On April 24, 2014, the National People's Congress Standing Committee promulgated an amended Food Safety Law (“Law”), which took effect on October 1, 2015. The new Law significantly expands the scope of the previous Food Safety Law, which was first implemented in 2009, and has been called “the most strict Chinese food safety law ever.”1 In this alert, we summarize some of the key changes.
Improved regulatory supervision of special foods, including health foods, formula foods for special medical purposes, and baby and infant formulae.
Under the new legal regime, certain health care products require registration or recording with the China Food and Drug Administration (CFDA), depending on their ingredients and whether the products are being imported into China for the first time. Health foods imported into China for the first time must be registered with the CFDA, but if health foods are regarded as nutritional supplements, such as vitamins and minerals, a recordal procedure applies.2 Among other things, the labeling, consumption instructions, and advertising of health foods must clearly state “this product is not a substitute for pharmaceuticals.”3
On July 28, 2015 China published three draft implementing measures for the Law, which have not yet been formally issued. The “Administrative Measures for Registration and Recordal of Health Care Foods,” the “Administrative Measures on Health Care Foods Labeling,” and the “Administrative Measures on Health Care Foods Raw Material List and Health Function List” address matters such as competent agencies, and materials required and procedures for registration and recordal purposes. Two of the measures regulate the management of the functions list and raw materials list for health foods, and address labeling, health functions of products and raw materials. The Measures also contain provisions permitting manufacturers and research institutions to apply for new functions and raw materials.
Formula Foods for Special Medical Purposes (FSMPs)
The Law provides for robust supervision and administration of FSMPs, which must be registered with the CFDA. The actual formulae, production processes, labeling, and consumption instructions of products, as well as materials demonstrating the safety, nutritional adequacy, and special medicinal purposes and clinical effects of products must all be submitted to the CFDA for registration.4
On September 2, 2015, the CFDA issued a draft Administrative Measures for Registration of Formula Foods for Special Medical Purposes. This is a new regime that applies to both FSMPs for infants (0-12 months) and FSMPs for persons above one year of age, and is applicable to both domestically produced and imported FSMPs. Domestic and overseas manufacturers of FSMPs must be registered with the CFDA before they can manufacture or import products. The Measures specify the requirements that applicants must meet to apply for registration, the registration procedures, and labeling and consumption instructions.
Baby and Infant Formula Food
In recent years food safety in relation to baby and infant formula has been of critical concern for parents in China. The Law explicitly stipulates that all matters regarding the raw materials, additives, product formulae, product labeling and related matters regarding baby and infant formula food must be notified to provincial Food and Drug Administrations (“FDAs”).5 The formulae of baby and infant milk powders must also be registered with the CFDA.6
The Law also provides that baby and infant formulae must not be produced by sub-contractors and prohibits manufacturers from using the same formulae to produce baby and infant milk powder for different brands.7 The Law prohibits manufacturers from using the same formulae for different brands to deal with the market management confusion of baby and infant milk powder. According to incomplete statistics, there are more than 2000 brands of baby and infant formula milk powder in China now, but there is very little difference between the formulas of different products.
On September 2, 2015, the CFDA issued a revised draft of the Administrative Measures for the Registration of Product Formula of Baby and Infant Formula Milk Powder, which among other things stipulates that registration of baby and infant formula milk powder with the CFDA applies only to domestic manufacturers, and not to imported baby and infant formula products. The Measures also stipulate registration and approval procedures, labeling and consumption instructions, and legal liabilities. Overseas manufacturers must be registered with the Certification and Accreditation Administration of the People’s Republic of China (CNCA) before importation of baby or infant formula.
Improved supervision of online food transactions and of imported food.
Online food sales have become a significant trend in China, but they have not been specifically regulated, and the safety and authenticity of food products purchased over the Internet has become a significant concern for consumers. The Law adopts new provisions regulating online food sales and provides that third-party online platforms must require food retailers operating on their platforms to register with the third party using their real names supported by evidence of identity.8 Third-party platform operators are required to specify the responsibilities for food safety management of such business operators.9
The Law, provides that overseas exporters and overseas manufacturers must ensure that foods, foods additives and food-related products imported into China conform with the Law, other relevant Chinese laws and regulations, and with national food safety standards. Further, exporters and manufacturers are accountable for the contents specified in labeling and instructions regarding consumption.11 Importers are required to establish review systems for foods imported from overseas.12 Imported food and food additives must pass testing by the relevant local entry-exit inspection and quarantine bureaus.
On September 9, 2015, the PRC General Administration of Quality Supervision, Inspection and Quarantine (AQSIQ) released the draft Administrative Measures for Food Importers’ Examination and Verification on Overseas Enterprises. The AQSIQ is one of the agencies competent to implement the Law and related administrative measures.
Civil compensation responsibility system is improved
The Law provides for “first liability,” whereby if consumers suffer harm from non-compliant food, they can demand compensation from business operators or from producers, who are required to pay compensation, whether they are directly liable or not. Subsequently, such parties can claim compensation for their “first liability” losses from other liable parties.13 Further, if illegal actions by third-party online platforms, food testing agents, certification authorities or public media are involved in the violation, such parties now bear joint and several liability to compensate injured parties.
More robust administrative penalties
While generally the types of administrative penalties available under the Law have not been changed, amounts of fines have been increased dramatically. Depending on the type of violation, maximum fines can be up to 30 times higher than the purchase price of relevant products.14 The Law also addresses performance of food industry employees. If a food industry employee violates the Law, he or she may have relevant individual licenses or qualifications restricted or revoked.15 This is in addition to any criminal liability.
Improved risk prevention measures.
The Law provides for the establishment a food safety risk monitoring system,16 a food safety risk assessment system,17 and a system for tracing all of the processing of food.18 These systems are designed to identify and control risks at source. Under the food safety risk monitoring system, authorities have the responsibility to monitor foodborne diseases, food contamination and harmful factors in food. Under the food safety risk assessment system, authorities must assess the biological, chemical and physical hazards in food, food additives and food-related products by using scientific methods and according to food safety risk monitoring information, scientific data and other relevant information. The food safety risk assessment results are to serve as the scientific basis for formulating and revising food safety standards and conducting food safety supervision and administration. Under the tracing system, food producers and business operators must ensure the traceability of relevant foods.
Improved supervision of food safety.
The obligations and responsibilities of food industry associations are set forth in the Law, which requires that such associations must provide relevant food safety information and techniques to guide manufacturers and retailers to enhance compliance with the Law.19 The Law specifically provides that consumer associations and organizations must take responsibility for supervising food manufacturers and retailers in order to protect consumers’ rights.20 Departing from traditional legal provisions, the Law also encourages news media to expose illegal food safety scenarios truthfully and fairly.21 The Law now includes whistleblower provisions that provide for rewards for exposing food safety issues, although no monetary thresholds are stipulated. Persons exposing food safety issues have statutory protections, including protection of their identities.22 Further, when an informer tips-off authorities regarding the enterprise where the informer works, that enterprise cannot retaliate against the informer.
Subsidiary legislation implementing the Law is underway and there is a strong impetus for enforcement; however, it remains to be seen whether the new food safety regime will improve the quality of foods in China.