New PRC Anti-Pollution Notice Targets Exporters

The PRC Ministry of Commerce ("MOFCOM") and the State Environmental Protection Administration of China ("SEPA") jointly issued a notice on October 8, 2007 on "Strengthening the Environmental Monitoring over Export Enterprises" (the "Notice").

The stated goals of the Notice are to save energy, reduce emissions, build an environmentally‑friendly society, protect state environmental interests and promote the transformation of trade growth.

The Notice reflects a new approach to regulating pollution in China. Existing anti-pollution rules, which generally impose fines on polluters, have been considered largely ineffective because many businesses find it less expensive to pay the fines than to restructure their operations to reduce pollution. The new rules embodied in the Notice target exporters of goods, and require businesses to demonstrate environmental compliance as a condition to obtaining an export license or quota. ¹ It is believed that these rules will be more effective in