What You Need to Know About Importing and Exporting Endangered Wildlife and Derivatives

 

I. Case Summary

A company declared a shipment as "wooden handicrafts" for import. Upon inspection, Customs found that the goods turned out to be products made from Dalbergia latifolia Roxb. As this tree species is listed in Annex II of the Convention on International Trade in Endangered Species of Wild Fauna and Flora (CITES), the products in question fall under the category of regulated endangered wildlife products. The company neither submitted the required Permit for Import/Export nor declared the correct product name. Following an official assessment, Customs put the value of the imported goods at RMB 150,000 Yuan. Pursuant to paragraph (3) under Article 15 of the Regulations of the People’s Republic of China on Implementing Customs Administrative Penalty, the company was imposed a fine of RMB 15,000 Yuan and, upon payment, presented the requisite Permit for Import/Export to Customs. After verification, the shipment was cleared for release.

II. Key Analysis

(I) Understanding the Regulatory Framework for the Trade in Wildlife and Derivatives

The import and export of wildlife and their derivatives are subject to a multi-layered regulatory system. As a subset of fauna, flora, and their derivatives, such items must first comply with the People's Republic of China on the Entry and Exit Animal and Plant Quarantine and its implementing regulations, as well as all associated administrative measures. A cornerstone of this system is a mandatory certificate-based management scheme for wildlife and their derivatives, as stipulated by the Administrative Measures for the Import and Export Permits of Wild Fauna and Flora. This scheme requires traders to obtain either a Permit for Import/Export or a Certificate of Species. To implement such scheme, a Permit for Import/Export is mandatory for trading any CITES-restricted endangered wildlife and derivatives listed in the Commodity Catalog of Import and Export Wild Fauna and Flora (hereinafter referred to as the Commodity Catalog), and for exporting any wildlife under national key protection and their derivatives included in the Commodity Catalog. For all other wildlife and derivatives listed in the Commodity Catalog, a Certificate of Species is required. The administration of this catalogue and certificate system is centralized. To be specific, the Commodity Catalog is jointly formulated, adjusted, and published by Office of Endangered Species Management and the General Administration of Customs (GACC). The exclusive authority, to issue both the Permit for Import/Export and the Certificate of Species, resides with the Office of Endangered Species Management, with its regional offices issuing these documents on its behalf.

(II) Navigating Customs Supervision of the Trade in Endangered Wildlife and Derivatives

Customs exercises its supervisory authority primarily under the Regulations of the People's Republic of China on Administration of Import and Export of Endangered Wild Animals and Plants and the Administrative Measures for the Import and Export Permits of Wild Fauna and Flora. Accordingly, any entity importing or exporting endangered wildlife and derivatives, should present a valid Permit for Import/Export to Customs for inspection and clearance declaration, and accept full Customs oversight throughout the process. Such trade is restricted to ports jointly designated by the competent department of wildlife protection under the State Council and the General Administration of Customs, and formally approved by the State Council. Furthermore, every shipment must strictly adhere to all specifications on the Permit for Import/Export, including the permitted species, quantity, port, and validity period. Any failure to comply with these requirements, specifically, a discrepancy between the declared goods and the details recorded in the Permit for Import/Export or the Certificate of Species, will be subject to legal action by Customs.

(III) Legal Consequences for the Illegal Import and Export of Endangered Wildlife and Derivatives

The legal consequences are explicitly stipulated. As provided in Article 14 of the Regulations of the People’s Republic of China on Implementing Customs Administrative Penalty: “Where anyone, in violation of the provisions of the State on import and export administration, imports or exports goods the importation or exportation of which is restricted by the State, and the consignee of import goods or the consigner of export goods cannot submit the licensing documents when making the declaration to the Customs, such import or export goods shall not be released and a fine of not more than 30% of the value of the goods shall be imposed”. Furthermore, pursuant to paragraph (3) under Article 15 of the same Regulations: “failure to declare or to truthfully declare to the Customs the commodity name, tariff headings, quantity, specifications, prices, term of trade, origin, place of dispatch, place of arrival, final destination or other items of the import or export goods which should be so declared shall be punished respectively in accordance with the following provisions and the illegal gains, if any, shall be confiscated: where it has an effect on licensing administration of the State, a fine of not less than 5% but not more than 30% of the value of the goods shall be imposed”.

III. Penalty Application

While declaring the import of products made from Dalbergia latifolia Roxb, the company mis-declared them as “wooden handicrafts” and failed to present the required Permit for Import/Export, albeit without intent to evade Customs supervision. According to Article 86 of the Customs Law of the People's Republic of China and paragraph (3) under Article 15 of the Regulations of the People’s Republic of China on Implementing Customs Administrative Penalty, the company committed a false declaration. As this false declaration had an effect on the state licensing administration, it constituted a violation of Customs regulations. An administrative penalty was therefore imposed.

Given that the value of the goods was below RMB 500,000 Yuan, and the company voluntarily admitted the wrongdoing, accepted liability, and submitted a written application for the expedited procedure, Customs therefore decided to apply the expedited procedure to the case, as permitted by paragraph (6) under Article 103 of the Provisions of the Procedure for Handling Administrative Punishment Cases by the Customs of the People's Republic of China. Under Announcement No. 182 [2023] of the General Administration of Customs (Announcement on Issuing the Discretion Benchmark of the Customs of the People's Republic of China for Administrative Penalties (I)), and in the absence of any mitigating, extenuating, or aggravating circumstances, the case was deemed to involve ordinary circumstances. Accordingly, pursuant to the Annex Discretion Benchmark of the Customs for Cases under Summary Procedures and Expedited Handling of Administrative Penalties (I) attached to the Announcement, a fine equivalent to 10% of the value of the goods was imposed.

(by an author from Huangpu Customs)

 

 

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