The Ministry of Commerce (“MOFCOM”) and General Administration of Customs (“GAC”) jointly issued Announcement [2016] No. 45 in order to abolish the examination and approval procedures for processing trade operations and establish a sound in-process and post-process regulatory mechanism nationwide. The General office of MOFCOM subsequently issued Notice on Follow-up Work for Abolishing Examination and Approval Procedures for Processing Trade Operations  [Shang Ban Mao Han (2016) No. 720] on 26 August to further specify and explain the Certificate of Operating Condition and Production Capacity of Processing Trade Enterprises (“Production Capacity Certificate”). The reform to streamline administrative examination and approval procedures for bonded operations under Customs supervision back in 2013 in Guangdong provided practical experience and a basis for the implementation of this announcement.

In this issue of China Tax Alert, we will clarify and analyse the main contents of the Announcement [2016] No. 45 issued by MOFCOM and GAC, the comparisons with the examination and approval system reform in 2013 and potential effects on relevant enterprises, and summarise key issues and offer suggestions for business enterprises engaging in import and export operations.