On June 16th, a hearing before the House Energy and Commerce Committee took place to discuss a new act that would put additional requirements on foreign manufacturers who import goods regulated by the Consumer Product Safety Commission, the Food and Drug Administration, and the Environmental Protection Agency. This act requires foreign manufacturers to register an agent in at least one state in order for them to accept responsibility for civil and regulatory claims.

The bill is a reaction to several import scandals, including moldy Chinese drywall and tainted Chinese pet food, where it was difficult to sue the companies at the heart of the issues. In effect, it opens up foreign manufacturers to civil and regulatory litigation in the United States. It will likely increase the cost of exporting products to the United States and make it harder for U.S. companies to find qualified suppliers.

This legislation is currently sponsored by 62 members of the House and 15 members of the Senate for a similar bill. While the bill has not yet passed, it could have major consequences for importers and manufacturers. According to many Congress watchers, passage is very likely.

How to use trade data to prepare for passage:

1. Because of the expense of maintaining an agent in the United States, smaller foreign manufacturers could be frozen out of trade. If your company uses primarily smaller manufacturers, you may need to search for new suppliers who are both financially stable and large enough to shoulder the burden of these additional costs. Searching for suppliers of specific goods and developing qualified lists of manufacturing prospects is simple with TradeIQ.


2. If you are an attorney with clients affected by a faulty imported product, finding the actual manufacturer can be difficult. With trade data, you can tie the importer back to the company that exported the goods to the U.S. and identify the parties involved in the transaction. Many of the attorneys who litigated imported goods scandals have done this with Zepol in recent cases.


3. If the imports of a non-registered manufacturer are not seized or blocked by U.S. Customs, there is an opportunity for industries to self police and ensure that all players are on an even playing field. This would require importers of the products to regularly track imports using trade data and report violations to Customs. Often there are rewards for companies that help in these investigations.