China’s new Foreign Trade Law

On 30 December 2022, the National People’s Congress revised the Foreign Trade Law ( 外贸易法), whose first version was issued in 1994. 

Since its entry into the WTO in 2001, China has continued to promote the reform of foreign trade liberalisation and facilitation.

The Law, as amended, consists of 64 articles, organised into 11 chapters: General Provisions, Articles 1-7; Foreign Trade Dealers, Articles 8-12; Import and Export of Goods and Technologies, Articles 13-22; International Trade in Services, Articles 23-27; Protection of Trade-Related Aspects of  Intellectual Property Rights, Articles 28-30; Foreign Trade Order, Articles 31-35; Foreign Trade Investigation, Articles 36-38; Foreign Trade Remedies, Articles 39- 49; Promotion of Foreign Trade, Articles 50-58; Legal Responsibility, Articles 59-65; Supplementary provisions, Articles 66-69.

Compared to the previous text of the Law, the most notable change is the repeal of Article 9: « A foreign trade dealer who intends to engage in the import and export of goods or technologies shall register with the department for foreign trade under the State Council or the body it entrusts with the registration […].», however, unless otherwise prescribed by laws, administrative regulations and by the same department. The specific measures for registration shall be laid down by the above authority, and where a foreign trade dealer fails to register as required, the Customs authority shall not be able to handle the clearance of incoming and outgoing goods.

The purpose of the Law is clarified by Article 1: « This Law is enacted with a view to opening wider to the outside world, developing foreign trade, maintaining foreign trade order, protecting the legitimate rights and interests of foreign trade dealers and promoting the sound development of the socialist market economy » and Article 5: « The People’s Republic of China, on the principle of equality and mutual benefit, promotes and develops trade relations with other countries and regions, concludes or accedes to such regional economic and trade agreements as tariff alliances agreement and free trade zone agreement, and joins regional economic organisations.»

Concerning the protection of one’s own interests, Article 7 is explicit:« In the event that any country or region adopts prohibitive, restrictive or other similar measures that are discriminatory in nature against the People’s Republic of China in trade, the People’s Republic of China may, in light of the actual conditions, take countermeasures against the country or region accordingly.»

Despite the general line of openness set by Article 13 of the Law («The State permits free import and export of goods and technologies, except where otherwise provided for in laws and administrative regulations »), numerous restrictions are set out in Articles 15-22.

Concerning intellectual property, the line of maximum protection now taken by China is confirmed, under Article 28: «The State protects trade-related intellectual property rights in accordance with the laws and administrative regulations concerning intellectual property rights.»

The same focus on protecting an open market policy is in Article 31: « In foreign trade activities, monopolistic behaviour in violation of the provisions of the laws and administrative regulations against monopoly is not allowed», and the relevant remedies are set out in Chapter VIII of the Law, “Foreign Trade Remedies” (对外贸易救济), Articles 39-49.

Particularly noteworthy is Chapter X, “Legal Responsibility” (法律责任), in which a variety of penalties are provided in cases of violation of the Law.

As a result of the current amendment, it can be noted as follows:

1. the scope of foreign trade dealers is being expanded and legal entities, other organisations and individuals can become foreign trade dealers;

2. the acquisition of the right to carry out foreign trade is simplified.

The Law deserves due attention both in terms of China’s economic and opening-up policy and in terms of how foreign trade dealers should carry out their activities.

Source available at:

http://www.npc.gov.cn/npc/c30834/202212/1fb87c771e914c30918cf750b69cbaa6.shtml