The State Administration for Market Regulation (“SAMR”) issued the Announcement on Strengthening the Regulation of Recalls of Consumer Goods Sold Online (the “Announcement”) on 29 December 2020. The consumer goods in the Announcement refer to products purchased and used by consumers for the need of living consumption as provided under the Interim Provisions on the Administration of Recall of Consumer Goods (the “Provisions”) which took effect on 1 January 2020. Such goods are inter alia clothes, stationary and household appliance and products; but not motor vehicles, food, toys, pharmaceuticals and cosmetic, the recall of which are subject to specialised regulations.
1. Obligations of manufacturers and sellers
With effect of 29 December 2020, the Announcement requires manufactures, sellers and other operators to establish and improve systems for collecting, verifying, analysing and handling defects in consumer goods sold online. If it is found that any consumer goods sold online have caused or may cause death, serious personal injury or major property damage, or if there are any such consumer goods that have been recalled in overseas countries, then reports must be filed with the local SAMR in accordance with the Provisions.
Once receiving such a report, the local SAMR may instruct the manufacturer to conduct investigations and implement recalls if the goods are found to be defective. The local SAMR may also initiate investigations by itself if it considers the potential scale and impact of the defects may be significant.
Where it is found that there are defects in consumer goods sold online, the manufacturer of such consumer goods shall immediately stop manufacturing, selling, or importing them, notify other operators of stopping their relevant sales and other operation activities, and immediately recall the goods as per the requirements of the Provisions. After receiving the manufacturer’s notification, sellers and other operators shall immediately stop selling the defective consumer goods and assist the manufacturer in implementing recalls.
The Announcement also encourages manufacturers, sellers and other operators engaged in online sales of consumer goods to establish an internal traceability mechanism for the safety and recalls of consumer goods, and improve recording systems for product labelling, sales records, product registration, and warranty claims.
2. Obligations of e-commerce platform operators
E-commerce platform operators are required by the Announcement to conduct dynamic monitoring of defective consumer goods of which information has been made public by the market regulatory authority, and establish effective procedures for preventing the defective consumer goods from continuing to be sold online.
Under the Announcement, E-commerce platform operators are encouraged to establish convenient dispute resolution and remedial mechanisms to handle consumer complaints and disputes in a timely manner. E-commerce platform operators are also encouraged to implement self-commitment on consumer goods safety and recall co-governance, and strengthen cooperation with government authorities, in order to promote the healthy development of the online retail industry.
Compared with the Provisions, the Announcement emphasises e-commerce platform operators’ obligations of monitoring defective consumer goods sold via their platforms and providing necessary assistance for the implementation of recalls. This enhances the scope of responsibility of e-commerce operators.
Please click here for the full text (Chinese only) of the Announcement.