Shanghai Measures to Reinforce Cosmetic Entrusted Manufacturing Quality Control

Entrusted manufacturing (OEM) is a common practice in China utilized by both overseas and domestic enterprises. There is often confusion about safety, quality and distribution responsibilities associated with entrusted manufacturing. To clarify these issues for industry and the public Shanghai regulators have developed several measures to manage entrusted manufacturing of cosmetics.

1. Regulations that standardize entrusted manufacturing practices

The cosmetic entrusted manufacturing process should comply with the following regulations:

① Regulations concerning the Hygiene Supervision over Cosmetic;

② Working Standard for Cosmetic Production License;

③ Key Points for Inspection of Cosmetic Production License;

④ Provisions for Managing Cosmetic Production and Running Enterprises Who Ask for Certificate and Invoice and Account

⑤ Guidance for Reviewing Raw Material Suppliers for Cosmetic Production Enterprises.

According to the above regulations, the entrusting enterprises and entrusted manufacturers must sign a "Cosmetic Entrusted Manufacturing Quality Agreement".

For entrusting enterprises, they should consider the production condition, capability and qualification of entrusted manufacturers before decision making, and should check and review products quality and the safety control situation used during manufacturing. The entrusted manufacturer must not, assign, forge or resell the Cosmetic Production License and mustn't arbitrarily rent or loan the production facility. Cosmetics manufactured in this way should implement raw material traceability and product traceability systems.

Special use cosmetics can't be manufactured before registration. The entrusting enterprise and entrusted manufacturer should be the "production enterprise" and "actual production enterprise" shown on the registration certificate. For non-special use cosmetics a record should be filed, and the entrusting enterprise and the entrusted manufacturer should fulfill the registration of enterprise and the filing of entrusted manufacturing.

2. Strengthen the management on "Quality Agreement"

The entrusting enterprises and entrusted manufacturer must sign the above mentioned "Cosmetic Entrusted Manufacturing Quality Agreement" based on the "Guideline for Quality Agreement of Cosmetic Entrusted Manufacture (T31/SHRH001-2017)". In the agreement, the two parties should clarify the responsibilities related to safety and quality control, and guarantee that safety and quality is controllable.

Generally, the entrusting enterprise should be the principle party responsible for safety and quality and should also ensure sound management during the production process. The entrusted manufacturer should verify the qualification of the entrusting enterprise and the product and learn about information such as actual legal business address and contact details before accepting the entrusting party's offer. Once the case is entrusted, the manufacture should comply with the above mentioned relevant regulations and the "Agreement" when conducting the production, and is prohibited to arbitrarily change the formula, production technique and quality standard of the product. The entrusted manufacturer also mustn't re-entrust a second manufacture to produce the product.

3. Implement whole process management

The entrusting enterprise should take control of the whole manufacturing process and take the responsibility of compiling data on "marketed product adverse reaction report", consumer complaint, unqualified product recall and other issues like that.

The entrusted manufacturer should take the responsibility of managing raw material inspection, production and review record, account record and sample tracing and other issues like that. Also the entrusted manufacturer should assist in processing consumer complaints and unqualified product recall issues.

FDA at all levels will reinforce the surveillance of cosmetic entrusted manufacturing, and conduct random inspection regularly. If any violation is discovered, FDA will trace the accountability and punish the responsible party according to the regulations.

For more information on cosmetic entrusted manufacturing, you may refer to the "Guideline for Quality Agreement of Cosmetic Entrusted Manufacture (T31/SHRH001-2017)".