Effective May 1, 2008 China's Ministry of Commerce
("MOFCOM"), Customs and General Administration for
Quality Supervision, Inspection and Quarantine
("AQSIQ") collectively introduced a series of new
measures regulating the import of electro-mechanical products
("EMPs"). These consist of Order No. 5,
Administrative Measures for Import of Key Used
Electro-Mechanical Products; Order No. 6, Measures for
Implementing Automatic Import Licensing on Electro-Mechanical
Products; and Order No. 7, Administrative Measures for Import
of Electro-Mechanical Products.
While the new regulations do not significantly alter the
current regulatory regimen for the import of EMPs, they have
clarified various important issues.
1. Expanded and Clearer Scope of EMPs
Under the new regulations, EMPs include machinery equipment,
electronic equipment, metal products [...] and their components
and parts. Of these, "metal products" has been newly
added. In addition, the new regulations contain a detailed list
of relevant Harmonized System Codes ("HS codes") for
EMPs, thus providing clear and precise details for all products
falling within the scope of EMPs.
2. Changes in Classification of EMPs
The fundamental classification of EMPs remains the same,
consisting of four categories: (i) prohibited, (ii) restricted,
(iii) those requiring an automatic license and (iv) those that
may be freely imported. However, under Order No. 7, used EMPs
that are restricted are further considered to be key used EMPs,
which are subject to further dedicated regulations, as in Order
No. 5, which details the procedures and requirements relating
to applications for automatic import licenses. Notwithstanding
this revision, the current regulations and rules regarding
inspection of all used EMPs remains unchanged. MOFCOM has
published catalogs of prohibited EMPs, restricted EMPs, key
used EMPs and EMPs requiring automatic licensing. By default,
any EMPs that are not listed in these catalogs may be freely
Order No. 6 details the application requirements and
procedures for automatic import licensing. The regulation notes
that where EMPs are subject to China's compulsory
certification, China Compulsory Product Certification
("CCC") Certificate or an exemption certificate will
be required. Of course, where an EMP is subject to
authorization or production permit control or is imported
pursuant to an approved investment application, relevant
compliance documentation must be presented. For used EMPs,
including key used EMPs, a pre-inspection report issued by
AQSIQ must be provided. Finally, when used EMPs are imported
for retrofitting, the importer must also present evidence of
its qualifications to engage in retrofitting activities.
3. More Specific Application of the Regulations
The new regulations will not apply in certain circumstances.
For example, while the old regulation merely provided that the
regulation would not apply to EMPs imported by foreign invested
enterprises ("FIEs") for their own use, the new
regulations refine the position by limiting the exemption to
new EMPs that have been approved by MOFCOM as part of the
investment by the FIE. However, if exempted EMPs are sold or
transferred to a third party within the Customs supervision
period, the regulations will apply.
Overall, while the new regulations do not provide
substantial revisions, the detailed classification of EMPs, the
use of HS codes for EMP identification purposes and the setting
forth of procedures and requirements for automatic licensing
collectively provide clearer guidance for importers.
The rapid growth of global economy has led to widespread international trade and this expansion in international trade has brought with it increasing possibilities of cross border insolvency proceedings.
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