China's New Food Food Safety Law


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China has experienced significant food quality controversies in recent years, bringing food safety and security to the limelight. Here, we review the new law noting what areas have been strengthened and how the regulations will be enforced.

Food safety in China has always been a growing concern, and for the first time since 2009, China has updated its Food Safety Law of the People’s Republic of China, effective as of October 1 2015. Due to its status as a fundamental law responsible for the governing of food safety in China, the new Food Safety Law contains significant revisions that have the potential to materially strengthen
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regulation of food companies in China.

Under the revised Food Safety Law, the refined functions and responsibilities of the different regulators include:
1. the Food Safety Commission, which analyses food security, studies and plans coordination of food safety work, proposes policies and measures for food safety supervision, and supervises the implementation of food safety regulatory responsibility;
2. the National Health and Family Planning Commission, which monitors and assesses food safety risks and develops national food safety standards;
3. the China Food and Drug Administration, which is the main regulator and regulates any activities related to food production, sales, distribution, and catering services;
4. the General Administration of Quality Supervision, Inspection and Quarantine, which regulates imported and exported food; and
5. the Ministry of Agriculture, which regulates farm products, poultry, livestock, and genetically modified food.

The Significant Amendments of the Revised Food Safety Law

China is finally taking substantial action in its battle against questionable food safety procedures and food scandals that have plagued the country, thus seeking to restore its reputation globally and instill consumer confidence in domestic products. Included in the revised Food Safety Law are a number of significant amendments, which are further supplemented by a number of measures and regulations published by various agencies, containing important regulations and national food safety standards.

Under Article 1, the Food Safety Law aims to secure food safety and ensure public health and life safety, and in Article 2, it specifies who are the applicable parties, including:
1. food production and processing, food sales and restaurant service;
2. production and distribution of food additives;
3. production and distribution of packaging materials, containers, detergents and disinfectants used for food and of tools and equipment used for food production and distribution;
4. application of food additives and food-related products by food producers or distributors;
5. storage and transportation of food; and
6. safety management of food, food additives, and food-related products.

There are many new strict measures in the new Food Safety Law, including a verification record system for the first time under Article 50, which states food producers must record incoming food raw materials, food additives and food-related products, indicating such information as name, specification, quantity, production date or batch number, shelf-life, purchase date, and supplier name and contact information of food raw materials, food additives and food-related products and shall keep relevant credentials, which are to be kept for six months up to two years. Therefore, although stringent, this new provision shall enable the authorities to keep a track of the type of food used in China.

Food additives seem to be of a high concern in the new Food Safety Law, with Article 60 requiring food additives distributors to inspect the license and quality certificate of the supplier when purchasing food additives, and to record such information as name, specification, quantity, production date or batch number, shelf life, purchase date of the food additives, and supplier name and contact information and shall keep relevant credentials. Along with the many provisions providing for the regulation of food additives are many regulations and measures, which seek to supplement the relevant provisions, including:
1. the General Code of Hygienic Practice for Food Additives, which incorporates requirements on food additive production and applies to all domestic production of food additives, setting forth the requirements and management code for production sites, facilities and personnel in raw material procurement, processing, packaging, storage and transportation of food additives; and
2. the amended General Standards for the Use of Food Additives, which regulate the use of food additives in food products distributed in China.

Also for the first time, online sales platform operators are covered under the Food Safety Law. Article 62 charges third-party platforms providers with the obligation to register real contact information of sellers who use the sales platforms and to check the seller’s permits. However, to comply with such requirements, sales platform operators may need to set up new computer systems, revise their registration procedures for sellers, and recruit additional manpower to verify contact information, therefore significantly increasing costs.

However, the costs compared to the benefits are insubstantial, and the relevant bodies have also introduced a supplementary measure to aid online sales platform operators, the Measures for the Administration of Supervision of Foods Operation via Internet. This Measure applies to online food, including edible agricultural products, food additives, and trading activities taking places within the border of the People’s Republic of China, and stipulates for the third party online platform to require the online food retailer to register using a real name and identification with their acknowledgment of their food safety responsibilities, and allow for compensation if any customers’ rights are violated.

Furthermore, the Food Safety Law seeks to increase their monitoring of food producers and distributors. This can be seen from Article 26, which lists food safety standards and includes food inspection methods and specifications related to food safety. This is supplemented by the Measures for the Administration of Supervision and Inspection of Food Production and Operation, which regulates the supervision and inspection of food producers and operators per corresponding requirements mandated by the new Food Safety Law, including compliance check-lists for producers of food additives, producers of health foods, food distributors, and restaurant service providers.

As well as this, the Food Safety Law branches its regulatory control beyond China, evidenced by Article 93, which regulates for overseas exporters and overseas producing enterprises that must submit their national standards or international standards to the health administration under the State Council for review. This is also further regulated by:

1. the Administrative Measures for the Audit and Inspection of Overseas Companies by Food Product Importers, which impose significant responsibilities on the local importer to ensure the safety of food products intended for distribution in China, such as requiring domestic food importers to conduct an on-site audit once every three years of the facilities outside China that produce products including infant formula, formulation food for special medical purposes, health foods, and meat products; and
2. the Administrative Measures for the Supervision of Imported Food Inspection at Port, is intended to guide local ports of China on their inspection of imported food products by establishing a categorisation system per risk level and risk assessment result to manage the inspection, therefore reinforcing the legal obligations under the Food Safety Law on overseas food producers and exporters as well as local importers.

Several other general regulations published include:
1. the Management Regulations for Food Operation License & Food Production License, which seeks to manage the licensing regime by the China Food and Drug Administration for food production and restaurant service to ensure the production license for food additives is explicitly incorporated into the scope of the food production license;
2. the Measures for the Administration of Food and Drug Complaints, which establish the requirements to handle complaints for foods, drugs, medical devices and cosmetics with respect to safety and product quality during research and development, production, distribution and usage processes; and
3. the Administrative Measures for the Supervision of Markets of Edible Agricultural Products, which was published to coordinate with the current agricultural product regulations as the revised Food Safety Law has now expanded its scope to include the regulation of the distribution of edible agricultural products.

Therefore, the revised Food Safety Law is extensive due to the importance of ensuring the security of food safety across China. However, this will have many implications across the entire food sector as those applicable businesses and enterprises seek to meet the new requirements imposed on them.

Regulating Special Foods in China

The 2015 Food Safety Law, under Article 74, seeks to strengthen the supervision in relation to health foods, foods for special medical purposes and infant formula food. For example, under Article 75, the alleged health care function of health care food shall have scientific grounds, therefore prohibiting any health claims without the corresponding evidence, and requiring the catalog of raw materials and alleged health care functions of health food to be examined by China Food and Drug Administration.

The Food Safety Law has also simplified the registration obligation for health food by establishing a registration notification system in Article 76, which represents the significant progress from the current registration-only system for health foods, therefore assisting in easing the regulatory burden on the industry without compromising the quality and safety of health food products. This is supplemented by the Regulation on the Registration and Notification for Health Foods, which will be used to determine whether a health food product needs pre-market registration or only notification, where pre-market registration with the China Food and Drug Administration is required under two scenarios:
1. health foods using functional ingredients not listed in the ingredient catalog; and
2. health foods imported into China for the first time, excluding imported nutritional substances, such as vitamins and minerals on the ingredient catalog.

While the pre-market registration process for health foods has been in place since 1996, the notification process was recently introduced in to the new Food Safety Law, and requires notification for nutritional substances such as supplemental vitamins and minerals imported into China for the first time, and for domestically made health foods where all functional ingredients are listed in the ingredient catalog. Therefore, imported health foods are not eligible for the new notification process, unless the foreign health foods are supplemental vitamins and minerals, and any imported health food must be marketed in the producing country for at least one year before it can be registered or notified in China

Furthermore, the new Food Safety Law provides for the labeling and advertising of food, with Article 71 emphasising the prohibition of false information, exaggerated information, or statements about disease prevention and treatment functions for which food producers or distributors shall undertake legal liability for such declarations, and Article 73 providing for food advertisements to provide truthful information and imposing liability for the authenticity and legality of food advertisements. Here, there are several Regulations promulgated to assist in regulating the advertising and labeling requirements under the Food Safety Law, including:
1. the Interim Regulation on Food Advertisements Publication, which was issued by the State Administration of Industry and Commerce, and provides detailed guidance on regulation of food advertising capturing both conventional foods such as dairy products for infants, and health foods;
2. the Regulation on Health Food Labeling assists by imposing detailed and stringent labeling requirements, including compliance with GM labeling rules and food recall procedures. In particular, Article 35 states that when a health food manufacturer recalls its products due to non-compliant labels, it can continue selling the products as long as it takes and indicates remedial action and is able to guarantee product safety; and
3. the Announcement on Further Standardisation of Health Food Naming, which was recently published to prohibit the use of expression of product function in the product’s name, such as terms like ‘weight losing’, ‘beautifying’, and ‘lung moistening’, and approved products which have such expressions are subject to a mandatory name change by December 31, 2015.

Furthermore, the Regulation on Health Food Function Claim Catalog and Ingredient Catalog was promulgated to assist in regulating the safety of health foods, by setting forth the detailed standards and procedures for a health function claim or an ingredient to be included in the corresponding catalog, where the health claim catalog refers to a list of permitted health function claims on health foods, based on test methods and criteria that have been systematically evaluated and verified. Meanwhile, the ingredient catalog refers to a list of functional ingredients that can be used in health foods whose safety and functionality have already been through evaluation, and provides information on the name of each functional ingredient, use levels, permitted health function claims, quality standard, active components, and testing methods.

Under Article 74, special medical purposes food is included under the category of special food, and is provided for under Article 80, which states that foods for special medical purposes shall be registered with China Food and Drug Administration under the State Council because of its importance due to the fact that these products are designed to meet the need of a special group of consumers. This is further supplemented by the Measures for the Administration of Formulated Foods for Special Medical Purposes, which assists in regulating and provides for obtaining a pre-market approval from the responsible food and drug administration.

Finally, the Food Safety Law provides for infant formula food as a special food. Specifically, Article 81 requires enterprises producing infant formula to implement full-process quality control from incoming materials to outgoing finished products and to inspect the outgoing infant formula food batch by batch to ensure food safety. This involves requiring the raw materials and food additives used in the production of infant formula to comply with laws, administrative regulations and national food safety standards, as well as requiring the receipt of China-produced formulated milk powder for infants and young children to be registered with the China Food and Drug Administration, further regulated by the Measures for the Administration of Infant Formula Milk Powder Formulas Registration.

Therefore, as well as revising food safety procedures and standards in the new Food Safety Law, China has also placed a focus on significantly increasing its regulation over health foods to ensure the safe consumption of health foods in China.

Local Rules

While the central government seeks to implement and enforce the revised Food Safety Law, the local governments of China are also actively developing new implementing rules to assist in ensuring food safety in China.

For instance, Shanghai recently produced the Management Rules for Tracing the Food Safety Information of Shanghai, effective as of October 1 2015, which requires the industry to trace safety information related to food and edible agriculture products produced, distributed and served by restaurant service providers within the administration region of Shanghai.

Additionally, the local government of Guangdong promulgated the Regulation of Guangdong Province on Food Safety to detail local food safety management, such as requiring the operator for imported food to verify the product name and batch number against the record on the quarantine and inspection permit or sanitary certificate of the product, as well as the Rewarding Measures for Reporting Serious Violations in Food and Drug Production and Trading to implement the whistle-blower rewarding mechanism established under the new Food Safety Law.

Enforcement

The revised Food Safety Law also provides for enforcement and has increased the scope and extent of the punishments available for the violation of any of its provisions. This includes:
1. enforcing criminal liability if the violation of a provision constitutes to a crime, and where it is considered a severe crime amounting to imprisonment, participation in food-related work will no longer be allowed;
2. increasing the punishment price to thirty times higher than the price of the corresponding product;
3. increasing the compensation allowed for manufactures and distributers to three times the loss incurred;
4. providing compensation, allowing for joint liability where third party platforms, food testing agents, certification authorities and public media are involved; and
5. allowing punitive damages claims under the Consumer Protection Law, where consumers can claim punitive damages up to ten times the product or service price, or twice the total loss if the product resulted in death or severe damage to the health.

Conclusion

It is a significant step forward that China has revised its Food Safety Law, especially due to its position globally as the second largest economy, and as the world’s provider and manufacturer of countless goods and services. Therefore, any food produced domestically that is imported or businesses that import food into China need to be regulated heavily to ensure food procedure and safety standards are at its finest to maintain its global standing, as well as provide for the safety of its consumers. The revised Food Safety Law is significant for its massive amendments and corresponding measures and regulations, therefore improving the quality of food products and encouraging confidence in China food industry.

ABOUT THE AUTHOR: Matthew Murphy
Matthew has over 20 years of China and Asia Pacific legal and business experience, focusing on Intellectual Property, Mergers & Acquisitions (including anti-trust) and International Trade. Matthew has been listed as a leading corporate/IP lawyer by various publishers such as Euromoney, Chambers and the Legal 500 and is an arbitrator with the Hong Kong International Arbitration Centre, the Beijing Arbitration Commission, and an arbitrator and mediator with the Kuala Lumpur Regional Centre for Arbitration. Matthew is a regular contributor of articles on Chinese and IP law to major journals, and regularly teaches international IP and technology law at the post-graduate level at a number of leading universities.

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Disclaimer: While every effort has been made to ensure the accuracy of this publication, it is not intended to provide legal advice as individual situations will differ and should be discussed with an expert and/or lawyer. For specific technical or legal advice on the information provided and related topics, please contact the author.

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