According to the revised Foreign Trade Law, any legal person or entity can currently export products directly to China or directly from China. This change is an exciting opportunity for both experienced exporters and newcomers to the US market.
Last year, the value of US imports from China reached $163 billion. Products include toys, game consoles, clothing, electric machinery, and food. This year, as the United States and China have relaxed relevant policies, it is expected that the import volume will increase substantially.
One of the more important changes in China's foreign trade law is the abolition of the requirement to apply for import and export licenses, which usually requires the involvement of trading companies. Now you can eliminate trade agents and deal directly with US customers.
Regardless of whether companies choose to seek trade channels through agents or independently, in a fiercely competitive market environment, it is more prudent to understand what kind of responsibilities a company assumes under US law. Many exporters mistakenly believe that they do not need to pay attention to the rules and regulations of the US Customs and Border Protection ("US Customs") as long as they are not legal "registered importers" to the United States. This view is incorrect.
Consider the following situations. A US customer of the company requires the company to issue two separate commercial invoices, one of which misreports the nature of the product, underreports the actual value of the product, or misses the shipment; or requires that the country of origin not be marked on the product, or Incorrect country of origin; or require an incorrect or classified classification code (HTS code) on the invoice. If the company must agree to the above requirements in order to reach a deal, it will be in great risk.
Since the daily import volume in the United States is very large, the US Customs cannot check every batch of arrivals. However, the Customs will randomly check the imported products and check whether the invoices are filled correctly. If the description of the goods is unclear, the contents of the list are missing, only the name of the code is encoded, or the different items are mixed together, the goods will have to undergo additional detailed review. There are other factors that can lead to customs review, such as insignias missing important information such as the country of origin, or obvious errors such as inaccurate quantity reports. If the goods are retained by the Customs for deferred review, the parties will be entangled in the relevant paper-heading work for a long time, so that the documents meet the requirements, which will cost a lot psychologically and economically.
For each product produced outside the United States, the country of origin must be marked on the product in a prominent position, unless the relevant US law provides for an exception; and the content must be clear, non-erasable, and permanent. . If any product fails to meet this requirement, it will be postponed until it is corrected. In this case, additional human and financial resources must be invested in the replacement and re-production of the original label.
US Customs also requires that all products be categorized to determine the applicable tariffs for the product. Each export product has a corresponding verifiable classification number, which is the so-called HTS code. By classification, products are classified into a special category, from which the tariffs payable are determined. In this case, the legal “registered importer†is generally responsible for the relevant legal liability, but if the code is not listed or used incorrectly, the original manufacturer or supplier will also be affected.
For companies that intentionally or unintentionally attempt to export products to the United States by means of deception, negligence or gross negligence, US Customs can implement various measures within its jurisdiction to create disadvantages, losses and difficulties. Companies that have been proven to assist or incite others to commit the above actions will also be punished. This provision essentially means that any or all of the Chinese producers and manufacturers that trade with US customers may be punished by US Customs in the unpredictable circumstances.
The plots listed above can make the conditions of so-called "assisting" or "instigation" possible. If there is a deliberate misstatement or underreport on the invoice, the offender may be required to pay customs tax losses to the US Customs in addition to the currency fine imposed on entry, up to eight times the tax loss or the domestic transfer of the product. Price value. At the same time, the entire shipment may be confiscated.
In many ways, unpredictable consequences and the reflexive effects of these consequences may increase the threat to the business future. If a company’s past shipments give US Customs a reason to pay attention to it, it may be denied the right to receive timely inspections. At the same time, this situation extends to the goods of all of its US customers. If a company finds itself in this situation, it will often need to seek the assistance of a legal counsel to deal with US Customs.
For a company, before it succumbs to the customer's request, it should be considered whether these requirements will put the company's reputation in danger, and whether the company has the ability to cope with the negative publicity brought about by this, this negative publicity Will undoubtedly cause companies to lose their existing and potential customers in the hot market. When dealing with US customers, companies should exercise caution and avoid mistakes and omissions, so that they can protect the future development of the company while successfully exploring new areas of trade.
(The author is a senior consultant of the Beijing Representative Office of Gaoter Brothers Law Firm) (Text / "Global Entrepreneur" â–¡ Matthew J. McConkey From: March 2005, Issue 108)
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