FAQs on Regulations for Electronic Cigarette Production in China

To safeguard the legitimate rights and interests of participants in the electronic cigarette market, tobacco monopoly administration departments at all levels are implementing the "Decision of the State Council on Amending the Regulations for the Implementation of the Tobacco Monopoly Law of the People's Republic of China," the "Management Measures for Electronic Cigarettes," the national standards for electronic cigarettes, and relevant supporting policies. They are actively soliciting input from enterprises, coordinating administrative permits, accelerating product technical reviews, strengthening market regulation and actively providing guidance services to electronic cigarette related production enterprises. These efforts have received widespread support and recognition from participants in the electronic cigarette market. Now, we will address concerns related to approved production scales and issues raised in company discussions and phone consultations regarding the electronic cigarette industry.

What progress has been made in regulating the production scale of electronic cigarettes, and what has been the outcome thus far?

Answer: According to the Guidelines for Issuing Tobacco Monopoly Production License to Electronic Cigarette Related Production Enterprises and Several Policies and Measures (Trial) for Promoting the Legalization and Standardization of the Electronic Cigarette Industry, the tobacco monopoly administrative authorities under the State Council have developed a production scale calculation method based on researching the current production scale of electronic cigarette related production enterprises. The provincial tobacco monopoly administrative authorities have organized personnel to conduct on-site verification of the nominal capacity of production equipment, the average actual sales volume over three years, and the utilization rate of industry equipment capacity. The tobacco monopoly administrative authorities under the State Council have combined relevant data and actual conditions to conduct comprehensive calculations and form the confirmed production scale for enterprises.

Based on feedback from e-cigarette manufacturers who have obtained tobacco monopoly production licenses, it appears that the approval methods are practical and effective, the approval procedures are orderly and standardized, the approved quantity is essentially reasonable, and the companies are actively cooperating.

What are the reasons why the approved production scale may not meet the demand of market orders, and how can this be addressed in standard journalistic English?

Answer: When determining production levels, the orderly growth factors of e-cigarette production companies have already been taken into consideration, so it is generally not expected that the approved annual production volume will be lower than the total annual demand for orders. However, for some companies, changes in consumer demand for different products due to differences in product quality and product development efforts, as well as uncertainties in overseas market order demands, may result in some companies either producing less than the market demand or producing more than the market demand. In response, the administrative authorities of the State Tobacco Monopoly will adhere to the requirements of total quantity management and supply-demand management, respect the market, and timely introduce relevant management regulations based on the "Regulations on the Administration of Electronic Cigarettes" and related policies and measures.

Thirdly, how should companies that are not currently qualified to proceed with scheduled plans be addressed?

Answer: Adhering to the principle of "standards not lowered, requirements not loosened, and procedures not missing" for administrative licensing, and further improving work quality and efficiency, tobacco monopoly administrative departments at all levels will make classifications for e-cigarette-related production companies that have been scheduled but do not yet meet the conditions. If companies cannot be contacted after being notified of their scheduling, express no intention to apply, or fail to submit an application within five days after notification, they will be deemed to have abandoned their scheduling. If there are any delays during the application process for product technical review, the company will also be deemed to have abandoned scheduling. If for any reason a company withdraws its application on the Ministry of Industry and Information Technology's online platform for administrative licensing after applying, it will also be deemed to have relinquished its scheduling. If a company abandons its scheduling, the State Tobacco Monopoly Administration will deal with it by postponing the scheduling, and the new scheduling time will be notified separately.

If an application does not meet the acceptance requirements or has not been corrected within 10 working days from the day after the notification to make corrections is given, and still does not meet the requirements, the provincial tobacco monopoly administrative authority can make a decision to reject the application. If an application is accepted but found to not meet legal requirements upon review, the State tobacco monopoly administrative authority can make a decision to reject approval.

Fourthly, how can the products of certified e-cigarette manufacturing companies be registered for export on trading platforms?

Answer: Electronic cigarette production companies that have obtained tobacco monopoly production licenses and engage in export businesses should file for export declaration on the trading platform. The export declaration product includes nicotine, vape juice, and electronic cigarette products for electronic cigarettes. According to the "Implementing Rules for the Technical Review of Electronic Cigarette Products," electronic cigarette products should also be filed through the electronic cigarette product technical review management system before export.

The main process for recording export business involves certified electronic cigarette production companies registering on a trade management platform and creating a primary member account. Electronic cigarette exporting companies also need to associate their products with the Export Product Authorization Application page, where they will provide export-related information and agree to the "Export Product Electronic Commitment Letter." After completing the export declaration, the company will need to verify the export information on the "relevant documents" page and upload invoices, packing lists, customs declarations, and other related documents to complete the export business registration process.

How is the scope of a production enterprise license determined and what happens when the approved product brand changes?

Answer: After receiving license applications from electronic cigarette production companies, the tobacco monopoly administrative authority will conduct initial review, verification and approval in accordance with license conditions, combined with the application materials and on-site inspections. The production scope of the company's license will be strictly verified in accordance with legal regulations.

During the validity period of their license, e-cigarette manufacturers should conduct business activities in accordance with their approved product brands. In response to possible changes to product brands during a company's business operations, tobacco monopoly administrative departments are currently studying and developing relevant management regulations to adapt to market demand.

How to Obtain Samples of the National Standard Product for Electronic Cigarettes

Answer: Electronic cigarette manufacturers can contact the provincial tobacco monopoly administrative department where their residence (primary place of business, operating location) is located to obtain reference samples that meet the flavor requirements of the national standard for electronic cigarettes. The product technology evaluation agency will continue to guide and service electronic cigarette manufacturers who have submitted and submitted products for inspection and review, helping their products meet the national standards for electronic cigarettes as soon as possible.

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