China Foreign Trade Law has been adjusted, which is good news for foreign trade operators in the country. On December 30, 2022, China’s Ministry of Commerce abolished the need for businesses involved in foreign trade to file and register with the commercial authorities. This change is a result of the revision of the country’s Foreign Trade Law, and the deletion of Article 9.
Effective January 1st, 2023, the requirement for businesses to register with the commercial authorities in order to obtain import and export licenses, technology import and export contract registration certificates, quotas, state-owned trade qualifications, and other relevant documents has been abolished.
As a result, enterprises engaged in import and export activities will automatically acquire the right to engage in these activities and will no longer need to complete registration formalities for foreign trade managers. However, they must still complete the following requirements:
- Custom Records
- Electronic Port Card
- Registration of Goods in Foreign Exchange
Deleted Article 9. A foreign trade dealer who intends to engage in the import and export of goods or technologies shall register with the department for foreign trade under the State Council or the body it entrusts with the registration unless otherwise prescribed by laws, administrative regulations or by the said department. The department shall formulate the specific measures for registration. Where a foreign trade dealer fails to register as required by regulations, the Customs shall not process the procedures of declaration, inspection, and release for the import or export of goods.
Click here for the full China Foreign Trade Law: http://www.npc.gov.cn/zgrdw/englishnpc/Law/2007-12/12/content_1383624.htm
Why it’s important?
The recent decision by China’s Ministry of Commerce to eliminate record registration requirements for businesses involved in foreign trade represents a major reform in this area. It represents an important institutional innovation for the Chinese government. This change aims to promote trade liberalization and facilitation and will have a number of positive impacts on the business environment and the growth potential of foreign trade.
Streamlining the process of importing and exporting goods, this change will make it easier for businesses to engage in these activities and will help to promote high-quality trade development and increased openness. This is expected to lead to a range of benefits, including increased efficiency, lower costs and greater competitiveness for businesses operating in the foreign trade sector.
Overall, the elimination of record registration requirements is a positive development that is expected to positively impact the business environment in China and the growth of foreign trade in the country. It is an important step towards creating a more open and supportive environment for businesses and will help to promote foreign trade liberalization and facilitation.
The Ministry of Commerce has also announced that it is working with local commerce departments to manage the transition and monitor the operations of foreign trade enterprises in order to improve government services. The ministry is also increasing information sharing with other government departments to improve its foreign trade analysis and enhance foreign trade policies and measures.
To file import and export records, six steps previously needed to be completed: foreign trade operator registration, customs enterprise registration, electronic port card application, foreign exchange account registration, export tax rebate filing, and opening the company’s bank foreign currency account.
To complete foreign trade operator registration, individuals needed to first apply on the Ministry of Commerce website, complete the necessary documents online, and then attend an offline review. Upon successful completion of this process, they would receive a record registration, which was required to complete customs enterprise registration.
The whole process is now optimized with the cancellation of record registration. This change has reduced the time required to complete the process by one day, reducing the overall duration from seven days to six.
These efforts are intended to promote the upgrading of trade in goods, the innovation of development mechanisms for services trade, and the overall advancement of trade innovations and high-quality development.