CHINA PRODUCT CERTIFICATION

Kim Kirkendall, CPA International Resource Development, Inc. Email: virtualoutsource@hotmail.com www.intlresource.com www.chinaresourcenetwork.com

With 29 years of doing business in China and clients that range from SME to multi-nationals we are the resource to improve your business!

TOPICS

Ò Who Is In Charge? Ò What is the Process For Certification Ò How Do You Know If Your Product Is Included? Ò How To Go Through Application Process Ò Audits….who, why, how, when Ò Discussion

WHO IS IN CHARGE?

Ò  Overall Agency – CNCA Ò  The CCC mark is administered by the CNCA (

Certification and Accreditation Administration). The China Quality Certification Centre (CQC) is designated by CNCA to process CCC mark applications and defines the products that need CCC.

Ò  Standardization Administration of the People's Republic of China (SAC) was established in April 2001 and authorized by the State Council to exercise administrative responsibilities by undertaking unified management, supervision and overall coordination of standardization works in China. (ISO)

Ò  Other product categories have their own agencies (future slide).

State Council(PRC)

CNCA

AQSIQ

SAC

Compulsory Certification & Lab

Accreditation

Marketplace Surveillance

Border Control (Inspection & Quarantine)

Standard Setting

CNCA: Certification and Accreditation Administration of the People’s Republic of ChinaAQSIQ: State General Administration of the People’s Republic of ChinaSAC: Standardization Administration of China

Provincial Branches

CQC – WHO ARE THEY???

CCC – WHO ARE THEY???

7

Operations

Recent List of Products Needing CCC

• No localized Supply Chain • No process documentation • No MRP • No Established stable team

1.  Electrical wires and cables 2.  Circuit switches, electrical devices for protection or connection 3.  Low-voltage Electrical Apparatus 4.  Low power motors 5.  Electrical tools 6.  Welding machines 7.  Household and similar electrical appliances 8.  Audio and video apparatus 9.  Information technology equipment 10.  Lighting apparatus 11.  Telecommunication terminal equipment 12.  Motor Vehicles 13.  Motor vehicle types 14.  Safety glasses 15.  Agricultural Machinery 16.  Latex Products 17.  Medical Devices 18.  Fire Fighting equipment 19.  Safety protection products 20.  Home décor and remodeling products 21.  Safety parts and accessories of vehicles and motorcycles 22.  Toy products 23.  IT Products 24. WHATEVER ELSE THE GOVERNMENT DECIDES!

OTHER AGENCIES

Ò  China Food and Drug Administration – regulates the imported medical device registration, drug/health food registration, pharmaceutical packaging. Went through a re-organization last year

Ò  Certification and Accreditation Administration – regulates a large group of products, for example, Electrical wires and cables, Circuit switches, electric devices for protection or connection, Low-voltage Electrical Apparatus, Low power motors, Electric tools, Welding machines, Household and similar electrical appliances and more

Ò  National Nuclear Safety Authority– regulates the certificate for nuclear products

Ò  Ministry of Industry and Information Technology – regulates a lot of electronic information products, the network access license for telecommunication products, SRRC license for radio frequency (RF) and satellite products.

Ò  AQSIQ – Production Licensing Industrial Products Ò  Standardization Administration China – ISO Related

WHAT IS THE PROCESS

There are five major steps in the CCC mark application process. If your company elects to handle the application process, your first step should be to visit the website of the China Quality Certification Center (CQC), which administers the CCC mark application process.

At the website, click on the "Application Process", a document giving step-by-step instructions on how to apply for the CCC mark. The five-step application process includes:

1. Submission of an application and supporting materials, including user

guides, CB reports, EMC reports, regulatory labels and other information. 2. Type Testing. A CNCA-designated test laboratory in China will test product

samples. (more)

PROCESS (CONTINUED)

3. Factory Inspection. CQC will send representatives to inspect the manufacturing facilities for your product. They will inspect each factory producing your product (e.g. If your company manufactures Product Z in five separate factories, all of which ship product to China, you will need to have five separate factory inspections).

Please note: Chinese inspectors will need U.S. visas to visit U.S.-based facilities. The U.S. State Department is now subjecting visa applications to a greater degree of scrutiny than in the past, and visa applicants are being advised to expect delays. These visa delays may slow your CCC mark application.

4. Evaluation of certification results, and approval (or failure or retesting).

5. Follow-up Factory Inspection. Manufacturing facilities for the product will be re-inspected by Chinese officials every 12-18 months.

PROCESS - OVERVIEW

The application process for the CCC mark: Ò  1. can take sixty to ninety days or longer (their estimate); Ò  2. requires testing at accredited laboratories in China; Ò  3. generally does not permit self certification or third-party testing

results – they focus on China’s GB (national standards); Ò  4. requires submission of numerous technical documents; Ò  5. requires submission of a product sample to a Chinese testing

laboratory, usually two pieces; Ò  6. requires a factory inspection by Chinese officials at the applicant's

expense for every factory that will make this product; Ò  7. requires follow-up inspections every twelve to eighteen months;

and Ò  8. can cost several thousand dollars.

WHAT? YOU WANT US TO DO WHAT?

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Operations

Unofficial CCC Process Process

• No localized Supply Chain • No process documentation • No MRP • No Established stable team

1.  Preparation of application material and submission to the Chinese authority a)  Appoint a local team member as the CCC project head b)  Submit the Product Safety Material Application c)  Research testing centers and choose based on location and

testing appointment time (NOT Beijing or Shanghai) d)  Communicate frequently with CQC while writing application e)  Negotiate with CQC f)  Submit all the material needed in the Prepare section

2. Receive the CCC Factory code and requirements of

the test products a)  Review the testing criteria b)  Negotiate with CQC on testing requirements c)  Negotiate on the number of types of test samples d)  Build test samples and send to lab

Prepare

15

Operations

Unofficial CCC Process Process

• No localized Supply Chain • No process documentation • No MRP • No Established stable team

3. Product testing in a CNCA-designated Chinese

laboratory a)  The CCC project head should check in with CQC weekly b)   Send testing support for each schedule test c)  Negotiate testing techniques and failures d)   Try not to have your units put back in the queue

4. Factory Audit/Inspection (2 Days)

a)  Start and complete the factory form early b)  Initial inspection always by CQC c)  Note all comments made by inspectors and correct

immediately

Test Inspect

16

Operations

Unofficial CCC Process Process

• No localized Supply Chain • No process documentation • No MRP • No Established stable team

5. Approval of CCC Certificate

a)  Testing is complete with payment is required b)  Certificate may not arrive for months after completed testing

6. Receive the printing or purchasing permission of China

marks a)  Immediately save a copy of your completed permission form

to purchase or print CCC labels for future inspections b)  NOTE: The entire process can take more like 12-18 months!

7. Annual follow-up certification (4-8 hours)

a)  Local inspectors will give you a 2-week window b)  Complete the factory form c)  Ensure a sample is ready for inspection

Approve & Follow-up

17

Operations

Application/testing approval tips Process

• No localized Supply Chain • No process documentation • No MRP • No Established stable team

•  Focus on Steps 1 and 2, PREPARE o  MOST important part of the process o  Binding agreement between your company and CQC o  If done correct, will save a lot of time and money

•  Less details in application file

o  Ambiguity is an asset in descriptions o  Only add details if requested by CQC

•  Critical Component List

o  Least number possible (by CQC) o  List many alternate suppliers

•  Include all options •  Testing proposal is negotiable

HOW DO YOU KNOW IF YOUR INCLUDED? Ò  Like many countries, China has multiple certification schemes. Though the

CCC mark is the widest-ranging certification requirement, your product may have to meet other requirements as well.

Ò  Try the US website www.export.gov which has links to Chinese certification sites and download materials w/ lists for product categories.

Ò  CNCA has published 47 "Implementation Rules for Compulsory Certification." The booklets are available on the Web, in English, at http://www.cnca.gov.cn/20040420/column/227.htm . The booklets outline detailed technical application requirements for each of the product categories.

Ò  CNCA's Implementation Rules cite numerous "GB Standards," which are mandatory standards. Information on mandatory standards can be requested from China through the U.S. WTO/TBT National Enquiry Point.

Ò  Don’t rely on U.S. based sources as to whether you need CCC or Customs Codes, the code can indicate “no” but your product is still is “yes”

GOING THROUGH THE APPLICATION PROCESS

Ò  The greatest challenge you will face in completing an application will not be meeting the product standards, but rather dealing with the bureaucratic nature of the process. It will be important that whatever documents you are required to submit for the application match exactly with the requirements of the Chinese regulatory agency.

Ò  It is important that either you or your representative develop a good working relationship with the agency responsible for your product’s certification. This is critical, it’s a negotiation – what tests are performed, how they are performed, etc

Ò  It is also important to anticipate that not every step of the application will go as planned and that there may be sudden changes in application requirements. Reversals, different staff at the agency interpret differently, etc.

Ò  Remember, its not about what is right, its about what the person who wrote the test expects to get as an answer.

AUDITS – WHO, WHEN, WHY & HOW

Ò The agency or its licensed “agents” perform the audits

Ò Done annually (or could be waived) Ò They are generally done onsite at your facility,

by inspectors flown in (tips for managing this) Ò The staff change, the rules change, the audit

changes – how do you prepare??

FOLLOW UP SURVEILLANCE AUDITS •  After the Initial Factory Inspection, which is typically completed

by the registrar . . .

•  Surveillance Audits are required annually for most product categories

•  Some products categories require two audits per year •  They include a review of the factory’s QA abilities

(documents, control, testing, etc), product consistency checking (markings, production sample, components, etc) and onsite appointed testing (test a component off the line)

•  Certificates are typically valid for five years provided: •  Surveillance Audits are successfully completed •  Standards Referenced on the CCC Certificate are NOT

updated.

Its Not How Well You Stand Out…Its How Well You Fit In

We Approach Business VERY Differently – And That’s OK

IN SUMMARY

The regulations change frequently, are often issued without implementation details, can be implemented differently by region/office, and the individuals you work with can have a significant effect on the process & outcome.

It is NOT like the process you go through in the U.S. or Europe. Adjust your expectations.

25

Operations

CCC Waiver Overview

• No localized Supply Chain • No process documentation • No MRP • No Established stable team

1.  Products imported for scientific research and test 2.  Product parts imported for technology examination 3.  Products imported for end users’ repair service directly 4.  Equipment/parts imported to form a manufacturing

production line 5.  Products imported for commercial exhibits only 6.  Products imported temporarily and will be exported back out

of China 7.  Product parts imported in regular trading for the purpose to

export the entire system 8.  Product parts imported for processing materials for the

purpose of exporting the entire system

1.  Application form (two copies); 2.  Applicant’s company registration document (first time

only); 3.  Manufacture’s company registration document (first time

only); 4.  Power of Attorney if using an agent; 5.  If applicant is distributor or importer, a copy of the relative

contract between distributor and manufacture, or a copy of the relative contract between importer and manufacturer;

6.  Product Safety Certification Questionnaire for Factory Inspection;

7.  CB testing certificate / testing report (if any); �

REFERENCE: LIST OF DOCUMENTS

8.  Trademark registration document; 9.  Product electric circuit diagram, wiring diagram and

schematic assembly drawing; 10.  List of components, copy of approval certificates for

critical components; 11.  List of main materials; 12.  Explanation of differences for each specific model in the

same application unit; 13.  Declaration of Conformity; 14.  Copy of the latest factory inspection report or follow up

inspection report; and 15.  Product photos (exterior, internal structure) �

REFERENCE: LIST OF DOCUMENTS

INTERNATIONAL RESOURCE DEVELOPMENT, INC.

For over ten years we have been helping companies improve their operations in China. The founder, Kim Kirkendall moved to China in 1986 living there 5 years. She has manufacturing / operations management experience in China and has spent the last 28 years focused in this field.

Recent projects include; É  guiding a company through re-submission and approval of their CCC certification

for products made in their US and Chinese plants É  assessment of the effectiveness of a Rep Office and its staff – reviewing the

cost/benefit of changing to a trading company format, É  establishing a distribution network in China – creation of the distributor

structure, identifying master distributors, leading the development of a local website, advice on pitching Chinese online retail outlets,

É  resolution of a clients customer (GE) complaints & managing the preparation for their audit of the local supplier

www.intlresource.com www.chinaresourcenetwork.com TEL: 330-573-5518 EMAIL: virtualoutsource@hotmail.com