On September 30, 2016 the China Food and Drug Administration (“CFDA”) released the Circular on the Transition Period for Formula Registration of Infant Formula Milk Power (the “Circular”) This was just one day before the effective date of the Administration Measure for the Registration of Formulas of Infant Formula Milk Powder (“Registration Measure”)[1]according to which formulas of infant formula milk products must be registered before manufacturing or sale in China.

The Circular suspends the formula registration requirements for infant formula milk powder until January 1, 2018, and provides a guideline on the handling of products manufactured or imported before that date.

The Circular appears to be straightforward, however infant formula marketers whether by the traditional business model or through cross-border ecommerce, should be aware of the underlying impacts of this Circular and take preparatory measures during the transitional period.

Key contents of the Circular

Transition Period – during the transition period from October 1, 2016 to December 31,2017 the formula registration requirement will not apply.

Products covered by the Circular- domestically made infant formula milk powder as well as imported formula that has been approved for manufacture or sale are both covered and can be exported to or manufactured in China during the Transition Period without formula registration, such product will also be allowed to be sold until its expiration date.

Issues Requiring Attention/Clarification

(1) What has not been suspended. It should be noted the Circular is intended to suspend the infant formula registration requirement but this will not be an indefinite suspension of the Registration Measure. In addition to registration formalities, the Registration Measure also provides detailed and stricter requirements on labelling. This might trigger significant risk for companies currently selling infant formula as most of these products carry claims and statements which do not comply with the Registration Measures, particularly for products manufactured or imported after October 1, 2016. We will continue observing the authority’s attitude toward this.

(2) The meaning of “approved”. The Circular allows products approved for manufacture in or export to China before the Implementation Date to continue to be sold before their expiration date. “Approved” here means products with all approvals for manufacture or import of infant formula milk power except for formula registration. For example, a domestic manufacturer must have a license to manufacture, a foreign manufacturer must have a foreign manufacturer registration, and so on.

(3) How to define “before January 1, 2018”. For domestically manufactured products, “before January 1, 2018” means the product should have a manufacturing date before January 1, 2018. For imported products, it is less clear whether the deadline should be the customs declaration date or another date. This will need to be clarified by the quarantine and inspection authority.

Implication for Cross-border E-commerce Participants – CNCA Registration

Before the Circular was issued, it had already been clarified that infant formula milk powder sold through cross-border e-commerce (“CBEC”) must have formula registration with CFDA. The implementation date for formula registration was to be January 1, 2018.[2] the same as the Circular.

It also important to keep in mind that, for infant formula milk powder to be exported to China, the manufacturer must be registered as a foreign manufacturer with the PRC Certification and Accreditation Administration (“CNCA”). The rules do not specify whether this registration is also required for CBEC sales. Currently, different CBEC pilot zones adopt different practices. However, given the trend of tightening regulations on food products, one can reasonably assume it is only a matter of time as to when the CNCA registration will apply to CBEC sales of infant formula milk powder.

CNCA registration is a complicated and time-consuming procedure, and requires the involvement of regulatory authorities in a manufacturer’s country. If this is required, CBEC participants who have not obtained such registration will have more work to do to ensure their products can be sold through CBEC, in addition to preparing for infant formula registration before January 1, 2018.

Actions to be taken during the Transition Period

The Transitional Period is only about 14 months. The application and approval of formula registration will take several steps, including document review, onsite inspection, sample testing, and expert discussion. Even if a start is made right away, the transition period is barely enough time for companies to obtain registration of all their products, not to mention that the detailed implementation rules for formula registration have not yet been officially issued.

Even so, there are still plenty of things manufacturers could begin to do for registration:

  • Selecting formulas to be registered. The Registration Measure allows each company to register no more than 9 formulas under 3 series. In addition, formulas for the same stage should be significantly different from each other. Therefore, companies which have more than 9 formulas should start choosing which formulas to register and make adjustments to those formulas if necessary.
  • Begin preparation of application documents. Although the detailed implementation rules for formula registration have not been officially issued, the Registration Measure provides general conditions for the application. Plenty of reports will need to be submitted, including formula research and development reports, product testing reports, safety standards and so on. Drafts of several implementation rules have been published for public comment and these drafts can be used as reference for application material preparation[3] .
  • Arranging testing of products. It can be expected that product will be required to undergo formula testing at a qualified testing entity. As such testing can only be conducted by qualified entities, it would be prudent to get in line as early as possible.
  • Be cautious with labels and new product launches. Obtaining infant formula registration will be a top priority for manufacturers. Companies should be prudent and cautious about introducing new products as government authorities may prefer issuing registration certificates to those products with stable safety records and a sales history. In addition, since infant formula products must meet labelling standards and the labels of imported products must be directly printed on the product package, any non-compliance with printed labels might result in direct financial losses, not to mention potential civil claims and administrative penalties. Therefore companies may need to check the labels of their products, particularly those products which will be manufactured after the effectiveness of the Registration Measure.

Editor’s note: this article was simultaneously published on Chinalawinsight.com