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Label it or Lose it: US Customs Proposes Regulations to Block Imports of Consumer and Industrial Goods Lacking Proper Energy Labeling or Conservation Standards

April 30, 2012

US Customs and Border Protection (CBP) has proposed new regulations outlining procedures to block at the border any household appliances or industrial equipment that do not meet required energy conservation standards or labeling requirements of the US Department of Energy (DOE) or the US Federal Trade Commission (FTC).  Non-complying import shipments may be entirely denied entry or, in some cases, conditionally released after payment of a bond and a promise by the importer to correct the merchandise.  CBP will accept comments on the proposed rules until May 25, 2012.  

The Energy Policy and Conservation Act of 1975 (EPCA) gives the DOE and the FTC the authority to regulate most major household appliances and industrial equipment.  The EPCA and its implementing regulations provide specific energy conservation and labeling standards.  Using the existing authority of the EPCA, the proposed rule would allow CBP to take action against non-complying imports when notified by the DOE or the FTC that the goods do not meet:

(1) energy conservation standards, or

(2) labeling standards. 

If CBP receives such a notification, it may entirely refuse import admission for the goods.  Or, if recommended by the DOE or FTC, CBP may allow conditional release of the imports (under a bond posted by the importer), so that the goods may be reconditioned, re-labeled, or otherwise made compliant.  CBP would retain the right to demand redelivery to CBP’s custody if the imports’ defects are not timely corrected.   

CBP’s notice states that although the proposed rule qualifies as a significant regulatory action, the CBP does not anticipate that it will be economically significant.  Indeed, CBP reports that DOE has identified only a small number of businesses importing noncompliant articles.  However, a review of the DOE website shows that the DOE states that this rule is the result of ”extensive collaboration” with CBP.  The DOE says that this rule is part of the DOE’s of ”stepped up enforcement” in this area.  These statements are consistent with the DOE’s prior promises of ”tougher enforcement efforts under the new Administration”, announced in 2009.  In keeping with this commitment, the DOE filed almost 50 enforcement cases between the fall of 2010 and the spring of 2011 against companies that the agency believed to be selling products without the appropriate conservation compliance certifications.  

Similarly, recent action by the FTC has shown that agency’s interest in enforcement of energy conservation labeling standards.  Under the current iteration of the labeling guidelines, online retailers were fined $400,000 for failing to post Energy Guide information for appliances on their sites.  Additionally, the FTC recently announced a proposed rule of its own, updating and revising the labeling requirements that businesses must adhere to in order for appliances to be deemed EPCA compliant.

Regardless of whether the proposed rule is adopted, a business importing household appliances and goods into the United States should be aware of the increased enforcement of the energy standards and labeling requirements under the EPCA.  If the proposed rule goes into effect, it seems likely that CBP also can be expected to look for opportunities to use the new procedures. 

The full notice from CBP proposing the new regulations is available at: http://www.gpo.gov/fdsys/pkg/FR-2012-03-26/pdf/2012-7105.pdf.

Comments on the proposed rule will be accepted by CBP until May 25, 2012.

If you have any questions on the proposed EPCA regulations or any other US import compliance issues, please contact:

Greg McCue at gmccue@steptoe.com and 202.429.6421 or

Vicki Murphy at vmurphy@steptoe.com and 202.429.1308.