Chinese Cosmetic Regulation in Need of Comprehensive Overhaul

Zhangjiagang CIQ recently discovered a batch of Korean cosmetics with several information mismatches between the product package and import certificates. Use of counterfeit documentation was also found which led to an immediate halt of importation procedures.

The activities at Zhangjiagang are just a small example of a much larger national regulatory enforcement campaign currently being conducted by Chinese authorities targeting imported cosmetics. In 2014 161 batches of cosmetics were found to have quality issues caused by issues such as excessive microbial contamination or excessive use of preservatives, lead and arsenic. As in Zhangjiagang the use of unqualified product labels was also a prominent feature at a national level. A number of renowned cosmetic makers have also been found importing substandard or noncompliant products which is steeling government resolve to make more drastic changes to regulatory compliance requirements and market access barriers.

A major issue facing China’s cosmetic regulatory framework is the inadequacy of the foundational standards upon which its cosmetic administrative system are built. Disparities in technical capacities at a provincial level have forced government to make allowances when legislating at a national level. Despite the governments best efforts to align its new flagship cosmetic standard the “Cosmetic Safety Technical Standard with Europe’s Cosmetic Directive 76/768/EEC, technical capacity issues have meant it has fallen far short of the gold standard offered up by Europe’s regulation.

Another major failing of China’s cosmetic regulatory framework is the absence of relevant legal provisions regarding product quality in the import trade contract. Overall China’s national standards fail to sufficiently articulate requirements in this area which places additional burdens on local CIQ to individually interpret requirements, implement discretionary rectifications and ultimately results in inconsistent application of standards at a national level.

A deeper probe into China’s stagnant regulatory environment highlights China’s lack of a unified regime to regulate cosmetics within its markets and is in sharp contrast with the EU system, which has one commanding voice and one fixed set of procedures. Instead, over five governing bodies are involved in the management of cosmetics in China which invariably leads to inefficiency, redundancy and unintentional overlap in regulatory enforcement.

When AQSIQ promulgated “Measures of management of inspection, quarantine and supervision of cosmetic import/export” several years ago, it failed to foresee the massive growth in China’s market. Growth has brought with it new problems and scenarios never before encountered, exposing China’s government’s vulnerability and its inability to adapt to a changing market environment. Similar issues also plague the other department involved in cosmetic regulation in China. CFDA categorizes all finished cosmetic as products in which the “final stage has been completed abroad”. For these products acquisition of an import hygiene permit is a prerequisite. At present there is that no clear requirements or procedural guidance on how to clarify the linkage between filling, distribution and manufacture.

Label inspection still remains the easiest target for officials to find regulatory compliance issues and is therefore no wonder the statistically most significant cause of product being rejected or destroyed at port. In 2004, AQSIQ repealed the previous “Rules of Inspection of Labels on Prepackaging of Import/Export Food and Cosmetic”, canceling out “Administrative Permit of Label Examination of Import/Export Cosmetic” while issuing “Order 143”, which lumped “label inspection” with other inspection responsibilities. However the rules have failed to provide frontline inspectors with adequate guidance to effectively examine errors in marking, font size and information mismatch with product certification.