Daiso to Pay $2 Million Fine, Stop Importing Children’s Products

Last year, we followed some recalls issued by Daiso concerning defective children’s toys. Now, the U.S. Consumer Product Safety Commission (CPSC) announced that Daiso Holding USA Inc.; Daiso Seattle LLC, of Seattle, Washington; and Daiso California LLC, of Hayward, California, have agreed to pay a $2.05 million civil penalty and to stop importing children’s products and toys into the United States. Due to alleged violations of federal safety laws, the company must now demonstrate to the Commission that it has sufficient knowledge of and is in compliance with CPSC safety standards and testing requirements.

The consent decree resolves CPSC staff allegations that the company violated federal laws and regulations involving the safety of children’s toys and other products. These violations include, but are not limited to, importing, distributing, and selling toys with illegal levels of lead content, illegal levels of lead paint and phthalates, small parts on toys intended for children younger than three years old, and products that lack required warning labels.

The decree prohibits Daiso from importing or entering into commerce in the United States—directly or indirectly—any toy or other children’s product until it meets the requirements in the consent decree. Further, Daiso must also retain an independent product safety coordinator to assist in the creation of a comprehensive product safety program, conduct a product audit of merchandise to determine testing and certification requirements, and develop and establish procedures for compliance and reporting.

“This landmark agreement for an injunction sets a precedent for any firm attempting to distribute hazardous products to our nation’s children” said CPSC Chairman Inez Tenenbaum. “We are committed to the safety of children’s products and we will use the full force of our enforcement powers to prevent the sale of harmful products.”

“Companies that manufacture and distribute toys should be put on notice by the government’s action today,” said Tony West, Assistant Attorney General for the Justice Department’s Civil Division. “We will not tolerate our children being exposed to products that can cause serious injury or worse, and will do everything in our power to prevent these companies from operating until they comply with federal safety laws.”

Upon completion of the requirements described in the injunction, the firm has agreed to be further restrained and enjoined from directly or indirectly importing or distributing children’s toys or products that violate any laws, standards, or bans enforced by the CPSC. “This consent decree is an agreement by Daiso to follow best industry practices. It serves as a declaration that the company will become more knowledgeable of regulations and comply with those requirements, which are intended to keep children safe,” added Chairman Tenenbaum.

The firm, which has conducted business in the U.S. since 2005, had been previously issued Letters of Advice from CPSC after examinations at ports and inspections turned up violations. Many of the violations occurred prior to the enactment of the Consumer Product Safety Improvement Act (CPSIA), which reduced allowable limits of lead and phthalates and increased the Commission’s ability to seek higher penalties. Daiso voluntarily withdrew all toys and children’s products from its stores before signing the decree, and has initiated a new product quality and safety program.

Exposure to lead in children can cause brain and nervous system damage, behavioral and learning problems, slowed growth, hearing problems, headaches, mental and physical retardation, and behavioral and other health problems. Lead is also known to cause cancer and reproductive harm. Once poisoned by lead, no organ system is immune. Of particular concern is the developing brain because negative influences can have long-lasting effects and can continue well into puberty and beyond. Phthalates are chemicals that enable flexibility in plastics and vinyls and which are known in laboratory testing to cause reproductive disturbances such as decreased sperm count, infertility, and reproductive tract malformation.

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