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The Latest News of China IP (2017S03)

Part I：New Trends of Food Safety: ............................................ 2

1. Imported Foods Including Some Well-Known Foods Have Serious Problem of

Excessive Additives ................................................................................................... 2

2. “Supervision and Management Measures on the Safety of Import and Export Food”

Will Come Out ............................................................................................................ 5

3. Compulsory Certificates for All Imported Food Cause the Foreign Food Enterprises

to Complain A Lot ....................................................................................................... 7

Part II：Introduction on the Latest Food Safety Cases: ........... 9

4. CFDA for the First Time Made Administrative Penalties of Off-limits Industry for the

Person Responsible for the Issues ............................................................................ 9

5. An Eventful Year of Nestle .................................................................................... 11

6. CFDA Reminds the Consumers to Notice the Food Safety of Moon Cake ........... 12

7. The Court Punished the Online Vendor to Compensate Tenfold for Food

Violations…. ............................................................................................................. 14

8. “RED BULL” Follows “RED POT”, It Is A War Without Smoke .............................. 16

9.“Daigou”Also Has Forbidden Zone, “Daigou”Contact Lenses in Wechat Moments

Was Charged With Criminal Offence ....................................................................... 17

Copyright© 2017 Shanghai HFG Law Firm All Rights Reserved

 

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Part I：New Trends of Food Safety:

1. Imported Foods Including Some Well-Known Foods

Have Serious Problem of Excessive Additives

In September 2017, the State

Administration of Quality Supervision,

Inspection and Quarantine (hereinafter

referred to as "AQSIQ") announced that a

total of 233 batches of imported food from

34 countries or regions were tested as

unqualified by the inspection and

quarantine institutions, among which 67

batches were tested out the use of

additives beyond the scope. Beverages,

pastry biscuits and crackers and sugar

food have more serious problems in these

67 batches, including some of well-known

international brands, such as GODIVA,

Nissin, Nestle, etc.

China has strict requirements for the

use of food additives. The imported foods

shall be deemed as "substandard" if the

food additives beyond the range and

quantity are tested out. The substandard

products found this time include Nissin

Udon noodles of doufu or curry flavor,

which have used nutrition enhancers

Vitamin B1, B2 out of scope, America

Nestle chocolate powder, which have used

the food additives like copper gluconate

out of scope, and Godiva truffle

chocolates, which have used potassium

sorbate out of scope, etc. AQSIQ said that

these 233 batches of substandard food

have been returned or destroyed by the

ports according to law, and did not flow

into the domestic market.

Information of Food & Cosmetics

Prohibited to Access in July 2017(Partial

List)

  

                                                                                                                                                                                3    

 

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【HFG’s comments】The edible food with excessive food additives have great harms to

human body especially for the vulnerable groups such as kids and elderly, that is why

we make strict requirements for the amount of additives added in food. In the food

tested as substandard this time, sugar, pastry biscuits and crackers and beverage

products account for a large proportion, the main consumer groups of which are kids.

So once such food flow into market, we can predict that serious problem shall appear.

China's standards for food additives are different with those of foreign countries,

that is why the problem of excessive additives in imported food is the frequenter of

 

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media reports. All these “substandard” imported food are made based on the

production standards of its country of origin, so problem of excessive food additives

appears after entering China. It is understood that China's standards for food additives

in 2020 are expected to be geared to international standards. The "Guiding Opinions on

Promoting the Healthy Development of the Food Industry" points out that the relevant

departments will actively promote China’s standards for food additives and other

standards to be geared to international standards, which is undoubtedly good news for

many imported food enterprises.

2. “Supervision and Management Measures on the Safety of

Import and Export Food” Will Come Out

The AQSIQ on September 13, 2017

issued “Supervision and Management

Measures on the Safety of Import and

Export Food (Draft)" (hereinafter referred

to as "Measures") in WTO and sought for

opinions, which based on "Food Safety

Law of the People's Republic of China ".

The revised draft contains six chapters,

fifty-seven articles.

The "Measures" for the first time

makes clear that import and export food

production operators include: Overseas

exporters or agents and production

enterprises which export food to China,

importers which import food to China,

production enterprises of exported food

and exporters.

In view of food safety issues, the

entry-exit inspection and quarantine

departments at various regions and

relevant support departments are added

into the inspection and supervision

departments based on the FDA and AIC,

which shall conduct inspection, quarantine,

supervision and management for the

import and export food under the guidance

of the AQSIQ by the way of conformity

assessment.

 

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The "Measures" also regulates that

imported food of the import and export

enterprises should comply with our laws

and regulations and national food safety

standards. Importing food which has no

national food safety standards to comply

with shall be in compliance with the

relevant standards temporarily applied

decided by the health administrative

department of the State Council. New food

raw materials or the food made of new

food raw materials should be through the

safety inspection of health administrative

departments under State Council before

import.

The "Measures" at the same time

stresses that the overseas food production

enterprises which export food to China

should get the register approval of AQSIQ.

The product catalog related to those

enterprises needed to get register

approval is made and adjusted by the

AQSIQ, the product catalog and the list of

enterprises approved to register shall be

published.

【HFG’s comments】In recent years, with the economic globalization and the growing

international trade, food safety issues are frequent in some countries and regions,

which also often affect our country, such as the famous KFC Sudan Red event. Food

safety issues are big problems concerning the people’s livelihood, so which are always

touching the sensitive nerves of the masses. Although the existing laws and

regulations are strict, it is still lacking in operational level, so from the practical level to

further restrict the import and export food safety issues has become a top priority, so

this“Supervision and Management Measures on the Safety of Import and Export Food

(draft)” comes into being.

This "Measures" and the "Food Safety Law of the People's Republic of China" are

combined to form an effective food health legal system. At present, China's food quality

and safety situation is not satisfactory, while the quality and safety accidents of the

imported food are frequent. The "Measures" for the gray area of the quality and safety

of the import and export food in China makes a detailed provision to prevent import and

export food safety accidents in the practical level.

 

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3. Compulsory Certificates for All Imported Food Cause the

Foreign Food Enterprises to Complain A Lot

In April 2016, the AQSIQ sent a notice

to the embassies of the EU member states,

requiring the use of unified official

certificates for all food exported to China

except for specific certification

requirements. AQSIQ has clearly defined

the certificate, that is, "the official

certification documents issued by the

competent authorities or their authorized /

designated agencies at exporting

countries / regions to prove that the

corresponding batches of food exported to

China have been manufactured,

processed, stored, transported and

exported and fit for human consumption

under the effective supervision of the

competent authorities at the export

countries / regions, in addition, the

certificates should also include such clear

information as production and processing

enterprise information, product information,

trade information. In June 2016, the

AQSIQ issued the "Management

Measures on the Attached Certificates of

Imported Food (exposure draft)". After 18

months of transition, according to

regulations, "Management Measures on

the Attached Certificates of Imported

Food" (hereinafter referred to as

"Measures") will take effect on October 1,

2017. But all walks of life have different

comments for the implementation of the

"Measures".

The AQSIQ proposes in the exposure

draft of the “Measures” that the purpose of

the “Measures” is to ensure the quality

safety of the imported food and realize the

effective convergence of imported food

supervision and government regulation of

the countries and regions which export

food to China. According to the "White

Paper of China’s Quality Safety of

Imported Food in 2016" issued by the

AQSIQ in July 2017, a total of 46.62 billion

US dollars of imported food were

inspected and tested in 2016 in China, of

 

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which the food imported from the EU

ranked first in terms of the value of trade.

However, products imported from 82

countries / regions were inspected as

unqualified, the main unqualified reasons

of which are excessive food additives and

the microbial pollution and so on.

For the implementation of the new

"Measures", the German ambassador to

China, Michael Clauss said that (These

requirements) may significantly reduce the

import volume of food, which seem to

protect Chinese producers rather than

defend food safety". The EU Chamber of

Commerce also believes that other

countries in the world often require only

official certificates of meat, dairy and

perishable food and it is not necessary for

the AQSIQ to require relevant official

certificates for low-risk food. “It is a big

problem from the symbolic point of view,

because it gives a sign that since the

access conditions of the food industry can

worsen, so do the other industries," said

HE Mochi, president of the European

Union Chamber of Commerce. Finally, by

studying the views of the parties, the

AQSIQ decides to provide a two-year

transition period from October 1, 2017 to

September 30, 2019.

【HFG’s comments】With the improvement of living standards of our residents, the

demand for imported food and other commodities has increased rapidly. In the past five

years, the average annual growth rate of the trade volume of China’s imported food is

2.6%. Part of the imported products have become an important source of supply for our

market, for example, imported meat in 2016 accounts for 5.1% of China's domestic meat

supply. With the continuous influx of imported food, the safety problems for imported

food are frequently appearing, such as the imported "zombie meat", oatmeal

manufactured from the nuclear pollution area and snacks with excessive additives. The

AQSIQ’s concerns for the imported food safety are reasonable. Food safety is no small

matter.

At present, all walks of life concern on the implementation of the Measures. Some

people concerned believe that Chinese investors in Europe enjoy a relaxed market

entry policy, but the European investors in China cannot enjoy the same treatment,

which is not conducive to the equality and mutual benefit of the investment trade of

China and the EU. The EU Chamber of Commerce also believes that the implementation

of the new "Measures" will hinder free trade.

The introduction and implementation of each new provision generally requires a

process of adaptation, and it is normal for different opinions. From the notice issued by

the AQSIQ to extend the transition period can see the firm determination of the relevant

departments for the protection of imported food safety, but also the relevant

 

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departments actively adopt the different opinions from all walks of life and give the

relevant countries / regions a certain time to adapt to our country new rules. The

implementation of the new "Measures" is only a matter of time.

Part II：Introduction on the Latest Food Safety Cases

4. The CFDA for the First Time Made Administrative Penalties

of Off-limits Industry for the Person Responsible for the

Issues

Recently, according to the complaint,

the FDA in Beijing Tongzhou District,

conducted the inspection and test for the

"premature" food of Beijing Wanquanju

Food Industry and Trade Co., Ltd. located

at Beijing Tongzhou District (that is, food

production date marked later than the

actual production date) and filed the case

on the illegal act of marking false

production date on food.

The law enforcement officers found

that the production date marked on some

food was false date after inspecting the

enterprise's production records, sales

records and outbound delivery orders.

During the law enforcement inspection,

the inspectors also found the inventory of

finished food in the factory's warehouse.

The value of the above food is about RMB

9000, of which the Beijing Wanquanju

Food Company has got the illegal income

of more than RMB 2,000 through

confirmation.

The FDA in Beijing Tongzhou District

made the final punishment decision that

the Beijing Wanquanju food company

because of marking the false production

date, was revoked the food production

license, at the same time, the company's

legal representative is also be severely

punished “off-limits industry within 5

years”.

The law enforcement officers said that

the enterprise that has been punished has

seriously violated the relevant regulations

of “forbid to produce or trade food, food

 

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additives labeled with fake production date

or shelf life or produce or trade food and

food additives that have passed the shelf

life” stipulated in the "Food Safety Law".

Thus, the FDA in Beijing Tongzhou District

in accordance with the relevant provisions

made the decision to confiscate the illegal

income, confiscate and destroy the food

manufactured and operated illegally, and

impose a fine; While taking into account

the seriousness of the act, the FDA made

the punishment decision to revoke the

national industrial products production

license of the enterprise involved.

According to the provisions of the law, the

legal representative and the persons who

are directly in charge of the enterprise that

has been revoked the license within 5

years from the date of the decision of the

punishment shall not apply for food

production and operation license, or shall

be engaged in the food production and

management work and serve as the food

production and operation enterprise food

safety management staff.

【HFG’s comments】The newly revised “Food Safety Law” in 2015, is known as the

"most ever stringent” food safety law, which makes the rule for the first time that the

administrative department has the right to impose the administrative penalty of

"revoking the production licenses" according to the seriousness of the offenses of the

parties. Moreover, the penalty is not based solely on the amount involved in

malfeasance and the quantity of the goods of the penalized party.

In this case, the enterprise has in a long term in a variety of products marked

non-real production date illegally, which is a serious illegal act of label fraud and

belongs to subjective intentional illegal act, with a vile nature, serious enough, so the

infringer in this case was punished to "revoke the production licenses". Throughout the

2015 “Food Safety Law”, it focuses on the regulation for the production areas, that is,

from the source to manage the food hygiene issues, such as the provisions of "it is

prohibited to apply the extreme poisonous pesticides and highly toxic pesticides on

vegetables, fruits, tea and other agricultural crops”. This case is also more typical

punishment case after the promulgation of the new food safety law.

 

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5. An Eventful Year of Nestle

As one of the first multinational food

companies to enter the Chinese market,

since entering China in 1984, Nestle has

now entered China for 30 years. Nestle

has many brands which are familiar with

Chinese consumers, such as Hsu Fu Chi,

Wyeth, Yinlu, etc., which is one of the

most successful multinational companies

in China.

Since the second half of 2017, Nestle

has appeared a spate of scandals:

1. In mid-July 2017, six former employees

of Nestle (China) Co., Ltd. were sentenced

to have constituted the crime of violating

the personal information of citizens by the

Lanzhou Intermediate People's Court for

being suspected of the illegal exploitation

of medical channels and obtaining the

sales resources of the hospital neonatal

milk powder by improper means.

2. On July 18, two kinds of infant formula

food for special medical purpose of

Shanghai Nestle Products Service Co.,

Ltd. were piped off by the CFDA for the

content of selenium is lower than the

express values in the product label;

3. On July 25, the Shanghai Nestle

Products Service Co., Ltd. was filed a

case and investigated by the Pudong MSA

due to the sales of substandard "Alfare"

infant formula food, the relevant batch of

products had been recalled off the shelf;

4. On July 31, the AQSIQ announced that

the imported milk powder of 10.82 tons

from Taiwan shared by the Nestle and its

subordinate brand KLIM were refused

entry for the use of nutritional supplements

vitamin B2, B6, B12 beyond the scope.

For the second and the third event,

the relevant experts expressed that

selenium is essential trace elements in the

human body, so China has strict

requirements for the content of selenium

in the food. The selenium detection values

of the "Alfare" products operated and sold

by the Nestle is less 33.7% and 37.4%

than the express values in the packaging

label. After this incident, Nestle

immediately informed the relevant dealers

and retail stores to stop selling and recall

the relevant batch of products.

 

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In response to the information

published by the AQSIQ on July 31(the

fourth event), Nestle expressed the listed

milk powder was only for the Chinese

market in Taiwan, rather than for the

Chinese mainland market.

【HFG’s comments】Ensuring the food safety has become a complex and intractable

problem in the context of economic globalization. Especially for transnational food

production enterprises which have many products variety, wide range of sales, jumbled

dealers, especially in the transport and distribution links prone to have problems.

Generally food standards vary from region to region. As a result, multinational food

manufacturers usually produce and sell products that meet local food standards in

different regions. However in the real life, it is not uncommon for the food to be sold in

cross-circulation areas and cross-channel sales. HFG recommends that multinational

food production plants can conduct the food quality monitoring by strengthening

logistics management, while strengthening channel management in view of different

sales areas to produce products that meet local food standards, while food production

can use information platform, strengthen cooperation with third-party management

agencies, in order to achieve open and transparent food information, which is also

conducive to internal risk management.

6. CFDA Remind the Consumers to Notice the Food Safety of

Moon Cake

At present, it is just in time for the traditional Chinese Mid-Autumn Festival,

 

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the sales of the traditional food "moon

cake" is closely following the pace of the

development of e-commerce business,

entering into online sales era from offline

sales. Whenever we open the WeChat

(China's most popular social networking

sites), we can see all kinds of advertising

on moon cakes, or called "self-marketing",

or "advertising for others". Most the

advertisings are for the sales of "DIY

moon cake", flaunting "pure handmade ",

"free of additive", "real stuff" and other

selling points. In fact, these "good looking"

moon cakes are likely to not meet health

standards.

It is reported that, according to the

requirements of the CFDA, the relevant

departments were asked to conduct spot

check and test for the food quality on the

shopping malls, supermarkets and other

areas of circulation, but the laws have no

regulations for the home-made food,.

According to the actual situation of the

current spot check, the products are

conducted spot check provided that they

have QS food safety access mark. At

present, many products sold in Wechat

and online shops are hand-made, such

online suppliers even do not get food

production and management qualifications,

which is the act of undocumented

business, for such suppliers the

administrative authorities cannot carry out

spot check. Therefore, the quality of

related products cannot be guaranteed.

The relevant staff in FDA suggests

that consumers have better not to buy

self-made moon cakes through the online

channels such as the Wechat unless you

choose a vendor with formal food

production and operation and operational

qualifications and high credit rating. In

addition, in order to protect you own

legitimate rights and interests, it is

recommended that consumers can require

the vendors to issue valid bills, which will

be easy for future rights protection in case

of quality problems.

【HFG’s comments】Over the past 10 years, there have been three major changes in

the license of food circulation area. The "Food Hygiene License" is the earliest, which

was then abolished by the “2009 Food Safety Law” and replaced by the “Food

Circulation License”. Recently, the "Food Circulation License" was abolished by the

2015 "Management Measures on Food Business license" and replaced by the "Food

Business License".

Many online stores are lazy to understand the new policy and handle the "Food

Business License", coupled with the low threshold of online shop to open and the

non-strict management review, consumers cannot distinguish whether the shop has a

corresponding "Food Business License", resulting in many online shops do not

register in the food hygiene supervision and management departments and industrial

 

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and commercial administrative departments, the government's regulatory measures

cannot be implemented in place.

At present, due to the system constraints, many food inspection and test can only

be handled for the formal units with the "Food Business License", for those who do not

apply for "Food Business License", the regulators can only rely on society complaint to

achieve the purpose of inspection and test. Therefore, in practice, please be careful

when purchasing the self-made moon cakes through e-commerce before the

promulgation of the effective management measures for e-commerce.

7. The Court Punished the Online Vendor to Compensate

Tenfold for Food Violations

Recently, Foshan Shunde People's

Court made the judgment on the lawsuit

filed by one consumer against the online

vendor and its e-commerce platform on

the problematic food purchased online, to

sentence the vendor to return the

purchase price of RMB 1470, and pay ten

times the purchase price a total of RMB

14700 as compensation, but its sales

platform Tmall is non-fault.

In July 2016, the plaintiff Mr. Mo

purchased wild oat tablets valued at RMB

1470 (RMB 490 +RMB 980) from the

Tmall store called “Yelaixiang Health Care

Products Store” opened by the defendant.

After that, Mr. Mo found that the product

ingredients include Mair-cona, but the

product labels and brochures are not

marked with proper edible amount and

unsuitable crowds. As a result, Mr. Mo

filed a lawsuit against the vendor and the

operator of Tmall Zhejiang Tmall Network

Co., Ltd. Mr. Mo believed that according to

the announcement of the Ministry of

Health, there are relevant provisions on

the daily usage amount and unsuitable

crowds of the new resource food

Mair-cona, so which are needed to clearly

be marked in the food labels and

 

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instructions. At the same time, the food

involved also violates the relevant

requirements of "General Rules on the

Nutrition Labeling of Pre-packaged Food".

Tmall is liable for the inspection and

supervision for the goods of the vendors

settled in its platform. One of the reasons

for the sales of the problematic food is that

Tmall has failed to fulfill well the duty of

inspecting and supervising the food.

Mr. Mo pointed out that the vendor

has violated relevant regulations, which

was supported by the court. And as to

whether the goods themselves meet the

food safety standards, the defendant did

not submit evidence, so the defendant

should bear the negative consequences of

failure on burden of proof. The court held

that the Tmall has borne its duty of prior

identity review for the vendor, complied

with the relevant requirements of

"Consumer Protection Law," and promptly

provided the seller's real name, address

and limited contact information, so

defendant’s claim that Tmall should bear

the responsibility was not supported by the

court.

【HFG’s comments】According to the "Food Safety Law of People's Republic of China",

the seller should pay tenfold compensation provided that "it still sells the food even

though it knows that food does not meet the food safety standards", that is, the seller

bears the liability for fault.

The consumer, who asks for ten times of the purchasing price as the compensation

after online shopping should bear the initial burden of proof and try to save the relevant

food, purchase vouchers, and take legal means to safeguard their own interests if

necessary.

According to the legal practice, in the event that the internet trading platform

provider cannot provide the real name, address and effective contact information of the

seller or the service provider, the consumer can also request compensation from the

trading platform; the platform provider shall be jointly and severally liable with the

seller or the service provider provided that knows or should know the seller or the

service provider uses its platform to infringe the lawful rights and interests of the

consumers and fails to take the necessary measures.

In this case, the Tmall on the seller involved has borne the duty of prior review, and

can provide the seller's real name, address and effective contact information, so the

plaintiff's claim for the Tmall to bear the responsibility was not supported by the court.

 

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8. “RED BULL” Follows “RED POT”, It Is A War without

Smoke

Recently, the “Red Pot” packaging

dispute between JDB and Wong Lo Kat

finally came to an end after over five years.

The two sides halved the match from the

view of the final result. On August 16,

2017, the Supreme People's Court made

the final decision that JDB and Wong Lo

Kat to share the rights of red pot

decoration.

Since 2012, JDB and Guangzhou

Pharmaceutical Group on behalf of Wong

Lo Kat have been suing each other, which

all claim the ownership of the "red pot"

decoration. In 2014, the Guangdong

Higher People's Court made the first

instance judgment to sentence the

Guangzhou Pharmaceutical Group to

enjoy the "red pot" packaging and

decoration rights and interests, and the

JDB should not only stop the infringement

immediately, but also pay for Guangzhou

Pharmaceutical Group economic losses of

RMB 150 million and the cost for rights

protection of RMB 260000. Subsequently,

JDB filed an appeal with the Supreme

People's Court, but at the same time in

2015 launched the gold pot packaging. In

a short period of 2 years, after JDB's

tireless efforts, the gold pot products have

occupied a place in the market. After the

advent of JDB gold pot, many industry

insiders believe that this is the best of a

bad bunch for JDB, but the fact was that

JDB was not so depressed, but very

promising.

The “Red Pot” dispute between JDB

and Wong Lo Kat has just come to an

end, the dispute on the "Use rights of

Red Bull trademark" kicks off. Reignwood

Group used the “Red Bull” trademark up

to now after acquiring the authorization

for “Red Bull” trademark 20 years ago

from the Thailand Tiansi Medical and

Healthcare Co., Ltd. (hereinafter referred

to as “Thailand Tiansi”), and made the

“Red Bull” trademark a super product

with annual sales of RMB 20 billion and

in the "dominant" status in the Chinese

functional beverage market for a long

term. However, with the expiration of

trademark licensing, the trademark

disputes between Thailand Tiansi and

& 

 

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Reignwood Group are also escalating.

Thailand Tiansi even pointed out that the

Reignwood Group has constituted

trademark infringement, unfair

competition and other illegal acts.

Thailand Tiansi said that in October 2016

the Red Bull trademark licensing

agreement has expired and was not

renewed. In July 2017, Thailand Tiansi

filed a lawsuit against the relevant

enterprises of Reignwood Group

including packaging manufacturer ORG

Packaging Co., Ltd, etc. Reignwood

issued a statement that "Reignwood

Group has never closed the door to

cooperation." Due to the impact of the

incident, the Chinese Red Bull has

reduced its sales target in 2017 by RMB

2 billion compared to 2016.

【HFG’s comments】Trademark authorization is a legal way to obtain the right to use

the trademark, it is very popular for the middle and small-sized enterprises which have

insufficient fund in venture stage to take advantage of famous brands to enhance their

product level. Trademark licensing, although there are various benefits, by which the

enterprises can get the right to use a well-known brand in a short period of time, has

great risks. Once the trademark owner takes back the authorization, trademark user

shall be in vain for so many years, while there may be more interest disputes.

Such trademark authorization dispute case is not uncommon, as a warning, "Wong

Lo Kat" trademark licensing dispute is a typical case, in the end the parties are

sentenced to share "Wong Lo Kat" trademark. It is no exaggeration to say that the

trademark is one of the most important identifiers in the field of food circulation, which

concerns the lifeblood and sales amount of the enterprises.

9. “Daigou”Also Has Forbidden Zone,

“Daigou”Contact Lenses in Wechat Moments Was

Charged with Criminal Offence

  

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According to the message of the

Nanchang West Lake District People's

Procuratorate, the online vendor SHENG

Moumou who without the approval of the

drug regulatory department sold contact

lenses and cosmetic contact lenses in

Wechat was accused of illegal operation

and hereby initiated a public prosecution

by the Procuratorate.

It is introduced that from 2015 to July

2016, although no Class C Medical Device

Business License was obtained, the

defendant SHENG Moumou purchased

the contact lenses and cosmetic contact

lenses from the "overseas purchasing

supermarket" on Taobao and then through

WeChat, microblog and other social

software to release commodity information

for the purpose of sale, totaling illegal

profit of around RMB 10,000.

It is understood that the cosmetic

contact lenses are medical device

products, direct contacting with the cornea,

which have a higher risk and cannot be

sold until obtain the medical device

business license and the approval of

relevant departments.

The prosecutor gives a kind remind

that "wechat business" must be through

legal channels, learn more about the law

knowledge, and not muddle over laws and

regulations.

Daigou goes wild at recent years and

also more and more people are punished

for Daigou. We can find after the analysis

of such cases that "overseas purchasing"

sellers may be involved in the charges

such as the crime of smuggling ordinary

goods, illegal business crime and the

crime of selling fake drugs.

In principle, the buyer for the purpose

of self-use generally does not involve

criminal offenses. As the Daigou is very

popular, the sudden appearance of

“punishment for Daigou” indicates that the

public lack the legal knowledge of Daigou.

【HFG’s comments】 According to the criminal law of China, either illegal turnover of

more than RMB 50,000, or illegal income of more than RMB 10,000 need to be filed a

case by the public security, and be prosecuted by the procuratorate. In this case, the

person who conducts the “Daigou”has set foot in the "crime" area for lacking of the

knowledge of the law. Therefore, “Daigou” has certain risks, such as illegal business crime,

crime of selling fake drugs, but also faces the supervision problem of whether pay the tax

reasonably, such as the crime of smuggling ordinary goods.

According to customs regulations, the customs for the personal items of entry and

exit takes the "own use, reasonable quantity" as the basic principle in addition to those

products limited or prohibited to be imported by the state. The personal use items valued

at more than RMB 5000, or the goods for the purpose of obtaining profits by reselling need

to pay tariffs. Strictly speaking, if the person who conducts the online“Daigou”deliberately

evades the customs inspection, or passes the customs inspection in the excuse of

self-use to cover up its real purpose of sales, then he shall constitute the act of evading

 

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tariffs, who is also possible to be convicted if the amount is too large (tax evasion of more

than RMB 50,000).

Shanghai HFG Law Firm

September 30, 2017

 

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ABOUT HFG

HFG since found in 2003，as a firm uniquely integrated and co-managed by multi-national

professionals, persists in providing clients with service of the highest standard and quality all

the time. By profound understanding for the commercial requirements of clients from all walks

of life all over the world, we do our best to obtain the largest business interests for clients. At

the moment, HFG consists of three entities: HFG Law Firm, HFG Intellectual Property

Consulting Co. Ltd and HFG Intellectual Property Agency Co. Ltd. and sets up two offices in

Beijing and Shanghai.

HFG collects an abundant and diversified knowledge base and multi-lingual communication

capability through a long-term practical experience, and does all kinds of intellectual property

business for clients in administrative and judicial authorities at various levels at provinces,

municipalities directly under the central government and autonomous regions of the country.

HFG integrates the commercial and corporate law services of IP contentious and

non-contentious practices, providing a one stop solution to companies whose intangible assets

out value the tangibles. Service scope of HFG includes IT communication, petrochemistry,

wine such as grape wine, fashion cosmetics, retail and e-commerce trade, food and

pharmaceuticals standard, the acquirement of certificate and the earnings of patent technology

etc.

Cases completed by HFG are evaluated as the top ten representative criminal cases and top

five classic cases by Ministry of Public Security for several continuous years, in addition, the

top ten best cases claimed by high quality brand protection committee of CAEFI and the

classical lawsuit in that every year by many medium and high courts at many main provinces.

HFG has been awarded as the best IP service provider by many international clients for

several continuous years.

HFG is recommended by Legal 500 as the No.1 in terms of IP business in Shanghai since

2010and by MIP ranked in Chambers and Partners and WRT 1000.

 

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Please feel comfort to contact us if you have any advice or opinions for IP news of food

industry in this season.

Contact information:

Tel：+86 21 5213 5500

Fax：+86 21 5213 0895

Email：lli@hfgip.com; Hfg_china@hfgip.com