E8-25551. Importer Self-Assessment Product Safety Pilot

AGENCY:

U.S. Customs and Border Protection, Department of Homeland Security.

ACTION:

General notice.

SUMMARY:

This document announces the expansion of the Importer Self-Assessment Program (ISA) to include the Importer Self-Assessment-Product Safety Pilot (ISA-PS). The ISA-PS is a partnership that will be created among CBP, the Consumer Product Safety Commission (CPSC), and importers which will strive to maintain a high level of product safety compliance, and to achieve the goals of the Interagency Working Group on Import Safety by working collaboratively to prevent unsafe imports. The ISA-PS is a voluntary approach to product safety compliance, which will provide recognition and support to participating companies. Application to the ISA-PS is open to all importers who are participants in the ISA. CBP and CPSC staff will designate a limited number of importers from the initial applicants and determine their eligibility for participation in the pilot program. This document contains information on the application process, the benefits, and continued participation requirements.

DATES:

Effective Date: This pilot program will be open to applications from qualified importers on October 29, 2008.

FOR FURTHER INFORMATION CONTACT:

Cathy Sauceda, Director, Import Safety and Interagency Requirements Division, Office of International Trade, Customs and Border Protection, [phone].

SUPPLEMENTARY INFORMATION:

Background

ISA Program

U.S. Customs and Border Protection (CBP) is committed to encouraging importers to share the responsibility for compliance with trade laws and regulations. In order to enable interested importers to participate in a program that allows them to assess their own compliance with CBP laws and regulations on a continuing basis, CBP (then known as the U.S. Customs Service, Department of the Treasury) announced the Importer Self-Assessment (ISA) program on June 17, 2002 in a notice in the Federal Register (67 FR 41298). The ISA program is a trade facilitation partnership program that recruits trade compliant companies in order to reduce both CBP and company resources required during entry and post entry, and to build cooperative relationships that strengthen trade compliance with trade laws. The ISA program is based on the premise that importers with strong internal controls achieve the highest level of compliance with CBP laws and regulations, and provides a means to recognize and support importers that have implemented such systems.

Since the ISA program started in 2002, over 172 importers under 760 different Importer of Record numbers have been approved to participate in the program. The compliance measurement program has shown that ISA program participants have continued to hold the highest rate of compliance with major trade laws among major importing groups. In FY 2007, merchandise imported by ISA participants comprised 15% of the total value imported into the United States and the compliance rate for ISA importers was 99.4%.

Import Safety

On July 18, 2007, President George W. Bush issued Executive Order 13439, which established an Interagency Working Group on Import Safety (“Working Group”). The Working Group, a cabinet-level panel of designated members, includes CBP (acting as a designee of the Secretary of Homeland Security) and the Chairman of the U.S. Consumer Product Safety Commission (CPSC). The mission of the Working Group is to identify actions and appropriate steps that can be pursued, within existing resources, to promote the safety of imported products by (i) Reviewing and assessing current import safety procedures and methods aimed at ensuring the safety of imported products, (ii) identifying potential means to promote all appropriate steps by U.S. importers to enhance safety of imported products, and (iii) surveying the authorities and practices of Federal, State, and local government agencies regarding the safety of imports to identify best practices and enhance coordination among agencies. Executive Order 13439 required the Working Group to provide recommendations within 60 days to the President regarding these actions and steps.

On September 10, 2007, the Working Group submitted a comprehensive strategic framework entitled Protecting Americans Every Step of the Way: A strategic framework for continual improvement in import safety (“Strategic Framework”), which outlined an approach that can build upon existing efforts to improve the safety of imported products, while facilitating trade. On November 6, 2007, the Working Group followed the submission of the Strategic Framework by presenting an Action Plan for Import Safety: A roadmap for continual improvement (“Action Plan”). The Action Plan takes the form of 14 broad recommendations and 50 specific action steps based on the Strategic Framework.

Three organizing principles form the keystones of the Strategic Framework and the Action Plan recommendations: (i) Preventing harm resulting from the importation of unsafe products; (ii) intervening when risks are identified; and, (iii) responding rapidly after harm has occurred. Within each of these organizing principles are cross-cutting building blocks that departments and agencies should use to guide their programs. These “building blocks” include the advancement of a common vision across the federal government, as well as fostering a culture of collaboration among federal departments and agencies.

CBP is responsible for multiple action steps in the Action Plan, including harmonizing government procedures concerning imports, creating an automated system reflecting a “single window” concept, and being an active participant in establishing good importer practices for foreign collaboration, capacity building and developing voluntary certification programs. Taking the lead for a significant amount of the action steps, CBP leads the Working Group in its mission to implement the Action Plan and Strategic Framework by working collaboratively with other government agencies and focusing on import safety issues.

The Working Group is comprised of multiple government agencies, including CPSC. CBP and CPSC have a strong history of partnership in combating unsafe imports, and the two agencies have worked diligently on several significant product recalls including those on lead in toys, cribs, and children's sleepwear. This collaboration has strengthened as both agencies have worked together in the Working Group to implement the Action Plan and the Strategic Framework. In November of 2007, CBP officials worked closely with CPSC officials to formulate a response to the recall of the toy Aquadots after it was discovered that some of the imported toys contained a toxic chemical that resulted in the illness and hospitalization of some children who ingested the toys. The two agencies devised a plan to seize and recover shipments of Aquadots bound for the U.S. or that were already in the U.S. and still subject to redelivery, and thereby successfully prevented the unsafe toys from further distribution.

Currently, to more precisely target consumer products that present a safety risk, CPSC staff and CBP are collaborating on action steps to further improve import safety. CBP and CPSC staff are working collectively with the trade community in the development of a trilateral partnership to facilitate the trade of safe products. Since the development of the ISA program, CBP and CPSC staff have worked with the Departmental Advisory Committee on Commercial Operations of Customs and Border Protection and Related Homeland Security Functions (COAC) to expand the ISA program to include a product safety component, and thereby extend the ISA program to include compliance with other agency requirements.

Expansion of ISA Program To Include Import Safety

In order to further the goals of the Working Group's Strategic Framework and Action Plan, this document announces the expansion of the ISA to include the Importer Self-Assessment-Product Safety Pilot (ISA-PS). The ISA-PS is envisioned to be a partnership among CBP, CPSC, and importers to maintain a high level of product safety compliance, and to thereby achieve the objective of the Strategic Framework and Action Plan, that is, working collaboratively to prevent unsafe imports. The ISA-PS is a voluntary approach to product safety compliance, which provides recognition and support to participating companies. CBP and CPSC staff have developed a list of best practices to ensure compliance with CPSC's current regulations and will be working through this program to adapt those best practices to meet CPSC's new statutory scheme. Within the realm of their respective authorities, CBP and CPSC will verify that companies have adequate controls and processes in place to ensure product safety at all points in the product life-cycle of imported products and to comply with these mandatory standards. CPSC staff and CBP have worked to develop CPSC-based benefits to encourage participation in this expanded pilot program. Acceptance into the program is by mutual agreement of CPSC and CBP.

Description of the Importer Self-Assessment Product Safety Pilot

Overview

The Importer Self-Assessment-Product Safety Pilot (ISA-PS) is envisioned to be a partnership among CBP, the Consumer Product Safety Commission (CPSC) and importers to maintain a high level of product safety compliance. ISA-PS is a voluntary approach to product safety compliance, which provides recognition and support to participating companies.

ISA-PS Participation Requirements

In order to participate in ISA-PS, an importer must:

1. Be an active member in ISA and comply with all ISA requirements and obligations.

2. Complete an ISA-PS/CPSC Questionnaire and sign an ISA-PS/CPSC Addendum.

3. Agree to comply with all laws and regulations administered by CBP, as well as the CPSC including, but not limited to: the Consumer Product Safety Improvement Act of 2008, Public Law 110-314, 122 Stat. 3016 (August 14, 2008), the Consumer Product Safety Act (codified at 15 U.S.C. 2051-2089), the Federal Hazardous Substances Act (codified at 15 U.S.C. 1261-1278), the Flammable Fabrics Act (codified at 15 U.S.C. 1191-1204), the Poison Prevention Packaging Act (codified at 15 U.S.C. 1471-1476), the Refrigerator Safety Act (codified at 15 U.S.C. 1211-1214), the Virginia Graeme Baker Pool and Spa Safety Act (codified at 15 U.S.C. 8001-8008), and the Children's Gasoline Burn Prevention Act, Public Law 110-278, 122 Stat. 2602 (July 17, 2008).

4. Maintain an internal control system that ensures the integrity of product safety.

5. Notify CBP of any major organizational changes that may impact the importer's product safety controls.

6. Submit an annual written notification to CBP that sets forth the importer's ISA-PS point of contact and acknowledges that the importer continues to meet the requirements of ISA-PS.

Application Process

1. Required Information

Interested applicants (importers that are already active members of ISA) may send an e-mail requesting an application to [e-mail], and will receive an electronic ISA-PS/CPSC Questionnaire and an ISA-PS/CPSC Addendum. Completed ISA-PS/CPSC Questionnaires may be submitted electronically via e-mail to [e-mail].

2. CBP Review of Application

After the applicant has submitted the ISA-PS/CPSC Questionnaire and ISA-PS/CPSC Addendum, CBP and CPSC staff will review the applicant's submission. For a limited number of applicants, the review will include a CPSC risk assessment to determine the applicant's readiness to assume responsibilities for self-assessment. The risk assessment will include an examination of the applicant as identified by the Importer of Record (IOR) number(s) listed on the ISA-PS/CPSC Questionnaire and its scope will include the laws and regulations administered by CPSC requirements set forth above (in ISA-PS Participation Requirements, Item 3). CBP and CPSC will perform a formal domestic site visit with the importer. At the discretion of CBP and CPSC it may also be necessary to perform a formal visit with the applicant at a foreign facility. The purpose of these site visits is to determine if the applicant is ready to assume the responsibilities of self-assessment and to equip CBP and CPSC with the knowledge of the importers internal control procedures as appropriate. If CBP and CPSC determine that the applicant is not ready to assume the responsibilities of self-assessment, CBP and CPSC staff will continue to work with the applicant to strengthen their product safety program. If CBP and CPSC staff determine that the applicant is ready to assume all the responsibilities of self-assessment, they will sign the ISA-PS/CPSC Addendum and return a copy to the importer. CBP and CPSC staff reserve the right, in their discretion, to approve or disapprove an application. Further, in selecting applicants for participation in ISA-PS, CBP and CPSC staff reserve the right to establish priorities for the processing and approval of applications.

ISA-PS Potential Benefits

In addition to the benefits received as a participant in ISA, once accepted into the ISA-PS, the participant also becomes eligible for the following benefits:

1. CPSC will provide the participant with a product-specific CPSC point of contact who can assist in providing National Electronic Injury Surveillance System (NEISS) Product Codes for entry lines.

2. CPSC will provide access to the participant with special training concerning product safety compliance, internal controls, and CPSC audit trails.

3. CPSC will allow the participant the opportunity to apply for external participation coverage of multiple business units (multiple IOR numbers) identified in the ISA-PS/CPSC Addendum.

4. CPSC will consider expansion of benefits to all products of approved participants if the entry line(s) contains all the applicable NEISS product code(s).

5. CPSC will reduce product safety tests on goods imported by ISA-PS participants.

6. CPSC laboratories will grant priority “front of the line testing” to ISA-PS participants when product safety testing is conducted.

7. CPSC may allow products to be destroyed by the ISA-PS participant in lieu of requesting redelivery to CBP of the product.

8. CPSC will acknowledge the participation of ISA-PS in CPSC's “Fast-Track Product Recall Program.”

9. Additional benefits tailored to specific industry needs may later become available.

Additionally, the ISA-PS participant will enjoy greater business certainty because a reliable system of internal controls ensures compliant product safety transactions.

ISA-PS Continuing Participation Requirements

Each ISA-PS participant must remain an active member in ISA and comply with all ISA requirements and obligations, available at http://www.cbp.gov/​linkhandler/​cgov/​trade/​trade_​programs/​trade_​compliance/​importer_​self_​assessment/​isahb.ctt/​isahb.doc. Additionally, each ISA-PS participant must remain in compliance with the requirements of the ISA-PS/CPSC Addendum and provide annual written notification to CBP that it continues to meet the requirements of ISA-PS. In connection with this notification, CBP and CPSC staff will determine if additional discussions or reviews of company controls or documentation are necessary. In addition, ISA-PS participants are responsible for making appropriate ongoing changes to internal controls as needed.

If a participant fails to remain an active member in ISA or fails to meet the requirements of the ISA-PS/CPSC Addendum, or is determined to have violated a law or regulation administered by CBP or the CPSC, the participant may be subject to penalties, liquidated damages, and/or removal from the ISA removal from the ISA-PS. If CBP and CPSC staff believe that there is a basis for removal of an ISA-PS participant, a written notice proposing removal with a description of the facts or conduct warranting removal, will be provided to such participant. The participant will be offered the opportunity to respond to the proposed removal notice within 30 days of the date of the notice. CBP and CPSC will issue a final written decision on the proposed removal within 30 days of the receipt of the response to the proposed removal notice, if one was timely received. In the case of a public health interest and/or safety concern, a participant may be removed immediately from the ISA-PS. The participant will be given an opportunity to respond within 30 days to the notice providing for immediate removal.

Evaluation of Pilot

CBP and CPSC staff intend to review the ISA-PS pilot two years after its effective date to measure its effects and achievements, and recommend to CBP and the Commission whether ISA-PS shall become a permanent program.

Dated: October 21, 2008.

Jayson P. Ahern,

Acting Commissioner, Customs and Border Protection.