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Industry InsightLatest NewsMarketingRegulations24/05/2021China New Cosmetic Regulation-Easier or More Challenge?!

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Let’s Analyze the differences between the new cosmetic regulation and the old version:

The “Regulations on the Supervision and Administration of Cosmetics” (hereinafter referred to as the new “Regulations”) and the “Regulations on the Hygiene Supervision of Cosmetics” (hereinafter referred to as the original “Regulations”) have significantly improved the breadth and intensity of legal liabilities. With the development of the cosmetics industry, the legal responsibilities stipulated in the original “Regulations” are no longer in full compliance with the current status of the cosmetics production and business field, and the protection measures for the legitimate rights and interests of consumers are also slightly insufficient, and even the determination of certain illegal acts is lacking. Full legal support. The low cost of illegal cosmetics also makes unlicensed production, counterfeiting, illegal additions, and false declarations continue to be banned repeatedly, which affects the effectiveness and authority of cosmetics supervision to a certain extent.

The new “Regulations” fully embodies the “four most stringent” principles, especially in terms of implementing the main responsibility and strengthening punishment measures for violations. Compared with the original “Regulations”, the new “Regulations” stipulated an increase in the number of legal liability clauses, expanded the scope of illegal causes, and greatly strengthened penalties for illegal causes, which will play a positive role in regulating the development of the industry .

Expansion of legal liability clauses

The original “Chapter V Penalty Provisions” of the original “Regulations” set up 9 penalty clauses, of which Articles 24 to 29 were aimed at enterprises that did not obtain a cosmetics production license for unauthorized production of cosmetics, and production without an approval number Special purpose cosmetics, import or sale of imported cosmetics that have not been approved or inspected, production or sale of cosmetics that do not meet the national “Hygiene Standards for Cosmetics” and violations of other relevant provisions of the Regulations. Article 31 provides for Liability for human injury or poisoning accident.

The new “Regulations” “Chapter V Legal Liability” sets up 18 penalties, which are divided according to the severity of the violations, corresponding to different degrees of legal responsibility. The description of illegal acts in the new “Regulations” mainly includes the following:

1. Engage in cosmetic production activities without permission, or the cosmetic registrant or recorder entrusts an enterprise that has not obtained the corresponding cosmetic production license to produce cosmetics;

2. Production, operation or import of unregistered special cosmetics;

3. Use raw materials that are prohibited to be used in the production of cosmetics, new raw materials that should be registered but not registered to produce cosmetics, illegally add substances that may harm human health in cosmetics, or produce cosmetics using cosmetics or raw materials that have exceeded their expiration date, discarded, or recycled ;

4. Use raw materials that do not meet mandatory national standards or technical specifications, packaging materials that directly contact cosmetics, produce cosmetics with new raw materials that should be filed but not filed, or use raw materials that do not comply with mandatory national standards or technical specifications;

5. The production and operation of cosmetics that do not meet mandatory national standards, technical specifications, or do not meet the technical requirements specified in the cosmetics registration and filing materials;

6. Failure to organize production in accordance with the requirements of cosmetics production quality management regulations;

7. Change the use period of cosmetics;

8. The cosmetics business operator prepares cosmetics without authorization, or sells cosmetics that have deteriorated or have exceeded their expiration date;

9. Refuse not to recall after the department in charge of drug supervision and management orders it to implement the recall, or refuse to stop or suspend production or operation after the department in charge of drug supervision and management orders to stop or suspend production or operation;

10. On the market, sell, operate or import ordinary cosmetics that have not been filed;

11. Failure to set up a person in charge of quality and safety in accordance with the regulations;

12. Failure to establish and implement the health management system for employees in accordance with the regulations;

13. Produce and manage cosmetics whose labels do not meet the regulations;

14. Failure to publish a summary of the basis for cosmetic efficacy claims in accordance with the regulations;

15. Failing to establish and implement the purchase inspection record system and product sales record system in accordance with the regulations;

16. Failing to conduct self-inspection on the implementation of cosmetics production quality management regulations in accordance with the regulations;

17. Failure to store and transport cosmetics in accordance with the regulations;

18. Failure to monitor and report adverse cosmetic reactions in accordance with the regulations, or refuse to cooperate in cosmetic adverse reaction investigations conducted by cosmetic adverse reaction monitoring institutions and departments responsible for drug supervision and management;

19. The importer fails to record and keep the imported cosmetics information in accordance with the regulations;

20. The registrant and recorder of new cosmetic raw materials failed to report the use and safety of new cosmetic raw materials in accordance with the regulations;

21. Provide false information or adopt other deceptive methods when applying for cosmetics administrative license;

22. Forgery, fabricate, lease, lend or transfer cosmetics licenses;

23. Provide false information when filing;

24. The filed materials do not meet the requirements;

25. After the filing department cancels the filing, it still uses the new cosmetic raw material to produce cosmetics or still sells or imports the ordinary cosmetics;

26. The organizer of the cosmetics centralized trading market and the organizer of the exhibition failed to perform the management obligations of review, inspection, stop, and report in accordance with the regulations;

27. The e-commerce platform operator fails to perform real-name registration, stop, report, and stop providing e-commerce platform services in accordance with the regulations;

28. Cosmetic advertisements violate the regulations;

29. The corporate legal person in my country designated by the overseas cosmetics registrant and recorder has not assisted in the monitoring of cosmetic adverse reactions and the implementation of product recalls;

30. Obstruct staff of the department responsible for drug supervision and management from performing their duties according to law;

31. Forging, destroying, concealing evidence, or concealing, transferring, selling, or damaging items that have been sealed up or seized according to law;

32. Violating the regulations and causing personal, property or other damage.

The provisions of the new “Regulations” on legal responsibilities, on the one hand, further clarify the description of the reasons for violations, so that enterprises can accurately understand the relevant legal responsibilities; on the other hand, it is also conducive to the supervisors to accurately determine the reasons for violations. At the same time, the establishment of legal responsibilities under the new “Regulations” reflects the principle of advancing with the times and in line with the current situation of the industry. It relates the responsibilities of the entrusting party and the trustee, the responsibilities of the registrant and the filing person, the responsibilities of imported and domestic products, and the new business model. Responsibilities are included, which is significantly expanded and refined compared to the original “Regulations.”

Penalties are greatly enhanced

In addition to the expansion of legal liabilities, the increase in penalties is also one of the major changes in the new “Regulations”, which are mainly reflected in four aspects: first, the penalty amount base is adjusted from illegal income to the value of the goods; second, the penalty amount or multiples Significant increase; the third is to implement punishment to people and introduce employment prohibitions or restrictions on employment; the fourth is to closely integrate with public security management penalties.

From the original “Regulations” imposing a fine of 3 to 5 times the illegal proceeds to the new “Regulations” imposing a fine of up to 30 times the value of the goods or up to 500,000 yuan, the cost of violations has greatly increased and the warning effect has been significantly strengthened. In addition to fines and confiscations, the newly introduced ban on employment will limit the re-entry of serious offenders into the cosmetics industry to the greatest extent. At the same time, the new “Regulations” implement the principle of product safety as the core, and violate the laws that directly affect the safety of product use, such as unlicensed production, unauthorized production of imported special cosmetics, and the use of prohibited raw materials, hazardous substances, and the production of cosmetics with unapproved new raw materials. The most severe punishment will be imposed on the behavior.

Legal responsibility and industry development

1. Will further clarify and enhance the sense of corporate responsibility

According to incomplete statistics, there are currently more than 70,000 cosmetic brands in China, and only more than 5,000 companies hold the “Cosmetics Production License”; a large proportion of the registered or filed products are commissioned products. In other words, in the entire production and operation activities, the vast majority of product liability entities are enterprises that do not have actual production capacity. The new “Regulations” registrant and recorder system clarify that the registrant and recorder are the first persons responsible for product quality, and are responsible for product quality, safety and efficacy claims, and should bear related legal responsibilities. The clarification of the responsibilities of the registrant and the filing person will also fundamentally change the responsibility and production of the product’s formula, efficacy, and claim that should have been borne by the brand in the actual production and operation process. The situation where the form does not match.

The regulations on the responsibilities of the registrant and the filing person not only clarify the actual subject responsibility, guide and standardize the production and operation behavior of the enterprise, but also raise the entry threshold for cosmetics practitioners, so that they have the ability to bear the main responsibility of product quality and safety. The basic ability conditions further ensure the quality and safety of the products.

2. The degree of standardization of enterprise production and operation has been strengthened

In addition to stipulating the responsibilities of registrants and filing holders, the new “Regulations” have detailed responsibilities for manufacturers, cosmetics operators, centralized trading market organizers, exhibition organizers, e-commerce platform operators, importers and other responsible entities. Penalty clauses are divided and correspondingly set. This undoubtedly makes the role of the enterprise clearer, and the responsibilities and obligations to be fulfilled are also more specific, which is conducive to solving the unclear responsibilities of the entrusting party and the entrusted party, the unclear responsibilities of the producer and the operator, and the Unclear responsibilities between traditional and new formats. It is also more conducive to the further standardized development of the industry.

3. Increased penalties prevent offenders from gaining a foothold in the industry

Vigorously crack down on violations of laws and regulations, and standardize industry development has always been the focus of supervision. In order to ensure the healthy development of the industry, the new “Regulations” adhere to the “four strictest” as the fundamental orientation, further consolidate the main responsibility of enterprises, increase penalties and reflect the requirements of punishment to people, and play a deterrent effect of laws and regulations to control chaos , The supervision methods are more abundant, and the legal responsibility system is more complete, which is conducive to keeping the bottom line of cosmetics safety. More detailed regulations and stricter penalties for illegal activities make the illegal “red line” clearly visible, and companies that touch the “red line” will not be able to establish themselves in the industry.

Now with 20 more supporting documents will be released to the public during the next half year, I think China government will more formally promote it’s enforcment to the cosmetic industry companies, generally we will say China will open the market wider but with more stricter rules and laws.