On Jan. 1, 2021, the overarching cosmetic regulation Cosmetic Supervision and Administration Regulation (CSAR) in China entered into force, replacing the former Cosmetics Hygiene Supervision Regulations (CHSR). With the entry into force of the CSAR, China's cosmetic sector is now ushering in a new era.

The new regulation is designed to overhaul the outdated regulatory framework and address issues revolving around cosmetic pre-market and post-market management in new situations, such as cosmetic classification, new ingredient management, efficacy evaluation, safety assessment, online cosmetic supervision, accountability system, and punitive measures. To support the new regulation, China has been releasing and will implement a series of subsidiary regulations in the next few years.

Given that the CSAR puts forward several new requirements for cosmetic enterprises, transitional measures were also released. Prior to implementing the subsidiary regulations on registration and notification, the registrants and notifiers shall submit registration and notification dossiers in accordance with the current regulations and requirements. The notification is deemed completed after the submission of notification dossiers. The medical products administration departments will carry out the registration management in accordance with the procedures and time limit stipulated in the CSAR.

Part 1 Regulatory Framework and Competent Authority

1 Existing Main Cosmetic Regulations in China

2 Competent Authority

China underwent a largescale institutional reform in 2018. Currently, there are three major competent authorities in the cosmetic sector.

Part 2 Cosmetic Products

Before being marketed or imported into China, cosmetic products must get approval from NMPA or medical products administration departments of provinces, autonomous regions, and municipalities directly under the Central Government according to the product category.

1 Definition of Cosmetic Products

Cosmetic products refer to daily chemical products intended to be applied on the external part of the human body (such as skin, hair, nails, lips, etc.) by spreading, spraying, or other similar ways for cleansing, protecting, beautifying, or grooming purposes.

The definitions of cosmetics vary in different countries (regions). How to determine whether a product falls in the scope of cosmetics in China? You may take into consideration the following three aspects:

• Toothpastes are not defined as cosmetics but shall be regulated with reference to general cosmetics regulations, requiring notification, testing, safety assessment, efficacy evaluation, new toothpaste ingredient application, etc. After toothpaste notifiers conduct the efficacy evaluation in accordance with national standards and industry standards, they can claim that the toothpaste has efficacy such as anti-caries, plaque inhibition, anti-dentine hypersensitivity, and relieve gingiva problems, etc. More information can refer to CL News.

• CSAR does not apply to soaps, excluding those claimed to have special cosmetics efficacy (e.g., whitening). Soaps that claim to have the efficacy of special cosmetics shall apply for the registration and obtain a registration certificate in accordance with the CSAR.

2 Classification of Cosmetic Products

2.1 Cosmetic Category

According to the previous CHSR, cosmetics in China were categorized as special use (9 categories) and non-special use cosmetics. Under the new CSAR, cosmetics are categorized as special cosmetics and general cosmetics. The categories of special cosmetics are reduced to 5+1. Other cosmetics are general cosmetics.

2.2 Cosmetic Classification Code

In the future, NMPA will launch a classification coding system to subdivide all cosmetics according to their efficacy claims, application areas, dosage forms, target users, and application methods to facilitate product statistics, supervision, and determination of product subcategories.

The cosmetics classification code is composed of 5 layers of numbers, and each layer is separated by "-" and represented by a 2-digit number or letters. Specifically, the 5 layers are:

For example:

The classification code of children's sunscreen is 09-03-01-03-02;

The classification code of the whitening moisturizing body lotion is 0310-03-02-01-02.

More information about coding rules can refer to CL News.

3 Registration/Filing of Cosmetic Products

At present, imported and domestic special use cosmetics and new ingredients require pre-market registration with NMPA; domestic non-special use cosmetics are subject to pre-market filing with the provincial Medical Products Administration; and situation is divided for imported non-special cosmetics that through the specific 11 FTZs, imported non-SUC cosmetics are subject to filing management with provincial Medical Products Administration, while through other ports, imported non-SUC require filing management with NMPA.

3.2 Filing of Imported Non-special Use Cosmetics

China has implemented a new policy for initially imported non-special use cosmetics through Shanghai Pudong New Area since Mar 1 2017. The cosmetics only require filing with Shanghai MPA instead of registration with NMPA and the MPA grants a filing certificate to the applicant after a priliminary review of application dossiers, then the applicant can start to import. After a year NMPA officially expanded the practice of imported non-special use cosmetics filing management in Pudong to other 10 FTZs including Tianjin, Liaoning, Zhejiang, Fujian, Henan, Hubei, Guangdong, Chongqing, Sichuan and Shanxi. On Nov. 9, 2018, China National Medical Products Administration announced that registration of first-imported non-specials cosmetics shall be replaced by filing management nationwide from Nov. 10.

3.3 Registration Procedures for Imported & Domestic Special Use Cosmetics

Step 1: Assign a Responsible Agent in China (imported special use products)

The pre-condition for registering imported cosmetics is to designate a Responsible Agent (RA), who must be a Chinese legal entity. The RA could be:

• A subsidiary based in China;

• Importer; 

• A third party, like REACH24H Consulting Group.

» There are four possible results of technical review:

1. Approval;

2. Approval subject to amendment of the submitted dossier (if product Chinese name modifies or the description, format and writing of submitted documents need to be further improved);

3. Additional information requested (if contents of dossier need to be revised; additional testing data or a verification test is needed; etc.)

4. Rejection (if the dossier contents or product samples are false; the formula or testing result shows safety problem; etc.)

» The NMPA expert panel will extensively review the following aspects:

• Product label and name: the applicant should concentrate on mandatory labeling items, warning statement, the authentic Chinese translation of imported product label, appropriate efficacy claims and the correct SPF identification.

• Product formula: the use of prohibited ingredients listed in Hygienic Standard for Cosmetic 2007 is not permitted; cosmetics for increasing hair growth, slimming and breast beautification need a full description of efficacy ingredients and explanation and rationale for their usage, in addition to information of production process and quality specification.

• Hygienic chemical and microbiological testing data: all testing results analyzing the presence of heavy metals, microorganism, restricted and active ingredients must meet relevant requirements and confirm with formula statement.

• Toxicological data: the product should not cause obvious skin and eye irritation and elicit no obvious skin allergic reaction and /or phototoxicity; Infant or children products will be subjected to higher safety standards.

• Human safety evaluation: animal testing is required prior to human trials; human trials should demonstrate no obvious adverse reactions of cosmetics to the human body.

3.4 Registration Duration and Cost

The duration and cost of testing and the whole registration process depend on the category and property of cosmetic products.

In general, it takes 80 days for SUC to be tested and 6 months to be registered. Sunscreens and products for hair growth, body shaping and breast enhancement need more time since additional efficacy tests are required.

The registration cost consists of the testing fee, translation fee, notary fee and consulting fee (if a regulatory consultant is involved). NMPA does not charge any administration fee for registration.

3.5 Registration Dossier

The table below shows required documents for registration of imported and domestic special use cosmetics:

4 Labeling of Cosmetic Products

Cosmetics labels are subject to review by NMPA expert panel during registration and also checked by Custom when products arrive at the port. Many exporters lack adequate knowledge about correct Chinese compliant labeling for their cosmetics, demonstrated by a high volume of cosmetic products destroyed or rejected at the port due to substandard labels.

According to Instruction for Use of Consumer Products—General Labelling for Cosmetics (GB 5296.3-2008), the following information shall be indicated on labels of the imported cosmetics:

1. Product name (in line with Requirements on Naming of Cosmetics);

2. Name and address of the manufacturer, distributor;

3. Country of origin;

4. Approval ID number (the ID number on the administrative license or record-filing certificate, such as “国妆备进字J20130000”);

5. List of ingredient (all ingredients with concentration over 1.0% must be indicated with Chinese INCI names and listed in descending order of "quantity"; in absence of INCI name, the corresponding name in Chinese Pharmacopoeia, its chemical or botanical name can also be adopted);

6. Net content;

7. Production date and shelf life or the batch number and expiration date;

8. Warnings (for products containing restricted substance, e.g. Zinc phenolsulfonate, the term "avoid to contact with eyes" shall be indicated on the label; and special use cosmetics e.g. hair dye);

9. Instruction and storage condition (provided if inadequate storage impacts safety);

10. Other info (the local distributor or wholesaler can be indicated as well).

Two options are available for labeling the imported cosmetics. Companies can design the label especially for the Chinese market according to Chinese labeling regulations or use the original package with a China compliant over-label.

5 Claim of Cosmetic Products

Cosmetic companies cannot claim functions or features that the products do not possess. Medicinal or therapeutic function claims and any misleading wordings are prohibited. Local expertise will be necessary for balancing compliance with Chinese claim requirements and addressing the interests of manufacturers who rely on the added value derived from the inclusion of certain claims in their marketing strategies. Claims on some imported products, such as "hypoallergenic", "dermatologically tested" or "100% natural", would be challenged by NMPA's expert panel.

6 Custom Inspection of Imported Cosmetics

After the products are approved by NMPA, foreign firms can start exporting cosmetic products to China immediately. Distributors or importers in China need to apply for Custom inspection by submitting required documents, such as NMPA product approval license or certificate, product formula, Chinese label samples, etc. The inspection process includes on-site examination of the label and package, sampling and testing and the issuance of the certificate of Inspection and Quarantine of Imported Goods, which is the ultimate requirement for custom clearance.

7 Manufacture License of Cosmetics in China

Part 3 Cosmetic Ingredient

1 Cosmetic Ingredient Lists

Currently China adopts 9 lists to regulate the cosmetic ingredients, as shown below:

2 New Cosmetic Ingredients (NCI)

2.1 Definition

According to Article 11 of the CSAR, a new cosmetic ingredient is a natural or artificial ingredient that is applied in cosmetic products for the first time in China. Before being used to make cosmetics, it must be approved by the NMPA. Basically, an ingredient is deemed as "new" if not included in IECIC.

In the case that a new ingredient is identified as a new chemical under the China chemical regulation, it should be notified to the Ministry of Environment (MEP) before manufacture or import [See Chempedia China NCSN (China REACH)] for exhaustive compliance guidance].

In this instance, double registration under two different regulatory schemes is required prior to placing a cosmetic ingredient on the Chinese market. 

2.2 Classification

Under China's new cosmetic regulations, NCI are divided into 2 categories: high-risk NCI and low-risk NCI.

High-risk NCI require registration with NMPA and obtain approval, while low-risk NCI is subject to notification.

2.3 Notification/Registration of NCI

Cosmetic companies who want to utilize the NCI or cosmetic ingredient companies who want to export NCI to China shall apply for notification or registration with the NMPA.

Application Process

China regulates that overseas companies shall authorize a domestic enterprise as the Responsible Person (RP) to apply for notification/registration. The RP is responsible for applying for an account for applications, arranging the testing of NCI and prepare the application dossiers.

Dossiers Necessary for Notification/Registration 

For notification, after successful submission of the documents online the notifier can directly export the NCI or to use the NCI. In the case of registration, there will be a complicated review process for the application documents, including format review, technical review, etc., which takes a maximum of 128 working days. Only companies passing the review and obtaining the registration certificate can export the NCI or use the NCI.

2.4 Safety Monitoring and Reporting

After successful registration or notification of NCI, registrants and notifiers shall establish a safety monitoring system for the notified/registered NCI within 3 years of completing the notification or obtaining the registration certificate. During the 3 years, they shall report the NCI's use and safety data to the NMPA annually and may be required to conduct a safety assessment.

If there are no safety issues found within the 3 years, the NCI will be included in theInventory of Existing Cosmetic Ingredients in China (IECIC).

2.5 Safety Re-assessment

For the NCI already added into the IECIC, the registrants or notifiers may be ordered to carry out re-assessment and further submit a safety assessment report if there is a new recognition on its safety or there is evidence showing that the NCI may have any safety risks. If the NCI is confirmed to have safety risks after re-assessment, they will be prohibited for use in the production of cosmetics or be subject to a use restriction.

3 List of Approved New Cosmetic Ingredients 

From 2004 to 2014, there were only 10 new cosmetic ingredients that got approval from MOH and NMPA, indicating the extreme difficulty in the registration of an NCI in China. However, the situation is about to change with the introduction of the CSAR. 

On December 28, 2020, the NMPA newly approved 4 new cosmetic ingredients. The approval of the 4 NCI is an active signal that the regulatory stance on new cosmetic ingredients is being softened and the classified management of such ingredients is being put in place. It is expected that more advanced ingredients will be approved and used legally in the Chinese market, and the industry will enter a new era of rapid development.

Part 4 Animal Testing Issue

China's mandatory requirement of animal testing for cosmetics registration has been a long-standing controversy that makes current Chinese cosmetics regulatory framework incompatible with that of EU and Israel where such testing is prohibited for both cosmetic products and ingredients. The different animal testing policies have made global trade between these regions difficult. Chinese companies cannot sell cosmetics in EU if they are marketed in China and the European companies that stick to "cruelty-free" status cannot enter the Chinese market. 

Under the existing regulatory regime, cosmetic companies are obliged to assign NMPA-approved labs to perform animal tests on their cosmetic finished products or ingredients even if they have been assessed as "safe" and used or marketed in other countries. Testing results drawn from non-animal testing methods are not likely to be trusted and accepted by NMPA technical review experts. However, the past few years witnessed a turning point for animal testing policy in China. 

Removal of mandatory animal testing requirements for domestically-made non-special use cosmetics

The abolishment of the obligatory animal testing requirement for domestic non-special use cosmetics is the most significant cosmetics policy shift in 2013. Toxicological tests can be exempted as long as the ingredients and the finished products are proven to be safe after risk assessment.

Although it is still uncertain whether the new change will be extended to imported products, it is nonetheless a major milestone for China on its way to the modernization of its animal testing policy and alignment of its regulatory framework with the global cruelty-free trends. 

Latest Developments in Alternative Testing Methods in China

On Nov 11, 2016, China included 3T3 NRU Phototoxicity Test as a toxicology test method into Safety and Technical Standards for Cosmetics. Then on Aug 15, 2017, Skin Corrosion: Transcutaneous Electrical Resistance Test was accepted as in vitro test method for skin corrosion.

On Feb 5, 2018, China opened public consultation on 2 new draft standards for 2 additional alternative testing methods to public consultation namely:

1.  Skin Sensitivity: Direct Peptide Reactivity Assay

2.  Eye Irritation(Corrosion): Short Time Exposure

On Jun 27, 2018, China opened public consultation on 2 new draft standards for two more alternative testing methods namely:

1. Skin Sensitivity: Murine Local Lymph Node Assay: DA

2. Skin Sensitivity: Local Lymph Node Assay: BrdU-ELISA

Currently, Eye Irritation (corrosion): Porcine Corneal Opacity Permeability and Genotoxicity: In Vitro Micronucleus are under research. The research on Eye Irritation (corrosion): Fluorescent Leakage test and Skin Sensitivity: 442E(h-CLAT), 442D will commence soon.

On Sep 19, 2018, China Working Group for the Validation of Alternative Methods was newly established. This working group is organized by NIFDC and covers 15 units including cosmetics testing institutions, scientific research institutions and representatives of the cosmetics industry.

The working group's major goal is to improve the validation and utilization of alternative testing methods which can act as viable surrogate markers in the assessment of potential toxicities, adverse effects and hazards of cosmetics and ultimately reduce China's reliance on the use of animal testing. Feasibility criteria are based on the inherent characteristics of China's cosmetic industry, consumers and product lifecycle.

Although China has not yet established a Center for the Validation of Alternative Methods, the establishment of the working group is also a major step forward.

Animal testing for non-special use cosmetics may be exempt

On 27th May 2019, China National Medical Products Administration (NMPA) released a draft version of Administrative Measures for Filing of Non-special Use Cosmetics. The regulation stipulates: if the production enterprise has obtained the Good Manufacturer Practices certificate and product safety risk assessment results can fully confirm this product's safety, the toxicological testing for this product is not required, except in the following situations...

There is a big possibility that imported non-special cosmetics will be exempt from mandatory animal testing.Animal testing is still mandatory for the following products: children's products, products which contain the new ingredient that has filed and been approved but not included in the IECIC, products manufactured by enterprises which have bad records.

Part 5 Cross Border E-commerce

In addition to the general trade that shall complete pre-market approval in advance, China also developed another trade channel for international stakeholders’ entry into its cosmetic market, and that is Cross Border E-commerce (short for “CBEC”), which generally refers to the online purchase of a select list of goods that are imported from overseas countries via China government-sanctioned third-party e-commerce platforms such as Tmall Global, Vipshop, Kaola, JD using the bonded warehouse mode or the direct mail mode.

1 Development History

Over the years, China has flip-flopped on its CBEC policies. For a long time, commodities imported via CBEC channel were supervised as personal goods and were subject to personal postal articles tax. In 2016 China initiated a regulatory reform on CBEC policies which was scheduled to be effective on Apr. 8, 2016 to mainly address 3 key issues: taxation, positive list and supervision method. However, as the reform sparked huge controversy among the public, two-year buffer period was granted for stakeholders to prepare for the new regulatory scheme until the end of 2018. During the grace period, a transitional policy that “temporarily” exempted the verification of customs clearance sheet and pre-market approval for first imported cosmetics, infant formula, medical device, special foods (such as health food and food for special medical purposes) via CBEC channel was launched in 15 CBEC pilot cities. Besides the supervision method, the new tax scheme and positive lists were in effect in the 2016 CBEC reform.

2 CBEC New Policies

At the end of CBEC grace period in 2018, China determined to further extend the transitional policies of CBEC retails beyond the January 1st, 2019 deadline. Given no new deadline has been specified, ChemLinked expects current measures to remain stable in the short to medium term.

As per the official circulars, the regulatory updates mainly include 3 aspects:

(1) The continuation of previous supervision method

Commodities imported via CBEC channel has been essentially regulated as personal articles, exempt from mandatory registration or filing requirements of first-imported cosmetics, infant formula powder, medical device and special food (such as health food and food for special medical purposes).

Additionally, the number of CBEC pilot cities where the new policies apply has also been increased from the previous 15 to 37.

(2) The increase in the number of the positive list

The previous two lists of products permitted to be imported via CBEC were merged into one list and were appended to include 63 types of new commodities in great demand. For the full list of cosmetics, please refer to the cosme-list.

(3) The increase in the transaction limits for both single purchases and total annual purchases

The consumers’ transaction limit of CBEC commodities was raised from 2000 RMB to 5000 RMB per transaction and from 20,000 RMB to 26,000 RMB per person per year.

3 CBEC New Tax Rate

According to the CBEC tax scheme, commodities imported in this way are subject to a comprehensive tax which is a combination of three taxes—tariffs, VAT (value-added tax) and consumption tax.

1. Within the transaction limits, consumers are eligible for preferential tax policy in which the import tariff rate is temporarily fixed at 0.0%, and the import VAT and consumption tax are levied at 70% of the statutory tax payable. The calculation rules are:

CBEC Comprehensive Tax Rate = [(VAT rate + Consumption tax rate) ÷ (1 - Consumption tax rate)] × 70%

Significantly, since China officially dropped the VAT rate of imported goods from 16% to 13% on April 1, 2019, the CBEC comprehensive tax was accordingly reduced and the updated rates are as follows:

2. On the contrary, the products imported via CBEC will be taxed in full in line with the general trade mode in any of the following cases:

• A single transaction is over 5,000 RMB but within the annual limit of 26,000 RMB, it is allowed to be imported via CBEC but is subject to full tax.

• Any excess beyond the annual limit will be regulated as general trade.

4 CBEC vs. Animal Testing

Under the current regulatory regime, the significant time and financial investment associated with standard pre-market approval along with the necessity to produce Chinese labels and toxicology test reports can all be avoided because CBEC-imported cosmetics are regulated as personal articles and not subject to cosmetics regulations. Thus it offers an excellent market access route for international cosmetic stakeholders who intend to circumvent animal testing and mandatory general trade registration requirements in consideration of ethical issues and/or expedited market access.

5 Future Trends

As widely predicted, the prosperity of CBEC business is expected to continue in the second half of 2019, fueled by a series of favorable policies including China State Council’s plan to expand the positive list of CBEC imported commodities and the convening of the 2nd China International Import Expo.