Yesterday, two eye-catching public announcements were published on China MEE’s website, stating that three Chinese companies were fined for violations of the new chemical notification obligations. They have manufactured new chemical substances without notification.
The three companies are:
- Jiangsu Liside New Material Co., Ltd. (a fine of RMB 20,000)
- Shandong Sihuan Pharmaceutical Co.,Ltd. (a fine of RMB 15,000)
- Jinan Shenghong Pharmaceutical Technology Co.,Ltd. (a fine of RMB 10,000)
The punishment caused quite a sensation among the industry stakeholders. Although the current punishment (a fine up to RMB 30,000 only) for violating the Measures for the Environmental Management of New Chemical Substances (MEP Order 7) are not effective deterrents, the public disclosure of the offending companies’ information is a harsher disincentive to deter others and increase compliance with new chemical notification obligations. Also, it is a signal that regulatory enforcement will be enhanced and we will see more supervisory activities. Shanghai has been conducting a citywide supervision campaign on new chemicals since 2017 and some other provinces have followed this model, e.g. Shandong Province and Jiangsu Province.
In addition, the new Regulation on Environmental Risk Assessment and Control of Chemical Substances under development (CL news) will impose more severe punishment on such violators. As proposed, a fine between RMB 500,000 and RMB 1 million shall be imposed; if severe consequences are caused, a fine between RMB 1 million and RMB 2 million shall be imposed. The significant increase in financial penalties will definitely serve to raise the awareness of the manufacturers and importers of new chemicals in China.