Customs brokers caught in import safety legislative net

Customs brokers caught in import safety legislative net A consumer product safety bill that passed a Senate committee last week contains a nasty surprise for customs brokers — the possible loss of their license for repeated entry of unsafe imports.
   Commerce, Science and Transportation staff inserted the provision on Oct. 30 during final editing of the Consumer Product Safety Commission Reform Act of 2007, which increases the agency’s enforcement authority and funding levels.
   The original version of the bill said any importer who repeatedly brings in products that violate consumer product safety law could be referred to Customs and Border Protection to yank its import license. Committee members subsequently realized that there is no such thing as an import license, so they substituted customs brokers as the target of the repeat offender rule because they require a license to do customs business, industry lobbyists involved in the issue said.
   Under the provision, brokers found by the Consumer Product Safety Commission to have aided or abetted in the transportation of unsafe products can have their license revoked.
   The legislation is a reaction to numerous recalls of tainted or faulty toothpaste, pet food, toys, tires, fish and other products from China this year.
   “This bill is about safety,' said Chairman and co-sponsor Sen. Daniel Inouye, D-Hawaii, in a statement. 'Harmful products continue to enter the stream of commerce, resulting in tens of thousands of deaths, tens of millions of injuries, and hundreds of billions of dollars in losses to our country each year. These numbers are too high, and an effective CPSC should help reduce these grievous losses.'
   Customs broker industry representatives expressed surprise at being included in legislation targeted at the manufacturing industry. Brokers do not have first hand knowledge about the product or suppliers — they simply process customs documentation and make sure all information passed to them by the customer is properly submitted and import fees paid.
   “We told them that a customs broker had no knowledge in almost every instance of the nature of an importation, the specifics about the content of the product, where it was made,” said Jon Kent, legislative representative for the National Customs Brokers and Forwarders Association of America.
   The association wrote co-sponsor Mark Pryor, D-Ark., that “the entire bill talks about responsibilities of manufacturers, retailers and distributors — parties who are beneficial owners of the product and have contractual relationships with suppliers. Yet, when it comes to the penalty, the legislation turns to the customers' broker, who is not in a position to choose the supplier or source of a product. This does not make sense from either a legal or practical standpoint.”
   Lobbyists said they are fighting to strip the provision out of the bill, which now may have to go to the Senate Finance Committee because it involves customs matters. The bill could have gone straight to the Senate floor for a vote if it simply focused on consumer product law and not customs law. Committee staff claim that the customs broker language is just a placeholder until an import penalty solution is found, Kent told Shippers’ NewsWire.
   “The customs broker community is up and arms and been calling their congressmen all over the country. It's unprecedented how upset they are. It's partly because their licenses are at stake and because it's such a ridiculous provision. For our community, it undermines confidence in the institution,” he said.
   The bill, which includes measures that impact the import and logistics industries, would also:
   * Ban importation of recalled products.
   * Require independent, third-party certification of children’s products.
   * Mandate tracking labels (source, date, production batch) on children’s goods to enhance recalls.
   * Increase CSPC funding by 58 percent during the next seven years.
   * Restore the commission to five members, from three. (The commission is operating with only two members now due to a vacancy).
   * Increase staff to at least 500 employees by 2013.
   * Streamline product safety rulemaking procedures.
   * Ban lead from children’s products.
   * Foster information sharing among federal, state, local and foreign agencies about unsafe products.
   * Increase civil and criminal penalties for violating consumer product safety laws.
   * Provide whistleblower protection for manufacturers’ employees.
   * Require companies to identify their manufacturers and subcontractors in the supply chain.
   * Require bonding of manufacturers to ensure funding for recalls.
   * Enhance the CSPC’s authority to order corrective action plans by the makers of recalled products.
   The House version of the consumer protection bill does not include the customs broker provision. The Energy and Commerce Committee is scheduled Tuesday to hold a hearing on product safety, followed by a markup session and vote on Thursday.
   The committee has investigated recent widespread findings of lead in children's products imported from China, and the nation's system for recalling defective or tainted products. In August it sent letters to 19 retailers and importers requesting information on their findings of lead.
   Meanwhile, more than 110 companies and trade associations expressed concern about provisions in pending food safety legislation that would impose user fees on shipments of imported food to help pay for Food and Drug Administration inspections.
   In a Nov. 1 letter to Rep. John Dingell, D-Mich., chairman of the Energy and Commerce Committee, the business groups said the cost of FDA research and inspections should be paid for out of general tax revenue because the benefits accrue to all citizens.
   “In addition, the fee proposed in H.R. 3610 would likely violate America's trade agreements, invite foreign countries to impose reciprocal fees on U.S. exports, and unfairly impact specific food products,” the letter said.
   The industry letter expressed strong opposition to provisions to permit a private right of action against food companies and retailers, new requirements for labeling, traceability, certification, civil penalties, process controls, quarterly inspections and to restrict food imports to a limited number of ports.
   The measures “would place enormous new burdens on FDA, food importers, and the food industry and would dramatically increase food prices without addressing the sources of contamination,” it said.
   The industry groups said risk-based safety checks were more effective and that Congress should help the FDA and the food industry expand the ability of foreign governments to detect and deter threats to public safety. ' Eric Kulisch