A Path to Improved Access and Product Acceptance
Manufacturers looking to sell their products into the Peoples Republic of China (PRC) need to understand and comply with the required Chinese regulations. Many products need to acquire specific licenses, approvals and/or certifications prior to their production and shipment. Each product will need to be examined carefully by both description and description of use to determine which, if any, compulsory license, approval and/or certification will be needed.
For example medical devices and drugs need to apply for approval and registration with the China Food and Drug Administration (CFDA), firefighting equipment needs China Compulsory Certification for Fire Products (CCCF), toys, electronics, automotive parts need China Compulsory Certification (CCC) and some types of electronic products such as monitors and certain motors require a China Energy Label (CEL) before they can be shipped to China. It is important to understand that many of these requirements must be addressed prior to manufacturing for the final products to be in compliance.
Chinese National Standards (also known as “GB Standards”) specifically determine which products require approval or certification. The corresponding Implementation Rules prescribe the methodology by which the certification process is conducted. The process of getting approval, registration, and/or licensing takes time, and can depend on a given product’s complexity and the required testing. All testing is generally required to be done in China. Once tests are completed, the Chinese authorities typically require a factory inspection, also known as an “audit,” and similar to an ISO inspection. Manufacturers are usually not required to have ISO certification, but only to be in compliance with “Best Practices” and to have an established quality management system in place. Requirements are more stringent for products that may directly affect consumer safety, such as medical devices and drugs.
Non-Transparent Certification Requirements and Ever-Changing Regulations
It can be difficult to determine what type of certification is needed and which certifying authority has jurisdiction. Some products are required to have more than one type of certification or approval. There are quite a few different certifying authorities in China. Each authority is responsible for a specific type of certification or approval. Unfortunately, the process of figuring out what is needed and applying for certification is complex and not always completely transparent. Language and cultural differences can yield different answers to the same question when asking the certifying authority what is required. In cases in which a product may need multiple approvals, one certifying authority may be unaware of additional requirements from other certifying authorities.
Ever-changing regulations and constant updates can make it confusing for China’s Customs authorities as well. Reforms, updates and new regulations thrown together with “the human factor” and different interpretations of the regulations can cause products to be detained at Customs. Unfortunately, even for an experienced customs agent, it is not always obvious which products need what kind of approvals and/or certifications. For this reason, they often err on the side of caution, holding the goods until they can get a final determination, or request that the manufacturer provide additional documentation. Getting products out of customs after they are detained can be difficult. Again, cultural differences, language barriers, and time differences may require numerous communications before a product is released or shipped back to the sender. It is not uncommon for this back and forth communication to take weeks or even months for resolution. Incomplete requests by customs often require the manufacturer to send and re-send additional documentation, often with less than optimal results and all the while racking up storage fees. To avoid this unnecessary headache, it is best to completely understand the relevant regulations in advance, to send all of the proper documentation and to have a customs agent on the ground in China who understands what the product is and who is able to assist if needed.
Unfortunately, regulation changes and updates are often announced and implemented quietly or with very short notice. So short in fact that the certification bodies and customs agents are often unprepared themselves. There is often a lack of synchronization between the Chinese government, the certifying authority and Customs. This constant state of flux in the regulations can cost the manufacturer time, money and even customers if their products are detained at Customs for any length of time.
Problems with Proper Clearance at Chinese Customs
If a manufacturer’s product requires approval and/or certification and is sent with the proper documentation, it will generally have no problem clearing China’s Customs. However, if there is no mandatory approval or certification required for a given product, it can be difficult to get that product through Customs since it can often be mistaken for a product that requires certification. Products that do not need approval or certification raise a big question mark with Customs and again they would often rather err on the side of caution before letting such a product pass through.
This confusion is sometimes attributable to how the Harmonic System code, also known as “HS” code, is used by Customs to understand what the product is and how to classify it. Sometimes a proper HS code wrongly classifies a product as requiring certification. Unfortunately, there are often other factors that can be used to determine whether a product requires certification, as “description of use.” Another common reason for delays at Customs is an agent’s understanding of what a products is actually used for. A quick visual observation by an agent at Customs may result in an incorrect assessment. Think of how many computer components come in a generic-looking enclosure. A computer server generally needs certification, but not every enclosure that looks like a server is actually a server.
Voluntary CQC certification – A Solution For More Than Customs Issues
One way to potentially avoid these issues is to apply for a voluntary product certification with the China Quality and Certification Centre (CQC). The CQC is the largest certification body in the PRC. They are responsible for the official certification of a wide variety of products ranging from toys to automobiles. If a product is not listed in the official product catalog as requiring CCC approval, but appropriate regulations and test standards exist, it may be possible to get a CQC Mark certificate. The scope of CQC certification catalog is already extensive with more products being added regularly. Some of the product that can get CQC certification include certain types of household appliances, motors, machines, medical products, textiles, and office equipment. Keep in mind that products eligible for CQC certification must not require CCC approval. The CQC Mark demonstrates that the product conforms with China’s standards regarding quality, safety, environmental and energy efficiencies. Currently more than 500 products fall under the scope CQC product certification.
Like all PRC approvals and certifications, only the manufacturer of the product can apply for the CQC Mark certification, and distributors, subsidiaries or other intermediaries are not eligible. The process required to obtain the certification is aligned with the standard CCC process, and includes the filing of application documents, product testing (usually required to be done at a laboratory in China) and a factory inspection by the Chinese authorities. The requirements and time needed are based on the complexity of the product. Although the general timeframe is four to six months, the whole process can take up to one year or longer from start to finish, depending on the product and how the certification process is managed.
There are many different ways to save cost and time with CQC Mark certification. As one example, if a product is similar in kind and function to a single “family of products,” it may be possible to avoid testing each product in the family, thereby avoiding redundancy and additional test costs. Similar products of the same category can be seen as a certification group. The number of units and whether multiple products can be accepted under one test can only be confirmed by CQC after submitting all the necessary documentation and product information. However, testing can be expensive, so these savings could be substantial.
In the application process, numerous documents must be provided detailing the product as well as the core components that make up the product. This can be extensive, and sometimes requires detailed information regarding power supplies, wire, connectors and more. The manufacturer may need to contact their suppliers for the additional documentation required for these components.
After the application is accepted, the CQC will issue a code that applies to the specific manufacturing facility. It is important to check all of the paperwork from the CQC to verify that the name and address of the facility is 100% consistent with the existing business license. Any deviation, no matter how small, could present a problem down the road.
After an application has been accepted and a factory code issued, the CQC will request test samples to be shipped. The CQC will appoint a China-based testing laboratory certified by the Certification and Accreditation Administration (CNCA) to perform the required testing. Shipping test samples into China can be difficult, since they can run into some of the same issues previously mentioned. It is important to have all of the necessary paperwork and documentation, and it is suggested that the manufacturer use a competent logistics provider, and a skilled customs agent to avoid any problems.
Once the testing has begun, the applicant will need to be in continual contact with the test lab, since it is common for questions to come up and the test lab will require timely answers. Depending on the product, it is sometimes suggested that a technician or engineer from the manufacturer accompany the product for testing to provide on-site support and guidance. Although prior test reports used in conjunction with regulatory submittals for other jurisdictions may be helpful and simplify testing, they are not a substitute for test report issued by a CNCA-certified testing laboratory.
As part of the certification process, a factory inspection (also known as a factory audit) will need to take place. For the initial inspection, CQC will only entrust their own auditors to perform the audit. For manufacturers whose primary business is manufacturing, the preparation for the audit can be overwhelming. Quality management systems will need to be updated to address CQC-specific requirements (quality management systems certifications, such as ISO 9001, may be helpful but are generally not required). In addition, internal test reports, product certifications and other documents must be organized and ready for the auditors. The manufacturer is also responsible for the cost of all travel expenses for Chinese auditors as well as the cost of an interpreter when required. The factory audit can be stressful, but success can be achieved with good preparation and planning.
If the product testing and factory inspection do not identify any non-conformities, the CQC will issue a CQC Mark certificate. The certificate is valid for up to five years with annual follow-up inspections required. The CQC will usually allow non-CQC auditors to perform these annual follow-up inspections, but retains the right to require the use of its own auditors as well. The ongoing validity of CQC certification requires complete compliance to CQC regulations, including the annual audits. Likewise, it is important for the manufacturer to be in compliance with any regulatory changes. If an annual audit is missed, or the manufacturer does not keep up with the latest regulatory changes, a non-conformity can be reported and the certificate may be suspended or revoked.
Advantages for CQC Certificate Holders in Cases of Regulatory Changes
It is important to note that, in certain cases, a voluntary product certification can become mandatory, often with little or no advance notice. Test standards are quickly transformed to GB Standards, especially in the field of electronic products like household appliances, tools and IT products. Manufacturers holding a CQC Mark certificate for their products will have a competitive advantage, since they can transform their CQC certificates to a CCC approval through simple administrative procedures, once CCC becomes needed. Competitors without CQC certification will have to start the process from the beginning (i.e., application, factory code, testing, factory audit, etc.) and are not allowed to ship their products into China until they have completed the CCC approval process.
The CQC Mark certification process is challenging for manufacturers, but it can be worthwhile. The product certification improves the perceived product quality within the Chinese market, giving it a competitive advantage over other products that are not CQC certified. National quality certifications like the CQC certification receive a better response in China when compared with marks and certifications from other jurisdictions. For many product groups, the CQC Mark certification has set the standard by which product selections are made by the Chinese consumers. Another advantage is that products marked with the voluntary CQC Mark have a greatly reduced risk of being detained by Chinese Customs.
The China marketplace is vast and full of potential. With the right product and good preparation, a manufacturer can easily justify the initial difficulties of getting their product(s) certified.
Julian Busch is director of MPR GmbH – China Certification Corporation (www.china-certification.com/en), a company that supports manufacturers’ worldwide obtaining product certifications for the Chinese market. He can be reached at firstname.lastname@example.org.