On February 1, 2012, the General Administration of Customs (“GAC”) in China launched a “Green Fence Campaign” against smuggling of “foreign garbage”. The campaign is reported to be completed on November 30, 2013.

As for companies importing solid waste products, they may face more stringent documentary scrutiny and on-spot examination during customs clearance. Meanwhile, with more vigorous post-clearance audits and anti-smuggling investigations made by Chinese Customs, the legal risks as may be accumulated over the years may become explosive.

  1. Rigorous Inspection of Imports

The Customs will vigorously inspect the declaring documents and imported goods. .Moreover, the clearance for imported solid waste will be subject to 100% weighing, 100% examination and 100% on spot inspection.

With more stringent customs supervision, customs clearance for imported solid waste may inevitably be significantly slowed down and more goods may potentially stagnate in the entry ports for inspection. If the goods were found to be mixture with solid wastes or inclusion of excessive solid wastes, such goods may even not be released and ordered to be shipped back.

  1. Increased Post-Clearance Audit Risks

This year, the Customs will carry out post-clearance audits on the enterprises engaging in importation and processing of solid waste products. The audit will focus on the illicit activities such as smuggling of prohibited solid waste (so-called “foreign garbage”), scalping or leasing of import license of solid wastes, scalping of bonded solid wastes imported under processing trade transactions, fraudulent declaration of commodity description, under-declaration of the import price, smuggling by way of hiding other dutiable or restricted items. It may happen that non-compliance with customs regulations, if any, may become explosive this year and the importing companies may become administratively or criminally liable.

  1. Crackdown on Smuggling of Solid Wastes

One of the focuses of the campaign is to investigate and crack down solid wastes smuggled from Europe, U.S., Taiwan, Hong Kong and other major sourcing countries or regions. It is reported that, once detected, the customs will impose severe punishment as the law permits.

The “Green Fence Campaign” is another massive customs operation following the campaign of “National Gate Guard” in 2012. Given the risks and exposures, companies in the relevant businesses must take prudent measures to ensure customs regulatory compliance in China.