Chinese Foreign Trade Law Jiaxiang Hu Professor of Law, School of Law, SJTU.

Chinese Foreign Trade LawChinese Foreign Trade Law

Jiaxiang HuJiaxiang Hu

Professor of Law, School of Law, Professor of Law, School of Law, SJTUSJTU

Chapter Eight Foreign Trade Chapter Eight Foreign Trade Promotion and Legal LiabilitiesPromotion and Legal Liabilities

I. Foreign Trade PromotionI. Foreign Trade Promotion

1. The Role of the Government in the Promotion 1. The Role of the Government in the Promotion of Foreign Tradeof Foreign Trade

(1) Lending(State Policy Banks)(1) Lending(State Policy Banks)

(2) Taxing(Tax Refund)(2) Taxing(Tax Refund)

(3) Training(3) Training

(4) Associations(4) Associations


Article 51 of Article 51 of Foreign Trade LawForeign Trade Law

The state formulates its strategy for foreign The state formulates its strategy for foreign trade development, establishes and improves trade development, establishes and improves its its foreign trade promotion mechanismsforeign trade promotion mechanisms. .



The state establishes and improves its foreign-The state establishes and improves its foreign-trade-oriented financial institutions and trade-oriented financial institutions and establishes establishes foreign trade development fundsforeign trade development funds and and risk fundsrisk funds according to the demand of according to the demand of foreign trade development. foreign trade development.



The state employs such The state employs such foreign trade foreign trade promotion measurespromotion measures as import and export as import and export credit, export credit insurance, export tax credit, export credit insurance, export tax refund, etc. to develop its foreign trade. refund, etc. to develop its foreign trade.



The state establishes a fThe state establishes a foreign trade public oreign trade public information serviceinformation service system so as to provide system so as to provide information services to the foreign trade information services to the foreign trade business operators and the general public. business operators and the general public.



The state takes measures to encourage foreign The state takes measures to encourage foreign trade business operators to trade business operators to explore the explore the international marketinternational market, and employ diversified , and employ diversified means including foreign investment, foreign means including foreign investment, foreign engineering project contracting, and labor engineering project contracting, and labor cooperation, etc. to cooperation, etc. to develop its foreign tradedevelop its foreign trade. .



Foreign trade business operators may lawfully Foreign trade business operators may lawfully establish and join relevant establish and join relevant associations and associations and chambers of commercechambers of commerce……


2. The Relevant Associations for Foreign Trade 2. The Relevant Associations for Foreign Trade

(1)China Council for the Promotion of (1)China Council for the Promotion of International TradeInternational Trade

(2)China Chamber of International Commerce(2)China Chamber of International Commerce

Article 57 of Foreign Trade LawArticle 57 of Foreign Trade Law

The The Chinese international trade promotion Chinese international trade promotion organizationsorganizations carry out foreign contacts carry out foreign contacts


according to their respective constitutions, according to their respective constitutions, hold exhibitions, provide information, hold exhibitions, provide information, consultation and conduct other foreign trade consultation and conduct other foreign trade promotion activities.promotion activities.



The state supports and promotes small and The state supports and promotes small and medium-sized enterprisesmedium-sized enterprises to engage in foreign to engage in foreign trade. trade.


The state supports and promotes The state supports and promotes minority ethnic minority ethnic group regionsgroup regions and and economically underdeveloped economically underdeveloped regionsregions to engage in foreign trade. to engage in foreign trade.


II. The Activities Which the Foreign Trade II. The Activities Which the Foreign Trade Law ForbidsLaw Forbids


No one may, in the business activities of No one may, in the business activities of foreign trade, implement any act of foreign trade, implement any act of monopolizationmonopolization against the relevant anti- against the relevant anti-monopolization laws or administrative monopolization laws or administrative regulations. regulations.


Anyone who carries out any Anyone who carries out any monopolizing actmonopolizing act in in its foreign trade business activities shall be dealt its foreign trade business activities shall be dealt with in accordance with the relevant anti-with in accordance with the relevant anti-monopolization laws and administrative monopolization laws and administrative regulations. If any of the illegal acts as described regulations. If any of the illegal acts as described in the preceding paragraph endangers the foreign in the preceding paragraph endangers the foreign trade order at the same time, the foreign trade trade order at the same time, the foreign trade department of the State Council may take department of the State Council may take necessary measures to eliminate the harm. necessary measures to eliminate the harm.



No one may, in the business activities of No one may, in the business activities of foreign trade, conduct such unfair competition foreign trade, conduct such unfair competition acts as acts as selling commodities at unjustified low selling commodities at unjustified low pricesprices, , colluding bid invitation and tendering colluding bid invitation and tendering for bidfor bid, , disseminating false advertisementsdisseminating false advertisements, or , or offering commercial bribesoffering commercial bribes, etc. , etc.


Anyone who conducts any Anyone who conducts any unfair competition unfair competition actact in its foreign trade business activities shall in its foreign trade business activities shall be dealt with in accordance with the relevant be dealt with in accordance with the relevant laws and administrative regulations regarding laws and administrative regulations regarding counteracting unfair competition.counteracting unfair competition.



No one may, in foreign trade activities, No one may, in foreign trade activities, commitcommit any any of the following:of the following:

1. Forging or altering the marks of origin of the import 1. Forging or altering the marks of origin of the import or export goods; forging, altering or trading the or export goods; forging, altering or trading the certificates of origin, the licenses of import or export, certificates of origin, the licenses of import or export, the certificates of import or export quotas of the the certificates of import or export quotas of the import or export goods, or any other certification import or export goods, or any other certification documents of import or export; documents of import or export;


2. Cheating for export refunds;2. Cheating for export refunds;

3. Smuggling;3. Smuggling;

4. Evading inspections and quarantines as 4. Evading inspections and quarantines as provided for by any law or administrative provided for by any law or administrative regulation; orregulation; or

5. Committing any other violation of law or 5. Committing any other violation of law or administrative regulation.administrative regulation.


Article 35 of Article 35 of Foreign Trade Law Foreign Trade Law

All foreign trade business operators shall abide All foreign trade business operators shall abide by the provisions of the state regarding by the provisions of the state regarding foreign foreign exchange administrationexchange administration in their foreign trade in their foreign trade business activities. business activities.


Article 36 of Article 36 of Foreign Trade Law Foreign Trade Law

Anyone who Anyone who violatesviolates the present Law and the present Law and endangersendangers the foreign trade order shall be the foreign trade order shall be made public by way of announcements made made public by way of announcements made by the foreign trade department of the State by the foreign trade department of the State Council.Council.


III. Legal LiabilitiesIII. Legal Liabilities

1. Administrative Sanctions1. Administrative Sanctions


Anyone who violates Article 11 of the present Anyone who violates Article 11 of the present Law by unlawfully importing or exporting any Law by unlawfully importing or exporting any of the goods subject to state-run trade without of the goods subject to state-run trade without authorization shall be fined up to authorization shall be fined up to 50,000 50,000 yuanyuan… If the circumstances are serious, the … If the circumstances are serious, the


application of the offender for engaging in the application of the offender for engaging in the import or export of the goods subject to state-import or export of the goods subject to state-run trade run trade may be turned down for a period of may be turned down for a period of three yearsthree years as of the day when the decision on as of the day when the decision on administrative sanction takes effect, or the administrative sanction takes effect, or the authorization to engage in the import or export authorization to engage in the import or export of goods subject to state-run trade that has of goods subject to state-run trade that has already been granted may be canceled. already been granted may be canceled.



Anyone who imports or exports any goods that Anyone who imports or exports any goods that are banned from import or export or are banned from import or export or unlawfully imports or exports any goods that unlawfully imports or exports any goods that are restricted from import or export without are restricted from import or export without approval shall be dealt with and punished by approval shall be dealt with and punished by the customs office according to relevant laws the customs office according to relevant laws or administrative regulations. If the offenceor administrative regulations. If the offence


constitutes any crime, it shall be subject to constitutes any crime, it shall be subject to criminal liabilities. Anyone who imports or criminal liabilities. Anyone who imports or exports any technology that is banned from exports any technology that is banned from import or export or unlawfully imports or import or export or unlawfully imports or exports any technology that is restricted from exports any technology that is restricted from import or export shall be ordered by the import or export shall be ordered by the foreign trade department of the State Council foreign trade department of the State Council to correct, and to correct, and be fined two times up to 5 timesbe fined two times up to 5 times


the illegal proceeds and the illegal proceeds the illegal proceeds and the illegal proceeds shall be confiscated. Where there are no illegal shall be confiscated. Where there are no illegal proceeds or the illegal proceeds are not as proceeds or the illegal proceeds are not as much as 10,000 yuan, it shall much as 10,000 yuan, it shall be fined 10,000 be fined 10,000 yuan up to 50,000 yuanyuan up to 50,000 yuan. If the offence . If the offence constitutes any crime, it shall be subject to constitutes any crime, it shall be subject to criminal liabilities. As of the day when the criminal liabilities. As of the day when the decision on administrative sanction asdecision on administrative sanction as


described in the two preceding paragraphs takes described in the two preceding paragraphs takes effect, the foreign trade department of the State effect, the foreign trade department of the State Council or other relevant departments of the State Council or other relevant departments of the State Council may, Council may, within a period of three yearswithin a period of three years, refuse , refuse to accept the offender’s applications for import or to accept the offender’s applications for import or export quotas or licenses, or prohibit the offender export quotas or licenses, or prohibit the offender from engaging in the import or export of relevant from engaging in the import or export of relevant goods or technology goods or technology within a period of one year up within a period of one year up to three yearsto three years. .



Anyone who is engaged in any banned Anyone who is engaged in any banned international service trade or is unlawfully international service trade or is unlawfully engaged in any restricted international service engaged in any restricted international service trade without approval shall be punished trade without approval shall be punished according to relevant laws and administrative according to relevant laws and administrative regulations. Where it is not provided for in any regulations. Where it is not provided for in any law or administrative regulation, it shall belaw or administrative regulation, it shall be


ordered by the foreign trade department of the ordered by the foreign trade department of the State Council to correct and State Council to correct and be fined two times be fined two times up to five timesup to five times the illegal proceeds, and the the illegal proceeds, and the illegal proceeds shall be confiscated. Where illegal proceeds shall be confiscated. Where there are no illegal proceeds or the illegal there are no illegal proceeds or the illegal proceeds are not as much as proceeds are not as much as 10,000 yuan10,000 yuan, it , it shall be fined shall be fined 10,000 yuan10,000 yuan up to up to 50,000 yuan50,000 yuan. . If the offence constitutes any crime, it shall beIf the offence constitutes any crime, it shall be


subject to criminal liabilities. The foreign tradesubject to criminal liabilities. The foreign trade

department of the State Council may prohibit department of the State Council may prohibit the offender from engaging in the business the offender from engaging in the business activities relating to international service trade activities relating to international service trade for a period of one year up to three yearsfor a period of one year up to three years as of as of the day when the offender is given an the day when the offender is given an administrative sanction or criminal penalty.administrative sanction or criminal penalty.


The foreign trade department of the State Council The foreign trade department of the State Council may prohibit the offenders from engaging in the may prohibit the offenders from engaging in the business activities of international service trade business activities of international service trade for a period of one year up to three yearsfor a period of one year up to three years as of as of the day when the decision on administrative the day when the decision on administrative sanction as described in the preceding paragraph sanction as described in the preceding paragraph takes effect or as of the day when the judgment takes effect or as of the day when the judgment of criminal punishment takes effect. of criminal punishment takes effect.



Anyone who violates Article 34 of the present Anyone who violates Article 34 of the present Law shall be penalized according to relevant Law shall be penalized according to relevant laws and administrative regulations. If the laws and administrative regulations. If the offence constitutes any crime, the offender offence constitutes any crime, the offender shall be subject to criminal liabilities. The shall be subject to criminal liabilities. The foreign trade department of the State Council foreign trade department of the State Council may prohibit the offenders from engaging inmay prohibit the offenders from engaging in


relevant foreign trade activities relevant foreign trade activities for a period of for a period of one year up to three yearsone year up to three years as of the day when as of the day when the decision on administrative sanction as the decision on administrative sanction as described in the preceding paragraph takes described in the preceding paragraph takes effect or as of the day when the judgment of effect or as of the day when the judgment of criminal punishment takes effect. criminal punishment takes effect.



In case anyone is banned from engaging in In case anyone is banned from engaging in relevant foreign trade business according to relevant foreign trade business according to Articles 61 through 64 of the present Law, the Articles 61 through 64 of the present Law, the customs shall, during the period of banning, customs shall, during the period of banning, refuse to handle relevant customs inspection refuse to handle relevant customs inspection and release formalities for the relevant import and release formalities for the relevant import or export goods of the foreign trade businessor export goods of the foreign trade business


operator according to the decision of banning operator according to the decision of banning made by the foreign trade department of the made by the foreign trade department of the State Council, and the administrative State Council, and the administrative department of foreign exchange or the department of foreign exchange or the designated foreign exchange banks shall refuse designated foreign exchange banks shall refuse to handle relevant foreign exchange settlement to handle relevant foreign exchange settlement and sale. and sale.


2. Criminal Liabilities2. Criminal Liabilities


Where any functionary of the department that Where any functionary of the department that is responsible for the administration of foreign is responsible for the administration of foreign trade according to the present Law neglects his trade according to the present Law neglects his duties, practices fraud for private benefits or duties, practices fraud for private benefits or abuses his power so that any crime is abuses his power so that any crime is committed, he shall be subject to committed, he shall be subject to criminalcriminal


liabilitiesliabilities. If the offence is not so serious as to . If the offence is not so serious as to constitute a crime, he shall be subject to constitute a crime, he shall be subject to administrative sanctions.administrative sanctions.

Where any functionary of the department that Where any functionary of the department that is responsible for the administration of foreign is responsible for the administration of foreign trade according to the present Law solicits any trade according to the present Law solicits any property from any other person by taking property from any other person by taking advantage of his position, or unlawfullyadvantage of his position, or unlawfully


accepts any property of any other person for accepts any property of any other person for the benefit of that person so that any crime is the benefit of that person so that any crime is constituted, he shall be subject to criminal constituted, he shall be subject to criminal liabilities; if the offence is not so serious as to liabilities; if the offence is not so serious as to constitute a crime, he shall be subject to constitute a crime, he shall be subject to administrative sanctions.administrative sanctions.



Where any of the parties concerned of foreign trade Where any of the parties concerned of foreign trade business activities is dissatisfied with the concrete business activities is dissatisfied with the concrete administrative act made by the department that is administrative act made by the department that is responsible for the administration of foreign trade responsible for the administration of foreign trade according to the present Law, it may apply for according to the present Law, it may apply for administrative reconsideration according to law or administrative reconsideration according to law or lodge an administrative action with the people’s lodge an administrative action with the people’s court.court.


• Question OneQuestion One

• In which ways, does the Chinese government In which ways, does the Chinese government promote foreign trade?promote foreign trade?

• Question TwoQuestion Two

• What is the different between the What is the different between the administrative sanctions and criminal administrative sanctions and criminal punishment?punishment?

Chinese Foreign Trade Law Jiaxiang Hu Professor of Law, School of Law, SJTU.

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Transcript of Chinese Foreign Trade Law Jiaxiang Hu Professor of Law, School of Law, SJTU.