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Ongoing Hoverboard Concerns

posted by Jennifer Diaz January 27, 2016 1 Comment

The U.S. Consumer Product Safety Commission (CPSC) and U.S. Customs and Border Protection (CBP) Address Ongoing Litigation & Seizure of one of the hottest toys, the Hoverboard.

Hoverboards, as they are commonly known, are self-balancing two-wheeled electric scooters.  They are powered by controversial rechargeable batteries that have recently garnered attention for malfunctioning, causing devices to catch fire and destroy homes.  The lithium-ion batteries have been known to overheat, catch fire, and explode without warning.

Several airlines have begun to prohibit transportation of the boards aboard aircraft, due to safety concerns.  Amazon.com is placing safety first and offering consumers that have purchased a hoverboard from Amazon a full refund.  Hoverboards are also facing additional litigation from Mark Cuban, who potentially has a patent infringement claim against Walmart for selling the devices.

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Do You Want to be a “Trusted Trader”? C-TPAT is No Longer Enough

posted by Jennifer Diaz June 25, 2014 1 Comment

Trust

U.S. Customs and Border Protection (CBP) recently published the long awaited Federal Register Notice, dated June 16, 2014, discussing the “Announcement of Trusted Trader Program Test.”

This new “Trusted Trader” program is big news for U.S. and non-resident Canadian importers, and if implemented will combine the Customs-Trade Partnership Against Terrorism (C-TPAT) and Importer Self Assessment (ISA) programs, making ISA extinct.  CBP is currently recruiting test companies that have to be willing to go through an 18 month program test. Continue Reading

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Florida Companies Convicted and Sentenced

posted by Jennifer Diaz June 24, 2013 0 comments

Co Authored by Robert Becerra

In another example of the government’s continuing use of the criminal justice system to enforce international trade laws, three Florida companies and their management were recently convicted and sentenced for importing smuggled toys from China containing lead and containing counterfeit trademarks.

LM Import-Export, Inc., Lam’s Investment Corp., and LK Toys Corp., Hung Lam and Isabella Kit Yeung plead guilty to charges of conspiracy to traffic and smuggle toys containing hazardous substances such as lead, and one count of trafficking in counterfeit goods, in violation of 18 U.S.C. Secs. 371 and 2320, respectively. Co-defendant Yeung plead guilty to one misdemeanor count of submitting a false country of origin label, in violation of 19 U.S.C. Sec. 1304(a). The information, or charging document filed in court, against all defendants, as well as the plea agreements for each defendant can be found on the website of the District Court for the Southern District of Florida. (If you have trouble getting these documents, email me and I’d be happy to share them with you).

The facts underlying the charges, as stated in court documents, are that from April, 2000, until May 2011, a span of 11 years, the corporate defendants conspired to sell children’s products imported from China in violation of the Consumer Product Safety Act 15 U.S.C. Sec. 2068, and the Federal Hazardous Substances Act, 15 U.S.C. Sec. 1263. Some of the toys contained lead, while others presented various hazards such as choking, aspiration or ingestion. The products were imported using false statements on Customs declaration forms and with false country of origin labeling.

Hung Lam was sentenced to 22 months incarceration, 3 years of supervised release and a $10,000 fine. The corporations were sentenced to 5 years of probation. Yeung was sentenced to 1 year probation and a $1,000 fine. An order was entered mandating the forfeiture to the government of $862,500 and all products imported by the defendants that were seized by the government. The press release from the Consumer Products Safety Commission and Department of Justice discussing the case can be found here and here respectively.

This case is extremely important for importers to be familiar with and understand that:

  1. It is vital for importers to retain counsel to assist with pre-compliance before you import.
  2. When you receive any violation notice from the federal government, retain counsel immediately and be sure to address all violations with remedial action and enhanced compliance procedures in an attempt to keep administrative penalties or forfeiture cases from turning into potential criminal matters.
  3. Resolving a civil action through a consent decree with the government does not absolve you of criminal liability.
  4. Once contacted by government officials, retain counsel immediately. Any evidence you provide or any statements you make will be used against you in court.
  5. Repeated misconduct and federal regulatory law violations over a period of years will often result in criminal prosecution of both companies and their individual employees, resulting in federal prison sentences and substantial fines and forfeitures.

 

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U.S. Consumer Product Safety Commission: Not Just Toys and Games

posted by Customs & International Trade Law Blog May 14, 2010 1 Comment

U.S. Consumer Product Safety Commission  (CPSC) officers will target more imported merchandise for safety risk assessments using information filed with U.S. Customs and Border Protection by importers or their customs brokers. The CPSC is an independent health and safety regulatory agency that is responsible for protecting the American public from unreasonable risks of injury and death from about 15,000 types of consumer products. Since the passage of the Consumer Product Safety Improvement Act (CPSIA) of 2008, CPSC increased the number of staff co-located with U.S. Customs at U.S. ports of entry.  Recently, U.S. Customs Commissioner Alan Bersin and CPSC Chairman Inez Tenenbaum signed a memorandum of understanding to create an Import Safety Commercial Targeting and Analysis Center (CTAC). 

CTAC is the culmination of President Obama’s Food Safety Working Group  focused on (1) prevention, (2) surveillance, and (3) responding to the attempted importation into the United States of unsafe products.  The authority of CPSC officers is modeled after the authority and actions by the U.S. Food and Drug Administration (FDA), and the U.S. Department of Agriculture’s Food Safety and Inspection Service (FSIS). 

CPSC will soon issue its own Detention Notices, rather than having U.S. Customs do it, for imported cargo that is suspected of being unsafe.  CPSC will not only target and detain toys, games, and other children’s’ products, but also products previously screened only the FDA – food, cosmetic, medical devices, and dietary supplements. 

The $600,000 penalty that Target Corp., of Minneapolis, Minn. has agreed to pay to CPSC for allegedly violating the federal lead paint ban on toys is merely a prelude to the type of civil penalties to be assessed against importers for attempting to import and sell unsafe products.

Is the CPSC doing enough to keep unsafe products out of the United States, or being too aggressive and bureaucratic? Sound off with a comment below.