RC2 Corp, distributor of the popular Thomas and Friends children's toys in the US, has agreed to pay a $1.25m settlement for importing and selling toys that contained lead levels above legal limits.

The Consumer Product Safety Commission charged the company with knowingly importing and selling Thomas and Friends Wooden Railway toys that had “paints or other surface coatings” containing lead levels above 0.06 per cent by weight from China.

RC2 denied it intentionally violated federal law. In 2007 the company reported that more than two dozen styles of vehicles, buildings and other train set components were found to contain lead levels that violated then 1978 ban. The CPSC says that prompted a recall beginning in June 2007, which got the attention of Congress. Last year, lawmakers passed the Consumer Product Safety Improvement Act, which lowered the legal lead levels of toys.

Although the allegations and eventual civil settlement do not relate directly to products sold through bulk vending machines, industry watchers say the case demonstrates that the CPSC remains vigilant in its pursuit of imports that don’t comply with safety standards.