Decree No. 195 of the General Administration of Customs of the P. R. China

Article 9 Processing trade enterprises shall, in accordance with the Accounting Law of the People's Republic of China and relevant laws, administrative regulations and rules of the State, establish account books, statements, and other relevant documents that comply with the requirements of Customs supervision to record the information of import, storage, assignment, transfer, sale, processing, use, wearing-off, export, and so on relating to its processing-trade goods, keep accounts and make accounting on the basis of legal and valid certificates.

Any processing-trade enterprise shall, pursuant to relevant provisions, submit to the Customs its annual statements on business operations for the previous year and other relevant documents.

Any processing-trade enterprises shall conduct specialized management of their processing-trade goods by separating such goods from non-processing-trade goods. Processing-trade goods shall be stored at Customs-registered places according to specific goods-storage requirements. Where changing the storage places for processing-trade goods, the enterprises shall acquire beforehand the approval from the Customs authorities.

Article 10 The operating enterprise shall go through the archival filing formalities for the processing-trade goods with the Customs in Charge at the place of the processing enterprise. Where the operating enterprise and the processing enterprise are not within the jurisdiction of the same Customs directly under the GACC, the formalities for the archival filing of goods shall be carried out pursuant to the Customs provisions on the administration of processing trade at different places.

Article 11 Where going through the formalities for the archival filing of processing-trade goods, the operating enterprise shall faithfully report the trade mode, unit consumption, ports of import/export, and the commodity names, HS codes, specifications, models, prices, places of origin, and so on regarding the imported materials/parts and export-oriented finished products.

Article 12 The operating enterprise shall submit the following documents when going through the formalities for archival filing of processing-trade goods:

1) Valid documents of approval issued by the competent authority regarding the conduct of processing trade business;

2) The Certificate on the Production Capacity of Processing Enterprise under Processing Trade issued by the competent authority, if the operating enterprise itself has the capacity of processing;

3) The contract of entrusted processing and the Certificate on the Production Capacity of Processing Enterprise under Processing Trade of a processing enterprise issued by the competent authority, if the operating enterprise entrusts the processing to the processing enterprise;

4) The contract concluded by the operating enterprise with a foreign party;

5) Other certificates and documents that the Customs deem required to submit.

Article 13 If the documents are complete and valid and comply with Articles 10 to 12 herein upon examination by the Customs, the Customs shall put the record on file within 5 workdays from the day of receipt of the application filed by the enterprise, and shall issue the manual of processing trade. Where it is needed to handle the formalities for guarantee, the Customs shall issue the manual of processing trade after the operating enterprise finishes the formalities for guarantee pursuant to the provisions.

Article 14 Under any of the following circumstances, the Customs shall refuse to put the record on file and shall notify the operating enterprise in writing:

1) The imported materials or export products fall within those prohibited by the state from import and export;

2) The products to be processed fall within those prohibited by the state from being processed and produced within China;

3) The imported materials are those for which the Customs is unable to apply the control of bonded goods;

4) The operating enterprise or processing enterprise is one that is not permitted to carry out processing trade as provided for by the state; or5) The operating enterprise applies to the Customs for archival filing without reporting and surrendering the manual of processing trade, upon its expiration, to the Customs within the prescribed time lime.

Article 15 Where the operating enterprise or processing enterprise is under any of the following circumstances, the Customs may put on record for it after the operating enterprise provides guarantee of the same value as that of the payable taxes or provides a letter of indemnity of the bank;

1) Being suspected of smuggling or rule breaking, and the Customs has put the case on file for investigation and the case has not been concluded yet;

2) Being required by the Customs to make rectification as a result of poor management and the rectification has not ended yet. If the operating enterprise or processing enterprise is under any of the following circumstances and the Customs has good reason to believe that there is high risk in the control, the Customs may handle the case by analogy to the preceding paragraph and notify the relevant enterprise in writing:

1) Leasing the factory or equipment;

2) Carrying out the processing trade for the first time;

3) Having applied for or extended the manual of processing trade for twice or more;

4) Handling the archival filing of processing trade in different places.

Article 16 Where the Customs has found out that the documents submitted by the operating enterprise for archival filing of processing-trade goods are not in conformity with the facts, it shall deal with the case pursuant to the following provisions:

1) Where the goods have not been imported, the Customs shall write off the record thereof;

2) Where the goods have been imported, the enterprise may apply for returning them or may continue to perform the contract after providing the Customs with security of the same value as that of the payable taxes or providing a letter of indemnity of the bank.

Article 17 The operating enterprise that has put on record the processing-trade goods may apply to the Customs for the sub-volume or follow-up volume of the manual of processing trade.

Article 18 Where there is any alteration in the record of the processing-trade goods, the operating enterprise shall go through the formalities for alteration within the valid term of the manual of processing trade. Where it is needed to report to the original examining and approving organ for approval, such report shall be made.


Article 19 Where an operating enterprise imports goods under processing trade, it may either import them from foreign counties, areas under special customs supervision, or bonded warehouses, or transfer them into China by way of deep processing and transfer. Where an operating enterprise exports goods under processing trade, it may export the goods to foreign countries, areas under special customs supervision, or bonded warehouses, or transfer them out of China by way of deep processing and transfer.

Article 20 The operating enterprise shall make import and export customs declaration of processing-trade goods by taking with it such relevant documents as the manual of processing trade, and the special customs declaration form for import and export processing-trade goods, etc.

Article 21 The goods imported and exported by operating enterprises by way of processing trade shall be included in the Customs statistics.

Article 22 The operating enterprise, upon approval of the competent authority, may carry out deep processing and transfer, and shall go through the relevant formalities pursuant to the provisions of the Customs on the administration of deep processing and transfer of processing-trade goods.

Article 23 The operating enterprise may carry out outward processing business upon the approval of the Customs, and, in this case, the relevant administrative provisions on outward processing shall apply. When contracting out the processing trade, an operating enterprise may not sell the processing-trade goods to the undertaking enterprise. The undertaking enterprise may not contract the processing of the processing-trade goods to any other enterprise again.

Source: ETCN