[Federal Register Volume 60, Number 159 (Thursday, August 17, 1995)]
[Notices]
[Pages 42848-42849]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 95-20429]



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CONSUMER PRODUCT SAFETY COMMISSION


Announcement of Amnesty and Conditions Under Which the Staff Will 
Refrain From Making Preliminary Hazard Determinations

AGENCY: Consumer Product Safety Commission (CPSC).

ACTION: Notice.

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SUMMARY: Section 15(b) of the Consumer Product Safety Act requires 
manufacturers, distributors, and retailers of consumer products 
distributed in commerce to notify the Commission of certain defects, 
unreasonable risks or non-compliance with voluntary or mandatory 
standards. Firms that fail to report are subject to civil penalties. 
The Commission is announcing a one time amnesty for firms who have 
failed to report in the past. The Commission is also announcing the 
staff will forego making a preliminary hazard determination when firms 
report and within 20 working days implement corrective action 
acceptable to the staff.

DATES: This action announces that the staff of the CPSC will not seek 
penalties under any of the rules or acts it administers against firms 
who report under section 15(b) of the CPSA from August 17, 1995, to 
February 13, 1996, potential hazards the firm failed to report prior to 
the amnesty period. The staff will meet with interested members of the 
public September 12, 1995 at 10 a.m. to discuss this initiative and a 
second initiative announced in this notice.

FOR FURTHER INFORMATION CONTACT: Theresa Rogers, Office of Compliance, 
CPSC, 4330 East West Highway, Bethesda, MD 20814 (Mailing address: 
Washington, D.C. 20207), telephone (301) 504-0608, extension 1363, or 
Eric L. Stone, Office of Compliance, CPSC, 4330 East West Highway, 
Bethesda, MD 20814 (Mailing address: Washington, D.C. 20207), telephone 
(301) 504-0626 extension 1350.

SUPPLEMENTARY INFORMATION:

A. Reporting Amnesty

    Section 15(b) of the Consumer Product Safety Act (CPSA), 15 U.S.C. 
2064(b), requires manufacturers, distributors and retailers of a 
consumer product distributed in commerce to notify the Commission when 
they obtain information which reasonably supports the conclusion that 
their product (1) fails to comply with an applicable consumer product 
safety rule or voluntary standard relied upon by the Commission under 
section 9, (2) contains a defect which could create a substantial risk 
of injury, or (3) creates an unreasonable risk of serious injury or 
death. The Commission published a rule interpreting this provision at 
16 CFR Part 1115. Firms that knowingly fail to report are subject to 
civil penalties under sections 19(a)(4) and 20(a)(1) of the CPSA, 15 
U.S.C. 2068(a)(4) and 2069(a)(1). Similar penalties exist for failures 
to report under section 37 of the CPSA, 15 U.S.C. 2084, and section 102 
of the Child Safety Protection Act, Public Law 103-267, 108 Stat. 722 
(1994), and for violations of various safety rules in Title 16 of the 
Code of Federal Regulations.
    For years, the Commission has been concerned that many firms are 
not complying with their reporting obligations under section 15(b) of 
the CPSA. Despite the efforts of CPSC and various industry and legal 
groups to publicize the requirements, some of this failure is 
undoubtedly due to ignorance of the law. Many other factors also play a 
role. Once a firm has failed to report it finds itself in a quandary. A 
late report subjects the firm to civil penalties and the stigma 
associated with failure to comply with the reporting obligation in the 
first instance. Fear of such penalties could cause some firms to hide 
their problems.
    To address this fear, the Commission is announcing a one-time 
amnesty program. The staff will not seek penalties under any of the 
rules or acts it administers against firms who report under section 
15(b) of the CPSA from August 17, 1995, to February 13, 1996, potential 
hazards the firm failed to report prior to the amnesty period. The 
amnesty will not be available for any product reported prior to the 
date of this Federal Register notice, nor will it apply to firms who 
are currently under investigation for a failure to report or other 
violation of the Commission's laws. Firms will not receive amnesty for 
failures to report based on reporting obligations that arise between 
August 17, 1995, and February 13, 1996.
    This amnesty is intended to encourage firms to ``clean out their 
closets'' of matters that should have been reported in the past. While 
firms may report such matters without fear of penalty, the staff will 
still seek corrective action when such action is needed to protect the 
public from a possible substantial product hazard.

B. Staff to Forego Preliminary Determinations When Firms Initiate 
Timely Corrective Action

    In the past, the Commission staff has made a preliminary hazard 
determination as to whether a product presents a substantial product 
hazard (section 15 of the Consumer Product Safety Act, 15 U.S.C. 2064), 
or contains a defect which creates a substantial risk of injury to 
children (section 15 of the Federal Hazardous Substances Act, 15 U.S.C. 
1274), whenever it receives a report under section 15(b) of the CPSA. 
See 16 CFR 1115.12(a). Some firms have expressed concern that the 
preliminary determination, although not a formal hazard determination 
of the agency, could have a negative impact in their product liability 
cases or on their reputation. From August 17, 1995, until February 13, 
1996, on a pilot basis, the staff will forego such preliminary 
determinations for firms that report in a timely and complete manner 
and implement within 20 working days after filing an initial report a 
corrective action the staff believes will be effective. For purposes of 
this pilot program, ``implement'' means issuance of a news release or 
other form of public notice approved by the staff commencing the 
corrective action.
    This pilot project does not modify firms' reporting obligations. 
Firms who have an obligation to notify the Commission under section 
15(b) or section 37 of the CPSA, or section 102 

[[Page 42849]]
of the Child Safety Protection Act, must continue to do so even when 
they believe the risk does not warrant corrective action.
    At the end of the pilot period, the Commission will evaluate the 
effectiveness of this initiative and determine whether it should be 
extended.
    The staff will only forego preliminary determinations for a firm 
that:
    a. Files a Full Report (See 16 CFR 1115.13(d)). Currently, many 
firms do not submit complete information. Firms sometimes omit copies 
of complaints and claims. This information is crucial for the staff to 
properly evaluate the problem and the firm's corrective action. The 
staff will not allow firms that do not report fully to participate in 
this pilot program.
    b. Advises the staff it wishes to undertake an expeditious 
corrective action under the pilot program.
    c. Submits a proposed corrective action plan in sufficient time for 
the staff to review the plan, analyze any replacement product or 
repair, and work out the details of the corrective action with the firm 
so that the plan can be implemented within 20 working days after the 
filing of the report. The plan shall include the following:
    (1) A description of the action to be taken (refund, repair, or 
replacement) that will eliminate the identified risk.
    (2) Sufficient product design, incident, and testing information to 
allow the staff to determine whether the proposed action corrects the 
identified problem and the problem is limited to the model[s] and 
production dates identified by the firm. Such information should 
include, but is not limited to: consumer complaints, test data, 
engineering drawings, material specifications, samples of product, and/
or component parts, as needed. If the needed information and 
documentation is being compiled, but is not yet available, the firm 
must provide the date it expects to forward the information to CPSC. 
CPSC staff must have sufficient time to review the information and meet 
the 20 working day time limit.
    (3) Usually, the firm's proposed plan must include notice to 
distributors, retailers, and consumers of the subject product. The 
notice must describe the product, the hazard, the number and type of 
injuries that have been reported, the type of injury that may occur, 
and the action to be taken in plain language understandable to the 
people to whom the notice is directed. Generally, the plan must include 
a joint news release with the Commission, letters and instructions to 
retailers and distributors, point-of-purchase posters, and, depending 
upon the level of risk, the population at risk, age and number of 
products involved, there should be an additional notice. Supplementary 
notice may include a Video News Release, print and/or radio 
advertisements, incentives or bounties to encourage consumer response, 
posters for specific audiences, such as for posting in pediatricians' 
offices, medical clinics, national parks and campgrounds, and repair 
shops (see Corrective Action Handbook, available from CPSC Division of 
Corrective Actions). In those cases where all purchasers can be 
contacted directly, a news release may not be necessary.
    (4) An agreement that the Commission may publicize the terms of the 
plan and inform the public of the nature and the extent of the alleged 
hazard. The consumer notice should be targeted to reach a significant 
portion of the public likely to have purchased the subject product. 
(See 16 CFR 1115.20(a) and CPSC Corrective Action Handbook.)
    (5) The corrective action plan and notice must be acceptable to the 
staff. The staff will consider whether the corrective action plan 
adequately addresses the risk of injury presented by the product and 
whether the notice and corrective action plan are designed to make the 
plan as effective as is reasonably possible given the nature of the 
product and the risk. The Office of Compliance staff will provide 
expedited review of each proposal submitted and work with the firm to 
develop an acceptable corrective action plan that can be implemented 
within the 20 working day period. The staff anticipates there may be 
cases where a firm has submitted all the necessary information in a 
timely manner but cannot implement the corrective action plan within 
the 20 day period because the staff requires additional time to 
evaluate a proposed corrective action plan and this delay did not 
result from delay or fault on the part of the firm. It is also possible 
that in some cases the staff and firm will agree that notice and 
corrective action should occur at a later time (such as in the case of 
a seasonal product). In both those cases where delay is neither caused 
by, nor is the fault of, the firm, the staff will not make a 
preliminary hazard determination.
    If corrective action is implemented within the specified 20 working 
days, staff will provide written acknowledgement that the firm has 
submitted information under section 15(b); that, based on available 
information, the proposed corrective action plan is adequate; and that 
the staff will monitor the progress of the plan. The staff will advise 
the firm that the firm has a continuing obligation to report new or 
different information that may affect the scope, prevalence or 
seriousness of the defect or hazard.
    If the firm does not implement a corrective action acceptable to 
the staff within the specified 20-day time limit, staff will inform the 
firm that it will continue its evaluation and will preliminarily 
determine whether the product contains a defect that creates a 
substantial risk of injury to children under the FHSA or presents a 
substantial product hazard under the CPSA.
    Firms should not delay their reports under section 15(b) of the 
CPSA in order to prepare a corrective action plan. The staff will not 
forego preliminary determinations if the information available suggests 
a firm delayed its initial report to prepare a corrective action plan.

C. Meeting

    The staff will meet with interested members of the public at 10 
a.m. on September 12, 1995 to discuss these initiatives. The meeting 
will be held in the Commission's hearing room on the fourth floor of 
4330 East-West Highway, Bethesda, Maryland.

    Dated: August 7, 1995.
Sadye Dunn,
Secretary, Consumer Product Safety Commission.
[FR Doc. 95-20429 Filed 8-16-95; 8:45 am]
BILLING CODE 6355-01-P