The Western Union Business Solutions Learning Center is a blog provided for general informational purposes only and should not be construed as legal, financial, tax or accounting advice. Consult your own independent advisors regarding your particular needs and circumstances.
In October 2012, the General Administration of Customs of the People's Republic of China rolled out new measures to boost international trade, making it easier and less expensive for Western companies to import and export goods from the country.
The measure helped to streamline inspection and quarantine procedures for products, created more efficient customs clearances and reduced some costs associated with international shipping. However, exporters doing business in China should be aware of some of the technicalities that could still prove difficult when they export to China.
To get through customs in China, companies need shipment paperwork that details what the product is, its value, where it shipped from, contact information for the import/export agent and final ship-to party information. Plus, the company also needs to include very specific details:
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· Proof of testing and labeling
· Tariff classification
· Tax considerations
"If you are short on any of this information, your shipment won't go through," says Adrian Allen, managing director of Anderen Ltd., a business consulting firm with offices in the U.K. and China.
A business owner has no guarantee that shipped goods will pass easily through China's customs authority. Because the rules and regulations are so difficult to interpret, it's up to the officials in charge to decide whether cargo can be cleared.
Allen once worked with a small European seafood company that sent a container of fresh seafood to Shanghai in the summer. It was the first time they had exported to China and they sent the cargo with no documentation or proof of testing.
"It sat on the dock for weeks until the Chinese officials finally cleared it because it smelled so bad," Allen says. "The guy lost £10,000. He blamed customs, but really it was his fault."
When shipping goods abroad, international business owners may face large service fees, less than favorable exchange rates and slow processing times. To maximize export efforts, business owners can use a trusted online foreign exchange service to send payments abroad. Plus, signing up for email market-rate alerts via an online FX service alerts businesses when their preferred exchange rates are available. Then, the business owner can log into his or her online FX account and secure the latest market rate.
Even small tweaks to language can mean the difference between something that's banned, and something that's not, Allen says. He has a client in the U.K. who produces bone ash, which is used to make ceramics. The China customs authority bans imports of U.K. bone ash.
To get around the rule, they had the product tested in a Chinese laboratory to show that it's distinct from a different material, also called bone ash. They were then able to change the name of the product to Hydroxyapatite, the chemical name for bone ash, which is allowed.
There are also rules for packaging materials, and health and safety certifications of products, and even where stamps must be placed on shipments. "They have a bookcase full of rules and regulations all which have to be interpreted," Allen says.
The easiest way to deal with the customs authority is to work with an import/export agent who is local to the country, and who has a strong network within the customs authority, Allen says. "Having someone on your team who knows the right people is the best way to get things done."
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