Bill for import of cosmetics miffs local firms

Legislation is designed to speed approval, increase competition

A section in the Treasury’s arrangements bill that will speed Health Ministry approval for imported cosmetics, help increase competition and reduce prices was approved on Sunday in a stormy meeting of the Knesset Labor, Social Welfare and Health Committee.

The reform is similar to the one that reduced red tape for dried-food imports, known as the “cornflakes law.” The Treasury’s estimate of the annual cosmetics market is some NIS 6 billion.

Today, imported cosmetics – including shampoo, soaps, perfumes, sunscreen and makeup – require licenses and expensive fees, in a process that takes months for each product.

In the section of the bill just approved, Israel would adopt European regulations for such products, significantly speeding up the process while ensuring public health, the committee said.

It also establishes more severe financial penalties against those companies that violate those regulations. Violators will have to pay up to NIS 75,000 for failing to prevent the use of a harmful cosmetic product.

At the same time, the health minister and the Knesset committee could demand that the old, more bureaucratic procedures remain in place for certain kinds of cosmetics, if they believe such actions are needed to protect the public.

The new regulations will go into effect six months after their publication in Reshumot, the public journal in which official records and laws are published.

Committee chairman MK Eli Alalouf (Kulanu) welcomed the change and said the move will bring down prices and increase competition, a change that was not welcomed by local cosmetics companies.

But Alalouf also said it would increase sales. “We have made great efforts to make it easier for importers and merchandisers, and I expect that consumers will gain,” he said.

Despite requests by representatives of the Israel Manufacturers Association and the Dr. Fischer Company, the committee did not agree to reduce license application fees from the current NIS 1,723 per product. The Treasury official in charge of this subject said such fees now cover only half of the NIS 30 million cost of checking and approving products.

But as a result of a request by Kulanu MK Roi Folkman, an exemption will be given to perfumes and solid soaps, unlike other cosmetics for which fees have not previously been charged. Fees for just changing the name or color of a product will be reduced, Alalouf said.

Local cosmetics companies argued that the changes did nothing for them, only for importers. The new procedures will save the authorities a lot of money, so fees should be substantially reduced, they said.