The Fashion Jewelry & Accessories Trade Association

The Fashion Jewelry & Accessories Trade Association

25 Sea Grass Way, Wickford, RI 02852

Phone (401) 667-0520 Fax (401) 267-9096

www.fjata.org

Newsletter- January, 2014

Now is the time to register and then reserve your room for the FJATA Annual Conference at Foxwoods Casino, April 9-10th, 2014. Invited speakers include a CPSC Commissioner, Len Morrissey of ASTM International, and the CEO of Alex and Ani, Giovanni Feroce. Sessions will include compliance and legislative updates, social media marketing B2B, and industry news with still time to network. We are changing the format with a blend of presentations and more panel discussions to engage the audience with an interactive experience. Rooms are a very low $99 per night and bus transportation will be available from NYC to pre-registered attendees.

Please help us serve you by registering early! Register here:

Connecticut Legislative Update: Meetings continued this past month with Rep. Baram, House Majority Leader Joe Aresimowicz, Deputy Majority Leader Sandy Nafis, Ranking House Member General Law Committee Rep. Carter, Ranking Senate Member General Law Committee Senator Witkos, and Senators Doyle, Williams, and Leone. As reported before, we are in a full court press to educate legislators in Connecticut the benefit of relying on the Children’s Jewelry Safety Standard to protect children.

The Connecticut limit of 75ppm total cadmium content for children’s products becomes effective July 1st, 2014 which has put this effort on high alert. It is important that we combat laws that are not based on current scientific information and the CPSC-supported cadmium testing protocol.

New York:

FJATA has once again filed a Memo in Opposition to A.4822 (Sweeney), a bill that would limit cadmium in children’s products to 75ppm total content. FJATA had an opportunity to speak with Assy. Steve Englebright, off the floor of the Assembly Chamber and was asked what he thought our best course of action is with respect to moving A.5970-A (Englebright) in the Assembly during this Session. Hesuggested that he broker a meeting with Assy. Bob Sweeney and FJATA. Assy. Englebright agreed and we will arrange someAlbanymeetings in February.

FJATA also spoke to Joe Erdman in Sen. Mark Grisanti's office, about requesting S.3947-A (Grisanti) out of the Senate Health Committee, in order to get the bill moving and re-pass it in the Senate as early as possible. Joe reported that he has already formally requested the bill out of the Health Committee and will follow-up with Kristin Sinclair, Senate Health Committee Director and with the Chair, Sen. Kemp Hannon as well.

Rhode Island H.7157:

The RI Comprehensive Children’s Jewelry Safety Act currently requires jewelry manufactured in the state to meet the specifications of ASTM F2923-11. Last year, H.5423, a bill that replaced the word “manufactured” with “sold” in RI, that captures the original intent of the bill, passed both houses in a last minute frenzy of activity involving dozens of stakeholders supporting the bill. Unfortunately the separate bills were not a “same as” and because the Senate version changed the word “act” to “section” the bill never went to the Governor for signing. Senator Sheehan and Rep. Craven are our bill sponsors this year and we expect passage to be completed.

Washington State Legislative Update:

After making significant progress with Washington State Ecology and the WA Department of Health the existence of a competing bill, HB 1294 (CSPA) reduces the chance for success of a Rhode Island-type bill recognizing the provisions of ASTM 2923-11. We have stopped HB 1294 three years in a row in the Senate and amended the bill to only ban TCEP and TDCPP in the Senate last session. The links are provided below:

http://apps.leg.wa.gov/billinfo/summary.aspx?bill=1294&year=2013

http://dlr.leg.wa.gov/rollcall/rollcall.aspx?bienid=22&legnum=1294

Legislative counsel in Washington State advises that the short legislative schedule this year combined with the momentum of HB 1294, combined with this being an election year would make passage of an FJATA supported bill unlikely. Rather than burn our relationships on an unsuccessful effort we have decided to wait until the 2015 legislative year to introduce and promote our science based cadmium protocol allowing a migration option, stated to be the only way to correctly assess risk by the CPSC.

California Adds DINP to Prop 65 List:

The California Office of Environmental Health Hazard Assessment (OEHHA) added disononyl phthalate (DINP) to its Prop 65 list. The Carcinogen Identification Committee (CIC) was ultimately responsible for the decision. DINP may have been frequently used as a non-regulated alternative after BBP was declared a developmental toxicant in 2005.

DEHP, DIDP, DnHP, and DBP are also included on the Prop 65 list, which means that, if a listed chemical is used, a warning must appear with the product. DINP is a found in synthetic leather, gloves, footwear, some adhesives and surface coatings, among other things.

The American Chemistry Council (ACC) opposed the decision, as did several large corporations, such as Exxon Mobil and BASF, and FJATA likewise opposes the decision. Together, the message of opponents to the listing was that DINP was not shown to be a health hazard according to the complete set of studies; although the studies used by the CA CIC did show probable carcinogenicity. In a press release, the ACC writes:

"The CIC’s decision to list DINP as a Prop 65 ‘carcinogen’ is contrary to the weight of evidence demonstrating that DINP does not cause cancer in humans.The animal data summaries cited by the CIC in the Prop 65 listing are both exaggerated and misleading."

CPSC News & Information:

CPSC Report in the Federal Register: The CPSC public calendar posted 1/14/14, notes that Kristina Hatlelid, Directorate for Health Sciences, and other CPSC staff attended a meetingof the ASTM subcommittee F15.24 on jewelry on January 29th to discuss the status and possible updates of the children's jewelry voluntary standard. Dr. Hatlelid was an important contributor to the prior work leading up to the ASTM 2923-11, and FJATA is pleased that she and her colleagues plan to participate in the work of updating the standard.

CPSC Voluntary Recall Proposed Rulemaking Implications:

CPSC has proposed to impose new obligations on companies proposing to issue voluntary recalls for consumer products through a new “interpretative” rule. While fortunately there have been very few recalls of jewelry and accessories, the proposed changes will have a significant adverse impact on companies seeking to engage in voluntary consumer product recalls. FJATA disagrees that the proposed rule is merely “interpretive” because it in fact affects concrete rights and obligations. These substantive proposed changes include making corrective action plans legally binding, imposing legally binding corporate product safety compliance plan obligations on companies through the voluntary recall process, and denying a company the right to disclaim a defect in a manner that could create subsequent liability. FJATA plans to submit comments on the proposed rule, and also is working with the NAM CPSC Coalition. The Federal Register notice is available at: http://www.gpo.gov/fdsys/pkg/FR-2013-11-21/pdf/2013-27656.pdf. For former CPSC Commissioner Nancy Nord's most recent post on the subject, click here: http://nancynord.net/2014/01/16/the-side-effects-of-tweaking/

CPSC Proposes Revisions to 6(b) Rules Protecting Company Confidentiality:

CPSC staff has proposed a set of amendments to the Commission’s policy on the disclosure of information related to the safety of specific companies’ products. Under Section 6(b) of the Consumer Product Safety Act, the CPSC generally must give a company 15 days’ notice before releasing information about a product that would allow the public to identify the product’s manufacturer or private labeler. Some elements of the draft amendments would curtail companies’ ability to correct or refine agency disclosures about them and their products. For example, under current policy companies can submit comments about proposed disclosures and have been able to keep such comments confidential. The proposed staff amendments would require companies to provide a rationale and cite applicable statutory or regulatory bases for the confidential treatment of those comments to justify nondisclosure. Other provisions of the proposed amendments are limited to “modernizing” the rule to account for technological changes, such as generally providing for electronic notice when possible.

The rule, provides critical protection for businesses and an incentive to report possible incidents to the Commission,has long been criticized by some consumer advocates and agency officials, including acting Chairman Robert Adler. The Commission is scheduled to be briefed on the staff’s amendments on Thursday, January 23, 2014, and to vote on the matter in a public meeting on February 5, 2014. The staff briefing package is available at: http://www.cpsc.gov//Global/Newsroom/FOIA/CommissionBriefingPackages/2014/NPR%20AmendmenttoRegulationonInformationDisclosureUnderSection6boftheCPSA.pdf.

Patent Troll Reform Passed out of House:

Patent assertion entities (PAEs) have received much attention in recent months, both from the media and from state and federal legislative bodies. Termed "patent trolls", PAEs make oncome turning otherwise productive companies into ATMs. According to an article from Venable LLP, patents asserted by non-originating entities has grown from 30% to 70% in the last 10 years.

In December, Congress acted by passing the "Innovation Act", a bill that will make the task of assertion more difficult through a variety of mechanisms. The Patent Transparency and Improvements Act of 2013 (S. 1730), the Patent Litigation Integrity Act of 2013 (S. 1612), the Patent Abuse Reduction Act (S. 1013), and the Patent Quality Improvement Act (S. 866), all are U.S. Senate bills in progress this year. S. 1612 may feature the most effective method for controlling frivolous assertions: stipulating that the assertion entity secure financing for an amount sufficient to cover both parties' legal expenses in the event of a loss, except in special circumstances. For a concise summary of the federal activity, see the Venable LLP article here.

CBP and the New Bipartisan Budget Act

The new U.S. budget includes some sequester relief, corresponding cuts, puts discretionary spending at just over $1 trillion, and extends the current customs user fees rates through 9/30/2023. The rates were scheduled to revert in October of 2021 to levels that only allowed fees in amounts that would cover costs associated with providing customs services. The addition to the sunset provision timeline is projected to add $6.8 billion in budget offset dollars for the sequester relief. It also has some worried that the Generalized System of Preferences (GSP) renewal may not receive support because the usual method of compensating for GSP duty losses is by increasing customs user fees. With the user fee increases already accounted for, funding for a GSP may then be lacking.

FJATA Association News:

FJATA Joins Multi-Industry Coalition in Calling for GSP Renewal
A multi-industry coalition of over 460 companies and associations on January 27 in sending a letter to all members of the U.S. Senate and a letter to all members of the U.S. House of Representatives calling for renewal of the Generalized System of Preferences program, which has been expired since July 2013. FJATA has supported swift renewal of the valuable trade

preference program intended to support developing countries, and has advocated for the inclusion of an update to the program to allow eligibility for non-import-sensitive travel goods.

The ASTM F15.24 Jewelry Sub-committee began a new session this month to review both the adult and children’s standards and discuss technical corrections as well as a new proposed nickel test, cadmium in plastics testing protocol, the flux index calculation and other business raised by the committee. ASTM requires that standards undergo a review every three years. The “11” postscript from the ASTM F2923-11 indicates the year the version was published; it is FJATA’s hope that agreement among the Committee on these changes will be achieved quickly and that a new version can be issued in 2014. As noted earlier, the meeting was posted on the CPSC Public Calendar and CPSC Staff will participate.

International News: The Chinese New Year falls between January 31 and February 6 this year.

Health Canada Draft Risk Assessment Framework:

The comment period for the draft Health Canada (HC) Risk Assessment Framework (RAF) ended on January 30, 2014, focusing on the manufacturer/importer's obligation to ensure that a consumer product does not pose a risk to Canadian consumers through a reasonable risk assessment process. The RAF was written pursuant to the Canada Consumer Product Safety Act's coming into force in June of 2011. Health Canada defines the purpose of the RAF as:

"to provide clarity and guidance to internal and external stakeholders on the principles and processes associated with risk assessment in the Program and to support a risk based approach to determine where the Program should focus its attention."

Particular elements resemble those used for compliance with U.S. regulations such as the CPSIA, CPSA, FHSA, and state statutes. Companies must consider: 1) the degree to which their product may pose a hazard, 2) use evidence and sound judgment to determine risk, 3) make the process transparent to regulators and the public, 4) identify uncertainties, 5) consider sensitive populations, and 6) include potential use and abuse in evaluating risk. You may review the complete HC RAF draft here. FJATA in general supports a regulatory approach that applies sound, science-based risk assessment criteria, and submitted comments on the framework.

CBP Nominee Kerlikowske:

Richard G. Kerlikowske, President Obama's nominee for U.S. Customs and Border Protection (CBP) Commissioner, received strong bipartisan support, a sign that his confirmation is highly probable. Some key points Kerlikowske makes in his prepared comments include that business needs a "consistent, stable, and predictable environment" to operate in, and that as CBP Commissioner, he has goals to reduce paperwork, to "minimize transaction costs" at border crossings and to continue to prioritize completion of the Automated Commercial Environment (ACE) and International Trade Data System (ITDS).

http://www.fjata.org/wp-content/uploads/KERLISKOWSKE-WRITTEN-STATEMENT-SFC-011514-FNL.pdf

China's New Trademark Regulations under Consideration: