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Daiso To Pay $2 Million Civil Penalty for Violations of Federal Safety Laws and Must Stop Importing Children's Products and Toys Into U.S.

Release Date: March 02, 2010

The U.S. Consumer Product Safety Commission (CPSC) announced today that Daiso Holding USA Inc., Daiso Seattle LLC, of Seattle, Wash. and Daiso California LLC, of Hayward, Calif. have agreed to pay a $2.05 million civil penalty and 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 (pdf) 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 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.

The consent decree was filed today in the U.S. District Court for the Northern District of California by the Office of Consumer Litigation of the Justice Department's Civil Division, on behalf of CPSC. In signing the consent decree, the company does not admit any violation of law. The consent decree is subject to court approval and has the force of law when entered by the court.

CPSC applauds U.S. Customs and Border Protection San Francisco and Seattle Area Ports for their cooperation and assistance in this enforcement action.

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The U.S. Consumer Product Safety Commission (CPSC) is charged with protecting the public from unreasonable risk of injury or death associated with the use of thousands of types of consumer products. Deaths, injuries, and property damage from consumer product-related incidents cost the nation more than $1 trillion annually. CPSC's work to ensure the safety of consumer products has contributed to a decline in the rate of injuries associated with consumer products over the past 50 years. 

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