Online Retailers Use Trade Loophole to Flood U.S. Consumers With Uninspected, Potentially Dangerous Imported Goods: Testimony at 10 a.m. Wednesday

  Millions of Potentially Fake, Unsafe Products Enter the U.S. Daily Uninspected, Heading to Unsuspecting Consumers, Lori Wallach, Director of Public Citizen’s Global Trade Watch, Will Tell House Lawmakers

WHAT: Lori Wallach, director of Public Citizen’s Global Trade Watch, will testify Wednesday before U.S. House of Representatives lawmakers about a loophole in U.S. trade law that is generating a new flood of unsafe and counterfeit products – ranging from dangerous air bags and children’s toys laced with lead to cosmetics containing arsenic and prescription drugs lacking active ingredients – to be imported into the U.S. uninspected and sent to unsuspecting consumers.

The hearing, titled, “Buyer Beware: Fake and Unsafe Products on Online Marketplaces,” will be held before the U.S. House Energy and Commerce Committee’s Subcommittee on Consumer Protection and Commerce.

WHERE: Room 2123, Rayburn House Office Building

WHEN: 10 a.m. EST, Wednesday, March 4

WHO: Lori Wallach, director, Public Citizen’s Global Trade Watch

BACKGROUND:

A quiet change to U.S. trade law has generated a growing tsunami of fake and dangerous products, with millions of e-commerce-purchased individual packages of imports daily coming to U.S. consumers from overseas, almost all uninspected.

When most people think of fake products, they imagine knockoff Gucci bags or Rolexes. But today, thanks to the practices of many major online retailers, consumers are being widely exposed to serious health and safety risks by very different fake imported products, many of which could pose significant health and safety issues.

The exponential growth of e-commerce means fake and unsafe products produced anywhere in the world gain millions of potential customers, with sales and delivery made easy and quick, and listings on well-branded e-commerce platforms providing an air of legitimacy and false sense of safety.

Approximately one million small e-commerce packages arrive in the United States daily from China alone. Both the new daily flood of small imported packages and the lack of inspection are a result of a 2015 trade law change that allows goods valued under $800 to avoid most U.S. Customs procedures. This is called a Section 321 “de minimis” waiver, and no detailed information is even required about the contents of packages imported under this loophole, which means they skirt systems used by the Consumer Product Safety Commission and other government agencies to target high-risk products for inspection.

Many major e-commerce retailers sought this trade-law change. They now exploit this loophole in combination with their claim not to be sellers of goods but just an interface between other sellers and consumers (and thus not responsible for accuracy of goods’ descriptions or safety) to allow anyone to sell anything. Even though these imports arrive at our doors only thanks to Amazon and other online platforms, U.S. Customs policy treats consumers – not the e-commerce sales platforms – as the “importer.”

Consumers remain unaware products they purchased from well-known e-commerce sites may not be what they assume and are not inspected. Recent Customs spot checks of small imported e-commerce packages have found a terrifying violation rate. But to date, U.S. government agencies have not altered their operations to manage the flood of goods made offshore arriving in small packages via e-commerce.

Public Citizen will urge Congress to prioritize consumer safety and address both the trade loophole that permits the new floods of unsafe imported goods and the e-commerce retailers’ lack of responsibility and accountability for the safety of the goods they sell.

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