China Customs announced the implementation of Sino-Korea and Sino-Australia Free Trade Agreements

The General Administration of Customs issued Announcement on Matters relating to the Implementation of the Free Trade Agreement between the Government of the People’s Republic of China and the Government of Australia and Announcement on Matters relating to the Implementation of the Free Trade Agreement between the Government of the People’s Republic of China and the Government of the Republic of Korea on 18 December 2015, announcing that the Sino-Korea and Sino-Australia Free Trade Agreements were to be officially implemented on 20 December 2015. In addition, the General Administration of Customs released relating Rules of Origin, the administration measures of the origins of imported and exported goods as well as the special commodity list. The official implementation of the Sino-Korea and Sino-Australia Free Trade Agreements will push forward the liberalization of China’s foreign trade operations, thereby facilitating the development of the manufacturing industry, the logistics industry and the international trade business. Furthermore, the Sino-Korea Free Trade Agreement is also the free trade agreement with the most extensive coverage and the largest trade value that China has signed with foreign countries by far, representing a great significance to the development of related companies.

For more information about the policy update, you may refer to our KPMG China Tax Alert through the following link:

• Preparing for the implementation of the China-South Korea Free Trade Agreement (China-ROK FTA) (PDF 1.42MB)
• China-Australia Free Trade Agreement (ChAFTA) Officially Finalised and Signed (PDF 424KB)

 

Mutual recognition of Authorized Economic Operator between China and European Union

The China Customs and European Union (EU) Customs officially implemented mutual recognition of Authorized Economic Operator (AEO) from 1 November 2015 whereby the EU Customs validates the Advanced Level Certified Companies certified by the China Customs as China Authorized Economic Operator (“AEO Companies”) and China Customs validates Security and Safety (AEOS) companies and Customs simplifications / Security and Safety (AEOF) companies certified by EU Customs as EU AEO companies. The China Customs and EU Customs will grant to the mutually-recognized AEO companies with customs clearance facilitating services such as simplified imported and exported goods inspection and regulatory risk assessment procedures, recognition of safety and security trade partners, prioritized customs clearance and trade continuous operation protection mechanism.

 

China Customs implemented processing trade work order write-off

The General Administration of Customs issued Announcement No.53 on 5 November 2015 regarding issues related to the implementation of processing trade work order write-off. Work order write-off refers to the customs management system whereby the customs accounts and writes off processing trade materials, semi-finished products and finished products by generating an electronic account based on the material code data and work order data extracted from customs declarations and packing lists submitted by processing trade companies as well as work orders in these companies’ Enterprise Resource Planning (ERP) system, taking into account the entry, discharge, consumption, transfer and storage of the material, semi-finished products and finished products categorized under various material codes. This write-off system is likely to minimize the difference between companies’ actual stock and customs’ theoretical stock to help reduce processing trade companies’ compliance risk while requiring them to enhance the internal customs affairs management.

For more information about the policy update, you may refer to our KPMG China Tax Alert through the following link:

• Announcement Released by the General Administration of Customs to Develop Work Order Write-Off of the Processing Trade (PDF 1.19MB)

 

China Customs adjusted Catalogue of Prohibited Commodities in Processing Trade

The General Administration of Customs and the Ministry of Commerce jointly announced on 10 November 2015 that a total of 11 ten-digit HS codes, representing products that are in compliance with the national industrial policy, not in the category of high energy consumption and highly polluting products and are technically advanced, were removed from the Announcement of the Ministry of Commerce and the General Administration of Customs 2014 No. 90 -Catalogue of Prohibited Commodities in Processing Trade. Related companies are recommended to follow up with the announcement and apply for commencing the processing trade of products removed from the Catalogue on the basis that the companies’ environmental and production capabilities comply with standards.

 

Direct Shipment certificate compliance under preferential trade agreements

The General Administration of Customs issued Announcement No. 57 on 7 December 2015, stating that the customs no longer requires the importer to submit the shipment certificate issued by the customs of the place of transit for imported goods transferred from countries/regions other than Hong Kong and Macau, provided that the importer has submitted the required shipment certificates when applying for applicable conventional tariff and preferential tariff. Regarding container transportation under trade agreements such as Economic Cooperation Framework Agreement (ECFA) for which exchange of electronic origin data has been enabled, the importer may also provide shipment certificates that can verify that the container number and seal number of the cargo remain the same during the whole shipment. Companies that are granted with preferential tariff under specific free trade agreement and international freight forwarders may keep a close watch on the development of the new directive and review the current operation process in this regards.

 

Regulation of bonded cargo maintenance service within special customs supervision zone

The General Administration of Customs issued Announcement No. 59 on 11 December 2015 regarding regulatory issues relating to bonded cargo maintenance service within special customs supervision zone. This announcement is relevant to the inspection and maintenance of bonded cargos within the bonded areas and other applicable areas (to be shipped out after maintenance).

For more information about the policy update, you may refer to our KPMG China Tax Alert through the following link:

• Announcement on Regulatory Issues Related to Bonded Repair and Maintenance Business in Special Customs Supervision Zones (PDF 305KB)

 

Announcement on the Implementing Proposal for Tariffs in 2016

The Customs Tariff Commission of the State Council announced that the Implementing Proposal for Tariffs in 2016 were to be implemented from 1 January 2016. Related companies should monitor the impact arising from the change of the new implementing proposal and proactively prepare counter measures.

For more information about the policy update, you may refer to our KPMG China Tax Alert through the following link:

• MOF issued Notice on Tariff Adjustment Plan 2016 (PDF 244KB)

 

The launch of online customs administrative approval platform

The General Administration of Customs issued Announcement No. 70 on 30 December 2015 to announce that the online customs administrative approval platform integrating processing, data entry, inquiry and statistics, were to be launched on 31 December 2015. Applicants can submit applications for the approval of administrative issues and enquire the processing status and result thereof through the platform. After the launch of the platform, the counter processing model will remain, whereby the applicant can still submit hard copy materials to apply for administrative approvals.

 

China Customs simplified requirements on Certificate of Origin under preferential trade arrangements with Greater China regions such as Hong Kong, Macau and Taiwan

In order to facilitate the implementation of preferential trade agreements and simplify requirements on Certificate of Originunder the preferential trade arrangements for which exchange of electronic origin data has been enabled, the General Administration of Customs issued Announcement No. 71, announcing that the customs will no longer requires the importer to submit the original copy of Certificate of Origin for the importation declaration under preferential trade arrangements such as Arrangement for Establishing Closer Economic and Trade Partnership between Mainland China and Hong Kong, Arrangement for Establishing Closer Economic and Trade Partnership between Mainland China and Macau and ECFA. However, the importer should still submit the original copy of the Certificate of Origin in case the customs deems necessary.

Guangzhou Customs issued Announcement No.11 on 16 December on the implementation of the “Internet + etongguan” model in the subordinate Foshan Customs in order to promote the application of an online platform for completing customs declaration procedures. Qingdao Customs issued Announcement No. 6 on 27 December, announcing that registered customs declaration agencies can conduct customs declaration through the E-port system. Shanghai Customs issued Announcement No. 13 on Record Management of Imported Goods Priced by Specific Formula to regulate the record management of imported goods that are priced by specific formula. Tianjin Customs issued Announcement No. 38 on Clearing the Practice of Paperless Customs Clearance to further streamline the process of uploading customs documents, which aimed at improving the paperless customs clearance and reducing the workload of enterprises.

• Announcement Released by the General Administration of Customs to Develop Work Order Write-Off of the Processing Trade
• MOF issued Notice on Tariff Adjustment Plan 2016
• Customs authorities promote foreign trade The Customs Authorities Introduced New Measures to Promote the Steady Growth of Foreign Trade
• Announcement on Regulatory Issues Related to Bonded Repair and Maintenance Business in Special Customs Supervision Zones