Regulations for Applying for E-Cigarette Production Business License

On February 5th, the State Tobacco Monopoly Administration released the "Notice on Application for E-cigarette Production and Operation License", the original text is reprinted below:

According to the Tobacco Monopoly Law of the People's Republic of China, the Implementation Regulations of the Tobacco Monopoly Law of the People's Republic of China, and the Regulations on the Management of Tobacco Monopoly Licenses (Order No. 37 of the Ministry of Industry and Information Technology), the Regulations on the Management of E-cigarette (Announcement No. 1 of the State Tobacco Monopoly Administration in 2022), the Detailed Rules for the Management of Tobacco Monopoly Licenses for E-cigarette related production companies and wholesale companies, and the Guidelines on the Layout and Permit Management of E-cigarette Retail Points, a tobacco monopoly license must be obtained for engaging in e-cigarette production and operation activities. In order to facilitate the application for tobacco monopoly licenses for e-cigarette production and operation entities, in accordance with relevant laws and regulations and normative documents such as the Detailed Regulations on the Establishment, Separation, Merger, and Revocation of E-cigarette related production companies, the Approval and Management Regulations for the Establishment of Foreign-invested E-cigarette related production companies, and Several Policy Measures (Trial) on Promoting the Legalization and Standardization of the E-cigarette Industry, the following matters are hereby notified.

Notice on Application for Tobacco Monopoly Production Enterprise License

(1) Type of application.

Various types of applications for tobacco monopoly production enterprise license are related to e-cigarette production companies, including new application (including reapplying for a license), change application, extension application, cessation application, resumption application, suspension application, and reissue application.

Scope of application.

New application. Legal entities or other organizations intending to engage in the production and operation of e-cigarette products, aerosols, and nicotine for e-cigarettes within China shall submit a new application for a tobacco monopoly production enterprise license to the competent authority.

Renew the license. If an e-cigarette related manufacturing enterprise experiences the following situations during the validity period of their tobacco monopoly production enterprise license, they should reapply for a new license from the accepting authority.

Business entities that undergo a change in ownership;

Changes in a company's registered address (main place of business) due to non-objective reasons, excluding objective reasons such as road planning and urban development.

The scope of change of a company's registered address is limited to the jurisdiction of the tobacco monopoly administrative authority within the same district or county, or within the jurisdiction of the city-level tobacco monopoly administrative authority in an unincorporated district or county.

Those whose permissions have changed;

Other circumstances specified by the State Tobacco Monopoly Administration.

Change application. During the valid period of the tobacco monopoly production enterprise license, if the following situations occur in the e-cigarette related production enterprise, it should timely submit a license change application to the accepting authority:

If the name of the company changes;

In cases where there is a change in the legal representative or the leader of an organization.

There has been a change in the type of business entity, but the operating entity remains the same.

Changes in the company's residence (main place of business, operating location) due to objective reasons such as road planning and urban development.

If there are any changes in the registered information of the major investors and certificate holders such as the production factories and finished goods warehouses under their supervision.

There should be no change in the major shareholders: New major shareholders have been added to the list of serious illegal and dishonest entities, the list of suppliers engaging in bribery, and other entities that violate the relevant regulations on foreign investment in e-cigarettes. They do not meet the regulatory requirements for e-cigarettes.

The scope of the change in production factory address is limited to the jurisdiction of the tobacco monopoly administrative authority in the same district or county, or the jurisdiction of the city-level tobacco monopoly administrative authority in the same undesignated district or county.

Other situations stipulated by the administrative department in charge of the state tobacco monopoly.

Extension application. Tobacco monopoly production enterprises must submit an extension application at least 30 days before the expiration of their license if they wish to continue production and operations after the license expires.

Closure application: Tobacco monopoly production enterprise license holders who need to temporarily suspend production and business operations for more than 3 months must submit a closure application before the closure. The application for closure should be within the validity period of the license and the closure time should not exceed one year.

Submit an application to resume operations. If the tobacco monopoly production enterprise license holder wishes to resume operations before the end of the closure period, they must submit an application in advance.

Closure application. Holders of production licenses for tobacco monopoly enterprises who are no longer engaged in e-cigarette related production and business activities within the validity period of the license should promptly submit a closure application.

Application for reissuance. In the event that the tobacco monopoly production enterprise permit is lost or damaged during the validity period, the holder of the permit should promptly submit an application for reissuance.

Receiving and decision-making bodies.

The agency responsible for reviewing the application is the provincial tobacco monopoly administrative authority where the applicant's residence (main operating location, business location) is located, and the decision-making authority is the State Tobacco Monopoly Administration of the State Council.

Branches of e-cigarette related production companies directly engaging in the production and operation of e-cigarette products, aerosols, and nicotine for e-cigarettes should separately apply for a tobacco monopoly production enterprise license. The application should be submitted by the legal entity to the provincial tobacco monopoly administrative department in the location of the branch's operating premises.

Permit application requirements.

Engaging in the production and operation of e-cigarette products, aerosols, and nicotine for e-cigarettes requires obtaining a tobacco monopoly production enterprise license and meeting the following conditions:

There is sufficient funding available to support production.

2. Possessing the necessary technological and equipment conditions for production.

Meets the requirements of the national e-cigarette industry policies.

Other conditions mandated by the administrative authorities in charge of tobacco monopoly under the State Council.

In the United States, between 2019 and 2020, there was a decrease in the percentage of adults using other tobacco products, including e-cigarettes, which went from 4.5% to 3.7%. The use of combustible tobacco products also decreased from 16.7% to 15.2%. Additionally, the percentage of people using two or more tobacco products also decreased from 3.9% to 3.3%.