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Overview of Food Safety in the PRC

This event provides an overview of the 13th Five Year Plan on Food Safety in the People's Republic of China (PRC), along with an overview of the Food Safety Laws and the changes to the revised Food Safety Law in 2015.

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Overview of Food Safety in the PRC

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  1. Overview of Food and Safety in the PRC ICC Event 17 May 2017 de Bedin & Lee LLP Helen Morris

  2. Agenda for Today • Two main sections: • 13th Five Year Plan on Food Safety • Overview of Food Safety Laws and highlight changes to the revised Food Safety Law in 2015

  3. 13th Five Year Plan on Food Safety • The Five Year Plan announced this February outlines three main areas of enhanced supervision of food safety to better protect public health. • Numerous food safety scandals in the recent years have led to widespread public concern on food safety in the PRC. For example: • Melamine tainted infant formula in 2008; • 15,000 dead pigs in Huangpu River, Shanghai; and • Sale of 40 year old frozen meat.

  4. 13th Five Year Plan on Food Safety • The Five Year Plan focuses on 3 key areas: • Strengthening food safety supervision processes: • Control use of highly poisonous farm chemicals and prevent contamination of agricultural products; • Conduct stricter supervision of the production and sale of food via new business channels, e.g. e-commerce and online food-ordering; • Strengthen punishments on overuse of food additives, industrial ingredients, fake production and expiration dates, and exaggerated advertisements; and • Control export and import of food

  5. 13th Five Year Plan on Food Safety • 2) Increase frequency of food inspections and risk assessments • Conduct random inspections and risk assessments, including at village and town level • Conduct sample tests to cover all types of food by 2020

  6. 13th Five Year Plan on Food Safety • 3) Strengthen food safety standards • Amend national food safety standards to catch up with international quality levels • Set over 300 national standards – to cover consumer foods, agricultural products and pesticides • Speed up the introduction of laws relating to the protection of soil contamination and management of grain and fertilizers

  7. Overview of Food Safety Laws • Food Safety Law of the People’s Republic of China (“Food Safety Law”) • Background • First enacted in 2009 to consolidate hundred of regulations and standards on food and beverage • Amended again in 2015 • The Food Safety Law attempts to further ensure food safety and to protect the public • “tracebility” • Definition of “Food” • All finished products and raw materials that people eat or drink • Includes all beverages

  8. Overview of Food Safety Laws • Activities governed by Food Safety Law: • Food production, processing, sales and catering services; • Production of trade in food additives; • Production of and trade in packing materials, containers, detergents, disinfectants for food, utensils and equipment for food production and trade; • Use of food additives and food-related products by food producers and traders; • Storage and transport of food; and • Safety management of food, food additives and food-related products.

  9. Overview of Food Safety Laws • Authorities: • The National Health and Family Planning Commission: monitors and assess food safety risks and develops/publishes national food safety standards with the CFDA. • The General Administration of Quality Supervision, Inspection and Quarantine (“AQSIQ”): regulates imported and exported food. • The Ministry of Agriculture: regulates farm products, livestock, and genetically modified food.

  10. Overview of Food Safety Laws • Authorities: • The Food Safety Commission: analyses food security, studies and plans coordination of food safety work, proposes polices and measures for food safety supervision, and supervises the implementation of food safety regulatory responsibly • The China Food and Drug Administration (“CFDA”): established in 2013: overseas food manufacturing, distribution and consumption and manages regulation processes for food and drug safety.

  11. Overview of Food Safety Laws • National food safety standards • The Food Safety Law delegates power to the National Health and Planning Commission to develop and publish national food safety standards which are industry specific • Businesses in the food and beverage sector should ensure compliance with both the Food Safety Law and industry specific food safety standards

  12. Changes to Food Safety Law • Revision of Food Safety Law in 2015 • Numerous food scandals and the increase of food businesses conducted through e-commerce led to decision to revise the 2009 Food Safety Law • The new Food Safety Law imposes stricter controls and supervision on food, and more sever liabilities for offenders • Introduced 49 new articles. 99 Articles amended • Came into effect on 1 October 2015

  13. Changes to Food Safety Law • Food labelling • All imported food and beverage products must include a Chinese label • State product name, place of origin of food, exporter’s information. • Alcoholic beverages have additional labeling requirements under the food safety standards: • Wine: state type of wine, vintage, variety of grapes, place of origin and alcoholic strength • Beer: state bottling date, original wort concentration, name and address of producer • Health warning

  14. Changes to Food Safety Law • ii. Food Packaging • The 2015 amendments continue the move to safer food packaging begun in the 1980s. • Numerous new standard have been introduced in the past 2 years relating to food contact plastics, paper, coating, rubber, glass and metal.

  15. Changes to Food Safety Law • iii. Regulatory control of imported foods • Overseas exporters and manufacturers of imported goods also regulated by the Food Safety Law • Submit proof that national standards or international standards have been met to the AQSIQ for review • Overseas exporters and manufacturers required to undertake that: • the imported food complies with the Food Safety Law and other relevant laws • Contents of the food labels are true

  16. Changes to Food Safety Law • iii. Regulatory control of imported foods • Imported food must be registered with AQSIQ • Establish a record system for all imported goods: • Names • Specifications • Quantities • Dates of production • Batch numbers of productions or imports • Shelf life

  17. Changes to Food Safety Law • iv. Distribution • All food distributors must be apply to their local office of the CFDA for a Food Distribution License. • All alcohol distributors must complete filing procedures with the Ministry of Commerce.

  18. Changes to Food Safety Law • v. Food Producer Databases • Food Producers required to create a database which records the details of all purchased food materials, food additives, food-related products used in food production • Record: quantity, hygienic certificate number, date of manufacturer, shelf life, names of exporters, names of purchasers and suppliers. • Records retained for at least 6 months after expiry of product shelf-life or at least 2 years if food does not have a shelf life

  19. Changes to Food Safety Law • vi. Special Foods (defined as health foods and infant foods) • Health Foods • CFDA has authority to compile, revise and publish catalogues of permitted ingredients and “health claims” in products • Regulation on Health Food Function Claim Catalogue and Ingredient Catalogue • Health foods with catalogue ingredients: registered at FDA provisional level • Health foods with non catalogue ingredients: registered with CFDA • Advertisements must be approved by CFDA • Labels: “this product cannot replace medicine”.

  20. Changes to Food Safety Law • Infant Formula • 2008 tainted formula incident • Manufacturers of infant formulas must register with CFDA • approval based upon research and development reports and other scientific material submitted to ensure formula is safe for consumption

  21. Changes to Food Safety Law • Infant Formula • Manufacturers are no longer permitted to re-package infant formula; • Manufactures are no long permitted to produce different brands of infant formula using the same formulation of infant formula; • Manufacturers can only registered a maximum of 9 formulas in 3 series; and • From 1 January 2018 the new regulations will apply to infant formula sold through cross-border e-commerce.

  22. Changes to Food Safety Law • vii. Third-party food providers (e-commerce platforms) • Due diligence requirement: ensure that food traders are registered in their own name and licensed • Reporting obligation: must report food safety violations by food traders to CFDA • Liability: • Subject to a fine and may be ordered to cease operation for failure to comply • Consumers may claim damages. Joint and several liability with food traders. • CFDA’s national standards: Administrative Measures for the Supervision of Online Food Trading

  23. Changes to Food Safety Law • viii. Cross-border e-commerce platforms • New rules to regulate the provision of food to China based consumers via cross border e-commerce were partially introduced in April 2016, with the rest coming into effect on 11 May 2017. For example: • Higher taxes were introduced. • A positive list was introduced, whereby anything which is not on the list cannot be sold through cross-border online platforms.

  24. Changes to Food Safety Law • ix. Penalties • Administrative Liability: • Penalties up to 30 x purchase price of the food in question • Third parties knowingly involved in illegal acts, such as third party platforms, food testing agents, public media and certification authorities, may be jointly liable to a fine of not less than RMB 50,000 • Life time ban on working in food industry if sentence to imprisonment for violation of the FSL • Food traders that engage in food trading without a proper license are subject to a fine of 20 times the value of the food product. • The minimum fine for common food safety violations, such as the sale of expired goods, has been increased to RMB 50,000

  25. Changes to Food Safety Law • ix. Penalties • Civil Liability • Consumer can choose to claim against the manufacturer or the retailer. Whoever receives the claim must pay. • Third parties knowingly assisting a manufacturer or retailer’s non-compliance will be jointly liable to the customer • eCommece platforms are jointly liable with food manufacturers and distributors who fail to authenticate the status of the seller or verify their license • Punitive damages: 10 time purchase price of 3 x loss. Minimum damages: RMB 1,000

  26. Changes to Food Safety Law • ix. Penalties • Criminal • Enforcing criminal liability if the activity constituting the violation amounts to a crime. • A number of cases have already been prosecuted: • 2016: OSI Group LLC: American company was fined RMB 2.4 million and 10 employees sent to prison, including an Australian citizen (3 years). Case related to the reuse of returned food and doctoring of production dates of meat products.

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