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

The General Administration of Customs of the P. R. China (GACC) has deliberated and adopted on October 14, 2010, through its administrative conference, the Decision (Ⅱ) by the General Administration of Customs of China on Revising the "Measures of the Customs of the People's Republic of China on the Control of Processing-Trade Goods", which is hereby promulgated and to take effect as of December 5, 2010.





Decision (Ⅱ) by the General Administration of Customs of China on Revising the "Measures of the Customs of the People's Republic of China on the Control of Processing-Trade Goods"

To adapt to the changes in processing trade and regularize the relevant business of processing trade, the General Administration of Customs of China (GACC) has decided to make following revisions to the Measures of the Customs of the People's Republic of China on the Control of Processing-Trade Goods (hereinafter referred to as these Measures, released with the GACC’s Decree No. 113):

1. Article 7 of these Measures shall be revised as "Without prior approval by the Customs authorities, none of processing-trade goods may be mortgaged."

2. Article 9 of these Measures shall be added with an Item 3 that "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 relevant approvals from the Customs authorities."

3. Article 25 of these Measures shall be revised as:

Under any of the following circumstances, any enterprise, if applying for the conduct of outward processing, shall deliver a sum of cash deposit or a banker's guarantee that is equivalent to the tax amount payable on its outward processed goods:

(1) More than one Customs district is involved in the outward processing business;

(2) All working processes resort to outward processing;

(3) Outward processed goods are not subject to carrying back for direct exportation;

(4) The operating or undertaking enterprise is suspected of smuggling and of violating regulations and therefore subject to ongoing detection and investigation by the Customs, although the goods applied for outward processing are not involved in such cases.

With respect to the goods applied for outward processing, where having delivered to the Customs the cash deposit or banker's guarantee that is not less than the tax amount payable, the operating enterprise may be exempt from delivery of such cash deposit or banker’s guarantee to the Customs as prescribed above in this Article.

Where the production operation of the operating or undertaking enterprise is incompliant with Customs supervision regulations and the goods applied for outward processing fall into any ongoing law cases, the Customs authorities may not grant the approval of such outward processing business.

Additionally, former Article 25 of these Measures shall be shifted as the Article 24 thereof, while former Article 24 of these Measures shall be shifted as the Article 25 thereof.

4. Article 27 of these Measures shall be revised as:

Any processing-trade goods shall be used for their specified purpose only.
In urgent need by the processing of export-oriented products, after approval by the Customs, the operating enterprise may conduct exchanges among bonded materials/parts or between bonded and non-bonded materials/parts. But such exchanges of materials/parts shall be limited to the same enterprise under the principle of the same variety, specification, and quantity and non-profit making.

None of such exchanges may apply to bonded materials/parts imported under the processing trade with foreign client-supplied materials.

This Decision shall take effect as of December 5, 2010.