Customs Measures Of the P. R. China On Supervision Of Processing-Trade Goods

The General Administration of Customs (GACC) hereby releases the P. R. China's Customs Measures On Supervision Of Processing Trade Goods, which were adopted on February 13, 2014 and shall enter into force from their issue date below, along with a simultaneous repeal of their former edition of February 26, 2004 in GACC Decrees No.113, No.168 and No.195.


China Customs Minister
March 12, 2014



Article 1 These Measures are formulated in accordance with the Customs Law Of the P. R. China and other relevant Chinese laws and regulations.

Article 2 These Measures are applicable to the procedures relating to processing trade such as goods handbook formulation, import-export declarations, goods processing, supervision, verification and cancel.

Article 3 The "processing trade" herein refers to an enterprise operation that involves import of raw materials or parts/components and, after their processing or assembly, re-export of the finished products, including two types: the processing of materials offered by foreign customers and the processing with imported materials.

Article 4 Unless otherwise regulated, where the importing materials are restricted by the state, the processing trade operators may be exempted from submitting import licenses to the customs; where the exporting products are restricted by the state, the operators shall submit export licenses to the customs.

Article 5 Where the importing materials are under bonded supervision, the customs shall, after the export of finished products, conduct verification and cancel as per actual re-exported volume;

Where the importing materials are taxed at the time of their import, the customs shall, after the export of finished products, refund the paid taxes as per actual re-exported volume.

Where the exporting products are subject to export duties, the customs shall levy relevant export duties.

Article 6 The customs shall implement a guarantee system as regulated for the goods involved in processing trade; without customs' approval, such goods shall not be used as collateral.

Article 7 The customs shall supervise the processing trade by means of classifying them.

Article 8 The customs shall have the authority to inspect the processing trade enterprises; the customs inspection shall not hamper enterprises' normal operations.

Article 9 The goods handbook formulation, import-export declarations, verification and cancel processes shall be undertaken with paper documentation and electronic data.

Article 10 Processing trade firms shall maintain account books, statements, reports, and other documents compliant with customs requirements and keep accounts based on valid certificates.
The firms shall keep separate management of processing-trade goods from that of non-processing-trade goods. The processing-trade goods shall be stored in the venues registered with the customs, and their transfer to different storage shall be upon customs approval.

Article 11 The processing-trade operators shall undertake the formulation of goods handbooks with the customs that are in charge of corresponding processing firms.

Article 12 Unless otherwise regulated, the operators shall declare to the customs the trade mode, unit consumption, entry-exit ports, importing materials and exporting products and their HS Codes, models, prices, origins, etc. along with submissions as follow:

(1) Valid processing-trade approvals issued by relevant authorities;
(2) Their own Processing Capacity Certificate issued by relevant authorities;
(3) As regards consigned processing, submit the commission contract and the processors' Processing Capacity Certificate issued by relevant authorities;
(4) The operators' contracts signed with foreign parties;
(5) Other required documents

Article 13 The customs shall finish the handbook formulation within five workdays upon their acceptance of the operators' declaration.
Where a guarantee is required, the customs shall conduct the handbook formulation only after the operators provide the guarantee.

Article 14 Under any of the following circumstances, the customs shall conduct the handbook formulation only after the operators provide security deposit or bank guarantees that are equivalent to tax amount payable:

(1) Being suspected of smuggling, without conclusion of the investigation;
(2) Being within the period of organizational rectification as required by the customs

Article 15 Under any of the following circumstances, the customs may require the operators to provide security deposit or bank guarantees that are equivalent to tax amount payable during the course of the handbook formulation procedure:

(1) Lease of workshops or equipment;
(2) Doing processing-trade business for the first time;
(3) Postponement of the handbooks for twice or more;
(4) Handling non-local processing-trade formalities;
(5) Being suspected of violating regulations, without conclusion of the investigation

Article 16 The processing-trade firms shall not undertake the handbook formulation under any of the following circumstances:

(1) Importing materials or exporting products are banned by the state from import and export;
(2) The processed products are banned by the state on their processing;
(3) Importing materials are not appropriate for bonded supervision;
(4) The operators or processors are banned by the state from processing trade;
(5) The operators fail to declare to the customs their expired processing-trade handbooks within a time limit.

Article 17 The customs shall dispose as follows when the operators declare untrue contents and submit untrue documents:

(1) Where the goods are not imported yet, the customs shall cancel their handbooks;
(2) Where the goods are imported already, the customs shall order the importers to return the goods outbound. The operators may request their offering of security deposit or bank guarantees for them to continue performing their contracts.

Article 18 The operators having finished the handbook formulation may acquire the sub-books or continued books of their handbooks from the customs.

Article 19 Where the formulated handbook contents are changed, the operators shall undertake alteration formalities with the customs within the handbook period of validity.


Article 20 The processing-trade operators may import from abroad, customs supervision zones, and bonded supervision venues or import through transfer for deeper processing.
The processing-trade operators may export abroad, to customs supervision zones and bonded supervision venues, or export through transfer for deeper processing.

Article 21 The processing-trade operators shall undertake import and export declarations by submitting processing-trade handbooks and special declaration documents.

Article 22 The import-export goods under processing trade shall be included into customs statistics.

Article 23 As regards the transfer for deeper processing business, the transferors and transferees shall respectively make declarations to their local customs.
Under any of the following circumstances, the processing-trade operators shall not undertake the transfer for deeper processing:

(1) Incompliant with customs requirements and under organizational rectification;
(2) Processing trade handbooks are expired without examination by customs;
(3) Being suspected of smuggling, without conclusion of the investigation

Article 24 As regards outbound processing business, the processing-trade operators shall undertake registration with the customs within three workdays from the date of outbound transfer.

The operators shall not sell the processing-trade goods to the external contractor; the contractor also shall not further transfer the goods outbound.

Where total processes are to be transferred outbound, the operators shall, upon their registration, provide to the customs corresponding security deposit or bank guarantees equivalent to tax amount payable.

Article 25 The outbound materials or products to process may no longer be returned to the processing-trade operators after they finish relevant formalities with local customs.

Article 26 The processing-trade operators and contractors shall cooperate with customs supervision of goods.

Article 27 The goods under processing trade shall be used for intended purposes.

Upon customs approval, the operators may swap between bonded materials or between bonded and non-bonded materials; but the swapped materials shall belong to one firm and shall be of identical variety, specification, quantity and non-profit making.

As regards the processing of materials offered by foreign customers, the bonded importing materials shall not be swapped.

Article 28 In need of using non-bonded materials, the processing-trade operators shall in advance declare to the customs their usage in terms of proportion, variety, specification, model, and quantity; during customs verification, the customs shall deduct the declared quantity from the total consumption of exporting finished products.

Article 29 Where the imported materials need to be returned to foreign suppliers for replacement, and where unprocessed bonded materials need to be exported, the processing-trade operators may take declarations to local customs at ports.

Any processed, bonded, imported materials shall not be returned for replacement.


Article 30 The processing-trade operators shall re-export within certain time limit the products made from their processing of imported materials and shall declare to the customs for verification within thirty days from the date of their last exports or from the expiring date of their processing-trade handbooks.

Where their foreign-signed contracts terminate in advance, the operators shall declare to the customs for verification within thirty days upon the termination.

Article 31 The operators shall declare to the customs for verification the information of imported materials, exported products, leftover materials, defective products, by-products, and unit consumption by submitting relevant documents.

Article 32 The customs may adopt paper documentation, electronic data, and onsite inspection for the verification.
The customs shall finish the verification-cancel procedure within thirty days upon their acceptance.

Article 33 Where the bonded imported materials or products need to be changed to domestic sale, the customs shall, upon relevant authoritative approvals, levy tax plus tax-deferral interests upon the bonded imported materials, unless otherwise regulated.

Article 34 Where the operators return outbound the imported materials, the customs shall conduct the verification-cancel procedure upon corresponding return certificates.

Article 35 As regards resulting leftover materials, defective products, by-products, and damaged bonded goods, the customs shall conduct the verification-cancel procedure upon corresponding certificates.

Article 36 Where their processing-trade handbooks are lost, the operators shall timely inform the customs of the loss.

Article 37 As regards the processing-trade handbooks that are already canceled after verification, the customs shall issue to the operators the Notice On Conclusion.

Article 38 After the conclusion of the verification-cancel procedure, the customs shall remove any guarantees provided by the operators.

Article 39 The goods handbook formulation and verified documents shall be kept for three years upon the conclusion of the verification-cancel procedure of the processing-trade handbooks.

Article 40 Where a processing-trade firm is to be separated, merged, bankrupt, dissolved, or ceased, the firm shall timely inform the customs of such situations.
Where the processing-trade goods are sealed up by law-enforcement sectors, the firm involved shall inform the customs of the situation within five workdays from the sealing date.


Article 41 Any violation of these Measures and other customs laws/regulations shall be punished by the customs authorities or even the court of law.

Article 42 The meanings of some phrases in these Measures:

(1) The processing of materials offered by foreign customers: the importing materials are offered by external customers; the operators do not need to pay for their imports, and process or assemble the materials as required by the external customers with processing fees to earn only; the finished products are to be sold by the external customers.

(2) The processing with imported materials: the operators import materials by paying foreign exchanges, and export the finished products for sale.

(3) Processing-trade goods: the imported materials, finished products, and resulting leftover materials, defective products and by-products that are covered by a processing trade project.

(4) Processing-trade firm: the processing-trade operators and the goods processors.

(5) Processing-trade operators: the firms entering into processing-trade contracts with foreign parties.

(6) Processors: the firms or factories commissioned by the operators to process the imported materials.

(7) Unit consumption: the quantity of imported materials that are consumed to produce exporting products per unit under normal production conditions.

(8) Transfer for deeper processing: a processing-trade firm transfers the products made from bonded imported materials to another firm for deeper processing and then re-exports the finished products.

(9) Contractors: the firms or individuals reaching contracts with the operators to do outbound processing business.

(10) Outbound processing: the operators commission the contractors to process the goods and re-export the finished products within a time limit.

(11) Verification and cancel: the customs relieve the processing trade practices from customs supervision after verifying them as compliant.

Article 43 The bonded factories to undertake processing trade shall follow customs regulations thereof.

Article 44 Any bonded group engaged in processing with imported materials shall follow customs regulations thereof.

Article 45 The processing-trade firms under web-based supervision shall follow customs regulations thereof.

Article 46 The processing-trade firms within customs supervision zones shall follow customs regulations thereof.

Article 47 The declaration and verification of unit consumption shall follow customs regulations thereof.

Article 48 Relevant import taxation and export refund shall resort to separate customs regulations.

Article 49 These Measures shall be construed by the General Administration of Customs of the P. R. China.

Article 50 These Measures shall enter into force from their issue date, along with a simultaneous repeal of their former edition of February 26, 2004 in GACC Decrees No.113, No.168 and No.195.