Meeting Summary: SIA, USITO, GAC Policy and Legal Affairs Department

BACKGROUND On February 8, 2012, SIA and USITO met with the General Administration of Customs (GAC) Policy and Legal Affairs Department to discuss counterfeiting, customs training and logistics issues. This meeting was held during a visit by SIA to Beijing prior to the 2012 JSTC meeting in Taipei.

ATTENDEES Mr. Wang Yongshui, Counsel (Director-General level), Department of Policy and Legal Affairs, GAC Mr. Li Qunying, Director, Department of Policy and Legal Affairs, GAC Ms. Li Dan, Program Manager, Department of Policy and Legal Affairs, GAC Ian Steff, Devi Keller, Sarah Wang, SIA; Matt Roberts, Weiwei Gu, USITO

MEETING SUMMARY SIA and USITO discussed the following policy issues with GAC.

 Counterfeiting: GAC stated that in 2011 it uncovered over 2200 cases of counterfeit semiconductors, a total of 13% of all counterfeit cases in China. 80% of these semiconductor-related cases were for cell phones. We reiterated that counterfeit semiconductors negatively affect a variety of critical sectors including transportation and public safety, and also negatively affect the proper use and operation of end-use products. We expressed our willingness to work with GAC, a law enforcement agency, to strengthen its ties with foreign customs authorities and industry. GAC responded that this type of inter-customs authority cooperation is extremely powerful; GAC hopes that SIA can assist GAC in understanding the risks, trends, and nature of counterfeit semiconductors. GAC also encourages SIA to contact authorities directly if and when counterfeit semiconductors are discovered.  Training: GAC responded positively to the idea of scheduling regular training for customs officials related to semiconductors. GAC has organized such training not only aimed at identifying counterfeit semiconductors but also to increase public awareness of this issue. GAC also stated that it welcomes guidance from SIA regarding this training program, and hopes that SIA can provide details and plans related to the program to GAC.  Logistic issues: GAC expressed that different departments are responsible for various aspects of logistics management but that two channels in particular could be utilized to discuss the semiconductor industry’s logistics and tax issues: first, local customs authorities, and second, the central GAC office. Within GAC, the Supervision Department ( 监管司 ) handles customs pass-through, transportation and logistics, and registration transfer. The Customs Duty Department ( 关税司 ) handles product tax catalog issues. GAC places great importance on companies’ logistics issues. Regarding product duty catalogs, GAC recommends contacting the Customs Duty Department or MIIT (because as the line ministry for electronics/semiconductors MIIT has some degree of decision-making power in this instance), and GAC will work with MIIT on duty issues related to the electronics industry.