Don’t Panic! New Chinese Administrative Penalties take pragmatic approach to enforcement

23 November 2012 |

The newly introduced Chinese Administrative Penalties Rules for Pharmaceuticals and Medical Devices provide for adminstrative penalties for breaches of regulations.  However the preamble to the new regulations explicitly calls for discretion in application of penalties and the requirement that discretion be exercised to adjust the penalty according to the severity of the breach.

There are specific provisions which reduce or eliminate penalties in cases where no harm was done or the breach was minor or there was active remedial action taken to minimise the effect.

For example, parallel to the lists of violations warranting more severe penalties are the following points (our translation):

  • Clause 7 (1) “if the offender actively seeks to eliminate or reduce the consequences of illegal conduct…” [penalties will be reduced]
  • Clause 8  “If the nature of violation was mild and did not result in significant harm, no administrative penalties should apply”;
  • Clause 10 lists many of the “serious offences” are qualified with a requirement that they must have caused “serious consequences” before administative penalties apply.

Clause 8 also includes a time limitation: if the illegal conduct is not identified within 2 years, no administrative penalties apply unless otherwise specifically indicated in the [Chinese] regulations

So in summary – don’t be alarmed, this new regulation continues a trend of pragmatic evolution of medical device regulations in China with a reasonable approach where penalties are administered with considerable discretion according to the severity of regulatory breach.  This mirrors the increasing use of administrative penalties seen in other jurisdictions outside of China such as the “Civil Penalties introduced in Australia in 2006.

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