CHINA Law and Practice Contributed by: Yue Dai, Zhenghao Li and Xiaokun Yuan, King & Wood Mallesons
product recalls. However, it should be noted that under the latest Regulation on Administration and Supervision of Medical Devices, the recall obligation explicitly lies with the medical device registrant or filing holder – including those of the imported medical devices. 1.4 Obligations to Notify Regulatory Authorities Where a manufacturer or a seller has discov - ered a defect in its goods or services, which may harm personal safety or property security, it must immediately report the defect to the relevant administrative authorities. This reporting obliga - tion is widely required in many recall regulations for specific products. Under the Measures for the Implementation of the Regulation on the Administration of the Recall of Defective Auto Products, upon learning of potential defects in its automobile products, the manufacturer must organise an investiga - tion and analysis thereof, and truthfully report the result to the SAMR. Sellers, repairers, rental service providers or spare part manufacturers are also required to report any defects they iden - tify in their business operation to the SAMR and notify the manufacturer of such information. Under the current Measures for the Administra - tion of Medical Device Recalls, a medical device manufacturer must immediately report any of its medical device products that are found to be defective to the provincial food and drug super - vision and administration department. Medical device operation enterprises and users are also required to immediately report to their provin - cial food and drug supervision and administra - tion department and notify the manufacturer or supplier of defects. In particular, if the medical device user is a medical institution, it must also report device defects to its provincial health
administrative department. Please also note that, as discussed in 1.3 Obligations to Com- mence Corrective Action , while the measures impose the recall duty on the “medical device manufacturer” , the latest Regulation on Admin - istration and Supervision of Medical Devices uni - formly requires “medical device registrants and filing holders” to bear the ultimate recall duty. In other words, for imported medical devices, the corresponding foreign registrant or filing holder is also subject to the recall duty. 1.5 Penalties for Breach of Product Safety Obligations Failure to comply with product safety obligations may give rise to civil, administrative, and criminal liabilities. Civil Liability If a product with quality issues causes personal injury or property damage, the manufacturer must compensate any losses suffered by the infringed person. Product liability for the manu - facturer is a form of strict liability under Chinese law, which means that the manufacturer is liable for damages regardless of whether there is any fault on their part. The seller, on the other hand, is liable for damages only if it is at fault for the injury or loss. However, the infringed person may also bring claims directly against the seller. If the fault ultimately lies with the manufacturer, the seller may ask the manufacturer to reimburse its damages after it compensates the plaintiff. Separately, if the quality issue arises from the fault of a third party ‒ such as a transporter ‒ the manufacturer or seller, after compensating the injured party, may seek reimbursement from that third party for the losses incurred. The manufacturer and the seller also bear liability when their failure to adopt prompt and effective corrective actions leads to aggravated damages.
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