China Tightens Its Enforcement Measures Against Violators of Food and Drug Legislation

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March 14, 2018 - Xiaolu Wang

The China Food and Drug Administration and the Ministry of Public Security jointly issued the Regulation on Imposing Penalties against Violations of Food and Drug Related Regulations on Individual Violators (严格落实食品药品违法行为处罚到人的规定) (the Regulation) on 24 January 2018. The Regulation reiterates that penalties against violations of food and drug related legislation must be imposed on individual violators, instead of only legal entities. In addition, the Regulation further clarifies the scenarios under which administrative penalties may be imposed on individuals who are directly responsible for the violations committed.
 
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The Regulation makes it clear that in cases where a legal entity in China violates food and drug related legislation, both the entity and the individuals who are directly responsible for these violations will be subject to applicable penalties. The Regulation further clarifies the concept of 'individual directly responsible for violations of food and drug legislation' as including both management personnel and regular employees. Specifically, management personnel refer to individuals who are in a management position and who use this position to approve, connive, or order others to commit concerned violations; regular employees may also be directly responsible for violations of food and drug related legislation, if they play a major role in committing the violation. 
 
On a more specific level, the Regulation outlines scenarios under which an individual would be punished for the wrongdoings committed by the legal entity, such as a company, with which they are associated. For instance, if a company fails to obtain a permit prior to manufacturing food or food additives, the management personnel and regular employees who are directly responsible for this violation would be subject to administrative penalties personally, in addition to the penalties imposed on the company. 
 
Companies should note that the Public Security Bureaus at all levels may arrest and detain the management personnel who are directly responsible for a violation of food and drug legislation for up to 15 days, provided that the violation meets one of the following criteria:
  • value of products involved in the concerned violation exceeds 20,000 CNY (approximately 3,100 USD);
  • duration of a violation exceeds three months; 
  • violation caused at least one death or health damages to at least 30 people; and
  • violator has been subject to administrative penalties for similar violations less than one year prior to the current violation.
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Companies that conduct businesses in the food or pharmaceutical industry should note that China has tightened the administrative penalties that it has against violators of food and drug related legislation. For instance, in cases where a company fails to obtain a permit to manufacture food additives, not only will the company be subject to penalties for this violation, the individuals who are directly responsible for it will also be liable for this violation personally. The Public Security Bureaus are also authorized to arrest and detain personnel who are directly responsible for a violation for up to 15 days. 

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