Mar 08 2008
ny times goes after chinese products–get used to it.
I noticed this past week that the New York Times decided to do back-to-back articles yesterday and today about Chinese products. Not all that surprising since it has become a media sensation to bash China and stir up China fears. (albeit sometimes justifiably so) The last time around, it was Trader Joe’s that made the news. Now its more on Heparin (which I have tried to follow closely) and toothpaste, which Brad Luo at China Business Law Blog picked up on recently.
Before I go ahead and present the articles, I do want to say: this is going to be the norm for some time to come. And though the Chinese economy is not slowing and China sourcing is not about to keel over and die (or even slow in my opinion), I think the media will continue to have a field day with China. It has to be popular in America, especially with the rhetoric that’s been flying around the presidential primary elections. And it will sell newspapers. So get used to it.
First, the Heparin update from the Times:
The German authorities said Friday that they had asked all German producers of the blood thinner heparin to check whether their ingredients came from China, after allergic reactions to the drug there were linked to two Chinese suppliers.
In cases where China did supply the raw ingredient, manufacturers were asked to test for any irregularities. The German authorities recalled the suspect heparin on Wednesday after receiving reports of allergic reactions in about 80 patients.
The German authorities identified the two plants as Changzhou Quianhong Bio Pharma Company, and the Yantai Dongcheng Biochemicals Company. Both are among the top 10 Chinese exporters of heparin, according to a report last September by the China Chamber of Commerce for the Import and Export of Medicines and Health Products.
The European Medicines Agency, which is based in Britain, has looked through databases in Europe and concluded that there had been no allergic reactions to heparin in any European countries except Germany.
So that makes the U.S. and Germany as the only two countries where Heparin has been an issue. This is not really big news in my mind. Just another warning to conduct due diligence, regular QC, and do periodic followup.
Second, and more importantly, the Los Angeles City Attorney’s office, in conjunction with the FDA, filed a criminal complaint against some executives at two companies that imported toothpaste that contained the rather poisonous diethylene glycol. (think Panama cough syrup) The article ( h/t to Brad Luo) states:
Criminal charges were filed on Thursday against four executives at two American companies who imported toothpaste from China that contained a poison used in some antifreeze, the city attorney in Los Angeles said in a statement.
The chemical, diethylene glycol, which is banned from certain ingestible items in the United States, was discovered in almost a million tubes of toothpaste last May and led to recalls in 34 countries. The chemical, commonly used in antifreeze and as a solvent, can lead to kidney damage or liver disease.
The toothpaste ended up being distributed in the United States in prisons, luxury hotels, hospitals and discount stores. It was one of the earliest global alerts to broader manufacturing problems in China that allowed scores of tainted products, including toys, children’s jewelry and pet food, to end up on store shelves. The chemical in the toothpaste was used instead of the more expensive chemical glycerin.
The Los Angeles city attorney, Rocky Delgadillo, working with the Food and Drug Administration, filed a criminal complaint against two Los Angeles-based importers, Vernon Sales Inc. and the Selective Imports Corporation.
At Selective, Frahad Nazarian, the president, and Yones Ghermezi, the vice president, were charged with two counts of receiving, selling and delivering the tainted products.
At Vernon Sales, Kamyab Toofer, the president, and Pejman Mossayi, the vice president, were charged with 14 counts of receiving, selling and delivering an adulterated drug.
“This is just going to keep happening every day,” said Richard Cellini, vice president of Integrity Interactive, a consulting firm in Waltham, Mass. “It’s becoming clear that law enforcement isn’t afraid to act.”
The executives are accused of receiving, selling and distributing Cooldent-branded toothpaste containing the diethylene glycol.
In May after federal health officials discovered that tainted Chinese toothpaste had entered the United States, they warned that it would be found largely in discount stores. As it turned out, nearly one million tubes have turned up in hospitals, prisons and elsewhere.
I have already discussed criminal liability for wire-tap fraud in this post regarding pet food, and so you should know that criminal liability is to be expected. This new case just re-affirms the point: you can be criminally liable for the products you import from China, so be very very careful. Again, I don’t think its realistic to cut off all ties to China–just be aware of the potential liability.
I will try to write more about the actual criminal charges in a future post.
