CHINA. In a key development, the Hainan Provincial Government and General Administration of Customs have from today (1 August) implemented traceable source code measures on three categories of duty free goods – fragrances & cosmetics, wines & spirits, and mobile phones. All categories will be covered by year-end.
The interim measures are the first in a range of initiatives designed to counter reselling of duty free items.
They were announced at a press conference in Haikou yesterday. The event was attended by The Moodie Davitt Report’s Hainan partner, Hainan Hinews Media Co (the province’s leading digital publisher). This report draws on the Hainan Hinews coverage, that of the Hainan Free Trade Port Official Account, as well as our own knowledge of the reselling and smuggling issues.
The label includes an anti-counterfeiting code, a Hainan duty free logo and the warning, ‘Duty unpaid, reselling prohibited’.
The source codes will also be applied to items covered by the much-anticipated duty free policy for residents of Hainan island when it is released [an additional, much-anticipated but delayed policy that will allow an extensive range of commodities to be sold tax and duty free to islanders, without them having to depart the province -Ed].
After the implementation of the new source code management system, the purchaser can be identified and investigated, he said. “It is easy for the supervisory authority to find the offenders and impose corresponding penalties in accordance with the law,” Chen said.
“We call on passengers to purchase duty free goods in compliance with relevant regulations and to fully enjoy the dividends of the offshore duty free policy.”
Yao Lei, a Senior Inspector with the Hainan Provincial Department of Commerce, said that the measures are designed to strengthen the offshore duty free system and create a safe and secure shopping environment for consumers.
The moves reflect the desire of the Hainan Provincial Government and the General Administration of Customs to promote the traceability of offshore duty free items.
The system has three main components:
- The introduction of the ‘Interim Measures for the Traceability Management of Duty-Free Commodities in Hainan Free Trade Port’ (‘Interim Measures’);
- The construction of a full-fledged source code traceability system;
- A data management system for duty free product tracing.
Lei said that the legislation has four main purposes.
Firstly, it will strengthen the full-process management of duty free goods, create a better shopping environment, and make consumers more at ease when shopping in Hainan.
Secondly, it will reaffirm the principles of ‘duty free but no reselling’ to ensure that the offshore duty free shopping policy fulfils the original intention of benefiting the people and promoting consumption.
Thirdly, it will lay a solid foundation for the relevant departments to identify the source of goods in the law enforcement process; the duty free retail stakeholders to accept social supervision; and the participation of all sectors of society in the comprehensive management of smuggling. This will assist the healthy development of Hainan’s offshore duty free business, Lei said.
Fourth, the risk prevention and control mechanism has been further improved to prepare for the implementation of the residents duty free policy.
We will bring you further details and analysis of this development soon.
Footnote: Every fortnight The Moodie Davitt Report publishes Hainan Curated, in association with Foreo, a selection of all recent stories from the offshore duty free sector in Hainan province. Click here to subscribe free of charge and to view all back issues.
