People's Republic of China, Product Quality Law 2000

Revisions to the PRC's product quality law were promulgated on 8 July 2000 and became effective on 1 September 2000. The law covers a number of different areas, including the following:

1. a requirement for producers and sellers to establish sound internal product quality management systems;

2. the prohibition of forgery or passing off of quality marks, certification marks or place of origin marks;

3. a State product quality certification system, with the prohibition of products that fail to meet the standards and regulatory powers for product quality supervision departments at county level;

4. requirements for handling customer complaints, and the right for consumer organisations to support consumers in instituting court actions over damage caused by product quality;

5. general labelling requirements for products;

6. sale of goods liability provisions, including that product quality shall satisfy the requirements that:

(a) the product shall not provide unreasonable danger to personal safety or the safety of property;

(b) any State or industry standards for the safeguarding of health, personal safety or the safety of property should be complied with;

(c) the product possesses the properties for use that it should possess and that any flaws (defects) are clearly indicated;

(d) the product conforms to the product standards indicated on the product or its packaging, description, samples etc.

7. obligations on sellers to establish and operate an examination and acceptance system for stock, to adopt measures to maintain the quality of products sold, and not to sell products that the State has pronounced obsolete or whose sale it has ordered to be stopped or products that have expired or whose quality has deteriorated;

8. product liability provisions for the seller, who shall be responsible for the repair, replacement or the return and compensation of the purchaser if the product does not possess the properties for use that it should, and no prior indication is given of this, or if the product sold does not conform to the applied product standard as indicated on it or its packaging, or if the product does not conform to the quality indicated by the product's description or sample. This obligation is enforceable by the Product Quality Supervision Department or the administration authority for industry and commerce;

9. product liability provisions for the seller. The circumstances in which the seller is liable for damages are very similar to the essential provisions contained in the European Product Liability Directive, which has also been adopted in Japan and Australia. Liability is based on a defect causing injury or damage to property other than the defective product. A product is defective where it contains an unreasonable danger which threatens personal safety or another's property. Where a product is governed by State or industry standards for the safeguarding of health, personal safety or the safety of property, the term "defect" means non-compliance of the product with such standards. The producer shall not be liable if he can prove that:

(a) he has not put the product into circulation;

(b) the defect causing the harm did not yet exist when the product was put into circulation; or

(c) the level of science and technology at the time when the product was put into circulation was not sufficient to detect the existence of the defect (this is the so-called "development risks defence").

Fault liability is also imposed on the seller of a defective product which causes injury or damage.

The limitation period is 2 years from the date on which the person concerned knew or ought to have known that his rights and interests had been infringed, but subject to the fact that a claim arising from a defect is extinguished 10 years after the defective product causing the damage is delivered to the first consumer, unless the warranty period expressly indicated has not expired.

10. anyone who produces or sells products that do not comply with the State or industry standards for the safeguarding of health, personal safety or the safety of property may be ordered to cease production or sale, and the products shall be confiscated and a fine imposed equivalent to not more than 3 times the value of the product. There is a similar provision in the case of adulterated products.

For further information please contact Luke Filei on [email protected] or +86 10 6590 0389 in Beijing or +86 21 6289 6363 in Shanghai.