On February 14, 2007, the General Administration of Customs of the People's Republic of China (China Customs) promulgated the Regulations of General Administration of Customs of People's Republic of China on Classified Management of Imported and Exported Commodities (abbreviated as the Regulations), the Decree No.158 of the China Customs. The regulations came into effect on May 1, 2007.

Since it entered the World Trade Organization (WTO), China has boosted its economy, spurring domestic and foreign enterprises to raise growingly higher demands on facilitating trade. World trade rules also lodge unified, standardized, transparent and efficient requirements on government administration, covering the performances of customs. The Regulations was established exactly under this backdrop. The Regulations define and elaborate rights and obligations of customs and taxpayers, providing taxpayers more open, transparent and convenient commodity classification service, so as to ensure further improving trade convenience and lowering taxpayer trade costs. In this sense, the Regulations is an important case in point showing China's respect of WTO rules.

Background of establishing the Regulations
Along with the introduction of commodity classification in the Chinese customs sector in recent years, the country is benefiting from increasingly mature operation and improved management modes in commodity classification. Customs have boldly adjusted the classification mechanism and related regulations and systems on the basis of summing up work achievements. Take the No.80 Order. China Customs introduced the restrictive pre-classification system on relative persons, commodity classification decision public announcement system, and import and export commodity standardized declaration system. These systems played significant roles in managing relative person obligations and legal liabilities, and stipulating customs to launch related operations.

To ensure customs execute laws in honest, transparent and unified modes and provide taxpayers convenient clearance service, China Customs needs to establish the Regulations to rearrange and relocate relations of all systems. It has to design reasonable and standardized classification management mechanism, define layers for all customs classification activities. With these measures, it will furnish open and transparent basis for classification to guarantee unified law enforcement in all customs, accelerate rapid clearance at ports, prevent unlawful practices, and reduce administrative disputes. Thereby, the Regulations were promulgated on the basis of summing up experiences of the aforesaid customs commodity classification operation systems. It systematically illustrated the legal status of the classification operation system, remedied some legal limitations of commodity classification system, and subsequently promoted the legal layer of the existing classification system.