GACC Customs Recordation Procedures for Intermediate Component Seizure Actions
Record intermediate component patents and authorized supplier codes with GACC to execute immediate border seizures against unauthorized vendor exports.
Mode Two Interdiction
Meaning
Legal authority under the Foreign Investment Law governs mode two interdiction as a restricted administrative measure applied to cross-border service supply. This mechanism prevents foreign entities from delivering professional services through commercial presence if those services infringe upon domestic industrial policy or national security guidelines. The Ministry of Commerce exerts regulatory control to halt business operations that exceed the scope of authorized investment certificates.
Administrative Procedure
Official scrutiny begins when the State Administration for Market Regulation identifies a deviation from the registered business license. Regulators perform a documentary audit of the revenue stream to determine if the income derives from forbidden service categories. Violations trigger an immediate suspension notice that compels the foreign entity to cease the specific activity within a fixed period.
Compliance requires the submission of a corrective action report to prove the removal of the prohibited service from the operational structure.
Enforcement Mechanism
Local bureaus utilize the Enterprise Credit Information Publicity System to record non-compliance events which creates a public footprint for the violating company. Financial institutions then receive notice to restrict the movement of funds linked to the unauthorized service lines. Statutory penalties include the confiscation of illegal gains and heavy fines calculated against the total turnover of the entity.
Persistent disregard for the interdiction order leads to the revocation of the business license and the forced liquidation of local assets.
Legal Boundary
Jurisdictional limits define the reach of this interdiction by excluding services provided through digital channels that lack a physical nexus within the territory. Regulations apply solely to entities established under the Company Law as foreign invested enterprises. Contractual obligations between the foreign party and domestic clients remain subject to private civil litigation rather than administrative enforcement.
This measure provides a rigid barrier that separates permitted auxiliary functions from prohibited primary service delivery.