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China NCSN: MEP Punishes Five NCSN Certificate Holders

On 24 July 2014, China MEP issued a written decision on the administrative penalty for five certificate holders that have failed to submit the annual report of year 2012 production or import activities of new chemical substances reports.

Among the five certificate holders, three are domestic enterprises and the other two are Japanese enterprises. According to Article 44 of MEP Order 7, in such cases enterprises are subject to fines of up to RMB 10,000. Although the fine is relatively small, detailed information of the offending enterprises has been made public, including business license No., organization code, legal person’s name, address, etc.

According to the MEP Order 7, applicants submitting consecutive applications for China new chemical substance notification, should have an unblemished history within the last three years if they want to apply for further NCSN. In other words, for these enterprises, any breach of MEP Order 7 may subject their new notification to delays or even rejection.

China designates regulatory supervision to regional authorities and each region has their own Environmental Supervision Center under China MEP in addition to a provincial Environmental Protection Department which is both assigned to environmental regulatory supervision and enforcement. In China there are six Environmental Protection Supervision Center covering East China, South China, North China, Northwest, Southwest and Northeast which monitor local environmental protection work on behalf of China MEP.

This is the first time the MEP has enforced administrative penalty for China NCSN offences. Even as recently as 2013 some provincial Environmental Protection Departments knew absolutely nothing about practical enforcement of China NCSN requirements. However, the issuance of this written administrative penalty has shown that the provincial Environmental Supervision Center and provincial Environmental Protection Department are increasingly active in NCSN regulatory enforcement.  

The judiciary process is still inefficient and the whole process takes almost one and a half years. The timeline is specified below:

Due by Feb 2013, annual report of year 2012 production or import activities of new chemical substances were required to be submitted

  • By 1 Apr 2014, three rounds of supplementation for 2012 annual report completed

  • 5 Nov 2013, CRC reported to the Department of Pollution Prevention and Control under MEP the annual report submission condition

  • 29 Dec 2013, Department of Pollution Prevention and Control reported to China MEP

  • Jan 2014, publication by MEP

  • 14 Apr 2014, enterprises were informed to defend themselves

  • May 2014, the content of defending were judged by MEP (some are of no objection)

  • 24 Jul 2014, corresponding written decision on the administrative penalty was issued

The public exposure of this information in conjunction with the financial penalties are likely to deter other enterprises and increase compliance with post-notification obligations. China MEP and the CRC-MEP (now called SCC-MEP) will further strengthen its efforts to publicize and implement China NCSN with the aim to comprehensively enforce NCSN in China. 

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