On November 8, 2019, the State Administration of Market Regulation adopted the Interim Provisions on the Administration of Consumer Product Recalls (the “Provisions”), which will go into effect on January 1, 2020. The Provisions regulate the recall of defective consumer products in the People’s Republic of China as highlighted below:
1. Definition of “defective consumer product recall”
“Consumer products” refer to those routinely purchased and used by consumers for their livelihood. A “defect” refers to any unreasonable danger to body and property that generally exists in the same batch, model number or type of consumer products as a result of design, manufacture or warnings. A “recall” refers to activities conducted by a manufacturer to eliminate the defect or reduce safety risks through remedial measures such as supplemental or modified warning signs, or repair, replacement or return of the products.
2. Supervision of defective consumer product recalls
The State Administration for Market Regulation is responsible for guiding, coordinating and supervising the recall of defective consumer products nationwide, while the provincial market regulatory departments are responsible for the supervision and administration of the recall of defective consumer products within their respective administrative areas. All units or individuals have the right to report to a market regulatory department information about potential defects in consumer products. The market regulatory department shall secure channels of information reporting, and collect, aggregate and analyze information about the potential defects. Manufacturers and other operators that engage in the sale, lease or repair of consumer goods (“Other Operators”) shall report to the local provincial market regulatory department within two working days should any of the following occur to the consumer products they manufacture and operate: (1) They have caused or may cause deaths, serious injuries or property damage; or (2) they have been recalled outside the People’s Republic of China.
3. Investigation and analysis of the defective goods and of the defects
If a manufacturer discovers a potential defect in its consumer products, it shall conduct its own investigation and analysis and submit its results to the provincial market regulatory department. If the provincial market regulatory department discovers any potential defect in consumer products manufactured in its administrative area, the manufacturer shall be notified to conduct an investigation and analysis. If the results of the investigation and analysis show that there are defects, the manufacturer shall immediately recall the products without concealing the defects.
If the manufacturer fails to conduct the investigation and analysis as notified, or if the provincial market regulatory department believes that the results are not sufficient to prove that there is no defect, the provincial market regulatory department shall organize a defect investigation. If a market regulatory department at or above the provincial level believes that there may be consumer product defects that are likely to cause serious consequences or have a large scope of impact, it may also directly organize a defect investigation. If the defect investigation shows that the products are defective, the market regulatory department that organized the defect investigation shall notify the manufacturer to implement a recall immediately. If the manufacturer receiving such a recall notice believes there is a defect, it shall immediately implement the recall; but if it does not believe there is a defect, it may submit an objection to the market regulatory department that issued the recall notice within ten working days upon receipt of the notice.
4. Contents of a recall plan
A recall plan should include the following contents: (1) the scope of the consumer products to be recalled, the existing defects, and contingency measures to avoid injury; (2) the specific recall measures; (3) the organization in in charge of the recall, its contact method and scheduling; and (4) any other matters that should be reported.
5. Entities responsible for imported consumer products
For imported consumer products, the entity designated by the foreign manufacturer to handle recalls in the People’s Republic of China shall be deemed as the manufacturer under the Provisions. If the foreign manufacturer fails to designate such an entity, the importer shall be deemed as the manufacturer under the Provisions.