3rd Report of the Market Access Ombudsman Council (March 18, 1996)

2-(2) Deregulation and Simplification of Cosmetic Regulations

1. Complainant: Tokyo Chamber of Commerce and Industry

2. Ministry concerned: Ministry of Health and Welfare

3. Background Information:

Imported cosmetics are subject to the following regulations under the Pharmaceutical Affairs Law in the interest of ensuring safety.

(1) License for the import of cosmetics

A person who wishes to import cosmetics as a business shall obtain a license for each business office as a cosmetic importer. Requirements for the license include the installation of testing facilities (or utilization of another testing facilities) and the availability of a responsible engineer. When a licensed importer wishes to increase or revise his list of licensed imported products (category), it shall obtain a license for the new or revised products (category) for each office. When the product (category) is outside the comprehensive licensing standards of cosmetics by category (CLS, hereafter) the business shall obtain the following approval.

(2) Category license and category approval

CLS are for the ingredients that are generally considered safe when used as ingredients in cosmetics. They show ingredients and their quantities for each of 25 categories (including cosmetic lotion and lipstick).

The importer will obtain a category license for a cosmetic within CLS (since he normally gets category licenses for all his cosmetics upon being licensed as an importer, it is rare to get an additional product license for a category license), then submit an imported product notice (carrying domestic name of product, foreign name of product, name of manufacturer, and ingredients etc.) for each product. After completing this procedure, the importer will be allowed to import the product.

If the cosmetic is outside the CLS (for example, cosmetic containing an ingredient that has never been used in Japan), the importer shall obtain a category approval that provides an overall approval on the ingredients, volumes, etc., for each category. In processing the application for the approval, the approval review will be conducted based on the data on safety and other materials submitted by the applicant. After obtaining a category approval and an additional product license for each category of this approval, an additional product licenses for each product is not required, i.e. importing products needs only submitting an imported product notice for each product.

Furthermore, when submitting an imported product notice, the importer shall attach a certificate on the ingredients prepared by the manufacturer. Note that it is not necessary to submit an imported product notice for each act of import when a same importer continually imports the cosmetics for which the notice has been submitted.

(3) Approval and license

The application for an approval will be reviewed to check whether there will be any problems with the cosmetics. For a license, a review will be conducted to examine whether the cosmetics will be able to be appropriately controlled. As an approval (required only for cosmetics outside CLS) is given as a pre-condition to an import license, in principle, only the person who received the approval for the product can apply for the import license or additional (revision) import product (category) license (normally, approval application may be submitted concurrently with the license application). In addition, it is also possible for a foreign manufacturer to apply for an approval.

(4) Labeling

When selling cosmetics, the importer shall show in Japanese on the product his name and address, name of the cosmetic, names of ingredients designated by the Ministry of Health and Welfare such as those that may cause allergic reactions, manufacturing number or manufacturing code, etc. The United States requires that all ingredients be displayed on the product, and EU plans to introduce the same system.

(5) Miscellaneous

Quality standards for cosmetics stipulate substances such as prohibited ingredients in cosmetics.

The United States and EU, like Japan, employ a negative list (i.e. a list of prohibited ingredients) and a positive list (i.e. a list of permissible ingredients), but the contents of their restrictions (lists) differ between two countries.

The ministry concerned plans deregulation according to the following schedule based on the Deregulation Action Plan (March 1995).

1) Concerning CLS, during fiscal year 1996, the ministry concerned will integrate categories and increase the number of usable ingredients for each category.
2) Review regulations on the licensing system and labeling pertaining to the manufacture and import of cosmetics, including the alignment of current ingredient regulation with the international regulation, paying attention to international developments in regulations for cosmetics.

In March 1996, the ministry concerned took a measure to permit parallel import, provided the importer attaches data on all the ingredients, in lieu of the certificate of ingredients prepared by the foreign manufacturer, to the imported product notice.

4. Complaint:

The following issues were raised.

(1) Some products manufactured and sold in the United States according to the U.S. FDA (Food and Drug Agency) standard cannot be imported into Japan due to domestic regulations. For example, a business attempted to import soap bars from the United States, but since the soap contained ingredients that haven't been employed in cosmetics in Japan the business needed an approval and consumed time and money in collecting the data. In order to promote imports, the ministry concerned should deregulate the restriction on ingredients of cosmetics.

(2) When importing cosmetic soap bars, the Pharmaceutical Affairs Law requires installation of testing facilities and hiring of a chemical engineer. However, the regulation is not needed on cosmetics that individuals have purchased abroad and have been accustomed to using, so it should be abolished.

(3) When importing shampoo, even if it is the same product manufactured by the same manufacturer (i.e. the ingredients and the manufacturing method are the same), it is necessary to undertake the procedure, such as collecting data, for each product category, from the very beginning. A simpler method should be made available for products whose imports have been licensed.

5. Results of Deliberation:

Consumers have selected and used at their own responsibility cosmetics not subject to Japanese regulations on overseas trips and through mail order purchases. The enforcement of the Product Liability Law has helped in creating an environment where products can be distributed, sold, or consumed by consumers or businesses at their own responsibility. Furthermore, in terms of administrative efficiency, the regulations should be kept at the minimum for their purposes.

Considering these factors, the ministry concerned should review the entire structure of cosmetics regulations, including licensing and ingredient labeling, as well as international harmonization, during the fiscal year 1996. In this review, the required measures should be taken for the following points.

(1) Modification of CLS, from the viewpoint of international harmonization, should be promoted. As a result, ingredients which are used in the United States, EU countries, etc., should be incorporated into CLS, referring to the regulations in the United States and EU. Furthermore, to make approval unnecessary upon import of a cosmetic whose ingredients are the same as those of an approved cosmetic, the specifications of the ingredients outside CLS should be established based on the data submitted upon approval procedure and be promptly included in CLS.

(2) The system of licensing an importer for each office should be reviewed during fiscal year 1996, including the necessity of employing a responsible engineer and installing testing facilities, then the required improvement measures should be taken promptly.

(3) As for the import product notice submitted when actually importing a product, the notice should be reviewed during fiscal year 1996 to reduce the burden, and then the required improvement measures should be promptly taken.

Government decision (March 26, 1996)

2-(2) Deregulation and Simplification of Cosmetic Regulations

The entire structure of cosmetics regulations will be reviewed, from various viewpoints including international harmonization, during the fiscal year 1996. In this review, the required measures will be taken for the following points.

(1) Modification of the comprehensive licensing standards of cosmetics by category (CLS, hereafter), from the viewpoint of international harmonization, will be promoted. As a result, ingredients which are used in the United States, EU countries, etc., will be incorporated into CLS, referring to the regulations in the United States and EU. Furthermore, to make approval unnecessary upon import of a cosmetic whose ingredients are the same as those of an approved cosmetic, the specifications of the ingredients outside CLS will be established based on the data submitted upon approval procedure and be promptly included in CLS.

(2) The system of licensing an importer for each office will be reviewed during fiscal year 1996, including the necessity of employing a responsible engineer and installing testing facilities, then the required improvement measures will be taken promptly.

(3) As for the import product notice submitted when actually importing a product, the notice will be reviewed during fiscal year 1996 to reduce the burden, and then the required improvement measures will be taken promptly.

Follow-up (May 12, 1997)

2-(2) Deregulation and Simplification of Cosmetic Regulations

The ministry established a Study Group on Regulations Concerning Cosmetics in December 1996, to study deregulation of cosmetics and international harmonization, with the greatest emphasis placed on consumer safety. An interim report was produced in March 1997, and after working groups have studied individual issues, a final report will be compiled during FY1997.

(1) Taking into consideration ingredients used in the United States and the EU, about 140 new ingredients were added to the CLS (August 1996), and the existing 25 categories were consolidated into 11 categories (March 1997).
And, following FY1997, further ingredients will be added once a year. Selection of the ingredients to be added began in May 1997 and will be announced by the end of March 1998, after standards have been established.

(2) In its interim report, the Study Group on Regulations Concerning Cosmetics stated that qualification requirements for technicians on duty would be streamlined and that wider use of outside testing facilities would be allowed.

(3) Regarding the contents of the imported product declaration, it will now be possible to list ingredients and quantities which conform to CLS using the words "appropriate amount" rather than specific percentages, to lessen the burden on applicants. (Directive of March 1996 from the Director-General of the Pharmaceuticals and Cosmetics Division, Ministry of Health and Welfare).