## Trade Regulatory Framework
### Governing Bodies
– Ministry of Commerce (MOFCOM)
– General Administration of Customs (GAC)
– State Administration of Foreign Exchange (SAFE)
– State Administration for Market Regulation (SAMR)
### Key Laws
– Foreign Trade Law
– Customs Law
– Import/Export Regulations
– Product Quality Law
## Import Regulations
### Restricted Imports
| Category | Restrictions |
|———-|————-|
| Food | Health certificate required |
| Cosmetics | Registration required |
| Medical devices | License required |
| Electronics | CCC certification |
| Chemicals | Special permits |
### Prohibited Imports
– Weapons and military equipment
– Counterfeit goods
– Hazardous waste
– Certain agricultural products
– Endangered species products
### Import Licensing
| License Type | Products | Validity |
|————-|———-|———-|
| Automatic | Most goods | 1 year |
| Non-automatic | Restricted | 6 months |
| Quota | Limited quantity | Annual |
## Export Regulations
### Export Control
– Dual-use items
– Military products
– Advanced technology
– Strategic resources
### Export Restrictions
| Category | Control |
|———-|———|
| Rare earth | Quota management |
| Technology | License required |
| Cultural relics | Prohibited |
| Endangered species | CITES permit |
### Export Incentives
– VAT rebates (5-17%)
– Tax exemptions
– Subsidies for certain industries
– FTZ benefits
## Product Compliance
### CCC Certification
– China Compulsory Certification
– 17 product categories
– Required for import and sale
– Testing and factory audit
### Other Certifications
| Certification | Products |
|————–|———-|
| CFDA | Food, drugs, cosmetics |
| SRRC | Radio equipment |
| CQC | Voluntary quality |
| Energy Label | Appliances |
## Customs Compliance
### Declaration Requirements
– Accurate product description
– Correct HS code classification
– True value declaration
– Complete documentation
### Valuation Rules
– Transaction value primary
– Must be arm length
– Includes freight and insurance
– Supporting documents required
### Record Keeping
– Import/export records: 3 years
– Financial documents: 5 years
– Electronic records accepted
– Subject to customs audit
## Free Trade Agreements
### Active FTAs
| Partner | Coverage |
|———|———-|
| ASEAN | Most goods |
| Australia | 95%+ goods |
| South Korea | 90%+ goods |
| Switzerland | Industrial goods |
| RCEP | Regional comprehensive |
### Certificate of Origin
– Required for FTA benefits
– Issued by authorized bodies
– Must accompany shipment
– Validity: 1 year
## Compliance Best Practices
### Documentation
1. Maintain complete records
2. Verify HS codes
3. Keep contracts organized
4. Track license validity
5. Document all transactions
### Internal Controls
– Compliance officer designation
– Regular training
– Audit procedures
– Risk assessment
– Reporting mechanisms
### Risk Management
| Risk | Mitigation |
|——|———–|
| Classification errors | Expert review |
| Valuation issues | Documentation |
| License lapses | Tracking system |
| Regulation changes | Monitoring |
## Penalties for Non-Compliance
### Administrative Penalties
| Violation | Penalty |
|———–|———|
| Undeclaration | Fine 5-30% of value |
| Undervaluation | Fine + duty difference |
| Wrong classification | Fine + adjustment |
| License violation | Fine + confiscation |
### Criminal Liability
– Smuggling ordinary goods
– Smuggling prohibited items
– Bribery of officials
– Serious violations
## Staying Compliant
1. **Know Regulations**: Stay updated
2. **Classify Correctly**: Verify HS codes
3. **Document Everything**: Maintain records
4. **Use Experts**: Licensed customs brokers
5. **Audit Regularly**: Internal compliance checks
6. **Train Staff**: Regular compliance training
Compliance with trade regulations is essential for sustainable business in China.