Details of Committee-Reported U.S. Registered Agent Bill

The following are highlights of H.R. 4678 as reported, including the agent and product defect reporting requirements, and the studies for expanding the bill’s agent reporting requirement to additional products:

Agent Reporting Requirement

Foreign Mfrs/Producers of Certain Products Would Require U.S. Agents

The bill would direct each applicable agency¹ to require foreign manufacturers and producers of the following covered products (or items intended to be components in such products) distributed in commerce to register an agent in the U.S. who is authorized to accept service of process on behalf of such manufacturer or producer for the purpose of any State or Federal regulatory proceeding or any civil action in State or Federal court related to such covered product:

• drugs, devices, and cosmetics;
• biological products;
• consumer products;
• chemical substances or new chemical substances;
• pesticides; and
• motor vehicle or motor vehicle equipment.

(The bill would also require studies on extending the agent registration requirement to additional products, see below for details.)

Foreign mfrs/producers exceeding certain minimum requirements would need to register. The registration requirement would only apply with respect to a foreign manufacturer or producer that exceeds minimum requirements established by the head of the applicable agency in cooperation with the Commerce Secretary and U.S. Customs and Border Protection Commissioner.

Minimum requirements that would need to be considered would include: (i) the value of all covered products imported from the manufacturer or producer in a calendar year; (ii) the quantity of all covered products imported from the manufacturer or producer in a calendar year; and (iii) the frequency of importation from the manufacturer or producer in a calendar year.

Certain foreign mfrs/producers would be excluded. The term ‘‘foreign manufacturer or producer’’ would not include: (i) certain foreign manufacturers or producers of covered products that are owned or controlled, directly or indirectly, by one or more U.S. natural or legal persons; or (ii) foreign manufacturers or producers that own or control, or through common ownership or control are affiliated with, directly or indirectly, one or more U.S. operating legal persons if the principal executive officer residing in the U.S. of each U.S. operating legal person makes a certain certification to the applicable agency that about such person.

Imports Without Registered Agents Would be Prohibited

The effective date of the registration requirement would be 180 days after the date on which regulations to implement the bill’s requirement for registration of agents of foreign manufacturers or producers authorized to accept service of process in the U.S. are prescribed.

After that date, the bill would prohibit the importation into the U.S. of a covered product (or component part that would be used in the U.S. to manufacture a covered product) if such product (or component part) or any part of such product (or component part) was manufactured or produced outside the U.S. by a manufacturer or producer who does not have a registered agent whose authority is in effect on the date of the importation.

Foreign Mfr/Producer with Agent Would Consent to State/Federal Jurisdiction

A foreign manufacturer or producer of a covered product that registers an agent would thereby consent to the personal jurisdiction of the State and Federal courts of the State in which the registered agent is located for the purpose of any judicial proceeding related to such covered product. This would not apply to actions brought by foreign plaintiffs where the alleged injury or damage occurred outside the U.S.

Registered Agent Would Need to be Located in Certain Areas, Etc.

The bill would require the registered agent to be located in a state with a substantial connection to the importation, distribution, or sale of the products of the foreign manufacturer or producer and be an individual, domestic firm, or domestic corporation that is a permanent resident of the U.S.

Registered Agent List Would be Available Online

The registered agent list would be made available to the public (in a searchable format) on the Commerce Department’s website and be made available to the CBP Commissioner (in a format prescribed by the Commissioner).

Reporting Requirements for Defective Products

Foreign Mfrs/Producers Would Need to Report Overseas Safety Campaigns for Covered Products

The bill would require a manufacturer or producer that determines to conduct a safety recall or other safety campaign in a foreign country of a covered product that is identical or substantially similar to a covered product offered for sale in the U.S. to report that determination to the head of the applicable agency within five working days.

In addition, the bill would require a manufacturer or producer that receives notification that the government of a foreign country has determined that a safety recall or other safety campaign must be conducted in the foreign country of a covered product that is identical or substantially similar to a covered product offered for sale in the U.S. to report that determination to the head of the applicable agency within five working days.

Agencies Would Need to Prescribe Contents of Defect Notifications

Each applicable agency would be required to prescribe the contents of such required notifications effective one year after the date of the enactment of the Act.

Component Part, Food Distribution, and Chinese Drywall Studies

The bill calls for the following reports to be completed within one year after enactment of the Act:

Agencies Would Report on Extending Registration Requirement to Component Parts within Covered Products

Each applicable agency would be required to complete a study on determining feasible and advisable methods of requiring manufacturers or producers of component parts within covered products manufactured or produced outside the U.S. and distributed in commerce to register agents in the U.S. who are authorized to accept service of process on behalf of such manufacturers or producers for the purpose of any State or Federal regulatory proceeding or any civil action in State or Federal court related to such component parts; and submit to Congress a report on the findings.

USDA/FDA Would Report on Extending Registration Requirement to Food

The Secretary of Agriculture and the Food and Drug Commissioner would be required to jointly complete a study on the feasibility and advisability of requiring foreign producers of food distributed in commerce to register an agent in the U.S. who is authorized to accept service of process on behalf of such producers for the purpose of any State or Federal regulatory proceeding or any civil action in State or Federal court related to such food products; and submit to Congress a report on the findings.

GAO Would Need to Complete Study on Defective Drywall Imported into U.S.

The bill would also direct the Government Accountability Office to complete a study on methods to enforce judgments of any State or Federal regulatory proceeding or any civil action in State or Federal court relating to defective drywall imported from China and distributed in commerce during the period 2004 through 2007 and used in residential dwellings in the U.S.; and submit to Congress a report on the findings.

Committee Amendments Did Not Include an Importer Declaration

Although the Committee adopted amendments to H.R. 4678 during its mark up, trade sources have confirmed that the Committee did not adopt an amendment to require an importer declaration attesting to the importer’s belief, after appropriate inquiry, that the foreign manufacturer or producer of the covered product has a registered agent in the U.S.

According to the National Customs Brokers and Forwarders Association of America, such an amendment had been under discussion and NCBFAA recently sent a letter to the House Ways and Means Committee opposing such an amendment.

Trade sources further state that an importer declaration amendment is a House Ways and Means Committee issue. Sources indicate that the House Ways and Means Committee is unlikely to have its own mark up of H.R. 4678, but will likely make changes to the bill, (which could include a possible importer declaration amendment) when H.R. 4678 comes to the House floor, possibly during the week of July 26, 2010

¹the Food and Drug Administration, the Consumer Product Safety Commission, the Environmental Protection Agency, or the National Highway Traffic Safety Administration.

(See ITT’s Online Archives or 07/22/10 news, 10072218, for BP summary announcing that the Energy and Commerce Committee approved the bill.

See ITT’s Online Archives or 07/16/10 news, 10071631, for BP summary of NCBFAA’s letter expressing concerns with H.R. 4678, including a possible importer amendment.

See ITT’s Online Archives or 07/01/10 news, 10070132, for BP summary stating that a House Energy and Commerce Subcommittee had amended and approved the measure. See ITT’s Online Archives or 03/25/10, 10032515, for BP summary of H.R. 4678 as introduced.)