Analysis of Indonesia’s New Cosmetic Notification Regulation (Draft)

I. Background

The Indonesian National Agency of Drug and Food Control (BPOM) has recently released a draft regulation on “Procedures for Submitting Cosmetic Notifications” (Tata Cara Pengajuan Notifikasi Kosmetik). This new regulation aims to standardize market access management for cosmetics and protect consumer rights. It will replace the 2020 Regulation No. 12, demonstrating the Indonesian government’s determination to strengthen cosmetic supervision.

II. Key Contents

1. Basic Framework

The new regulation covers several key aspects:

• Definition and classification of cosmetics: Cosmetics are defined as substances or preparations intended for external use on the body, including the skin, hair, nails, lips, and external genital organs, as well as teeth and the oral mucosa. The regulation categorizes cosmetics into various types based on their intended use and composition.
• Eligibility requirements for applicants: Applicants for cosmetic notifications must meet specific criteria, such as possessing a valid business license, having no record of violation of cosmetic laws, and ensuring the safety, efficacy, and quality of their products.
• Notification procedures: The process involves registering with BPOM, submitting necessary documents, paying fees, and obtaining a product ID number. This system aims to streamline the notification process and ensure compliance with regulatory standards.
• Document requirements: Companies must provide detailed product information, including safety assessments, manufacturing practices, and labeling information to ensure transparency and consumer safety.
• Time limits: Specific deadlines are set for the submission of notifications and responses to BPOM’s requests for additional information, ensuring timely market entry for compliant products.
• Penalties for violations: Penalties are outlined for non-compliance with the regulations, which can range from written warnings to the suspension of online application eligibility or import licenses.

2. Significant Changes

(1) Clarification of Eligible Applicants

The new regulation clearly specifies the entities that can apply for cosmetic notifications:

• Domestic cosmetic manufacturers in Indonesia: These are companies that produce and package cosmetics within the country or those that import semi-finished products for final processing and packaging in Indonesia.
• Individuals/companies with contractual relationships with domestic cosmetic manufacturers: This includes entities that have agreements with local manufacturers for contract production.
• Importers engaged in cosmetic importation: Companies that import cosmetics from abroad for distribution in Indonesia must also comply with these regulations.

All these applicants must possess business licenses and meet relevant qualification requirements to ensure they have the necessary capabilities to produce or distribute safe cosmetics.

(2) More Detailed Product Classification

The regulation categorizes cosmetics into several types:

• Domestically produced cosmetics: These are manufactured entirely within Indonesia.
• Domestically contracted cosmetics: Cosmetics produced under contract by a local manufacturer on behalf of another company.
• Overseas contracted cosmetics: Similar to domestic contracts but with a foreign manufacturer.
• Licensed production cosmetics: Cosmetics produced under a license agreement, where the technology or formula is provided by another entity.
• Imported cosmetics: Products brought into Indonesia from abroad for distribution.
• Export-only cosmetics: Cosmetics manufactured in Indonesia but solely intended for export markets.
• Cosmetic kits: Collections of cosmetics packaged together, which can be either domestically produced or imported.

Each category has specific requirements and procedures to ensure that the diversity of cosmetic products is managed effectively.

3. Procedural Requirements

(1) Application Process

1. Applicant Registration: Companies must register with BPOM to obtain an account for submitting notifications. This includes providing business licenses and other relevant documents to prove their legitimacy and compliance.
2. Submission of Notification Application: Applicants fill out a standardized template, upload all necessary documentation, pay the required fees, and receive a product ID number as acknowledgment of their application.
3. Review and Verification: BPOM reviews the submitted documents. If further clarification or information is needed, BPOM will request it from the applicant. The review process ensures that all cosmetics entering the market meet safety, efficacy, and quality standards.

(2) Time Limits

• General product review time: Cosmetic products, excluding fragrances, are reviewed within 14 working days.
• Perfume product review time: Fragrances are given a faster review, taking only 3 working days due to their lower risk profile.
• Deadline for submitting additional information: Applicants have 14 working days to respond to BPOM’s requests for additional information, ensuring that the process does not unduly delay market entry.
• Additional information requests: BPOM can request additional information up to three times, allowing for thorough evaluation while also providing an opportunity for applicants to rectify any deficiencies.

III. Key Focus Areas

1. Priority Review Channel

The new regulation introduces a priority review channel, which significantly reduces the review time to 3 working days for eligible companies. Eligibility criteria include:

• Being registered with BPOM and having existing notification numbers.
• A clean record in terms of cosmetic law violations.
• Complete and standardized documentation to facilitate quick review.
• Employing a safety assessor or technical manager to ensure product safety.
• Not using intermediary agencies, which could complicate the process.
• No warnings or rejections due to non-compliance in recent years.

This channel is designed to expedite the market entry of products from companies that demonstrate a high level of compliance and reliability.

2. Validity Period Management

• Notification validity: Generally, notifications are valid for 3 years, providing companies with a predictable timeframe for their products to be on the market.
• Alignment with agreements: For imported, contracted, and licensed products, the validity period aligns with the term of the respective agreements, ensuring continuity in production and distribution.
• Post-expiration restrictions: After the expiration of a notification, the production, import, and sale of the product are prohibited, with a grace period of 6 months for existing stock to be sold if certain conditions are met.

3. Penalties for Violations

The regulation outlines penalties for non-compliance:

• Written warnings: For minor infractions or first-time offenders.
• Revocation of notification: For serious breaches of safety or quality standards.
• Suspension of online application eligibility: Companies can be barred from submitting new notifications online for up to a year.
• Suspension of import license application eligibility: Similarly, importers can face restrictions on applying for import licenses.

These penalties serve as a deterrent against non-compliance and ensure that only safe and compliant cosmetics are available to consumers.

IV. Impact Analysis

1. Positive Impacts

1. Standardization of Market Order: The regulation provides clear entry requirements, detailed management procedures, and enhanced process supervision, leading to a more organized and transparent market.
2. Improved Efficiency: The establishment of an online system, a fast-track channel, and clear time limits streamline the notification process, reducing administrative burden and speeding up market entry.
3. Consumer Protection: By ensuring product quality, standardizing product labeling, and strengthening safety management, the regulation prioritizes consumer safety and confidence in cosmetic products.

2. Potential Challenges

1. Higher Requirements for Companies: Stricter qualification requirements, more complex procedures, and potential cost increases could pose challenges, especially for smaller businesses.
2. Adaptation Period: Companies will need time to transition to the new system, adjust their operations, and train personnel to comply with the updated regulations.
3. Implementation Difficulties: There may be initial hurdles in interpreting and implementing the new standards uniformly across the board, testing the system’s efficiency, and ensuring that supporting measures are in place.

V. Recommended Strategies

1. For Companies

1. Preparation: Companies should familiarize themselves with the new regulations, upgrade their qualifications, and establish robust compliance systems.
2. Management Enhancement: Standardizing production processes, improving quality systems, and enhancing document management will help meet the new regulatory demands.
3. Proactive Compliance: Keeping licenses updated, standardizing product labels, and conducting thorough safety assessments will ensure ongoing compliance.

2. For the Industry

1. Communication: Sharing experiences, discussing solutions, and promoting self-discipline within the industry can facilitate smoother implementation.
2. Feedback: Reporting issues, proposing improvements, and engaging in positive interaction with regulators can lead to better policy adjustments and industry growth.

VI. Conclusion

This new regulation represents a significant step by Indonesia to strengthen the supervision of cosmetics, aligning with global trends towards standardized, scientific, and information-based regulation. While it increases the burden on companies, the long-term benefits for consumer safety and market order are substantial. Companies are encouraged to actively engage with these changes to ensure sustainable development under the new regulatory framework.

Moreover, this regulation serves as a benchmark for other countries, fostering mutual learning and adaptation in the global cosmetic market. Companies, particularly those operating internationally, must develop comprehensive compliance strategies to navigate the regulatory landscape effectively.

Indonesia Cosmetic Regulation Guidelines

Indonesia Cosmetic Regulatory Database