International Trade and Customs Affairs Newsletter, August, 2020

The Duty-Free Shopping Policy for Travelers Leaving Hainan Island Ushered in New Benefits
 

On June 9, 2020, the Ministry of Finance, the General Administration of Customs, and the State Administration of Taxation jointly issued the Announcement on the Duty-free Shopping Policy for Travelers Leaving Hainan (Announcement No. 33, 2020 of the Ministry of Finance, the General Administration of Customs, and the State Administration of Taxation) (hereinafter referred to as “Announcement”). Subsequently, on July 6, the General Administration of Customs issued Announcement No. 79 of 2020, revising the Measures of the Customs of the People’s Republic of China on the Supervision of Duty-Free Shopping on Travelers Leaving Hainan Islands (hereinafter referred to as the “Measures”).
 

The main contents of the Announcement and Measures are as follows:
 

1. The variety of duty-free goods has increased from 38 to 45, with the addition of electronic consumer products such as tablets, mobile phones and video game consoles, as well as alcohol, tea, natural honey and other edible animal products.
 

2. Except for cosmetics (limited to 30 pieces), mobile phones (limited to 4 pieces), and alcohol (not more than 1500 ml in total), there are no restrictions on the number of single duty-free purchases of other commodities.
 

3. The annual duty-free shopping limit for leaving travelers will be increased from 30,000 yuan to 100,000 yuan per person, unlimited times, and the 8,000-yuan tax-free limit for a single product will be abolished.
 

4. Travelers can purchase goods in excess of the duty-free shopping limit, the types of duty-free goods and the quantity limit for each purchase, provided that they pay the import tax according to the regulations.
 

5. Illegal purchasing agents, reselling duty-free goods purchased on Hainan Island in the domestic market, are not allowed to enjoy the duty-free shopping policy within 3 years and the illegal behavior can be included in the relevant credit records in accordance with relevant regulations.
 

6. When travelers purchase duty-free goods, they should take the initiative to provide their valid ID or travel documents, as well as the relevant information about the outlying island transportation required by the customs. If false information is provided, they will not be allowed to enjoy the duty-free shopping policy within the next 3 years and their behavior can be included in the relevant credit records in accordance with relevant regulations.
 

The promulgation of the Announcement and Measures is aimed at further releasing China’s domestic consumption to promote the construction of Hainan Free Trade Port.
 

New Version of Regulations on Supervision and Administration of Cosmetics Released
 

The old version of Regulations Concerning the Hygiene Supervision over Cosmetics was promulgated on November 13, 1989, and it has been implemented for 30 years. On June 29, 2020, the State Council promulgated the Regulations on Supervision and Administration of Cosmetics (Order No. 727 of the State Council of the People’s Republic of China) (hereinafter referred to as “Regulations”), with a total of 80 articles in 6 chapters, which will come into force on January 1, 2021.
 

Compared with the old version, the new version of the Regulations has more detailed and strict regulations on the classification of cosmetics, corporate responsibility, regulatory measures, illegal penalties and so on. The details are as follows:
 

1. Divide cosmetics into special cosmetics (referring to cosmetics used for hair dyeing, perm, freckle whitening, sun protection, anti-hair loss, and cosmetics that claim new effects) and ordinary cosmetics (cosmetics other than special cosmetics), and implement registration and filing management respectively. The concepts of cosmetics registrant and recorder were put forward for the first time.
 

2. Introduce the division of responsibilities for e- commerce platform operators, requiring e- commerce platform operators to register the cosmetics operators on the platform in their real- name and assume management responsibilities for the cosmetics operators on the platform.
 

The cosmetics operators in the platform shall disclose the information of the cosmetics they operate comprehensively, truly, accurately and in a timely manner.
 

3. Strengthen the legal liability for illegal acts, and impose a fine of up to 30 times the value of the goods for serious illegal acts involving quality and safety.
 

Announce No. 31 [2020] of the Ministry of Commerce: Initiation of the Anti- dumping Investigation on Imported Polyphenylene Ether (Polyphenylene Oxide) Originating in the US
 

On August 3, 2020, Ministry of Commerce of the People’s Republic of China (the “MOFCOM”) issued Announcement No. 31 of 2020, making public its decision to initiate the anti-dumping investigation on imported polyphenylene ether (polyphenylene oxide) originating in the US.
 

On June 23, 2020, the MOFCOM received a petition for an anti-dumping investigation submitted by Nantong Xingchen Synthetic Material Co., Ltd on behalf of the domestic Polyphenylene Ether (Polyphenylene Oxide) industry. The petitioner requested the MOFCOM to conduct an anti- dumping investigation into the imported Polyphenylene Ether (Polyphenylene Oxide) originating in the US. Pursuant to the Anti- Dumping Regulations of the PRC, the MOFCOM examined the standing of the petitioner, the relevant information of the subject merchandise in the petition, the information of the domestic like products in Mainland China, the impact of the subject merchandise in the petition on the domestic industry, the relevant situation of the subject country and the like, and then decided to initiate the anti-dumping investigation on imported polyphenylene ether (polyphenylene oxide) from the US since August 3, 2020.
 

The dumping period of this investigation is from January 1, 2019 to December 31, 2019 and the injury period of the investigation is from January 1, 2017 to December 31, 2019.
 

Announcement No.28 [2020] of the Ministry of Commerce: Announcement on Inheriting the Anti-dumping Duty Rate applicable to Solvay Chemicals Korea Co., Ltd in Adipic Acid Case by BASF Performance Polyamides Korea Co., Ltd.
 

On July 23, 2020, the MOFCOM issued Announcement No. 28 of 2020, determining that BASF Performance Polyamides Korea Co., Ltd can inherit the anti-dumping duty rate applicable to Solvay Chemicals Korea Co., Ltd in adipic acid case.
 

On November 1, 2009, the MOFCOM issued Announcement, deciding to impose anti-dumping duty on adipic acid from the US, the EU and Korea. On October 23, 2015, the MOFCOM issued Announcement, deciding to continue the anti- dumping duties on adipic acid from the US, the EU and Korea for another five years.
 

On April 16, 2020, BASF Performance Polyamides Korea Co, Ltd submitted application, requesting to inherit the duty rate applicable to Solvay Chemicals Korea Co., Ltd in adipic acid case. After review, the MOFCOM believes that the name change of BASF Performance Polyamides Korea Co, Ltd complies with relevant laws and regulations and there is no change in terms of operation and management, production capacity, suppliers and customer base after change. Therefore, BASF Performance Polyamides Korea Co, Ltd can inherit the duty rate of 5.9% applicable to Solvay Chemicals Korea Co., Ltd in adipic acid case.
 

Announcement No.25 [2020] of the Ministry of Commerce: Announcement on Preliminary Determination of Anti- dumping Investigation on N-propanol from the US
 

On July 17, 2020, the MOFCOM issued Announcement No. 25 of 2020, making the preliminary determination of the anti-dumping investigation on n-propanol from the US.
 

After investigation, the MOFCOM determined that, n-propanol from the US dumped in China, the domestic n-propanol industry suffered material injury and there is causal link between dumping and injury. Therefore, the MOFCOM decided to take anti-dumping measures in cash deposit. The cash deposit rate for respondents is as follows:
 

Announcement No.24 [2020] of the Ministry of Commerce: Announcement on Inheriting the Anti-dumping Duty Rate applicable to DSM Engineering Plastics B.V. in Nylon 6 Case by DSM Engineering Materials B.V.
 

On July 6, 2020, the MOFCOM issued Announcement No. 24 of 2020, determining that DSM Engineering Materials B.V can inherit the anti- dumping duty rate applicable to DSM Engineering Materials B.V in nylon 6 case.
 

On April 21, 2010, the MOFCOM issued Announcement, deciding to impose anti-dumping duty on nylon 6 from the US, the EU, Russia and Taiwan Region. On April 21, 2016, the MOFCOM issued Announcement, deciding to continue the anti-dumping duties on nylon 6 from the US, the EU, Russia and Taiwan Region for another five years.
 

On May 9, 2020, DSM Engineering Materials B.V. submitted application, requesting to inherit the duty rate applicable to DSM Engineering Plastics B.V in nylon 6 case. After review, the MOFCOM believes that the name change of DSM Engineering Materials B.V. complies with relevant laws and regulations and there is no change in terms of operation and management, production capacity, suppliers and customer base after change. Therefore, DSM Engineering Materials B.V can inherit the duty rate of 8.2% applicable to DSM Engineering Plastics Co., Ltd in nylon 6 case.