The U.S. Consumer Product Safety Commission (CPSC) announced today that Gree Electric Appliances Inc., of Zhuhai, China; Hong Kong Gree Electric Appliances Sales Co. Ltd., of Hong Kong; and Gree USA Sales Ltd., of City of Industry, Calif., has agreed to pay a $15.45 million civil penalty – the maximum penalty provided for under the Consumer Product Safety Act (CPSA).
CPSC had alleged that Gree:
- knowingly failed to report a defect and unreasonable risk of serious injury to CPSC immediately (within 24 hours) with dehumidifiers sold under 13 different brand names, as required by federal law;
- knowingly made misrepresentations to CPSC staff during its investigation; and
- sold dehumidifiers bearing the UL safety certification mark knowing that the dehumidifiers did not meet UL flammability standards.
In a recent keynote speech at the International Consumer Product Health and Safety Organization (ICPHSO) Annual Meeting and Training Symposium, CPSC Chairman Elliot Kaye signaled that CPSC would be seeking double-digit penalties. This record-setting penalty announced today is clearly intended to send a message to the regulated community that those who fail to follow their reporting obligations face a more aggressive enforcement environment than they had previously.
Manufacturers, importers and retailers should certainly assess whether their product safety compliance and reporting policies and procedures adequately ensure that they stay on the right side of the law.
Nancy Nord, a former Commissioner and Acting Chairman of the CPSC, and Elliot Belilos assist companies in complying with CPSC reporting and recall obligations.