On October 13 2015, the Chinese General Administration of Quality Supervision, Inspection and Quarantine (AQSIQ) issued the draft regulation, Detailed Rules for Supervision and Administration on Food Imported by Bonded Mode of Cross Border E-Commerce.
According to REACH24H, a Chinese regulatory consultancy, cross border e-commerce (CBEC) is “booming” in China due to “lax regulation.”
Until now, it said, consumer products sold on Chinese CBEC platforms, such as Alibaba's T-Mall, via bonded warehouses have been subject to “expedited and greatly reduced” inspection by the China Inspection and Quarantine Service (CIQ).
CBEC products are also subject to “preferential taxation policies” and are not required to comply with Chinese national standards.
In an email to DairyReporter, REACH24H branded the AQSIQ draft regulation as "a complete U-turn."
Under the proposed legislation, imported products sold on CBEC platforms will be required to adhere to the same regulatory requirements applied to those that enter China through traditional channels, including China Certification and Accreditation Administration (CNCA) registration.
Manufacturers of imported dairy products and infant formula sold on Chinese CBEC platforms via bonded warehouses will be “significantly impacted," Raymond Ng, regulatory consultant, REACH24H, told DairyReporter.
"Dairy manufacturers that once took advantage of this regulatory lax trade model by selling direct to consumers via e-commerce (T-Mall, JD.com etc.) would need [to] withdraw and start all over again to make sure they comply with China national standards,” he said, “meaning their manufacturing plant needs to be registered with CNCA, as well as complying with China’s product and labeling standards."