Segway to Pay $1.25 Million Penalty for Importing ATVs Without Action Plan

Segway Powersports will pay a $1.25 million penalty to resolve charges that it knowingly imported All Terrain Vehicles (ATVs) without a CPSC-approved ATV action plan in place at the time of importation, the CPSC said in a recent news release. The commission assessed a total penalty of $5 million for Segway’s importation of 152 ATVs, suspending $3.75 million of the penalty in light of potential financial hardship for the company.

Under the mandatory CPSC safety standard for ATVs, manufacturers and importers must have a written action plan in place that “describes actions the manufacturer or distributor agrees to take to promote ATV safety, including rider training, dissemination of safety information, age recommendations, other policies governing marketing and sale of the ATVs, the monitoring of such sales, and other safety related measures.”

“On numerous occasions, CPSC staff informed [Segway] that it could not import or distribute ATVs without an approved ATV action, plan, and that such unlawful importation or distribution would subject [Segway] to enforcement actions and potential civil penalties,” CPSC said in the settlement agreement. Nonetheless, Segway “unlawfully imported eight separate ATV shipments” that were not subject to an approved action plan on file with CPSC, the commission said.

In the settlement agreement, Segway said it had filed the action plan 15 months prior to importation, and believed CPSC would approve it by the time the ATVs arrived in port. “As soon as the shipments arrived while CPSC had not yet approved the action plan, [Segway] voluntarily self-reported the importation and fully and timely cooperated,” placing the ATVs in warehouses pending approval of the action plan and not selling distributing any of the ATVs.

“CPSC has agreed to suspend all but $1.25 million of the $5 million penalty based on SPI’s sworn representations that paying a penalty exceeding that amount would cause the company financial hardship and compel [Segway] to cease business operations,” the commission said in the news release. Segway did not admit guilt as part of the settlement.