On August 31, 2018, the E-Commerce Law was adopted at the fifth meeting of the Standing Committee of the 13th National People’s Congress and was implemented on January 1, 2019. This is the first comprehensive law in China’s e-commerce field, and it includes cross-border e-commerce under the jurisdiction of this law, which has positive significance for promoting the development of cross-border e-commerce and promoting the initiation and improvement of cross-border e-commerce legislation.
The E-Commerce Law defines e-commerce, with a total of 7 chapters and 89 articles, including general principles, e-commerce operators, e-commerce contract dispute resolution, e-commerce promotion, legal liability, and supplementary provisions.
The implementation of the E-Commerce Law fills the gap in online shopping supervision and realizes full coverage, full links, and full chain supervision of cross-border e-commerce business operations; it makes the cross-border e-commerce field truly have laws to rely on, and also means the end of the era of wild growth of cross-border e-commerce.
The law involves provisions on cross-border e-commerce retail imports, including business entities, applicable laws, regulatory measures, tax obligations, trade facilitation, consumer rights, and intellectual property protection.
(I) Business Entity
Article 2 and Article 9 of the E-Commerce Law clearly define the definition and scope of e-commerce and e-commerce operators. The e-commerce operators referred to in the law are mainly natural persons and legal persons who sell goods through information networks, including e-commerce operators, platform operators, and online service sales personnel. Therefore, purchasing agents are subject to the regulation of the law. The E-Commerce Law clearly stipulates that e-commerce operators should strictly handle market registration, provide consumers with various valid shopping vouchers and invoices, and take the initiative to assume their own tax obligations. These legal provisions have a far-reaching impact on purchasing agents.
(II) Applicable Law
Article 26 of the E-Commerce Law clearly stipulates: “E-commerce operators engaged in cross-border e-commerce shall abide by the laws, administrative regulations and relevant national regulations on import and export supervision and management.” Since many regulations on cross-border e-commerce retail imports are formulated by national ministries and commissions, they are neither laws (formulated by the National People’s Congress) nor administrative regulations (formulated by the State Council), but departmental regulations. At this point, with the principle provisions of the superior law, the legal, regulatory and regulatory system of cross-border e-commerce has been basically established.
(III) Regulatory measures
Article 10 and Article 12 of the E-commerce Law stipulate that all individuals, purchasing agents, cross-border e-commerce platforms or other organizations should register and obtain corresponding administrative licenses in accordance with the law, which is conducive to the supervision of regulatory authorities.
In addition, Article 25 clearly stipulates: “If the relevant competent authorities require e-commerce operators to provide relevant e-commerce data and information in accordance with the provisions of laws and administrative regulations, e-commerce operators shall provide them. The relevant competent authorities shall take necessary measures to protect the security of the data and information provided by e-commerce operators, and strictly keep the personal information, privacy and business secrets therein confidential, and shall not disclose, sell or illegally provide them to others.” This means that the original data of the payment orders of import cross-border e-commerce companies will be connected to the system of the General Administration of Customs. As a result, all related transfer payment operations, false payment orders, false logistics orders, under-reporting customs clearance, etc. on e-commerce platforms in the industry will be caught in one fell swoop.
(IV) Tax obligations
The E-commerce Law defines the taxable objects as “goods sold or services provided.” According to Article 11, Article 28, paragraph 2, Article 71, and Article 72, e-commerce platform operators must truthfully report taxes to the tax authorities and pay taxes in accordance with the law. In addition, penalties for illegal e-commerce business operations are also stipulated, which means that as long as the law is violated, a fine of up to 500,000 yuan may be imposed, and legal liability will be pursued for tax evasion.