GACC Announcement No.67, 2016 on Expendable Materials Import under Processing Trade

In order to improve the control over the import of expendable materials under processing-trade mode, relevant matters are hereby announced:

1. The expendable materials described herein refer to the materials that are imported by processing-trade firms for processing export-oriented products and directly used for the production while not physically or chemically transformed into basic features of final products.

2. The Customs shall control the expendable materials as bonded goods. The import thereof by processing-trade firms shall not be restricted in terms of enterprise type, trade mode (processing with imported materials or with client-supplied materials) or whether being declared/imported separately from other goods or not.

Where being listed into the catalog of commodities prohibited from processing trade, the expendable materials shall be treated as those prohibited therefrom, without the bonded coverage.

Where being turned to domestic sale, the expendable materials shall be subjected to customs duties and relevant interests; regarding the expendable materials under import license, their import license shall be submitted for the domestic sale.

3. The commodities below shall not be regarded as processing-trade expendable materials for bonded control: quick-wear parts such as drills, grinding wheel, blade, and abrasive tools; perishable articles such as engine oil, lubricant, print film and PS plate; detection materials such as detection paper, band, disc and pin; labor protection materials such as working coat, cap and gloves; soft metal, wax and refractory materials used for certain equipment.

4. Import materials meeting the following conditions shall be subject to the regulations for bonded materials rather than expendable materials:

(1) The materials exist in or transform into final products through physical changes or chemical reactions during the processing.

(2) The quantity of the materials in final products is the component essential to maintain product performance, rather than the residual.

5. The expendable materials to import under bond shall be specified as import materials in “Processing-Trade Business Status and Capacity Certificate”. In manual/account setup/alteration formalities, the processing-trade firm shall submit completed “Expendable Materials Import Declaration” (see the Annex) to local in-charge Customs House. If necessary, the firm shall also submit the following supplementary materials:

(1) Written description of expendable materials attribute and usage;

(2) Written description of expendable materials chemical reactions or physical changes and consumption quantity during processing;

(3) Others required

6. The expendable materials shall be recorded in the same manual/account book as other imported materials and final export products covered by the same processing trade. In Import Declaration form, the expendable materials shall be marked by “[消]” (in half width) preceding in the “Commodity Description” column.

The expendable materials shall be declared separately from other bonded materials.

7. The processing-trade firm shall verify the consumption quantity of expendable materials in line with actual production and declare the consumed quantity to the Customs within the time limit set out in its processing-trade manual/account book.

The Customs may examine the declared data or information by field inspection.
The later disposal of expendable materials may refer to “Customs Administrative Measures on Processing-Trade Leftovers, Defective Goods, By-Products and Damaged Bonded Goods” (in GACC Decrees No. 111 and 218).

8. The expendable materials imported into Customs special control areas shall be controlled under bond. Where such materials or their products are put into domestic sale outside the control areas, import tax or duties shall be levied upon relevant formalities and Import License, if involved, shall be submitted.

9. This Announcement shall enter into force as from 1 January 2017 along with simultaneous repeal of GACC Announcement No. 2 of 2011.

Annex: Processing-Trade Expendable Materials Import Declaration (omitted)




General Administration of Customs of China (GACC)
November 24, 2016