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Brands Authorize Factories to Register/Notify Cosmetics in China, Is It Compliant?

China Cosmetic Supervision and Administration Regulation was officially implemented on January 1, 2021. A series of subsidiary regulations have been released continuously, making more scientific and rigorous adjustments to all aspects of the cosmetic industry.

The new regulations introduced the concept of “registrant/notifier", the entity that obtains the registration / notification certificate. The registrant/notifier shall set up a person in charge of quality and safety, establish a production quality management system, put the product on the market, and be responsible for the product's quality, safety, and efficacy claims.

However, the shortage of person in charge of quality and safety in China has plagued brands that entrust factories to produce cosmetics. In response to this problem, some brands choose to transfer the registration / notification right to factories that have been equipped with person in charge of quality and safety. The factories will apply for cosmetics registration/notification as the registrant/notifier instead of the brands.

This article discusses the reasons of the emergence of this approach, its specific steps, and whether it is compliant or not.

*The “brand” mentioned in this article refers to the brand that entrusts the factory to produce cosmetics.

1. Under the new regulations, why does the brand authorize the factory to register/notify cosmetics on its behalf?

There are two main reasons for the emergence of this approach:

  • For brand: the difficulty to recruit the person in charge of quality and safety who meets the qualification requirements;

  • For factory: the unwillingness to share the complete formula of the ODM product to the brand.

In Regard to Brands

The new regulations require registrant/notifier to be equipped with the person in charge of quality and safety with more than five years of experience. The high qualification requirement has deterred some brands.

Qualification Requirements

"The person in charge of quality and safety shall have cosmetics, chemistry, chemical engineering, biology, medical science, pharmacy, food, public health or legal science and other cosmetic quality and safety-related professional and legal knowledge; and be familiar with relevant laws, regulations, rules, mandatory national standards, and technical practices; and have more than five years of experience in cosmetic production or quality management."

 

Source: Supervision and Administration Measures on Cosmetics Manufacture and Operation

In China, the current situation is that there are few qualified person in charge of quality and safety, and they are not allowed to concurrently serve in two or more companies, resulting in a huge talent gap. Some brands’ user permission applications in NMPA registration/notification system were rejected due to the lack of or unqualified person in charge of quality and safety. Without user permission, brands cannot apply for registration/notification on their own.

In Regard to Factories

Another significant change in the new regulations is that when applying for cosmetics notification, the notifier needs to submit detailed formula, including the serial number, name, content, use purpose, supplier’s information of all the ingredients and compounding material’s content and ratio.

This new requirement has led to an embarrassing situation. If the brands apply for registration/notification, the factories need to provide them with a detailed formula. Factories worry that once the detailed formula is disclosed, the processing cost of the product and the formula system will also be open and transparent. 1

"Product detailed formula is the lifeblood of the processing factory," a person in charge of a factory said. Once the detailed formula is provided to the brand, the factory will lose its competitive advantage.

2. How to authorize the factory to register/notify cosmetics on the brand’s behalf?

Based on the above two problems faced by the brand and the factory, there has been a phenomenon that the brand authorizes the factory to do the registration/notification, mainly in three steps. 2

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