Notice Of The State Tobacco Monopoly Administration On The Revision And Issuance Of Detailed Rules For The Management Of Electronic Cigarette Transactions And Policy Interpretation

Notice of the State Tobacco Monopoly Administration on the revision and issuance of detailed rules for the management of electronic cigarette transactions and policy interpretation

The revised "E-cigarette Transaction Management Rules" consists of six chapters and 30 articles. The main contents of the revision include: the unified and standardized names of relevant transaction entities and the explanatory contents are uniformly included in the appendix, the description of transaction types is reorganized, the specific content of total volume management is improved, some management requirements are added and simplified, and purely platform technical processing content not related to transaction management is deleted.
[Two Supremes Reprinted from the State Tobacco Monopoly Administration] On September 2, the State Tobacco Monopoly Administration issued the "Notice on the Revision and Issuance of the E-cigarette Transaction Management Rules".

The specific announcement content is as follows:

Policy Interpretation of the "E-cigarette Transaction Management Rules"

In order to thoroughly implement the "E-cigarette Management Measures" (Announcement No. 1 of the State Tobacco Monopoly Administration in 2022), further strengthen the management of e-cigarette transactions, standardize the production and circulation order of e-cigarettes, and protect the legitimate rights and interests of e-cigarette market entities, the State Tobacco Monopoly Administration revised and issued the "E-cigarette Transaction Management Rules".

The revised "E-cigarette Transaction Management Rules" consists of six chapters and 30 articles. The main contents of the revision include: the unified and standardized names of relevant transaction entities and the explanatory contents are uniformly included in the appendix, the description of transaction types is reorganized, the specific content of total volume management is improved, some management requirements are added and simplified, and purely platform technical processing content not related to transaction management is deleted.

Notice of the State Tobacco Monopoly Administration on the Revision and Issuance of the E-cigarette Transaction Management Rules

National Tobacco Law [2024] No. 131

All provincial tobacco monopoly bureaus:

In order to thoroughly implement the "E-cigarette Management Measures" (Announcement No. 1 of the State Tobacco Monopoly Administration in 2022), further strengthen the management of e-cigarette transactions, standardize the production and circulation order of e-cigarettes, and protect the legitimate rights and interests of e-cigarette market entities, the revised "E-cigarette Transaction Management Rules" are now issued to you, please follow them carefully.

State Tobacco Monopoly Administration

August 27, 2024

(Voluntary disclosure)

Detailed Rules for the Management of Electronic Cigarette Transactions

Chapter I General Provisions

Article 1 In order to strengthen the management of electronic cigarette transactions, standardize the production and circulation of electronic cigarettes, and protect the legitimate rights and interests of electronic cigarette market entities, these detailed rules are formulated in accordance with the Civil Code of the People's Republic of China, the Electronic Commerce Law of the People's Republic of China, the Tobacco Monopoly Law of the People's Republic of China, the Regulations for the Implementation of the Tobacco Monopoly Law of the People's Republic of China, and the Measures for the Management of Electronic Cigarettes (Announcement No. 1 of the State Tobacco Monopoly Administration in 2022) and other laws, regulations and normative documents.

Article 2 These detailed rules apply to transactions such as electronic cigarette products and electronic cigarette raw materials (hereinafter collectively referred to as electronic cigarette transactions) within the territory of the People's Republic of China.

Article 3 The tobacco monopoly administrative department of the State Council is responsible for supervising and managing the national electronic cigarette transactions.

The tobacco monopoly administrative departments at the provincial, municipal and county levels are responsible for supervising and managing the electronic cigarette transaction activities of electronic cigarette market entities within their administrative regions.

Article 4 Electronic cigarette transactions shall follow the principles of equality, fairness, integrity and standardization. Promote the full-process management of business flow, logistics flow, capital flow and information flow of electronic cigarette transactions, and use transaction data as an important basis for market standard management, status evaluation and effective supervision.

Chapter II Transaction Types

Article 5 The tobacco monopoly administrative department of the State Council shall establish a national unified electronic cigarette transaction management platform (hereinafter referred to as the platform).

Electronic cigarette nicotine raw material sales enterprises, electronic cigarette nicotine production enterprises, atomizer production enterprises, electronic cigarette production enterprises (including product production, processing, brand holding enterprises, etc., the same below), electronic cigarette wholesale enterprises (including electronic cigarette import and operation enterprises), electronic cigarette retail operators and other electronic cigarette market entities that have obtained tobacco monopoly licenses in accordance with the law shall trade through the platform.

Import and export of electronic cigarette products, atomizers and nicotine for electronic cigarettes shall be registered through the platform in accordance with relevant regulations.

Article 6 Electronic cigarette transactions are divided into:

(i) Transaction of raw materials for electronic cigarettes between nicotine manufacturers for electronic cigarettes and nicotine raw materials sales enterprises for electronic cigarettes;

(ii) Transaction of nicotine for electronic cigarettes between atomizer manufacturers and nicotine manufacturers for electronic cigarettes;

(iii) Transaction of atomizers between electronic cigarette manufacturers and atomizer manufacturers;

(iv) Transaction of electronic cigarette products entrusted for processing between electronic cigarette product manufacturers, electronic cigarette brand holders and electronic cigarette product manufacturers, and electronic cigarette processing enterprises;

(v) Transaction of domestic electronic cigarette products between electronic cigarette wholesale enterprises and electronic cigarette product manufacturers, and electronic cigarette brand holders;

(vi) Transaction of imported nicotine for electronic cigarettes between atomizer manufacturers and electronic cigarette import and operation enterprises, and transaction of imported atomizers between electronic cigarette manufacturers and electronic cigarette import and operation enterprises;

(vii) Transaction of electronic cigarette products between electronic cigarette retail operators and electronic cigarette wholesale enterprises (including electronic cigarette import and operation enterprises);

(viii) Other transactions confirmed by the tobacco monopoly administrative department of the State Council in accordance with the "Electronic Cigarette Management Measures".

Chapter III Commodity Management

Article 7 Electronic cigarette products that have passed technical review shall be included in the platform for sale and dynamic management shall be implemented. The information of electronic cigarette products on the market shall be consistent with that of products that have passed technical review.

Article 8 The basic information of electronic cigarette products shall be maintained on the platform by electronic cigarette product manufacturers, electronic cigarette brand holders, and electronic cigarette import and operation companies.

The basic information of atomizers and nicotine for electronic cigarettes shall be maintained on the platform by atomizer manufacturers, electronic cigarette nicotine manufacturers, and electronic cigarette import and operation companies.

The basic information of nicotine raw materials for electronic cigarettes traded through the platform shall be maintained on the platform by nicotine raw material sales companies for electronic cigarettes.

Article 9 Adhere to market-determined prices and establish and improve a price formation mechanism for electronic cigarette products that is mainly regulated by the market.

The ex-factory price and recommended retail price of domestically sold electronic cigarette products shall be determined independently by electronic cigarette product manufacturers and electronic cigarette brand holders, and the wholesale price shall be reasonably determined by electronic cigarette wholesale companies based on the ex-factory price in combination with operating and management costs, national tax policies and other factors.

The import price and suggested retail price of imported electronic cigarette products shall be determined by electronic cigarette import and foreign businessmen through negotiation, and the wholesale price shall be reasonably determined by electronic cigarette import and operation enterprises based on the import price in combination with operating and management costs, national tax policies and other factors.

Electronic cigarette products of the same specification shall be subject to a unified national sales price and shall be made public on the platform.

The operating profits of each link in the industrial chain shall be within a reasonable range, and the overall price level of electronic cigarette products shall remain basically stable.

Article 10  The prices of atomizers and nicotine for electronic cigarettes shall be subject to market regulation.

Article 11  The tobacco monopoly administrative department of the State Council shall formulate the price policy and standards for nicotine raw materials for electronic cigarettes, and maintain the price range on the platform according to the price standards. Electronic cigarette nicotine manufacturers and electronic cigarette nicotine raw material sales enterprises shall negotiate and determine the specific transaction price within the price range and form a price record.

Article 12  If electronic cigarette product manufacturers, electronic cigarette brand holders, and electronic cigarette wholesale enterprises (including electronic cigarette import and operation enterprises) need to adjust the price of electronic cigarette products, they shall publicize the price adjustment information through the platform at least three months in advance.

Article 13  If the electronic cigarette product quality supervision spot check fails or there are problems in the inspection, it shall be implemented in accordance with relevant regulations and requirements.

Chapter 4  Contract and Order Management

Article 14  The two parties to the electronic cigarette transaction shall sign a transaction contract on the platform.

The content of the contract generally includes the party's member name, member code, license number, address, contact information, the name, quantity, quality, price, packaging method, inspection standards and methods of the subject matter, the contract signing time, performance period, performance place and method, payment method, transportation method, contract validity, breach of contract liability, dispute resolution method, integrity agreement and other terms.

The terms and content of the electronic cigarette nicotine raw material transaction contract shall also comply with the relevant provisions of the tobacco monopoly transaction management.

The electronic cigarette product transaction between the electronic cigarette retail business entity and the electronic cigarette wholesale enterprise (including the electronic cigarette import business enterprise) shall be confirmed in the form of an order. The electronic cigarette retail business entity selects the product and submits the order successfully, and the contract is established.

Article 15  The payment settlement of all types of transactions shall be carried out on the platform. Electronic cigarette retail business entities shall settle the payment in real time after placing an order, and the buyers of other transactions shall pay the payment within the payment time limit agreed in the contract.

Article 16  All types of transaction entities shall carry out logistics business such as warehousing, sorting, and transportation in accordance with the relevant requirements of electronic cigarette logistics management and contractual agreements, deliver electronic cigarette products or electronic cigarette raw materials to the logistics warehouse or location agreed by both parties within the agreed time limit, and do a good job in collecting and uploading various data and information.

Article 17  If there are quality problems with electronic cigarette products, atomizers, and nicotine for electronic cigarettes after they are sold, the buyer may apply for a return through the platform in accordance with relevant laws and regulations.

Article 18  The annual cumulative purchase volume of nicotine raw materials for electronic cigarettes by electronic cigarette nicotine manufacturers shall not exceed the total annual purchase volume of nicotine raw materials for electronic cigarettes issued by the tobacco monopoly administrative department of the State Council to electronic cigarette nicotine manufacturers.

The annual cumulative platform transaction volume of nicotine manufacturers for electronic cigarettes, atomizer manufacturers, and electronic cigarette manufacturers shall comply with the total volume management requirements of the tobacco monopoly administrative department of the State Council.

The annual purchase volume of nicotine and atomizers imported by atomizer manufacturers and electronic cigarette manufacturers shall not exceed the annual import demand for nicotine and atomizers for electronic cigarettes determined by the tobacco monopoly administrative department of the State Council.

The annual sales volume of electronic cigarette products of electronic cigarette wholesale enterprises (including electronic cigarette import and operation enterprises) shall not exceed the annual domestic sales volume target and import sales volume target of wholesale enterprises determined by the tobacco monopoly administrative department of the State Council based on market demand.

Article 19  Marketing activities carried out by electronic cigarette manufacturers shall register relevant activity information on the trading platform and shall not violate relevant national laws and regulations.

Chapter V  Member Management

Article 20  The platform implements membership management. Electronic cigarette nicotine raw material sales enterprises, electronic cigarette nicotine production enterprises, atomizer production enterprises, electronic cigarette production enterprises, electronic cigarette wholesale enterprises (including electronic cigarette import and operation enterprises), electronic cigarette retail operators, etc. that have obtained tobacco monopoly licenses in accordance with the law, if they need to carry out electronic cigarette transactions or import and export registration, they shall register as trading members through the platform before they can trade or register through the platform.

Article 21  Members shall truthfully maintain relevant member information on the platform in accordance with the requirements of the e-cigarette administrative license and the supervision requirements of the tobacco monopoly administrative department.

Article 22  Members' transactions and filing activities on the platform shall be completed by their designated member representatives logging into the member transaction account. Members shall strictly manage their member representatives and be responsible for all their actions on the platform.

Article 23  Members enjoy the right to equal transactions, independent transactions, and fair transactions on the platform. Members' transactions and filing activities on the platform shall comply with relevant national laws and regulations and relevant regulations of the tobacco monopoly administrative department of the State Council, operate in good faith, pay taxes in accordance with the law, ensure that the information published on the platform is true and accurate, and bear corresponding legal responsibilities.

Article 24  The platform may suspend the trading qualifications of relevant members for market entities that violate relevant regulations.

If a member's tobacco monopoly license is revoked, withdrawn, cancelled, or the qualification to engage in the production and operation of e-cigarette products, atomizers, nicotine for e-cigarettes, nicotine raw materials for e-cigarettes, etc. is cancelled in accordance with the law, the corresponding membership qualification will be automatically cancelled.

Article 25  The tobacco monopoly administrative department shall rely on the platform to build an e-cigarette market entity credit information management system to strengthen the credit management of e-cigarette market entities.

Chapter VI Supplementary Provisions

Article 26 Electronic cigarette raw materials referred to in these rules include atomizers, nicotine for electronic cigarettes, and nicotine raw materials for electronic cigarettes. Nicotine raw materials for electronic cigarettes refer to tobacco leaves, shredded tobacco (including shredded, powdered, granular, the same below), tobacco stems, etc. that cannot be used in cigarette production but can be used to produce nicotine for electronic cigarettes. Abandoned tobacco monopoly products, crude nicotine, and other products not specified in these rules shall not be used as nicotine raw materials for electronic cigarettes.

The relevant provisions of tobacco monopoly products shall apply to the issuance of plans, purchase and sale transactions, and logistics and transportation of nicotine raw materials for electronic cigarettes.

Article 27 Electronic cigarette nicotine raw material sales enterprises include cigarette industrial enterprises, commercial enterprises, leaf threshing and redrying enterprises with independent legal person status, etc. The scope of their tobacco monopoly licenses shall include: the sale of tobacco leaves, shredded tobacco, tobacco stems, etc. that cannot be used in cigarette production but can be used to produce nicotine for electronic cigarettes, or the sale of tobacco leaves, etc.

Article 28  An e-cigarette import and operation enterprise refers to an enterprise that has obtained a tobacco monopoly wholesale enterprise license and the scope of the license includes the operation or wholesale business of imported e-cigarette nicotine, atomizers, and e-cigarette products.

Article 29  These rules shall be interpreted by the tobacco monopoly administrative department of the State Council.

Article 30  These rules shall come into force on the date of promulgation. The "E-cigarette Transaction Management Rules (Trial)" in the "Notice of the State Tobacco Monopoly Administration on Issuing the E-cigarette Logistics Management Rules and E-cigarette Transaction Management Rules (Trial)" issued on June 2, 2022 (State Tobacco Office [2022] No. 77) shall be abolished at the same time.