Home > News > Content

Impact Of New Coronavirus Pneumonia On Export-oriented Foreign Trade Enterprises And The Countermeasures

Mar 08, 2020

Recently, the outbreak of new coronavirus pneumonia (2019-nCoV), which has spread from Wuhan City, Hubei Province to the whole country, has had a very significant impact on the entire society. On January 20, 2020, the National Health and Health Commission issued Announcement No. 1 of 2020, incorporating new coronavirus-infected pneumonia into the Class B infectious diseases specified in the Law of the People's Republic of China on the Prevention and Control of Infectious Diseases, and taking the prevention of Class A infectious diseases Control measures. Incorporate pneumonitis infected by a new type of coronavirus into the management of quarantine infectious diseases as stipulated in the Frontier Health and Quarantine Law of the People's Republic of China. Subsequently, many provinces, municipalities, and autonomous regions across the country have successively initiated first-level responses to public health emergencies, and have adopted various measures to reduce the flow and concentration of personnel. On January 26, 2020, the General Office of the State Council issued the "Notice of Extending the Spring Festival Holiday in 2020", extending the Spring Festival Holiday in 2020 to February 2. The Shanghai Municipal People's Government also issued the “Notice on Delaying the Resumption of Work and the Start of Schools in Enterprises in this City”, requiring various enterprises in the Shanghai area to resume work no earlier than 24:00 on February 9. On January 31, Beijing time, WHO released a new coronavirus-infected pneumonia epidemic as a public health emergency of international concern, and issued temporary recommendations for China, other countries, and the international community, but it is not recommended to implement travel and trade restrictions .

For the majority of export-oriented foreign trade enterprises, the delay in starting operations and blocking traffic in order to prevent the new coronavirus epidemic will have a considerable impact on their original business plan, which may cause them to fail to fully implement the signed International contract for the sale of goods. There may also be cases where the foreign trade company has already delivered the goods, but the consignee refuses to accept the goods because of the serious epidemic situation. In addition, the consignee may also unilaterally terminate the international contract for the sale of goods. This article tries to start from the above several possible disputes and provide some suggestions for China's foreign trade enterprises.

I. You can claim force majeure or change of situation if you can't deliver in time

(1) Epidemic of new coronavirus may constitute force majeure

Force majeure is provided in China's "General Principles of Civil Law" and "Contract Law." Article 180 of the General Principles of the Civil Law stipulates that those who cannot perform civil obligations due to force majeure shall not bear civil liability. If the law provides otherwise, such provisions shall be followed. Force majeure is an objective situation that cannot be foreseen, unavoidable, and insurmountable. Article 117 of the Contract Law stipulates that if the contract cannot be performed due to force majeure, according to the influence of force majeure, the liability shall be partially or wholly exempted, except as otherwise provided by law. In the event of force majeure occurring after the parties' delayed performance, the liability cannot be relieved. The "force majeure" referred to in this law refers to objective conditions that cannot be foreseen, unavoidable, and insurmountable.

Article 79, paragraph 1, of the United Nations Convention on Contracts for the International Sale of Goods stipulates that the party is irresponsible for non-performance, and if he can prove such non-performance, it is due to some obstacle beyond his control, and for such obstacle There is no reason to expect that he could consider or avoid or overcome it or its consequences when entering into a contract. As China, the United States, Germany, France, Japan and other major trading nations are parties to the United Nations Convention on Contracts for the International Sale of Goods, according to the provisions of the Convention, as long as the place of business is a contract for the sale of goods between parties in different countries, it is automatically The provisions of the Convention apply. Therefore, the Convention is one of the most important international treaties in the field of international sales of goods.

According to the above regulations, it is necessary to meet the following conditions to constitute force majeure: it cannot be foreseen; it cannot be avoided and cannot be overcome; it belongs to an objective situation that does not transfer by human will; this objective situation affects the performance of the contract. As far as this epidemic is concerned, first, since the case appeared in December 2019, even medical experts have gone through the stage of understanding from "no person to person" to "limited person to person" to "person to person". Not to mention ordinary people, therefore, it can be said that the outbreak is unforeseeable. Secondly, the outbreak is fierce. From December 30, 2019, the Wuhan Municipal Health and Health Commission's Medical Affairs and Medical Administration issued the "Urgent Notice on Doing a Good Job in the Treatment of Unknown Cause of Pneumonia" to January 31, 2020. The epidemic has been included in public health emergencies of international concern. In just one month, more than 10,000 confirmed cases have been confirmed, and all provinces, autonomous regions, and municipalities nationwide have confirmed cases. With the continuous strengthening of national control, measures such as suspension of production and operations, postponement of resumption of work, and suspension of train flights are the control measures that enterprises must abide by under special circumstances. According to China ’s “Emergency Response Law”, “Infectious Disease Prevention Law”, “Emergency Regulations on Public Health Emergencies”, etc., if an enterprise fails to comply with relevant government regulations and resumes work without authorization, it may be subject to administrative penalties. Suspected criminal offences such as the crime of endangering public safety by dangerous methods, the crime of obstructing public affairs, etc. Therefore, the outbreak and its control measures cannot be avoided and overcome by the enterprise. Thirdly, the epidemic is spreading rapidly, and the relevant restrictive measures adopted by the government are within a reasonable range, which is an objective situation that does not take human will as a transfer. Finally, if the company is unable to deliver according to the contract due to the impact of the epidemic situation, the company can claim to cancel or change the contract on the grounds of force majeure.

During the "SARS" period in 2003, the Supreme People's Court issued the "Notice on Doing Well the Trial and Enforcement of People's Courts According to Law during the Prevention and Control of Infectious Atypical Pneumonia" (Law [2003] No. 72), Article 3 of the notice Provides that disputes arising from administrative measures taken by the government and relevant departments to prevent the SARS epidemic will result in contract failure, or the parties will not be able to perform the contract due to the impact of the SARS epidemic. The provisions of Articles 117 and 118 (that is, the provisions of force majeure) are properly handled. The notice has now expired, but it still has a great significance. On January 30, 2020, the China Council for the Promotion of International Trade issued an announcement that in order to protect the legitimate rights and interests of enterprises and help enterprises reduce losses, the China Council for the Promotion of International Trade may issue force majeure in accordance with the regulations of the "China Council for the Promotion of International Trade" approved by the State Council. Proof, and provides a process of online factual proof of force majeure.

In the current situation that the WHO has announced that the epidemic of new coronavirus infection is a public health emergency of international concern, it is believed that the stoppage measures brought about by this epidemic constitute a major force majeure. Therefore, foreign trade enterprises can claim exemption or partial exemption for contract breaches caused by the epidemic situation, or, in accordance with Chinese law, they can also claim termination of contract due to force majeure's failure to achieve the purpose of the contract. As mentioned above, foreign trade enterprises can apply for a certificate of force majeure to the CCPIT Commercial Certification Center if needed, which is used to negotiate with the foreign company about the cancellation or change of the contract.

Click to add a picture description (up to 60 words)

(2) Epidemic situation of new coronavirus may constitute situation change

Some enterprises may not be able to invoke force majeure to claim the termination of the contract according to their actual situation, but this may constitute a change of situation. According to Article 26 of China ’s "Contract Law Judicial Interpretation II", "After the establishment of the contract, objective circumstances have occurred in which the parties had not foreseen at the time of entering into the contract, a major change caused by force majeure that was not a business risk, and continued to perform the contract. If one of the parties is obviously unfair or unable to achieve the purpose of the contract, and the party requests the people's court to change or terminate the contract, the people's court shall determine whether to change or terminate based on the principle of fairness and the actual situation of the case. "It is worth noting that the change in circumstances requires Make a request to a court or arbitration agency. In addition, in the above-mentioned Supreme Court's "Notice on Doing Well in Related Trials and Enforcement of the People's Courts During the Prevention and Control of Infectious Atypical Pneumonia", it was also mentioned that due to the "SARS" epidemic, the performance of the rights and interests of one party in accordance with the original contract Contract disputes that have a significant impact may be dealt with in accordance with the specific situation and the principle of fairness. The notice was issued earlier than the Second Judicial Interpretation of Contract Law, which can be regarded as an exploration based on the fairness principle of civil law before the Supreme Court has clearly stipulated the change of situation.

After the "Judicial Interpretation of Contract Law 2" was promulgated, in order to prevent the abuse of the principle of changing the situation, the Supreme Court in 2009 explained the "Proper Application of the Contract Law of the People's Republic of China" (2) Work for the Party and the State The General Notice states that the interpretation of certain issues in the "Contract Law of the People's Republic of China" should be strictly applied (2) Article 26. People's courts at all levels must correctly understand and carefully apply Article 26 of the "Judicial Interpretation of Contract Law 2". If it is really necessary to apply in a case according to the special circumstances of the case, it should be examined by the higher people's court. If necessary, it should be submitted to the Supreme People's Court for review. As a result, an attitude of prudently applying the principle of situational change was established. In the "Guiding Opinions on Several Issues in the Trial of Civil and Commercial Contract Dispute Cases under the Current Situation" issued by the Supreme Court in 2009 based on the spread of the global financial crisis, "the principle of situational changes should be carefully applied and the interests of both parties should be adjusted reasonably: the people's courts must be Distinguish situational changes from commercial risks. Commercial risks are inherent risks of engaging in business activities, such as changes in supply and demand that have not yet reached the level of abnormal changes, price fluctuations, etc. Situational changes are risks inherent in non-market systems that the parties could not foresee at the time of contracting. When the people's court judges whether a major objective change is a change of situation, it should pay attention to measuring whether the type of risk is unforeseen in the general concept of society, whether the degree of risk is far beyond the reasonable expectations of normal people, whether the risk can be prevented and controlled, Whether the nature of the transaction falls within the usual 'high-risk, high-return' range and other factors, combined with the specific circumstances of the market, identify situational changes and business risks in individual cases. "

Although the procedure for determining the situation change is more stringent, if the company cannot determine that it constitutes force majeure according to the actual situation, if the requirements for the situation change are met (such as measures such as "close the city" and "road closure", which causes the company's transportation costs to increase significantly), the company also Can actively advocate a change of situation to change the contract and reduce losses.

Second, the buyer refuses to accept the goods due to the epidemic situation

As WHO has listed the new coronavirus-infected pneumonia epidemic as a public health emergency of international concern, according to Article 18 of the International Health Regulations, recommendations WHO can issue to States Parties include: for luggage, cargo, containers , Vehicles, articles and parcels-no specific sanitary measures need to be taken; review of manifests and navigation routes; inspections; inspection of certificates for removal of infection or pollution when leaving or transiting; handling of luggage, cargo, containers, transportation Tools, items, parcels or bones to eliminate sources of infection or contamination (including vectors and hosts); take specific hygiene measures to ensure safe handling and transportation of bones; quarantine or quarantine; if all existing methods of handling or handling are unsuccessful, Then under surveillance, seize and destroy infected or contaminated or suspected luggage, cargo, containers, vehicles, articles or parcels; and not be allowed to leave or enter.

Currently, according to the information on the WHO website, WHO has warned countries of risks on the one hand, and highly appreciated the efficiency and effectiveness of the Chinese government's response, and does not recommend the implementation of travel and trade restrictions. In country-specific recommendations, WHO believes that further international import cases are expected in any country. Therefore, all countries should be prepared for containment, including active surveillance, early detection, quarantine and case management, contact tracing, and preventing the continued spread of 2019-nCoV infection, and share all data with WHO. Countries should pay special attention to reducing human infections, preventing secondary transmission and international spread, and contribute to international responses through multisectoral communication and cooperation, and actively participating in the understanding of virus and disease knowledge, and promoting the development of research.

With regard to measures to limit the movement of people and goods, WHO considers that, overall, there is evidence that restricting the movement of people and goods in public health emergencies may be ineffective and may divert resources from other interventions come out. In addition, restrictions may disrupt required assistance and technical support, may disrupt operations, and may negatively affect the economies of countries affected by emergencies. However, in certain circumstances, measures to limit the movement of people may prove to be temporarily useful, such as in environments with limited responsiveness and capacity, or where high-intensity transmission occurs between vulnerable people. In such cases, countries should perform risk and cost-benefit analyses before imposing such restrictions to assess whether the benefits outweigh the disadvantages. Countries must inform WHO of any travel measures taken as required by the International Health Regulations. Warn States to oppose any stigma or discrimination in accordance with the principles of Article 3 of the International Health Regulations.

In fact, before WHO classified this outbreak as a public health emergency of international concern, many countries have successively adopted immigration control measures. According to information released by the National Migration Administration, 18 countries including North Korea, the Philippines, Malaysia, and Singapore have adopted different control measures for the entry of Chinese citizens. But no country has adopted clear controls on goods imported from China.

According to the above information, at present, no country has clearly issued a statement on special inspection and quarantine of goods imported from China. However, given that WHO has classified the outbreak as a public health emergency of international concern, and WHO can only recommend travel and trade restrictions, whether or not to implement trade restrictions will still depend on the attitude of each country. Any travel measures are sufficient to inform WHO). Therefore, it cannot be ruled out that in the future, there will be statements from countries that restrict the import of goods from China or carry out stricter inspection and quarantine on goods imported from China

In this regard, we recommend that for future international contracts for the sale of goods, it is recommended that the contract should make detailed agreements on inspection, quarantine, disinfection, and decontamination of goods, and clarify the rights and obligations of all parties, including the time of inspection and quarantine , Expenses and other aspects. For a contract that is already in the process of fulfillment, if the foreign trade enterprise has made an agreement in the contract on inspection and quarantine in the event of an epidemic situation, it will be handled in accordance with the agreement. In the absence of an agreement, if the importing country has not stipulated special inspection and quarantine measures for goods exported from China, we believe that the buyer must not refuse the goods or require additional sanitary measures on the ground that the goods come from China. However, if the importing country has provided additional sanitary measures in accordance with Article 43 of the International Health Regulations, the importing country may uniformly take sanitary measures on goods from China or specific areas of China. In the case, the payment is usually made by the exporting company in accordance with the price list established by the importing country. After additional hygiene measures have been taken, the buyer must not refuse. In extreme cases, if the importing country takes measures to prevent entry, we believe that such measures are also force majeure. The buyer can not bear the liability for breach of contract due to failure to receive the goods in a timely manner, but must notify the seller in a timely manner and take measures Avoid expanding losses.