With regard to royalties involved in cross-border trade in goods, most enterprises do not determine the exact amount at the time of importation of the goods and are therefore unable to declare the license fee to Customs. After the imported goods or related products are sold, enterprises will calculate the royalties payable in accordance with the sales revenue and the agreed accrual rate, and pay them to the offshore licensor through non-trade means. Due to the lag in the calculation and payment of royalties, it is often easy for enterprises to ignore the obligation to declare taxable royalties or fail to declare them to the Customs in a timely manner. In order to avoid the adverse consequences incurred by enterprises due to non-compliance with the declaration of royalties, with reference to practical experience of our work, in this article we will make a few tips on customs compliance declaration of royalties.

For business owners, the company name embodies goodwill accumulated by the company and its products in the market in previous years, thus belongs to important intangible assets to be maintained with care. However, unfortunately, there are always some unscrupulous companies in the market who, by attaching themselves to the influence and goodwill built up by other companies over years, try to misleading consumers that their products are under “big name” or have a specific connection with a recognized company or brand. The reason for these companies to play such “tricks” is quite obvious: to gain more competitive advantages for their own products. In fact, such unauthorized use of others’ company name, also a kind of the “free-ride”, constitute typical confusion behavior - the most typical and frequent one of the seven unfair competition behaviors listed in the PRC Anti-Unfair Competition Law, which is quite damaging in practice.

The Standing Committee of the National People's Congress (hereinafter as NPCSC) of the Peo-ple's Republic of China (hereinafter as PRC) amended the Civil Procedure Law of the PRC (here-inafter as CPL) on 1 September 2023, which will come into effect on 1 January 2024. The amendment particularly involves special provisions on foreign-related civil procedure, aiming to improve the efficiency of foreign-related civil procedure. This will streamline the process of initiat-ing cross-border litigation in Chinese courts, particularly when filing lawsuits against entities out-side of China. The most notable changes are briefly listed below (original legal text click here):