China: Proposed Rules on Anti-Circumvention Investigations in Trade Remedies Released by MOFCOM
Published 31 July 2025
Xia Yu
On 30 July 2025, to improve its trade remedy investigation system, the Ministry of Commerce of the People’s Republic of China (“MOFCOM”) released the Draft Rules on Anti-Circumvention Investigations in Trade Remedies (“Draft Rules”) for public comments until 29 August 2025. The Draft Rules, comprising 25 articles, primarily address the definition of circumvention, its determination, countermeasures, and related investigative procedures.
The Draft Rules define circumvention as the act of exporting goods to China through modifications to products or trade patterns that undermine the effectiveness of applicable trade remedy measures. Specifically, it includes the following five forms:1. Exporting components or raw materials from a country subject to trade remedy measures to China for assembly or processing into products covered by such measures, where such components or raw materials constitute a major or significant portion of the final product’s value.2. Assembling or processing components or raw materials from a country subject to trade remedy measures in a third country into products covered by such measures and exporting them to China, where such components or raw materials constitute a major or significant portion of the final product’s value.3. Shipping products subject to trade remedy measures through a non-subject country before exporting them to China.4. Producers or exporters from a country subject to trade remedy measures exporting covered products to China through other producers or exporters in the same country that are subject to lower duty rates.5. Exporting products subject to trade remedy measures to China after making minor modifications to their form, appearance, or functionality.
In determining circumvention, MOFCOM primarily considers the factors such as changes in the relevant products or trade patterns before and after the initiation of trade remedy investigations or implementation of trade remedy measures, and whether such changes are commercially reasonable; the relationship between relevant parties, including investigated producers, exporters, importers, or third country exporters; modifications to relevant components or raw materials, and appropriate circumstances of the investigated producers, exporters or their affiliated enterprises, including their investment levels in China or third countries, research and development capabilities, production scale and value-added ratio in processing and assembly operations; and changes to slightly modified products regarding their physical characteristics, chemical properties, consumer demand, product applications, marketing channels, advertising and promotion and so on.
Upon determination of circumvention, MOFCOM may impose countermeasures with retroactive effect, including but not limited to:1. Extending the original trade remedy measures to cover the components or raw materials imported from the subject country.2. Applying the original trade remedy measures to the products imported from third countries.3. Extending the original trade remedy measures to the slightly modified products imported from the subject country.4. Adjusting applicable duty rates by raising the duty rate for exporters utilizing low-rate entities to a level not exceeding the highest duty rate applicable to the subject country.
MOFCOM may initiate anti-circumvention investigations either upon application or ex officio. Upon initiation, MOFCOM may first implement necessary measures such as import registration for relevant products. It may then start to investigate by questionnaires, sampling methods, public hearings, or on-site verification. It is necessary to provide interested parties with opportunities to present views and submit evidence during the investigation. Within 12 months, MOFCOM shall render final rulings based on established facts and best available information and publish them through official announcements. Before the ruling conclusion, MOFCOM shall disclose the essential facts forming the basis of the final determination to the interested parties and provide them a minimum 10-day comment period following the disclosure.
China has emerged as one of the leading initiators of global trade remedy investigations. The Draft Rules aim to safeguard the effectiveness of its trade remedy measures. Under the Draft Rules, the key patterns of circumvention are third-country transshipment, slight product modification, and assembly through affiliated enterprises. Relevant enterprises are recommended to take immediate compliance measures, including conducting preemptive supply chain compliance reviews and performing comprehensive risk assessments of industry developments.
The Draft Rules define circumvention as the act of exporting goods to China through modifications to products or trade patterns that undermine the effectiveness of applicable trade remedy measures. Specifically, it includes the following five forms:1. Exporting components or raw materials from a country subject to trade remedy measures to China for assembly or processing into products covered by such measures, where such components or raw materials constitute a major or significant portion of the final product’s value.2. Assembling or processing components or raw materials from a country subject to trade remedy measures in a third country into products covered by such measures and exporting them to China, where such components or raw materials constitute a major or significant portion of the final product’s value.3. Shipping products subject to trade remedy measures through a non-subject country before exporting them to China.4. Producers or exporters from a country subject to trade remedy measures exporting covered products to China through other producers or exporters in the same country that are subject to lower duty rates.5. Exporting products subject to trade remedy measures to China after making minor modifications to their form, appearance, or functionality.
In determining circumvention, MOFCOM primarily considers the factors such as changes in the relevant products or trade patterns before and after the initiation of trade remedy investigations or implementation of trade remedy measures, and whether such changes are commercially reasonable; the relationship between relevant parties, including investigated producers, exporters, importers, or third country exporters; modifications to relevant components or raw materials, and appropriate circumstances of the investigated producers, exporters or their affiliated enterprises, including their investment levels in China or third countries, research and development capabilities, production scale and value-added ratio in processing and assembly operations; and changes to slightly modified products regarding their physical characteristics, chemical properties, consumer demand, product applications, marketing channels, advertising and promotion and so on.
Upon determination of circumvention, MOFCOM may impose countermeasures with retroactive effect, including but not limited to:1. Extending the original trade remedy measures to cover the components or raw materials imported from the subject country.2. Applying the original trade remedy measures to the products imported from third countries.3. Extending the original trade remedy measures to the slightly modified products imported from the subject country.4. Adjusting applicable duty rates by raising the duty rate for exporters utilizing low-rate entities to a level not exceeding the highest duty rate applicable to the subject country.
MOFCOM may initiate anti-circumvention investigations either upon application or ex officio. Upon initiation, MOFCOM may first implement necessary measures such as import registration for relevant products. It may then start to investigate by questionnaires, sampling methods, public hearings, or on-site verification. It is necessary to provide interested parties with opportunities to present views and submit evidence during the investigation. Within 12 months, MOFCOM shall render final rulings based on established facts and best available information and publish them through official announcements. Before the ruling conclusion, MOFCOM shall disclose the essential facts forming the basis of the final determination to the interested parties and provide them a minimum 10-day comment period following the disclosure.
China has emerged as one of the leading initiators of global trade remedy investigations. The Draft Rules aim to safeguard the effectiveness of its trade remedy measures. Under the Draft Rules, the key patterns of circumvention are third-country transshipment, slight product modification, and assembly through affiliated enterprises. Relevant enterprises are recommended to take immediate compliance measures, including conducting preemptive supply chain compliance reviews and performing comprehensive risk assessments of industry developments.