China’s tobacco authority announced draft regulations controlling e-cigarettes on Thursday, bringing the product out of the regulatory gray area and under state control.
The proposed guidelines from the State Tobacco Monopoly Administration come after China’s cabinet amended its tobacco monopoly legislation to cover e-cigarettes last week.
Companies selling e-cigarettes in China must fulfill national criteria, according to the proposed laws, in order to register with the tobacco administration and do business lawfully.
Companies that manufacture e-cigarettes must also obtain a special license from the tobacco authority if they can demonstrate that they have the necessary cash and a facility with compliant equipment.
All licensed e-cigarette distributors and retailers must sell goods through a “single national electronic cigarette transaction management platform,” according to the tobacco regulator.
Meanwhile, the regulator said that e-cigarette tax collection and payment “must be performed in conformity with national taxation rules and regulations.”
Following the success of comparable products elsewhere, a slew of Chinese businesses began manufacturing and marketing nicotine salt-based e-cigarettes for the local market in 2018.
RELX Technology Inc (RLX.N), the largest of them, went public in New York in January.
China’s cigarette business is a state-run monopoly that is directly controlled by the tobacco regulator, which sets brand price and distribution while also generating tax revenue for the government.