Decree No. 197 of the General Administration of Customs of the P. R. China

Article 14 Any customs brokerage enterprise, under any of the following circumstances, shall be subject to the class C management:

1. Having committed the act of smuggling;

2. Having violated Customs supervision regulations thrice or more within one year, or having been aggregately fined CNY 500,000 or more for violation of Customs supervision regulations within one year;

3. The goods declared under agency have been confiscated by the Customs authorities twice within one year due to infringement on intellectual property rights and have failed to go through rational inspection by the brokerage enterprise;

4. Having taken on the error rate of 10% or above in import/export declarations as a broker during previous year;

5. Having defaulted on taxes and fines payable in the amount of CNY 500,000 or less;

6. Having refused to accept or assist in any investigations made by the Customs authorities where the goods declared under agency are suspected of smuggling or violating Customs supervision regulations;

7. Having been suspended by Customs authorities for customs brokerage business.

Article 15 Any customs brokerage enterprise, under any of the following circumstances, shall be subject to the class D management:

1. Having committed the crime of smuggling;

2. Having committed the act of smuggling twice or more within one year;

3. The goods declared under agency have been confiscated by Customs authorities thrice or more within one year due to the infringement on intellectual property rights and have failed to go through rational inspection by the brokerage enterprise;

4. Having defaulted on taxes and fines payable in the amount of over CNY 500,000.

Article 16 Any customs brokerage enterprise, uncovered by the circumstances mentioned in preceding Articles 14 and 15 and compliant with any of the following conditions, shall be subject to the class B management:

1. Under registration for the first time;

2. No adjustment in management class after the first-time registration;

3. Any enterprise under the class AA neither meets relevant requirements of the class AA nor meets relevant requirements of the class A;

4. Any enterprise under the class A does not meet relevant requirements of the class A.

 

Article 17 Any enterprise, which complies with the Item 1 of Article 6 or the Items 1 and 2 of Article 12 of these Measures, may file an application for the class AA management to the Customs authorities directly under the GACC via the Customs authorities at the place of its registration, and submit the following documents:

1. Application Form for Receiving the Management by the Class AA;

2. Assessment Report on Enterprise Operation & Management;

3. Audit report issued by an accounting firm for previous year.

Article 18 Any enterprise, which complies with Article 7 or Article 13 of these Measures, may file an application for the class A management to the Customs authorities directly under the GACC via the Customs authorities at the place of its registration, and submit the following documents:

1. Application Form for Receiving the Management by the Class A;

2. Assessment Report on Enterprise Operation & Management.

Article 19 After accepting an application for the management by class AA or A filed by any enterprise, if the documents submitted by the enterprise are verified to be complete and in legal forms, the Customs authorities with registration of the enterprise shall make and issue the Decision on Acceptance of the Application for Classified Management of Enterprises on the spot and then report it to the Customs authorities directly under the GACC for examination and approval.

With respect to an application for the class AA management, the Customs authorities directly under the GACC, if holding the opinion of no need to make verification, shall make a disapproval of the application within one month from the date of acceptance; and if holding the opinion of needing to make verification, shall make a written decision on approval or disapproval of the application within two months from the date of drawing a verification conclusion.

With respect to an application for the class A management, the Customs authorities directly under the GACC shall make a written decision on approval or disapproval of the application within three months from the date of acceptance.

Article 20 With respect to an enterprise that applies for the management by the class AA or A, under any of the following circumstances, the Customs authorities directly under the GACC shall return the enterprise’s application to the enterprise and make the written decision of disapproval of the application:

1. Failing to meet the requirements set down in these Measures at the time of application;

2. Failing to meet the requirements set down in these Measures during the period of inspection;

3. Being suspected of smuggling, violating Customs supervision regulations or infringing intellectual property rights during the period of Customs inspection, and being subject to any detection and investigation by Customs authorities.

Article 21 Where an enterprise under the class C management has no commission of the acts listed in Article 8 or 14 of these Measures for one full year from the date of the Customs decision to adjust its management class, the Customs authorities may adjust the class C over the enterprise to the class B based on relevant application from the enterprise.

Where an enterprise under the class D management has no commission of the acts listed in Article 9 or 15 of these Measures for one full year from the date of the Customs decision to adjust its management class, the Customs authorities may adjust the class D over the enterprise to the class C based on relevant application from the enterprise.

Where an enterprise under the class C or D, which applies for adjustment to the class B or C, has engaged in any of the circumstances listed in Article 20 of these Measures, the Customs authorities directly under the GACC may return the enterprise’s application by making the written decision of disapproval of such adjustment.

Article 22 Any enterprise under the class C or D, where applying for adjustment of its management class respectively into the class B or C, shall submit an Application Form for Adjustment of the Management Classes over Enterprises to the Customs authorities directly under the GACC via the Customs authorities at the place of its registration.

If the documents submitted by the enterprise are verified to be complete and in legal forms, the Customs authorities at the place of its registration shall make and issue the Decision on Acceptance of the Application for Classified Management of Enterprises on the spot and then report it to the Customs authorities directly under the GACC for examination and approval.

The Customs authorities directly under the GACC shall make a written decision on approval or disapproval of such adjustment within one month from the date of their acceptance.

Article 23 Where an enterprise shall be downgraded in classification owing to its involvement in any of the following circumstances, relevant Customs authorities shall, within one month from the date of such discovery, make a written decision on the adjustment of the management class over the enterprise in accordance with the provisions in Chapter II of these Measures:

1. Any enterprise under the class AA or A does not meet relevant requirements of the class AA or A respectively;

2. Any enterprise under the class B has been involved in any of the circumstances covered by the class C or D;

3. Any enterprise under the class C has been involved in any of the circumstances covered by the class D.

Article 24 Where the Customs authorities directly under the GACC have made the written decision to approve or disapprove the adjustment of an enterprise's management class, the Customs authorities at the place of the enterprise's registration shall send relevant written decision to the enterprise within ten working days from the date of making such decision.

From the date of the written decision on adjustment by relevant Customs authorities, the Customs authorities may, according to the new management class after adjustment, apply corresponding management measures to the enterprise.

Where any enterprise withdraws its application for classification adjustment prior to any written decision made by relevant Customs authorities on the adjustment, the Customs authorities may terminate the verification process on the classification adjustment by making a written decision to terminate the verification thereof.

Article 25 Where an enterprise under the class AA or A is suspected of smuggling and subject to detection and investigation by the Customs, the Customs authorities shall suspend application of the management measures under the class AA or A to the enterprise; and during the period of such suspension, may apply the management measures under the class B to the enterprise instead.

Article 26 Any enterprise, where having changes only in its name or customs registration number, may continue applying its existing management class; however, under any of the following circumstances, its management class shall be adjusted by the following ways:

1. With respect to split-off of an enterprise, the carried-over enterprise may apply the management class over the original enterprise provided that it inherits main rights and obligations or creditor rights and debtor liabilities covered by the original enterprise before the split-off; and other enterprises established through the split-off may be regarded as the enterprises under initial registration.

2. With respect to dissolution and separation of an enterprise, all of the separated enterprises thereby may be regarded as the enterprises under initial registration.

3. With respect to enterprise consolidation by merger, the merged enterprise may apply the management class over the carried-over enterprise after the merger.

4. With respect to enterprise amalgamation, the amalgamated enterprise may be regarded as an enterprise under initial registration.

 

Article 27 Where a customs brokerage enterprise engages in customs declaration business on behalf of a consignee or consigner of imported/exported goods, the Customs authorities may implement relevant management measures respectively on the brokerage enterprise and the consignee or consigner of imported/exported goods, in light of the management classes respectively applied to them.

Where the management measures to be implemented on enterprises under different classes are in conflict with each other, the Customs authorities may implement these measures by the following ways:

1. Where the customs brokerage enterprise or the consignee or consigner of imported/exported goods are respectively under the class C or D, the Customs authorities may apply to them the management measures under the lower management class;

2. Where the customs brokerage enterprise and the consignee or consigner of imported/exported goods are both under no lower than the class B, the Customs authorities may apply management measures to both of them as per the class covering the customs brokerage enterprise.