Several Provisions on the Innovation and Development of Cosmetics Industry in Pudong New Area

(July 21,2022)

No.120

(Adopted at the 42nd Session of the Standing Committee of the 15th Shanghai Municipal People's Congress on July 21, 2022)

Article 1 With a view to promoting the innovation and development of cosmetics industry in Pudong new area, cultivating the new model and new form of the cosmetics business, assisting in the construction of Shanghai international consumer center city, these Provisions are formulated in accordance with the basic principles of laws and administrative rule, and in the light of the actual circumstances of Pudong New Area.

Article 2 The Municipal People's Government shall strengthen its leadership over the development of the cosmetics industry, deepen the cooperation with the relevant state departments, undertake the national innovation trials, and coordinate the major issues in the development of the cosmetics industry in Pudong New Area and other regions.

The People's Government of Pudong New Area shall strengthen the leadership of the innovation and development of the cosmetics industry in the region, integrate and optimize resources, and comprehensively coordinate the major issues in the innovation and development of the cosmetics industry.

Article 3 The municipal drug regulation department shall support and guide the innovation and development of the cosmetics industry in Pudong New Area and carry out the supervision and administration.

The municipal department of economy and informatization is responsible for facilitating the planning and layout as well as the industrial development of cosmetics industry.

The departments of development and reform, science and technology, commerce, market regulation, intellectual property rights, human resources and social security of this Municipality and Pudong New Area and Shanghai Customs Administration shall, in accordance with their respective duties and these Provisions, take charge of cosmetics industry development, consumption promotion, trade facilitation and other related work.

Article 4 This Municipality shall establish a municipal and district levels consultation mechanism for the innovation and development of cosmetics industry in Pudong New Area. The relevant departments of this Municipality and Pudong New Area shall strengthen communication and coordination, and make joint consultation and study of the cross-departmental and cross-cutting matters in the innovation and development of cosmetics industry in Pudong New Area.

Article 5 The municipal department of science and technology and the People's Government of Pudong New Area shall support cosmetic enterprises to cooperate with universities, scientific research institutes and medical organizations, facilitate the deep integration of production, education, research and medicine, enhance the industry innovation capabilities and the abilities to develop new products, and promote the transformation of scientific and technological achievements in the field of cosmetics.

The municipal department of science and technology and the People's Government of Pudong New Area shall guide and support cosmetic enterprises to increase investment in research and development, carry out technological innovation and professional personnel training, cultivate and develop high-tech enterprises, and support qualified cosmetic enterprises to establish scientific and technological innovation bases.

Article 6 This Municipality and Pudong New Area Administration shall encourage the digital transformation of cosmetics production enterprises, facilitate the integration of industrial Internet and consumer Internet in the field of cosmetics, build a real-time collection and analysis system of key data in the whole process of production, and improve the ability to manage quality and safety risks.

Article 7 The municipal departments of economy and informatization, commerce, and drug regulation shall, according to their respective functions and duties, promote cosmetic enterprises to strengthen the cultivation and construction of brand-led demonstrations.

Pudong New Area Administration shall take measures to promote the establishment of a cosmetic brand incubation base and provide services for brand research and development, design, publicity and promotion.

Article 8 The municipal departments of commerce, economy and informatization and drug supervision and administration shall, according to their respective functions and duties, support and cultivate new models and new forms of business in the field of cosmetic consumption.

The municipal department of commerce shall support the digital consumption mode in the field of cosmetics, build a demonstration scenario for smart shopping, and cultivate a benchmark enterprise for cosmetics e-commerce .

Pudong New Area Administration shall take measures to support and promote the aggregation of global cosmetics brands, encourage and guide the exhibition, promotion and experience activities in the comprehensive business district, support the establishment of special sales zones for domestic cosmetics in duty-free shops, and boost the construction of an international consumer  city.

Article 9 This Municipality encourages cosmetic enterprises to improve their ability to match consumer demand, carry out basic research in dermatology, explore production modes of small batch, multiple varieties and high flexibility, and make precise research and development of cosmetics suitable for consumers' personalized needs.

The cosmetics filing person in this Municipality shall, before the precise research and development of ordinary cosmetics is put on the market, conduct safety and efficacy evaluation according to the characteristics of the products and submit the filing materials in accordance with the state provisions.

Article 10 The cosmetics filing person in this Municipality and the responsible person within the territory of China may set up business venues in Pudong New Area and, in accordance with the personalized needs of consumers, provide packaging and repacking services to the registered ordinary cosmetics (excluding children's cosmetics, eye skin care cosmetics, cosmetics with the new material, etc.) on the venue, or may manufacture cosmetics by themselves or entrust municipal cosmetics manufacturing enterprise to engage in production.

The cosmetics filing person in this Municipality and the responsible person within the territory of China who provides on-site packaging and repacking services and involves direct contact with cosmetic contents shall conduct risk assessment on the quality and safety of cosmetics and apply for production license to the market regulation department of Pudong New Area. If qualified, the cosmetics production license shall be issued. The cosmetics filing person and the responsible person within the territory shall establish a corresponding cosmetics production quality management system and submit a self-inspection report on the production quality management system to the market regulation department of Pudong New Area on a regular basis.

The specific production license conditions and administrative requirements shall be formulated by the municipal drug regulation department.

Article 11 This Municipality shall support the administrative authorities of the industrial parks and the third party institutions to establish a service platform for the supply of cosmetic raw materials, so as to provide services such as the supply of raw materials and quality management for the registrants, filing persons and entrusted production enterprises of cosmetics in Pudong New Area.

The operating institution of the platform that provides cosmetics raw materials supply services shall establish the inspection record system of raw materials, strengthen its management of inspection and testing, storage and transportation, and keep good records of raw materials procurement and supply.

Article 12 This Municipality supports relevant enterprises in carrying out packaging and labeling services of imported cosmetics according to law to promote trade facilitation.

Where the packaging of the direct contact contents of imported cosmetics has been labeled and traceable, foreign cosmetics registrant, filing person or its responsible person within the territory may, in the regions of Pudong New Area that comply with relevant regulatory requirements, by themselves or entrust other enterprise to mark the name in Chinese and the service life on the package in direct contact with the contents, do packaging and labeling of Chinese in accordance with the relevant provisions of state cosmetics labels, but shall not touch or expose the contents of cosmetics.

Article 13 The cosmetic samples imported through Pudong New Area, used for registration or filing inspection, and the cosmetic samples used for research and development of enterprises, non-trial or non-sale exhibition and display that are in conformity with the relevant requirements, may be exempted from providing the registration certificate for imported special cosmetics or from the record information for imported ordinary cosmetics, and be exempted from import inspection.

Article 14 Exhibitor of China International Import Expo and other cosmetics professional exhibitions in this Municipality may, through the approval of Customs and other department, convert the originally imported cosmetics into bonded goods under the special customs supervision within the administrative zones of Pudong New Area after the exhibition is over, and

may hold consumption promotional activities. Eligible cosmetics goods may be traded in accordance with cross-border e-commerce rules.

Article 15 This Municipality encourages cosmetic industry associations, enterprises and scientific research institutes to participate in the formulation of relevant standards in the innovation fields of new cosmetic raw materials, new technologies and new business forms.

The intellectual property department of Pudong New Area shall use the rapid patent examination service mechanism to provide pre-examination services for enterprises applying for technology patents related to cosmetics in accordance with relevant state provisions.

Article 16 This Municipality encourages professional colleges and universities to train professional talents for the cosmetics industry, and enhance the import of high-end talents in cosmetics safety assessment and other professional fields at home and abroad.

The relevant departments of this Municipality and Pudong New Area shall support the construction of third-party inspection and testing institutions, professional R&D and production service platforms, support the relevant industry associations of cosmetics to strengthen the information communication and cooperation of the industrial chain, and establish  a research and development system for cosmetics of floristic resources with Chinese characteristics.

The municipal drug regulation department and the market regulation department of Pudong New Area may entrust a third-party professional institution to carry out the risk assessment of cosmetics quality and safety.

Article 17 This Municipality shall establish and improve an inclusive and prudent supervision mechanism that is compatible with the innovation and development of the cosmetics industry.

The municipal drug regulation department shall establish a cosmetic risk information exchange mechanism with relevant departments of Pudong New Area and Shanghai Customs, so as to realize the sharing, early warning and timely disposal of the risk information.

The market regulation department of Pudong New Area shall strengthen the daily supervision over the registrants of cosmetics, filers, entrusted production enterprises and responsible persons in Pudong New Area, and may formulate regulatory norms according to law and in the light of the actual conditions of Pudong New Area and the requirements of industrial innovation and development.

Article 18 Where a person, in violation of Article 10 of these Provisions, engages in on-site packaging and repacking services and involves direct contact with cosmetic contents, the department in charge of drug regulation shall confiscate his/her illegal incomes, and the cosmetics illegally produced or marketed, raw materials, packaging materials, tools, equipment and other articles specially used for illegal production or marketing; where the value of cosmetics illegally produced or marketed is less than 10,000 yuan, a fine of not less than 10,000 yuan but not more than 50,000 yuan shall be imposed; If the value of the goods is more than 10,000 yuan, a fine of not less than five times but not more than 20 times the value of the goods shall be imposed; If the circumstances are serious, the offender shall be ordered to stop production or business, cancel the filing or revoke the cosmetics license according to law, and the legal representative or the main person-in-charge, the person in charge directly responsible and other persons directly responsible for the violation shall be dealt with according to law.

For other acts that violate these Provisions, if the relevant laws and administrative rules have already provided for penalties, such provisions shall prevail.

Article 19 These Provisions shall be effective as of August 1, 2022.