Australia Cosmetic Regulation

In Australia, beauty products are legally classified into two distinct categories: cosmetics and therapeutic goods. The classification of a product as either "cosmetics" or "therapeutic goods" is typically determined by three key factors: 1) the primary purpose of the product, 2) its ingredients, and 3) the claims made about the product. It is important to note that the regulations governing each category vary significantly.

Part 1 Regulatory Framework and Competent Authority

1.1 Existing Main Cosmetic Regulations

1.2 Competent Authority

Cosmetic products and their ingredients fall under the purview of industrial chemicals in Australia as per the Industrial Chemicals Act 2019. Two primary regulatory bodies oversee this domain:

• Australian Industrial Chemicals Introduction Scheme (AICIS): Established by the Industrial Chemicals Act 2019, AICIS serves as the overarching framework (also regulator) of Australia for regulating the introduction (i.e., importation and manufacturing) of industrial chemicals, including cosmetics and soaps. It officially replaced the former overarching framework, the National Industrial Chemicals Notification and Assessment Scheme (NICNAS), on July 1, 2020. It is important to note that AICIS does not regulate therapeutic goods and is not involved in setting or enforcing labeling and advertising requirements for cosmetics.

• Australian Competition and Consumer Commission (ACCC): Responsible for regulating cosmetic labeling, advertising standards and ensuring product safety.

Furthermore, state and territory government authorities are involved in overseeing the use and disposal of cosmetics.

Part 2 Cosmetic Products

2.1 Definition

In Australia, a “cosmetic” is defined as a substance or preparation intended for use on any external part of the human body, or inside the mouth, with the purpose of altering its odor or appearance, cleansing it, maintaining its condition, perfuming it, or protecting it.

Cosmetic products encompass a diverse range, including but not limited to personal care items, skincare products, makeup, bath and shower products, secondary sunscreens (where SPF is the secondary function of the product), and various others. The following examples are provided for reference.

2.2 Enterprises Obligations

Before engaging in the introduction of cosmetic products or ingredients for commercial purposes in Australia, enterprises must adhere to a set of crucial regulatory obligations, encompassing business registration, introduction categorization, reporting, record-keeping, and annual declaration.

2.2.1 Business Registration

Manufacturers and importers of cosmetics and cosmetic ingredients must register their business—rather than individual products or ingredients—with AICIS before importing and manufacturing the product in Australia within any given registration year. This period spans from September 1 to August 31 of the next year, with registration being obligatory irrespective of the quantity of chemicals to be imported or manufactured. The registration process involves the completion of an online form on the AICIS Business Services platform, accompanied by the payment of  registration fee.

Notably, the business registration may be exempt in certain cases, including:

1. Naturally occurring chemicals;

2. Business selling products made from locally sourced industrial chemicals;

3. Non-isolated intermediates;

4. Incidentally introduced chemicals;

5. Chemical unintentionally released from an article;

6. Trans-shipment chemicals;

7. Chemicals introduced incidentally on an aircraft or ship;

8. Chemicals introduced only for personal use;

9. Foreign businesses using an Australian distributor already registered with AICIS;

10. Articles that are not intentionally designed to release chemicals;

11. Non-industrial chemicals

How to Register?

Before embarking on the registration process, enterprises should: 1) determine whether or not they need to register with AICIS; 2) assess the $AUD value of the industrial chemicals imported and/or manufactured during the previous financial year (which ends two months before the registration year starts, i.e., July 1–June 30), if any; 3) in the case of being a foreign (non-Australian) businesses, obtain an Australian Registered Body Number (ARBN).

To determine the value of chemicals, businesses can use relevant commercial documents like commercial invoices, orders, or confirmations, airway bills, insurance certificates or receipts for the purchase of goods. All relevant documents must be retained for at least five years.

There are four options for valuing chemical introductions, detailed in the table below. Businesses must maintain records of how the calculations were performed, as registrants are subject to random audits. Providing false or misleading information is an offense. The AICIS website offers a step-by-step guide for business registration.

(Source: AICIS website)

Registration Fees and Charges

The registration level of a business is based on the total value of the relevant industrial chemicals introduced in the previous financial year. Refer to the table below for fees and charges.

Source: AICIS website

Registration Renewal

As the AICIS registration year lasts from September 1 to August 31 of the following year, enterprises intending to continue importing and/or manufacturing cosmetic products and/or ingredients must renew registration by August 31 each year. Failure to do so may result in a late renewal penalty. For detailed renewal instructions, visit the "Renew your registration" page on the AICIS website.

2.2.2 Categorization of Industrial Chemicals Used in Cosmetics

Under the AICIS scheme, all chemical introductions (importation and manufacture) must undergo categorization. Following business registration but before importing and/or manufacturing cosmetics, enterprises are required to review the industrial chemicals in their products and categorize each chemical into one of the five introduction categories below:

The graph below outlines the obligations associated with different introductions.

Source: AICIS website

• AIIC Checking

Enterprises must first search AICIS’s industrial chemicals database, the AIIC, to check if all cosmetic ingredients in their products are listed in the Inventory and comply with the usage conditions. If yes, introductions are categorized as "Listed," allowing manufacturing or importing without prior notification to AICIS. If any ingredient is not listed, it must be categorized based on its health and environmental hazard.

The AIIC comprises public and confidential sections. The public AIIC is a searchable database with around 40,000 chemicals available for industrial use in Australia, providing chemical identity information and associated regulatory obligations. If no results are found in the public AIIC, enterprises can make an online request with the chemical name or CAS number for each chemical to search the confidential AIIC. The application progress and results can be tracked through AICIS Business Services.

• Chemical Introduction Categorization Guide

Upon ruling out the listed category by checking the Inventory, businesses engage in a process with up to 6 steps to determine the introduction category of ingredients not listed in AIIC. The outcome can be that the introduction is either exempted, reported, or assessed.

Source: AICIS website

AICIS provides a comprehensive seven-step guide, complemented by decision tools and extra resources (targeting specific chemicals, such as polymers and chemicals in cosmetics) to support businesses in comprehending and complying with the new scheme.

• Step 0: Introductions that are in the listed category

• Step 1: Introductions that cannot be exempted or reported

• Step 2: Introductions that are categorised as exempted

• Step 3: Introductions that are categorised as reported

• Step 4: Work out your introduction's risk to human health

• Step 5: Work out your introduction's risk to the environment

• Step 6: Complete your categorisation

After categorizing their chemical introductions, importers and manufacturers are also responsible for submitting reports and annual declarations, maintaining records, and providing information to AICIS when requested.

2.2.3 Reporting

The obligation for record-keeping and annual declarations applies universally across all categories. However, reporting obligations are specific to certain introduction categories.

• Exempted Introduction Declarations

For businesses introducing cosmetics with ingredients authorized under the exempted introduction category (chemicals deemed very low risk), a once-off post-introduction declaration (PID) is required after the initial import or manufacturing. This is separate to businesses’ usual annual declaration obligations.

Starting in 2022, declarations must be submitted by November 30 each year following the end of the previous registration year. For the information needed for the declarations, see the AICIS website.

• Pre-introduction Reports (PIR)

For businesses introducing cosmetics with ingredients authorized under the reported introduction category (chemicals considered low risk), a mandatory once-off pre-introduction Report (PIR) must be submitted through AICIS Business Services before import or manufacturing. No fee is charged for submission, and this obligation is separate from the usual annual declaration requirements.

Currently, there are seven types of PIRs, each with varied information requirements:

1. Highest indicative risk of your introduction is low risk (the most common type)

2. Low-risk flavour or fragrance blend reported introduction

3. Introductions of 10 kg or less

4. Research and development reported introduction

5. Chemicals that are internationally assessed for human health and the environment

6. Chemicals that are internationally assessed for human health and are low or very low risk for the environment

7. Chemicals that are internationally assessed for the environment and are low or very low risk for human health

Businesses only need to submit the report the first time they introduce the chemicals. Once submitted, immediate introduction is allowed—except for low-risk flavor or fragrance blends and internationally assessed types with confidential business information, which require additional steps before introduction. For more details, see the AICIS website.

• Assessment Certificate Application

For businesses introducing cosmetics with ingredients not listed on the AIIC and falling under the assessed introduction category, they must apply for an assessment certificate before introducing the chemicals. For more details, see the AICIS website.

2.2.4 Record Keeping

Enterprises are obligated to keep records about the value of industrial chemicals imported and manufactured during the registration year, as well as chemical introductions to confirm they comply with the laws. The amount and type of records subject to record keeping vary depending on the introduction category. Click the following links for specific details on record-keeping obligations based on introduction types:

• Record-keeping obligations for Inventory-listed chemicals

• Record-keeping obligations for exempted introductions

• Record-keeping obligations for reported introductions

• Record keeping for reported introductions - internationally assessed

• Record-keeping obligations for assessed introductions

• Record-keeping obligations for commercial evaluation introductions

Notably, these records shall be kept for 5 years, even after ceasing the introduction of chemicals, and must be provided within 20 working days if requested by AICIS. The 5-year period begins immediately after the end of the registration year.

2.2.5 Annual Declarations

Regardless of the introduction category, registered cosmetic importers and manufacturers must submit an annual declaration at the conclusion of each registration year to confirm that all the industrial chemicals imported and manufactured during the previous registration year were authorized under laws. Agent or consultant cannot submit the annual declaration on behalf of a business.

To complete the annual declaration, enterprises shall answer a few simple questions and make a legal declaration via an online form through AICIS Business Services. The annual declaration is due by November 30 following the end of the registration year.

Part 3 Cosmetic Ingredient Standards

Australia does not maintain a comprehensive list of banned or restricted ingredients specifically for cosmetics. The bans and restrictions on chemicals and consumer product ingredients, including those in cosmetics, are regulated by individual state and territory authorities. The Australian Government advises companies to consult the Poison Standards, a compilation of decisions regarding the classification of medicines and chemicals in consumer products, which can serve as a valuable reference when determining the marketability of a product as a cosmetic. The standard covers details such as chemical names, bans and restrictions, maximum concentrations, container specifications, label requirements, etc.

As an illustration, Phenoxyethanol, a commonly used preservative in cosmetic products, is identified in the "Schedule 6 Poison" of the Poison Standard. This classification indicates that the ingredient is considered a poison, with an exception for cosmetic preparations containing 1% or less of 2-phenoxyethanol. "Schedule 6 Poison" pertains to substances with a moderate potential for causing harm, which can be mitigated by using distinctive packaging along with prominent warnings and safety directions on the product label.

Part 4 Cosmetic Labeling and Claims

All cosmetic products imported or manufactured in Australia must be labelled in accordance with the Consumer Goods (Cosmetics) Information Standard 2020. This mandatory standard is applicable to all cosmetic products, with exceptions for:

• Therapeutic goods

• Free samples of cosmetic products

• Testers of a cosmetic product

• Cosmetics manufactured in Australia for export only

Outlined below are some key labeling requirements under this mandatory standard:

Part 5 Animal Test Ban

Australia implemented a ban on the use of new animal test data for ingredients exclusively used in cosmetics from July 1, 2020. New animal test data refers to data obtained from tests conducted on cephalopods or any live vertebrate animal (excluding humans) on or after July 1, 2020. For example, data acquired from tests conducted on fishes after the specified date is prohibited, while data from tests conducted on fishes before July 1, 2020, can continued to be used.

There are also restrictions on using new animal test data for chemicals with multiple end uses (including in cosmetics), but certain exceptions allows businesses to employ animal test data. It's important to note that the ban on animal testing for cosmetics does not extend to testing for therapeutics.

Part 6 Protection of Confidential Business Information

Businesses can apply online through AICIS Business Services for an AICIS approved chemical name (AACN) to safeguard the confidentiality of their chemical name. Additionally, they can apply for a generalized end use (GEU) to protect their chemical's specific end use.

Confidential business information (CBI) protection is valid for five years, unless the authority determines the need for earlier publication of information. After the initial five years, businesses can apply for the extension of CBI protection. The AICIS website offers guidance on applying for an AACN and protecting the end use. Businesses must also meet a statutory test that the AICIS applies to weigh up commercial and public interest.