- Definition of EMPs expanded and clarified
- Rules to be applied more specifically
Effective May 1, 2008 China’s Ministry of Commerce (“MOFCOM”), Customs and General Administration for Quality Supervision, Inspection and Quarantine (“AQSIQ”) collectively introduced a series of new measures regulating the import of electro-mechanical products (“EMPs”). These consist of Order No. 5, Administrative Measures for Import of Key Used Electro-Mechanical Products; Order No. 6, Measures for Implementing Automatic Import Licensing on Electro-Mechanical Products; and Order No. 7, Administrative Measures for Import of Electro-Mechanical Products.
While the new regulations do not significantly alter the current regulatory regimen for the import of EMPs, they have clarified various important issues.
1. Expanded and Clearer Scope of EMPs
Under the new regulations, EMPs include machinery equipment, electronic equipment, metal products [...] and their components and parts. Of these, “metal products” has been newly added. In addition, the new regulations contain a detailed list of relevant Harmonized System Codes (“HS codes”) for EMPs, thus providing clear and precise details for all products falling within the scope of EMPs.
2. Changes in Classification of EMPs
The fundamental classification of EMPs remains the same, consisting of four categories: (i) prohibited, (ii) restricted, (iii) those requiring an automatic license and (iv) those that may be freely imported. However, under Order No. 7, used EMPs that are restricted are further considered to be key used EMPs, which are subject to further dedicated regulations, as in Order No. 5, which details the procedures and requirements relating to applications for automatic import licenses. Notwithstanding this revision, the current regulations and rules regarding inspection of all used EMPs remains unchanged. MOFCOM has published catalogs of prohibited EMPs, restricted EMPs, key used EMPs and EMPs requiring automatic licensing. By default, any EMPs that are not listed in these catalogs may be freely imported.
Order No. 6 details the application requirements and procedures for automatic import licensing. The regulation notes that where EMPs are subject to China’s compulsory certification, China Compulsory Product Certification (“CCC”) Certificate or an exemption certificate will be required. Of course, where an EMP is subject to authorization or production permit control or is imported pursuant to an approved investment application, relevant compliance documentation must be presented. For used EMPs, including key used EMPs, a pre-inspection report issued by AQSIQ must be provided. Finally, when used EMPs are imported for retrofitting, the importer must also present evidence of its qualifications to engage in retrofitting activities.
3. More Specific Application of the Regulations
The new regulations will not apply in certain circumstances. For example, while the old regulation merely provided that the regulation would not apply to EMPs imported by foreign invested enterprises (“FIEs”) for their own use, the new regulations refine the position by limiting the exemption to new EMPs that have been approved by MOFCOM as part of the investment by the FIE. However, if exempted EMPs are sold or transferred to a third party within the Customs supervision period, the regulations will apply. Overall, while the new regulations do not provide substantial revisions, the detailed classification of EMPs, the use of HS codes for EMP identification purposes and the setting forth of procedures and requirements for automatic licensing collectively provide clearer guidance for importers.