MINUTES OF MEMBERS MEETING HELD ON 12th January 2011AT HOTEL SINGGAHSANA, PETALING JAYA

Present 1

Alliance Cosmetics Sdn Bhd

Joanna Yong, Shin Yee,Keh Ee Lyn

2 Amway (M) Sdn Bhd Zarrah Banu Hulwani3 AP Cosmetics Corporation Sdn Bhd Judy Ling4 Avon Cosmetics (M) Sdn Bhd Khairul Izlan5 Beauty Specialist Distributors Sdn Bhd Lim You Goang, Hasrina6 Blue Oasis (M) Sdn Bhd Chua Lee Yen7 Bodibasixs Manufacturing Sdn Bhd Lai Mee Ping, Esther Yee8 Celmonze Sdn Bhd Florence Lim9 CNI Venture Sdn Bhd Rosita Hassan, Christine Chia

10 Colgate Palmolive (M) Sdn Bhd Hamidah, PC Ng11 Cosway (M) Sdn Bhd Soo Hoong Kun, See Yee Lerk12 Clarins Sdn Bhd Beyen Ow13 DCM Personal Care Sdn Bhd Jane Ng14 Dermal Esthetica Sdn Bhd Chan Chooi Hun15 Delfi Marketing Sdn Bhd Crystal Khoo

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16 Elken Sdn Bhd Rachel Lim, Maggie Wang17 Envico Enterprise Sdn Bhd Kartina Yaali18 Est One Sdn Bhd Carin Ong, Susan Wong19 Ginvera Marketing Enterprise Sdn.Bhd Ivy How, Adrienne Tan20 Glamour Prestige Sdn Bhd Patrick Liew21 Golden Corner Sdn Bhd Felicia Gan

22Hawley & Hazel Marketing M'sia Sdn Bhd Ong Kah Keong

23 Henkel (M) Sdn Bhd. Abdul Aziz Arshad24 Hoe Pharmaceuticals Sdn Bhd Putri Fatimah Megat Mohamed Amin25 Hong Kong Sa Sa (M) Sdn Bhd Suhaini Soid26 Kao (Malaysia) Sdn Bhd Md Zahar Bin Md Yusop27 L’Oreal Malaysia Sdn Bhd Lilywati Arshad, Stacy Tan, Sok Fen28 Luxasia (M) Sdn Bhd Valerie Yap, Jenn Lee29 Macsam Sdn Bhd Janice Loh, Wong Yow Lee30 Melaleuca South East Asia Sdn Bhd June Fu31 Nutri-Metics Worldwide (M) Sdn Bhd Alice Tan32 Nutri-Active Sdn Bhd Janice June33 Pacific Cosmetics (M) Sdn Bhd Lily Loh34 Procter & Gamble (M) Sdn Bhd Revathi, Mei35 Shiseido Malaysia Sdn Bhd Averilla Cassandra36 SimplySiti Sdn Bhd Joshua Lee, Norena37 Starlight Cosmetics Sdn Bhd Lim Chung Fung38 Thalgo Cosmetic (Sea) Sdn Bhd Karen Yeo, Yvonne Kua39 Tupperware Brands Cheryl Chan40 Unilever (M) Holdings SdnBhd. Siti Farhana Bt Abdul Raof41 Unza (Malaysia) Sdn Bhd Tan Poh Poh

RSVP AND NOT PRESENT1 Kose (Malaysia) Sdn Bhd2 Naturalife Solution Sdn Bhd3 Reckitt Benckiser (M) Sdn Bhd4 Shaklee Products Malaysia S/B

ABSENT1 Best World Lifestyle Sdn Bhd 17 Mary Kay (Malaysia) Sdn.Bhd2 Cheerful Trading Sdn Bhd 18 Maestro Laboratories Sdn Bhd3 Connell Bros Co.Ltd 19 Melilea (M) Sdn Bhd4 Cosbel Le Specialiste Marketing 20 Mode Circle Sdn Bhd5 Cosmetic Resources Sdn Bhd 21 Nu Skin (M) Sdn Bhd

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6 Crabtree & Evelyn (M) Sdn Bhd 22 Obagi (Malaysia) Sdn Bhd7 DXN Marketing Sdn Bhd 23 Pro Beau Sdn Bhd8 EAC Industrial Ingredients Sdn Bhd 24 P.T.Mustika Ratu (M) Sdn Bhd9 Esplanade Avenue Sdn Bhd 25 Rampai Niaga Sdn Bhd

10 Fruitful Marketing Sdn Bhd 26 Rina Skincare (M) Sdn Bhd11 Johnson & Johnson 27 Sky Resources Sdn Bhd12 Laponie Marketing Sdn Bhd 28 Suria Meriang Sdn Bhd13 Luprim Sdn Bhd 29 Taiway Marketing Co Ltd14 LVMH Perfumes & Cosmetics (M) S/B 30 Unique Conversion Sdn Bhd15 Luxor Beauty World Sdn Bhd 31 Wayco Manufacturing16 Mandom (M) Sdn Bhd 32 Yakin Invest Corporation Sdn Bhd

MINUTES OF MEMBERS MEETING HELD ON 12th January 2011AT HOTEL SINGGAHSANA, PETALING JAYA

The meeting commenced at 10.00am. The President welcomed and thanked the members for their attendance.

Members reviewed the minutes of the last meeting held on 9 th November 2010. There being no further objections raised, the minutes were proposed and adopted by Ms Averilla Cassandra of Shiseido Malaysia Sdn Bhd and seconded by Ms Wong Yow Lee of Macsam Sdn Bhd. The President reminded and encouraged members to give feedback on the contents of the minutes. He encouraged members to be more participative/pro-active in giving input.

Sub- Committee Reports

Business Operations Report

Quest 3 Issues

1. There was an open session for members to voice out their issues and the following were the issues raised by members.

a. CNI Venture – Upon renewal, not able to find previously used INCI names in the database. Has BPFK updated the INCI names into the Quest 3?

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b. Luxasia – Ingredients in Quest 2 are not found in Q3: still under review for a few weeks and need constant follow-up.

c. Procter & Gamble - To check if Biro will use the PCPC ingredient list for their Quest 3 system.

d. Melaleuca - Master product has discontinued (withdrawed) but the variants are still active however it was not migrated to Quest 3. (Solution: The Board advise member to renew the variants as new product)

e. Unza – Q3 ‘sort’ function in the section of Notification list is not user-friendly.

Following the above issues, the Board will also put forward the following issues :-

a. Ban ingredient, Methyldibromo Glutaronitrile (Annex VI,36) previously approved and was later removed during one of the ACC meeting in 2008. To inform BPFK that it is impossible for the industry to check back the records since it was approved in Registration.

b. Reboot of System– To give prompt notices to the industry via Quest 3 so that it does not cause any interruption.

c. To clarify if there is a letter or criteria on ‘Taking of products’ by Enforcement Officers during surveillance

2. Generally, presently the speed of Quest 3 is well accepted. Noted that there are still many members using the smartcards and have not change to token yet.

3. Members are advised to continue to update CTFA office of any issues face in Quest 3.

4. Question: In Annex VI, Alkyl (C12-22) trimethyl ammonium, bromide and chloride (e.g. Cetrimonium Chloride, Steartrimonium Chloride, Behentrimonium Chloride, etc) can be used as preservative at 0.1% but these group of chemicals are also allowed for other applications. What are the limits for these chemicals in other applications?

5. Question:Since there is a (+) this group of chemicals can be used for applications other than preservative.  BPFK uses recommendation from a SCCS (Scientific Committee on

Consumer Safety) report.

Hair Care: cetrimonium chloride (C16), steartrimonium chloride (C18):Rinse-off hair care products up to 2.5%Leave-on hair care products up to 1.0%Leave-on facial cream products up to 0.5%behentrimonium chloride (C22):Rinse-off hair care products up to 5.0%Leave on hair care and facial cream products up to 3.0%

  Rinse-off cosmetic products:

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- the sum of the cetrimonium and steartrimonium chloride concentrations should not exceed 0.5%, and- the total sum of behentrimonium, cetrimonium and/or steartrimonium chloride should not exceed a maximum level of 3%.

Will there be an official limit?

The above Question 5 & 6 was being discussed in the last ACC meet and will be deliberate further in the next TWG meeting.

6. Question:  Does anyone export products like shower, hair shampoo to Thailand and encounter problems with the nitrosamine limit set by Thai authority?  Ingredients e.g. Cocamide DEA, TEA, etc might contribute to nitrosamine in the finished product.

 Mr PC Ng’s advice is as follows:-In raw materials such as alkanolamide (e.g. diethanolamide) and alkanolamine (e.g. triethanolamine) there is a possibility of contamination with diethanolamine. The nitrosation of diethanolamine with nitrosating agent (e.g. nitrite) can lead to the formation of  nitrosodiethanolamine which is carcinogenic. Modern formulations have already taken steps to re-formulate without the use of the alkanolamine as practical as possible. This is the reason for the regulatory authority to request for such information.

TRC Report

1. 14 th ACSB/15 th ACC meeting in Hanoi updates:-

Outcome from HOD meeting

a. Database of Notified Products Establishment of centralized database for notified products to be considered only after all Member States have comparable systems.

b. Structure of ACC New ACC meeting structure commencing 17th ACC :• Public-Private Open Forum • Regulators’ Closed Meeting • ACSB meeting • ACC meeting

c. Additional Requirements Imposed by Member States The rationale of implementing additional requirements (e.g. Free Sale Certificate and printing of Notification Nos. on packaging) was discussed.

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Challenges faced by PMS authorities were highlighted and will be further deliberated at the 16th ACC meeting.

d. ACD Requirements and the Role of Regulators Regulators are allowed carry out audits in line with their national requirements to ensure product safety and quality are not compromised.

2. 14 th ACSB Report

a. EU Update The following discussions are ongoing in the EU1) Safety assessment guidelines2) Reporting of serious adverse events3) Common criteria for claims4) Adaptation of the regulation annexes5) Notification of nanomaterials 6) Use of CMR substances as cosmetic ingredients

No recommendation will be made to the ACC until clarity has emerged from these discussions.

b. Pilot Risk Assessment of Botanical Ingredients ACA presented a safety review guideline for botanical ingredients. Member states to review this guideline against current national practices and provide comments to ACA by March 2011.

c. Annex II/III Structure ACSB Secretary presented options for clarifying Annex II by transfering the 495 ingredients which are restricted to a new Part 3 of Annex IIIACSB will seek clarification from EU on • why these ingredients are restricted instead of completely banned• what is EU legal interpretation of their use as cosmetic ingredient• what is the scientific committee’s opinion on these ingredients

d. Clarification of AHA entry

Annex III, Part 1 entry A6:

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e. Phthalates No change to the current regulation of phthalates as cosmetic ingredients in ASEAN. Currently, harmful phthalates are already in Annex II.

There is no need for specific legislation on Diethyl Phthalate (DEP) as • it is considered safe under current practices of cosmetic use. • there is no data to show ASEAN population exposure to DEP from cosmetics

f. Azelaic Acid ACA/Singapore proposed to transfer Azelaic Acid from Annex II to Annex III Part 1, with max. concentration of 10% for use in

• Leave-on products• Rinse-off products for the face and scalp

ACSB members to review safety data available and provide feedback to ACA by March 2011.

g. Fragrance Ingredient Requiring Specific Labeling in the EU

Singapore proposed the adoption of EU’s mandatory INCI labeling of 26 specific fragrance ingredients when present in formulation above defined thresholds.

Pros : closer alignment with EU Directive, increases level of information to consumers.

Cons : lack of evidence of a problem in the market, logistical and cost challenge to the industry

ACSB to review proposal and provide feedback to Singapore by end April 2011.

h. “Slimming” as Part of Product Name and Claim

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Due to the different positions of the Member States, decision on whether the use of the word “slim” or “slimming” will be made at national level.

i. Annex III, Part 2 with Dec 2010 Review Deadlines The review dates for entries 3, 4, 5, 6, 10, 11, 12, 16, 18, 19, 20, 21, 22, 25, 26, 27, 29, 31, 32, 33, 34, 35, 36, 37, 38, 39, 44, 48, 49, 50, 55 and 56will be extended to Dec 31, 2011.

3. Product Recall :- Member (AP Cosmetics) received a letter on product recall on their product “In2it Long Wearing Eyleliner Pen. EP01 (All Black)” containing a ban ingredient called Methyldibromo glutaronitrite (Annex VI, 36) (its function is preservative)

Points discussed and to seek clarification from BPFK: a. It is impossible for a member to check back the records after the product was approved

and besides members are not aware on the changes affected in the ACSB/ACC meetings.

b. To propose to have a pop-up notice of any ban ingredient in Quest 3 System. To provide letter to update the industry of any ban ingredients after each ACC/ACSB meeting.

c. To consider the degree of danger of the ingredient to warrant an immediate product recall and not penalize the industry by creating panic in issuing a letter for immediate product recall.

d. Proposed that the letter to notify concerned party of a ban ingredient and to allow enough grace period to retrieve products distributed.

4. Medical Device Committee Report Mr PC Ng, the sub-committee chairman attended the MDB Meeting at Ministry of Health, Putrajaya on 7th Jan 2011 on the impending passing of the Medical Device Bills in Parliament in 2011.

a) The Two Bills are :-

1. Medical Device Bill • To regulate the MD, MD industry and related matters

2. Medical Device Authority Bill • Establish the MD authority with powers to regulate

These two bills will be reviewed by the cabinet within 1 to 2 months and be read in Parliament probably in the next sitting in March 2011

b) Who & What to regulate?

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1. Medical device registration 2. Company/Establishment Licensing

- These are local manufacturer, exporters, local authorized representative, importers, distributors, Conformity Assessment Body (CAB)

3. Person – Permits for users operating designated MD The Minister will designate certain equipment especially those that can cause harm to

user or patient where the operator needs a certain level of competency and the MDrequires to have routine maintenance, an example mentioned was laser treatment equipment.

4. Good Distribution Practice (GDP) 5. MD advertisement

c) MDB regulate MD via Pre-Market Review 1. ensure product conformity 2. ensure products are manufactured in accordance to GMP 3. collect evidence of conformity

d) Regulate according to MD Risk Classification 1. Class A (low risk) - self declaration, no audit or inspection at premise, submit product notification 2. Class B (low moderate risk)

- submit product dossier for review 3. Class C (high moderate risk) and Class D (high risk)

- submit product dossier for review and audit of premise is required 4. Product that had already been approved as MD in any of the Global Harmonized Task

Force (GHTF) countries may apply for abridged registration procedure GHTF Countries – US, EU, Canada, Australia, Japan

e) Empowerment of the Industry 1. Industry can choose their authorized Conformity Assessment Body (CAB) 2. Industry to have post market activity

a. Complaint handling b. Field correction action c. Product recall

f) Medical Device Bill – Pertinent parts 1. Regulation of MD 2. Regulation of CAB 3. Establishment license 4. Designated MD permit 5. Duties & obligations of licensees and permit holders 6. General duty 7. Export duty

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g) Medical Device Authority Bill – Pertinent parts 1. Authority & functions of the authority, provisions for officers 2. Financial matters

3. Powers of the Minister related to a. Declare equipment as MD b. Powers to exempt c. Appeal against decision of the Authority

4. Powers of the Authority related to a. Register or refusal to register a MD b. Register or refusal to register a CAB c. Grant or refusal of an establishment license d. Grant or refusal of designated MD permit e. Usage, operation, maintenance etc. of a MD f. Appointment of an analyst - appoint any qualified person to be an analyst for the purpose of carrying out an analysis

5. Example of Offences :-a. Import, export or place the MD in the market that is unregistered b. Import, export or place the MD in the market without establishment license c. Advertising of unregistered MD d. Making misleading and fraudulent claims e. Refuse access to premise or refuse to furnish information f. Refuse to comply with any demand made by an authorized officer to obtain samples of

any MD for purpose of analysis g. Making untrue declaration

h) Transition Plan – Grace Period for the Enforcement of the MD Bills The grace period mentioned is 3 years but it is unofficial yet until the MD Bills have been passed in Parliament and to be announced by the Minister on the actual date of

enforcement of the Bills.

i) Other Matters of Concern Related to the Enforcement of the MD Bills 1. MDB mentioned in the meeting that the regulation will also specify compounding for

certain offences 2. The Minister had a concern on registration timeline taking into consideration available

resources at the MDB and requested the MDB to provide timeline to the industry in order not to impact the industry and the availability of MD in the market

3. MDB will be “grandfathering” existing MD in the market 4. Current registration procedure to be manual and will eventually go on-line

j) Impact of the Medical Device Bill to CTFAM members 1. Members who have premise/saloon that uses equipment that is a designated Medical Device will be required to :

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a. Have competent person to operate the MD b. Apply for a user permit from the MDB to operate the MD c. Have routine maintenance of the MD

The list of designated MD has not been finalized yet pending the passing of the Bill in Parliament. However during this meeting the MDB has mentioned equipment using laser may be one of the designated MD.

2. Import, distribute or export Medical Device will required to register the a. Medical device b. Establishment or company

k) Other Information a. Members who require more information can direct their query to the Medical Device

Bureau at: Email address: mdb@mdb.gov.my. Telephone No: 03 - 88850777 Address: Bahagian Kawalan Peralatan Perubatan Kementerian Kesihatan Malaysia Aras 5, No. 26, Boulevard Plot 3C4, Presint 3,

62675 Putrajaya

Important:

Other countries in ASEAN like Indonesia, Thailand & Philippines already had their own MD Regulations. In the development of the ASEAN Medical Device Directive, it is hope that there be a harmonized classification on what is regarded as a Medical Device in the future. (at the moment, cosmetics and pharmaceutical in Thailand & Philippines are under the Medical Device Regulations) CTFA will continue to monitor on the development of the ASEAN Medical Device Directive especially on the classification.

Therefore the Medical Device Regulations cannot be disregarded and affected members are advised to work together with CTFA so that the interest of our members can be taken care of prior to the finalization of the regulations for the cosmetic industry. CTFA wants to play a part in influencing for the betterment of the cosmetic industry in the MD development of the Regulations for cosmetics.

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With regards to training by MDB, members are to provide to CTFA a list of products which may fall under the MDB so that we could use the information to request MDB to tailor -made a training according to the needs of the cosmetic industries.

Government & External Affairs

Halal Issues updates:- 1) FAQ Workshop CTFA was invited to participate in the Frequently Ask Questions workshop conducted by Jakim. The authorities involved were Jakim, Jais, State Religious Bodies, authorities from Sabah and Sarawak, also invite MAMPU and HDC in the two day meetings.

The objective is to address the questions raised by the industries and to present their answers to the industries. This tool is also to revise their webpage section on FAQs. Members can check on Jakim’s website for the updates. During the meeting MAMPU raised the following concerns:-

a. Jakim to re-look into the current processes and do away some of the red tapes.

b. The latest requirements that Jakim requires all advertisement that feature Malayisan halal logo need to apply for approval from Jakim:

The concerns is that Jakim may not have the necessary resources or dedicated manpower to review the applications for approval on advertisements and could foresee that approvals may be delayed.

2) CTFA Board members will be meeting up with the new director of Halal Hub Division, Ustaz Zainal. (replaces Ustaz Saimah). The Halal Hub Division is responsible for Halal Certification, policies of Halal enforcement.a) The main purpose of visit is the introduction of CTFAb) To seek clarification

- The latest development on the amendment of the Trade Description Act - The status on the power of enforcement to Jakim- To raise the concern on advertisement approval by Jakim.

c) Re-visit of our proposals on the format on printing of the Malaysian Halal logo

The Board like to clarify the following :-(a) That the government has no intention to mandate halal certification on

cosmetics. (b) Jakim will maintain to recognize foreign bodies of certification.(c) Implementation of the new format on halal logo will be 1st Jan 2012

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3) Competition Act Updates ( extract from Bernama news)

The Competition Act 2010, which will come into force on Jan 1, 2012, will promote a competitive environment and give foreign investors more confidence in the country’s business practices. The Act will govern all firms, including government-linked companies (GLCs). The Act, which was passed in Dewan Rakyat in May, was gazetted on June 10. It will have two major prohibitions – anti-competitive agreements and abuse of dominant positions.

a. Anti-competitive agreements include price fixing, import cartel, bid rigging, territorial allocation, limiting production, market sharing.

b. The abuse of dominant position includes predatory pricing, price discrimination, excessive pricing and denying market access.

The law promotes the efficient functioning of the markets which will benefit consumers in terms of lower prices and better choices.

It will safeguard against practices that could drive companies out of business, allow lower entry barriers to promote entrepreneurship and growth of SMEs, efficient allocation and utilization of resources and control international unfair competition and restrictive business practices such as international cartels.

The Malaysian Communications and Multimedia Commission and the Energy Commission of Malaysia would not come under the Act.

Membership Committee

1) The Membership Chairman welcomed a new member in the meeting.

Company: Golden Corner Sdn Bhd. Products: skincare & cosmetic Importing Products from Korea, Japan and Taiwan Distributes to; HK Sa Sa, Jusco and Watsons. Person in charge: Ms Felicia Gan, Manager

The member was recommended by Hongkong Sa Sa.

2) The ACD Ingredient Database System in CTFA website has been updated to the latest Annexes.

Education & Special Event1) Training

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a) The GDP seminar will be on 8th March 2011b) The fees will be RM100 per person.c) Speakers from PKP on new GDP guidelines and also a speaker from 3rd Party Logisticsd) This seminar is also to provide a platform for members to share their concernse) The New GDP guidelines is still pendingf) Will also be looking into the Medical Device Training

2) Special Event This year’s annual dinner date is on 23rd Sept 2011. The committee is open to members to participate in this year’s Annual Dinner committee.

3) Updates on KPDNKK The following are a brief report from the meeting on 20th Dec 2010 a. Number of counterfeit seizures in 2010 (as at 30Nov) is 1112 cases worth about RM10M.

The top 3 items seized are:i) shoes- est RM2 M worthii) communication device- est RM1 M worthiii) liquor- est RM758,000 worth

b. The Ketua Pengarah Penguatkuasa (KPP), Tuan Mohd Roslan raised his concern on getting the product owners’ cooperation to attend to the verification practice after seizure of the goods by his enforcement team….citing some best practices in Hong Kong whereby the product owner came to verify within 2 hrs after seizure by the authority.

c. KPP also informed that Malaysia is currently in the “Watch List” of the U.S. Trade Representative (USTR) in their move to deter widespread piracy worldwide. As such, we should strive to work towards removing Malaysia from the “Watch list” as much as possible.

d. In order to gauge the level of effectiveness in controlling counterfeits, KPDNKK plans to call for a meeting with the relevant rights owners to identify which industry should be included in their “Basket of Brands”. This will be used as an indicator…something like how the country’s inflation rate is determined.

The meeting adjourned at 12.30pm.

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