Meaning
Official administrative procedures governed by the Ministry of Commerce require domestic companies to register all contracts involving the import of technology or intellectual property. The TIER contract registration process applies to technology import and export regulations, categorizing technology into freely importable, restricted, or prohibited classes. This registration is a prerequisite for the foreign exchange bank to process outbound payments to the licensor.
Legal Foundation
State Council regulations establish the legal framework that governs the transfer of intellectual property into the domestic market. Under the TIER contract registration system, contracts involving restricted technologies must secure a license, whereas freely importable technologies require only a post-facto filing. This filing holds the force of law and cannot be bypassed.
Administrative Flow
The importer submits the technology contract along with the corporate business license to the regional department of commerce. This authority reviews the contract clauses to ensure compliance with technology import rules. Once the bureau approves the submission, it issues the TIER contract registration certificate to the applicant.
Practical Risk
Operating without the mandatory registration prevents the repatriation of license fees and invalidates the contract. Without the completed TIER contract registration, the bank will refuse to remit any payments to the foreign technology owner. The foreign licensor is left with no legal mechanism to enforce payment or protect its technology rights if the registration is neglected.
Consequently, foreign firms must make contract registration a condition precedent for any technology transfer or licensing activity in the region.
