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.