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Relevant risks of foreign trade industries during China's NCP epidemic prevention and control

Date:2020-02-09 13:09:59   Source: Grand Union International Trade Co., Ltd.    Click:
Based on the first-hand information and survey reports from several overseas channels, China Credit Insurance tracks the policy changes of the major export target countries in real time to escort the export business of Chinese companies during the special period of the new crown virus epidemic. The information in this issue provides global policies and corresponding international trade practice recommendations.

1.Is the import of goods from China prohibited? (Continually updated)

At present, some countries have imposed import restrictions on certain categories of goods in China. Update tips are as follows:

1. Kyrgyzstan announced a ban on the import of meat, meat products and agricultural products from China. In addition, Kyrgyzstan will close the China-Kyrgyz border from February 1;

2. Tajikistan announced a ban on all kinds of food imports from China;

3. Kazakhstan will close the China-Kazakh border from February 4.

4. Russia's agricultural quarantine department temporarily (until March 1, 2020) restricts the import of insects, fish and seafood. In Russia, both central and local governments have the power to impose restrictions. It is recommended to check the specific goods for restrictions before shipping.

5. Egypt banned the import of onions from China and strengthened control over food imports from Asia.

However, most countries do not restrict imports from China, such as the United States, Canada, Mexico, Brazil, Argentina, and Peru in the Americas, India, Vietnam, and Thailand in Asia, Tanzania, Ghana, Kenya, South Africa, and Benin in Africa , The Netherlands, Italy, Spain, the United Kingdom, France, Greece, Germany and Russia in Europe, the import and export trade between China and China are all underway.

The Philippine government has also strengthened controls on illegal second-hand goods from countries infected with the new coronavirus, and customs has strengthened controls on the import of "toxic" animals or other foods that may carry the virus. Customs authorities in Chittagong, Bangladesh have adopted means of inspecting cargo at ports to prevent the spread of the virus through goods and transport from China. Ghana's Tema health department says it is highly vigilant about a new coronavirus outbreak in the region.
2.Will the force majeure certificate issued by CCPIT be recognized? (Continually updated)

Regarding the proof of force majeure, the update of the situation in each country is as follows:

At present, the Philippines has no relevant cases or regulations concerning the application of the CCPIT's force majeure certificate on the new coronavirus. However, under Philippine law and the courts, force majeure can be used as a reason for exempting the obligor from liability (Philippine Civil Code Article 1174).

 In Latin American countries such as Brazil, Argentina, Mexico, and Peru, the court accepted such evidence as additional evidence, but it could not be the sole evidence. If a force majeure case is encountered, the judge will ask the parties to provide additional evidence to decide whether or not to make a force majeure determination, and will take into account factors such as comprehensive media reports, contract and bill of lading agreements, and WTO, WHO, international and local laws. Once the court accepts such evidence, it is not considered a breach of contract. It is important to note that any issues arising from the impact of a coronavirus outbreak or a government action must be communicated to all of its customers. For cases caused by the coronavirus epidemic, the reasons for applying force majeure are not retroactive, and unless otherwise evidenced, they are only effective when an emergency occurs or when relevant measures begin to be implemented.

 In African countries such as Ghana and Benin, the court accepts a force majeure defense, but applies a strict interpretation of force majeure. In Ghana, additional evidence may be required, and the new coronavirus must be declared a World Health Emergency by the World Health Organization.

There is no such court case in Russia. However, the Russian Chamber of Commerce recommends and encourages everyone to consider force majeure and consider delaying the performance of contractual obligations until the end of force majeure. If the supplier applies for confirmation in court, notarization of the force majeure certificate is required.

 In Germany and France, the court recognizes the certificates issued by CCPIT, but the court has discretion (whether "force majeure" applies to specific cases) and is not subject to the issuance of certificates by foreign institutions. Therefore, Chinese exporters should ensure that they can provide appropriate proof of force majeure under all circumstances, including administrative measures, domestic transportation restrictions, work bans, and quarantine orders. The party that fails to perform the obligation must notify the other party of the relevant obstacle and its impact. If the notification is not received by the other party within a reasonable period of time after the party that did not perform the obligation has known or should have known the obstacle, the other party shall Liability for damages caused by notice.

In the United Kingdom, if force majeure is included in the contract, force majeure can relieve a party of liability. How to prove and apply this clause is based on specific trade contracts. If there is no force majeure clause in the contract, then the common law failure principle can be applied in England and Wales under the law applicable to the contract.

In Asian countries such as Thailand and the five Central Asian countries, the force majeure certificate issued by the China Council for the Promotion of International Trade is generally recognized, but because it needs to be used overseas, it is recommended that export companies apply for certification. It is worth noting that Chinese exporting enterprises should specify that the specific text of the force majeure certificate should indicate that the company has been affected by the new coronavirus epidemic, not just the impact of the extended national holiday. In addition, the contract number and specific obligations should be mentioned in the force majeure certificate.

Export companies can also refer to the following template to add force majeure clauses in future foreign-related business contracts:

  Force Majeure. At any time during the execution of this Agreement, neither Party shall be liable for any failure to perform this Agreement in case of Force Majeure such as war, serious fires, flood, typhoon, earthquake, epidemic or pandemic, etc. Any Party temporarily excused from performance hereunder by any such circumstances shall use its best efforts to avoid, remove or cure such circumstances and shall resume performance with utmost good faith when such circumstances are removed or cured. Any Party claiming circumstances as an excuse for delay in performance shall give prompt notice in writing thereof to the other Party.

3. What changes will the epidemic outbreak bring to overseas market demand? (Continually updated)

Regarding overseas market demand, the update of the situation in each country is as follows:

Bangladesh is highly dependent on China for industrial raw materials and manufactured goods, and its trade and economy could be severely affected by the new coronavirus epidemic that is spreading in China. China mainly supplies fabrics and clothing accessories for Bangladesh's garment manufacturing industry, and the country's main export industries are highly dependent on it. Bank of Bangladesh statistics show that more than 40% of textiles and related goods and nearly 30% of machines are from China. The country's imports from China also include agricultural machinery, mobile phones, electrical and electronic products, fruits, and major spices. In addition, China is currently engaged in various large-scale development projects in Bangladesh. The implementation of these projects and the tourism industry may be affected.

 In the Netherlands, retailers can raise prices because fewer flights to and from China, shipping capacity is also reduced, production capacity is lost, and transportation costs are rising.

Russia's market demand has not changed significantly. However, based on the current situation, Russian companies are increasingly worried about trade between Chinese and Russian companies, because Chinese companies are likely to default on their payments or run into trouble.

 In Vietnam, local market demand for some Chinese agricultural products has begun to slow.



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