On August 19, 2014, the Department of Justice announced that Samsung Electronics had agreed to pay $2.3 million to settle a qui tam lawsuit alleging Samsung had caused its resellers to violate the Trade Agreements Act (TAA) by selling Samsung products manufactured in non-designated countries (primarily China) on their GSA Multiple Award Schedule contracts. This settlement underscores the need for companies selling to the U.S. under schedule contracts, whether directly or indirectly, to actively monitor changes in their supply chain for both end products as well as components and ancillary items offered separately to U.S. government customers on contracts subject to the TAA.
The Transatlantic Trade and Investment Partnership (TTIP) negotiations formally commenced on July 8, 2013. A little over a year later, the negotiators have held six rounds of negotiations. The most recent round of negotiations was held during the week of July 14-18 in Brussels, and the seventh round is now expected for D.C. in late September.
During July’s discussions, the two sides covered the full range of “market access” issues, including trade in goods, trade in services, investment, and government procurement. Negotiations included greater regulatory cooperation, widely considered to be the greatest value of the TTIP talks, with modest progress made in regards to several product sectors, including textiles and apparel (where they focused on labeling and safety issues), chemicals (where they discuss broad opportunities for cooperation), and automobiles (where talks advanced in areas like equivalence of technical regulations). Food safety also continued to be an important issue during negotiations, particularly with the leak of the EU’s proposed chapter on Sanitary and Phytosantiary Measures (SPS) prior to the start of the latest round.
On Wednesday, September 4, 2013 from 2:00-3:30 pm EST, a Crowell & Moring team of regulatory and public policy attorneys, along with a subject-matter expert from Exponent, will host a webinar examining the current status of TSCA modernization efforts and the potential impacts on manufacturers and importers. The discussion will include an analysis of the Chemical Safety Improvement Act of 2013, a bill introduced in the Senate earlier this summer that could have profound implications for companies that manufacture or import consumer or industrial products that are made using routine chemical products, such as coatings, paints, adhesives, and insulators, among others. This proposed bill may create new review requirements, safety standards, and reporting and certification requirements for chemical substances. Speakers include Cheryl A. Falvey, Warren Lehrenbaum, and Josh Tzuker from Crowell & Moring and John Phillips from Exponent. For more information about this upcoming webinar and to register, click here.
Politicians and public interest groups in the European Union are showing renewed interest in expanded country of origin labeling requirements in the wake of February’s horse meat scandal, where lasagna and other products sold in the EU purportedly made from beef were found instead to contain horse meat. Specifically, attention is focused on Regulation (EU) No. 1169/2011, published in November 2011, which imposes a number of notable labeling requirements, including mandatory nutritional information, allergen ingredient emphasis, and nanomaterial identification. The regulation also includes newly expanded requirements for labeling foods with their country of origin. For more information, click here.
Content provided by Laura J. Walther, counsel in Crowell & Moring’s Washington, D.C. office.
We are now over 3 months into the first compliance year for federal Conflict Minerals regulations, and over 6,000 directly impacted companies and thousands of their suppliers are trying to figure out the best way to build and execute an effective compliance plan. By this time, most of those impacted have a good understanding on the background of the legislation and on the key definitions, applicability considerations, and reporting requirements. They are now asking themselves, how do we go about instituting a sustainable supply-chain analysis that either allows us to achieve compliance in 2013 (year 1) and beyond, or else to make representations to those who must achieve compliance? Additionally, forward-looking companies have asked themselves how they can embrace the conflict minerals rules in the context of the corporate social responsibility and sustainability movement, thereby gaining a competitive edge.
On April16, 2013, Crowell & Moring will co-host (along with international consulting firm Resources Global) a webcast that will address many of the key challenges companies are facing including: lessons learned from early adopters and others who have already started down the path to compliance; and practical and opportunistic considerations to apply to your conflict minerals planning and compliance efforts.
To register, please visit this link.
On July 27, 2012, California released a revised draft of its Safer Consumer Products Regulations—commonly known as the "Green Chemistry Initiative." The proposed regulations establish a process for California’s Department of Toxic Substances Control (DTSC) and product manufacturers to assess whether consumer products containing certain "chemicals of concern" can be made with safer ingredients. Once implemented, the regulations will empower DTSC to order companies to use substitute chemicals when manufacturing certain consumer products or face a ban on the sale of those products in California. Moreover, manufacturers that currently sell products only outside of California will have to be increasingly vigilant about whether their products end up being sold in California, and subject to these regulations.
Manufacturers, importers and retailers of consumer goods—defined as "responsible entities"—should be aware of that:
- All consumer products will be impacted: Regardless of whether the product is named a “priority product” by DTSC or contains one of the 1,200 “chemicals of concern,” responsible entities will be required to provide information on the source, ingredients, and toxicity characteristics of each of their consumer products sold in California. Responsible entities with a "priority product" in the stream of commerce will have a heightened obligation to produce detailed reports—known as "alternatives assessments"—to DTSC, which DTSC will use to determine whether manufacturers will need to reformulate certain products to continue sales in California. Companies that do not comply will be named on a publicly accessible "failure to comply" list on DTSC’s website.
- All entities in the distribution chain should remain vigilant: While the obligations for responsible entities under the regulations are tiered, no level of commerce is exempt. Primary reporting and compliance responsibility will lie with the manufacturer. The importer will have responsibility if the manufacturer fails to comply, and retailers will be required to comply only if the manufacturer and importer (if any) fail to comply. Retailers will be responsible for tracking information posted on a "Failure to Comply" list on DTSC’s website, and ensuring compliance for listed products.
The proposed regulations are presently undergoing a 45-day public comment period. DTSC intends to issue final regulations by the end of this year or early 2013. DTSC will hold a hearing on the proposed regulations on September 10, 2012, and written comments are due by September 11 at 5 PM PST.
For more information and to read the full client alert, please click on this link.
Content for this post was provided by the following product risk management attorneys: Kevin C. Mayer (partner in Crowell & Moring’s Los Angeles office), Monica M. Welt (counsel in Crowell & Moring’s DC office), and Lynn R. Levitan (counsel in Crowell & Moring’s Los Angeles office).
On June 20, 2011, the Canadian Consumer Product Safety Act (CCPSA) took effect, and retailers who sell or distribute products in Canada will now need to include the CCPSA in their regulatory compliance considerations. This post offers some basic highlights of the new CCPSA for retailers facing product issues in Canada.
It has been almost 30 years since a court has ruled on what constitutes a handbag for purposes of determining the correct import duty. Yet, everywhere you look, from the sidewalk to the subway, women’s handbags are clearly getting bigger. The bags’ intended purpose hasn’t changed, but styles have; bigger bags have become the norm.
U.S. Customs and Border Protection (Customs) imposes a four-percent higher duty on plastic handbags if they are classified as “travel bags” rather than “handbags” under the Harmonized Tariff Schedules (HTS). While Customs has established rules for determining whether an article is classified as a handbag or travel bag, Customs’ classification of these articles may not have not kept up with fashion. The result is that importers are forced to classify their ever-larger plastic handbags into the higher-duty travel bag tariff provisions. For years, importers have relied upon a size test for determining the tariff classification of handbags; e.g., bags that are smaller than 12” (W) x 9” (H) are handbags. This simple metric has always masked more than it has revealed and, as bags grow bigger, it has become increasingly meaningless. Size is becoming less and less indicative of the use for which a bag was intended.
The U.S. Consumer Product Safety Commission (“CPSC”) just announced a giant leap forward in its effort to protect U.S. consumers against defective products manufactured in China. To combat the increasing frequency with which hazardous Chinese consumer products enter the United States, on January 10, 2011, the CPSC opened an office in China. The CPSC hopes that this new office will promote more effective communication with its Chinese counterpart – the General Administration of Quality Supervision, Inspection and Quarantine of the People’s Republic of China (“AQSIQ”) – allowing the CPSC to adopt a proactive approach to product safety with respect to Chinese imports. The agency’s proactive and preventative approach to product safety should also benefit U.S.-based retailers who often bear the expense of recalling defective products that originate in China, yet are left without recourse against the products’ Chinese manufacturers.
Cosmetics, food, and other products sold by retailers often contain ingredients based on R&D conducted on plant and animal DNA/RNA or “genetic resources.” But what retailers, manufacturers, and others in the supply chain may not know is the ultimate origin of those genetic resources. They may need to start paying attention.