28 Dec 2018
China Clarifies Requirements of Upcoming Cross-Border E-Commerce Regime
Details of the new cross-border e-commerce import regulations (due to come into effect as of 1 January 2019) have been clarified in a recent joint circular issued by the Ministry of Commerce, the National Development and Reform Commission, the Ministry of Finance and a number of other government departments.
Among the key points highlighted in the advisory document are the following:
- Cross-border e-commerce retail is to be deemed as primarily related to goods imported for personal use and, as such, no import licence, registration or filing procedure is generally required. Among the items excepted from this entitlement however, are any sourced from quarantined areas where import / export restrictions have been implemented, goods deemed to represent significant risks in terms of quality or safety and any goods previously subject to emergency risk management.
- In all instances, an “e-commerce retail import operator” is to be defined as an overseas-registered enterprise which sells on a cross-border basis to domestic consumers. These operators shall be deemed to have responsibility for the quality and safety of the goods they have for sale and are required to engage an enterprise registered in China in order to handle the required customs registration. The operator and its designated mainland representative will then be deemed to have responsibility for the validity of any subsequent declaration, while bearing joint and several liability in any future civil cases, as well as being liable for any action taken relating to consumer rights protection at any later date.
- All cross-border e-commerce third-party platform operators who provide web-hosting, transaction processing and any other information-based service related to cross-border e-commerce must be registered in China with the relevant customs credentials. Furthermore, they are obliged to transmit all electronic data relating to import-bound transactions to the appropriate customs authorities in real time, while validating the transaction and confirming the identity of the purchaser. Additionally, it is incumbent upon them to put in place a satisfactory complaints resolution system and to agree to pay any agreed compensation on an upfront basis.
- Any banking institutions providing payment services active within China must be in possession of a valid Financial Licence, as issued by the China Banking and Insurance Regulatory Commission (or the former China Banking Regulatory Commission). In the case of non-banking payment institutions, they must be in receipt of a Payment Business Licence as issued by the People’s Bank of China (with “internet payment” included within their specified scope of business). For their part, any participating logistics enterprise must obtain an Express Business Licence from the State Post Bureau.
- In official terms, consumers will be deemed to be liable for the tax due on any imported e-commerce retail goods, while e-commerce platforms, logistics enterprises and customs declaration agencies will be considered the tax-withholding agents. In all instances, consumers are not permitted to offer for sale any goods purchased via any cross-border e-commerce retail channel.
Following the implementation of these requirements on 1 January 2019, enterprises may only take advantage of the specified transition arrangements until 31 March that year.
For further details, please access the following links:
Circular of the Ministry of Commerce, National Development and Reform Commission, Ministry of Finance, General Administration of Customs, State Administration of Taxation and State Administration for Market Regulation on Improving the Oversight of Retail Imports in Cross-Border E-Commerce (Shang Cai Fa No. 486 ) (in Chinese)