Another Breakthrough for Cruelty Free Cosmetics in China

Takehome: Shanghai Fengxian District will likely become China’s first area implementing a new imported cosmetic filing and mandatory animal testing exemption program.

On June 22, Shanghai FP Industrial Park signed a memorandum of understanding (MOU) intending to start a “pilot program” with Cruelty Free International (CFI) which will invite and introduce foreign cosmetic brands to Fengxian District. The new program will exempt imported cosmetics in this area from mandatory animal testing requirements.

Background 

Pursuant to Shanghai government’s Opinions on Promoting the Development of Shanghai Beauty and Health Industry (No. 67 of 2017), Shanghai Fengxian District, already home to numerous cosmetic manufacturers and processing facilities (interestingly dubbed “China's Silicon Valley for Cosmetics Industry”), aims to implement a filing system for imported products.

The system will draw heavily from the filing system developed and rolled out initially in Pudong and now being expanded to numerous areas in China (see CL news). However the Fengxian system will differ considerably in that it has been developed with international stakeholder’s specifically in mind and will also attempt to directly address the contentious issue of mandatory animal testing in China, which is a major market entry stumbling block for many ethically minded cosmetic enterprise.

The policy comes at an opportune moment and is supported by the “Opinions” and other favorable policies. So far, what we know is that Fengxian District Authorities have reached a preliminary cooperation agreement with CFI to invite more foreign brands to the district and help test out the new filing system and ultimately retail imported finished product cosmetics in China without requiring prior animal testing. Finally, Fengxian District aims to provide enterprises and customers with a more dynamic platform and serve as a springboard for future development of the sector.

Information from Reliable Sources

Unfortunately no official statements have been issued yet and no specific details have been released. ChemLinked consulted relevant officials from Fengxian District and experts from related industry bodies and we received the following information:

The official from Shanghai FP Industrial Park indicated that “the vast majority of foreign brands, Western European and American based companies in particular, are diametrically opposed to animal testing and have not entered the Chinese market due to these ethical considerations. Current regulatory compliance requirements have hindered both development of the market and failed to keep pace with consumer demands and global best practice. Considering the situation, China will appropriately soften its stance on this issue however the Fengxian district will still operate within the constraints set by existing laws and regulations”.

Additionally, the official said the new system was likely to be a variant of the 2014 animal testing exemption policy used for domestic non-special use cosmetics or some iteration of the CBEC cosmetic policy or possibly a hybrid of the two. Imported cosmetic products will not be subject to geographical sales restriction and nationwide sales will be definitely encouraged.

One of the executives of Personal Care Products Council (PCPC), China Task Force, suggested that the pilot project appears to be a “re-packaging” of existing regulations that allow “ordinary” products manufactured in China to be notified at provincial level with safety assessments and avoid animal testing. The MOU merely reaffirms CFDA (now SAMR) regulations from 2014.

As we can see two experts from two very different but extremely relevant areas have similar views on the practical implications of the new program being rolled out in Fengxian District. Although it is still unknown when the new program will be officially implemented, the fact there is any agreement on the table at all is highly promising and indicative of China’s intention to develop the sector.

Develop of Alternatives to Animal Testing in China 

China’s plans in this area are best summarized by the “3R” principle (Replace, Reduction and Refinement) spearheaded by CFDA (now SAMR). CFDA accepted the first alternative to animal testing of cosmetics ingredients on 11 November, 2016 (see CL news), named “In Vitro 3T3 NRU Phototoxicity Test for Chemicals in Cosmetics”.

In 2018, China drafted 2 more animal testing alternative methods, namely 1) In Chemico Skin Sensitization: Direct Peptide Reactivity Testing; 2) Short Time Exposure in Vitro Test: Test for Assessment of Eye irritation (see CL news).

3 Ways International Stakeholders Can Circumvent Mandatory Animal Testing

Currently, only domestic non-special use cosmetics are exempt from mandatory animal testing, with the proviso the product/ingredient has been proved safe through safety assessment (By using existing animal testing data or data drawn from EU validated non-animal tests to substantiate the product safety). For international interests 3 “work arounds” are possible:

1. Establish Mainland Manufacturing Facilities. Effective from on 30 June 2014, CFDA (now SAMR) issued Requirements for Filing of Domestic Non-Special Use Cosmetics stipulating that mandatory animal testing could be avoided for domestically manufactured non-special use cosmetics if reliable safety assessment reports were provided. Based on these requirements, international cosmetic brands can establish manufacturing factories in China to produce non-special use cosmetics classed as domestic. (see CL news)
2. Export through Cross border Ecommerce (CBEC). CBEC cosmetics enjoy lower tax and exemptions from SAMR registration requirements since they are supervised as personal goods. Trade of cosmetics through this channel has become exceedingly popular and a profitable way for ethically inclined SMEs to do business in China. However given the uncertain future of this channel, the benefit may only be available in the short-term. (see CL news).
3. Repackage Goods in China. Repackaging semi-finished products in finished products. The last stage of processing is conducted in China classifies the product as domestic. Exploiting this technicality is another option available for international interests. The ingredients used in the product must be “existing” (previously registered in China). Small overseas cosmetic companies can consider OEM production (entrusted manufacturing) or can export materials or semi-finished products in bulk and then sub-package for retail in China.