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The public can submit their comments on the draft by logging onto the website of the Legislative Affairs Office of the State Council http://www.chinalaw.gov.cn. The deadline for comment is May 26, 2009.

The draft rules are part of China's efforts to improve the recall system. At present, there is a patchwork of recall regulations in respect of special products – often it seems to be a response to an emergency of some kind. The first recall regulations were issued in relation to automobiles in 2004 – against a backdrop of foreign manufacturers not affording Chinese consumers the same rights as enjoyed in other jurisdictions. Other recall regulations were passed in relation to food and toys in 2007 – again responding to specific crisis in these areas. The recent PRC Food Safety Law which was approved by the National People's Congress (NPC) on February 28, 2009 also has specific provisions in respect of food products.

The draft rules currently being considered cover all types of products, whether manufactured within China or imported from outside. The only exceptions are drugs and military products which are excluded from the draft rules ambit.

The current draft states that manufacturers (including entities with production within China as well as importers or import agents) are required to immediately stop production and sale of defective products and commence a recall. Thereafter the manufacturer/importer will need to submit a report to the local quality inspection department immediately after the product has been confirmed to be harmful to human health and safety. The draft states that manufacturers must not conceal the hazards of their defective products and should report to the quality department details as to risks posed to human health and safety, damage or accidents that may have been caused as well as defects that have been identified outside of China.

The draft also states that sellers shall establish stock account and sales account, record details of sales including product type, specification, production batch and quantity etc. These details need to be stored for at least 3 years.

The draft also states that if sellers or service providers become aware that products may be defective and this is harmful to human health and safety, they should immediately stop sales, use or lease of products, inform the customers, producers and suppliers and report to quality department. The seller or service providers are also under a duty to coordinate with the producers to carry out the recall.

Penalties

The draft states that violators of the rules will be warned or asked to rectify the issue within a fixed period. Producers failing to comply may be fined between RMB 200,000 and RMB 500,000 or subject to sanctions under PRC criminal law.

Similarly, sellers or service providers may face fines up to RMB 200,000 on PRC criminal law sanctions.

Summary

The draft rules will, if and when they are issued, address a major concern of PRC consumers – how to deal with defective products. The main criticism one could have on the draft is that its provisions are still too vague and the penalties too limited to adequately protect consumers. However, as an incremental first step it is useful. On the other hand of the equation manufacturers and retailers would prefer more clear statements as to what is considered a “defect”, “harmful to human health and safety” and how best to deal with situations which fall within gray areas.

The new Food Safety Law further establishes an enhanced monitoring and supervision system, a product-recall system and a set of national safety standards.

Improved Regulation - pursuant to the law, the State Council will set up a province-level food safety commission. The current system of splitting food safety responsibilities among many different agencies has long been blamed for the uneven enforcement and confusion in the market. A major problem in the past has been the patchwork of standards. In order to combat this, the new law stipulates a set of mandatory national food safety standards. This was a key concern voiced in the Asian Development Bank policy note. Food safety standards will be the only mandatory food standards and accordingly, all food producers and business operators shall follow such food safety standards when engaging in food production and related business activities.

Despite the establishment of a food safety commission, the law still foresees a role for a variety of departments including the departments of health, agriculture, quality supervision and industry & commerce. These departments will shoulder different responsibilities such as risk evaluation, making and implementing safety standards, monitoring of food production and distribution etc. All in all the new law will likely make it much easier to determine the correct authority to be addressed and also to deal with co-ordination issues in case a problem arises.

Improved Monitoring - the new law establishes a food safety risk system to monitor food-borne diseases and food contamination as well as a food safety risk assessment system to assess risks as to biological, chemical and physical hazards in food and food additives. These safety systems will be regulated and implemented by the health administrative department of the State Council. In addition, the result of food safety risk assessments will also flow into revisions to food safety standards as well as to how food safety is supervised and administrated. The Food Safety Law focuses on prevention rather than resolving problems that arises.

Another important step the law takes is to cancel the exemptions from the inspection system. A major problem in recent years has been the system of “trusted” companies. These trusted companies were left largely unsupervised. As in the case of Sanlu, it turned out that some of the trusted companies were actually not to be trusted. The trusted system was cancelled by the Food Safety Law. Sanlu's shadow looms large over the legislation. As a result, the law pays special attention to the issue of food additives that lay at the heart of last year's infant formula scandal. Additives are prohibited unless proven to be both necessary and safe.

Food Recall Procedures- in the event that the preventative systems do not succeed, the law also establishes a regime for food recalls. Article 53 provides that a food producer which detects non-conformity with food safety standards shall promptly stop production, recall food already in the market place, issue a notification to related producers, business operators and consumers and record the recall.

Improved Enforcement- no matter how well designed a food safety system is, there will still be a need for coercion in implementation. Severe punishments are foreseen to warn off potential offenders. Enterprises found producing or selling sub-standard foodstuffs can be subject to claims of up to 10 times the price of the product in addition to compensation for the harm the product causes to the consumer. In severe cases criminal prosecution is also likely.

Summary

The PRC Food Safety Law will become effective June 1, 2009. For food manufacturers, abiding by the law may mean stricter tests on raw materials and tighter control of the manufacturing process. Compliance will likely increase the cost of production. The new law is an umbrella law which aims to establish a comprehensive supervision system for food safety and resolve turf fights between various supervision authorities and set national guidelines. The adoption of this law will not immediately change the food safety landscape. However, careful implementation will lead to improved food quality and safety for consumers of PRC products.
 

As the main supervising department for product quality, the General Administration of Quality Supervision, Inspection and Quarantine has promulgated several regulations on defective product recalls. These regulations include the “Regulation for Defective Automobile Product Recalls” (which came into force on Oct 1, 2004), the “Regulation for Child Toy Recalls” (which was promulgated on Aug, 2007), and a 3C certification for toys (that came into force in September of 2007). These new regulations aim to eliminate incidents like “Benz smash” and the “Mattel recall” etc. The “Regulation for Medicine Recall”, implemented in December of 2007, symbolized the law’s guarantee of public medicine safety. The “Law for Food security in The People’s Republic of China (draft)” and the “Regulations for the Supervision and Administration of Medical Devices” (draft amendment) are all now in the process of soliciting public opinion. These regulations represent a comprehensive system for recalling food and medical devices produced and sold in China. These new rules will also offer a further level of legal protection to consumers in terms of physical health and safety.


Furthermore, the procedure for dealing with defective product recalls has also been streamlined. According to the legislative affairs office of the General Administration of Quality Supervision, Inspection and Quarantine, the “Regulation for the Recall and Administration of Defective Products (draft)” has been submitted to the Legislative Affairs Office of the State Council, and is planned to be implemented next year. According to this regulation, the scope of defective product recalls extend to all products that pose a serious risk to health and safety except food, medicine, and medical devices. The implementation of this regulation will fill the shortage of rules for product recalls in China, and bring China in line with international standards. It will also avoid an unfair and discriminatory result for Chinese consumers whereby Chinese companies face unlimited liability abroad while defective foreign products only face very limited levels of liability in China.


The establishment of recall rules indicates that China has built a recall system that meets international standards. However, for protecting consumers, the regulation itself is not enough, implementation is more important. Compared to mature legal systems for product recalls in western countries, there is still a long way to go.

 

召回？召回！

作者： 李咏梅      诉讼仲裁组 国内诉讼部

近年来，“中国制造”频频被曝存在质量问题。从水产养殖产品到牙膏，从沙滩车到汽车轮胎，从玩具到手机……中国出口产品在国际市场引发“信任危机”。同时，国内 “手机爆炸”到 “欣弗”等产品缺陷致人死亡事件，也频频牵动人们的神经，产品安全问题一再凸现在国人面前。

     诸多集中爆发的产品质量问题，促使中国的主管部门从多层面加快了产品召回制度的建立和健全工作。国家质检总局作为最主要的产品质量监管部门，出台了多项行业缺陷产品召回规定，例如，2004年10月1日实施的《缺陷汽车产品召回管理规定》、2007年8月颁布的《儿童玩具召回管理规定》和9月正式实施的玩具产品3C认证，积极稳妥地消除了“砸奔驰车”及“美泰召回”等事件的不利影响。2007年12月实施的《药品召回管理办法》标志着公众用药安全受到制度保证。正在公开征集各界意见的《中华人民共和国食品安全法(草案)》及《医疗器械监督管理条例（修订草案）》，明确了即将在国内推行的食品及医疗器械召回制度，这些制度一旦实施，无疑将为消费者的身体健康和生命安全提供进一步的法律保障。

    中国首部关于缺陷产品召回制度的法规也加快了进程。根据从国家质检总局法规司了解的信息，《缺陷产品召回管理条例（草案）》已递交国务院法制办，并计划于明年推出。根据该草案，缺陷产品召回的范围进一步扩大，除了食品、药品、医疗器械外，其他所有可能造成严重人身健康伤害的产品都将被将纳入召回范围。该条例出台后将弥补中国召回制度的缺失，加强与国际的接轨，避免出现中国缺陷产品在国外面临巨额惩罚，而国外缺陷产品在中国只是支付少额赔偿，中国消费者被采取歧视待遇的严重不公平结果。

    召回制度的建立标志着中国逐渐建立了与国际接轨的缺陷产品管理体系。但消费者的权益保障，只有法规是不够的，更重要的是法规的贯彻落实。相对于西方国家成熟的产品召回法规体系，中国的产品召回制度无疑任重而道远。