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Memo gets tough on import-export outfits

By Zhong Nan in Beijing and Ren Xiaojin in Guangzhou | China Daily | Updated: 2017-03-29 07:37

China released its first memo imposing dozens of punitive measures against discredited trading companies to further facilitate and safeguard trading activities, especially with economies linked to the Belt and Road Initiative, senior customs officials said.

The Memorandum of Cooperation on Jointly Introducing Punitive Measures Against Discredited Import and Export Enterprises was released on Tuesday.

It is designed to tackle such illegal activities as smuggling, tariff payments in arrears and shell companies, to better regulate foreign trade, especially trade transactions involving the initiative. It is thought to include some of the toughest such measures ever released.

The memorandum, which took effect on Tuesday, says 33 central government departments-including the Ministry of Public Security, the State Administration for Industry and Commerce and Supreme People's Court-will work together to keep a sharp eye on all trade companies nationwide, setting up a tight credit management and supervision network.

"The public security authority will ban legal representatives of discredited companies from leaving the country, and the rights of discredited companies, such as those related to foreign exchange quotas, financing and credit, will also be severely affected by their loss of credibility," said Li Guo, vice-minister of the General Administration of Customs.

The memo details and quantifies 39 punitive measures based on laws and regulations. Li said measures address market access, industry standards and other key areas such as industry and commerce, taxation, quality inspection, finance and environmental protection.

"This will not only provide more legal assurance for Chinese companies to conduct business with markets along the Belt and Road Initiative, but will also send a signal to the global market that China is deepening its reform in the foreign trade sector," said He Jingtong, a trade professor at Nankai University in Tianjin.

The new document bolsters measures already taken.

By Tuesday, Chinese courts had blocked the purchase of 6.15 million airline tickets and 2.2 million train tickets by people with negative credit records, the National Development and Reform Commission said. Some 71,000 people have been kept from taking senior jobs or becoming legal representatives of companies.

Authorities have denied 814 requests to leave the country, 1,469 companies were unable to obtain land and 1,192 companies were not allowed to issue bonds. Financial institutions have tightened 1,624 accounts' credit limits or refused credit services.

Meng Yang, director-general of GAC's department of customs control and inspection, said the agency is also encouraging exports to countries and regions with which China has mutual recognition as an authorized economic operator through the World Customs Organization.

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