After public consultation, the China Food and Drug Administration recently promulgated the Provisions on the Food and Drug Administrative Penalty Procedure (the "Provisions"), which came into effect on June 1, 2014. The Provisions concern food, drugs, cosmetics, and medical devices. The Provisions cover all procedures of administrative law enforcement, and specify the requirements for entrusting and delegating law enforcement power. In addition, the Provisions also further specify the procedures of trans-regional cooperative investigations, the effectiveness of evidence obtained before the case being formally filed, the connection between administrative procedures and criminal procedures, and overseas evidence collection.
Connection between administrative procedures and criminal procedures
- The Provisions specifically require the food and drug regulatory department to transfer a case to the public security department at the same level according to Provisions on Administrative Law Enforcement Authority's Transfer of Alleged Crimes if a suspected crime is found during an administrative investigation.
Evidence collection overseas
- Evidence obtained from outside the People's Republic of China ("PRC") needs to be either certified by a local notary identified by the PRC's embassy or consulate or subject to the certification formalities provided in relevant treaties entered into by the PRC and the local country. These procedures are also applicable to evidence obtained in Hong Kong, Macau, and Taiwan.
Effectiveness of evidence obtained before the case is formally filed
- The Provisions clarify that evidence obtained in an investigation or inspection before the case is formally filed can also be adopted as a basis for ascertainment of facts. Food and drug business operators should thus be prepared for administrative investigations, as any evidence obtained from the investigation can be used to impose fines or criminal charges in a future case.
Evidence registered and retained in advance
- If relevant evidence might be destroyed or if it will be difficult to obtain in the future, upon appropriate approval, such evidence can be registered and saved in advance. At the same time, the Provisions require that the specific disposal decision, such as evidence preservation, inspection and quarantine, confiscation, sealing up and detaining the evidence, must be made within 7 days. If the disposal decision cannot be made in time, the evidence registered and saved must be released.
Entrusted law enforcement and cooperation in trans- regional investigations
- The Provisions provide that a food and drug administration department at or above the county level may entrust a qualified organization to enforce administrative penalties within the scope of authority of the entrusting department. The entrusting department should be responsible for the entrusted law enforcement conducted by the entrusted organization. For trans- regional investigations, the Provisions clarify that a formal letter of cooperative investigation must be produced if assistance is needed from the food and drug administration department of other regions.
- The Provisions set forth more clear and detailed requirements on the procedures of investigation, evidence collection, and administrative penalties related to the food and drug field, which will lead to an increase of administrative investigations and penalties imposed. Moreover, since the Provisions establish a connection between administrative procedures and criminal procedures, companies concerned should consider establishing a compliance system to handle administrative investigations effectively. Companies are obligated to cooperate with the investigation. It is also necessary for the companies to be familiar with the statutory procedural requirements of such an investigation, including the number of law enforcement personnel required for a formal investigation, checking and signing investigation records, having evidences registered and kept in advance returned immediately if a decision cannot be reached on the due date, so as to protect their legitimate rights and interests.
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