Recently, we see more and more foreign employees working in our Chinese client’s enterprises. In comparison to employing the citizens, there are some particulars in respect of employing a foreign employee in China.
1. When a local enterprise decides to employ a foreigner, the enterprise must apply for an Employment Permission for recruiting foreign employees and shall handle the Work Permits such foreign employees.
2. In China law, there is a special requirement as to employing a foreign student for an internship position, which require the foreign student to obtain the consent of his/her school, and to apply for the annotation of information such as the place and period for work in support of the internship with the exit and entry administration institution of relevant public security authority.
3. China law requires the employer of the foreign employee in China must be the same as that specified in his/her Work Permit. Thus, it is prohibited for an enterprise to recruit any foreign employee through dispatch mode.
4. According to relevant China law, the term of the labor contract concluded between the enterprises with the foreign staff may not exceed five years.
5. China law requires that the Work Permit shall only be effective in the region prescribed by the authority that makes the issuance. Therefore, it is not allowed for a foreign employee to work simultaneously or take any part-time job in any region other than the one listed on the Work Permit.
Published by Jacob Blacklock on March 22nd, 2017 tagged Uncategorized | Comment now »
Last week a potential corporate client visited our office to consult with our China Trademark and Patents counsel regarding IP protection in China. The client was concerned with competitors which may manufacture goods by using the client’s registered trademarks and wanted to discuss measures which can be taken to prevent the infringement of their registered intellectual property. The client was glad to learn there are options available that go beyond cease and desist letters. First and foremost there is the option to report a suspected infringer to the local Administration for Industry and Commerce for investigation. There also the option to collect evidence and filing a lawsuit against the suspected infringer.
One other option is that the client as the owner of valid intellectual property rights registered in China may ally for assistance from China Customs to protect their rights. If infringing goods are suspected of being imported into or exported from China, a rights holder may apply to China Customs for protective measures. If an inspection at customs reveals products which are likely infringing, Customs will impound the goods.
One key point is that registered IP may be recorded with Customs beforehand so that Customs will have the protected Trademarks are Patents in its database. This makes seizure much more effective if and when required.
Contact your China Lawyer today for more information about recording IP with Customs and filing and application for seizure of infringing goods.
Published by Jacob Blacklock on March 22nd, 2017 tagged Uncategorized | Comment now »
Business Method Patents in China? Software Patents in China? These are on the Horizon. The “New, New thing” in China now for everyone from lean-start-ups, to lumbering state owned enterprises, is obtaining patents. China’s large tech focused private companies and state owned companies alike are now thinking “Patent or Perish,” and the government is taking new measures, such as patent reform, to stimulate innovation. Encouraging new patents is part of its quest to pump up the economy.
Patents typically have been a legal way to prevent others from using, and so to profit from a unique or disruptive invention or idea. In patents, “God protects the protected” and those who are protected have a monopoly on their unique invention or process within the jurisdiction granting the patent.
Like politics, all patents are local. I have been working as a foreign intellectual property professional in mainland China for 30+ consecutive years. I have noted that most of the big intellectual property mistakes in China are really “self inflicted wounds” by foreigners who do not understand the China legal or Intellectual Property system. SMEs, maybe on a tight budget and focused primarily on their home market will often tell themselves (or our China patents experts) something along the lines of this: “We have our patents filed in the United States, so we must be protected in China (or just don’t think we need protection in China).” On the other hand you will have bean-counting MNC’s who have the budget but are under the guidance of a “pennywise, pound foolish” cynic that refuses to spend money for IP protection in China based on a preconception that there is no protection in China. This then becomes self-fulfilling prophecy, based on lack of true understanding of conditions and the legal system in China. My dearly departed mother used to say, “God is in the details,” and this is certainly true with the protection of intellectual property rights in China.
(I am constantly amazed some foreign lawyers I encounter here, so-called “China legal hands” or some such, who in giving a seminar on intellectual property clearly do not know a patent from copyright… but I guess that is neither here nor there.)
Lace up your cleats and get in the game! Intellectual property protection is a fast moving and fast changing area of law in China, with many trends point to tighter more effective laws, better more specialized IP courts, and stronger and more capable enforcement. One sign of this is the expected new ability to patent both software and business methods which will be implemented soon in China.
I learned of these important changes as I was covering the National People’s Congress (NPC), and the CPPCC meetings as the China Legal Commentator for the newly re-branded CGTN (China Global Television Network; formerly CCTV), the undisputed public flagship media in China and “mouthpiece” of the ruling Party. I have done “color commentating” as a legal expert over the past 16 years now, but this one I found particularly interesting. The new proposals and initiatives announced at these “Two Meetings” offer China watchers opportunities to “read the tea leaves” as to what is important for the leadership over the coming months. China’s NPC meets only for a couple of weeks each year; the engine that writes and shapes the laws, policies and regulations considered by and then hopefully passed by the NPC is the State Council which sits all year round. Protection of intellectual property has been on the State Council’s minds for some time now, not to protect foreign multinational’s, but to better cultivate and protect the local inventors and innovations which is both a short term goal to give a gradually slowing economy a kind of boost, as well as a long term effort to transform the Chinese economy.
In an effort to further enhance protection of Intellectual Property Rights (IPRs) and to promote implementation of the new “innovation-driven” economic development strategy, the State Intellectual Property Office (SIPO) of China has issued a revised set of Examination Guidelines for Patents which will come into force on April 1, 2017. This is no April Fool’s joke, but a genuine effort by SIPO to make intellectual property protection rules easily understood, practical, and available to IP-experts and non-experts alike.
Are you still paying attention? or have I lost you? Well, one of the most significant changes in new version of the Guidelines confirms that software and business methods are to be patentable. Yep, did you get that? This will mean new property rights will be granted over software and business methods which have never in the past been available for patent in China. The importance of this change should not be underestimated. Take for example recent disruptive start ups such as Uber or Airbnb, which have used a mobile software platform to implement a new business method, which has propelled each of these companies to household name status around the world.
Now imagine the opportunities which might arise when new disruptive companies seek to perform a similar feat with the added protections a China patent would grant to their software platform, and, critically, their business model. First movers stand to rake in the Benjamins… or should that be “Maos”?
SIPO’s new Guidelines: What the heck will change?
The new Guidelines will loosen the standards for obtaining business method patents if there is a technical element to the novel business method. Heads-up Poindexter, as someone doing this for 30+ consecutive years, this is the time to take note, these inventions were previously denied patentability on the basis that they were intellectual rules or methods under Article 25 of the Patent Law.
With brandy snifter in hand, you might try glibly mentioning this little fact at your next professional networking function just to see how many of the attendees will be impressed, “Did you know that the new SIPO proposed Guidelines state: “Claims related to business methods that contain both business rules and methods and technical characteristics, shall not be excluded from the possibilities of obtaining patent rights by Article 25 of the Patent Law.?
You may go on to say the SIPO guidelines also appear to loosen the standards for obtaining software enabled inventions, and that the second line of Part II, chapter IX, section 5.2, paragraph 1, the third sentence of the Patent Examination Guidelines is amended from, “and describe in detail which parts of the computer program are to be performed and how to perform them” to provide that: “The components may not only include hardware, but may also include programs” (I read this stuff so you do not have to). If you see too many blank faces, you can go on to point out that this change may allow an innovator to obtain a business method patent in China and so become as famous as, I don’t know, say…Mark Zuckerberg. You heard it here first!
Think about your business methods & software. Get patents. Grow rich.
In my very humble opinion, act now! Do not wait; he who hesitates is losing, but heck, it’s your business, I am just a well-educated service guy with a lot of fancy titles. I say the new Patent Examination Guidelines will be implemented at start of April this year as scheduled. I have no doubt, due primarily to the current state of the China economy. As with most countries, that is the answer. The issue here in China is how does the Party improve the China economy, which has seen steadily slowing official growth rates for the past several years now. One key is to have clear IP guidelines in place and to promote innovation and disruptive technologies. Not many other patent professionals will write this as bluntly as I, the economy here needs a boost, and come hell or high water this is going to be the standard. Not because China is bowing to pressure from foreign companies, chambers of commerce, or governments of China’s trading partners… the Party needs these and other reforms for China, its own companies and would-be entrepreneurs. This is part of a trend of new signals to Chinese enterprises to generate new intellectual property, and to protect it in China, and overseas. It is “Patent or Perish,” but it is not just the act of filing a patent that is needed, it is the underlying innovation in technology, software, or business methods which officials seek to cultivate.
China is about to become friendlier to patents on business methods and on software. And more generally, patent owners will find relief in reductions to the complexity of prosecution procedures and by efforts to make more information on registered patents publicly available. Other new developments in the new Guidelines include the acceptability of post-filing experimental data for chemistry related inventions, and changes to the rules for amending a claim during patent invalidation procedures.
Do you want to apply for a (software) or business patent in China?
Then we should get to know each other! Our China Patent Attorneys would be happy to will guide you through the procedures before other economic disrupters can figure out what is happening over here! Email me at email@example.com
Published by Edward E. Lehman on March 20th, 2017 tagged Uncategorized | Comment now »
Any employers should take note of this law. You activity towards employees may incur new legal liability and bad effect. Please refer to below:
“The administrative departments of human resources and social security shall publicize to society the following acts in material violation of labor protection laws that have been investigated and in regard to which the handling decisions have been made:
1. deductions of large amounts from or delay in payment of large amounts of employees’ labor remunerations without cause; or refusal to pay labor remunerations and being transferred to judicial authorities for investigation of criminal liability;
2. failure to purchase social insurances or pay social insurance premiums in accordance with the law, which is serious in nature;
3. violation of the provisions on working hours, rest and vacations, which is serious in nature;
4. violation of the provisions on special protection for female employees and underage employees, which is serious in nature;
5. violation of the provision on prohibition of using child labor;
6. resulting in serious adverse social influences as a result of violation of labor protection laws; or
7. other acts in material violation of labor protection laws.”
It means if an employer is punished for violation of employment laws and pays damages, it is not the end, the employer and its legal representative may be publicized, and its credibility and fame will ill affected.
What is the extent of publication?
“In material violation of labor protection laws shall be publicized on the web portals of the administrative departments of human resources and social security, as well as through major newspapers, TV and other media in their respective administrative areas.”
Apart from being publicized, what other bad effects will be incurred. “The administrative departments of human resources and social security shall include the acts in material violation of labor protection laws and the disclosure thereof in the employers’ labor protection compliance and credit records, incorporate such acts into the credit system of human resources and social security, and conduct information sharing and joint punishments with other departments and social organizations in accordance with the law.”
It means the employers credibility record will be damaged and such information will be known to almost all relevant authorities, such as AIC, commercial committee.
However, there is also a chance for an employer to make a defense. “Where any employer raises any objections to the publicized contents, the administrative department of human resources and social security that is responsible for investigating and punishing the case will review and deal with it within 15 working days as of the date of receiving such application, and will inform the employer.”
Published by Mike Wang on March 17th, 2017 tagged Uncategorized | Comment now »
The Revised Patent Review Guidelines has been deliberated and approved by the SIPO, and will enter into force on 2017.4.1. The revised guideline shows that China is improving requirement on the quality of patent at the same time when encouraging innovation of enterprises, more and more companies to attach importance to improving the quality of patent application, instead of going after quantity alone.
Special focuses of the Guideline
- Business mode with technical characteristics can obtain patent protection under the revised Guidelines.
Claim of rights involving business mode cannot be excluded the possibility of obtaining right of patent if it not only includes business rules but also technical characteristics. This new change indicates that enterprises need to pay attention to dig the technical characteristics in their business modes, and write them into the claim of rights.
- Improving invention patent protection of computer programs in fields of Internet, big data and e-commerce.
The new guidance further clarifies that “a computer program itself” differs from “invention relating to a computer program”, showing that only “a computer program itself” cannot be the object of patent protection, while “invention relating to a computer program” can get such protection.
- Increasing publicity of the documents during the review to better serve the enterprise.
This new rule makes it more convenient for enterprises to master the actual situation during patent application and assignment. The range which the public have access to is enlarged under the revised guidance to the substantial exam procedure, including the examination guideline, search report as well as the letter of decision. In this way, applicants can improve their quality of application writing after doing detailed research on the prior applications of the same field, thus improving the quality of patent application.
Published by Joy Xu on March 16th, 2017 tagged Uncategorized | Comment now »
Several days ago, one of our corporate clients came to me suggesting that the company would like to fire one of its employees due to the absence for 3 days in a single month without reason. The client further proved that the company has formulated the Employee Handbook with all of its employees in which there is a provision providing that “the Company may unilaterally cancel the labor contract with any employee, who is absent from work for 3 days without justified reasons during the term of the Labor Contract.” However, when we obtained the specific Labor Contract concluded between the Company and the employee, we found an article that stated ”the Company may cancel this Contract if the employee is consecutively absent from work for more than 3 days”.
Obviously, the above mentioned two provisions are different from each other. Can the company fire such employee based on the provisions in the Employee Handbook? As China lawyers, we would not advise the company to do so. Although the company as the employer can prove that such Employee Handbook was formulated through democratic procedures and had been formally announced to employees in accordance with the requirements of China laws and relevant judicial interpretations, and it seems like the employer would be justified in relying on the Handbook to terminate this employee, one must tread lightly.
China law does allow courts to use a company’s legitimate internal rules to resolve labor disputes. However, there are also provisions in the law which allow an employee to choose between applying provisions of the Employment Agreement, or the Employee Handbook in the event these documents have conflicting provisions.
Therefore, it would be risky for the Company to terminate the current labor contract with this employee based on the provisions in Employee Handbook, as the provisions in labor contract shall prevail in case there is dissatisfied with Company’s decision to terminate the Employment Agreement and brings the case to court requesting to apply the labor contract to try the case, the court will definitely support the employee’s claim, and the Company then is likely to be found liable for its unilateral cancellation of the labor contract and will be responsible for monetary compensation to the employee as specified in the law.
China companies should their company handbook and other internal rules or regulations to ensure they are aligned with the company’s current Employment Agreements. In case there are any discrepancies, timely adjustments made by company’s China lawyer will work to avoid the uncomfortable situation the surprised employer found itself in above.
Published by Crys Zheng on March 14th, 2017 tagged Uncategorized | Comment now »
The General Rules of Civil Law (Third Draft) (hereinafter referred to as “Third Draft”) has been submitted to the 5th Session of 12th NPC for review on March 13th. Today, we will review some important points about the General Rules of Civil Law.
The General Rules of Civil Law constitute a very important part of the China Civil Code, it has been reviewed by the Standing Committee of NPC three times and has received public comments each time since its first appearance. In this post we will look at several legal changes in the Third Draft.
A.Limitation of Action.
The limitation of actions regarding applications to a court for protection of civil rights is two years according to the current effective General Principles of Civil Law. While in the Third Draft, it has been extended to three years. This means that in the future if someone owes your money, you have one more year to consider whether to sue her/him or wait for her/him to get your money back.
B. Civil Status of a Fetus
According to the currently effective General Principles of Civil Law, an individual shall have the capacity for civil rights from birth to death and shall enjoy civil rights and assume civil obligations in accordance with the law. Only the currently effective Succession Law contains a provision regarding a fetus’ right to the decedent’s estate, specifically, at the time an estate is partitioned, a reservation shall be made for the share of any unborn child.
In the Third Draft expands on the protections which are provided for the rights of a fetus. In limited instances where a fetus becomes the subject of a protected legal interest, such as an inheritance and as the recipient of a gift, a fetus shall be deemed as having the capacity for civil action.
C. Special Legal Persons
This is a new content in the Third Draft. Official organs, rural collective economic organizations, cooperative economic organizations and grass-roots self-governing mass organizations, all terms of art for various official and social organizations under Chinese law, well have the status of “legal person” under the Third Draft, similar to that of a company. These entities will be allowed to conduct such civil actions as necessary for the performance of their core functions.
D. Individual with Limited Capacity.
A minor who has reached the age of six, rather than the age of ten, will be considered a person with limited capacity for civil conduct, and may independently perform civil juristic acts which are purely to benefit the minor or the performance of which is compatible with the age and intelligence of the minor. According to this, a 6 years old child is legally capable to independently buy a pencil for himself/herself in a convenience store according to this provision.
E. Virtual Property Will Be Protected by Law.
If your accounts for online games were stolen, you may ask for legal protection according to the Third Draft. Data and network virtual property has been included in the protection of civil law according to the Third Draft.
F. Protection on Personal Information
Anyone who has spent some time in China has received spam phone calls from strangers with offers such as “Mr. Xi, do you want to sell your house located in ……?” or “Ms. Liu, have you ever considered to buy insurance for your child?” Callers have your name, number and often other personal information.
In the Third Draft, provisions for the personal information protection have been included. The personal information of a natural person shall be protected by the law. No organization or individual may illegally collect, use, process or transmit personal information, or illegally buy or sell, provide or make public personal information. According to this provision, if you are required to provided your cell phone number and ID number when you register an account in a website, such website is obligated to protect your personal information.
G. Liability Exemption for those Who Provide Emergency Assistance
The Third Draft encourages people to help others for a just cause. A person who causes harm to any recipient in providing emergency assistance shall not bear civil liability, unless such harm arises from gross negligence. It is hoped that this provision will encourage bystanders to intervene more often when they witness and accident, rather than avoid the situation in fear of be tagged with unwanted liabilities.
Published by Myra Kong on March 13th, 2017 tagged Uncategorized | Comment now »
The Stand Committee of China’s National People’s Congress submitted the revised draft of China’s Anti-Unfair Competition Law on February 22nd, which is revised for the first time in the past 24 years. Here are several points companies and their employees should note while doing business in China following the proposed new amendment:
1. Using others’ unregistered well-known trademarks will be punished.
Under the new amendment, if an enterprise uses others’ registered trademark OR unregistered well-known trademark as its enterprise name, with an intention to mislead the public, it would be regarded as an act of unfair competition, which infringes consumers’ rights to know and choose, and damages the principle of fair dealing.
2. Resigning employees should not reveal trade secrets of former employers.
In accordance with the new amendment, even if there is no explicit agreement in the labor contract that resigning employees cannot reveal trade secrets of the former employers, this action will be strictly prohibited by the revised Anti-Unfair Competition Law. Where a resigning employee reveals trade secrets to a new employee, the new employee would also be punished under the new amendment. Important to the legal profession, the new amendment also adds provisions on the obligation for lawyers and certified accountants to maintain secrecy of the trade secrets they obtain while performing their duties.
3. Prohibiting unfair competition on the internet for the first time.
The amendment introduces for the first time provisions addressing unfair competition in the field of the internet. Competitors are not allowed to use technological means on the internet to influence the consumers’ choices and disturbing other competitor’s normal operations.
Published by Joy Xu on March 8th, 2017 tagged Uncategorized | Comment now »
Administrative Measures of the Customs of the People’s Republic of China for the Origin of Imported Goods under the Special Preferential Tariff Treatment to the Least Developed Countries (Revised in 2017)
The Measures have been promulgated on March 1, 2017 and will be effective on April 1, 2017. In order to convenient our clients, potential clients and cooperators in operations, we hereby translate the new articles for your reference.
Article 1 For the purposes of correctly determining the origin of imported goods under the special preferential tariff treatments to the least developed countries that have established diplomatic relations with China and promoting the economic trade between China and the relevant countries, these Measures are formulated in accordance with the provisions of the Customs Law of the People’s Republic of China and the Regulations of the People’s Republic of China on the Origin of Imported and Exported Goods.
Article 2 These Measures shall apply to the goods that are imported from the least developed countries that have established diplomatic relations with China (hereinafter referred to as the “Beneficiary Countries”) under items of enjoying special preferential tariff treatment.
Article 3 Where the imported goods meet one of the following conditions, the countries of origin of such imported goods shall be deemed as the Beneficiary Country.
1. wholly obtained or produced in a Beneficiary Country; or
2. completely produced by using the original materials in accordance with the requirement provided in these Measures within the territory of the Beneficiary Countries; or
3. not wholly obtained or produced in a Beneficiary Country, but the substantial change of such goods is finalized in such Beneficiary Country.
The term “substantial change” as mentioned in Item 3 of Paragraph 1 of Article 3 shall apply to the determination of standards as provided in Article 5 and Article 6 hereof.
The goods which are originating from a Beneficiary Country and are directly transported from such Beneficiary Country into China may, in accordance with the regulations of these Measures, apply for enjoying the corresponding special preferential tariff as provided in the Import and Export Tariff Regulations of the People’s Republic of China (hereinafter referred to as the “Tariff Regulations”).
Article 4 The term of the goods “wholly obtained or produced from a Beneficiary Country” as mentioned in Item 1 of Article 3 of the Measures refers to:
1. the live animals borne and raised in such Beneficiary Country;
2. the products obtained from the animals of such Beneficiary Country as mentioned in Item 1 of this Article;
3. the plants or their products harvested, picked or collected from such Beneficiary Country;
4. the products obtained from hunting or fishing in such Beneficiary Country;
5. the fish, shellfish and other aquatic products obtained from the offshore waters, which may be developed by such Beneficiary Country under its applicable domestic laws in accordance with the relevant international convention entered by it, by vessels registered in such Beneficiary Country legally flowing the flag of such Beneficiary Country,
6. the products obtained from processing the products as listed in Item 5 of this Article on the processing vessels registered in such Beneficiary Country legally flowing the flag of such Beneficiary Country;
7. the mineral products and other natural materials exploited or extracted from such Beneficiary Country, or products (other than fish, selfish and other aquatic products) obtained from the offshore waters, seabed and subsoil which may be developed by such Beneficiary Country under its applicable domestic laws in accordance with the relevant international convention entered by it;
8. the waste and old articles that are generated and gathered in the course of consumption in such Beneficiary Country which can only be used for the recycling of raw materials;
9. the waste and piecemeal materials that are generated in the course of production in such Beneficiary Country and that can only be used as raw materials of recycling; and
10. the products obtained from processing the products as listed in Items 1 to 9 of this Article within such Beneficiary Country.
Article 5 Unless otherwise provided in the Specific Rules of Origin for Goods of the Least Developed Countries That Have Established Diplomatic Relations with China, the manufactured or processed products from using materials not originating from the Beneficiary Country within the Beneficiary Country shall be deemed as originating goods of the Beneficiary Country despite the four digital of tax classification as provided in the Tariff Regulations of such products have changed.
Where the goods are manufactured or processed by using the non-originating materials which are not satisfied with the requirements provided in paragraph 1 of this Article, but according to the Agreement on Customs Valuation, the finalized transaction price of the non-originating material is not more than 10% of the price of the goods, in the premises that those goods are in compliance with other applicable regulations of these Measures, such goods shall still be deemed as the originating goods of the Beneficiary Country.
Article 6 Unless otherwise provided in the Specific Rules of Origin for Goods of the Least Developed Countries That Have Established Diplomatic Relations with China, where the goods are produced by using materials not originating from the Beneficiary Country within the Beneficiary Country, and its regional value is not lower than 40% of the price of the goods, such goods shall be deemed as originating goods of such Beneficiary Country.
The value of the goods in the first paragraph of this Article shall be calculated according to the following methods:
Regional value component = (price of goods – non-originating material price) / price of goods * 100%
Among which, the “price of goods” refers to price adjusted based on the FOB price in accordance with the Agreement on Customs Valuation. “Non-originating material price” refers to the CIF price determined in accordance with the Agreement on Customs Valuation including the price of material of unknown origin. The price of Non-originating materials acquired by the manufacturer in the territory of the Beneficiary Country shall be in accordance with the transaction price determined according to the Agreement on Customs Valuation, excluding the freight, insurance premiums, packaging cost and any other expenses generated in the course of transportation from the supplier’s warehouse to the place where the manufacturer locates.
Article 7 Where the goods or materials originated in China are used for producing another goods within the territory of the Beneficiary Country, such goods or materials shall be regarded as the originating goods or materials of the Beneficiary Country.
Where a Beneficiary Country is one of the members of a specific regional group, and the goods or materials originated in other beneficiary countries in that group are used for producing other goods within the territory of the Beneficiary Country, such goods or material used can be regarded as the originating goods or materials of the Beneficiary Country.
Article 8 The following minor processing or treatment shall not have any impact on the determination of the origin of the goods:
1. Disposals to ensure that the goods are in good condition during transportation or storage; or
2. Assemble the parts and components into a complete product, or simply disassemble the product into parts; or
3. Change packaging, spin off or assemble packaging; or
4. Washing, cleaning, dust removal, removal of oxides, degreasing, de painting and removal of other coatings; or
5. Textile ironing or pressing; or
6. Simple painting and polishing process; or
7. The decladding of grain and rice, partly or completely bleaching, polishing, and glazing; or
8. Color or flavor the sugar, the process of formation of sugar; completely or partially crush the crystal sugar to powder; or
9. Remove the peel, stone and hull of fruit, nuts, and vegetables; or
10. Sharpening, simple grinding or simple cutting; or
11. Filtering, screening, selection, classification, classification, matching (including a combination of a set of items), slitting, bending, winding, expansion; or
12. Simple bottling, canning, pot, bag, packing or packing box, fixed on the cardboard or wood and other simple packaging process; or
13. To paste or print marks, labels, logos, and other similar marks on the product or its packaging; or
14. A simple mixture of similar or different products; a mixture of sugar and other materials; or
15. Test or calibration; or
16. Dilute with water or other substances, without substantially changing the nature of the goods; or
17. Dry, salt (or saline), refrigerated, frozen; or
18. Animal slaughter;
19. A combination of two or more processes in Item 1 to Item 18.
Article 9 For the complete sets of goods as provided in the general classification rule III of the Tariff Regulation, if all goods are originated from the same Beneficiary Country, such complete sets of goods shall be originated from such Beneficiary Country; if part of the goods are not originated from such Beneficiary Country, but the percentage determined in accordance with Article 6 hereof is not exceeding 15% of the price of the complete sets of goods, such complete sets of goods shall still be deemed as originating from such Beneficiary Country.
Article 10 In the determination of the origin of goods, the origin of the following materials or articles as used in the course of production of goods, which do not constitute the material composition of goods or constituents of goods, shall not affect the determination of the original of goods:
1. fuel, energy, catalyst and solvent;
2. equipments, devices and appliance used for testing or examining the goods;
3. gloves, glasses, shoes, cloth, safety equipments and appliances;
4. tools, models and moulds;
5. spare parts and materials used for maintaining equipments, plants and building;
6. lubricant, oil (grease), synthetic materials and other materials used in the production or used for operating equipments and maintaining the construction of plants; and
7. any other goods used in the course of production of goods, which do not constitute the constituent of such goods but can reasonably show that they have participate in the course of production of such goods.
Article 11 Where the standards for applicable tariff code for good are changed, in the determination of the origin of goods, the origin of the packages, packing materials and containers that are declared and uniformly classified into the same category of the goods under the Tariff Regulations and the origin of the accessories, spare parts, tools and introductory materials normally equipped that are declared and uniformly classified into the same category of the goods under the Tariff Regulations, which are not separately invoiced, shall not impact the determination of origin of goods.
Where the standard of regional value component applies to the goods, in the calculation of the regional value component of goods, the price of the packages, packing materials and containers that are declared and uniformly classified into the same category of the goods under the Harmonized System and the price of the accessories, spare parts, tools and introductory materials normally equipped as well as the specification materials shall be calculated.
Article 12 The term “directly transported” as mentioned hereof refers to the direct transport of originating goods of the Beneficiary Country from such Beneficiary Country to China without passing by any other country or region other than China and such Beneficiary Country (hereinafter referred to as the “Other Country or Region”).
Where the originating goods of the Beneficiary Country are transported to China via Other Country or Region, regardless of whether any shift of transport vehicle is made during the transport or whether there is any interim storage made, it shall be deemed as “directly transported” if the following conditions are met:
1. where the goods do not enter into the trade or consumption field of Other Country of Region;
2. where such goods did not have any other treatment other than loading and unloading or other treatments necessary for keeping the goods in good condition when passing Other Country or Region; and
3. where the transport of such goods is under regulation and supervision of the customs of such Country or Region.
Under the circumstance as provided in Paragraph 2 of this Article, the stay time of relevant goods in Other Country or Region shall not exceed six months.
Article 13 Where the customs have any evidence to prove that the imported goods are suspected of circumventing these Measures, such imported goods may not enjoy special preferential tariff treatment.
Article 14 The consignee of imported goods or the agent thereof shall complete the Form for Declaration of Imported Goods of the Customs of the People’s Republic of China within 14 days after the date of entry reported by the conveyance to state the application of preferential tariff, and simultaneously submit the following documents, except as otherwise provided by the General Administration of Customs:
1. The certificate of origin in conformity with the provisions of these Measures and in the period of validity (see Annex 1 for the format) or declaration of origin (see Annex 2 for the format);
2. The commercial invoice of the goods; and
3. The transport certificate of the goods during the whole course.
Where the goods are transported to China via Other Country or Region, the certificates issued by the Other Country or Region or other relevant documents confirmed by the Customs shall be submitted additionally.
Where the Customs have received the certificate of origin of the Beneficiary Country or the electronic data of certificate through the relevant information exchange system, the consignee of import goods or the agent does not need to submit the corresponding paper documents for the originating goods of such Beneficiary Country.
Where the transport documents submitted by the consignee of import goods or the agent satisfy the direct transportation requirements in Item 3 of the first paragraph of this Article, there is no need to submit the documents listed in the second paragraph of this Article.
Article 15 Except as otherwise provided by the General Administration of customs, where the country of origin of the imported goods is declared as the Beneficiary Country, the consignee of import goods or the agent does not submit the valid certificates of origin or declaration of origin during the import declaration, or the customs does not receive the electronic data mentioned in the third paragraph of Article 14, supplementary declaration shall me made with the Customs as to whether such imported goods are qualified as originated from Beneficiary Country before releasing the goods (see Appendix 3 for the format).
Where the consignee of import goods or the agent in accordance with the provisions of the preceding paragraph has made supplementary declaration as to whether such imported goods are qualified as originated from Beneficiary Country and provided the corresponding tax guarantee in accordance with the law, the customs shall handle the import formalities, except as otherwise provided by the law or administrative regulations that such guarantee shall be forbidden. For those that have provided the tax guarantee equals to the highest amount of tax for the early release of goods, the guarantee for ensuring whether the goods have the qualification of originating may not be provided separately.
Where the consignee of import goods or the agent does not in accordance with the relevant provisions to complete the import declaration with the Customs, or during the import declaration, the consignee or the agent neither state to apply the preferential tariff rate provided in the Tariff Regulations, nor make supplementary declaration to the Customs as to whether the imported goods are qualified as originated from the Beneficiary Country, relevant imported goods shall not apply the preferential tariff rate in the Tariff Regulation.
Where the consignee of imported goods or their agents apply to the Customs for the application of the preferential tariff rate provided in the Tariff Regulations after the release of goods, the tax already levied shall not be adjusted.
Article 16 The certificate of origin submitted to the customs by the consignee of imported goods or the agent thereof shall simultaneously meet the following conditions:
1. it shall be issued within no more than 5 days after the export of goods by the Issuing Institution designated by the Beneficiary Country;
2. it shall be made in the format as provided in the appendix 1 of these Measures and completed in English;
3. it shall meet such security requirements as being in consistent with the stamp specimen of the Issuing Institution as notified by the Beneficiary Country to the customs of China and in consistent with the stamp and signature of the Customs or the administrative organ of the port;
4. the goods or any of them listed thereon shall be the imported goods of the same batch;
5. it shall have unrepeated and valid serial number of the certificate of origin; and
6. it shall state the basis for determining the goods have the qualifications for origin.
The certificate of origin shall be valid within one year upon the date of issuance.
Article 17 Where the Customs has ruled and confirmed that the country of origin of imported goods shall be the Beneficiary Country according to the application submitted by the consignee of the imported goods or its agent, and where such ruling is in a valid state, and there is no change as to the basis or facts of such ruling, the consignee of imported goods or its agent may submit the declaration of origin to Customs during the import of goods under such ruling and state to apply the preferential tariff rate according to the Tariff Regulations.
The declaration of origin submitted to the Customs by the consignee of imported goods or its agents shall simultaneously meet the following conditions:
1. it shall be made in the format as provided in the appendix 2 of these Measures and completed in Chinese;
2. it shall be printed out, completed and correctly signed by the consignee of imported goods or its agent; and
3. one declaration of origin can only correspond to one ruling.
The declaration shall be valid within one year upon the date of signing.
Article 18 When having any doubt upon the authenticity of the certificate of origin or whether the concerned goods are originated from relevant Beneficiary Country, or having any other doubt under other provisions hereof, the General Administration of Customs may, directly or via the economic and commercial counselor’s office of the embassy or consulate of China based in the corresponding Beneficiary Country, require the customs of the Beneficiary Country or the original issuing authority of the certificate of origin to conduct verification, and to give it a reply within 180 days as of the receipt of the verification request. Whenever necessary and upon consent of the relevant competent authorities of the Beneficiary Country, the General Administration of Customs may dispatch personnel to visit the location of the exporter or supplier in the Beneficiary Country, and make onsite survey over the review procedures of the competent institutions of the Beneficiary Country.
When having any doubt on the declaration of origin submitted by the consignee of imported goods or its agent, the Customs may conduct verification on such consignee or its agent who issued the declaration, and such consignee or its agent who is under verification shall provide written reply to the Customs within 180 days as of the receipt of the verification request.
In case of failure to receive any reply within the said period, the goods may not enjoy the special preferential tariff treatments.
During the period of waiting for the result of verification of the certificate of origin by the Beneficiary Country, the customs may, pursuant to the application of the consignee of imported goods or the agent thereof, legally choose to release the goods after it charges a sum of security equivalent to the amount of tariff calculated according to the most-favored nation rate, general tariff or other tariff rate applicable to the goods, and it shall handle the entry formalities in accordance with the relevant provisions and collect the corresponding customs statistics. After the customs of the exporting country or the issuing authority of the certificate of origin completes the verification, the entry customs shall, according to the verification result, promptly handle the formalities for refunding the security or converting the security to the import tariff, and correct the relevant statistic data accordingly.
In case of the imported goods restricted by the importing country or subject to violation of laws, the entry Customs shall not release them before completion of the review of the certificate of origin.
Article 19 Under any of the following circumstances, the consignee of the imported goods or its agent may apply to the Customs for tax relief within the time limit for tax guarantee approved by the Customs and within 1 year upon the date of import of goods:
1. the consignee of imported goods or its agent has, in accordance with the provisions in these Measures, made supplementary declaration to the Customs and submitted valid certificates of origin, declaration of origin and other certificates according to Article 14 of these Measures; or
2. the Customs has received the electronic data provided in Item 1 of the first paragraph and the second paragraph of Article 14 of these Measures.
Article 20 Where the dutiable value of the same batch of imported goods originated from the Beneficiary Country is not more than 6000 yuan as confirmed by the Customs in accordance with the law, the certificates of origin or declaration of origin may be exempted from submission.
The provisions of the preceding paragraph shall not apply to the import of goods in one or more times in order to circumvent the provisions of these Measures.
Article 21 Where the certificate of origin is theft, lost or damaged, and unused, the consignee of imported goods or the agent thereof may demand the exporter of such imported goods to apply to the original Issuing Institution of the Beneficiary Country for issuance of the approved duplicate of the certificate of origin within the term of the original certificate of origin. Such duplicate shall be indicated in English on its remark column that “the approved authentic copy of the original of the certificate of origin (No.: ____, Date: ____)”. Upon submittal of the approved duplicate of the certificate of origin to the customs, the original certificate of origin will become invalidated. Where the original certificate of origin has been used, the approved duplicate of the certificate of origin shall be invalid.
Article 22 Under any of the following circumstances, the certificate of origin may be re-issued within one year upon the date of export of goods:
1. where the certificate of origin did not issue at the time of export of goods or within five days upon the date of export of such goods due to force majeure; or
2. where the authority institution is convinced that the certificate of origin has been issued, but the certificate of origin has not been accepted at the time of import due to fail to comply with the provisions of Article 16 hereof.
The re-issued certificate of origin shall indicate the wording of “re-issuance” in English on it. In case of circumstance under Item 1 of Paragraph 1 hereof, the reissued certificate shall be effective within one year upon the date of actual export of goods; and in case of circumstance under Item 2 of Paragraph 1 hereof, the term of the reissued certificate shall be consistent with the term of the original certificate of origin.
Article 23 Under any of the following circumstances, the special preferential tariff shall not apply to the imported goods:
1. where the imported goods does not qualify the requirement as being originated from the Beneficiary Country;
2. where the consignee of imported goods or the agent thereof does not submit the valid certificate of origin or declaration of origin, nor make supplementary declaration on whether the imported goods have the qualifications for origin of the Beneficiary Country when declaring the import of goods;
3. the certificate of origin or the declaration of origin does not comply with the provisions of these Measures;
4. where the goods listed in the certificate of origin is inconsistent with the actual imported goods;
5. where, within 180 days upon the date of receipt of the request for verification of the origin by the Customs or Issuing Institution of the Beneficiary Country, the entry customs receive no reply or result from the customs or Issuing Institution of the Beneficiary Country, or such reply or result does not contain information sufficient to confirm the authenticity of the certificate of origin or the authentic origin of goods;
6. where, within 180 days upon the date of receipt of the request of verification of the origin by the consignee of imported goods or its agent, the Customs receive no reply or result from the consignee of imported goods or its agent, or such reply or result does not contain information sufficient to confirm the authenticity of the certificate of origin or the authentic origin of goods; or
7. where the consignee of imported goods or the agent thereof have any other activity that is inconsistent with the provisions hereof.
Article 24 Customs shall be obligated to keep in confidential any trade secret they have known under these Measures. Without the consent of the consignee of the imported goods, the customs may not divulge such trade secret or use it for purposes other than those provided herein, however, unless there is otherwise provided in laws, regulations and relevant judicial interpretations.
Article 25 Anyone who violates the Measures and constitutes smuggling or violation of the regulatory provisions of the Customs, or has any other activity in violation of the Customs Law shall be punished in accordance with the Customs Law and the Implementing Regulations of the People’s Republic of China on Customs Administrative Penalties. If any crime is constituted, he shall be prosecuted for the criminal liabilities according to law.
Article 26 The following terms mentioned herein shall have the following meanings:
“Beneficiary Country” refers to a country or region that has exchanges official documents with China concerning the special preferential tariff treatment for the least developed countries.
“Materials” shall include the components, spare parts, constituent parts, component and/or raw materials that formed another product in its physical nature or have been used in the production process of another product.
“Originating Materials” refer to the materials that have satisfied the qualification of origin as provided under the rules of origin as provided herein.
“Production” refers to the ways of obtaining goods, including planting, breeding, exploiting, harvesting, fishing, capturing, entrapping, manufacturing, producing, or processing or assembling.
“Agreement on Customs Valuation” refers to the Agreement on Implementation of Article 7 of GATT 1994 as part of the Marrakesh Agreement Establishing the World Trade Organization.
Article 27 the Specific Rules of Origin for Goods of the Least Developed Countries That Have Established Diplomatic Relations with China and the name list of the regional group mentioned in these Measures shall be announced separately by the General Administration of Customs.
Article 28 The power to interpret these Measures shall vest into the General Administration of Customs.
Article 29 These Measures shall come into effect on April 1, 2017. The Administrative Measures of the Customs of the People’s Republic of China for the origin of Imported Goods under the Special Preferential Tariff Treatment to the Least Developed Countries published in the 192nd Order of the General Administration of Customs in June 28, 2010 and the Decision of the General Administration of Customs on Revising the Administrative Measures of the Customs of the People’s Republic of China for the origin of Imported Goods under the Special Preferential Tariff Treatment to the Least Developed Countries published in the 210th Order of the General Administration of Customs in July 1, 2013 shall be simultaneously annulled.
Published by Crys Zheng on March 7th, 2017 tagged Uncategorized | Comment now »
During this period in China, “two meetings” will fill with headlines of all newspapers. This is an annual event with great significance in Chinese political life. One of the meetings is China People’s Congress, and the other is China People’s Political Consultation Committee. Foreigners could understand China People’s Congress as their own states’ Congress or Parliament, they might be, however, quite unfamiliar with CPPCC, for it is originated and sole-owned by China.
The system of CPPCC is of Chinese characteristic, and it is one of ways of realization of democracy with Chinese features. Its main functions are three: political consultation, democratic supervision and participation into and discussion of state affairs. Its members are from all walks of life, including businessmen, workers, officials, professors, scientists, doctors, artists, actors and all other representatives and elites of their industries. They may have made great achievements or contribution in their area or are elites of its occupation and could represent other people in that occupation. So this system could gather the wisdom from all walks of life, could make the government and the Party know main problems and main concerns of people from all walks of life and also could learn how to solve the problem and make new advancement from proposals of members of CPPCC. In addition, the CPPCC has the function of supervising the administrative action and judicial action of the government and the judiciary organs. It is also an important chain of check and balance system.