this time, to place all required information under Section 103 in one discrete location.

Other key points from the CPSC's Statement of Policy are as follows:

• The CPSC appears to allow manufacturers or importers to employ codes or numbering systems to identify the required information on the product and its packaging. The key consideration under this system is that all of the required information under Section 103 must be ascertainable by the manufacturer and the consumer.
• Section 103 of the CPSIA requires that the distinguishing marks be permanent. The CPSC has interpreted this requirement to mean that a mark must reasonably be expected to remain on the product during its useful life. For packaging, the marks need only be permanent to the extent that they can reasonably be expected to reach the consumer. However, the CPSC does not further elaborate on what kind of marking on a product would be considered permanent.
• If the marks are visible on the product through disposable packaging, then no additional or separate marks on the packaging are needed. Furthermore, the CPSC recognizes certain cases where marking the product might not be practicable. In such instances, the manufacturer should mark the packaging with all the required information.
• Section 103 requires that manufacturers identify the location and date of production of the product. With respect to location, the CPSC interprets this requirement to include the country, city, state or other administrative unit in which the city is located. This information will presumably assist the consumer in ascertaining a product's regional proximity to a location where significant recalls have occurred. The CPSC does not appear to require the specific source of the product to be marked, but the manufacturer would be responsible for providing that source in the event of a CPSC compliance inquiry or other action.
• With respect to the date of production, the CPSC understands that the production process could foreseeably take more than one day. Therefore, for products that are made over a period of time, the date of production can be expressed as a date range. Additionally, for products that are assembled from disparate components or items, the date of production is considered to be the date of assembly.
• Manufacturers deemed "small volume manufacturers or crafters" do not necessarily need to create a labeling system incorporating the use of lot, batch or run numbers. However, manufacturers must be able to keep adequate records of the components and materials used in their products, and have a reasonable means in place to identify detailed production information. Accordingly, in developing a tracking label system, small volume manufacturers should consider the business and recordkeeping practices of their peers.

With regard to enforcement, the CPSC intends to "exercise its discretion" with regard to assessing penalties on noncompliant manufacturers or importers. Each of the three Commissioners issued statements accompanying the policy that explained their views on the implementation of Section 103 of the CPSIA. All three Commissioners noted that the CPSC would not direct its enforcement efforts toward manufacturers who have made good faith efforts to comply with Section 103, even if those manufacturers may have inadvertently violated the labeling requirements.

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