Ecommerce Industry Update - May 17, 2018

May 17, 2018

By Patrick Lozada

Dear USCBC members interested in ecommerce:

On April 24, a government monitoring center under AQSIQ released an unpublished notice calling for increased monitoring of US crossborder ecommerce products. 

The “Letter on Strengthening Self-Control of American Product Inspections”  “关于加强对美国产商品自检自控的函” was circulated internally and to ecommerce enterprises calling for more scrutiny of US products. The letter was apparently issued by the National Monitoring Center for Cross-border E-commerce Product Quality and Safety Risks “跨境电子商务商品质量安全风险国家检测中心,” established in October of 2016 under AQSIQ. A full translation of this notice is at the bottom of this email. 

At least five member companies received this notice. USCBC's government contacts and third party reporting note that several pet food brands were pulled from ecommerce platforms in response. Besides pet food, the notice also lists human food, healthcare products, and cosmetics as requiring additional sampling inspection. 

As this specifically targets US products, it may be a result of tensions in the bilateral relationship. Future enforcement may be linked to ongoing US-China bilateral negotiations. The crossborder ecommerce channel currently operates under a provisional stay of rules. Rules requiring domestic product registration are set to come into effect by the end of the year unless an additional delay in implementation is granted by the central government. 

We continue to monitor this situation. If you have any comments or questions, please email [email protected]

Translation of the Letter on Strengthening Self-inspection and Self-control of American-made Products
To those cross-border e-commerce enterprises concerned:

American-made products have always constituted an essential part in cross-border ecommerce trade in China, accounting for a large portion in healthcare products, food and pet food in particular. As trade volume grows between China and U.S., quality and safety problems have been arising incessantly from the US produced commodities. Even with the release of new regulations on cross-border ecommerce by State Council on April 8, 2016, there remained some US products not technically sold as ruled by law and regulations. To facilitate the sound development of cross-border ecommerce trade and create legal, safe market environment in China, requirements on strengthening the self-inspection and self-control of US-made products are listed as follows:

1. All cross-border e-commerce enterprises shall organize personnel for the comprehensive sorting-out and risk assessment on American-made commodities, which are to be sold by the ecommerce platform itself as well as the settled-in sellers, remove products from shelf and suspend the selling that do not comply with the country’s supervision requirement of entry-exit inspection and quarantine. 

2. All cross-border e-commerce enterprises shall double efforts on the sampling inspection on key, sensitive American-made products (food, healthcare products and cosmetics), remove items from shelf and suspend the selling of products that fail to meet the inspection requirement. Items that do not meet standards in safety, health and environmental friendliness shall be taken off the shelf and called back by the enterprises that made them.

3. Strengthen management on American-produced animal-derived pet food. All cross-border e-commerce enterprises shall have full inspection on the American-made animal-derived pet food that are to be sold on the e-commerce platform. Pet food without an Import Feed Registration Certificate shall be removed from the shelves and suspended selling.

4. All cross-border e-commerce enterprises shall conduct self-inspection and self-control on the safety and quality of US made products in complying with the above requirements. When there is a problem, they shall report in a timely manner to the customs inspection and quarantine authorities as well as the National Monitoring Center for Cross-border E-commerce Product Quality and Safety Risks.
 Please be advised of the above.
The National Monitoring Center for Cross-border E-commerce Product Quality and Safety Risks (seal)
April 24, 2018