Product Testing and Compliance

When selling products to international markets, some certifications and compliance testing is likely required before your product can be shipped.  The type of product you sell will determine which testing protocol and certifications are required.  Certification proves a minimum level of credibility to the market.  Consumers in global markets increasingly seek safe and reliable products and regulatory agencies require minimum standards for many product categories.

When choosing to enter a market, it is important to determine what testing, marking, labeling and packaging is mandatory versus voluntary.  There are many global companies that are established to consult with suppliers to determine the requirements for specific products.  It is also important to understand the difference between a mark and a label.

• Mark – a symbol and/or pictogram that appears on a product or its respective packaging. Typically used to communicate information concerning safety, health, energy efficiency and/or environmental issues relating to a product.
• Label – appear in form of written text or numerical statements, which may be required but are not necessarily universally recognizable. Labels typically indicate more specific information about a product, such as measurements or an indication of materials that may be found in the product.

Typical certifications or marks for electrical products to be sold in North America are UL, ETL and NOM.  A product bearing one of these marks show that a product has been tested by an accredited lab and complies with the appropriate product performance and safety standards.

Similar certifications are available for products sold into the European Union such as CE, S Mark and GS Mark.  Additionally, in many countries, the materials which compose products and packaging may need to be tested separately to ensure they meet the minimum safety standards established by the governments of the countries to which the product will be sold.

There are many global testing companies that can test products for one or more of the certifications mentioned above.  To follow are a few companies that test products globally and good sources to learn about the tests and certifications available, based on product type.

Underwriters Laboratories (UL)

Intertek www.intertek.com

Bureau Veritas

Packaging

Once a supplier has chosen the key markets into which it will sell products, a determination must be made if any marking and language requirements are needed on the packaging.  Rules for packaging depend on specific country requirements.  The choice of languages is typically one of the most important decisions that must be made.  Some countries, like Canada, have specific regulations that govern which languages are used on packaging, what types of information must be communicated, and even the font size in which the official languages must be presented.

Many companies choose to include one or more languages on a package to better serve consumers.  This approach can help a company manage inventory levels, since a single inventory unit can potentially be sold in many different countries.  The drawback to this approach is that the information presented on the packaging has the potential to become cluttered or overwhelming to consumers, resulting in loss of sales.

If there is not sufficient space to add the additional languages to the existing packaging, new packaging would need to be developed.

A good resource for understanding the different requirements for each country and other packaging considerations is the International Trade Association website managed by the U.S. Department of Commerce or via third-party companies that specialize in this field such as Product IP.

There is a lot to consider regarding packaging, product testing and compliance when a supplier is looking to export.  It’s key to do your homework before launching product into new markets to avoid errors which would render your product unsellable within a market or simply undesirable to consumers.

Shipping Compliance

When shipping dangerous goods such as aerosols, pressurized products, alcohol, chemicals/cleaning solvents and glues, special care must be taken to ensure safety of the shipment.  These materials include everything from paints and batteries to explosives and caustic chemicals.  There are special regulations and procedures with which to comply when these goods are shipped, regardless of the shipping method.

When shipping hazardous materials, there are regulations overseen by at least two major regulating bodies that may govern the shipment.  The Code of Federal Regulations, Title 49 from the U.S. Department of Transportation, governs the domestic transportation of hazardous materials for all modes of transport to, from, and within the United States.  Outside the United States, the UN Model Regulations provide international guidelines regarding all aspects of transporting dangerous goods.  The UN Model of Regulations are not obligatory or legally binding within individual countries, but they have gained a wide degree of international acceptance.

The basic steps you should take if you are planning to ship are:

1. Get employees trained and certified – Training on 49 CFR and relevant international regulations applicable to the type of goods you are shipping is critical to safe transport.
2. Get Material Safety Data Sheets (MSDS) on all materials – This information will help you outline the nature the hazardous materials and will help you classify and communicate any hazard information properly.
3. Determine necessary packaging and labels – This decision will be impacted by the selected mode of transport (air, ground, rail, and sea).
4. Use the package correctly when shipping – You must prepare the package in the same manner in which it was tested and certified.
5. Declare the package with the shipping carrier – It is the shippers responsibility to declare the package as hazardous material, or dangerous good, with the carrier. Many dangerous goods cannot be shipped with other products, so proper declarations allow the carrier to segregate the freight correctly.
6. Retain all shipping records – Shipping records, paper or electronic, must be retained on every shipment for a minimum of two years after the material is accepted by the initial carrier. For hazardous waste, the records must be retained for a minimum of three years.

It is the obligation of the shipper to know, understand, and apply the proper regulations on every shipment containing hazardous materials.

Customer Compliance

When importing, exporting or dealing with foreign affiliates, numerous U.S. trade regulations must be observed.  The Bureau of Industry and Security (BIS) has primary responsibility for enforcing export control laws under the Export Administration Act (EAA) and the Export Administration Regulations (EAR).  These regulations are primarily for commercial goods (non-military).

A shipment is considered an “Export” if it meets one of the following requirements:

• A physical shipment of EAR-subject goods, technology, or technical data outside U.S. Customs Territory
• Downloads and emails of technology and technical data outside of the U.S.
• “Sharing” technology with a foreign national, even on U.S. soil. This would be considered a “deemed export”.

When preparing to export your goods, there are four key questions you need to consider for compliance.  They are as follows:

1. What is it? To determine description and classification
2. Where is it going?
3. Who will be receiving it? (What person or entity)
4. How will it be used?

Answering the above questions thoroughly will help you determine whether a license is required to export the goods.  If your good or commodity is listed on the Commerce Control List and no applicable exemption applies, you will need to apply for an export license from BIS.  If your goods do not require a license, the next step will be to check the various lists of prohibited people or entities in which you cannot do business.  There are third-party services that can help monitor these lists at a cost, but it is possible to check the lists each time you begin working with a new person or entity.  The key lists are:

1. Denied Persons List – This list is published by the BIS. It is a list of individuals and entities that have been denied export privileges.  Any dealings with a party on this list that would violate the terms of its denial order are prohibited.
2. Entity List – The Entity List identifies foreign parties that are prohibited from receiving some or all items subject to the EAR unless the exporter secures a license.
3. Debarred Parties List
4. Unverified List – This is a list of parties that the BIS has not been able to verify their credentials.
5. Consolidated Screening List – The Consolidated Screening List is a searchable and downloadable file that consolidates export screening lists of the Department of Commerce, State and the Treasury into one spreadsheet to assist in screening potential parties to regulated transactions.

Steps should also be taken to ensure your export would not violate any current U.S. sanctions.  This process is overseen by the Office of Foreign Asset Controls (OFAC).  Information can be found here.  You must ensure that your shipment is not going to a country that is a sanctioned destination.  The ultimate destination of your goods governs the transaction.  Sanctioned countries are reflected on the BIS database.  Current sanctioned countries are Cuba, Iran, North Korea, Sudan and Syria.  Shipments to Hong Kong, Singapore, United Arab Emirates and Iraq have specific information provided to aid exporters to those countries to help prevent unauthorized transshipment or reexport of controlled items into sanctioned countries.

International trade involves numerous rules and agencies.  You must be aware of the applicable rules and ensure compliance through proper training and review of your internal processes.  The rules can change frequently and penalties for non-compliance can be severe.  Diligence with trade compliance is critical for your success in exporting your goods.