Inside ACI’s twelfth Annual Cosmetics & PBC Compliance Discussion board

The American Convention Institute (ACI) lately hosted its twelfth Annual Authorized, Regulatory, and Compliance Discussion board on Cosmetics and Private Care Merchandise, bringing collectively authorized consultants, regulatory officers, and business professionals for 2 days of digital and in-person periods targeted on the evolving panorama of cosmetics regulation. Hosted in New York Metropolis, the occasion offered updates on state, federal, and worldwide compliance necessities, in addition to sensible insights on threat administration and enforcement traits.

This Q&A highlights key takeaways from three professional presenters on the discussion board: Dr. Ameki Ooka, Head of International Provide Chain Sources on the Unbiased Magnificence Affiliation, who spoke on the rising influence of prolonged producer duty (EPR) and recyclability rules on packaging selections; Jennifer Santos, Lawyer on the Nationwide Promoting Division of BBB Nationwide Packages, who addressed current updates to the FTC’s Endorsement Guides; and John W.M. Claud, Lawyer at Hyman, Phelps & McNamara, P.C., who mentioned regulatory contrasts in Latin American and Chinese language markets.

Collectively, their insights present a snapshot of the present regulatory pressures and alternatives shaping enterprise selections within the cosmetics and private care product industries.

John W.M. Claud, Lawyer, Hyman, Phelps & McNamara, P.C.

Presentation – Magnificence in Growing World Markets: Contrasting Alternatives and Challenges within the Latin American and Chinese language Cosmetics Markets

CDU: Given your expertise with FDA-regulated entities, what are the most typical compliance challenges that cosmetics manufacturers face when coming into the Latin American market, significantly in Brazil and Mexico?

JC: Latin American markets are experiencing sturdy progress, pushed largely by the rise of social media advertising. Nonetheless, the area doesn’t function like a “Southern EU” with a harmonized regulatory framework.

One key problem is that whereas the FDA has largely ceded enforcement of beauty rules to the plaintiff’s bar within the US, nationwide companies like ANVISA in Brazil and COFEPRIS in Mexico take a much more hands-on and rigorous strategy. Consequently, manufacturers accustomed to the comparatively lenient oversight of cosmetics by the FDA should make investments considerably in localized regulatory methods to efficiently enter these increasing markets.

CDU: How do the regulatory approaches of ANVISA in Brazil and COFEPRIS in Mexico differ from FDA oversight within the US, and what key compliance pitfalls ought to corporations pay attention to?

JC: In Brazil, ANVISA enforces strict registration and labeling necessities, even for merchandise that might be thought of “low threat” within the US. Firms should adapt their formulations to adjust to ANVISA’s restricted ingredient lists, security information necessities, and limitations on claims language.

In Mexico, COFEPRIS requires both notification or full registration, relying on the product’s classification. US corporations typically face challenges attributable to differing definitions, comparable to whether or not a product is taken into account a “beauty” or a “therapeutic,” which may considerably influence the regulatory pathway.

Moreover, each international locations require native illustration, which means a authorized entity or accountable third celebration should be current on the bottom. And not using a educated companion to supply a transparent compliance roadmap, coming into the market can grow to be a fancy and dear course of.

CDU: With rising demand for clear magnificence and sustainability in Latin America, how are regulatory companies adapting ingredient restrictions, and what steps ought to manufacturers take to make sure compliance with evolving rules?

JC: Claims of “clear” cosmetics will be catnip for the plaintiff’s bar right here within the US, until these claims are clearly outlined and substantiated. In Latin America, the danger stems from authorities regulators as an alternative.

That mentioned, companies within the area are beginning to align extra carefully with EU requirements in response to rising shopper demand for clear and sustainable merchandise. This contains tighter restrictions on doable endocrine disruptors, preservatives, and allergens, in addition to better emphasis on biodegradability, security, and toxicological information for brand spanking new or plant-based actives.

Nonetheless, the evolving nature of those rules shouldn’t essentially deter corporations from performing. I encourage manufacturers to obviously outline what they imply by “clear” or “sustainable” of their product labeling and promoting and to be ready to help the claims to attenuate regulatory threat.

CDU: What greatest practices would you suggest for corporations navigating post-market surveillance and regulatory updates in Brazil and Mexico to take care of long-term compliance?

JC: As a result of shut regulatory scrutiny cosmetics obtain within the area, corporations ought to deal with post-market surveillance and staying present with regulatory updates as ongoing operational priorities, not one-time duties. Having a professional native liaison is crucial for implementing product monitoring packages and staying updated with authorized modifications.

As within the US, sustaining a well-organized central compliance file and conducting common opinions of labels and elements are essential for long-term market viability. Moreover, coaching is commonly missed—guaranteeing that business and advertising groups are simply as knowledgeable concerning the regulatory panorama as higher administration could make a major distinction.

The Latin American market is residence to a rising center class that locations a excessive worth on magnificence and self-care. A well-designed and executed compliance program is a worthwhile funding for corporations in search of to faucet into this probably high-growth alternative.

Jennifer Santos, Lawyer, Nationwide Promoting Division, BBB Nationwide Packages

Presentation – Influencing Magnificence: Assessing the Affect of the Endorsement Guides on the Cosmetics and Private Care Industries

CDU: What are essentially the most vital modifications within the up to date FTC Endorsement Guides, and the way do they influence cosmetics and private care manufacturers working with influencers?

JS: The FTC’s up to date Endorsement Guides make clear what qualifies as an endorsement and what constitutes a fabric connection between manufacturers and influencers. The FTC additionally took this chance to emphasise the significance of “clear and conspicuous” disclosures, particularly in video and social media content material, whereas offering related examples of each compliant and non-compliant practices.

Beauty and private care manufacturers typically depend on influencer pictures, movies, and tutorials to have interaction customers, so it’s essential that they perceive how to make sure honesty a couple of product’s efficiency and transparency relating to any relationships between manufacturers and influencers in compliance with the brand new Guides.

When manufacturers and influencers clearly disclose connections and make trustworthy claims, customers usually tend to really feel assured of their buying selections, finally strengthening model loyalty and credibility.

CDU: The FTC has set the next customary for “clear and conspicuous” disclosures. What are the important thing parts manufacturers ought to give attention to to make sure compliance, particularly in video and social media content material?

JS: The up to date Guides outline “clear and conspicuous” disclosures as “tough to overlook (i.e., simply noticeable) and simply comprehensible by odd customers” and stress that disclosures must be applicable for each cell and desktop viewing. The Guides additionally clearly state that when an endorsement is audible, the accompanying disclosure must be audible, and when the endorsement is visible, the disclosure must be visible as nicely.

When it comes to greatest practices, your disclosures usually tend to be thought of “clear and conspicuous” if they’re each audio and visible. And when crafting that disclosure, be sure you contemplate your viewers. What could also be “clear and conspicuous” for a teen might not be for an aged viewers.

CDU: Latest NAD circumstances have highlighted shortcomings in materials connection disclosures. What are some frequent errors manufacturers and influencers make, and what greatest practices ought to they undertake to keep away from enforcement actions?

JS: To this point in 2025, BBB Nationwide Packages’ Nationwide Promoting Division (NAD) has printed six selections that analyze and make suggestions relating to a model’s materials connections disclosures.

Listed here are some necessary takeaways from our current circumstances:

• A fabric connection exists not solely when there’s a monetary relationship between the model and influencer, but additionally when there’s a gifting relationship.
• The influencer, company, and model are all accountable for guaranteeing clear and conspicuous materials connection disclosures are used and utilized appropriately.
• Placement of your materials connection disclosure is necessary. To make sure it’s simply noticeable, it ought to seem above the fold and shouldn’t require the viewer to click on on a hyperlink or to scroll to a different display to view it.
• Ensure your materials connection disclosure sufficiently describes the fabric connection. For instance, stating “#paid partnership” alone might not be sufficient with out explaining who the paid partnership is with. 
• The FTC acknowledges that utilizing a platform’s disclosure instrument alone might not be sufficient to fulfill the “clear and conspicuous” requirement.
• Take into account separating your phrases or beginning every phrase with a capital letter in order that the disclosure will be clearly understood by all viewers (i.e., “#PaidParternshipWithBrand” or “#Paid Partnership With Model”)

CDU: With the rising use of AI-generated influencers, what authorized and regulatory issues ought to cosmetics and private care manufacturers take into account to take care of transparency and compliance?

JS: One of many guiding rules of the FTC Endorsement Guides is that endorsements ought to replicate the trustworthy opinions and experiences of the endorser with the product. Beauty and private care manufacturers ought to warning influencers to not use generative AI to create an endorsement that’s not true or doesn’t replicate the influencer’s precise expertise with the product.

Manufacturers also needs to be cautious in utilizing digital influencers or AI-powered chatbots to reply to customers’ web site inquiries, as they might present deceptive details about merchandise and even violate FTC tips or sure state legal guidelines.

Dr. Ameki Ooka , Head of International Provide Chain Sources, Unbiased Magnificence Affiliation

Presentation – Packaging In Focus: Navigating the Affect of EPR and Recyclability Rules for the Cosmetics Trade

Dr. Ooka: General, state regulatory our bodies stay very energetic, and in some ways have stepped in the place federal regulation has waned. Prolonged Producer Duty is an space that has not seen a lot federal oversight curiosity (even earlier than this administration) and is an instance of the variability of state-enacted legal guidelines and the ensuing complexity of compliance for corporations.

Oregon is the primary state to start reporting, and firms are all watching how this course of works and what charges may consequence.

CDU: What’s EPR?

Dr. Ooka: EPR is a coverage framework that requires Producers (often the model proprietor of a product) to both partially or totally fund the gathering, sorting, and waste processing of packaging related to objects that they promote and distribute.

Within the US, 5 states have enacted EPR legal guidelines: Colorado, California, Oregon, Maine, and Minnesota. Three states have wants assessments underway—Illinois, Maryland, and Massachusetts. Seven further states have proposed payments up to now in 2025. These embody Connecticut, Hawaii, Nebraska, New Jersey, New York, Tennessee, and Washington.

The principle necessities of EPR legal guidelines are that Producers should:

1. Register with a Producer Duty Group (PRO),
2. Report the amount and sort of packaging offered and/or distributed within the state, and
3. Pay a price primarily based on the sort and amount of packaging they promote or distribute within the state.

There are some exemptions, sometimes primarily based on tonnage or income thresholds, however corporations must evaluate the legal guidelines in every state, as they’re barely completely different.

CDU: The place are we with respect to the legal guidelines which were enacted?

Dr. Ooka: Oregon is the primary state requiring reporting submissions, and their deadline simply handed on March 31. Colorado would be the subsequent state requiring reporting, doubtless by August 31, 2025.

Particular be aware on California: CalRecycle simply missed their deadline to finalize guidelines for SB-54, because the governor didn’t log out on the principles as drafted. They need to revisit rulemaking, however have famous that they won’t transfer statutory deadlines, so this revisit might be extremely compressed.

CDU: What are the implications for noncompliance?

Dr. Ooka: Every state’s enforcement scheme appears to be like completely different, however usually the state companies can have the suitable to impose financial penalties and different administrative measures relying on the violation.

Penalties vary from $5,000-$50,000 per day, per violation, relying on the state (For instance, Oregon is $25K per day per violation (ORS § 459.995)

Different dangers embody these from class motion or plantiff’s fits, in addition to difficulties in assembly supply discount targets. Many states additionally require that registration lists be made publicly obtainable, which might additionally create points for non-compliant corporations.

CAA, the PRO for many state compliance packages, is extra targeted on getting corporations on the suitable path.

CDU: What are a number of the challenges corporations are experiencing as legal guidelines are being applied?

Dr. Ooka: There are some frequent ache factors recognized, significantly as Oregon’s deadline loomed and firms needed to collect information. For instance, the definition of a “Producer” is completely different throughout states—that is difficult for companies, as they might be obligated in a single state however not one other.

One other space of confusion is the excellence between Packaging and Product, particularly for cosmetics merchandise. For instance, in Oregon, CAA has famous that the plastic used for an eyeliner pen is taken into account a bundle, however the housing for a writing pen is just not thought of packaging.

Audio system additionally famous that confusion on the “coated materials” classification of prescription vs. OTC medication. In some rulemaking, prescription merchandise are thought of exempt from coated materials classification, however OTC merchandise aren’t thought of exempt.

Thus, in circumstances the place secondary packaging should be reported to the PRO, and the place an OTC and a prescription drug product are each delivered to the patron in the identical bundle (for instance, in a cardboard field from an ecommerce pharmacy), it’s unclear whether or not the secondary packaging is taken into account a “coated materials.”

There’s additionally rising concern that non-compliant corporations could act as “Free Riders” and never contribute their information and/or charges, leading to law-abiding corporations solely bearing the general burden of compliance. On this case, there could also be self-policing inside the business, as compliant corporations or watchdogs could determine suspected “Free Riders” to regulatory or state authorities, or name them out on social media.

CDU: So, what can corporations do?

Dr. Ooka: Create an inner Working group and determine course of homeowners. Have interaction Cross-Functionally, and embody Regulatory, Sustainability, Packaging, Gross sales, and Sourcing. Firms also needs to guarantee their high management understands compliance necessities, together with charges, and penalties for non-compliance.

Keep updated with compliance info from commerce associations like IBA.