China Laws and Regulations Update in April 2023

1. Internet Advertisement Regulations

Promulgated by State Administration for Market Regulation

Promulgation date: 20 March 2023

Implementation date: 1 May 2023

Document number: SAMR Order 72

The Rules further clarifies responsibilities of advertisement owners, internet advertisement managers and publishers and internet information service providers; actively addresses social concerns, includes provisions relating to pop-up ads, splash ads and ads published by smart device; further specifies advertisement regulatory rules in key areas, including “advertorials”, internet advertisements containing links, cost-per-click, algorithm recommended or live stream advertisements and ads indirectly published subject to approval; adds provisions relating to jurisdictions over advertising sponsors. It establishes a system that supports regulation and law administration in internet advertising and energizes the orderly growth of the internet advertising industry. (Source: SAMR website)

2. Provisional Rules on Financial Management of After-school Training

Promulgated by Ministry of Education, etc.

Promulgation date: 22 March 2023

Implementation date: 22 March 2023

Document No.JJGTH[2023]

The Rules includes provisions relating to financial management, fund raising, capital operating, assets and liabilities management, profit distribution, liquidation and financial supervision. It requires that the organization should maintain a full set of all party involved financial decision making and supervision rules and a related financial management system, with its legal representative responsible for the authenticity and completeness of its financial work and documents. It stresses that no listed company may sponsor or participate in sponsoring any organization offering courses on academic subjects for compulsory education students or acquire such organization’s assets by issuing shares or paying in cash; none of such organizations may allow foreign investors to control or hold its shares by merger, trust, franchise, variable interest entity, etc.; and no primary or high school may sponsor or participate in sponsoring any after-school training organization. (Source: MOE website)

3. Online Cosmetic Business Regulations

Promulgated by China National Medical Products Administration

Promulgation date: 4 April 2023

Implementation date: 1 September 2023

Document number: CNMPA 36, 2023

The main content of the rules is as follows. First, in respect of regulated online cosmetic businesses and regulatory authorities, it sets out that cosmetic businesses in e-commerce include people running e-commerce platforms for cosmetics, cosmetic businesses on the platforms and e-commerce businesses selling cosmetics via their own websites or other network services and that the National Medical Products Administration and other medical products administrations above the county level are responsible for regulating online cosmetic businesses. Second, in respect of the platform’s responsibility to manage businesses on it, it requires that the platform should conduct real name registration and day-to-day inspections, prevent and report illegal activities and fulfill other management duties. Third, in respect of legal obligations of cosmetic businesses on the platform, it provides that cosmetic businesses on the platform should fulfill the duties to check incoming products, display product information, etc. Forth, in respect of regulatory requirements for online cosmetic businesses, it explicitly sets out powers of supervision and inspection, jurisdiction over administrative punishment, etc. cin connection with regulation of online cosmetic businesses. (Source: NMPA website)

4. Futures Exchange Management Rules

Promulgated by China Securities Regulatory Commission

Promulgation date: 29 March 2023

Implementation date: 1 May 2023

Document number: CSRC Order 219

The amendments to the Rules are mainly about 1. upholding the leadership of the Communist Party of China over the futures exchange and improving requirements for CPC teams in the futures exchange, 2. implementing requirements of the Futures and Derivatives Law and improving related rules, 3. optimizing internal governance of the futures exchange and improving its organizational structure and operational mechanism, 4. strengthening risk control of the futures exchange for the market safety and 5. fully implementing responsibilities of the futures exchange to help healthy growth of the futures market. In addition, based on the Futures and Derivatives Law, the Rules adjusted related clauses. (Source: CSRC Website)

5. Law Enforcement Guide for Extreme Words in Adverts

Promulgated by State Administration for Market Regulation

Promulgation date: 20 March 2023

Document number: SAMR 6, 2023

The main content of the Guide is as follows. First, it further defines the boundaries of law application. Based on the original purpose of and regulatory and law enforcement practices under the Advertisement Law of the People’s Republic of China (Revised Edition 2021), it specifies the circumstances where extreme words in advertisements are not governed by Article 9.3 of Advertisement Law to avoid arbitrary law enforcement. Second, it sets out general principles of law enforcement and regulation that requires market regulation authorities at all levels understand extreme words in advertisements and decide whether they violate law by considering the content and context of advertisements in order to harmonize political, social and legal effects. Third, it regulates the discretion and specifies circumstances where no, reduced, lighter or heavier punishment should be legally given in accordance with the Administrative Punishment Law of the People’s Republic of China, Instructions on Regulating the Discretion to Decide Administrative Punishment by Market Supervision and Regulation Authorities. (Source: SAMR website)

6. Toothpaste Regulations

Promulgated by State Administration for Market Regulation

Promulgation date: 23 March 2023

Implementation date: 1 December 2023

Document number: SAMR Order 71

The Rules defines the toothpaste, specifies its efficacy and labeling requirements, requires its efficacy be advertised on a fully scientific basis and sets out required and prohibited content of its label and the scope of and words used in advertisement of its efficacy. It also specifies that the National Medical Products Administration and local governments above the county level should be responsible for regulating toothpastes. In addition, the Rules specifies the toothpaste recordation rules, under which new ingredients of a toothpaste should be registered or recorded according to the risk classification rules and monitored according to the safety rules and with no safety issues during the monitoring period, will be included in the list of toothpaste ingredients in use; and that the existing toothpaste production permit system remains valid, in which the cosmetic production permit is required for toothpaste production. It further states that the person who requests the registration of a toothpaste should be responsible for its quality, safety, stated efficacy, etc. (Source: SAMR website)

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