Explanation by the Supervising Office of the General Administration of Customs of China (GACC) on the Announcement of Related Matters with the Supervision on Imported and Exported Sample Goods and Advertising Articles

On May 25, 2010, the General Administration of Customs of P. R. China (GACC) released its Announcement of Related Matters with the Supervision on Imported and Exported Sample Goods and Advertising Articles (GACC's Announcement No. 33, 2010) taking effect as of July 1, 2010.

 Background

As a special kind of goods, sample goods and advertising articles are relatively smaller in quantity and value compared with those in ordinary trade and processing trade. Therefore, Customs authorities in most of developed countries have no special management systems on sample goods and advertising articles.

At the early stage of China's reform and opening, owning to limited external economic exchange and external trade operation, State-owned enterprises made up the main force approved by the State to deal with import and export, in which the ordering was done by means of sending/receiving samples and advertising articles.

In 1986, the GACC formulated the Customs Supervision Measures of the People's Republic of China on Imported and Exported Sample Goods and Advertising Articles ([86]ShuHuoZi No. 496) to provide certain amount of tax-exemption for imported and exported samples and advertising articles, which allegedly adapted to the system of State-owned external trade in specific historical period, facilitating then China's external trade and international economic and technological cooperation.

Along with the unceasing development of China's opening and external trade, China has more and more frequent international exchanges and provides the external-trade franchise to more and more business entities, further facilitating enterprises to engage in import and export trade. However, the GACC's Customs Supervision Measures on Sample Goods and Advertising Articles released in 1986 have been unable to keep up with the times, as indicated below:

First, it is required that any entities without external trade franchise should present approval documents by competent authorities in charge for their importation of sample goods and advertising articles, conflicting with relevant requirements for imports and exports declaration currently in effect. In fact, most of entities have no the so-required "competent authorities in charge". Even though such authorities exist, it is very difficult for them to furnish any approval documents for such imports and exports along with the sound development of China's administrative system.

Second, part of the 1986's Customs Supervision Measures on Imported and Exported Samples and Advertising Articles have been included into the adjustments subject to other Customs regulations, such as processing trade with supplied samples, and articles used for analysis and tests and consumed in such processes.

Third, along with the economic growth, the tax-exemption amount of CNY 400 has been low in its role of adjusting tariffs on sample goods and advertising articles, and been inconsistent with the tariff threshold of CNY 50 stipulated in China's Tariff Regulations, thus unfavorable for the uniform enforcement of law. In addition, lawbreakers have the chance to import other goods and articles in the name of sample goods and advertising articles so as to evade taxes payable, thus impacting the orderly import and export.

In short, in the view of both Customs control and entities' real demands, the 1986's Customs Supervision Measures on Sample Goods and Advertising Articles should go through revisions since they have accomplished their historic mission so far.

On May 25, 2010, the General Administration of Customs of P. R. China (GACC) released its Announcement of Related Matters with the ...