General Administration of the Custom (“GAC”) has entered into “the Memo on the Cooperation of Stimulating the highly-verified company at the custom” with other 40 authorities in the last November and let the highly-verified companies enjoy the green tunnel during import and export and decrease their common and random custom inspection. On 14th March 2017, the similar Memo was also signed by 33 authorities including the National Development and Reform Commission, the People’s Bank and the GAC as “the Memo on the Cooperation of the Punishment on the Dishonest Companies”. According to the new Memo not only the dishonest company itself, the legal representative (principal), the director, the supervisor and other senior management will also be punished. GAC addressed eight typical activities as below that will make the company on the dishonest company list.

The company is involving in the smuggling activities. “Involving in the smuggling activities” means for the purpose of avoiding the custom administration, to transport, carry or post the prohibited goods intentionally. It will cause the crime if the amount is high.

The company breaches the Custom’s regulations frequently in one year or reach the certain amount.

The company delays the payment of tax or the fine payable.

The registration information is false and hard to be contacted. The investor uses the fake information to register the company and makes it as a shell company.

The custom declaration is suspended due to the violation of the laws and regulations.

The company is suspected of smuggling and refuses to cooperate with the Custom investigation.

The company takes the use of the Customs or other companies to seek for its own illegitimate interests.

The company make the fake company credit information.
AC comments: we can find from the above typical illegal activities that one important point that is easily omitted by the company is to provide the out-of-date information. We advise the company to have a self-check at least once every month to ensure they are still on the white list. If, unfortunately, the companies will be regarded as the dishonest company, it will have the more administration by the local government such as it will take more time for import and export or its senior management will be restricted their activities in China.