Annex II vs Annex III: Understanding EU Cosmetic Restrictions

When skincare media reports that an ingredient is “banned in the EU,” the framing is often wrong. The EU has two different regulatory mechanisms — full prohibition and conditional permission — and the distinction matters for how you read what’s on the shelf. Here’s the precise version.

The structure of EC 1223/2009

Regulation EC 1223/2009 is the law governing cosmetic products in the European Union. It has six annexes, each defining a different regulatory mechanism:

• Annex II — substances prohibited from any use in cosmetics
• Annex III — substances allowed under conditions (concentration limits, product-type restrictions, mandatory warnings)
• Annex IV — permitted colourants (positive list with conditions)
• Annex V — permitted preservatives with concentration caps
• Annex VI — permitted UV filters with concentration caps

Annex II and Annex III are the two annexes most often confused in consumer reporting, and the confusion is more than semantic.

Annex II: prohibited

A substance on Annex II cannot legally appear in any cosmetic sold in the EU. There is no concentration limit because there is no permitted concentration — full stop.

Examples:

• Mercury and most mercury compounds (historic skin-lightening creams)
• Hydroquinone (with narrow exceptions for nail products and prescription medical use)
• Certain phthalates (DBP, DEHP, BBP, DIBP)
• The five banned parabens (isopropylparaben, isobutylparaben, phenylparaben, benzylparaben, pentylparaben)
• HICC and Lilial fragrance allergens
• Coal tar (most fractions)
• Asbestos (historic talc contaminant, now strictly excluded)
• Most aristolochic acids (botanical, hepatotoxic)
• Roughly 1,600+ entries in total

If you see any of these on a product sold in the EU, the product is non-compliant — usually because it has been imported illegally or sold online from outside the EU.

Annex III: restricted

A substance on Annex III is permitted, but only when its use complies with specific conditions. Each Annex III entry specifies:

1. The substance (with INCI name)
2. The product type in which it is allowed (rinse-off only, leave-on only, etc.)
3. The maximum concentration
4. Any other limitations (pH, application site, etc.)
5. Mandatory wording on the label (warnings, instructions)

This is the mechanism the EU uses for ingredients that are useful at low concentrations but problematic at higher ones.

Annex III: worked examples

A few examples to show how the framework operates:

Salicylic acid

Salicylic acid is allowed in cosmetics but restricted under Annex III:

• Up to 3.0% in rinse-off hair products
• Up to 2.0% in other product categories
• Not for use in oral hygiene products
• Not for use in products for children under 3, except for shampoos
• Mandatory label warning: “Not to be used in preparations for children under 3 years of age”

A salicylic acid serum at 2% with this warning is fully compliant. A “salicylic acid 5%” product in any leave-on cosmetic is not legal.

Retinol

Retinol (and its esters) has a recent Annex III entry following the 2024 SCCS revision:

• Up to 0.05% total retinol-equivalent in body lotions
• Up to 0.3% total retinol-equivalent in face products
• Mandatory wording for body products: “Contains retinol — not for use during pregnancy”

This is why high-strength “1% retinol” body products you might have seen in 2019 are no longer on EU shelves — the 0.05% cap on body cosmetics moved them out of compliance.

Methylisothiazolinone

Methylisothiazolinone:

• Prohibited in leave-on cosmetics (Annex II since 2017 for leave-on use)
• Restricted in rinse-off cosmetics to 15 ppm maximum (Annex V)

This is an example of an ingredient that has different regulatory status in different product types — banned in leave-on, restricted in rinse-off.

UV filters

Every UV filter approved in the EU is on Annex VI, with its own maximum concentration. For example:

• Octocrylene: up to 10% — concentration tightened in 2022 over benzophenone-1 contamination concerns
• Avobenzone: up to 5%
• Titanium dioxide (nano): up to 25% as filter, with size and coating specifications
• Homosalate: 7.34% (tightened in 2022 from 10%)

A sunscreen formulator can use any combination of Annex VI filters within each filter’s concentration cap.

How to read Annex III data on a label

The EU regulation requires the listed substance to appear on the INCI list, but it does not require the concentration to be disclosed. Brands can voluntarily declare the percentage (and many do — “10% niacinamide!” is a marketing claim), but most ingredients have no associated number.

Inferring concentration from the INCI list:

• Ingredients are listed in descending order by concentration down to about 1%
• Below 1%, ingredients can be listed in any order
• An ingredient appearing in the top half of the list is generally above 1%
• A fragrance allergen near the end is at the trace declaration level (10–100 ppm)
• The position of a regulated ingredient on the INCI is the best clue to its concentration

What “EU compliant” actually means

A product that is EU-compliant has been:

1. Notified to the Cosmetic Products Notification Portal (CPNP) with a full ingredient declaration
2. Assessed by a qualified safety assessor — a Cosmetic Product Safety Report (CPSR) on file
3. Checked against Annex II (no prohibited substances)
4. Compliant with all Annex III, V, VI concentration limits and labelling requirements
5. Manufactured to Good Manufacturing Practice standards (EN ISO 22716)
6. Labelled in the language(s) of the markets it is sold in
7. Backed by a responsible person (a legal entity in the EU)

This is a real legal floor, not a marketing one. The system is enforced by national market surveillance authorities (e.g., Germany’s BVL, France’s ANSM, Italy’s Ministero della Salute) who do periodic compliance testing.

How LuxSense uses the Annex framework

Every ingredient in our database is checked against current Annex II, III, V and VI status. The score reflects:

• Annex II substances: won’t appear in our database for current EU products
• Annex III substances (and Annex V, VI): scored against their concentration window, with methodology accounting for INCI position
• Unrestricted substances: scored on their hazard data and clinical evidence independently

The result: when a product earns a high LuxSense score, it has complied with the most stringent cosmetic safety regime in the world, and our scoring layers additional ingredient-level evidence on top of that legal floor.

FAQ

If an ingredient is restricted under Annex III, should I avoid it?

Not usually. Annex III restrictions are the EU saying “this ingredient is useful at low concentrations but problematic at higher ones, so the law caps it at a safe level.” A product complying with Annex III is using the ingredient within a regulator-assessed safety window. Avoiding all Annex III ingredients would mean avoiding salicylic acid, retinol, AHAs, most UV filters, and many preservatives.

Why is salicylic acid restricted to 2% if it’s safe?

The 2% cap is the assessed safe concentration for leave-on use. Higher concentrations have a higher irritation profile and are reserved for rinse-off or professional treatment use. The restriction is a calibration, not a warning.

Is the US system the same?

No. The US FDA has banned only about 11 cosmetic ingredients outright and has no equivalent of the Annex III concentration-cap framework for most ingredients. The two regulatory philosophies are fundamentally different: the EU operates a positive-list, hazard-precautionary system; the US operates a negative-list, risk-based system.

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Browse the EU-regulated ingredients in our database or scan any cosmetic with LuxSense to see its complete Annex compliance profile.