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Updates on China’s New CBEC Regulations

Crossboarder ecommerce trade will be subject to the same regulations and product standard requirements as normal trade in the near future. For food traded through CBEC this means that China’s food safety law and subordinate horizontal standards and vertical product standards must be followed.  

Takehome:

  • Crossboarder ecommerce trade will be subject to the same regulations and product standard requirements as normal trade in the near future. For food traded through CBEC this means that China’s food safety law and subordinate horizontal standards and vertical product standards must be followed.

A series of new policies for CBEC were released starting on April 8, 2016, including a new taxation policy, a positive list system, “Customs Clearance of Entry Commodity” (CCEC) system, etc. (see CL news report on May 31, 2016), which were formally implemented from May 11, 2016 but are subject to a one year grace period which will end on May 11, 2017.

The CBEC sector has developed rapidly over the last three years largely due to loose regulations and beneficial policies. However the implementation of new policies has and will continue to significantly affect CBEC traders. According to Mr. Mao Jiayuan, an expert from China Europe Shanghai Cross Border E-commerce Research Center, “the total trading volume of the whole CBEC sector has recovered 60% to 70% since the implementation of the new policies”. He suggested that enterprises should develop through their own strength, technological innovation and market sensitivity rather than policy support.

Compliance strategy for CBEC traded commodities

As there are still some food categories excluded from the CEBC positive list, notably health foods with specific health functions, Mr. Mao Jiayuan also suggested practical compliance strategies available to traders looking to continue business activities in this sector. He outlined that there was still some wiggle room in the interpretation of the product classification criteria used by customs in different areas of China that could be exploited by savvy CBEC traders.

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