Summary
The PRC Government has published draft Administrative Regulations on the Recall of Defective Products (the "Regulations"), and is now inviting the public to give their views on the draft Regulations.
The draft Regulations, developed by the General Administration of Quality Supervision, Inspection and Quarantine of the PRC ("AQSIQ"), have laid down requirements in relation to investigation and recall of defective products and imposed various statutory duties on the relevant parties such as manufacturers and sellers of products.
Full Update
The draft Regulations provide that the products to be regulated are those being manufactured and/or sold in Mainland China, excluding pharmaceutical and military products. If products of the same batch, type or category have caused or may cause danger to personal health and safety of an unreasonable level due to reasons such as the products' design, production or instructions, they shall be considered defective products for the purposes of the draft Regulations. AQSIQ will be the authority responsible for the supervision and administration of recalls of defective products.
The general requirements under the draft Regulations can be summarised as follows:
Investigation
Manufacturers (which are deemed under the draft Regulations to include importers and their agents) shall be obliged to undertake an investigation on a product in the circumstances specified under the draft Regulations, for example, in cases where the manufacturer takes the view that there may be defects in the product which may cause concern to personal health and safety, or where a complaint has been made by a consumer over the safety of the product.
The local Department of Quality Inspection may also undertake investigation on its own initiative, and manufacturers and the other relevant parties shall be obliged to cooperate with the authority by providing the product concerned and also information in relation to the design, manufacturing and sales of the product.
Implementation of Recall
Once it has been confirmed that a product is defective, the manufacturer shall forthwith: (1) cease the manufacturing and sale of the product; and (2) implement a recall of the product; and (3) make a report to the local Department of Quality Inspection. Sellers of the product shall be obliged to assist the manufacturer in the product recall exercise. AQSIQ may order the manufacturer to implement a recall if the latter fails to do so. In such a case, the manufacturer shall submit a product recall proposal to the authority within five days upon receiving AQSIQ's recall order, and implement the recall within two days upon receiving the authority's approval of the proposal. The draft Regulations provide that a failure to comply with the requirements therein may result in a penalty of between RMB200,000 and RMB500,000. In a case of serious violation, the authority may revoke the business licence of the manufacturer concerned.
Next Steps
The recent major incidents of defective products in China, such as the Sanlu contaminated milk powder incident, have caused serious concerns over the safety of products in China, and the PRC Government is now moving quickly to implement relevant laws and regulations in this regard. The consultation period of the draft Regulations will expire on 26 May 2009, and it is expected that the finalised Regulations will be published by the PRC Government shortly thereafter.
For more information, please contact:
Tom Fu (tom.fu@mayerbrown.com)
Vincent Wu (vincent.wu@mayerbrown.com)
Learn more about our PRC offices and Environment practice.
