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Preamble
On 8th April 2016, a total of 11 China State Departments issued a notice about commodities allowed to be imported using CBEC. This notice included a positive list (Chinese, English 1 2), which means that rather than mentioning all forbidden items, the 11 departments decided to name all permitted products. Later on 15th the same month, 13 ministries and commissions of China co-released the second batch of positive list for commodities traded through cross border e-commerce, which took effect from April 16, 2016.The list includes 1240 product types in total, which include many food categories and 20 kinds of cosmetics. Products not included in the list are forbidden to be imported via CBEC.
A grace year was granted, to last until May 11th 2017 during which import of any kind of product didnt need to pass Custom Clearance of Entry Commodity and other requirements. On november 2016, the grace period was further extended to the end of 2017.
On March 2017, a China Ministry of Commerce spokesman stated that during the grace period CBEC Imported Retail Products will be considered as personal articles. It means that currently CBEC imports will still be exempt from pre-market registration/filing and Customs clearance of entry commodity. Let’s now review some noteworthy product categories in the positive list.
Positive list Product Categories
Food and beverage
Most prepackaged foods are included in the list (refer to our F-lists). Liquid milk and fresh foods are allowed to be traded through CBEC via bonded warehouses to China; Health food and foods for special medical purpose are also allowed after registration or filing with CFDA according to the Food Safety Law; Grain and grain products can be traded through CBEC (through bonded warehouse) with a limit on annual purchase amount per individual of 20kg/person; Unregistered (recipe) infant formulas but still be manufactured by CNCA verified manufacturers are allowed to be traded before 1 Jan 2018.
Cosmetics
China’s CBEC policy towards cosmetics is still vague. Before “2016.4.8 policy”, all CBEC commodities were exempted from registration procedures and all cosmetics, including functional high risk cosmetics, didn’t need animal testing. However, the “4.8 policy” required that except for “first import cosmetics”, all cosmetics imported through E-channel should acquire registration license or filing certificate. That means imported functional cosmetics which can only apply for registration must undergo animal testing. However, this policy has been suspended because of the previously mentioned Grace Period.
Possible Future Scenarios
Until 31st December 2017 products on the positive list are still exempted from checks of their Customs Clearance Certificates, and first-time imported cosmetics, baby formula, medical equipment and food products for health/medical purposes are also not required to provide import permits, registration or filing. Hence, until the end of 2017, exporters can ship these goods to bonded warehouses in the pilot cities, or via the direct mail model without having to comply with rules on cross-border e-commerce activities.
There is an ongoing debate between officials’ desire to ensure product safety and E-traders pushing for a loosened regulation in order to boost E-Economy, as food and cosmetics products are staple commodities of CBEC. A final decision will surely emerge in the second half of 2017, but given the unexpected past policy shifts, it’s difficult to predict what will happen.
Talking about food products, maybe the decision to treat CBEC traded goods as personal articles will only apply to products listed on the positive list, maybe it will it include all traded products.
Another problem is health foods: how will they be treated? It is possible that after December 31st 2017 all health foods sold in China will require registration/filing regardless of the chosen sales channel. A scenario in which all of them are indistinctively treated as personal articles is less likely to happen.
As for cosmetics, Internal sources predict that the coming policy will loosen restraints on general cosmetics but will keep firm control on functional cosmetics, therefore requiring animal testing for them.
Anyway, it is probable that the situation from January 2018 on won’t last forever, and it is likely that the most sensitive categories will be regulated differently from other more neutral ones. Chinese government can’t dare to lose control on harmful cosmetics and food categories perceived as crucial in ensuring national food safety like infant formula and health products.
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