Ministry of Ecology and Environment issued a penalty notice on illegal production of new chemical substances

On November 20, 2019, three companies were punished and announced by the Ministry of Ecology and Environment due to the violation of relevant provisions of the "Measures for Environmental Management of New Chemical Substances" (Order No. 7 of MEE, hereinafter referred to as "Order No. 7") and the illegal production of new chemical substances without obtaining the environmental management registration certificate.

Chemical substances not listed in the "Inventory of the Existing Chemical Substances in China" are all considered to be new chemical substances. Article 5 of the "Order No. 7" mentioned that, "A producer or importer of a new chemical substance must submit a notification of the new chemical substance and obtain the registration certificate for environmental management of the new chemical substance (hereinafter referred to as “registration certificate”) prior to production or import. A new chemical substance without registration certificate shall be prohibited from being produced, imported, processed or used. A new chemical substance without registration certificate or failed to be filed shall be prohibited from being used for scientific research."

The official website of the Ministry of Ecology and Environment of the people's Republic of China has set up a special announcement column to publish the violations of new chemical substances to give full play to the role of public supervision. (http://www.mee.gov.cn/hjzli/hxphjgl/xhxwz/gg/)

The administrative punishment information of the above-mentioned illegal enterprises has been recorded into the "credit China" website sponsored by the national public credit information center. (https://www.creditchina.gov.cn/)

At present, China's laws and regulations on chemical control are in the process of comprehensive promotion. The "Regulations on Environmental Risk Assessment and Control of Chemical Substances (draft)" (hereinafter referred to as the "Regulations") and the "Measures for Environmental Management of New Chemical Substances (Revised Draft)" (hereinafter referred to as the "Measures") have completed the primary review of the "Agreement on Technical Barriers to Trade of The World Trade Organization (WTO / TBT)", and will be reviewed by competent departments through internal argumentation and deliberation, which is expected to be officially issued and implemented soon.

The "Regulations", as ministerial rules with higher legal effect of the "Measures", more clearly defines the main responsibility of enterprises in the chemical environmental management work, and makes more severe punishment for violations of the new chemical environmental management regulations:

In accordance with Article 39 "Unit legal liability (1)" of the "Regulations", in any of the following circumstances in violation of this provision, units that produces, processes or imports chemical substances shall be ordered to make corrections within a time limit by the competent department of ecological environment of the local people's government at or above the level of city divided into districts, and imposed a fine. Its violations will be published and recorded as poor record. Enterprises fail to make corrections within the time limit shall be ordered to suspend production for rectification according to law. Cases of gross violation shall be reported to the people's government with the power of approval to suspend or close down, and to carry out joint punishment for dishonesty in accordance with the law and regulations.

1. Units that, in violation of the provisions of Article 26, illegally produce, process, use or import new chemical substances without obtaining the registration certificate for environmental management of new chemical substances;

2. Units that, in violation of the provisions of Article 29, fail to re-register new chemical substances as required, and illegally produce, process, use or import new chemical substances

3. Units that, in violation of the provisions of Articles 20 and 33, use chemical substances for new purposes without registration

In violation of any of the above-mentioned circumstances, enterprises shall be imposed a fine of not less than half a million Yuan but not more than 1 million Yuan; enterprises which cause serious consequences shall be imposed a fine of not less than 1 million Yuan but not more than 2 million Yuan.

Compared with the provisions in previous version, the upper limit and severity of punishment have been greatly increased, which will have a serious impact on illegal enterprises.

The "Regulations" and "Measures" have further improved the basic system of notification and registration of new chemical substances. Meanwhile, the "Regulations" also include the production, import, processing and use of all chemical substances (including new chemical substances) in the territory under unified supervision. Multiple competent departments including the Ministry of Ecology and Environment, National Development and Reform Commission, Ministry of Industry and Information Technology and General Administration of Customs will jointly carry out the risk control of chemical substances in accordance with the law, which will cause all-round deterrence and severe crackdown on the violations of environmental management of chemical substances, urge all relevant stakeholders to fulfill their legal obligations, and take effective measures to prevent and control the environmental risks of chemical substances.

"Keep faith, benefit all; break faith, lose all." With the acceleration of social credit legislation and increasingly strict environmental supervision, the survival chance of illegal enterprises will be smaller and smaller, and the consequences of illegal and dishonesty will be more and more difficult to bear.