9 Essential Points to Understand China’s Cross-Border Ecommerce (CBEC) Policy

20 January 2021

By Yilia Ye, ChemLinked

At ChemLinked we often get asked questions in relation to China’s CBEC Policies so we felt it might be better to compile the most common ones and answer them here. Below you can find our answers to the most commonly asked questions about CBEC.

Q1. Can companies from any countries export products through CBEC provided they are on the positive list, even if the exporting country has not previously signed a bilateral agreement with China?

A1. It depends on what kinds of food products you want to export.

For pre-packaged food, enterprises from any countries are allowed to export through CBEC as long as the products are included in the “Positive List”. However, this may not apply to fresh food such as meat, aquatic products and fruit. According to the remarks for fresh food products and Note 1 in the Positive list, CBEC-traded fresh food can only be imported through the bonded warehouse model, and they still require inspection and quarantine following what is specified in corresponding inspection and quarantine supervision administrative measures. In this case, the products should be granted market access approval.

Q2. How to check if my product is included in the CBEC Positive list? For example, there are no items designated as “health food”, does that mean health food cannot be imported via CBEC?

A2. The food classification in CBEC Positive list is based on the HS code system, which is different from the common food classification method. When we check if a product is included in the ?Positive List, it’s necessary to confirm its food property. For example, there are various ways in which health foods can be taken, including as a beverage, candy, as even as an alcoholic drink. In the HS code system, there is no item named “health food”, but the product may be classified as another food type based on its product property. In this way, health foods can still be imported through CBEC.

Q3. Note 1 of the CBEC Positive list mentioned that the importation of cosmetics, infant formula, medicine, medical equipment, special foods (including health foods and FSMP) through CBEC should follow the relevant national laws and regulations, does that mean corresponding administrative approvals are also mandatory?

A3. It’s necessary to look at the context in order to answer this question.

According to Note 1, products included in the positive list follow the CBEC policy, and the inspection & quarantine should comply with relevant laws and regulations. For products outside of this scope, the importation of cosmetics, infant formula, medicines, medical equipment, special foods (including health foods, and FSMP) through CBEC should follow the relevant Chinese national laws and regulations.

As revealed by Notification on Optimizing CBEC Retail Import Supervision issued in 2018 [1], CBEC policy only applies to “pilot cities”. This means that if the products mentioned above are imported through pilot cities, then they are exempted from registration/filing or other administrative approvals. However, if enterprises export products to non-pilot cities through a bonded warehouse model, CBEC policy will not be applicable and product registration will still be required.

At present, 86 CBEC pilot cities and the whole of Hainan Island are eligible for CBEC policies.

Q4. What are the differences between CBEC pilot cities and CBEC comprehensive zones?

A4.

Note: some cities are both CBEC pilot cities and comprehensive zones.

Q5. What are the regulatory obligations for CBEC-traded products?

A5. Because food products imported through CBEC are supervised as personal articles, they are exempted from administrative approvals and not required to comply with GB standards [NB. GB = “guobiao”, Chinese national standards]. However, this does not mean that they are free of any supervision in China. CBEC-traded products are still subject to sample inspection for the customs release, and they cannot contain prohibited ingredients, western medicine, toxic substances, contaminants etc.

In September 2020, TMall Global released a?prohibited and restricted ingredients standard for CBEC infant formula, health foods and pet foods, which took effect on September 17, 2020. 

In addition, the official authorities will also conduct risk-monitoring on CBEC products and non-compliant products will be recalled and/or other measures taken. For example, the barium content of a batch of red crayons made from natural soybean was found to be over the allowable limit by a monitoring centre. After verifying with the producer’s technical recalls centre, this batch of product was recalled immediately. As another example, a batch of feeding bottles made in the USA was deemed not to qualify, by analysis of consumer appraisals.

Q6. What are the labelling requirements for products imported via CBEC?

A6. According to the?latest CBEC policy issued in November 2018, Chinese labels are not required to be attached on the package but it e-labels should be indicated on the related e-commerce platforms. At present there isn’t a specific requirement for the Chinese e-labels, but ChemLinked advises it should include those items that are indicated on the original language label. 

In addition, CBEC enterprises are obliged to inform consumers of potential risks and indicate the risk notification on the product introduction page of e-commerce platforms. This includes indications such as: this product conforms to the standard or technical specification of quality, safety, hygiene, environmental protection and labelling in the country of origin, but they may differ from Chinese standard, and consumers should bear the risks.

Q7. What’s the quantity limit for CBEC trading?

A7. There isn’t quantity limit for overseas manufacturers exporting products to China, but there are transaction limits for consumers/customers.

According to?“Notification of Optimizing CBEC Retail Import Tax Policy”?[2]?issued in 2018, the transaction limit of CBEC retail products eligible for preferential tax policy is 5000 RMB per transaction and 26,000 RMB per person per year. If the purchase amount exceeds the annual transaction limits, the transaction will be regulated as general trade, and will incur tariffs, VAT and consumption taxes.

In addition, some products have purchasing limits through CBEC channel, such as rice (not exceed 20 kg per person per year), long-shaped rice (not exceed 20 kg per person per year), white granulated sugar (not exceed 20 kg per person per year), processed corn (not exceed 20 kg per person per year).

Q8. If it is possible to set up "pop-up stores" for CBEC products in China mainland if products are not being sold?

A8. According to the CBEC policy, it’s not allowed to purchase products online for subsequent pickup offline. Therefore, it is permitted to set up a “pop-up store” as long as consumers do not pick up products offline and the products go through the proper CBEC regulations.

Q9. Does China’s advertising law apply to CBEC-traded products?

A9. “Advertising Law” applies to commercial promotion activities in China that merchandisers/service providers use to directly or indirectly introduce the products/service they offer. In principle, CBEC-traded products should comply with relevant promotion requirements if the enterprise advertises in China. 

However, in reality, even if the advertising of CBEC products violates relevant regulations, the local authority has no ability to punish overseas enterprises due to jurisdiction limitations. As such, it is left up to customs authorities or market regulators to impose some sort of restrictions on future importation or market circulation. Authorities are studying this and ChemLinked believes there will be more detailed measures to address this in the future. 

Contact us and we'll be happy to help you with all these matters.

Reference Links 

[1] Notification on Optimizing CBEC Retail Import Supervision 

[2] Notification of Optimizing CBEC Retail Import Tax Policy 

This article was first published by ChemLinked at https://cosmetic.chemlinked.com/expert-article/9-essential-points-to-understand-chinas-cbec-policy

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