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Copyright © 2010 Underwriters Laboratories Inc.® Ensuring Internationally Traded Goods are SAFE Carlos Correia Vice-President & General Manager Global High-Tech Industry Underwriters Laboratories (UL) International Customs Conference EU-China Modern Customs :: Building bridges to facilitate legitimate trade while protecting citizens September 1-2, 2010 – Shanghai, China @ World Expo (v1.0b)
2 Underwriters Laboratories Copyright © 2010 Underwriters Laboratories Inc.® 2 ensuring internationally traded goods are SAFE (1) about UL (2) product safety (3) global trade (4) trading safe products
3 Underwriters Laboratories Copyright © 2010 Underwriters Laboratories Inc.® 3 Underwriters Laboratories Working for a Safer World Since 1894 Underwriters Laboratories began in the 19 th century and enters the 21 st century with the same purpose… to help make the world safer in the places where people live and work Underwriters Laboratories 3
4 Copyright © 2010 Underwriters Laboratories Inc.® 4 Underwriters Laboratories Working for a Safer World Since 1894 20,000,000,000 UL Marks on products annually 1,500,000,000 safety messages reach consumers 570,088 follow-up inspection visits 84,994 product evaluations 66,149 manufacturers of UL certified products 19,597 product types evaluated by UL 6,921 UL employees worldwide 1,420 published safety standards 120 inspection centers worldwide 102 countries with UL customers 68 lab facilities worldwide Data as of 31st December 2009 Underwriters Laboratories 4
5 Copyright © 2010 Underwriters Laboratories Inc.® 5 Underwriters Laboratories serving a Global Market Underwriters Laboratories North America United States - Northbrook - Camas - Melville - Research TP - Santa Clara Canada Latin America Argentina Brazil Mexico Europe Germany Finland France Denmark Italy Netherlands Poland Spain Sweden Switzerland United Kingdom Asia Pacific China Taiwan Hong Kong India Japan South Korea Singapore Malaysia Thailand Australia New Zealand 5 Copyright © 2010 Underwriters Laboratories Inc.®
6 Underwriters Laboratories Copyright © 2010 Underwriters Laboratories Inc.® 6 Underwriters Laboratories UL-CCIC Company Ltd :: Underwriters Laboratories 6 UL-CCIC Beijing Branch China Market Access Agency Services (CCC, etc) UL-CCIC Chongqing branch QRS UL-CCIC Suzhou Laboratory UL-CCIC Guangzhou Laboratory UL-CCIC Shanghai China Headquarters and Shanghai Branch Hong Kong Taiwan Hong Kong Taiwan UL Guangzhou Rep. Office FUS and Label services UL Nanjing Office 1,500 staff celebrating 30th anniversary of cooperation with CCIC* in Oct. 2010 * CCIC :: China Certification & Inspection Group :: Copyright © 2010 Underwriters Laboratories Inc.®
7 Underwriters Laboratories Copyright © 2010 Underwriters Laboratories Inc.® 7 ensuring internationally traded goods are SAFE (1) about UL (2) product safety (3) global trade (4) trading safe products
8 Underwriters Laboratories Copyright © 2010 Underwriters Laboratories Inc.® 8 everyone wants Safe Products… Product Safety Producers Distributors Consumers Workersothers… Conformity Assessment Bodies Regulators Copyright © 2008 Underwriters Laboratories Inc.®
9 Underwriters Laboratories Copyright © 2010 Underwriters Laboratories Inc.® 9 everyone wants a Safety System that delivers… Compliance ensures safe products are placed in the market Coherence has clear criteria that is applied equally to all parties Confidence everyone affected easily understands and believes …and evolves to improve detected weaknesses and overcome new challenges Copyright © 2008 Underwriters Laboratories Inc.®
10 Underwriters Laboratories Copyright © 2010 Underwriters Laboratories Inc.® 10 basic elements of a Safety System simplified for Electric & Electronic products legal framework standards pre-market testing & certification components pre-qualification end-product verification re-evaluation of modified products or components post-market factory surveillance factory pre-qualification ongoing product inspection at factory post-market trade surveillance blind-shopping & verification customs control & anti-counterfeiting regulatory cooperation technical competence ( of the parties involved ) EuropeChinaUnites States mandatory consensus based SDoC :: mostly self-declared by manufacturers independent 3 rd party bodies (appointed by CNCA) independent 3 rd party bodies (NRTLs accredited by OSHA) ??? not required to manufacturers in SDoC independent 3 rd party bodies governmental bodies ??? not required to manufacturers in SDoC accreditation & qualification
11 Underwriters Laboratories Copyright © 2010 Underwriters Laboratories Inc.® 11 Europe (and the world) has evolved… …from:…to: single market of 12 countries EEA market of 30 countries no European identifiers three European symbols: creation of a larger EU market » internal trade competing on a globalized market » global trade in-house design & production » localized production outsourced world » global design & supply-chains product diversification product specialization manufacturing design, brands & distribution conformity assessment, perceived as a trade barrier conformity assessment, perceived as a fair trade catalyst Copyright © 2008 Underwriters Laboratories Inc.®
12 Underwriters Laboratories Copyright © 2010 Underwriters Laboratories Inc.® 12...the European Safety System needs to catch-up... complex product life-cycle becoming shorter, but with numerous product changes in design, features & components extended supply chains 1 end product is estimated to have 10 to 100 suppliers of safety critical components and sub-assemblies large manufacturing networks 10 leading brands produced in 522 locations, 30 cities, 24 countries ( 18% EU; 10% Americas; 40% China ; 38% rest of Asia ) SDoC = CE self declaration manufacturer/distributer self-declares compliance with EU essential requirements and affixes CE marking (module A) EU Product Safety laws GPSD + LVD + EMC RoHS + WEEE energy labeling + … #2 in RAPEX notifications (1) with very limited market surveillance 22% notifications & 32% risks: shock, fire, burns ( #1 in 2006 before toys recalls ) EU safety E&E industry risks (1) 2007 Rapex Report Copyright © 2008 Underwriters Laboratories Inc.® an highly simplified European Product Safety system does not work in an increasingly complex Global Electric & Electronic industry
13 Underwriters Laboratories Copyright © 2010 Underwriters Laboratories Inc.® 13 …and Consumers clearly know it Just under half of Europeans think that (1) : some non-food products are unsafe (48%) while similar percentages either think that: all products are safe (17%) or a significant number of products are unsafe (18%) The absolute majority (75%) of European citizens have heard in the last 12 months of non-food products being recalled from the market (1) EC Special Eurobarometer 298 | Oct.02008
14 Underwriters Laboratories Copyright © 2010 Underwriters Laboratories Inc.® 14 ensuring internationally traded goods are SAFE (1) about UL (2) product safety (3) global trade (4) trading safe products
15 Underwriters Laboratories Copyright © 2010 Underwriters Laboratories Inc.® 15 simplified product supply chain traditional player; new player; new role complexity of the products Supply Chain the High-Tech products supply chain is becoming more & more complex :: new power players (EMS, ODM, eRetailers) highly decentralized (design, procurement, manufacturing) low cost & economies of scale driving efficiencies shorten product life-cycle increasing the pace of innovation Raw Materials Compon- ents EMSODMOEM Retailer & Distributor e. Media & e Retailer Consumer Recycling Business source :: Wall Street Journal, 18 May 2009, Clarity Is Missing Link in Supply Chain
16 Underwriters Laboratories Copyright © 2010 Underwriters Laboratories Inc.® 16 what manufacturers are saying… regulatory, environmental and industry requirements are more stringent and grew in both complexity and quantity companies struggle to keep up with the complex and changing compliance environment in particular to understand applicable regulations and managing multiple sources of specifications, standards and product data. as a result the burden to manage product compliance in particular increase in development cost and lack of focus on innovation. * source :: Aberdeen Group – the Product Compliance Benchmark Report [ % of responses view factor as major challenge ]
17 Underwriters Laboratories Copyright © 2010 Underwriters Laboratories Inc.® 17 a reliable 3 rd party conformity assessment body, like Underwriters Laboratories, prevents unsafe products to reach the places where people live and work what are we seeing… Underwriters Laboratories researched the failure rates for first time product submittals and found these failure rates vary by product type from 14% to 45%, averaging 28% (1) during our regular factory inspections, UL evaluates the products being manufactured to check compliance with specification originally tested & certified, on average 10% of the inspections detect non-compliant products (1) it is easy to imagine honest reasons why products fail to comply with technical requirements, particularly when one deals with complex products and supply-chains :: failure or inappropriate specs of components and subassemblies legitimate misunderstanding of requirements in standards & regulations lack of technical means or safety engineering knowledge to test and evaluate compliance of components, sub-assemblies and end-products manufacturers & suppliers do not know how to bring products into compliance Copyright © 2008 Underwriters Laboratories Inc.® (1) 2007 UL data
18 Underwriters Laboratories Copyright © 2010 Underwriters Laboratories Inc.® 18 globalization of trade under complex supply chains the risk of unsafe products escalates !!! and the costs of (non) compliance can increase considerably :: manufacturers need to invest in safety engineering knowledge and testing capability to evaluate their products and the ones of their suppliers & subcontractors larger companies often develop functions to manage design, compliance,suppliers & distributors control and procurement, to deal with their extended and complex design, production, subcontracting & distributing networks smaller companies often dont have such means, knowledge or technical capabilities, and rely on other (smaller) companies, that relied on others, that relied on others… creating an ad-hoc trust-me compliance system in either case everyone in the product supply-chain carries the crippling costs of cascading liabilities reputable firms are more likely do the right thing and incur the costs of honest action, putting them at a competitive disadvantage to those who would cheat the system, effectively imposing an honesty penalty Copyright © 2008 Underwriters Laboratories Inc.®
19 Underwriters Laboratories Copyright © 2010 Underwriters Laboratories Inc.® 19 ensuring internationally traded goods are SAFE (1) about UL (2) product safety (3) international trade (4) trading safe products
20 Underwriters Laboratories Copyright © 2010 Underwriters Laboratories Inc.® 20 illegal trade :: unfortunately it happens Legitimate Cord Wire SAFE Counterfeited Cord Wire UNSAFE ! 39% encountered Counterfeit incidents :: Original Components Manufacturers Circuit Board Assemblers Distributors Prime/Sub Contractors (1) US DoC OTE, Counterfeit Electronics Survey, 2009 Nov., 387 organizations, figs: VII-1, VII-8
21 Underwriters Laboratories Copyright © 2010 Underwriters Laboratories Inc.® 21 ULs product safety :: anti-counterfeiting program... enforcement partnershipeducation 3 rd party assessment testing & certification component traceability factory surveillance
22 Underwriters Laboratories Copyright © 2010 Underwriters Laboratories Inc.® 22 3 rd party assessment :: UL product safety process.engineeringtestingcertification.inspection product changes Recognized Components certification mark ongoing product inspection at factory FUS simplified version of the process
23 Underwriters Laboratories Copyright © 2010 Underwriters Laboratories Inc.® 23 a UL Listing Marking appearing on a product consists of four required elements :: UL in a circle Mark Word "Listed" Product name or company name/file number Issue/serial number or alphanumeric control number certain Product categories require holographic UL Marks… …that can be purchased on authorized label centers only and have unique control features UL mark :: control elements
24 Underwriters Laboratories Copyright © 2010 Underwriters Laboratories Inc.® 24 UL's anti-counterfeiting program :: enforcement education partnership enforcement UL's enforcement strategy relies heavily on the involvement and support of the law enforcement agencies that can seize products, lay criminal charges and ultimately prosecute counterfeiters. The foundation of our partnerships with law enforcement agencies is UL's zero tolerance policy for counterfeiters. education UL training program includes :: product authentication training for various law enforcement and/or jurisdictional authority personnel. Sessions include training on the four-element UL Mark and holographic labels. for a broader audience and focuses on the potential hazards of products bearing counterfeit UL Marks and the costs of counterfeiting to society as a whole. assistance to UL clients that may be experiencing problems or need help building internal anti- counterfeiting programs. partnership The final and perhaps most important pillar of UL's anti-counterfeiting strategy rests upon the strong partnerships we have developed with police and customs agencies, governmental bodies, industry organizations, jurisdictional authorities, other intellectual property rights holders, and UL clients. The core of UL's anti-counterfeiting program is based upon the network of partners that we have developed over almost 15 years of combating counterfeiting. US Department of Homeland Security U.S. Customs and Border Protection U.S. Immigration and Customs Enforcement US Department of Justice Federal Bureau of investigation INTERPOL International Criminal Police Organization Intellectual Property Crime Action Group Royal Canadian Mounted Police Canadian Anti-Counterfeiting Network CAEFI - QBPC Quality Brands Protection Committee NEMA (National Electrical Manufacturers Association) US Chamber of Commerce CACP International AntiCounterfeiting Coalition …and many other partners…
25 Underwriters Laboratories Copyright © 2010 Underwriters Laboratories Inc.® 25 ensuring internationally traded goods are SAFE (1) about UL (2) product safety (3) international trade (4) trading safe products summary
26 Underwriters Laboratories Copyright © 2010 Underwriters Laboratories Inc.® 26 an ideal Safety System model Consensus Standards 3 rd party Pre-market Assessment & Certification components pre-qualification end-product verification re-evaluation of modified products or components 3 rd party Factory Surveillance factory pre-qualification ongoing product inspection at factory 3 rd party Post-market Surveillance blind-shopping & verification anti-counterfeiting regulatory cooperation Accreditation & Qualified staff Third-party Certification is a proactive system working to prevent injury and property loss. It is analogous to preventative medicine. SDoC - Suppliers Declaration is analogous to ignoring the treatment of a disease and then having invasive surgery to cure it. trade requires a Safety System that delivers :: compliance coherence confidence Copyright © 2008 Underwriters Laboratories Inc.® chain supply complex operating on a increasingly complex supply chain requires a preventative system for public safety
27 Underwriters Laboratories Copyright © 2010 Underwriters Laboratories Inc.® 27 2010 International Law Enforcement IP Crime Conference The 2010 International Law Enforcement Intellectual Property (IP) Crime Conference co-hosted by INTERPOL and Hong Kong Customs in partnership with Underwriters Laboratories will be held in Hong Kong, China from 19-21 October 2010. The fourth annual International Law Enforcement IP Crime Conference, and the first to be held in SE Asia, will build on the success of the past three conferences. The focus of the 2010 IP Crime Conference is "Working Together to Break Organized Crime. Underwriters Laboratories is a very proud partner and we are therefore delighted to continue to support INTERPOL and this year's co-host Hong Kong Customs as we work together to present the 2010 IP Crime Conference http://www.ul.com/global/eng/pages/offerings/services/programs/ anticounterfeitingoperations/conference/
Copyright © 2010 Underwriters Laboratories Inc.® Underwriters Laboratories Carlos Correia firstname.lastname@example.org | +81 90 2230 1306 www.UL.com
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