Tobacco Authority: Vapes With Tobacco Content Require a Production License

On October 10, information published on the official website of the State Tobacco Monopoly Administration showed that, in a September 16 reply to a netizen's question about production approval for e-cigarettes, the STMA office stated that certain e-cigarettes, after identification and testing, are found to contain tobacco ingredients and are included in the cigarette identification and testing catalog of the State Tobacco Monopoly Administration. Such products are classified as tobacco monopoly products, and manufacturers of these products must hold a Tobacco Monopoly Production Enterprise License.

The netizen submitted the question on September 16 and received a reply from the STMA office on September 20.
 
Question from the netizen: I would like to ask whether the production of e-cigarettes requires approval. Does it fall within the scope of licensed market access under the Negative List for Market Access?

Reply from the office of the State Tobacco Monopoly Administration: According to Article 6, Paragraph 1 of the Regulations for the Implementation of the Tobacco Monopoly Law of the People's Republic of China, anyone engaged in the production, wholesale, or retail of tobacco monopoly products must apply for and obtain a tobacco monopoly license in accordance with the Tobacco Monopoly Law and these regulations. Certain e-cigarettes, after identification and testing, are found to contain tobacco ingredients and are included in the cigarette identification and testing catalog of the State Tobacco Monopoly Administration. These are tobacco monopoly products, and manufacturers of such products must hold a Tobacco Monopoly Production Enterprise License.

According to Baidu Baike, the components of tobacco include tar, smoke, and nicotine.

Information related to the Tobacco Monopoly Production Enterprise License: According to Article 12 of the Tobacco Monopoly Law, the establishment of a tobacco products manufacturing enterprise must be approved by the tobacco monopoly administrative department under the State Council, a Tobacco Monopoly Production Enterprise License must be obtained, and registration must be approved by the industrial and commercial administrative department. Any division, merger, or closure must also be approved by the tobacco monopoly administrative department under the State Council, and the relevant change or cancellation registration procedures must be handled with the industrial and commercial administrative department. Without a Tobacco Monopoly Production Enterprise License, the industrial and commercial administrative department may not approve registration.

Article 21 of the Regulations for the Implementation of the Tobacco Monopoly Law (State Council Order No. 223) states: To establish a tobacco products manufacturing enterprise, approval must be submitted by the provincial-level tobacco monopoly administrative department to the tobacco monopoly administrative department under the State Council, a Tobacco Monopoly Production Enterprise License must be obtained, and registration must be approved by the industrial and commercial administrative department.

As for what people currently understand as e-cigarettes, although IQOS products should more accurately be called novel tobacco products, domestic users generally also regard them as part of the broader e-cigarette category, alongside e-liquid vapor e-cigarettes. It is therefore difficult to determine whether the "certain e-cigarettes" mentioned in the reply specifically refer to e-liquid vaping devices.

However, based on the reply, any product that contains tobacco ingredients and is included in the cigarette identification and testing catalog of the State Tobacco Monopoly Administration is considered a tobacco monopoly product, and manufacturing such products requires a Tobacco Monopoly Production Enterprise License.

At present, many e-cigarette products in China label their nicotine content, so it is still unclear whether the above category includes such e-cigarettes.

However, when connected with a September 27 report by the Chinese financial media outlet Caixin, some correlation can be seen.

On September 27, Caixin reported that the tobacco monopoly authority has already begun implementing a licensing system for e-cigarette manufacturers, and is expected to issue 30 production licenses. Five companies have reportedly already obtained licenses, though no manufacturers have publicly disclosed this so far.

That evening, the Electronic Cigarette Industry Committee of the China Electronics Chamber of Commerce issued a public statement saying that it had not yet received any notice from relevant state authorities regarding the matter. However, the statement did not deny the licensing issue itself; it only said it had "not yet received" any notice.