Four Major Reasons Why Cosmetic Enterprises were Punished in China

Since China's overarching cosmetic regulation – Cosmetics Supervision and Administration Regulations (CSAR) – came into force on January 1, 2021, the authorities have been paying close attention to regulatory compliance and punishing enterprises for non-compliance. This article focuses on four of the main categories of non-compliance and provides case studies for each.

1. Improper Claims

Since the beginning of 2022, penalties caused by improper claims of cosmetics have endlessly emerged. There are many reasons behind this. On the one hand, China is becoming stricter on cosmetic claims; on the other hand, some cosmetics enterprises lack awareness of relevant laws and regulations, for example, cosmetic claims are illegal if:

• Normal cosmetics claim to have special uses;
• Cosmetic enterprises claim that they produce their cosmetic products in cooperation with “a university” or “a research institute”;
• Cosmetics claim to be produced according to the requirements of pharmaceuticals, or medical terminology; or
• Cosmetics claim that they can obviously inhibit COVID-19.

According to Article 22 of the Cosmetics Supervision and Administration Regulations, the efficacy claims of cosmetics should have sufficient scientific basis. Cosmetic registrants and filers should publish the literature, research data, or abstract of product efficacy evaluation materials on a special website specified by the National Medical Products Administration (NMPA), and accept "social supervision". Improper claims of cosmetics are mainly reflected in product labelings and advertising:

Labels

According to Article 37 of the CSAR, it is prohibited to label cosmetics with:

• contents that express or imply medical effects; and/or
• false or misleading content.

Case Study: the actual composition of a whitening and spot-lightening repair facial mask is consistent with the registered formula, but the composition marked on the label is inconsistent with the registered formula. According to the registered formula, the product does not contain p henylethyl r esorcinol and silicon dioxide, yet the outer packaging of the product is marked with the word “377VC”. False labeling can mislead consumers and increase sales. The enterprise was fined more than 80,000 RMB.

Advertising

According to Article 43 of the CSAR, the contents of cosmetic advertising shall be true and legal. Cosmetic advertising must not express or imply that the products have medical effects, contain false or misleading contents, or deceive and mislead consumers”.

Case Study: one essence claimed that the products had the effect of anti-aging in its advertisement published in Tmall. The product's efficacy is moisturizing, anti-wrinkle, and soothing, which is not equivalent to “anti-aging”. The company was fined 4,000 RMB.

2. Children’s Cosmetics

Children’s cosmetics refer to cosmetics that are suitable for children under the age of 12 (including age 12) and have the functions of cleaning, moisturizing, refreshing, and sunscreen. Provisions on the Supervision and Administration of Children’s Cosmetics (hereafter "the Provisions") were officially implemented on January 1, 2022. The supervision of children’s cosmetics has become a top priority.

According to Article 20 of the Provisions, when the departments in charge of drug supervision and administration investigate and deal with the illegal acts of children’s cosmetics, they can recognize these acts as serious acts stipulated in the Regulations on the Supervision and Administration of Cosmetics in one of the following situations:

• Children’s cosmetics contained ingredients prohibited for the production of cosmetics, or new ingredients that should be registered yet have not been registered;
• Illegal addition of substances that may harm human health in children’s cosmetics.

Case Study: on August 22, 2022, Guangdong Province issued a penalty of a lifetime ban, which is the second ban nationwide. According to public information, the company was fined 120,000 RMB for the children’s cosmetics it produced that tested positive for a substance that may harm human health. The Cosmetics Production License of the company was revoked, and the application for filing or the administrative license by the company in the coming ten years will not be accepted as well. The legal representative of the enterprise was fined 108,000 RMB and prohibited from engaging in cosmetics business for life.

3. Cosmetics Labeling

In September, the NMPA carried out a cosmetics spot check. A total of 20 batches of cosmetics failed to pass the spot check, mostly hair dye and sunscreen products. Illegal labeling is one of the main reasons that the products failed the spot check. Details are as follows:

• The product ingredients are inconsistent with that recorded on the product label;
• The product label is inconsistent with the technical requirements specified in the registration data;
• The product ingredients are inconsistent with the technical requirements specified in the product label and registration data.

According to the CSAR and the Measures for the Supervision and Administration of Cosmetics Production and Operation, the NMPA requires the corresponding local medical products authorities to file an investigation on the registrants, filers, entrusted manufacturing enterprises, and domestic responsible persons involved in the above 20 batches of cosmetics, and order the relevant enterprises to immediately take risk control measures according to law and carry out self-examination and rectification.

Other Case Study: In the product formula of “xx hair dye (chestnut brown)”, toluene-2,5-diamine sulfate is not used, but the production record of its “xx hair dye (chestnut brown)” (specification: 100ml/box, batch number: CJ2019031601) product showed that toluene-2,5-diamine sulfate was used as raw material. The enterprise was fined 110,000 RMB.

4. Improper Operation and Management

It is common for enterprises to be punished for improper production, operation, and management. It is mainly reflected in the following five aspects:

• Quality management;
• Materials and products;
• Production process management;
• Product sales management;
• Plant and facilities.

Case Study: One company was found violating cosmetic regulations. In terms of quality management, it failed to effectively operate the quality management system and implement the record management system. In terms of materials and products, there are problems such as failing to conduct incoming raw materials inspection as required and failing to store raw materials as required. In terms of production process management, production activities were not recorded as required. In order to ensure the safety of the public using makeup, the NMPA has ordered the enterprise to stop production and put it on file for investigation.

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