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Health Canada Releases New Guidelines for Civil Penalties System

Readers of our blog tend to pay a lot of attention to federal and state product safety developments for obvious reasons.  But, if your firm sells consumer products abroad, such as to Canadian consumers, paying attention to international product safety standards and enforcement policies or guidelines is imperative for your business.  Penalties incurred abroad can be as serious as those levied against your company here at home.

This summer, Health Canada released its new penalty guidelines for firms who do not comply with an order of the agency.  These orders include mandates to recall a product or take other measures such as stopping the manufacture, importation or sale of the non-compliant product in Canada.  The guidelines do not address penalties for late reporting of potential product safety incidents to Health Canada or other violations of Canada’s product safety law.

In the newly announced Canadian civil penalty guidelines, monetary penalties for non-compliance with an order of Health Canada will be based on two main factors:  the seriousness of a violation and past violation history of the firm.  As expected, repeat offenders will face more substantial penalties, as will companies whose non-compliance with an agency order is considered to be more severe based on the guidelines’ “gravity factors.”  Penalties will range from $5,000 per violation (committed by an individual or not-for-profit corporation for non-commercial purposes) to $25,000 per violation in any other case.  Notably, each day that a person fails to comply with an order represents a separate violation.  In other words, these figures represent daily penalties, which can quickly accrue into a much larger number.

These monetary penalty regulations have been enacted pursuant to the Canada Consumer Product Safety Act (CCPSA).  The new Canadian law came into force in June 2011.  Similar to the American “CPSIA,” the CCPSA enacted new safety requirements for children’s and household products, reporting requirements for potential product safety incidents, and record keeping.  The CCPSA is administered by the Canadian governmental agency, Health Canada, and cooperation and communication with the U.S. Consumer Product Safety Commission (CPSC) has increased dramatically.

Health Canada has recently posted the penalty guidelines to its website.  We encourage our readers who sell products in Canada to review these and other Canadian product safety regulations.  Compliance -- and the risk of an enforcement action or civil penalty -- does not stop at our shores.

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