Guiding Case No. 70: Food and Chinese Medicine

Transcription

1 Issue No. 2 June 26, 2017 The blurred distinction between food and Chinese medicine may easily lead to food safety lawsuits. To avoid being entangled in the plethora of unclear standards as illustrated in Guiding Case No. 70, businesses would be wise to seek official approval for treating new edible substances with pharmacological potential as new food raw materials. Yet China s new law on Chinese medicine and related ( ) strategic plan to promote Chinese medicine around the world, especially in countries participating in the Belt and Road Initiative, should make these businesses ponder whether identifying such new substances as Chinese medicine may be a better option. is Founder and Director of the China Guiding Cases Project ( CGCP ). She teaches the course China Law and Business at Stanford Law School. She is admitted as a barrister in England, Wales, and Hong Kong and is a member of the Bar in New York and the District of Columbia. She received her Doctor of Science of Law (JSD) from Stanford Law School and her MBA in Finance from the Wharton School at the University of Pennsylvania. Guiding Case No. 70: Food and Chinese Medicine Dr. Mei Gechlik Zhaoyi (Troy) Song * Guiding Case No. 70 ( GC70 ), 1 released in December 2016, reveals the complexity of China s food industry regulatory framework. In the adjudication of a food safety case, a court often has to go through multiple steps to determine whether a substance is prohibited from being included in the food at issue. The prohibition may be in the form of legal provisions or numerous lists prepared by various authorities. GC70 illustrates how the court went through these steps. The substance the defendants were jailed for adding into food was not specifically included in relevant regulations, official lists, standards, etc. It was, however, held to be toxic and harmful because experts tests and reports confirmed that it possessed the same attributes, and caused the same harm, as substances recorded on such official lists. Facing such a complicated regulatory framework, food production businesses would be wise to make sure that anything added into food is explicitly allowed by Chinese law. For example, while drugs are generally prohibited by the Food Safety Law of the People s Republic of China 2 (the Food Safety Law ) from being added into food, a certain type of Chinese medicine is allowed. Unfortunately, an official catalogue of these exempt Chinese medicinal materials remains to be issued, despite being years in the drafting. The lack of a final version of this catalogue is undesirable, but innovative food production businesses can

2 ensure that new edible substances with pharmacological potential are acceptable by seeking official identification of these substances as new food raw materials. With this approach, not only does the new edible substance have a more firm legal footing, helping to avoid food safety litigation, but the added novelty may open up more avenues, or create a new niche, in China s enormous food market, leading to yet more business opportunities. The release of the new Law of the People s Republic of China on Chinese Medicine 3 (the Law on Chinese Medicine ), however, affords yet another approach. As a significant step taken by Chinese leaders to implement their long-term plan to promote Chinese medicine inside and outside the country, the new law calls on innovative food production businesses to think strategically: would identifying an edible substance with pharmacological potential as a type of Chinese medicine potentially yield more profits than identifying it as a new food raw material? Guiding Case No. 70 In GC70, the defendants were found guilty of the crime of producing and/or selling toxic and harmful food as provided for in Article 144 of the Criminal Law of the People s Republic of China 4 (the Criminal Law ) because they added a toxic and harmful non-food raw material into food 5 they produced and sold and/or knowingly sold food into which a toxic and harmful non-food raw material had been added. 6 The substance added was buformin hydrochloride. In determining that the chemical was a toxic and harmful non-food raw material, the court relied on a judicial interpretation concerning the adjudication of food safety cases (the Interpretation ). 7 The court noted that buformin hydrochloride was neither prohibited by laws and regulations from being added and used in food production and operation activities nor recorded by the authorities on the List of Non-Edible Substances That May Have Been Unlawfully Added to Food 8 or the List of Substances That May Have Been Illegally Added to Health Food 9 (the Lists ) (Article 20, Items 1 2 of the Interpretation). The court also found that buformin hydrochloride did not fall within the category pesticides, veterinary drugs, and other toxic and harmful substances prohibited from being used as announced by the relevant department of the State Council (Article 20, Item 3 of the Interpretation). The chemical was finally found to fall within the catchall provision of Article 20 of the Interpretation other substances that endanger human health because, according to Article 21 of the Interpretation, inspection reports in combination with relevant materials, including expert opinions bore out the finding. To guide courts handling similar subsequent cases, the SPC distilled the above reasoning into the Main Points of the Adjudication section of GC70, which essentially provides that although a substance added by an actor in food production and is an Assistant Managing Editor of the CGCP. He is an incoming trainee solicitor of an international law firm and qualified as an associate of the Charted Institute of Arbitrators. He is scheduled to graduate from the LL.B. program at Fudan University Law School in the summer of

3 operation [activities] is not on [the Lists], the substance should still be determined to be a toxic and harmful non-food raw material as provided for in Article 144 of the Criminal Law if the substance possesses the same attributes as those substances recorded on the aforementioned lists and the substance can be determined, according to related materials, including inspection reports and expert opinions, [to cause] the same harm to human bodies. A Catalogue of Food Chinese Medicinal Materials All kinds of finished products and raw materials for people to eat or drink, as well as items which are traditionally both food and Chinese medicinal materials, excluding items used for the purpose of treatment. (emphasis added) The recognition of substances which are traditionally both food and Chinese medicinal materials reflects the deeply ingrained view among Chinese that the source of medicine and food is the same ( 药食同源 ). 10 The multiple steps taken by the court in GC70 provide a glimpse of the complexity of China s food industry regulatory framework. To avoid being entangled in the web of legal rules and official lists, food production businesses naturally turn to what is explicitly allowed by law. An example concerns the use of drugs in food. While drugs are generally banned from being added into food, Article 38 of the Food Safety Law provides for an exception: [ ] but substances which are traditionally both food and Chinese medicinal materials may be added. The catalogue of substances which are traditionally both food and Chinese medicinal materials shall be formulated and published by the health administration department of the State Council in conjunction with the food and drug administration department of the State Council. The above exception is consistent with Article 150 of the Food Safety Law, which defines food as follows: In 2014, the Catalogue of Substances Which Are Traditionally Both Food and Chinese Medicinal Materials (the Catalogue ), together with related administrative measures, 11 was released in draft form for comment. Once adopted, the administrative measures will replace the Administrative Measures on Health for Prohibiting Medicine from Being Added into Food. 12 Similarly, the Catalogue, which includes just over 100 substances, is expected to replace the List of Varieties That Are Both Food and Medicine, which has 87 substances. 13 [W]ould identifying an edible substance with pharmacological potential as a type of Chinese medicine potentially yield more profits than identifying it as a new food raw material? According to the draft administrative measures, substances which are traditionally both food and Chinese medicinal materials are parts of animals and plants that can be used (including food raw materials, spices, and condiments), the oral consumption of which is part of traditional eating habits, and which have been listed in the national standards for Chinese medicinal materials (including the Pharmacopeia of the People s Republic of China 14 and related standards for Chinese medicinal materials) (Article 2). Further, 3

4 to be included in the Catalogue, a substance needs to meet a few other requirements, including being recorded as edible in literature on Chinese medicine and not having been found to be toxic (Article 6). Unfortunately, both the Catalogue and the related administrative measures remain in draft form for comment. New Food Raw Material vs. Chinese Medicinal Material The lack of a final version of the Catalogue renders any attempt to build a legal argument upon the definition of the term substances which are traditionally both food and Chinese medicinal materials ineffective. For example, a party accused of adding a toxic and harmful non-food raw material into food may want to argue that the substance added is not non-food because it is a substance which is traditionally both food and Chinese medicinal materials a type of food as provided for in Article 150 of the Food Safety Law. But the defense is weak, because the Catalogue, the only authoritative document that lists these substances, does not exist. To avoid such pitfalls, it is wise for innovative food production businesses to take proactive steps by seeking official approval for identifying new edible substances with pharmacological potential as new food raw materials. According to the Administrative Measures for the Safety Review of New Food Raw Materials, 15 new food raw materials are various items (e.g., animals, plants, and microorganisms and ingredients extracted from animals, plants, and microorganisms ), the oral consumption of which is not part of the traditional eating habits in China (Article 2). In turn, traditional eating habits [in China] means that a certain type of food has been produced or traded as standard or non-standard packaged food in a province for over 30 years and has not been listed in the Pharmacopeia of the People s Republic of China (Article 22). In addition to a few other requirements, new food raw materials cannot be genetically engineered foods, health foods, or new varieties of food additives (Article 23). As of 2016, more than 100 items, such as Panax Ginseng C.A. Meyer ( 人参 ( 人工种植 ); Announcement No. 17 of 2012), have been approved as new food raw materials. 16 Seeking to identify a new substance as a new food raw material also makes sense from a business perspective, as the added novelty may open up more avenues, or create a new niche, in China s enormous food market. China s food market is the largest in the world, with a valuation of over USD 1 trillion. 17 Food exports and imports each have values in the tens of billions of dollars. 18 With the population still steadily increasing (projected to reach approximately 1.4 billion by 2022) and The promulgation of the new Law on Chinese Medicine and related ( ) strategic plan demonstrate the Chinese leaders determination to promote Chinese medicine, an important heritage of humankind, on a large, global scale. incomes rising (from a gross national income per capita of USD 940 in 2000 to USD 7,900 in 2015), 19 China s demand for food will likely continue to be strong. The above considerations, however, are complicated by the recent release of the Strategic Plan for the Development of Chinese Medicine ( ) 20 (the Strategic Plan ) and the promulgation of the new Law on Chinese Medicine. 4

5 According to the Strategic Plan, in 2014, there were more than 3,000 enterprises producing Chinese medicine in China and the total output value of the Chinese medicine industry was RMB billion. On this strong foundation, Chinese leaders plan to achieve various goals by 2020 (e.g., raising the total output value of the Chinese medicine industry to account for more than 30% of that of the pharmaceutical industry) and 2030 (e.g., consolidating China s leading position in the development of traditional medicine in the world). Specifically, the Strategic Plan emphasizes the need to promote the combination of Chinese and Western medicine. It also states that there is an urgent need to promote the innovative and overseas development of Chinese medicine to further the development of the Belt and Road Initiative, 21 China s going-global plan that has expanded to embrace over 80 countries that together account for over 45% of the global economy by GDP. 22 In less than a year after the release of the Strategic Plan, the Law on Chinese Medicine was promulgated to, inter alia, require that the development of Chinese medicine be included in the national economic and social development plans prepared by people s governments at or above the county level (Article 4). In addition, the law provides for the establishment of a system to evaluate authentic regional Chinese medicinal materials to ensure their good quality (Article 23) as well as a new regulatory framework for promoting compound Chinese medicine preparations originating from famous ancient prescriptions (Article 30). In view of these opportunities and the fact that the number of officially-recognized Chinese medicinal materials recorded in the Pharmacopeia of the People Republic of China has increased from 65 in 1953 to 618 in 2015 and is still growing, 23 innovative food production businesses must thoroughly consider whether identifying an edible substance with pharmacological potential as a type of Chinese medicine, rather than as a new food raw material, would be a better business move in the long run. Guiding Case No. 70 found a way to overcome hurdles in China s unclear regulatory framework for the food industry. This approach is useful, but it should be regarded as an interim solution. China needs a clear legal framework for regulating food and Chinese medicine, especially because some Chinese medicinal materials are allowed as additions into food. A finalized, authoritative Catalogue of Substances Which Are Traditionally Both Food and Chinese Medicinal Materials should be issued without further delay. The promulgation of the new Law on Chinese Medicine and related ( ) strategic plan demonstrate the Chinese leaders determination to promote Chinese medicine, an important heritage of humankind, on a large, global scale. Businesses may seize the opportunity to develop more Chinese medicinal materials, but their enthusiasm will be curbed if the relevant regulatory framework is unclear. While they do not expect clear legal standards in this complicated area to be low-hanging fruit, such standards should not be as difficult to find as wild ginseng on tall mountains. 5

6 Endnotes * The citation of this China Cases Insight TM is: Dr. Mei Gechlik & Zhaoyi (Troy) Song, Guiding Case No. 70: Food and Chinese Medicine, Stanford Law School China Guiding Cases Project, China Cases Insights TM, Issue No. 2, June 26, 2017, This piece was edited by Dimitri Phillips and Dr. Mei Gechlik; layout and design by Jacklyn Fang, Jennifer Ingram, and Dimitri Phillips. The information and views set out in this paper are the responsibility of the authors and do not necessarily reflect the work or views of the China Guiding Cases Project. 1 北京阳光一佰生物技术开发有限公司 习文有等生产 销售有毒 有害食品案 (Beijing Sunshine100 Biotechnology Development Co., Ltd., XI Wenyou, et al., A Case of Producing and Selling Toxic and Harmful Food), Stanford Law School China Guiding Cases Project, English Guiding Case (EGC70), Jan. 30, 2017 Edition, cgc.law.stanford.edu/guiding-cases/guiding-case 中华人民共和国食品安全法 (Food Safety Law of the People s Republic of China), passed and issued on Feb. 28, 2009, effective as of June 1, 2009, amended on Apr. 24, 2015, effective as of Oct. 1, 2015, zfjc/zfjcelys/ /25/content_ htm. 3 中华人民共和国中医药法 (Law of the People s Republic of China on Chinese Medicine), passed and issued on Dec. 25, 2016, effective as of July 1, 2017, 4 中华人民共和国刑法 (Criminal Law of the People s Republic of China), passed on July 1, 1979, issued on July 6, 1979, effective as of Jan. 1, 1980, amended nine times, most recently on Aug. 29, 2015, effective as of Nov. 1, 2015, 5 The food involved in Guiding Case No. 70 was Sunshine100 Shanqishen Capsules, which was specifically identified as health food. 6 The first-instance judgment is 北京阳光一佰生物技术开发有限公司与尹立新 王海龙等生产 销售有毒 有害食品罪一审刑事判决书 (Beijing Sunshine100 Biotechnology Development Co., Ltd., YIN Lixin, WANG Hailong, et al., The First-Instance Criminal Judgment of [a Case Involving] the Crime of Producing and Selling Toxic and Harmful Food) (2013) 扬广刑初字第 0330 号刑事判决 ((2013) Yang Guang Xing Chu Zi No Criminal Judgment), rendered by the Guangling District People s Court of Yangzhou Municipality, Jiangsu Province, on Jan. 10, 2014, full text available on the Stanford Law School China Guiding Cases Project s website, at jiangsu-2013-yang-guang-xing-chu-zi-0330-criminal-judgment. The second-instance ruling (i.e., the (2014) Yang Xing Er Zhong Zi No Criminal Ruling), which upheld the first-instance judgment, was rendered by the Intermediate People s Court of Yangzhou Municipality, Jiangsu Province, on June 13, This ruling has not been found and may have been excluded from publication. 7 最高人民法院 最高人民检察院关于办理危害食品安全刑事案件适用法律若干问题的解释 (Interpretation of the Supreme People s Court and the Supreme People s Procuratorate on Several Issues Concerning the Application of Law in the Handling of Criminal Cases on Endangering Food Safety), passed by the Adjudication Committee of the Supreme People s Court and the Procuratorial Committee of the Supreme People s Procuratorate on Apr. 28, 2013, issued on May 2, 2013, effective as of May 4, 2013, t _58566.shtml. 8 食品中可能违法添加的非食用物质名单 ( 第 1-5 批汇总 ) (List of Non-Edible Substances That May Have Been Unlawfully Added to Food (Compilation of Batch Nos. 1 5)), issued by the Special Remediation Leading Group for the Nationwide Crackdown on the Unlawful Addition of Non-Edible Substances and Abuse of Food Additives on Apr. 19, 2011, 9 保健食品中可能非法添加的物质名单 ( 第一批 ) (List of Substances That May Have Been Illegally Added to Health Food (Batch No. 1)), issued by the China Food and Drug Administration on Mar. 16, 2012, WS01/CL0847/69914.html. 6

7 10 See, e.g., Yu chih Chen, Chinese Values, Health and Nursing, 36 Journal of Advanced Nursing 270 (2001); Stella Ling, Janet King, & Virginia Leung, Diet, Growth and Cultural Food Habits in Chinese-American Infants, 3 The American journal of Chinese medicine 125 (1975). 11 国家卫生计生委办公厅关于征求 á 按照传统既是食品又是中药材物质目录管理办法 ñ( 征求意见稿 ) 意见的函 (Letter of the Office of the National Health and Family Planning Commission on Seeking Comments on the Administrative Measures for the Catalogue of Substances Which Are Traditionally Both Food and Chinese Medicinal Materials (Draft for Comment)), issued on Oct. 28, 2014, s3585/201411/67ac54fb05ed46929adc63f2db31d4bf.shtml. 12 禁止食品加药卫生管理办法 (Administrative Measures on Health for Prohibiting Medicine from Being Added into Food), passed by the then-ministry of Health on Oct. 22, 1987, issued on and effective as of Oct. 22, 1987, 国家食品药品监督管理局 (China Food and Drug Administration), 既是食品又是药品的品种名单 (List of Varieties That Are Both Food and Medicine), 14 国家药典委员会 ( 主编 ) (Chinese Pharmacopeia Commission (Ed.)), 中华人民共和国药典 :2015 年版 ) ( 中国医药科技出版社 2015 年版 ) (The Pharmacopeia of the People s Republic of China (China Medical Science Press, 2015)), 15 新食品原料安全性审查管理办法 (Administrative Measures for the Safety Review of New Food Raw Materials), passed by the then-ministry of Health on Feb. 5, 2013, issued on May 31, 2013, effective as of Oct. 1, 2013, 16 上饶市食品药品监督管理局 (Food and Drug Administration of Shangrao Municipality), 新食品原料名单和药食同源食品总览 ( 更新日期 :2016 年 10 月 ) (A List of New Food Raw Materials and an Overview of Foods and Medicines whose Sources are the Same (Updated in October 2016)), file/2017/02/06/ pdf. 17 See, e.g., Geoff Colvin, Inside China s $43 Billion Bid for Food Security, Fortune, Apr. 21, 2017, fortune.com/2017/04/21/chemchina-syngenta-acquisition-deal; USDA Food Agricultural Service, People s Republic of China: Food Processing Ingredients Annual (GAIN, 2017), 20Publications/Food%20Processing%20Ingredients_Beijing%20ATO_China%20-%20Peoples%20Republic%20of_ pdf. 18 See, e.g., World Bank statistics on China Food Products exports and imports By Country and Region 2015, at Hong Kong Trade Development Council statistics on China Customs Statistics, at en/1/1x39vtvq/1x09n9nm.htm. 19 United Nations Department of Economic and Social Affairs (Population Division), World Population Prospects: The 2015 Revision, Key Findings and Advance Tables (United Nations, 2015), at 4, wpp/publications/files/key_findings_wpp_2015.pdf; World Bank statistics on GNI per capita, Atlas method (current US$), at 20 国务院关于印发中医药发展战略规划纲要 ( 年 ) 的通知 (Notice of the State Council on the Issuance of the Strategic Plan for the Development of Chinese Medicine ( )), issued on Feb. 22, 2016, For more information about the initiative, see the Belt and Road Series section of the website of the Stanford Law School s China Guiding Cases Project, at 7

8 22 Data compiled by the CGCP with reference to its list of Belt and Road countries, at and to Alex Gray, The World s 10 Biggest Economies in 2017, World Economic Forum, Mar. 9, 2017, 23 See Pharmacopeia of the People Republic of China, supra note 14; About ChP on the website of the Pharmacopeia, at 中国食品药品鉴定研究院中药民族药鉴定所 (Chinese Medicines and National Medicines Identification Institute of the China Food and Drug Identification Research Institute), 2015 版 药典 中药材标准的变化情况 (Changes in the Standards for Chinese Medicinal Materials as Stated in the 2015 Edition of the Pharmacopoeia), 药智新闻 (Yaozhi News), news.yaozh.com/archive/11532.html. Related Resources 北京阳光一佰生物技术开发有限公司 习文有等生产 销售有毒 有害食品案 (Beijing Sunshine100 Biotechnology Development Co., Ltd., XI Wenyou, et al., A Case of Producing and Selling Toxic and Harmful Food), Stanford Law School China Guiding Cases Project, English Guiding Case (EGC70), Jan. 30, 2017 Edition, cgc.law.stanford.edu/guiding-cases/guiding-case-70. 北京阳光一佰生物技术开发有限公司与尹立新 王海龙等生产 销售有毒 有害食品罪一审刑事判决书 (Beijing Sunshine100 Biotechnology Development Co., Ltd., YIN Lixin, WANG Hailong, et al., The First-Instance Criminal Judgment of [a Case Involving] the Crime of Producing and Selling Toxic and Harmful Food) (2013) 扬广刑初字第 0330 号刑事判决 )((2013) Yang Guang Xing Chu Zi No Criminal Judgment), rendered by the Guangling District People s Court of Yangzhou Municipality, Jiangsu Province, on Jan. 10, 2014, full text available on the Stanford Law School China Guiding Cases Project s website, at 王召成等非法买卖 储存危险物质案 (WANG Zhaocheng et al., An Illegal Trading and Storage of Hazardous Substances Case), Stanford Law School China Guiding Cases Project, English Guiding Case (EGC13), Apr. 10, 2013 Edition, The CGCP thanks the following sponsors for their support: Alston & Bird Broad & Bright Center for East Asian Studies, Stanford University China Fund, Freeman Spogli Institute for International Studies, Stanford University Fu Tak Iam Foundation Limited Copyright 2017 by Stanford University 8