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Traceability Solutions For Australian Food & Agricultural Exports to China 大想法 CCIC Australia Pty Traceability Solutions For Australian Food & Agricultural Exports to China 大想法 CCIC Australia Pty Ltd

Contents A. How we define Ch. AFTA B. Regulatory Compliance C. Differences in Supervision Contents A. How we define Ch. AFTA B. Regulatory Compliance C. Differences in Supervision D. CCIC Traceability Solutions CCIC

[1] How we define Cha. FTA: CCIC win-win cooperation For a more reliable world [1] How we define Cha. FTA: CCIC win-win cooperation For a more reliable world

Cha. FTA Signatory: 17/06/2015 Effective: 20/12/2015 From April 2005 to November 2014, 21 rounds Cha. FTA Signatory: 17/06/2015 Effective: 20/12/2015 From April 2005 to November 2014, 21 rounds of dialogues and dozens of consultations had been held before Cha. FTA was signed. 1 Meaning of Cha. FTA Remove Tarriff Barriers 2 More Open Market 3 Hugh Business Opportunities Source:Ministry of Commerce For a more reliable world

1. Remove Tariff Barriers 1 Items 2 3 years after enforcement 3 Tariff cuts 1. Remove Tariff Barriers 1 Items 2 3 years after enforcement 3 Tariff cuts in 3 ways Reduced to Zero at effective date 5 years after enforcement Tariff Cuts Items Tariff Cuts 15. 5%-0% over 10 years; Special protection arrangement for beef. Over 5 years for wines from 34. 7% to zero. Gradually reduced from 12. 3% to zero over 5、10 & 12 years. 9 years period for Oranges from 11% to zero. Quota arrangement for wool; Zero tariff within quota. Transition over 5 years for lobsters to be reduced to zero. Source:Ministry of Commerce For a more reliable world

2. More Open Markets Systematic arrangement Market Channels more open, more efficient amd more 2. More Open Markets Systematic arrangement Market Channels more open, more efficient amd more streamlined A Australia was the first to make service and trade commitment to China by special administrative measures (Negative List) B Most favored nation to each other, high quality recogniation C Easier investment checks & market access; predictable and more transparency. For a more reliable world

3. Huge Opportunities for Australian foods & agri-exports According to WTO, China became the 3. Huge Opportunities for Australian foods & agri-exports According to WTO, China became the biggest importer of foods & agricultural products in 2011 -2015, China bought 4. 791 m shipments valued at US$220. 32 billion, 5. 2% increased per year. Australian agri-foods exports to China has increased steadily year by year. There will be more opportunities for Australian meats, fruits, wines, seafoods and dairy products. Meat imports 2011 -2015,China imported 2 -3 million tons of meats, 3% of total. Meats came from 23 countries & regions, Europe, USA & Australia being the First Three. 2014 -15, China imported from Australia about 135, 046 t of beef, about A$800 million. SEAN Europe USA New Zealand Brazil Australia Canada Russia Argentina South Korean Others According to AQSIQ, China import foods from 202 countries & regions, mostly from SEAN, Europe & USA. Foods from Australia accounts for 4. 5%. For a more reliable world

[2] Regulatory Compliance CCIC For a more reliable world [2] Regulatory Compliance CCIC For a more reliable world

Cooperative Machanism within the Framework of WTO The Chinese Government proposed a cooperative system Cooperative Machanism within the Framework of WTO The Chinese Government proposed a cooperative system for food safety in trade with major business partners; strengthen collaboration with each other to build a new safety network. SPS Transparency Cooperation Technical Assistance Capability Development TBT Easier Trade Technical measures Standards Audit/review recognition For a more reliable world

International Cooperation & Mutual Recognition AQSIQ has signed over 100 agreements with foreign countries International Cooperation & Mutual Recognition AQSIQ has signed over 100 agreements with foreign countries to ensure food safety. The arrangement of each government taking their own responsibilities helps to ensure smooth trade of quality foods. For a more reliable world

FTZs & Deepening Reforms good for Sino-Australia Trade China is following WTO rules to FTZs & Deepening Reforms good for Sino-Australia Trade China is following WTO rules to reform its economy; establishment of Free Trade Zones & open door policies are helpful measures for FTA implementation. A FTAs with more & more countries is an important step taken to be in line with WTO standards. B FTA implementation & structural reforms help with each other. C FTA is based on deepening consultation and mutual understanding. +Free trade zones +Easier trade arrangements +Better collaboration to avoid risks +Deepening reform +Bilateral trade development +Key trade partners For a more reliable world

Compliance & inspection/quarantine authorities Chinese authorities emphasize supervision & management on industries & products Compliance & inspection/quarantine authorities Chinese authorities emphasize supervision & management on industries & products key to safety, hygiene & environment. Four Laws Law on Commodity Inspection Law on Animals & Plants Quarantine More on compliance Quarantine Act Environment Food Safety Act 环保 Under Cha. FTA, most-favored nations arrangement does not change or intend to cancel policies, regulations and requirements still in force in both countries. Bilateral trade still needs to satisfy requirements in safety, health & environmental protection. Metrology law Product Quality Act Law on Environmental Protection; Registration Measures for Foreign Producers; √ Infant formula registration measures; ; √ Registration measures for dietary suppliments; ; √ General Standards for Food Labels; Supervisional & management Regulations on Inspection & Quarantine of Dairy Products; +of Meat products; +of Aquatic products; +of Cosmetics Implementation measures of Food Safety Act; Other Related regulations. For a more reliable world

Different roles of AQSIQ and CFDA AQSIQ & Local CIQs Before entry CFDA & Different roles of AQSIQ and CFDA AQSIQ & Local CIQs Before entry CFDA & Local FDAs √ Country assessment & evaluation √ Negotiate on quarantine bilateral agreement √ Registration of foreign producers √ Importer registration √ decision making power for examination & approval in quarantine √ Registration of Dietary Suppliments (include checking labels & product description) At the time of entry √ implementation of inspection and quarantine √ handling non-conformity cases After entry √ Random checks √ risk assessment & precautions √ infant formula registration √ Random checks AQSIQ: General Administration of Quality Supervision, Inspection and Quarantine of PRC CIQ: China Entry-Exit Inspection and Quarantine CFDA: China Food and Drug Administration For a more reliable world

[3] CCIC Differences in Supervision For a more reliable world [3] CCIC Differences in Supervision For a more reliable world

Imported Food Safety Supervision in China Before Importation At the time of Importation After Imported Food Safety Supervision in China Before Importation At the time of Importation After Importation Importing country's Food Safety System Review Quarantine at designated ports of destination Review of Foreign food safety system Producer Registration & Management Quality certification system Imports & sales records Exporter Registration Handling applications for inspection & quarantine Recall system Health Certificate Review Re-inspection system Importer/exporter credit rating Market Access Audit for animal & plant origin foods Measures for non-qualified foods Importer/agent Consultation system Annual Review of registration Safety risks monitoring system Result recognition of Third party inspection Formula registration Risk Precaution & reaction system Management system for voluntary quality guarantee (资料来源:质检总局) Preshipment inspection For a more reliable world

Main problems of imported foods (2011 -2015) AQSIQ has listed 20 categories of quality Main problems of imported foods (2011 -2015) AQSIQ has listed 20 categories of quality non-conformities with imported foods during 2011 -2015. The 4 main problems are: Microbial contamination, bad quality, problem of food additives and labelling non-conformities. These problems account for 3/4 of defective shipments. Microbial contamination Quality problems Food additives Labelling problems Inspection certificates Polluted matters Inedible additives Packaging problems Cargo & certificate non-conformity Illegal imports Others (Source: AQSIQ) For a more reliable world

Products required Chinese Label What products require Chinese Label: 1)Under Chinese Food Safety Law, Products required Chinese Label What products require Chinese Label: 1)Under Chinese Food Safety Law, all imported food, food additives and foodrelated products shall conform to the national food safety standards of China; 2) Imported food shall be subject to the inspection by CIQ. Imported prepacked food shall have labels and instructions in Chinese. 3)The labels and instructions shall conform to the Law, administrative regulations and national food safety standards of China, and tell the place of origin as well as the name, address and contact information of the domestic agent.

Chinese labeling requirements Complexity of Chinese labeling requirements: There are four base labeling standards Chinese labeling requirements Complexity of Chinese labeling requirements: There are four base labeling standards for all prepackaged foods label: GB 7718 -2011 General Rules for the Labeling of Prepackaged Foods GB 2760 -2014 Standards for Food Additive eg: Sulfur dioxide in wine, Vitamins in Dairy GB 23050 -2011 General Rules for Pre- packaged food nutrition labels GB 14880 -2012 Standards for Nutrition Supplements in Foods And for some products there additional requirements on label GB 13432 -2013 Standards for Label on Special Dietary Prepackaged foods eg: Infant formula required full Chinese and English print on tin after April 1 st 2014 Chinese label does not comply with Chinese requirements: When label does not comply with Chinese requirements, will cause rejection of the goods. Labeling issues accounted for almost 30% of rejection in food products. Quality issues accounted for about 40% of problems.

[4] CCIC Traceability Solutions CCIC For a more reliable world [4] CCIC Traceability Solutions CCIC For a more reliable world

About CCIC Australia: Based in Australia Serving International Clients branches & offices in over About CCIC Australia: Based in Australia Serving International Clients branches & offices in over 30 countries Over 200 cooperative labs 18, 000 employees CCICs in 31 provinces & regions CCIC, serves as an independent 3 rd party, a certification & inspection organization dedicated to providing inspection, verification, certification & testing services to international clients. CCIC Australia established in 1989 has been serving Australian businesses in all major industries & made its contributions to China-Australia trade. 创造更值得信赖的世界 For a more reliable world

Background of CCIC Traceability Solutions Safety & Quality Control • Advice on Development of Background of CCIC Traceability Solutions Safety & Quality Control • Advice on Development of Traceability System for key imports by State Council; • AQSIQ/CNCA authorization, and CIQ cooperation; • Related laws & Regulations on Quality Control & Administration by Gvmt authorities; • Cooperation with CIQ、CNAS certified labs. CCIC Inspection certification • Based on CCIC's inspection, certification and marketing services; • Label approval, Origin of Australia label, anti-forgery tags; • Preshipment quality inspection and loading supervision; • Coordination at destination ports and follow-up services. • Development of PSI system and integrated with local CIQ management systems; System & technical support • Development of Traceability Service System, big data & information management; • Technical support from both China and Australia; • Legal instructions from technical professionals. For a more reliable world

CCIC Traceability Structure Traceability Services Before Quality Control Assist in Supervision Factory Audit Assist CCIC Traceability Structure Traceability Services Before Quality Control Assist in Supervision Factory Audit Assist exporters for compliance with China requirements Product Certification Label Approval Export/ import Preshipment Quality Inspection Help with labelling problems; better understand product Follow-up Services Loading Supervision Discharge Supervision Monitor logistics; reasons for shortage After Draft Survey Other services Coordination with CIQ; Safeguard interests of related parties For a more reliable world

CCIC’s Services for prepackage food How to minimize your risks for refusal at destination CCIC’s Services for prepackage food How to minimize your risks for refusal at destination ports and achieve fast clearance? How to ensure that your products comply with China’s changing law and regulations? 1)Label Approval: Labels shall be checked of their design and contents in accordance with related rules and regulations formulated by Chinese authorities. This service shall avoid the risk of refusal as a result of label nonconformity at destination ports and is conducive to a smoother delivery. 2)Quality Approval: Pre-shipment quality approval by our designated or cooperated laboratories according to China’s health and safety requirements ensures that your products are qualified for entrance and thus helps build up a fast channel for entry clearance. 3)Loading Supervision: This service provides conformity inspection on weight, quantity and the process of loading and a certificate issued as a result helps your goods entering China through a specially arranged fast channel. 4)Origin Traceability: This service can provide product traceability throughout the production. CCIC Australia traceability management platform could showcase brands and products to help you explore the market. Thus builds up more confidence amongst Chinese consumers.

Main purpose of Service Platform and its demonstration Shall increase the brand’s market value Main purpose of Service Platform and its demonstration Shall increase the brand’s market value and build up stronger trust and acknowledgement of that brand Brand Origin Traceability to ensure customers in china will have the access to a basic insight and trust to those products. Entrusted by CCIC Australia to use QR codes on Origin Traceability shipments of certified products. Ensure full Shipment Traceability traceability and access for verification, traceability information will be demonstrated on the website to provide a solid evidence of Australia made. Customers can check those information online or by using certain apps. Security labels against forgery CCIC Security labels can be attached to the smallest packages of each product certified through this platform. A crucial requirement to gain fast Customs Clearance Services.

Work Relations in Traceability System Exterior Interior Consumers Enq uir ies Ap ins ply Work Relations in Traceability System Exterior Interior Consumers Enq uir ies Ap ins ply fo pe cti r on Importers & exporters Label approval data base collaboration Sharing Core services system AQSIQ & CIQs Data exchange Industry Associations Other Organizations Assist with Supervision Registration PSI audit Quality control PSI system & Traceability Platform International Network Local Resources Preshipment Quality inspection Lab testing Loading supervision Draft survey Lab test port coordination Origin Traceability

Traceability Solutions for Australian Agricultural & Food exports to China CCIC is dedicated to Traceability Solutions for Australian Agricultural & Food exports to China CCIC is dedicated to providing inspection and certification services to Australian exports in the fields of quality, safety, health and environmental protection. Our ideology for traceability solutions is a one-stop service provider of identifying differences, monitoring key process, with complete quality control and preshipment inspection. Thank you! CCIC Australia Pty Ltd Tel:+61 2 9580 3212 Web:www. ccicaus. com