Judicial Yuan Interpretation No.744 was announced on 6^th Jan. 2017 (hereinafter “the Interpretation”), which ruled that regulations about prior censorship of cosmetics advertisements in Paragraph 2, Article 24 and Paragraph 1, Article 30 of the Statute for Control of Cosmetic Hygiene (hereinafter “the Statute”) restrict the freedom of speech of the cosmetics industry to the extent exceeding necessity and were announced to be unconstitutional.  Said provisions are therefore nullified by the announcement date of this Interpretation.  The descriptions about this Interpretation are as follows:

1.    A Cosmetics advertisement, as a kind of commercial speech, is protected by the Freedom of Speech as stipulated in Article 11 of the Constitution.

The second paragraph of the reasoning of the Interpretation reiterates that the freedom of speech aims to protect free circulation of information, enabling the people to have to acquire information and self-fulfillment.  Cosmetics advertisements using broadcasting methods that propagate the function of cosmetics products, with the intent of making sales, fulfill the characteristics of a commercial speech.  As long as the information given in commercial speeches, with the intent of making sales and helping consumers make logical economical choices, is not false or misleading, such speeches should be subject to the protection of freedom of speech under Article 11 of the Constitution.

2.    Prior censorship on cosmetics advertisements has significant intervention on freedom of speech, is unconstitutionalin principle, and can only be justified if it fulfills the principle of proportionality

The statute in issue adopts prior censorship on cosmetics advertisements, which involves the restriction on freedom of speech of the cosmetics industry and limits people’s chances of obtaining sufficient information, and imposes significant intervention of freedom of speech, which is in violation of the Constitution in principle.  Such intervention can be deemed as conforming to the proportional principle and protection of freedom of speech in the Constitution only under the circumstances where there is support reflected in legislative documents that such intervention is not against the principle of proportionality and that immediate judicial remedy is provided to the people.  The principle of proportionality is considered as conformed when the purpose of the intervention is to prevent direct, immediate, and irreversible damage to the lives, bodies and health of people, i.e., particularly public interest, and such intervention has a direct and absolute necessity to its purpose.

3.    Ordinary cosmetics advertisements function at most to induce consumersto purchase such ordinary cosmetics products, with no direct and immediate threat to lives, bodies and health;therefore, prior censorship violates the principle of proportionality

The legislative intention of said statute is to prevent the broadcast of advertisements that are  obscene, indecent, or false and exaggerated so as to maintain good social customs, health of consumers, and other related rights, and such can be considered as protection of public interest.  However, since cosmetics are solely for external use, not for oral consumption or edible, and ordinary cosmetics products only function in general everyday usagein order to freshen the hair or skin, to stimulate the sense of smell, to cover body odor, or to improve facial appearance, as defined in "The Table of the Scope and Categories of Cosmetics" promulgated by the Ministry of Health and Welfare, the ordinary cosmetics advertisements function, at most, to induce the consumer to purchase ordinary cosmetics, with no direct and immediate threat to the lives, bodies and health of the people.  Therefore, it cannot be said that the purpose of the prior censorship scheme for these advertisements is particularly for public interest.  Consequently, it could not be deemed that such prior censorship (thereby imposes intervention to the freedom of speech of the cosmetics industry and limits people’s chances of obtaining sufficient information) has any direct and absolute relations with public interest.  Therefore, the statute at issue violates the principle of proportionality.

Even if the advertisement involves medical cosmetics, it does not constitute direct and immediate threat to lives, bodies and health; therefore, adopting prior censorship also violates the principle of proportionality under such scenario.  Moreover, the statute has setup health hazard prevention mechanisms and contains prohibition of false cosmetics advertisements.

Under the current regulations, cosmetics can be divided into two categories, namely medical and ordinary cosmetics.  According to the "Standard of Cosmetics Containing Medical or Potent Drugs" promulgated by the Ministry of Health and Welfare, the so-called medical cosmetics are cosmetics that function as sunscreen, hair dye, perming solutions, antiperspirant or deodorant, skin whitening creams, acne prevention, miniaturization, antibacterial, teeth whitening, etc.  Despite the higher effects on the lives, bodies and health of the people than ordinary cosmetics, the advertisements of such cosmetics pose no direct threat to the lives, bodies and health of the people. Moreover, in terms of preventing harm to the health of the people, the statute has the following control for medical cosmetics:

(1) Any cosmetics containing medical, poisonous or potent drugs may be imported only after an import license has been issued by the central competent authority.  (See Paragraph 1, Article 7 and Paragraph of Article 16 of the Statute.)

(2) For cosmetics containing medical, poisonous or potent drugs, they shall follow the same regulations related to labelling, instruction sheets and packaging as ordinary cosmetics; that is, the ingredients, indications, and usage volume as well as the drug name, content, the number of license/permit, and precautions for use should be indicated in accordance with the requirements promulgated by the central competent health authority. (See Article 6 of the Statute.)

(3) The cosmetics that are detrimental to human health are prohibited from being imported, manufactured or sold and are subject to the regulations such as revocation of the license/permit, spot-check, and random inspection.  (See Articles 23 to 26-1 and the penalties under Articles 27 to 33 of the Statute.)

Moreover, Paragraph 1, Article 24 of the Statute provides that false advertising is banned; in addition, for advertisements of cosmetics which are possibly detrimental to humans, the central competent authority can impose punishment pursuant to Paragraph 1, Article 30 of the Statute.

In light of the above, with regard to the prior censorship on advertisements of medical cosmetics, it still could not be considered that it is for the purposes of particularly protecting public interest or that it has a direct and absolute relationship to achieve such purpose.

1.    The responses of the Taiwan Food and Drug Administration of the Ministry of Health and Welfare ("TFDA")

The TFDA has responded to the Interpretation on the same day that since the Statute took effect on 28 December 1977, the legislative intent of Article 24 at that time only considered that the people had limited access to information and could not easily determine the correctness of cosmetics advertisements.  Therefore, it is stipulated in Paragraph 2, Article 24 of the Statute that cosmetics advertisements shall be submitted to the central, municipal or county (city) competent health authority for approval before publicizing or advertising to protect the rights of the people.

Nonetheless, with the social and economic development of our country, health awareness of the people continues to increase.  Currently, Japan, South Korea, the United States, and other countries have had no prior censorship for cosmetics advertisements.  Therefore, with reference to international cosmetics regulations, the TFDA is drafting a bill to overall amend the Statute for Control of Cosmetic Hygiene, wherein it plans to cancel prior censorship for cosmetics advertisements.  Such bill was sent by the Executive Yuan (cabinet) to the Legislative Yuan (congress) on 9 September 2016 for review.  However, the judicial review period of this Interpretation is still undergoing by the Legislative Yuan.

2.    The effects on medical advertisements

Currently there are only two judicial Interpretations dealing with both "commercial speeches" and "prior censorship" issues, i.e., Interpretation No. 414 and Interpretation No. 744. Therefore, this Interpretation has triggered discussion among industrial and legal communities about whether the rulings in No. 414 have been changed by Interpretation No. 744.  In this regard, the concurring opinions and dissenting opinion issued by the Grand Justices for this Interpretation have slightly addressed this issue.

As for scrutiny test standards, the Interpretation builds a stricter standard than the "unconstitutional presumption" scrutiny test standards adopted previously and has substantially challenged (or changed) the scrutiny test standard in the Interpretation No. 414 (which provides the constitutionality scrutiny test standard of "prior censorship of commercial speeches"). But the reasoning for the Interpretation does not discuss in detail the reasons of changing standard of the scrutiny test.  Therefore, the standard of a constitutional scrutiny test concerning prior censorship of medical advertisements will need to be decided by the Grand Justices in future disputes.