Customs enforcement in China has been an
effective way for foreign brand owners to stop counterfeit shipments. Brand
owners can utilize such practical enforcement strategy even more now in view of
the newly effective amended Law on Administrative Penalty and the Amended Provisions
of the PRC Customs on the Procedures for Handling Administrative Penalties Cases,
both of which just came into force on July 15, 2021. The Amended Provision is the
first substantive revision since 2014. The Amended Law and the Provisions
provide concrete guidance to the Customs administrative penalties and its
highlights are as follows:-
I. IMPOSING
A 6-MONTH EXAMINATION TIMEFRAME FOR ADMINISTRATIVE PENALTY CASES
Importantly, the Amended Provisions imposed
timeline on the Customs to examine administrative penalty cases, which was not
clearly stipulated before. The Amended Provision requires the Customs to make a
decision on administrative penalty within six months from the date the
case was placed on file. If it is necessary to extend the examination period,
it shall be approved by the Head of the customs, and the extension period shall
not exceed six months.
Such examination timeframe would increase
the efficiency of Customs administrative enforcement, prevent delay in
adjudication and grant timely remedy to right owners.
II.
INCREASING THE ROLE OF HEARING
The Amended Law added that a hearing can be
requested for cases involving “the seizure of a large amount of illegal income,
the seizure of large value of illegal property”. The specific measures as
applied to Customs administrative enforcement have been detailed in the Amended
Provisions as follows:
When intending
to make the following decisions on administrative penalties, the Customs shall
notify the parties to request for a hearing, and where a party requests for a
hearing, the Customs shall organize a hearing:
-
(1) Imposing a fine of not less
than RMB 10,000 (~US$1,600) upon a natual person, or imposing a fine of not
less than RMB100,000 (~US$16,000) upon a company or organization;
-
(2) Confiscating illegal gains of not
less than RMB 10,000 (~US$1,600) upon a natural person, or confiscating illegal
gains of not less than RMB100,000 (~US$16,000) upon a company or organization;
-
(3) Confiscating relevant goods,
articles, and smuggled means of transport, etc.
Broadening the application of the hearing
system would allow the brand owners to make their case in front of the Customs,
especially when the authenticity of products was in dispute. Previously, where
the case involves complicated submissions, the Customs would often not make a
decision, but instead direct the parties to file a separate civil action in
court to request for a court order to continue the seizure of products. The increased
use of the hearing system would equip the Customs to handle more complicated
cases, streamlining the enforcement procedures of brand owners.
III. CONCLUSION
We are pleased to see that the amended Law
and provision is introducing a series of concrete and specific articles to
enhance Customs enforcement. It is recommended that brand owners register their
trademarks with the Customs to take advantage of such effective enforcement
mechanism. Brand owners should also archive
customs declaration documents and correspondence in daily operations, and
provide relevant evidence to the customs when necessary. Brand owners are also
advised to enhance communication with Customs during the enforcement process, fully
state their case and defence, explain the situation to the Customs, submit
evidence to help the Customs ascertain facts and take full advantage of the
hearing procedure.
© Vivien Chan & Co., Newsletter issue 8, August 2021
All Rights Reserved
About Us
Vivien Chan & Co. is a full-service law practice with offices in Hong Kong (1985) and Beijing (1993). We are consistently recognized as a premier law firm for and in Greater China. With over 35 years of doing business in Greater China, our Hong Kong and China teams have an in-depth understanding and knowledge of the legal culture and market dynamics.
