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Environment, Health and Safety Hot-Topics Series No. 16 Key compliance issues under the New Cosmetics Regulations

2021.03.25 eorge Zhu Carey Ni Yating Yang Qixing Hang Jiaxin Li

Background: China has enacted several new regulations for the cosmetic industry in recent years and has gradually improved the legislation system in respect to cosmetics. This has established a regulatory foundation for enterprises engaged in cosmetic production and operation to refine their management, clarify their responsibilities, encourage innovation, and strengthen their supervision. With the emergence of the “Cruelty Free” concept in the global beauty industry, a series of laws and regulations in relation to animal testing have been gradually promulgated, which, to some extent, advance the legislative process relating to cosmetic products in China. In combination with the new cosmetic regulations and our relevant practical experience, this article aims to help enterprises engaged in the production and operation of cosmetics   understand certain key compliance issues regarding the new regulations.

I. Brief introduction to the recent legislative process

The Cosmetics Supervision and Administration Regulations (the “Regulations”) were formally promulgated on January 3, 2020 and came into effect on January 1, 2021. The Regulations replace the Regulations on the Hygiene Supervision over Cosmetics and establish the registration and filing management system for cosmetics and their raw materials. On December 31, 2020, the Administrative Measures for the Registration and Record Filing of Cosmetics (the “Administrative Measures”) were approved by the State Administration for Market Supervision and provides specific implementation measures to the principle rules stipulated under the Regulations. On February 26, 2021, the National Medical Products Administration issued the Administrative Provisions on the Registration and Filing Materials for Cosmetics (“Administrative Provisions for Cosmetics”) and the Regulations on the Administrative Provisions on the Registration and Filing Materials for New Cosmetic Raw Materials (“Administrative Provisions for Raw Materials”) which  further provide implementation rules for the Administrative Measures. The Administrative Measures and the above-mentioned two administrative provisions will come into effect on May 1, 2021.

II. Special safety supervision on the raw materials in new cosmetics

The Regulations implement risk classification management for raw materials in new cosmetics. The registration requirement applies to the raw materials in new cosmetics such as those with anti-corrosion, sunscreen, coloring, hair dye, pigmentation, and whitening functions only, while the filing requirement applies to other raw materials in new cosmetics. The registered or filed raw materials in new cosmetics that are free from safety concerns within three years of first use shall be included in the catalog of used cosmetic raw materials. In practice, it is extremely difficult to obtain registration approval for raw materials in new cosmetics in recent years; the Regulations may change this. The Administrative Measures have established a safety monitoring system with a three-year safety monitoring period (calculated from the date upon the completion of the registration or filing of the cosmetics that use new raw materials; in the course of the safety monitoring period, the registrants and filing obligors of the raw materials for new cosmetics may use such new raw materials to produce cosmetic products). In addition, the Administrative Measures and Administrative Provisions for Raw Materials have established a continuous monitoring and evaluation system, refining the requirements for the registration and filing material management for new raw materials and the obligations on monitoring and reporting, and the specifications of technical material preparation on new raw materials.

III. Exemption of animal testing for imported cosmetics 

As early as 2013, the Notice on the Adjustment of Cosmetics Registration and Filing related Matters promulgated by the China Food and Drug Administration no longer imposed compulsory animal testing for domestic non-special cosmetics whose risk evaluation results could fully reflect the product safety, which did not apply to imported cosmetics. In 2016 and 2018, certain exceptions for the retail and importation of cross-border e-commerce cosmetics were applied. The Administrative Provisions for Cosmetics explicitly exempts imported ordinary cosmetics from animal testing subject to certain conditions. In accordance with the Administrative Provisions for Cosmetics, for ordinary cosmetics (except for hair dyeing, hair perming, pigmentation and whitening, sunscreen, anti-hair loss cosmetics or cosmetics without a declaration of new functions), a manufacturer may be exempt from submitting a toxicology test report of such ordinary cosmetics if it has obtained the relevant qualification certificates in production quality management (“GMP certification”) issued by the competent governmental authorities of the country (region) where they are located, and the product safety risk evaluation results can fully reflect the safety of such cosmetic products. However, the cosmetics shall meet the three “N” s: non-infant and non-child products, no use of new raw materials within the safety monitoring period and non-supervised products. Where animal testing exemption is available, the time for the qualified ordinary cosmetics manufacturers to complete the filing of imported ordinary cosmetics can be effectively shortened provided they have obtained the GMP certification acceptable to the National Medical Products Administration.

IV. Quality and safety responsibilities of registrants and filing obligors

The Administrative Measures stipulate that the registrants and filing obligors of cosmetics and new cosmetic raw materials shall perform registration and filing obligations by law and be responsible for the quality and safety of the relevant products. For instance, cosmetic registrants and filing obligors shall specify the product standards and submit them to the relevant medical products administration authority during the application process for registration or filing; the applicants for cosmetics registration and filing shall entrust qualified institutions to conduct testing by law; registrants and filing obligors shall ensure the safety of the raw materials during the production of cosmetics with new cosmetics raw materials; registrants and filing obligors of the  who use raw materials in new cosmetics in the production shall (i) promptly report the use and safety of raw materials in new cosmetics to the registrants and filing obligors; and (ii) take immediate measures to control risks, notify the registrants and filing obligors of the raw materials for new cosmetics and perform reporting obligations when relevant adverse effects and/or safety problems occur. Overseas registrants and filing obligors shall appoint a domestic enterprise as the domestic responsible party; the domestically responsible party shall assume quality and safety responsibilities for the cosmetics and the raw materials for new cosmetics distributed in the domestic market in accordance with the agreements entered into with the registrants and filing obligors.

V. Conclusion and suggestions

As discussed above, we propose the following specific suggestions for relevant companies in the cosmetic industry to avoid compliance risks:

1. Study the relevant regulations such as the implemental rules of the Regulations, the Administrative Measures, Administrative Provisions for Cosmetics and Administrative Provisions for Raw Materials, as well as any further implementation rules to be issued by national and local authorities;

2. Carry out relevant registration, filing and other governmental procedures in time, abide by compliance requirements such as registration, filing for cosmetics and new cosmetics raw materials, undertake quality and safety and products risk assessment, and fulfill the relevant compliance obligations;

3. Ensure that the rights and obligations under the relevant laws and regulations are taken into account by overseas registrants or filing obligors whilst entering into the relevant agreements with the domestic responsible parties (in particular, clauses regarding quality control, safety monitoring, the adverse effect of cosmetics or raw materials and liabilities). If you need assistance in drafting or reviewing the relevant agreements, please contact us or your environmental legal counsel.

If you have any specific questions or need any assistance in the registration, filing and risk assessment for cosmetics and/or new raw materials for new cosmetics, or any additional relevant legal and compliance training, please contact us via email: ecoenvpro@junhe.com.

JunHe’s EHS Legal Team: JunHe LLP, with over 930 professionals, is one of China’s largest full-service law firms with an international reputation for providing high quality legal services. As one of the pioneers in the practice area of environment, health and safety production (“EHS”) in China, JunHe’s EHS team provides multinational enterprises with a full range of EHS legal services. These include industrial project development, the incorporation of joint ventures, M&A transactions, daily commercial operations, EHS related audit and compliance, government investigations, administrative punishments and reconsiderations and litigations.

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