BEIJING (Reuters) – A small trading company in southwest China was fined $420 million for violating rules on cosmetics sales, in one of the harshest penalties given in a nationwide crackdown on unlawful sales of cosmetic products.
Chongqing-based trading firm Dezhao was fined 2.9 billion yuan by the city’s market regulator for suspected flouting of cosmetics regulation management rules, including failure to get permits for the import of some cosmetics products, according to a government credit database statement dated April 26.
The fine was 2,900 times the company’s registered capital of 1 million yuan, according to Chinese company information data provider Tianyancha.
Since late 2021, China has launched a crackdown on online and offline sales of illegal cosmetics, inspecting medical claims made by cosmetic products and cleaning up sales of unregistered cosmetic products.
That year, China also unleashed a campaign to regulate advertisements for cosmetic surgery deemed excessive or to make false claims.
In September this year, companies are also due to change the packaging of cosmetics to adhere to more stringent requirements on design and presentation. Non-compliance means the product cannot be made or sold in China.
Dezhao and the Chongqing market regulator could not immediately be reached for comment after business hours.
China meted out a record fine of 55.03 billion yuan last year to Tomorrow Holdings, a financial conglomerate previously controlled by Chinese-Canadian tycoon Xiao Jianhua.
($1 = 6.9121 Chinese yuan renminbi)
(Reporting by Ella Cao and Ryan Woo; Editing by Mark Potter)