On March 06, 2016, China's Ministry of Environmental Protection (MEP) submitted a proposed draft rule on chemical substances, the Guidance for New Chemical Substance Notification and Registration (Draft) (2016 Guidelines) to the World Trade Organization for public comment. The Guidelines are expected to be formally adopted on May 04, 2016 and come into force on November 01, 2016.

China's primary legislation on chemical substances, Provisions on the Environmental Administration of New Chemical Substances (Order No. 17)(Provisions), came into effect on October 15, 2003, and China has issued three further supporting Guidance documents since then: Guidance for New Chemical Substance Notification (Trial) in December 2003; Guidance for New Chemical Substance Notification (1st edition) issued in October 2004; and in conjunction with a revision to the Provisions issued in January 2010 (taking effect on October 15, 2010), further revisions to the the Guidance for New Chemical Substance Notification and Registration were issued in September 2010 (2010 Guidelines). The 2016 Guidelines further update the supporting guidance for the Provisions to reflect the experience and lessons on Chinese authorities in enforcing the Provisions since 2003.

Though issued by MEP, the Guidelines are considered a technical document and do not have force of law. Instead, the Guidelines serve as a roadmap for MEP's enforcement of the Provisions, , which are known as "China REACH" because of its similarity to European Union provisions on chemical substances, EU REACH. We provide a brief summary of key elements as below.

(1) Notification of New Chemical Substance

The 2016 Guidelines reiterate that any new chemicals not already listed in the Inventory of Existing Chemical Substances Produced or Imported in China (IECSC) are subject to a notification requirement, irrespective of annual tonnage. The latest IECSC was issued by MEP in 2013 and includes 45,612 "existing" chemicals. The notification not only applies to new substances on its own, but also applies to new substances used as ingredients or intermediates for pharmaceuticals, pesticides, veterinary drugs, cosmetics, food additives, feed additives, etc. Changeable constituent substances, complicated performance exclusion, and polymers are not exempt from notification. Even if all monomers are listed already in the IECSC, notification is still necessary if the polymer itself is not listed in IECSC.

As with the previous version, the 2016 Guidelines also provides four substances exempted from the notification requirement, including (i) finished goods subject to other existing laws and regulations; (ii) substances existing in nature; (iii) substances of non-commercial purposes or unintentionally produced; (iv) special categories such as materials, alloy, non-isolated intermediates and articles. Primary changes from the 2010 Guidelines are in items (ii) and (iv). Under Item (ii) , although living matter such as DNA are still exempted from notification, the 2016 Guidelines make clear that the living matter that has undergone chemical processing requires a notification; for Item (iv), articles containing a new chemical substance (NCS) that may be exposed to the environment and/or humans during use (e.g. surface coatings of articles), now also require a notification.

The territorial scope of activities scope subject to the notification requirement remain unchanged under the 2016 Guidelines. Research, manufacturing, imports and processing of new chemical substances within the territory of Mainland China are subject to the notification, but substances only intended for re-export trade are exempted from the notification requirement.

(2) The Registrant of the Notification

New chemical notifications must be submitted by manufacturers and importers of new substances within China, as well as the foreign companies exporting such new substances to China. In this connection, companies registered in China can submit the notification on their own or appoint a local agent to do so, while the overseas registrants still need to appoint a local Chinese agent to submit the notification. In a change from the 2010 Guidelines, the overseas registrant may now be the holder of New Chemical Substance Environment Administration Certificate (Certificate)[1], and the local agent assumes liability only if the overseas registrant cannot or will not carry out its obligations. Any agency agreement between the foreign company and local agent must also include provisions reflecting this change in the 2016 Guidelines. Furthermore, it's also noteworthy that the 2016 Guidelines remove the registered capital threshold for the Chinese agent, whereas the 2010 Guidelines had required that such agents have at least RMB3 million in registered capital.

(3) Types of Notifications

The 2016 Guidelines clarify the hierarchy for notification types, from high to low: Scientific Record Notification, Simplified Notification, then Typical Notification, with application requirements becoming less stringent for each lower hierarchy. In addition, where a party obtains a higher-level notification for a substance, this will replace and abolish any previous lower-level notification (applicants may have only one notification per substance). In terms of the typical notification, the 2016 Guidelines clarify that the registrant can choose to do the notification based on specific tonnage or on tonnage band.

If the notification is conducted by tonnage band, the highest number of the selected band would automatically apply. Furthermore, if the registrant conducts the repetitive filing, joint filing, series filing, or joint series filing, the final notification tonnage is based on the total number of each registrant and each substance.

(4) Notification Formalities

Notification documents shall be submitted electronically, and hardcopies of application documents no longer must be sent to MEP.

(5) Simplified Notification for Export

The 2016 Guidelines clarify that if a new chemical substance is imported into China in a quantity less than one ton per year, and all this new substance is subsequently exported out of China, then the registrant can submit a simplified notification for Export Only. There will be no tonnage limits for polymers of simplified registration.

However, simplified registration procedures will not apply to unstable or degradable polymers or water absorbing polymers. If a polymer can easily degrade, decompose, or depolymerize, or if the polymer decomposes after production or usage, the polymer is not eligible for a simplified notification. Water absorbing polymers with Mn (number average molecular weight) greater than 10,000 daltons are not eligible for simplified notification.

(6) Toxicology Tests

Major changes to toxicology tests under the 2016 Guidelines are summarized below:

Level 1 typical notification: (i) acute dermal and acute inhalation toxicity tests can be exempted based on the new chemical substance's physical-chemical properties and its low exposure potential; and (2) if any of the Ames (bacterial reverse mutation test) in vitro chromosome aberration tests shows a positive result, and the new chemical substance has wide exposure potential, the mutagenicity tests for Level 2 are required.

Level 2 typical notification: an additional mutagenicity tests may be required based on four types of in vitro chromosome aberration tests results for the Level 1 notification.

Level 3 typical notification: full toxic kinetics study shall be performed only if the new chemical substance has any Globally Harmonized System of Classification and Labeling of Chemicals (GHS) health classification.

Level 4 typical notification: According to the 2016 Guidelines, a carcinogenicity study shall be performed only if the new chemical substance has a widespread dispersive use or there is evidence of frequent or long-term human exposure, and the new chemical substance is classified as germ cell mutagen category 2, or there is evidence from the repeated dose study(ies) that the new chemical substance is able to induce hyperplasia and/or pre-neoplastic lesions. Otherwise, only carcinogenesic risk assessment should be provided.

(7) Ecotoxicology Tests

The 2016 Guidelines remove the requirement for a fish 14-day prolonged toxicity test for the Level 2 typical registration. However, the 2016 Guidelines add that an earthworm reproductive test shall be performed for Level 4 typical notification if the new chemical substance has terrestrial organism acute toxicity classification.