Tips for Overseas Companies Looking to Export Non-special Use Cosmetics though Shanghai Pudong

Takehome:

• The new policy regarding first import of non-special use cosmetics though Shanghai Pudong New Area offers international companies a fast channel to enter Chinese markets.

China is to implement a new policy for first import non-special use cosmetics though Shanghai Pudong New Area. The cosmetics will only require filing with Shanghai FDA instead of registration with CFDA from Mar 1 2017 to Dec 21 2018. According to the detailed guidance released by CFDA on Jan 18 (see CL news), the FDA will grant a filing certificate to the applicant after a simple check of application dossiers, then the applicant can start to import. The technical review is conducted within 3 months after the filing certificate is granted. The cost of filing should be similar to the cost of registration. The total time required will be reduced by at least three months (not including an additional 2 months that can be saved if supplementation of documentation is required). This new policy offers international companies dealing in non-special use cosmetics a fast channel to enter Chinese markets.

Understand the risks

This new opportunity poses new compliance problems for companies looking to use this importation channel. Companies intending to use this fast channel have to fully understand the risks. In the past CFDA was tasked with pre-market documentation check (basic review) and subsequent technical review (comprehensive review). Under this new system, the competent authority is Shanghai FDA. Generally the simple check can be completed within 5 days after receiving the application dossiers, but due to FDA's inexperience the time required for this step is uncertain. Therefore an average timeline for applicants obtaining a digital filing certificate and being authorized to begin importation is still unclear. With regard to the technical review of application dossiers, the FDA's review standard has also not been clarified. It is possible that the review could be stricter than before as the FDA will be wary of approving unsafe products. In addition like many temporary pilot projects, the implementation of the new policy is subject to change.

Identify the products

The new policy legally defines the applicable scope of products that can be filed so companies must ensure that products to be imported are within the scope.

Select the qualified responsible person

Compared to the "responsible agent", the newly defined "responsible person" will be responsible for filing / registering cosmetics for overseas companies and also undertake other extra responsibilities such as import and sales of cosmetics, ensuring safety and quality of products and acceptance of FDA's examination and inspection. In addition, the responsible person shall be a business entity located in Shanghai Pudong New Area. It is imperative for international companies to ensure the selected responsible person owns sales channels and has a comprehensive knowledge of cosmetic regulations and product safety.

Prepare complete dossiers

The filing requires submission of 13 documents (see the details).Compared to the necessary documents prescribed by the normal requirements for imported non-special use cosmetics, overseas companies must submit an extra supporting documentation relating to production quality management from overseas manufacturers. Overseas companies shall provide an authorization letter for appointing a responsible person and its notarized copy to the responsible person prior to filing.

To avoid requirements to supplement documents after obtaining the digital filing certificate, overseas companies must confirm that the documents provided to the responsible person don't contain the following mistakes:

1)    Nonstandard Chinese characters, the Chinese Pinyin is missing or misspelled;

2)    Text content of product design packaging (including product labels, product instruction books) is missing or uses nonstandard handwriting;

3)    There are some misspellings of Chinese name, INCI name of raw materials or lack of CI number of colorants in the formula;

4)    Other misspelling.

Arrange Export in Advance

Since export can be started immediately after obtaining the digital filing certificate, companies that want to market their products in China as soon as possible can contact a shipping company and arrange export related issues when products are being tested by testing institutions. However, if the technical review finds the submitted documents incompliant the export and sales shall be suspended. The conservative approach is starting export after technical review and approval or exporting products in smaller quantities.