China General Administration of Quality Supervision, Inspection and

China
has strict and complex documentation requirements for the meat products
imported into the country (Sohlberg 2017). First of all, the exporters need to
confirm eligibility to export meat products from the country where the products
are manufactured. China banned imports of beef from the US for almost 15 years,
due to a case of mad cow disease that occurred in 2003 (China Briefing
2017).The country of manufacture needs to establish a protocol with the Chinese
government, before exports can take place (China Briefing 2017).

An
import permit is needed from The General Administration of Quality Supervision,
Inspection and Quarantine of the People’s Republic of China (AQSIQ) to import
food products such as meat (China Solutions 2012). In general, the IBL Sdn.
Bhd. must have a valid import license issued by Ministry of Commerce of the
People Republic of China (MOFCOM) to allow entry of meat and meat products
(AQSIQ 2017).The import license is important for IBL Sdn. Bhd. because the
license will need to present to customs for clearance. Any failure at this
point can lead to delays in delivery and payment (EU SME 2013). IBL Sdn. Bhd.
may face additional storage fees in customs or the penalty charges by the
authority (Johnson 2010).

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IBL
Sdn. Bhd. must comply with registration requirements in order to import food
products into China. All importers of food products must be established in
China with a registered business scope that includes the business activities of
(a) importing and (b) distributing food products. IBL Sdn. Bhd. must also be
registered as a foreign trade operator with the Ministry of Commerce (MOFCOM)
or its authorized local offices according to the Foreign Trade Law and the
Measures on Filing and Registration of Foreign Trade Operators in 2004
(Sohlberg 2017). Additionally, the company must register each shipment of meat
products online with the AQSIQ for tracking purposes (Sohlberg 2017). To
register the products for exports at AQSIQ, the HS codes (Harmonized System
codes) of the products is needed to know by the company, which are used to
classify products traded (Johnson 2010). It’s important that IBL Sdn. Bhd. able
to classify the products with the correct HS codes, so that the customs
understand what regulations and certifications that apply to it.

According
to China – Peoples Republic of Meat Quarantine and Inspection, Art. 9, local
entry-exit inspection and quarantine offices (Local CIQ Offices) of AQSIQ shall
take charge of inspection, quarantine and supervision of inbound and outbound
meat products under their respective purview. Unregistered consignees shall not
be allowed to go through entry formalities of Meat Products (Art. 10). This
will in turn make additional costs to IBL Sdn. Bhd.

China’s
import regulatory environment is dynamic. Regulations may vary across types of
food, and may not be consistently applied and enforced across ports, bureaus,
and officers (Amiti& Freund
2010). Given this procedural opaqueness, it is important to work with a trusted
partner (and perhaps multiple). The import of food products has a much higher
chance of success when working with a trusted, experienced customs broker that
can handle import procedures, especially as the customs broker holds the
knowledge of relevant import registrations and licenses, and acts as the
liaison between the company and the relevant government bureaus (Slater 2015).
IBL Sdn. Bhd. is advised to conduct due diligence on potential brokers to
verify that they are duly established and registered and have a history of
successful operations (Dean, Fung & Wang 2011). Export to different
locations within China will require due diligence so as to avoid administrative
failure (Slater 2015). At the outset, the company may want to work with
multiple partners to evaluate the quality of their support.

 

 

 

 

 

 

In
China, AQSIQ will be in charge of national import and export commodity
inspection. AQSIQ is located in the port provinces, autonomous regions and
municipalities as well as import and export of goods, distribution centre and
its affiliates CIQ (China Inspection and Quarantine), responsible for the
management of import and export commodities inspection area (Sohlberg 2017).
Once the meat products arrive to China, customs agent inspects them and reviews
the commercial invoice, packing list, bill of lading, in order to confirm their
declared value (Garruba 2014). The authority of customs then issues a
corresponding duty memo, which must be paid to customs within 15 days.
Therefore, IBL Sdn. Bhd. must ensure the documents needed are well prepared
with detailing description based on the requirements. Otherwise, IBL Sdn. Bhd.
will not be allowed to export into China.

This
document consists of overall information about the transaction such as the
delivery conditions, product description, quantity, unit price and amount.

There
are some risks related with the commercial invoice that could affect the
exportation of IBL Sdn. Bhd., including undervalued commercial invoice. Some
sellers are willing to avoid some formalities or pay less taxes(Holst &
Weiss 2004). As the commercial invoice is checked carefully by the customs
(USDA 2016), the goods may be withheld and the seller may suffer losses. IBL
Sdn. Bhd. is advised to comply with the formalities.

This
document is similar to the commercial invoice but doesn’t include pricing. It
does however include more details about the contents of a shipment, such as
weight and measurement. Customs officials will look for the packing list to
check the cargo(Sohlberg 2017). If IBL Sdn. Bhd. fail to complete a packing
list, a myriad of problems can arise that can delay the exportation process
(Sohlberg 2017). These problems range from delivery failure to payment delay.

The
Bill of Lading is a document issued by a shipping company and is issued as
receipt of the cargo. Depending on the terms of the contract, the Chinese
company will provide the importer with a copy of this document at some stage of
the shipment (Garruba 2014). It will help to ensure the complete shipment of
product, and also served as a proof for any claims in the case of incomplete
shipment or damaged condition (Sohlberg 2017).

 

Based
on China – Peoples Republic of Meat Quarantine and Inspection, Art. 15, the
importers are required to submit documents on products’ quality, quarantine,
origin, and import control, along with a detailed packaging list and a
description of the packaging material before the shipment. These documents are
reviewed only after the shipment reaches China. Therefore, the importers must
ensure that all the documents are complete and authentic to avoid any delay and
storage cost.

After
taking the time to search for a trusted partners and understand import
requirements, the actual process of importing food products for the first time
can be a significant undertaking (EU SME 2013). The time taken to obtain
relevant registrations can be vary. Even the customs and first-time import
review alone generally take up to one month for a first-time shipment, but
unpredictable delays have been known to delay a first-time import for
longer(Holst & Weiss 2004). Hence, IBL Sdn. Bhd. is advised to be prepared
early for importation to avoid any delay in time. It is important to expect a
longer time for the product exportation period in order to establish
progressive steps based on different circumstances (Sohlberg 2017). Besides,
costs, like timeframes, are never firm and depend on many variables. Additional
costs may include label verification costs, the cost of samples for testing,
customs daily storage fees, and importer service fees. A sufficient capital
beforehand would be helpful at this stage.