SAWS Published New Measures on Applying Hazardous Chemicals Operation Permit

According to the third article of the new measures, all enterprises engaged in the sale and operation (including storage business) of any given hazardous chemicals listed in the Chinese C&L Inventory (also known as the Catalogue of Hazardous Chemicals) within the territory of P.R.C must, prior to their operation activities apply and obtain the HC Operation Permit. However, operations of civil explosives, radioactive materials, nuclear materials and town gas are excluded. In the two following cases, the HC Operation Permit could also be exempted:

1) If your company has been granted a Hazardous Chemicals Safe Production Permit and the products being sold/traded are produced by your own (the company which holds the HC SP Permit) and sold within your own factory; or

2) If you are doing business on hazardous chemicals storage and sale within the Port area and you have obtained a Port license.

In comparison with the 2002 old version, the new measures have cancelled the categorized granting of the Permit. Under the 2002 version, HC Operation Permit was approved in two categories: the first type was particular for highly toxic chemicals; the second type fit for other hazardous chemicals other than highly toxic chemicals. Yet license-issuing still adopts two channels, the city level and the county level.

For the application conditions, besides retained requirements for storage and facility designing, which shall be in line with several industrial GB standards, the new measures begin for the first time to stress the compliance with relevant provisions in State Council Decree 591 and a SAWS Order 40 of 2011 about interim provisions for major hazard installations of hazardous chemicals.

As to legal liabilities of the affected companies, the new measures have largely increased economic penalties imposed on violations against the legislation. For example, given violations with regard to State Council Decree 591 and committed by HC companies with storage facilities could result in a fine of 50,000 – 100,000 RMB; forgery or illegal leasing of the HC Operation Permit may lead to a fine of 100,000 – 200,000 RMB.

Key licenses for hazardous chemicals businesses in China

Key License	Law	Date of Release	Date of Enforcement	For Who
HC Safe Production Permit	SAWS Order 41 of 2011 in replace of the 2002 version	August 2011	December 1, 2011	The hazardous chemical manufacturers and producers stated in the SAWS Order 41 refer to companies involved with the production of a final product or semi-finished product that is included in the Catalogue of Hazardous Chemicals in China, provided that the company has obtained the official approval to engage in the production, such as the business license granted by SACI or other SACI certified documents.
HC Safe Use Permit	2011 Draft Legislation, in place of the 2002 version	October 2011	December 1, 2011	Companies subject to this draft proposal must meet all the below conditions: 1, whose industry shall be included in a “Catalogue of applicable industry for HC Safe Use Permit”; 2, who use a hazardous chemical substance to produce a different product; 3, whose use of quantities of a chemical substance reaches a specified volume set in the “List of the Standard Minimum Use Quantities of Hazardous Chemicals” (containing first 62 substances); 4, who is not a HC manufacturer/producer defined under Measures for the administration of hazardous chemicals safe production permit (SAWS Order 41 of 2011).
HC Operation Permit	SAWS Order 55 of 2012 in replace of the 2002 version	July 2012	September 1, 2012	All enterprises engaged in the sale and operation (including storage business) of the hazardous chemicals listed in the C&L Inventory in China. Specific exemptions please see the second paragraph.