GACC Announcement No.59, 2015 on Bonded Repairs inside Customs Control Areas

Hereby announced are relevant matters for the administration of bonded repairs within special Customs-controlled areas in China:

1. This Announcement is applicable to China's special Customs-controlled areas including free trade zones, export processing zones, bonded logistics parks, bonded port areas, comprehensive bonded areas, Zhuhai Park of Zhuhai-Macao Cross-Border Industrial Zone, and China Part of China-Kazakhstan Khorgos Border Cooperation Center for the business of bonded repairs as follow:

(1) Transit of defective goods from abroad into the Customs-controlled areas aforesaid for test and repair, and re-export thereof afterwards;

(2) Transit of defective goods into the Customs-controlled areas from other areas within China for test and repair, and return thereof to other areas afterwards.

This Announcement is not applicable to entry of foreign ships and aircrafts for repair in China through the declaration as means of transport.

2. Firms located in the Customs-controlled areas may undertake such bonded repairs as the following:

(1) Permitted by China law and regulation;
(2) Approved by the State Council or other administrations of China;
(3) Repairs of domestically sold products

Unless being permitted by the administrations, they shall not engage in repairs for state-banned import or export goods.

3. As regards bonded repairs, the service firm shall make H Account Book with electronic records for the goods to repair, already repaired, unrepairable, and materials used for repair respectively in accordance with the following requirements:

(1) Having compliant management rules and computer management systems for whole tracking of repair and consumption information;
(2) Having computer network with the Customs for data interchange as required;
(3) Having special management over leftover bits/pieces arising from repairs of goods;
(4) Having relevant approvals from administrations as required.

4. The firms shall make truthful declarations on entry, exit, transfer and consumption of the goods under bonded repairs and afterwards undertake relevant verification and cancel formalities.

5. The goods to repair from abroad, after being tested and repaired in the Customs-controlled areas, shall be re-exported abroad. The firms shall make entry/exit goods registration list with the control mode "Bonded Repairs" (code 1371).

6. Where the goods to repair enter the Customs-controlled areas from outside, the firms inside or outside shall make export declaration under the control mode "Repairs" (code 1300) and meanwhile the firms inside the areas shall make entry goods registration list under the control mode "Bonded Repairs" (code 1371).

7. Where the repaired goods return to outside areas, the firms outside or inside the Customs-controlled areas shall make import declaration under the control mode "Repairs" (code 1300), including the items of repaired goods and repairing cost. The repaired goods shall be in actual exit quantity and in the tax mode "Totally Exempted"; the repairing cost shall be in the quantity of 0.1 and in the tax mode "Taxed as Regulated"; HS Codes to declare shall be consistent with those of repaired goods; The tax rate or exchange rate shall be those on the date when the Customs accepts the declaration for repaired goods return to outside areas.

The inside firms shall make exit goods registration list under the control mode "Bonded Repairs" (code 1371); the commodities shall be in the actual name of repaired goods.
The firms shall submit repairing contracts and invoices. Bonded repairing fee duty-paid value shall be determined by the cost of consumed materials and repairing cost.

8. Where centralized declaration is needed for the goods to repair entering the Customs-controlled areas and for return of repaired goods from the areas, the firms shall refer to China Customs Measures on Administration of Bonded Port Areas (in GACC Decree No.191).

9. The materials used for repair shall be managed as bonded goods. The firms shall declare entry, exit and transfer of the repair-used materials as per the specifications on customs declarations for import and export goods.

10. Damaged components and leftover pieces generated by inbound goods from abroad shall in principle be returned abroad under the control mode "imported materials/leftovers return abroad (code 0865)" or "incoming materials/leftovers return abroad" (code 0864). Those that cannot be returned may refer to China Customs Notice on Leftovers, Defectives Exit from Export Processing Zone (ShuJiaFa [2009] No.172) for domestic disposal formalities.

Damaged components and repairing leftovers belonging to solid wastes shall be subject to China's Administrative Measures on Solid Waste Importation.

11. In entry-exit declaration, the firms shall truthfully fill in entry-exit goods registration list and import/export declaration form.

12. During the course of repair, where the goods under repair need to be dispatched outside of the Customs-controlled areas for some repair processing, the inside firms may refer to Article 28 of China Customs Measures on Administration of Bonded Port Areas (GACC Decree No.191) for relevant formalities.

13. As regards bonded repairs, account write-off cycle may not exceed two years.

14. Under any of the following circumstances, the firms shall make rectification during which the Customs may not receive their application for new bonded repairs:
(1) Incompliant with the conditions for the business described in articles 2 and 3 of this Announcement;
(2) Suspected of smuggling under Customs investigation;
(3) Incompliant twice within one year;
(4) Failure to lawfully dispose repaired goods, goods to repair, damaged components or leftover pieces within time limit.

The firms may be allowed to undertake new bonded repairs only after their rectification is complete and recognized by the governing Customs.

This Announcement shall enter into force upon its issuance.


General Administration of Customs of China (GACC)
December 11, 2015