China legal update: China Adopts Its First Vaccine Administrative Law Including Tough Penalties for Faulty Vaccine Producers or Sellers

China legal update: China Adopts Its First Vaccine Administrative Law Including Tough Penalties for Faulty Vaccine Producers or Sellers

I. Legal News

China Adopts Its First Vaccine Administrative Law Including Tough Penalties for Faulty Vaccine Producers or Sellers

Following a big vaccine scandal that a major vaccine producer named Changsheng Bio-tech Co., sold vaccines using expired materials in December 2018, China’s top legislature has put a lot of effect to draft a law to regulate the vaccine industry. Finally, early on the morning of June 29, 2019, China passed its first law on vaccine administration which stipulates the strictest management standard in this field ever.

The Vaccine Administrative Law (the “Vaccine Law”), which will come into effect on December 1, 2019, not only strengthens the supervision over the vaccine industry but also toughens penalties both on the production and sale of fake or substandard vaccines.

(1) Higher administrative fines on fake or substandard vaccines

Comparing to the previous draft of the Vaccine Law released in April this year, the final version of the Vaccine Law imposes higher administrative fines on those producing or selling fake vaccines.

According to the previous draft, the producer or seller of fakes shall face a fine of 15 to 30 times of the values, however the maximum fine is lifted to 50 times in the final version.

Substandard vaccine producers or sellers also face a fine of 10 to 30 times the value. Moreover, the Vaccine Law set the lowest fine in a very high level by stipulating that fake or substandard vaccines worth less than 500,000 yuan shall be calculated as 500,000 yuan which means that the lowest fine shall be 5 million yuan once a company produce or sell substandard vaccines.

Aside from the administrative responsibility on the company, the harsh punishments will also be imposed on individuals who are responsible for such violations. The Vaccine Law states that executives and staff who are responsible for such producing or selling will face, firstly, paid salaries confiscated and secondly, additional fines of up to 10 times of their incomes. Such executives and staff will be banned from entering the vaccine industry again and might be subject to detention by police for up to 15 days.

(2) More transparent information requirement

Transparency will be the best way for supervision. So, to increase the transparency of the vaccine industry, the Vaccine Law says that an electronic information system will be set up to make all detailed information in vaccine industry be trackable. The scopes of disclosure information shall include but not limited to production, package, validity, date of vaccination, productive medical workers and even the names of recipients. All the records mush be retained for at least five years.

Under such disclosure system, all the vaccine license holders are required to publish vaccine information on their websites timely, and violations of said obligation to public information will be imposed a fine up to 2 million yuan.

(3) Requirement of approval when authorizing others to produce vaccine

The Vaccine Law especially stipulates the authorization given to others to produce vaccines shall got the approval of the National Medical Products Administration Department. Any producer without obtaining such approval will face a fine up to 50 times of the value.

It is said that the new Vaccine Law is to guarantee the vaccine safety, help improve the quality of vaccines in China and boost public confidence in the Chinese vaccine market.


II. Hot topic

1. China’s New Immigration Policies to Attract Foreign Talents

On July 17, 2019, the Ministry of Public Security of China held a press conference in Beijing, during which the National Immigration Administration announced that more convenient immigration policies will be adopted nationwide as of August 1, 2019 to attract foreign talents.

It is said that the new policies aim to create a more efficient and high-quality entry-exit environment for foreigners to come to China for entrepreneurship, cooperative development, scientific research and work. We highlight three main aspects introduced in the new policies:

I. More foreign talents are entitled to apply permanent residence

Previously, only few foreign applicants are entitled to apply for permanent residence in China. For example, the applicant has to be the one (1) who has made direct investment in China with stable operation/good tax paying record for at least three consecutive years, (2) who made a great and extraordinary contributions to China, or (3) who acts as deputy general manager (or above), associate professor/researcher (or above) for at least four consecutive years and so forth.

Pursuant to the new policies, the following foreigners can also apply for permanent residence in China:

(1) Overseas Chinese working in China who has a doctoral degree or who have worked in national key development areas for at least four consecutive years and lived in China for at least six months each year.

(2) Foreigners working in China who meet the annual income/tax standard.

Specifically, the following conditions shall be met:

(a) worked for at least four consecutive years;

(b) lived in China for no less than six months per year;

(c) annual income shall be at least six times the average salaries in the city;

Taking Beijing and Shanghai for example:

(d) annual personal income tax shall be no less than 20% of their salary.

(3) Foreign spouses and underage children of the above-mentioned foreigners

II. More foreign talents are entitled to apply for long-term visas and residence permits

Foreign talents who are invited by key domestic universities, scientific research institutes and well-known enterprises will be issued visas or residence permits valid for 2-5 years.

III. Foreign students/graduates are now entitled to apply for visas and work permits

Foreign outstanding students graduated within two years from internationally renowned universities who want to start a business in China, or foreign students who are invited to China for internship by well-known enterprises and institutions are now entitled to apply visas and work permits.

It is said that more detailed rules will be released soon.


2. Garbage Classification Coming: New Mandatory Sorting of Garbage in Both Beijing and Shanghai

Starting from July 1, 2019, Shanghai adopts its new mandatory garbage classification system with a much more detailed, more complicated and more scientific sorting method and became the first city in China to enforce the garbage sorting regulation. Following the trend of Shanghai, Beijing will impose its new mandatory garbage sorting regulation in the coming future. It will influence daily life of not only individuals and but also institutions.

(1) More categorizes of waste collection

Previously, the waste sorting in both Shanghai and Beijing only have two traditional categories, recycling and non-recycling (the implementation of waste sorting does not go well as no specific fines mentioned). But according to the new regulation released by Shanghai, the waste shall be sorted by a more comprehensive four – tier system, including recyclable waste, hazardous waste, residual waste and kitchen waste. The new sorting categorizes fixed in Shanghai are not very easy to follow and these days jobs related to garbage sorting is booming in Shanghai.

(2) Specific fines are introduced and implemented

Under the new regulations, both Beijing and Shanghai impose stricter fines both on individuals and enterprises who fail to sort the waste rightly. In Shanghai, individuals shall be fined up to 200 RMB for sorting unproperly and companies or institutions can be fined ranging from 5,000 RMB to 50,000 RMB. When it comes to Beijing, although the detailed regulation has not come out yet, the punishment standard would be no less than Shanghai, said by Sun Xinjun, director of Beijing Municipal Commission of Urban Management.1

It is reported that between July 1 and July 6, Shanghai issued 190 fines for incorrect waste sorting, in which 15 were given to individuals while the rest were given to institutions.2


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