Lawyer's interpretation: Chinese freight forwarding company investigated by Australian TGA, exporters may face dual risks at home and abroad

Lawyer's interpretation: Chinese freight forwarding company investigated by Australian TGA, exporters may face dual risks at home and abroad

Recently, the Australian Therapeutic Goods Administration investigated Huawell Trade Export Shipping, a Chinese freight forwarder, which promoted and transported e-cigarettes to Australia on social media, suspected of violating local regulations. In this regard, 2Firsts communicated with Tang Shunliang, a partner of Tianyuan Law Firm and a lawyer with many years of experience in the tobacco field, on industry compliance and legal risk issues.

Recently, 2Firsts noticed that the Australian Therapeutic Goods Administration (TGA) investigated Huawell Trade Export Shipping, a Chinese freight forwarder, which promoted and transported e-cigarettes to Australia on social media, suspected of violating local regulations (A Chinese freight forwarder was suspected of illegally transporting e-cigarettes, and the Australian Therapeutic Goods Administration intervened in the investigation).

In the development of the e-cigarette industry, e-cigarette logistics service providers are not only a key link connecting production with global consumers, but also an important role in ensuring product compliance. It is worth noting that the State Tobacco Monopoly Administration issued a notice on the revision and issuance of the e-cigarette logistics management rules on August 11, in which Article 16 clearly stated that e-cigarette logistics service providers shall not provide services aimed at circumventing domestic and foreign regulatory systems. This regulation emphasizes that e-cigarette companies must comply with the laws and regulations of the target market when conducting international trade to avoid legal risks and economic losses.

In this context, 2Firsts communicated with Tang Shunliang, a partner of Tianyuan Law Firm and a lawyer with many years of experience in the tobacco field, on industry compliance and legal risk issues.

It is understood that current Australian law stipulates that e-cigarette importers must notify TGA whether they meet the standards.

In this regard, Lawyer Tang mentioned that the TGA's investigation into Huawell is still in progress. This regulatory model is worthy of attention. For Chinese e-cigarette exporters, it involves both domestic and foreign risks. Once the e-cigarettes exported to the target market have clear violations and are notified by the local government, the risk of being investigated domestically is very high.

Secondly, illegal operations may cause the products to be seized and destroyed by the local government, causing significant losses to exporters. For example, the Philippine Internal Revenue Bureau recently stipulated that illegal tobacco and e-cigarette products must be destroyed within 20 days (new regulations of the Philippine Internal Revenue Bureau: e-cigarettes and other seized items must be destroyed within 20 days, and non-essential items will be auctioned publicly). Such regulations may result in exporters being unable to recover their payments.

Against the backdrop of strict control of e-cigarettes, the illegal tobacco market in Australia has been in turmoil. 2Firsts found that a corner of the illegal tobacco market in Australia can be seen from social media such as Facebook. In addition to the freight forwarding company Huawell illegally promoting e-cigarette transportation advertisements, there are also e-cigarette dealers who claim on social accounts that they can bypass Australian customs inspections (an e-cigarette dealer boasts about illegal customs bypassing, and Australian border control faces challenges).

In this regard, Lawyer Tang believes that in the face of a complex and changing international market, "compliance" is the key word, and e-cigarette exporters should be fully prepared for compliance. With the recent revision of e-cigarette trading and logistics-related rules becoming clearer and clearer, exporters need to keep up with the updates of e-cigarette trading and logistics rules and have a deep understanding of the compliance requirements of various countries. Only when both exporters and buyers have compliance awareness can the export risk be reduced.

Previously, 2Firsts tried to contact Huawell Trade Export Shipping for more information, but the other party refused to communicate. At the same time, 2Firsts contacted TGA, but no response was received as of the date of publication. As the investigation progresses, the relevant details may be further clarified, and 2Firsts will continue to pay attention to the progress of the incident.