U.S. Customs Proposes to Block Imports Due to Energy Conservation or Labeling Standards

U.S. Customs has proposed new rules that would authorize it to block imports of products that do not comply with the Energy Policy and Conservation Act of 1975. That act has authorized programs such as the Energy Conservation Program for Consumer Products Other Than Automobiles and the Energy Conservation Program for Certain Industrial Equipment, which collectively impose energy conservation standards and labeling requirements for major household appliances and industrial equipment.

Under the proposed rules, Customs would prohibit the importation of such products if the Department of Energy ("DOE") or the Federal Trade Commission ("FTC") notifies Customs that a product does not comply with a relevant regulation. DOE or the FTC could also indicate that the importer could pursue remedial measures to bring the products into compliance. In that event, Customs would provide the importer thirty days to do so. If the importer is unable to correct the identified issue and does not return the covered products to Customs at the end of the thirty days, or any extended period, Custom would be authorized to assess liquidated damages equal to three times the value of the covered product.

These proposed rules could significantly disrupt supply chains for industries covered by energy conservation standards. The rules also highlight the need to understand in advance how those standards might apply to products manufactured outside the United States.

Comments on the proposed rules are due on May 25, 2012.