With the release of the Draft Measures for the Administration of Tobacco Monopoly Licenses for E-Cigarette Manufacturers and Wholesalers, regulatory oversight of the e-cigarette industry in China is entering a more standardized and refined stage. Below is a summary of the main contents of the draft regulation:
I. License Application Requirements
Financial Capacity: Enterprises must have sufficient financial strength aligned with their production and business operations, including paid-in registered capital, a reasonable asset-liability structure, and stable cash flow.
Technology and Equipment: Applicants must possess the necessary technical and equipment resources for operations, including qualified personnel, facilities, production equipment, and technical documentation.
Capacity Utilization: The utilization rate of e-cigarette production capacity must be no less than 50% of the industry average level.
II. License Management and Modifications
Change Applications: During the license validity period, companies must apply for changes in a timely manner if there are modifications to the enterprise name, legal representative, company type, registered address, etc.
Change of Major Shareholders: Any new major shareholder must be qualified to legally engage in e-cigarette-related businesses and comply with relevant regulations.
Capacity Adjustments: Any changes to the factory address or approved production capacity require submission of valid and legal approval documents.
III. License Review and Decision-Making
Review Process: The review process includes both on-site inspections and document-based assessments. It focuses on verifying the applicant’s compliance with licensing conditions and the authenticity, legality, and completeness of submitted materials.
Review Outcomes: Preliminary review outcomes fall into three categories: approved, rectification required, or rejected. The rectification period shall generally not exceed six months. Failure to rectify within the timeframe will result in rejection.
IV. License Usage and Renewal
Renewal Application: To continue production and business activities after the license expires, the holder must apply for renewal between 90 and 30 days before the expiration date.
Non-Renewal Scenarios: Licenses will not be renewed under circumstances such as the need to apply for a new license, involvement in disqualifying activities, or criminal liability due to illegal e-cigarette business operations.
Validity Limitations: If the business has ceased operations, has not resumed, has a capacity utilization rate below the industry average, or is suspected of illegal conduct, the license validity will not exceed one year.
V. Quality Assurance and Consumer Rights
Quality Commitment: Enterprises are required to establish a quality safety advance compensation system and allocate special funds to manage quality risks.
Product Standards: Products must comply with the mandatory national standard GB 41700-2022 (E-Cigarettes) or the destination country’s market access standards to ensure product quality and safety.
This document summarizes the key points of the Draft Measures for the Administration of Tobacco Monopoly Licenses for E-Cigarette Manufacturers and Wholesalers, intended to help industry stakeholders understand and comply with the new regulatory framework.
Disclaimer: This article is for informational purposes only and does not constitute legal advice. For actual implementation, please refer to the official documents issued by the State Tobacco Monopoly Administration.
