A Preliminary Exploration of the Phase-Out of Pesticide Production Licenses and Pesticide Business Licenses

Pesticide production licensing and pesticide business licensing are fundamental institutional pillars of China’s pesticide management system. A pesticide production license is a certificate issued upon application by the provincial agricultural and rural affairs authority, authorizing an enterprise to engage in the production and operation of pesticides and conferring eligibility to produce such products. With the exception of sanitary-use pesticides, China operates a pesticide business licensing regime. A pesticide business license is typically granted upon application by the agricultural and rural affairs authority at or above the county level, serving as proof that an entity or individual meeting specified operational requirements is authorized to conduct pesticide‑related business activities and holds the requisite qualification; licenses for the sale of restricted‑use pesticides, however, are issued by the provincial agricultural and rural affairs authority. The revocation of a pesticide production license or a pesticide business license refers to an administrative penalty whereby, in accordance with the law, the licensing document is withdrawn from a pesticide producer or business operator found to have violated relevant pesticide‑management regulations, thereby stripping it of the right to engage in pesticide production or business activities. Under the Regulations on Pesticide Administration (hereinafter referred to as the “Regulations”), the licensing authority that issues the license is also responsible for its revocation—“whoever issues the license shall revoke it.” More than five years after the Regulations entered into force, examining the practical and real‑world implications of exiting the pesticide production and business sectors has become increasingly pertinent.

01

Relevant Laws and Regulations on the Revocation of Pesticide Production Licenses

1.1 Provisions in the Regulations Regarding the Revocation of Pesticide Production Licenses

The Regulations contain a total of five relevant provisions. Article 52 sets forth four circumstances under which a license may be revoked: (1) where counterfeit pesticides are produced, the licensing authority shall revoke both the pesticide production license and the corresponding pesticide registration certificate; (2) where a pesticide manufacturer holding a production license no longer meets the prescribed conditions but continues to produce pesticides, the agricultural administrative department of the local people’s government at or above the county level shall order it to make rectifications within a specified time limit; if the manufacturer fails to comply after the deadline or remains non‑compliant following rectification, the licensing authority shall revoke its pesticide production license; (3) where a pesticide manufacturer produces substandard pesticides in serious cases, the licensing authority shall revoke both the pesticide production license and the corresponding pesticide registration certificate; (4) where a manufacturer entrusts a processor without a pesticide production license to manufacture or repackage pesticides, or entrusts such processing or repackaging to a party producing counterfeit or substandard pesticides, both the principal and the processor shall be subject to penalties in accordance with the provisions set forth in subparagraphs (1) and (3) above.

Article 53 provides that if a pesticide manufacturer engages in any of the following acts and, despite being ordered by the agricultural administrative department of the local people’s government at or above the county level to make corrections, refuses to do so or commits a serious violation, the licensing authority shall revoke its pesticide production license and the corresponding pesticide registration certificate: (1) purchasing or using raw materials that, in accordance with law, are not accompanied by a certificate of product quality inspection or relevant permits; (2) selling from the factory pesticides that have not passed quality inspection and do not bear a certificate of product quality inspection; (3) producing pesticide packaging, labels, or instructions for use that fail to comply with statutory requirements; (4) failing to recall pesticides that, in accordance with law, are required to be recalled.

Article 54 stipulates that if a pesticide manufacturer fails to implement the systems for recording the procurement of raw materials and the sale of pesticides upon leaving the factory, or fails to fulfill its obligation to collect and recycle pesticide waste, the agricultural administrative department of the people’s government at or above the county level shall order it to make corrections. If the manufacturer refuses to comply or the circumstances are serious, the licensing authority shall revoke its pesticide production license and the corresponding pesticide registration certificate.

Article 62 stipulates that anyone who forges, alters, transfers, leases, or lends a pesticide production license shall have the license confiscated or revoked by the issuing authority. In cases of transfer, lease, or loan of the license, the license shall be revoked.

Article 63 stipulates that any entity that produces pesticides without a pesticide production license, or whose pesticide production license has been revoked, shall prohibit its directly responsible principal personnel from engaging in pesticide production activities for a period of ten years.

If a pesticide manufacturing enterprise employs any of the personnel specified in the preceding paragraph to engage in pesticide production activities, the licensing authority shall revoke its pesticide production license.

1.2 Provisions on the Revocation of Pesticide Production Licenses in the Measures for the Administration of Pesticide Production Licenses

Article 21 of the Measures for the Administration of Pesticide Production Licenses enumerates seven circumstances under which a pesticide production license may be revoked: (1) manufacturing counterfeit pesticides; (2) producing substandard pesticides in cases of serious severity; (3) continuing to produce pesticides despite no longer meeting the conditions for obtaining a production license, and failing to rectify the situation within the prescribed time limit or remaining non‑compliant even after rectification; (4) violating the provisions set forth in Articles 53 and 54 of the Regulations on the Administration of Pesticides; (5) transferring, leasing, or lending a pesticide production license; (6) employing personnel prohibited under paragraph 1 of Article 63 of the Regulations on the Administration of Pesticides to engage in pesticide production activities; and (7) other circumstances where revocation of the pesticide production license is required by law. The latter category primarily refers to the situation specified in paragraph 4 of Article 52 of the Regulations, namely “entrusting a trustee without a pesticide production license to process or repackage pesticides, or entrusting the processing or repackaging of counterfeit or substandard pesticides.”

02

Relevant laws and regulations on the revocation of pesticide business licenses

2.1 Provisions in the Regulations Regarding the Revocation of Pesticide Business Licenses

The Regulations contain a total of six relevant provisions. Article 55 stipulates that operators who engage in the sale of counterfeit pesticides or add unauthorized substances to pesticides, and whose violations are deemed serious, shall have their pesticide business licenses revoked by the issuing authority. Furthermore, if a pesticide operator holding a valid license no longer meets the prescribed conditions but continues to engage in pesticide business, the agricultural administrative department of the local people’s government at or above the county level shall order it to make rectifications within a specified time limit; if the operator fails to comply after the deadline or remains non‑compliant following rectification, the issuing authority shall revoke its pesticide business license.

Article 56 stipulates that if a pesticide operator engages in the sale of substandard pesticides and the circumstances are serious, the licensing authority shall revoke the pesticide business license.

Article 57 stipulates that if a pesticide operator engages in any of the following acts, the agricultural administrative department of the local people’s government at or above the county level shall order it to make corrections; if it refuses to do so or the circumstances are serious, the licensing authority shall revoke its pesticide business license: (1) establishing a branch without legally amending its pesticide business license or filing with the agricultural administrative department of the local people’s government at or above the county level where the branch is located; (2) purchasing pesticides from a pesticide manufacturer that has not obtained a pesticide production license or from another pesticide operator that has not obtained a pesticide business license; (3) purchasing or selling pesticides that are not accompanied by a certificate of product quality inspection or whose packaging and labeling do not comply with the relevant regulations; (4) failing to cease the sale of pesticides that are required by law to be recalled.

Article 58 stipulates that if a pesticide operator engages in any of the following acts, the agricultural administrative department of the local people’s government at or above the county level shall order it to make corrections; if it refuses to comply or the circumstances are serious, the licensing authority shall revoke its pesticide business license: (1) failing to implement the systems for maintaining records of pesticide purchases and sales; (2) conducting business involving food, edible agricultural products, feed, or other such items within premises designated for the sale of pesticides other than sanitary-use pesticides; (3) failing to display sanitary-use pesticides separately from other commodities; (4) failing to fulfill its obligation to collect and dispose of pesticide waste.

Article 62 stipulates that anyone who forges, alters, transfers, leases, or lends a pesticide business license shall have such license confiscated or revoked by the issuing authority. Under this provision, the revocation applies to licenses that are transferred, leased, or lent.

Article 63 stipulates that any individual directly responsible for a pesticide business whose license has been revoked shall be prohibited from engaging in pesticide-related business activities for a period of ten years.

If a pesticide operator employs any of the personnel specified in the preceding paragraph to engage in pesticide business activities, the licensing authority shall revoke the pesticide business license. The person whose pesticide business license has been revoked shall be prohibited from engaging in pesticide business for a period of ten years and may not reapply for such a license during that period; furthermore, they shall be barred from participating in the production or sale of pesticides at any other enterprise or retail outlet. The agricultural and rural affairs department that imposes the revocation of the pesticide business license shall concurrently impose an occupational ban on the directly responsible principal officers of the operator and make such decision public.

2.2 Provisions on the Revocation of Pesticide Business Licenses in the Measures for the Administration of Pesticide Business Licensing

The relevant provisions of the Measures for the Administration of Pesticide Business Licenses are primarily set out in Article 24. That article stipulates that, upon discovering that a pesticide business operator no longer meets the prescribed conditions, the agricultural authorities at or above the county level shall order it to make rectifications within a specified time limit; however, if the operator fails to comply after the deadline or continues to fail to meet the requirements even after rectification, the licensing authority shall revoke its pesticide business license. The “prescribed conditions” referred to herein shall be those specified in Articles 55, 56, 57, 58, 62, and 63 of the Regulations.

03

Provisions on the Revocation of Licenses in the Administrative Penalty Law

Among the types of administrative penalties stipulated in Article 9 of the Administrative Penalty Law are suspension of permits, downgrading of qualification levels, and revocation of permits. The revocation of both pesticide production licenses and pesticide business licenses falls under the category of administrative penalties involving the revocation of permits.

Article 52, paragraph 1 of the Regulations stipulates that any entity producing counterfeit pesticides shall have its pesticide production license revoked, thereby demonstrating the firm resolve and robust enforcement of China’s agricultural and rural authorities in combating such illegal activities. However, Articles 5, 6, and 33 of the Administrative Penalty Law—providing that administrative penalties must be based on facts and proportionate to the nature, circumstances, and social harm of the violation; that penalties should be imposed in conjunction with education to correct unlawful conduct; and that first-time violations with minor consequences that are promptly rectified may be exempted from administrative punishment—suggest that, for a pesticide producer’s initial offense involving the manufacture or an operator’s sale of a very small quantity of counterfeit pesticides (where evidence demonstrates that quality issues arose from cross‑contamination and where the operator has fulfilled their obligation to verify incoming goods), and provided the party promptly takes corrective measures (such as destroying or recalling the products) without causing serious harm, it may be appropriate to impose property‑based penalties like fines rather than immediately revoking the license. By contrast, repeat offenders or those whose actions result in harmful consequences should be subject to zero tolerance, with their pesticide production or business licenses revoked in accordance with the law.

04

Several circumstances under which the agricultural and rural affairs authorities may, in accordance with the law, revoke a pesticide license, along with the procedures for revoking such licenses.

In accordance with the provisions of the Administrative Penalty Law and the Regulations stipulating that “the licensing authority shall revoke pesticide licenses,” and given that agricultural administrative enforcement and administrative penalties are predominantly carried out by municipal and county-level agriculture and rural affairs departments, the revocation of pesticide business licenses may be handled directly by these local authorities. However, the revocation of pesticide production licenses falls within the purview of provincial-level agriculture and rural affairs departments; neither the ministerial level nor the municipal and county levels may exercise this power. Consequently, when revoking a pesticide production license, issues related to administrative jurisdiction and the administrative penalty procedure are more likely to arise. A brief analysis of the circumstances under which provincial-level agriculture and rural affairs departments may lawfully revoke pesticide production licenses, along with the associated administrative penalty procedures, is set forth below.

4.1 Provincial agricultural and rural affairs authorities shall, in accordance with the law, independently exercise their duties to revoke pesticide production licenses.

When provincial agricultural and rural affairs authorities, in performing their administrative law enforcement duties in accordance with the law, discover that a pesticide enterprise has engaged in unlawful conduct falling under the circumstances specified in the Regulations as grounds for revoking its pesticide production license, they shall initiate an investigation on their own initiative and, in accordance with the law, issue an administrative penalty decision to revoke the license. This situation does not involve issues of jurisdiction or the procedural requirements for imposing the administrative penalty of license revocation.

4.2 The municipal and county agricultural and rural affairs departments shall first perform their duties in accordance with the law; however, the case involves the revocation of a pesticide production license.

When municipal and county agricultural and rural affairs authorities, during supervision and enforcement inspections or upon receiving public reports, discover that a pesticide enterprise has engaged in unlawful conduct warranting the revocation of its pesticide production license, they shall initiate an administrative case, conduct investigations and gather evidence, and issue any other administrative penalties besides revoking the license. Furthermore, within fifteen working days of making such administrative penalty decisions at their respective levels, they shall submit the relevant materials pertaining to the license revocation to the provincial agricultural and rural affairs authority and put forward recommendations for handling the matter.

Provincial agricultural and rural affairs authorities, upon reviewing the administrative actions of municipal and county-level agricultural and rural affairs departments, may revoke a pesticide production license in two scenarios: first, when a pesticide manufacturer that has obtained such a license no longer meets the prescribed conditions; second, when municipal and county-level agricultural and rural affairs departments, after investigating and addressing violations by a pesticide manufacturer, fulfill their duties in accordance with the provisions of the Regulations and submit a request to the provincial agricultural and rural affairs authority to revoke the license.

4.2.1 An enterprise continues to produce pesticides despite no longer meeting the conditions for pesticide production licensing.

Article 52, paragraph 2 of the Regulations stipulates that if a pesticide manufacturer holding a pesticide production license no longer meets the prescribed conditions but continues to produce pesticides, the agricultural and rural affairs authority of the local people’s government at or above the county level shall order it to make rectifications within a specified time limit. If, upon expiration of the deadline, the entity refuses to rectify or, even after rectification, still fails to meet the required conditions, the licensing authority shall revoke its pesticide production license. With respect to whether an enterprise “no longer meets” the licensing requirements and whether it “still fails to meet the requirements after rectification,” the municipal and county agricultural and rural affairs departments shall submit a request to the provincial agricultural and rural affairs department for determination, or the provincial department may commission experts to conduct such a determination and issue specific recommendations for corrective action. Furthermore, the notice of限期整改 must clearly specify the rectification deadline—whether three months, six months, or one year. The provincial, municipal, and county-level agricultural and rural affairs departments shall coordinate and cooperate to effectively fulfill their administrative oversight responsibilities.

4.2.2 After the municipal and county agricultural and rural affairs authorities have investigated and dealt with the enterprise’s illegal activities, they shall, in accordance with the provisions of the Regulations, fulfill their duties and submit a request to the provincial agricultural and rural affairs authority to revoke the pesticide production license.

The specific unlawful acts of pesticide manufacturers generally refer to the violations enumerated in Article 21, paragraphs (1), (2), (4), (5), and (6) of the Measures for the Administration of Pesticide Production Licenses. These include: (1) manufacturing counterfeit pesticides; (5) transferring, leasing, or lending a pesticide production license; and (6) employing personnel prohibited under paragraph 1 of Article 63 of the Regulations on the Administration of Pesticides—three categories not covered by specific provisions. In other words, when agricultural law enforcement officers at the city or county level identify violations falling under paragraphs (1), (5), or (6), so long as such findings do not contravene Article 5 of the Administrative Penalty Law—which stipulates that “the establishment and implementation of administrative penalties must be based on facts and proportionate to the facts, nature, circumstances, and degree of social harm of the violation”—they shall submit a request to the provincial agricultural authority to revoke the pesticide production license. As for violations under paragraphs (2), which involve the serious manufacture of substandard pesticides, and (4), which concern failure to rectify or serious circumstances in contravention of Articles 53 and 54 of the Regulations on the Administration of Pesticides, whether to seek revocation of the license from the provincial department of agriculture and rural affairs may be determined in accordance with the Standards for Discretion in Agricultural Administrative Penalties.

4.3 Procedural Issues in the Revocation of Pesticide Production Licenses

When provincial agricultural and rural affairs authorities discover unlawful conduct, they shall initiate their own administrative investigation (including a hearing) and, in accordance with the specific violation, issue an administrative penalty decision to revoke the pesticide production license pursuant to the Administrative Penalty Law and the Regulations on Agricultural Administrative Enforcement Procedures; see Figure 1.

With respect to the revocation of pesticide production licenses and administrative penalties based on the administrative actions of municipal and county agricultural and rural affairs departments, the initiating step is the administrative action taken by the grassroots-level agricultural and rural affairs authorities. Municipal and county agricultural and rural affairs departments shall submit, together with the relevant materials, the agricultural administrative enforcement documents—such as notices requiring rectification within a specified time limit, evidence of failure to comply after the deadline, or findings demonstrating that, even after rectification, the conditions still do not meet statutory requirements—and a formal letter requesting the revocation of the pesticide production license to the provincial-level agricultural and rural affairs department.

The law enforcement (legal affairs) agencies of provincial-level agricultural and rural affairs departments shall, in accordance with the law, review the administrative enforcement materials submitted by municipal and county-level agricultural and rural affairs departments. Subsequently, in compliance with the “Regulations on Administrative Penalty Procedures in Agriculture” and the “Standards for Drafting Agricultural Administrative Enforcement Documents,” they shall proceed with case filing, investigation and evidence collection, drafting proposed penalties, organizing hearings, conducting legal review, and holding collective deliberations by responsible officials, before finally deciding whether to revoke the pesticide production license.

05

An Alternative “Export” of Pesticide Licenses: Revocation and Cancellation

The Regulations do not address the revocation or cancellation of licenses. However, the Administrative Licensing Law provides for such matters, and the Measures for the Administration of Pesticide Production Licenses and the Measures for the Administration of Pesticide Business Licenses contain specific provisions in this regard.

5.1 Revocation of Pesticide License

The revocation of a license is an exercise of legal sanction, characterized by its compulsory and punitive nature, whereas the cancellation of a license is a corrective measure that legally rescinds an administrative permit, applicable in cases where the administrative authority has unlawfully granted the permit or where the permit holder obtained it through deception or bribery. Article 22 of the Measures for the Administration of Pesticide Production Licenses sets forth four circumstances under which the provincial agricultural and rural affairs authorities may, in accordance with the law, revoke a pesticide production license. With the exception of paragraph (4)—“where the applicant obtains a pesticide production license by means of deception, bribery, or other improper practices,” for which the applicant bears the corresponding legal liability—the grounds for revocation specified in paragraphs (1), (2), and (3) all arise from violations of statutory procedures by the issuing authority or from dereliction of duty by its staff; accordingly, when an administrative permit is revoked, the issuing authority or its personnel should also be held accountable. Article 23 further stipulates that, upon lawful revocation or cancellation of a pesticide production license, the provincial agricultural authorities shall, in accordance with the law, proceed to cancel the registration of the license.

Article 25 of the Measures for the Administration of Pesticide Business Licenses stipulates that where a pesticide business license is lawfully revoked or canceled, the issuing authority shall proceed with its cancellation in accordance with the law. Although the circumstances under which a pesticide business license may be revoked are not explicitly enumerated, such determinations may be made by reference to the scenarios set forth in Article 22 of the Measures for the Administration of Pesticide Production Licenses.

5.2 Cancellation of Pesticide License

Article 23 of the Measures for the Administration of Pesticide Production Licenses stipulates five circumstances under which a pesticide production license shall be revoked in accordance with the law: when the enterprise applies for revocation; when the enterprise’s legal entity status is terminated in accordance with the law; when the validity period of the pesticide production license has expired and no renewal application has been filed; when the pesticide production license has been lawfully withdrawn, revoked, or suspended; and in other circumstances where revocation is required by law. Where an enterprise, due to reasons such as workplace safety or ecological environmental protection, is subject to relocation and no longer meets the conditions for obtaining a pesticide production license and thus ceases to produce pesticides, it may apply for revocation of its license.

In practice, some enterprises that have obtained pesticide production licenses no longer meet the prescribed conditions due to ecological‑environmental relocation or other reasons, and, owing to court‑ordered seizures or other impediments, have ceased pesticide production. Under Article 52, Paragraph 2 of the Regulations on the Administration of Pesticides, only those “continuing to produce pesticides” may face revocation of their production license if they “fail to make corrections within the prescribed time limit or, even after making corrections, still fail to meet the required conditions.” It is recommended to draw on Article 20 of the Measures for the Administration of Licenses for the Production and Operation of Crop Seeds, which provides: “During the validity period of a seed production and operation license, if any of the following circumstances occurs, the licensing authority shall revoke the license and make a public announcement: (1) the enterprise has suspended production and business activities for more than one year; (2) the enterprise no longer meets the licensing conditions stipulated in these Measures and, despite a deadline for rectification, remains unable to comply.” Accordingly, the criteria for revoking pesticide production licenses should be revised so that, where an enterprise is relocated due to safety‑production requirements, ecological‑environmental concerns, or other reasons and thus can no longer meet the conditions for pesticide production, the licensing authority may proactively revoke the license, rather than limiting such action solely to applications submitted by the market entity.

Article 25 of the Measures for the Administration of Pesticide Business Licenses sets forth five circumstances under which a license may be revoked in accordance with the law: when the pesticide business operator applies for cancellation; when the legal entity’s qualification is terminated; when the validity period of the pesticide business license has expired and no renewal application has been filed; when the pesticide business license has been lawfully withdrawn, revoked, or suspended; and in other cases where cancellation is required by law. Cancellation carries a certain punitive element but is primarily procedural in nature.

5.3 Temporary Suspension of Pesticide License

In accordance with the provisions of the Regulations, the Measures for the Administration of Pesticide Production Licenses, and the Measures for the Administration of Pesticide Business Licenses, where any of the following violations occur—producing counterfeit pesticides; failing to make required rectifications within the prescribed time limit or continuing to fail to meet statutory requirements after rectification; engaging in serious misconduct; transferring, leasing, or lending a license; or employing a directly responsible person who has had their license revoked within the past ten years—the relevant license shall be revoked.

Neither the Regulations, nor the Measures for the Administration of Pesticide Production Licenses, nor the Measures for the Administration of Pesticide Business Licenses contain any provision for “temporary suspension of a license.” However, Article 9 of the newly revised Administrative Penalty Law lists “temporary suspension of licenses” among the types of administrative penalties; Article 33 explicitly stipulates that for first-time violations with minor harmful consequences that are promptly rectified, no administrative penalty may be imposed; and Article 3 has deleted the provision stating that “administrative penalties are invalid if there is no statutory basis or if statutory procedures are not followed.” These changes provide a legal basis for agricultural and rural authorities to, in enforcement practice, comprehensively consider factors such as the social harm caused by an offense and directly impose lighter or reduced penalties. Accordingly, the author suggests innovating approaches to pesticide management and improving enforcement methods to reduce administrative disputes. Before issuing a decision to revoke a license, relying on Articles 9 and 33 of the Administrative Penalty Law, the licensing authority may, for cases involving the production of counterfeit pesticides without resulting harm, the transfer, lease, or loan of licenses, or the employment of directly responsible managers who have had their licenses revoked within the past ten years—where the resulting harm is minor—impose a “temporary suspension of the license” along with a clearly defined deadline for corrective action. During the period of suspension, the relevant producer or business entity shall be prohibited from manufacturing or trading pesticides. If the required corrections are not made by the deadline, or if, after correction, the entity still fails to meet the prescribed conditions, its license may then be revoked. This approach helps enhance the acceptance of administrative penalties involving the revocation of pesticide licenses among market entities, while also ensuring that enforcement remains both firm and balanced.

Source: AgroPages (World Agrochemical Network)