[Updated] CSAR Subsidiary Regulations: China Implements the First Regulation on the Supervision for Cosmetic Online Operation

Editor's note: This article was originally published on April 10, 2023, and was updated on September 1, 2023, as per the latest developments. The updated section is highlighted in red.

Latest Updates

On September 1, 2023, Supervision and Administration Measures on Online Operation of Cosmetics came into effect.

Background

The Internet economy's rapid growth has made online shopping a primary sales channel for cosmetics. However, the convenience offered to consumers comes with frequent quality and safety issues. Compared to traditional sales channels, online cosmetics have a significantly higher rate in failing random inspections and having risk monitoring problems.

In order to standardize the online operation of cosmetics, both Cosmetic Supervision and Administration Regulation (CSAR) and Supervision and Administration Measures on Cosmetics Manufacture and Operation contain relevant provisions on the online operation of cosmetics. E-commerce Law and Supervision and Administration Measures on Online Transactions also make clear requirements for regulating the online transaction market.

Based on these laws and regulations, on April 4, 2023, China National Medical Products Administration (NMPA) issued the finalized Supervision and Administration Measures on Online Operation of Cosmetics (Measures) and implemented it on September 1, 2023. ¹ This is China's first regulation specially established for cosmetic online operation, aiming to refine existing requirements and introduce new supervision approaches.

The Measures, consisting of 5 chapters and 35 articles, comprehensively and systematically outlines the management requirements for cosmetics e-commerce platforms, cosmetics operators on the platforms, and supervision and administration departments. Highlights of the Measures are as follows.

1. Clarifying the regulatory objects and authorities of cosmetics online operation

Regulatory Objects

Stakeholders of online marketplaces within the territory of China are all under the oversight of the Measures, except for cross-border e-commerce. Specifically, the objects involved are cosmetics e-commerce platform operators, cosmetics operators running business on the platforms, and e-commerce operators operating cosmetics through self-established websites or other online services.

Cosmetics e-commerce platform operators (hereinafter referred to as “platform”): e-commerce platforms such as Taobao, Tmall, JD.com, etc.;
Cosmetics operators on the platforms (hereinafter referred to as “operator”): the main body that deals directly with consumers, such as Taobao merchants, stores on JD.com, etc.;
Other e-commerce operators operating cosmetics through self-established websites or other online services: the main body operating cosmetics through brands’ official websites, WeChat Mini-Programs, etc.

Regulatory Authorities

NMPA is responsible for the supervision of cosmetics online operations nationwide. The medical products administration departments of the local governments at or above the county level are responsible for the local supervision of cosmetics online operations.

2. Detailing the management responsibilities of cosmetics e-commerce platforms

The Measures reiterates and further refines the provisions pertaining to e-commerce platforms' quality and safety management system, including real-name registration, daily inspection, the suppression and reporting of illegal acts, and the reporting of quality and safety information. The key responsibilities of cosmetic e-commerce platforms include:

Pre-market supervision

Strengthening the check and control of merchant entry and product entry:

When merchants apply to enter the platform, they are required to submit their authentic identity, address, contact and other necessary information, and shall verify and update such information at least every six months;
When merchants list products on the platform, the product name, special cosmetics registration certificate number, product executive standard number and other necessary information shall be verified to be consistent with the corresponding product information published by NMPA.

In-market supervision

Regularly checking whether the daily operations of operators on the platform are compliant, especially product qualification and labelling.

Whether the cosmetics on sale are unregistered or unnotified, or their registration certificate number or notification certificate number, etc. is fraudulently used;
Whether the information on cosmetic labels, etc. displayed on the product page is consistent with the corresponding information published by NMPA;
Whether the information on cosmetic labels, etc. displayed on the product page contains any contents that are prohibited to be displayed because of explicitly or implicitly indicating medical effect, being false or misleading, and/or violating the public order, good customs, etc.

Handling of illegal acts

If the operators on the platform are suspected of illegally operating cosmetics, the e-commerce platform should take necessary measures such as deleting, blocking and disconnecting links, stopping providing platform services, etc. In addition, the platform shall report the violations to the local medical products administration departments.

The platform operators shall set up a cosmetic quality and safety management department or assign quality and safety management personnel to perform the above responsibilities.

The Measures emphasizes that in the case of major quality and safety issues, the platform must take necessary steps to address the problem and report the violations to local regulatory authorities. This means that in the future, illegal online operations will not only be handled by the platform, but also be subject to the investigation and punishment of regulatory authorities.

3. Clarifying the obligations of cosmetic operators on the e-commerce platforms

The Measures clarifies the legal obligations of cosmetics operators on the platform, including purchase inspection, product information publicization, risk control, recall of non-compliant products, as well as product storage and transportation. The key obligations of cosmetic operators include:

Purchase Inspection	Cosmetics operators on the platform shall establish and implement the purchase inspection and recording system, check the market entity registration certificate of the direct supplier, the registration certificate of special cosmetics and the notification information of general cosmetics, as well as the product quality inspection certificate, and properly keep the relevant records, information and certificates; The operators shall record the cosmetic name, the registration certificate number of special cosmetics and the notification certificate number of general cosmetics, the durability, the net content, the purchased quantity, the supplier’s name/address/contact information, the purchase date, etc.; For children's cosmetics, the operators shall verify the children's cosmetics logo, and the compliance of their product information to the information published on NMPA.
Information Publicization	The operators shall fulfill the obligation of cosmetic information publicization, publicizing cosmetics labels and other information consistent with the registration or notification dossiers in a comprehensive, true, accurate, clear and timely manner on their webpages. All contents on the label shall be publicized. The product name and executive standard number shall be displayed in text in the prominent position on the display pages. Other publicized information about product safety and efficacy claims shall be consistent with the relevant content on the label and the summary of efficacy claim basis in the registration or notification dossiers; Meanwhile, operators are encouraged to display the registration certificate of special cosmetics and the notification information of general cosmetics.
Quality and Safety Management	The operators should actively cooperate with the platform in routine inspections and self-inspections. For specific batches of cosmetics that are considered to be non-compliant by the medical products administration departments, the operators should immediately stop selling this batch of products; For any detection of prohibited ingredients or substances that may pose a threat to human health, or any non-compliance in children’s cosmetics, the operators shall immediately stop selling the specific batches of products; if the operators continue to operate other batches of products of the same variety, the operators shall prominently publicize the non-compliant information of the variety found in the sampling testing, including the relevant publicly available regulatory information and the report of the self-inspection conducted by the cosmetic registrants or notifiers. The publicity period shall be at least one year; The operators shall store and transport cosmetics in accordance with laws and regulations as well as the requirements indicated on the cosmetics label. In addition, they shall regularly check and timely dispose the deteriorated or overdue cosmetics.

Currently, some enterprises tend to make exaggerated and false claims when advertising their products, despite submitting concise and cautious efficacy claims during the registration or notification process. To curb such practices and promote the standardized development of the industry, the Measures mandates that safety and efficacy claims on the product page must align with those in the registration or notification dossiers.

Moreover, the Measures for the first time specify that if operators continue to sell other batches of products of the same variety as non-compliant products, information about the punishment must be made public. As consumer’s trust in a brand is crucial when choosing products, this requirement will act as a deterrent for non-compliant enterprises, making them more stringent in controlling product quality.

Industry Comments

Currently, regulatory authorities primarily inspect cosmetics sold offline, while online inspections are mostly initiated by consumer complaints and reports. The Measures aims to establish a more refined regulatory framework, where platforms and business operators on the platforms have clear responsibilities and obligations, ensuring that both online and offline cosmetics fall under the same supervision framework.

The implementation of the Measures will bring about a new revolution in the online cosmetics market, providing compliant enterprises with a healthier development environment. At the same time, it will serve as a final warning for non-compliant enterprises.

ChemLinked expects to assist companies in registering/notifying cosmetics in China. If you have any further cosmetic compliance consultation needs, please contact us at [email protected].