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Press releases and law firm thought leadership

This page is dedicated to keeping readers informed of the latest news and thought leadership articles from law firms across the globe.

If your firm wishes to publish press releases or articles, please contact Shehab Khurshid on +44 (0) 207 396 5689 or shehab.khurshid@legalease.co.uk

 

Legal Developments Worldwide

Articles contributed by Haoliwen Partners

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Transfer Pricing – New Risks in Declaring Price Impact of Special Relationship to China Customs

May 2016 - Crime. Legal Developments by Haoliwen Partners.

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China Customs recently requires that the importer or exporter of record declare the impact on the import or export price of its special relationship with the counterpart (“Price Impact”). Specifically the declaring party must state whether its special relationship, if any, would affect the transaction value or price as declared to the China Customs. Previously the special relationship was an item of declaration subsequent to a specific request from the Customs. However, the impact of the special relationship was not an item of declaration, and the declaration party even had a general defense right to disprove such Price Impact. The Price Impact, if any, has been a pre-condition for  the Customs not to accept the declared transfer price for the purpose of ascertaining dutiable price of a given import or export shipment, in which case, China Customs shall re-value the given shipment according to China customs valuation rules.

New China Customs Taxation Policy on Cross-Border B2C E-Commerce Imports

May 2016 - Crime. Legal Developments by Haoliwen Partners.

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The Ministry of Finance, General Administration of Customs and State Administration of Taxation of China jointly issued a circular (“Joint Circular”) relating to the taxation policy on the cross-border e-commerce retailing imports, with effect as from April 8, 2016.

How to Identify Administrative Conducts as Administrative Anti-monopoly

January 2015 - EU & Competition. Legal Developments by Haoliwen Partners.

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With a trend towards increasing investigation against administrative monopoly, there will probably be more cases against administrative monopolistic conducts in 2015. Companies may, as plaintiffs, sue local governments or its authorized institutions for administrative monopoly.

It is specified under Article 8 of PRC Anti-Monopoly Law that administrative departments or organizations authorized by laws or regulations to perform the function of administering public affairs may not abuse their administrative power to eliminate or restrict competition. Accordingly, two factors shall be taken into consideration in identifying administrative monopoly: abuse of administrative power, and  impact of eliminating or restricting competition.

Foreign Investment Opportunities in Medical Service Sectorin the Shanghai Free Trade Zone

January 2014 - Corporate & Commercial. Legal Developments by Haoliwen Partners.

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On November 13, 2013, the Shanghai Municipal Government issued the Tentative Measures on the Administration of Foreign Owned Medical Institutions in China (Shanghai) Pilot Free Trade Zone [Hu-Fu-Ban-Fa [2013] No.63] ("Measures"). According to the Measures, a foreign investor, who has engaged in medical institution investment or management for 5 years or more, may, upon the approval by the relevant local government authorities, set up a wholly foreign owned medical institution ("Medical WOFE") in the Shanghai Pilot Free Trade Zone ("Shanghai FTZ"). Also, the Measures might open up an investment opportunity for foreign capital to enter the nursing home market in China.

China Customs Further Reforms Import & Export Clearance Procedures

January 2014 - Corporate & Commercial. Legal Developments by Haoliwen Partners.

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The General Administration of Customs ("GAC") issued Announcement [2013] No. 58 ("Announcement") on October 30, 2013, announcing its decision to further reform the customs clearance procedures for importation and exportation, whereby as from November 1, 2013, an AA Category enterprise in China Customs' AEO (Authorized Economic Operator) program, after filing application and signing an MOU with the customs, may choose to file import/export declarations and have the goods cleared at the local customs office of the place where such enterprise is located rather than where the port of entry or exit is located ("Privileged Model").

Multinationals urged to watch out for customs duty risks in royalty payments

January 2014 - Corporate & Commercial. Legal Developments by Haoliwen Partners.

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Chinese customs authorities have recently stepped up price investigations focusing on cross-border payments of intellectual property ("IP") royalties or license fees. More and more multinational companies ("MNC") have been chosen by the customs as principal audit/investigation targets for their royalty arrangements between Chinese subsidiaries and foreign parent companies or other associated parties. HaoLiWen customs practice lawyers have been approached by some of MNCs to advise on dutiability of such royalty payments and any risk exposure to customs law violation or even smuggling.

China (Shanghai) Pilot Free Trade Area:Foreign Investors’ Investment Opportunities

September 2013 - Corporate & Commercial. Legal Developments by Haoliwen Partners.

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The State Council has approved establishment of China (Shanghai) Pilot Free Trade Area ("SHFTA") and more flexible, efficient and open economic administration will be carried out within SHFTA. In summary, two aspects of breakthroughs are relevant to foreign direct investment in SHFTA.

Shanghai Special Customs Supervision Zones Upgraded as National Pilot Free Trade Area

September 2013 - Corporate & Commercial. Legal Developments by Haoliwen Partners.

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On August 22, 2013, MOFCOM announced that the State Council of China approved the establishment of Shanghai Pilot Free Trade Area ("SHFTA") to cover four customs supervision zones (Shanghai Waigaoqiao Free Trade Zone, Waigaoqiao Bonded Logistics Park, Yangshan Bonded Port and Shanghai Pudong Airport Free Trade Zone), with a total area of 28.78 square kilometers. It was reported that SHFTA will be formally established by the end of September, 2013. Early in September, the NPC StandingCommittee will determine adjusting some administrative examination and approval measures under some laws to be applied to SHFTA.

 

Small Labels, Big Matters-- Product Labeling under P.R.C. Law

August 2013 - Corporate & Commercial. Legal Developments by Haoliwen Partners.

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Normally perceived as a very small piece in the whole picture of production and distribution, product labeling is seldom taken seriously by distributors. However, the consequences of improper label are exceptionally severe in serious cases, including but not limited to:

Dual-use Item Export Control and Customs-related Liability Risks

July 2013 - Crime. Legal Developments by Haoliwen Partners.

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A multinational carries out export business of certain product from China. Prior to export declaration to the customs, the company obtained a classification opinion from a consultant. The HS code as suggested by the classifying consultant was not subject to any export license requirement. However, the export declaration was not accepted by the customs who raised a challenge that the export product was most probably subject to Export License For Dual-Use Items and Technologies ("Dual-Use Items License"). As per request by the customs, the company consulted with the Ministry of Commerce ("MOFCOM") from which the company received a letter of reply stating that the product to be exported was indeed subject to Dual-use Items License requirement. Because of this requirement, the Anti-smuggling Bureau of Customs initiated investigation into the case, seized the product to be exported and extended its investigation into two exported shipments of allegedly the same product as no license was produced to the customs. . The company was suspected to have evaded the export license control. This crisis endangered its export business from China, and exposed the company to potential administrative and even criminal liability risks as well.

Is a Typical Distribution Agreement Still Viable under the PRC Anti-monopoly Law?

July 2013 - Finance. Legal Developments by Haoliwen Partners.

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Recently two leading liquor producers of China - Moutai and Wuliangye, were severely sanctioned by enforcement authorities of China (i.e. respectively Guizhou Price Control Bureau and Sichuan Development and Reform Commission), for their maintenance of the minimum resale price in distribution agreements. This is the first vertical monopoly agreement case penalized by NDRC, one of three antitrust watchdogs, particularly in charge of pricing-related antitrust enforcement, pursuant to Article 14 of the PRC Anti-monopoly Law (the "AML").

China Customs Law: Successful Clearance Does Not Mean “Free of Legal Risks”

July 2013 - Crime. Legal Developments by Haoliwen Partners.

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As customs and trade lawyers, we often receive on various occasions such remarks from companies as "we are doing okay as we have encountered no big difficulties with China Customs". When pressed for reasons, they would explain that that the goods have been cleared with China Customs quite smoothly and there seem no legal problems at all.

The remarks immediately raise a red flag to us: there is a possible implication that China customs-related legal risks may have been accumulated beyond the notice of the legal department or even the management of the company.

Labeling Luxury Products Imported into China: - Why Do You Need A Seasoned Lawyer?

May 2013 - Corporate & Commercial. Legal Developments by Haoliwen Partners.

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Recently Guangdong Provincial Administration of Industry and Commerce ("Guangdong AIC"), a local administrative authority supervising business operations in its territory in China, revealed a list of jewelry manufacturers and distributors selling defective jewelry products in 2012. Some of internationally reputable jewel brands appeared on the list for non-compliance with Chinese labeling laws, regulations or standards, or for incorrect or improper engraving and/or labeling practices. As a result, Guangdong AIC slapped a large amount of fines on those companies and ordered them to recall all the defective products from the market. This exhibits how improper labeling has affected sale of products in China.

The Supreme People’s Court Issued a Judicial Interpretation

May 2013 - Finance. Legal Developments by Haoliwen Partners.

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The Supreme People's Court of PRC has recently issued its "Rules on Several Issues Related to Law Application concerning Adjudication of Civil Disputes Arising from Monopolistic Activities" (the "Judicial Interpretation"), which will come into effect from June 1, 2012. This Judicial Interpretation has laid out rules on the allocation of burden of proof relating to the following three cases of monopolistic activities on the basis of the PRC Anti-Monopoly Law (the "AML") and the PRC Civil Procedural Law.

 

China Customs New Interpretation

May 2013 - Crime. Legal Developments by Haoliwen Partners.

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For many products, tariff classification can be technically complex, confusing, and subject to multiple interpretations. Often several different Harmonized System Codes ("HS Code") may seem applicable for one given product with different tariff rates. Tariff classification is indeed a process of application of customs classification rules, including customs rulings and decisions, and misclassification may trigger severe legal consequences. The sad fact is, unfortunately, that many companies rely on non-legal professionals to determine the HS Codes for imports or exports. A recent interpretation issued by the General Administration of Customs of China ("GACC") (Circular No. [2012] 495 Shu-Fa-Fa) (the "Interpretation") reinforces the process of tariff classification as a legal matter, and formulates the test as to what counts for regulatory violation if tariff classification rules are improperly applied by the importer or exporter in a given case. If the legal defense is successful, misclassification may only be treated as a non-violation misclassification, with the possible obligation to pay up additional customs duties, if any, but without administrative or criminal consequences. The Interpretation took effect as from February 1, 2013.

Will OEM catch you out?

May 2013 - Intellectual Property. Legal Developments by Haoliwen Partners.

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Original Equipment Manufacturing(OEM), particularly cross-border OEM, is perhaps most common model in the contemporary manufacturing world. It's now routine for Western companies to provide design and technology know-how and then to outsource production to China and other Asian countries where the labour needed to manufacture a product is comparatively inexpensive.

A Second Look at NDRC’s Most Recent Enforcement Cases against Price Violations in 2013

May 2013 - Finance. Legal Developments by Haoliwen Partners.

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On January 4, 2013, NDRC declared that Samsung, LG and four Taiwanese firms were fined RMB 350 million for fixing the prices of LCD screens during the period from 2001 to 2006  ("LCD Case"). On January 16, 2013, Maotai, one of most famous wine brands in China, declared that they were investigated by NDRC for its monopolistic behaviors and they therefore would modify all their sales policies that had violated the 2008 Anti-monopoly Law of PRC ("AML"), in particular the resale price maintenance policy. This was closely followed by the declaration of WuLiangYe, another wine magnet in China, which announced on January 17, 2013 that they would also abolish all the sales policies in violation of AML, after an investigation of NDRC.

Legal Risks in Commodity Classification for Customs Clearance [Customs&Trade]

January 2013 - Finance. Legal Developments by Haoliwen Partners.

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In July of 2007, an overseas projector manufacturer modified its video projector products (HS Code: 8528 3010, Duty Rate: 35-30%) into digital projectors (HS Code: 8471 6090, Duty Rate: 15-10%) through a series of technical methods, such as installing video connectors and crystal oscillators, covering up pre-set sockets, changing buttons, modifying relevant software, renovating outer packaging and product manuals. Later, its subsidiary in China imported such modified products under an HS Code applicable to digital projectors. After customs clearance, the company had the imported products re-modified into video projectors and sold them in China.