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General product obligations

Basic laws

What are the basic laws governing the safety requirements that products must meet?

The PRC Product Quality Law

The PRC Product Quality Law was promulgated by the Standing Committee of the PRC National People’s Congress on 2 February 1993, to commence operation on 1 September 1993 and was amended by it on 8 July 2000 and 27 August 2009. Products mentioned in the law include products processed and manufactured for the purpose of marketing, except for military products. According to the provisions of the law, producers and sellers are responsible for product quality.

Obligations of producers

Producers will be responsible for the quality of the products they produce. Products should meet the following requirements:

  • products will be free from any unexpected dangers threatening the safety of people and property (if there are state standards or trade standards for ensuring the health and safety of lives and property, the products should conform to such standards);
  • products will have the property they are stated to have, except for cases in which there are explanations about defects in the properties of the products; and
  • products will tally with the standards prescribed or specified on the packaging and with the quality specified in the instructions for use or shown in samples.

Further, the marks on the products or the packaging should be accurate and include a certificate of quality inspection. For products that have a time limit for use, a date of production, a period for safe use or the date of the product becoming ineffective should be specified clearly in a conspicuous position on the product. Products that may cause harm to persons or injure the safety of persons and property because of improper use should carry warning marks or warnings written in Chinese. For products that are easily broken, inflammable, explosive, toxic, corrosive or radioactive and products that cannot be handled upside down in the process of storage or transportation or for which there are other special requirements, the package thereof should meet the corresponding requirements, carry warning marks or warnings written in Chinese or guidelines for handling.

Obligations of sellers

Sellers should implement the system of examination and acceptance of goods procured, verifying the product quality certificates and other marks and should adopt measures to maintain the quality of products for sale.

Sellers should not:

  • sell any product that has been withdrawn by order of the state and thereby prohibited from being sold, or products that have expired or deteriorated;
  • falsify the place of origin or falsify or use the names and addresses of other producers;
  • falsify or use quality marks such as certification marks and fine quality marks; and
  • adulterate the products for sale, or present fake ones as genuine or shoddy ones as good or substandard ones as standard.

The PRC Law on Protection of Consumer Rights and Interests (2013 Amendment)

The PRC Law on Protection of Consumer Rights and Interests was promulgated by the Standing Committee of the PRC National People’s Congress on 31 October 1993, commencing operation on 1 January 1994. The law was amended on 25 October 2013.

The law stipulates the rights of consumers and the obligations of business operators related to product safety.

Rights of consumers

Consumers will, when purchasing and using commodities or receiving services, enjoy the right of the inviolability of the safety of their person and property. Consumers should have the right to demand that business operators supply commodities and services up to the required standards of personal and property safety.

Obligations of business operators

Business operators should guarantee that the commodities and services they supply meet the requirements for personal or property safety. As to commodities and services liable to harm persons or property, business operators shall give the consumers accurate explanations and clear warnings, and shall explain or indicate the correct ways of using the commodities or receiving services as well as the methods of preventing damage.

Business operators should, upon discovery of defects of the commodities or services they supply that are liable to cause harm to persons or property, immediately report to the administrative departments concerned, inform consumers, stop production and sales, and adopt measures, such as alert, recall, harmless treatment and destruction, to prevent damage. Where recall measures are taken, the operators will be liable for the consumer’s necessary expenses caused by commodity recalls.

The PRC Tort Law

The PRC Tort Law was issued by the Standing Committee of the National People’s Congress on 26 December 2009, commencing operation on 1 July 2010.

According to the provisions of the law, manufacturers, sellers and third parties such as carriers or warehouse operators are responsible for various aspects of product quality.

Obligations of manufacturers are:

  • where a defective product causes any harm to another person, the manufacturer shall assume liability under tort law; and
  • where any defect of a product is found after the product is put into circulation, the manufacturer should take such remedial measures as warning consumers or carrying out a recall operation in a timely manner. The manufacturer who fails to take remedial measures in a timely manner, or take sufficient and effective measures, and has caused any harm will have liability under the tort law.

The obligations of sellers are:

  • where a product with any defect caused by the fault of a seller causes any harm to another person, the seller shall assume the tort liability;
  • where a seller can neither specify the manufacturer of a defective product nor specify the supplier of the defective product, the seller shall assume the tort liability; and
  • where any defect of a product is found after the product is put into circulation, the seller should take such remedial measures as warning and recall in a timely manner. The seller who fails to take remedial measures in a timely manner or take sufficient and effective measures and has caused any harm shall assume the tort liability.

The obligations of third parties are:

  • where any harm is caused to another person by a defective product and the defect is caused by the fault of a third party, such as carrier or warehouse worker, the manufacturer or seller of the product that has paid the compensation should be entitled to be reimbursed by the third party.

Rights of the victim are:

  • where any harm is caused by a defective product, the victim may require compensation to be made by the manufacturer of the product or the seller of the product;
  • where the defect of a product endangers the personal or property safety of another person, the victim shall be entitled to require the manufacturer or seller to assume the tort liabilities by removing the obstruction or eliminating the danger; and
  • where a manufacturer or seller, knowing of any defect in a product, continues to manufacture or sell the product and the defect causes a death or any serious damage to the health of another person, the victim shall be entitled to require the corresponding punitive compensation.

Besides the three basic laws above, there are regulations in effect in China related to the recall of specific product categories, such as automotive products, medical drugs, medical devices, food, children’s toys and railway equipment. These are:

  • Regulations on the Administration of Recalls of Defective Automotive Products (Decree No. 626 of State Council, promulgated by it on 22 October 2012 and commencing operation on 1 January 2013);
  • Measures for the Implementation of the Regulation on the Administration of the Recall of Defective Auto Products (Decree No. 176 of General Administration of Quality Supervision, Inspection and Quarantine (AQSIQ), promulgated by it on 27 November 2015 and commencing operation on 1 January 2016);
  • Administrative Measures for Drug Recalls (Decree No. 29 of the State Food and Drug Administration (SFDA), promulgated by it and commencing operation on 10 December 2007);
  • Administrative Measures for Medical Device Recalls (Decree No. 29 of SFDA, promulgated by it on 25 January 2017 and commencing operation on 1 May 2017);
  • Provisions on the Administration of Food Recall (Decree No. 98 of SFDA, promulgated by it and commencing operation on 27 August 2007);
  • Administrative Measures for Food Recalls (Decree No. 12 of the State Food and Drug Administration, promulgated by it and commencing operation on 11 March 2015);
  • Provisions on the Administration of Children’s Toy Recalls (Decree No. 101 of General Administration of Quality Supervision, Inspection and Quarantine, promulgated by it and commencing operation on 27 August 2007); and
  • Measures for the Administration of Recall of Defective Railway Special Equipment (Decree No. 23 of the Ministry of Transport, promulgated by it on 11 November 2015 and commencing operation on 1 January 2016).

On 21 October 2015, the AQSIQ issued the Measures for the Administration of the Recall of Defective Consumer Goods, which commenced operation on 1 January 2016. Nine types of electronics and 11 children’s products that are manufactured in China or imported into China and then sold in China are covered by the measures. If any other consumer goods that have not been listed in the catalogue need to be recalled, the measures may apply. The measures do not apply to tobacco and tobacco products, motor vehicle products, civilian aircraft, civilian vessels, food, pharmaceuticals, cosmetics, medical instrument products, pesticide products and other products specifically provided by laws or regulations.

On 22 March 2018, the original AQSIQ (which has been incorporated into the newly created State Administration for Market Regulation, under the 2018 institutional reforms delivered by the State Council) issued the Rules on Recall of Defective Imported Consumer Goods which commenced operation on the same day. Under these new Rules, importers are responsible for the recall of defective consumer goods imported by them when recall responsibilities are triggered.

Further, China has been enacting the administrative regulations for defective product recalls, implementation regulations of the Law on Protection of Consumer Rights and Interests, and provisions on the administration of household appliance product recalls - the three drafts have been published for public consultation, but the formal versions have not yet been issued.

According to the finalised draft of the Implementing Regulations of the Law on Protection of Consumer Rights and Interests issued by the State Council on 16 November 2016, provisions have been included as regards mandatory obligations for the recall of detective products by operators, producers and importers. The inclusion of these provisions in these implementing regulations, illustrates the importance of this area to the Chinese government.

Traceability requirements

What requirements exist for the traceability of products to facilitate recalls?

According to the Regulations on the Administration of Recalls of Defective Automotive Products and the Implementation Measures, producers should establish and maintain records on the design, manufacturing, labelling, inspection and other aspects of automotive products:

  • relevant documents on the design, manufacturing, labelling and inspection of automotive products and relevant quality control information;
  • information on the manufacturers of the safety-related parts of automotive products and the design, manufacturing and inspection of automotive parts; and
  • information on the production batches of automotive products and information on technical changes.

Producers should also preserve the names, valid certificate numbers, contact addresses, telephone numbers, purchase dates, vehicle identification codes and other information on car owners concerned in the initial sale of automotive products. These records should be maintained for not less than 10 years.

Producers should file the following information with the product quality supervision department of the State Council for their records:

  • the basic information about the producer;
  • information about automotive products, technical parameters and information about the initial owner of automotive products;
  • information as to repair, replacement or return owing to faults in the automotive products that endanger personal and property safety;
  • information on recalls implemented outside China;
  • technical service notification and announcements; and
  • other information required by the product quality supervision department of the State Council.

The information filed by producers should be updated within 20 working days if there are any changes.

Operators selling, renting and repairing automotive products must establish and maintain records on the models, specifications, vehicle identification numbers, quantity, whereabouts, purchasers, leasing and repair, among others, of the automotive products they deal in, and the records must be maintained for not less than five years.

According to the Administrative Measures for Drug Recalls, drug producing enterprises, management enterprises and the entities using such drugs must establish and maintain complete records of sales to ensure the traceability of drug sales.

According to the regulations for food recall, food producers must accurately record and store the information about raw and supplementary materials procurement, production and processing, storage and transport, sales and product identification, among others, in the production chain, and retain records on consumer complaints, incidents of food-borne diseases and food contamination incidents, as well as archives about the disputes over food hazards.

According to the Provisions on the Administration of Children’s Toy Recalls, producers must strengthen children’s toy production and sales information management and establish and perfect the relevant information files. Sellers must improve information management for the stock and sale of children’s toys and properly keep files of consumer complaints.

Non-compliance penalties

What penalties may be imposed for non-compliance with these laws?

According to the above basic laws, an enterprise producing or selling products that do not conform to the state standard or the specific trade standard for ensuring physical health and safety of persons and property will be:

  • ordered to stop production and sale;
  • the products illegally produced and sold will be confiscated;
  • a fine of up to three times the value of the products illegally produced or sold will be imposed upon the producer or seller;
  • where there are illegal proceeds, such proceeds will be confiscated; and
  • if the circumstances are serious, the business licence will be revoked.

These are administrative penalties. If the case is serious enough to constitute a crime, criminal responsibility will be investigated.

According to the Measures for the Administration of the Recall of Defective Consumer Goods, the producers who carried out recall of defective consumer goods as required are not exempted from liability.

Reporting requirements for defective products

Government notification

What requirements are there to notify government authorities (or other bodies) of defects discovered in products, or known incidents of personal injury or property damage?

The Regulations on the Administration of Recalls of Defective Automotive Products and the Implementation Measures require the dealers and automotive product part manufacturers to report to the AQSIQ information on potential defects in automotive products of which they have been informed, and notify the manufacturers. In addition, the producers informed of the potentially existing defects in automotive products must immediately organise investigation and analysis, and truthfully report the results to the AQSIQ.

According to the Administrative Measures for Drug Recalls, a drug management enterprise or entity using drugs that finds a potential safety hazard with the drug it is selling or using must promptly stop selling or using the drug, notify the drug producing enterprise or supplier, and notify the pharmaceutical supervisory and administrative departments.

According to the Administrative Measures for Medical Device Recalls, medical device operators and users, finding that medical devices they are selling or using may be defective, should report such findings to their local SFDA department. Those users which are also medical institutes should also report their findings to their local health supervision departments. Medical device producers should report any medical device adverse event information collected by them to their local SFDA. Further, agents designated by an overseas manufacturer of imported medical devices in China are required to promptly report relevant information regarding the recall of medical devices that are only carried out outside China to the SFDA.

According to the Provisions on the Administration of Food Recall, food producers must promptly notify the provincial or municipal qualitative inspection authority about information concerning food safety hazards, including consumer complaints and events related to food safety hazards, and must not conceal or attempt to falsify the facts concerning their food that endangers human health.

According to the Provisions on the Administration of Children’s Toy Recalls, producers must notify information including consumer complaints, product injury accidents, product damage disputes and product recalls abroad to the quality and technical supervision authority.

According to the Measures for the Administration of the Recall of Defective Consumer Goods, the manufacturers or importers shall also report to the AQSIQ information on the product recall implemented outside China.

Notification criteria and time limits

What criteria apply for determining when a matter requires notification and what are the time limits for notification?

For automotive products, under the following circumstances, notification is required if:

  • the manufacturer confirms that some defect exists in its automotive products;
  • the seller, leaseholder or repairer finds some defect exists in the automotive products; or
  • the seller, leaseholder or repairer receives consumer complaints that some defect exists in the automotive products.

The manufacturer must notify product defects within five working days from the defect being confirmed.

Further, according to the Measures for the Administration of the Recall of Defective Consumer Goods, the AQSIQ will strengthen the building of the expert database for the recall of consumer goods, select national product quality inspection institutions and laboratories with statutory qualifications to provide technical support for the administration of the recall of consumer goods.

Competent authority

To which authority should notification be sent? Does this vary according to the product in question?

For general products, including food, drugs and medical instruments, the notification should be sent to the State Administration for Market Regulation (which includes the former AQSIQ and SFDA). For railway special equipment, the notification should be sent to the national railway bureau, under the Ministry of Transport.

Notification information

What product information and other data should be provided in the notification to the competent authority?

Automotive product manufacturers need to complete a report detailing:

  • information on the manufacturer:
  • name of enterprise;
  • enterprise address, email address, telephone number, fax number and website; and
  • contact telephone number, fax number and email address;
  • information on the recalled vehicle:
  • brand;
  • vehicle model;
  • design;
  • model number;
  • production dates;
  • VINs affected;
  • engine numbers affected;
  • vehicle frame numbers affected;
  • vehicle type;
  • shape of vehicle body; and
  • photograph;
  • characteristic information of the defective vehicle model:
  • number of recalls and the total sales of this vehicle model;
  • production year and vehicle model information of the vehicle involved in the recall; and
  • total number of potential vehicle recalls;
  • description of the defect:
  • system the defect belongs to and its location;
  • causes of the defect;
  • potential results caused by the defect, and explanation of potential hazards and their severity;
  • warning information from vehicles before and when the defect occurs, such as abnormal alarms and warning lights;
  • if the defective parts were bought from another manufacturer, the details of the manufacturer (name, address, contact method, etc) and its manager or legal representative;
  • summary of defect, including, without limitation, number of defect reports, accidents, casualties and claims made; and
  • date or report of defect evaluation (attached if necessary);
  • description of defect analysis:
  • manufacturer’s methods of defect elimination (attached if necessary);
  • main differences between the parts used to repair and the recalled parts;
  • how and when the defect of the products involved in the recall was corrected in the course of production; and
  • schedule of recall illustrating the schedule of recall and potential problems during the implementation of the recall.

Sellers, leaseholders and repairers of automotive products need to complete the following report:

  • information on the seller, leaseholder or repairer:
  • name of enterprise;
  • enterprise address, email address, telephone number, fax number and website; and
  • contact telephone number, fax number and email address;
  • information on the vehicle:
  • brand;
  • vehicle model;
  • design;
  • model number;
  • vehicle type; and
  • shape of vehicle body;
  • characteristic information of the defective vehicle:
  • production date;
  • VIN code;
  • engine number; and
  • frame number;
  • description of the defect:
  • system the defect belongs to and its location;
  • causes of the defect;
  • results caused by the defect, number of defective vehicles, accidents, casualties, explanation of potential unreasonable hazards and their severity; and
  • warning information from vehicles before and when the defect occurs, such as abnormal alarms and warning lights.

Drug quality problems and adverse drug reactions should be provided in the notification to the competent authority, according to the Administrative Measures for Drug Recalls. Details are not listed in the Measures though.

Obligations to provide updates

What obligations are there to provide authorities with updated information about risks, or respond to their enquiries?

According to the Regulations on the Administration of Recalls of Defective Automotive Products and the Implementation Measures, where a manufacturer becomes aware of any potential defects in its automotive products, it should immediately organise investigation and analysis, and report the investigation and analysis results to the AQSIQ, and where the AQSIQ carries out a defect investigation, the manufacturer should cooperate with the defect investigation by providing relevant information, products and special equipment that are necessary for the investigation. Operators and automotive product part manufacturers should report to the AQSIQ information on potential defects in automotive products which they have been informed of, and notify the manufacturers.

According to the Administrative Measures for Drug Recalls, when pharmaceutical supervisory and administrative departments investigate potential drug safety hazards, the drug manufacturers must provide assistance. Drug-handling enterprises and the entities using the drug must cooperate with the investigation by the manufacturers or the pharmaceutical supervisory and administrative departments related to drug safety hazards, and provide relevant materials.

According to the Administrative Measures for Medical Device Recalls, any medical device operators or users that fail to perform their reporting obligations will be fined between 5,000 and 30,000 yuan; if serious consequences result, relevant Medical Device Business Licences can be withdrawn or cancelled.

According to the Provisions on the Administration of Food Recall, food producers and sellers must cooperate with investigations into food safety hazards organised by the provincial quality supervision departments, and must not refuse on the ground that the food passed any compliance examinations.

According to the Provisions on the Administration of Children’s Toy Recalls, producers and sellers must cooperate with defect investigations organised by the provincial quality supervision departments, and provide relevant materials for the investigations.

Penalties

What are the penalties for failure to comply with reporting obligations?

According to the Regulations on the Administration of Recalls of Defective Automotive Products, the producers concealing the recall will be ordered again by the authority to correct. Those failing to correct will receive fines of 1 to 10 per cent of the value of the defective automotive products. Any illegal income will be confiscated and relevant operating licences will be cancelled by the authority issuing the licences in the most serious situations. Further, the producers or operators who do not cooperate with the defect investigations carried out by the product quality supervision department will be ordered to go through correction procedures. Those failing to correct will be given fines of between 500,000 to 1 million yuan. Any illegal income will be confiscated and any relevant licences can be cancelled in the most serious cases.

According to the Measures for the Implementation of the Regulation on the Administration of the Recall of Defective Auto Products, if the manufacturer did not file the investigation analysis results as required, nor fail to correct this within the given time limit, a fine of between 10,000 and 30,000 yuan will be imposed. And if the automotive part manufacturer did not cooperate with the defect investigation, or failed to correct this within the given time limit, a fine of between 10,000 and 30,000 yuan will also be imposed.

According to the Administrative Measures for Drug Recalls, if drug-handling enterprises or the entities using the drug fail to report a defect, they will be fined between 1,000 and 50,000 yuan. If serious consequences are caused, the licence-issuing department will withdraw such entity’s drug supply certificate or other licence.

According to the Provisions on the Administration of Food Recall, if the food producer refuses to cooperate with an investigation of food safety hazards organised by the quality supervision departments, it will be warned and ordered to rectify the situation within a required time limit. If it fails to rectify the situation within such time limit, it will be fined up to 20,000 yuan.

According to the Provisions on the Administration of Children’s Toy Recalls, if the producer refuses to cooperate with the defect investigations organised by the quality supervision departments, it will be warned and ordered to rectify the situation within a required time limit. If it fails to rectify the situation within such time limit, it will be fined up to 20,000 yuan.

In addition to the administrative penalties listed above, anyone violating the regulations and constituting a crime will be held criminally responsible.

Public disclosure

Is commercially sensitive information that has been notified to the authorities protected from public disclosure?

The Regulations on the Administration of Recalls of Defective Automotive Products state that if staff engaging in the supervision and management of defective automotive products carry out one of the following acts violating the Regulations, they will be punished:

  • using the information, products and special equipment provided by producers or operators for a purpose other than technical inspection and identification necessary for defect investigation; and
  • disclosing the parties’ business secrets or personal information.

According to the Measures for the Administration of the Recall of Defective Consumer Goods, the AQSIQ should keep the information obtained from manufacturers and operators confidential, and shall not use such information for other purpose than technical detection and identification. AQSIQ officials who disclose business secrets or personal information shall be punished.

Use of information in prosecution

May information notified to the authorities be used in a criminal prosecution?

No provisions in product recall regulations stipulate that information notified to the authorities cannot be used in a criminal prosecution. According to China’s constitutional principles, all entities and citizens have an obligation to cooperate with the criminal investigation and relevant evidence collection. Thus, the conclusion is that information notified to the authorities may be used in a criminal prosecution.

Product recall requirements

Recall criteria

What criteria apply for determining when a matter requires a product recall or other corrective actions?

Automotive products

According to the Regulations on the Administration of Recalls of Defective Automotive Products and the Implementation Measures, when the defect exists in sold automotive products, the defective products must be recalled.

Definition of defect

Defect refers to a failure to comply with national standards or industry standards regarding security of personal and property safety that universally exist in the automotive products of some batch, model or category caused by design, manufacturing or labelling, and other unreasonable hazards endangering the safety of people and property.

Principles of judgement of defect of automotive products

A defect exists where:

  • during usual operation there are situations that do not accord with the technical regulations and national criteria related to automotive safety, through examination by the inspection bodies;
  • design or manufacturing defects have caused personal injury or property damage, to the vehicle owners or others; or
  • defects might cause personal injury or property damage under certain conditions, through testing, experiments and in theory, although the defects have not caused personal injury or property damage to the vehicle owners or others.

Drugs

According to the Administrative Measures for Drug Recalls, when potential safety hazards exist in the drugs on sale, the defective drugs must be recalled.

Definition of potential safety hazard

A potential safety hazard refers to an unreasonable hazard related to drugs that endangers human health and safety of life because of research and development, and production.

Evaluation of potential safety hazard

In evaluating the harm that could be caused by a drug, the following can be taken into account:

  • hazardous effects on the main users;
  • hazardous effects on special users, especially high-risk groups, such as the elderly, children, pregnant women, persons with hepatic and renal dysfunction, surgical patients, among others;
  • severity and emergency of the hazard; and
  • results of the hazard.

Medical devices

According to the Administrative Measures for Medical Device Recalls, defective medical device products mainly include products that:

  • may endanger human health and safety in normal use;
  • do not meet the mandatory standards, or the registered technical requirements; and
  • do not meet the relevant provisions on medical device quality management and lead to unreasonable risks.

Food

According to the Provisions on the Administration of Food Recall, unsafe food must be recalled.

Definition of unsafe food

Food that has caused or might cause hazards, including:

  • food that is contaminated in some manner, food that has passed on disease or food that is hazardous to human health;
  • food that includes ingredients that may cause health hazards to particular groups, but this is not marked on the food labels and instructions or is marked incompletely or unclearly; and
  • other unsafe food stipulated by relevant laws and regulations.

Investigation of food safety hazards

Investigations into:

  • whether the food meets the requirements of food safety laws, regulations or criteria;
  • whether the food includes non-food ingredients, includes non-food chemicals or describes non-food as food;
  • the type and number of the main consumers of such food; and
  • the amount, batch or category of the food in which safety hazards exist, its distribution channels and how widely distributed the product is.

Evaluation of food safety hazards

Investigations into:

  • food that is contaminated in some manner, food that has passed on disease or food that is hazardous to human health, or is potentially hazardous;
  • the effects on the main consumers;
  • the severity and emergency of the hazard; and
  • short-term and long-term results of the hazard.

Children’s toys

According to the Provisions on the Administration of Children’s Toy Recalls, children’s toys in which a defect exists must be recalled.

Definition of defect

Defect refers to unreasonable hazards that universally exist in the same batch, model or category of children’s toys and endanger the safety of persons and property because of design, production or instructions.

Consumer warnings

What are the legal requirements to publish warnings or other information to product users or to suppliers regarding product defects and associated hazards, or to recall defective products from the market?

Automotive products

According to the Regulations on the Administration of Recalls of Defective Automotive Products and the Implementation Measures, once the manufacturer confirms that a defect exists in its automotive products and decides to implement an initiative recall, it should:

  • promptly make a recall plan and file it with the appropriate departments for records;
  • promptly and effectively notify the importers, sellers, leaseholders, repairers and vehicle owners about the defect, potential damages and its prevention measures and recall plan;
  • notify the sellers to stop selling the defective automotive products, and notify the importers to stop importing;
  • set up hotline numbers, reply to enquiries and publish information about the defect on websites designated by the appropriate department for public search;
  • make the recall notice, file it with the appropriate department, notify the sellers, leaseholders, repairers and vehicle owners and start to implement the recall plan within one month of the date of filing the report with the appropriate department; and
  • file a final report with the appropriate department within one month of the completion of the recall.

Drugs

According to the Administrative Measures for Drug Recalls, once the drug producer decides to or is ordered to recall the defective drugs, it should:

  • make a recall plan and organise implementation;
  • notify the drug-handling enterprises - entities using the drug to stop selling and using within 24 hours (first grade recall), 48 hours (second grade recall) or 72 hours (third grade recall);
  • file the investigation evaluation report and recall plan with the SFDA for records within one day (first grade recall), three days (second grade recall) or seven days (third grade recall) after starting the drug recall;
  • report the progress of the drug recall to the SFDA within one day (first grade recall), three days (second grade recall) or seven days (third grade recall);
  • make detailed records related to the disposal of recalled drugs and report it to the SFDA;
  • destroy the drugs, which must be done under the supervision of the SFDA; and
  • evaluate the effect of recall, and file a final report to the SFDA after completing the recall.

Medical devices

According to the Administrative Measures for Medical Device Recalls, once a medical device is determined to be defective after investigation and evaluation, the producer should:

  • immediately decide to implement a recall and issue product recall information to the community;
  • notify operators and users within one day (first grade recall), three days (second grade recall) or seven days (third grade recall), once a product recall decision is made;
  • immediately file a report as to a medical device recall event with its local SFDA and then file an investigation and evaluation report and the recall plan, within five working days;
  • amend recall plans as required by the SFDA, arrange for the implementation of them and regularly report the implementation to the SFDA as per the recall plan;
  • make detailed records related to the disposal of recalled medical devices and report to the SFDA; and
  • evaluate the effects of a recall action within 10 working days of completion of the recall, and file a final report with the SFDA.

Food

According to the Provisions on the Administration of Food Recall, when food is confirmed to be unsafe food that should be recalled, the food producer should:

  • promptly stop producing and selling the unsafe food;
  • notify the sellers to stop selling and consumers to stop buying within one day (first grade recall), two days (second grade recall) or three days (third grade recall);
  • file a food recall plan with the quality supervision department within one day (first grade recall), two days (second grade recall) or three days (third grade recall);
  • file a periodic progress report related to the food recall with the quality supervision department every three days (first grade recall), seven days (second grade recall) or 15 days (third grade recall);
  • keep recall records, including batch numbers, amounts, portions, reasons and results of the food recall;
  • file a final report with the quality supervision department within 15 days from the due day of the food recall;
  • promptly implement non-toxic processing of the unsafe food, and destroy the food that should be destroyed; and
  • keep detailed records related to the processing of the recalled food.

Children’s toys

According to the Provisions on the Administration of Children’s Toy Recalls, when children’s toys are confirmed to be defective, the producer should:

  • promptly stop producing and selling the defective toys;
  • announce the defect in the toys to the public;
  • notify sellers to stop selling and consumers to stop buying;
  • file a recall plan with the quality supervision department for records; and
  • file a final report with the quality supervision department within 15 days of the due date of the recall.

Recall notices

Are there requirements or guidelines for the content of recall notices?

The recall notices should include the existing defects, emergency methods to avoid harm and the measures taken by the manufacturer to eliminate the defects.

Media

What media must be used to publish or otherwise communicate warnings or recalls to users or suppliers?

The producers implementing the recall should publish information ‘in a way that is convenient for the public’ and inform the owners of automotive products with defects, for emergency disposal methods’, and measures taken by producers to eliminate defects, through newspapers, websites, broadcasts and TV, within five working days of filing the recall plan with the authorities. They should also accept public consultation through the hotline and network platform.

Time frame

Do laws, regulation or guidelines specify targets or a period after which a recall is deemed to be satisfactory?

No, there are no PRC laws, regulations or guidelines specifying targets or a period after which a recall is deemed to be satisfactory. In practice, the recalling enterprise sets targets in the recall plan, which needs to be approved by the competent authority.

Repair and replacement

Must a producer or other supplier repair or replace recalled products, or offer other compensation?

The regulations related to product recalls do not stipulate specific measures for recalls. In practice, they are included in the recall plan set up by the recalling enterprise, and need to be approved by the competent authority.

However, according to the PRC Product Quality Law, producers will be responsible for compensating people for damage caused by defects, which means that the producer must offer compensation if the product defects cause personal or property damage. The compensation includes the following:

  • if bodily injury is caused by the defect, the party responsible shall pay for medical expenses and nursing expenses during medical treatment and the lost income because of absence from work;
  • if the bodily injury has resulted in disability, the party responsible will also be responsible for the expenses for self-supporting equipment, living allowances, compensation of the disabled person and the living expenses necessary for those being supported by the disabled person;
  • if death has resulted, the party responsible will pay the funeral expenses, compensation and the living expenses necessary for those who had been supported by the victim;
  • if the product defect causes damage to property, the party will be responsible for restoration or compensation; and
  • if victims sustain other major losses, the party responsible must compensate the losses.

Penalties

What are the penalties for failure to undertake a recall or other corrective actions?

According to the Regulations on the Administration of Recalls of Defective Automotive Products, producers that fail to implement the recall as per the recorded recall plan will be ordered by the authority to take corrective action. Those failing to correct will receive fines of between 500,000 and 1 million yuan. Any illegal income will be confiscated and relevant licences may be cancelled by the authority issuing the licences in the more serious cases. The regulations also state that producers refusing to recall after being ordered to do so will be ordered again by the authority to correct this. Those failing to correct this will receive fines of between 1 and 10 per cent of the value of the defective automotive products. Any illegal income may be confiscated and relevant licences may be cancelled by the authority issuing the licences in the most serious cases.

According to the Administrative Measures for Drug Recalls, if the drug producer finds potential safety hazards associated with the drug but does not recall the drug actively, it will be ordered to recall the drug, and be fined triple the value of the drug that should be recalled; if severe results are caused, the department that issued the drug approval will withdraw the certificates of approval of the drug and may even withdraw the producer’s drug manufacturing certificate. If the drug manufacturer refuses to recall the drug when the relevant authority orders it to do so, it will be fined three times the value of the drug that should be recalled; if severe results are caused, the department that issued the drug approval will withdraw the certificates of approval of the drug, and may even withdraw the producer’s drug manufacturing certificate.

According to the Administrative Measures for Medical Device Recalls, if a medical device producer refuses to undertake a recall, the SFDA must instruct the party concerned to make a correction and confiscate the medical devices illegally manufactured, operated or used. If the value of the medical devices illegally manufactured, operated or used is less than 10,000 yuan, a fine of between 20,000 and 50,000 yuan can be imposed; if the value is more than 10,000 yuan, a fine of more than five times but less than 10 times the value can be imposed; in serious cases, production can be ordered to be ceased and business licences may be withdrawn or cancelled.

According to the Provisions on the Administration of Food Recall, if a food producer fails to undertake a recall, it will be given a warning and ordered to correct the issue within a specific time limit; if it does not correct the issue within the required time limit, it will be fined up to 30,000 yuan.

According to the Provisions on the Administration of Children’s Toy Recalls, if the manufacturer fails to undertake a recall, it will be fined up to 30,000 yuan.

According to Tort Law of the People’s Republic of China, if any product defect is found after the product is put into circulation, the manufacturer or seller must issue a warning and recall it in a timely manner. If the manufacturer or seller fails to take remedial measures in a timely manner and has caused any harm, the manufacturer or seller can be liable under the tort law.

Authorities' powers

Corrective actions

What powers do the authorities have to compel manufacturers or others in the supply chain to undertake a recall or to take other corrective actions?

The authorities (the State Administration for Market Regulation and other relevant departments) are entitled to send the manufacturers a notification on a compulsory recall, notifying the manufacturer to recall designated products and requiring it to submit a recall plan within a time limit.

The detailed product recall action plan needs to be drafted by the manufacturers as mentioned above and then to be amended as per the advice given by the authorities until it is approved by them. The authorities are also entitled to enter the production and business place of the producers and operators for on-site investigation, to check and copy relevant information and records, and to gain an understanding of the potential defects existing in products from relevant entities and individuals.

Further, the certification authority is entitled to suspend or return the certificate for compulsory certification of products, and customs is entitled to stop going through import declaration procedures for defective products produced outside China’s borders.

Government warnings

Can the government authorities publish warnings or other information to users or suppliers?

According to the Measures for the Administration of the Recall of Defective Consumer Goods, where the AQSIQ determines there is a high risk that certain consumer goods are defective, and might cause serious personal injury or property damage, according to the defective information analyse and evaluation results, but the recall cannot be carried out as per the measures, owing to uncertainty about their origin or de-registration of their manufacturers, the AQSIQ will issue a consumption warning.

According to the Provisions on the Administration of Food Recall, the SFDA may publish food safety information and consumption warning information under the following circumstances or take other actions to avoid damage:

  • the food producer concealed food safety hazards deliberately, or it should have recalled but did not;
  • food safety hazards are extended or repeated owing to the faults of the food producer; and
  • potential safety hazards are found in food that may cause harm to human health and safety, during administrative supervision or selective examination.

In China, the authorities usually accept claims or complaints by phone, email or mail - usually the claims or complaints are not made public before investigation and verification though, so as to avoid confusion.

Government recalls

Can the government authorities organise a product recall where a producer or other responsible party has not already done so?

Government authorities usually do not organise a product recall by themselves; they instead guide, coordinate and supervise the recall, while the recall is actually carried out by the producer.

Costs

Are any costs incurred by the government authorities in relation to product safety issues or product recalls recoverable from the producer or other responsible party?

According to the Regulations on the Administration of Recalls of Defective Automotive Products, producers should bear the costs for eliminating defects and all necessary costs for transporting defective automotive products.

Other regulations do not refer to the cost issues.

Challenging decisions

How may decisions of the authorities be challenged?

Producers denying the products are defective may file an opposition with the AQSIQ within 15 working days from receipt of a notice requiring recall from the AQSIQ, and provide evidence. The AQSIQ will organise the experts who are not related to the producer to demonstrate the evidence, and carry out technical detection or identification to the products if necessary.

Further, if the producer considers that its lawful rights and interests have been infringed by the authorities or their personnel, they can file a complaint with the higher authorities, or appeal to the court, according to the PRC Administrative Reconsideration Law and Administrative Procedure Law.

Implications for product liability claims

Implications for product liability claims

Is the publication of a safety warning or a product recall likely to be viewed by the civil courts as an admission of liability for defective products?

Theoretically, yes. According to the Measures for the Administration of the Recall of Defective Consumer Goods, the recall actions implemented by producers will not exempt them from liability to pay compensation if the defective product causes actual damages to consumers.

When a product is recalled, consumers will not need to prove the defect existed in the product through tests, but just need to prove the facts of damage caused by the defective product, which accords with the legal principle that consumers should be given more protection.

Can communications, internal reports, investigations into defects or planned corrective actions be disclosed through court discovery processes to claimants in product liability actions?

Theoretically yes, if the court discovery processes are started. According to the Provisions of the Supreme Court on Evidence in Civil Procedures, if the necessary evidence refers to commercial secrets or the party is not able to collect such evidence by itself, the party can apply to the court for evidence collection by the court. Also, according to the PRC Civil Procedure Law, refusing or obstructing a court investigation or obstructing the collection of evidence may lead to the court not only ordering the relevant entity to perform its obligation but also imposing a fine on said entity.

Whether it is necessary for the court to approve the application and start the processes depends on the court itself.