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Cosmetics: Regulatory Focus On Safety
Cosmetics: Regulatory Focus On Safety
Cosmetics
F
Industry-Specific Issues
Introduction
igures from the China Association of Fragrance, Flavor and Cosmetic Industries (CAFFCI) indicate rapid growth in cosmetics consumption in China in 2010. According to CAFFCI statistics, the cosmetics industry in China recorded total sales of RMB 153 billion (US $23.3 billion) in 2010, up 9.3 percent compared to 2009. Total imports and exports in 2010 were US $997 million (RMB 6.5 billion) and US $1.62 billion (RMB 10.6 billion), up 42.4 percent and 24.6 percent respectively compared to 2009. Despite this significant growth in demand, the industry is greatly hampered by taxes and tariffs that result in retail prices that are 30 percent higher than those in other markets. Further, approvals for new cosmetics are impeded by a lack of transparency in the regulatory process as well as inconsistent and at times conflicting regulations.
Significant Developments
AmCham-China would like to thank all departments of the Chinese government for significant progress in ensuring the healthy and safe development of the cosmetics industry. Several examples of positive recent developments are outlined below.
Specific Issues
Regulations Concerning Hygiene Supervision of Cosmetics
The Regulations Concerning Hygiene Supervision of Cosmetics (Regulations) and their implementing guidelines have been in force for more than two decades, since 1989 and 1991 respectively. While the Regulations and guidelines are the primary instruments governing Chinas cosmetics industry, they fail to sufficiently meet industry needs in terms of regulation and development. We urge the State Council to amend the Regulations as soon as possible to simplify the administrative procedures for product registration. Amendments should also standardize the safety benchmarks for raw materials used in cosmetics production, consolidate production and health licensing, and establish a risk monitoring and evaluation system. We hope such amendments to the Regulations will unify regulatory functions and eliminate current regulatory overlaps. In particular, amendments could combine the current AQSIQ system for administering cosmetics production with the health monitoring and administration currently
Ingredient Labeling
The General Administration of Quality Supervision, Inspection and Quarantine (AQSIQ) began requiring the cosmetics industry to adopt full ingredient labeling on June 17, 2010. The new labeling requirements are a major milestone for Chinas cosmetics industry. They not only indicate that Chinas cosmetics labeling practices are increasingly in line with international practice, but they are also a significant step towards protecting consumer rights and interests, strengthening corporate standards and facilitating governmental supervision. We have also noticed that the National Cosmetics Standards Committee, which reports to AQSIQ, has made significant progress in shifting focus from promulgating a large quantity of standards to increasing the quality of new standards.
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233 2009 9.3%2010 9.97 65 16.2 106 2009 42.4% 24.6% 30%
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| CosmetiCs |
performed by the SFDA. Amendments should also enhance the safety orientation of the regulatory system and introduce a unified licensing system for cosmetics safety. We further believe that the much needed amendments could change the current regulatory approach by: enhancing selfregulation in the industry, strengthening corporate responsibility, simplifying administrative licensing and replacing administrative licensing prior to product launches with supervision following product launches. Introducing such amendments would help increase efficiency in the market. It would also improve the efficiency of government supervisory processes and save government resources.
Implementing the above measures will contribute to a stronger cosmetics market in China by shortening product lead-times. China is likely to benefit from allowing products to more quickly reach the market as this may improve the competitiveness of domestically manufactured cosmetics.
Industry-Specific Issues
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2007 12,000
2010 15,000
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changes will be reviewed. Similarly, there is no time limit on when comments following a review meeting will be provided to the importing company or manufacturer. Accordingly, we suggest the SFDA standardize the timing of review meetings and timeframes for comments. We also recommend that review meetings be held more frequently, and that the SFDA provide guidance on the time within which a company may provide further information to be considered at a review meeting.
laboratories that use alternatives to animal testing. We also suggest that China gradually work on legislation to support the establishment of laboratories and recognition of test results that use alternatives to animal testing. Introducing such policies in line with best-practice standards in safety testing will help build a strong and globally competitive cosmetics sector in China.
Industry-Specific Issues
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2009 30% 30%
2010 30%
30% 30%
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tising include the Advertising Law (1995), Administrative Measures on Cosmetics Advertising (1993), Administrative Measures on Print Advertising (2005) and the Anti-Unfair Competition Law (1993). Under these multiple laws, one region may apply the Advertising Law to determine standards and penalties applicable for cosmetics advertising, while another applies the Administrative Measures on Cosmetics Advertising. As the penalties differ from law to law and some of the provisions are ambiguous, there is much subjective interpretation and discretion in their execution. The penalty for advertising of the same kind may vary by a factor of ten or more. AmCham-China urges the government to unify the advertising law applicable to the cosmetics industry, so that one set of rules applies across the whole country. This will alleviate confusion and assist corporate compliance. AmCham-China appreciates the efforts of SAIC in amending the Advertising Law and Administrative Measures on Cosmetics Advertising. We urge SAIC to take the opinions of the industry into full account during the amendment process. We hope that the amendments provide clear principles to clarify the conflicting regulations in this area.
Recommendations
Industry-Specific Issues
Supervision of Cosmetics to simplify the administration of the industry and to ensure that safety is a priority in both cosmetics administration and licensing. Improve management of new ingredients, and use the latest List of Standard Chinese Names of International Cosmetic Ingredients (2010 version) issued by the SFDA when distinguishing new ingredients. Simplify registrations for domestically produced special-purpose cosmetics by abolishing provincial evaluations and approvals. Expand the scope of the 30 percent pre-tax deduction for advertising and business promotion expenses to apply to importing companies. Amend the tax provisions that list cosmetics and fragrance products as luxury goods and lower the tax rate on these products. Recognize a broad range of scientific testing for cosmetic chemical safety assessments and support the establishment of laboratories that use alternatives to animal testing.
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