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Practical guide for Canadian cosmetic products to be registered or filed in China

This article is not a check list of documents and requirements for cosmetic registration and filing in China. Rather, it highlights some important issues for Canadian cosmetic manufacturers considering selling in China through traditional channels, other than cross-border e-commerce.

Chinese regulations divide cosmetic products into two types: special and ordinary. Special cosmetics are products used, inter alia, for hair dye, hair perm, hair loss prevention, freckle removal, whitening, sunscreen and anything that is claimed to have any new efficacy. Ordinary cosmetics are cosmetics other than special cosmetics. Canadian cosmetic companies seeking to sell cosmetics in China, other than via cross border e-commerce (CBEC), must obtain approval for special cosmetics from the National Medical Products Administration (NMPA), or file notifications for ordinary cosmetics with provincial Medical Products Administrations (MPAs). As of May 1st, 2021, the registration and filing process must comply with the Administrative Measures on Cosmetic Registration and Filing and the Instructions for Cosmetic Registration and Filing Dossiers. Please contact the Trade Commissioner Services in China at infocentrechina@international.gc.ca if you are interested in receiving an English copy of the Measures and the Instructions.

Ingredients and formulas

The first step for a Canadian cosmetic company seeking to register or file cosmetics in China is to ensure the ingredients present in the products are on the list of ingredients permitted for use according to Chinese regulations. The permitted ingredients are either existing ingredients in the Inventory of Existing Cosmetic Ingredients in China (IECIC) or new ingredients as may be approved by NMPA from time to time.

As part of the cosmetics registration and filing process, China requires applicants to disclose the names of the ingredients, as well as formula for producing specific products. This may increase the risk of exposing proprietary business information. Exporters should ensure their proprietary business information is protected via contracts and appropriate non-disclosure agreements, and carefully consider the risk of intellectual property loss versus the benefits of market entry (see Intellectual Property Protection below).

Exemption of animal testing, ordinary cosmetics only

As of May 1 2021, for ordinary cosmetics, NMPA may grant limited exemptions for ordinary cosmetics from the toxicological animal test, if the manufacturers have obtained the Good Manufacturing Practice (GMP) certificates issued by the competent authority of the country (region) of origin, and if the safety assessment results can fully conform to the product safety requirements. Canada does not currently have a comprehensive national system for issuance of GMP certificates for cosmetic products. Canadian companies should consult experienced service providers and relevant industry associations for additional information on the process for the exemption of animal testing. Please contact the Trade Commissioner Services in China at infocentrechina@international.gc.ca if you are interested in a list of service providers.

The compulsory toxicological animal testing is still required for special cosmetics, cosmetics for use by infants and children, and cosmetics that use new ingredients within the three-year monitoring period, or when the manufacturers, filers, or domestic legal representatives are subject to enhanced supervision by NMPA's risk rating system.

Selling cosmetics via cross-border e-commerce (CBEC)

Registrations and filings for cosmetic products are required for companies seeking large volumes of sales in the Chinese market through traditional on-shore sales, otherwise known as General Trade. CBEC does not carry such registration or filing requirements, thus offering a time- and cost-saving way for Canadian cosmetic brands to enter the Chinese market. Furthermore, products sold via CBEC are treated as personal goods and are granted custom clearance with lower tax rates, in addition to the exemption from pre-market registration or filing. Currently, cosmetics that can be sold via CBEC include perfumes, skincare, eye care, lip care, nail care, and hair care products.

There are a few options to consider for the selling of cosmetics through CBEC. A company may choose to set up a standalone website, build a store on a B-2-C platform such as Tmall Global or JD Worldwide, or open a store on a social media platform, such as Wechat. Products could be shipped to Chinese customers directly from overseas or from bonded warehouses in China. Please contact the Trade Commissioner Services in China at infocentrechina@international.gc.ca if you need advice on how to build up your CBEC business or to connect with CBEC partners.

Intellectual property (IP) protection

The Canadian Trade Commissioner Service in China recommends that every company's prospective China business plan include a strategy to protect its intellectual property (IP). IP rights are jurisdictional. That is, a Canadian patent, trademark or industrial design does not secure your corresponding rights in China. You should carefully consider registering your IP in China if you plan to do business there, including selling products over the Internet and/or manufacturing. For companies already operating in the Chinese market, it is never too late to review your IP strategy to ensure that it is keeping up with your innovations and market expansion and provides optimal protection of your core IP. For more information about IP protection, please consult additional information on the Canadian SME Gateway to China and contact the Trade Commissioner Services in China at infocentrechina@international.gc.ca.

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