This article was written by Mark Schaub and Chen Bing, King & Wood Mallesons’ Corporate Securities Group
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ternational supplement companies selling to China via the cross border ecommerce model have recently experienced a few nail biting months. Although a last minute reprieve on sales of non-registered products was granted it should be noted that registration or filing will be required at some stage in the future.
Crucially the China Food and Drug Administration (“CFDA”) is seeking public comment on several lists of health food raw materials and auxiliary materials. These lists will have a direct impact on filing and registration of products by international supplement companies in China.
The New Regime: Simplified Filing Possible
The new PRC Food Safety Law which entered into effect on October 1, 2015 established a new regime for registration and filing of health food products. The new regime allows vitamin supplements and minerals (“Nutritional Supplements”) imported into China to proceed via a filing procedure rather than the much more involved and time consuming registration procedures. Although the filing requirements imposed by the new regime provide that Nutritional Supplements will be subject to less strict requirements than other health food it is still important to note that Nutritional Supplements will no longer be able to be imported under the guise of food, a common practice for many international companies.
Nutritional Supplements Raw Materials and Auxiliary Lists
As mentioned above CFDA has released several lists concerning Nutritional Supplements raw materials and auxiliary materials for public comment, including:
- List of Health Food Raw Materials (First Batch) – List of Nutritional Supplements Raw Material;
- List of Permitted Auxiliary Materials for Health Food Filing (First Batch); and
- List of Permitted Auxiliary Materials for Health Food Filing which Require Further Verification.
(together “Nutritional Supplements Lists”)
These Nutritional Supplements Lists will have a significant impact on the Nutritional Supplements filing system.
Requirement for Filing: Same Product as Back Home but Compliant with China
The PRC Food Safety Law and its administration measures provide for Nutritional Supplements to be permitted to import into China on the basis of a filing rather than a full registration.
However, to be eligible for this simpler filing procedure the product must meet the following requirements: (i) the ingredients in the Nutritional Supplements must be included in the lists of health food material (i.e. above mentioned Nutritional Supplements Lists); and (ii) the Nutritional Supplement must have been proven to have been sold for at least one year in its country of manufacture (“One-Year Sale Proof”).
Catch 22: Home Product May Not Be China Compliant
Although this filing procedure will make life much easier for most it should be noted that the above two requirements may place a number of supplement companies in a Catch 22 position.
The Catch 22 is that there are a number of materials that are commonly used in foreign countries that are not officially recognized by CFDA. Examples, of such materials include soya protein, some fruit juice powders.
The catch is that if any of the materials or ingredients used in a Nutritional Supplement is not included in the relevant lists then such product will need to proceed with the time consuming registration procedure rather than the much simpler filing procedure.
It should also be noted that in such case the international supplement company would not be able to adjust its overseas product to meet PRC standards as the One-Year Sale Proof test of the CFDA requires the imported product to be exactly the same as products sold in the country of manufacture in terms of ingredients and also levels of ingredient.
Given the importance of ensuring the lists are comprehensive our firm together with the Australian Chamber of Commerce Shanghai is in discussions with the CFDA in respect of which ingredients are crucial for international supplement companies. If you would like to participate in this initiative please reach out to Schaub@cn.kwm.com or Chenbing@cn.kwm.com or jack.brady@austchamshanghai.com . There will be no charge for participating and all participants will receive a complimentary report. However, time is short as the submissions need to be made to CFDA by 11 June 2016.