Customs Policy Update - from January 2015 to February 2015
China Customs adjusts import tariff on milk and cream in solid forms or in concentrated non-solid form originating in New Zealand
On 5 January 2015, the China General Administration of Customs (GAC) released Notice No.1, which announced that the import tariff on milk and cream in solid forms or in concentrated non-solid forms) originating in New Zealand would be subject to the most favoured nation tariff rate starting from 7 January 2015. Forthe agricultural products in transit, the applicable tariff rates and other relevant issues shall be determined in accordance with the provisions stated in the GAC Notice (2008) No.91. Companies involved in relevant businesses shall be aware of the updated regulations.
China Customs raises the import consumption tax on refined oil products
On 12 January 2015, GAC released Notice No.2 which announced to raise the applicable import consumption tax on refined oil products including gasoline, naphtha, solvent oil, lubricant, diesel, aviation kerosene and fuel oil. The aviation kerosene, however, is temporarily exempted from the import consumption tax. Companies should analyse the impact on their imports due to the changes in the consumption tax rates and take actions in response to the changes in a timely manner.
China Customs adjusts import tariff on some of the non-concentrated milk, cream and butter, as well as other fats, oils and cheese originating in New Zealand
On 29 January 2015, GAC released Notice No.3 which announced that the import tariff on some of the non-concentrated milk, cream and butter, as well as other fats, oils and cheese originating in New Zealand (previously subject to the particular safeguard measure) would be subject to the most favoured nation tariff rate starting from 30 January 2015. For the agricultural products in transit, the applicable tariff rates and other relevant issues shall be determined in accordance with the provisions stated in the GAC Notice (2008) No.91. Companies involved in relevant businesses shall be aware of the updated regulations.
China Customs levies import consumption tax on battery and coating products
On 30 January 2015, GAC released Notice No.4 which announced to levy import consumption tax on battery (excluding lead storage battery) and coating products starting from 1 February 2015. The Notice also specified the battery and coating products which would be exempted from import consumption tax, and stated that the lead storage battery would be subject to import consumption tax starting from 1 January 2016. Companies should analyse the impact on their imports due to the changes in the consumption tax rates and take actions in response to the changes in a timely manner.
Negotiations on the Sino-Korea Free Trade Agreement (“FTA”) completed
On 25 February 2015, representatives from the PRC and the Republic of Korea, on behalf of respective governments, signed the legal documents to confirm the terms and conditions for the Sino-Korea FTA. The negotiations surrounding this specific FTA are therefore formally completed.
The negotiations started in May 2012 and heads of both countries jointly announced the completion of the negotiations on the substantive clauses in November 2014. Among all the FTAs signed by the PRC so far, the one with Korea represents the largest trade volume and covers the most commodity categories. When the Sino-Korea FTA comes into effect, over 90% of goods traded between the two countries will be tariff-free after the transition period, including cosmetics and apparels originating in Korea. By reducing and eventually eliminating the duties on Korean-originated commodities, the FTA will help bring Chinese tourists’ outbound consumption of luxury goods back to China and therefore increase China’s domestic consumption.
Chief of the Audit Department of the GAC discusses further on the customs credit management
GAC is currently working on an internal operation guideline for the newly released Customs Certification Criteria for Enterprises, and will also help enterprises to improve their internal controls based on the new guideline to be issued.
Moreover, the PRC and EU Customs target to formally implement a mutual AEO recognition programme by the end of 2015. Once implemented, enterprises covered by this specific programme will be given prioritised customs clearance by the Customs authorities from both sides, including a lower inspection rate, a simplified document review procedure of imports/exports, as well as a prioritised customs clearance treatment on a special case basis.
In November 2014, GAC released the Announcement on the Matters Related to Errors in Customs Declaration (GAC Order No. 80), which became effective from 1 January 2015. According to the Notice, declaration errors made by the declaration entities (including agents, consignors and/or consignees) would be formally recorded by the Customs. Declaration entities can view their declaration errors through the Customs-Enterprise Cooperation Platform in the Customs Credit Management System (website: http://jcf.chinaport.gov.cn/jcf).
China Customs continues the reform on regional customs clearance integration in 2015
By the end of 2014, approximately 18 million declaration forms have been reviewed and accepted by the regional integration platform. Currently, the customs declarations performed by the regional integration platform accounts for more than 80% of the total customs declaration volumes in the PRC. In the fourth quarter of 2014, the average time savings for the customs clearance for imports and exports by the regional integration platform were 9.18 hours and 0.31 hours respectively when compared to those under the traditional declaration method. The reform will be expanded to all Customs authorities throughout the country in 2015. With the improvement in the internal co-operation and the development of a mutual-recognition/ information sharing mechanism between various Customs, the cross-regional customs clearance is set to become easier and faster.
One Window Review on International Trade to be expended to all coastal sea ports within 2015
The pilot One Window Review Programme on international trade started in Shanghai Yangshan Bonded Port in June 2014. The programme aims to simplify the traditional declaration procedures governed by multiple departments, enhance trade conveniences and improve the efficiency of customs clearance. Currently, ten coastal provinces (including Shanghai) and five separately planned cities (including Shenzhen) have started the feasibility studies and preparation for implementation of the One Window Review Programme. Among them, Shanghai, Tianjin, Guangdong and Shandong have completed the feasibility study and kicked off the formal implementation process.
China Customs promotes the unified export clearance management system for cross-border e-commerce
By the end of 2014, the amount of the pilot cross-border e-commerce programme has exceeded RMB 3 billion. Sixteen cities including Shanghai, Chongqing, Hangzhou, Ningbo, Zhengzhou, Guangzhou, Shenzhen, Beijing, Suzhou, Qingdao, Jinhua, Dongguan, Xi’an, Nanjing, Huludao and Yinchuan have started export e-commerce and generated trade volume of approximately RMB 2.04 billion. Cities including Shanghai, Chongqing, Hangzhou, Ningbo, Zhengzhou, Guangzhou and Shenzhen have started the import operations and generated trade volume of approximately RMB 1.01 billion. To avoid duplicate efforts at local level, GAC developed a national unified export clearance management system for cross-border e-commerce in 2014. Presently, the Customs in Guangzhou, Nanjing, Shenyang, Xi’an and Yinchuan have completed deployment of the system, while deployment of the system at Customs in Dalian, Gongbei, Xiamen, Hefei, Changsha and Harbin are still underway.
Updates on Local Customs Regulations
In January 2015, the Shanghai Customs and several other authorities including the Shanghai Municipal Commission of Commerce jointly issued a notice on the pilot project of parallel import of automobiles within the Shanghai Free Trade Zone. The notice specifies the qualification requirement for carrying out parallel import. Companies which meet the qualification requirements, upon obtaining the approval from the Ministry of Commerce, can import foreign-made automobiles under the parallel import scheme. Automobile dealers are expected to benefit from the parallel import scheme.
In February 2015, the Shanghai Customs issued Notice No.1 which announced that all transportation enterprises and their vehicles, which are registered and certified by the Shanghai Customs to transport goods under customs supervision, should undergo the 2014 annual inspection from 6 February 2015 to 31 May 2015. These enterprises should submit the requested materials and complete the inspection within the mentioned time period.
In January 2015, the Price Information Division of the Tianjin Customs issued the notice regarding the survey on the prices of imported automobiles in 2014. The survey covers issues related to the gross margins of each model of the imported automobiles, the exchange rate adopted and its impact on the tax contribution, recalled automobiles, and the transfer pricing matters. The selected enterprises should submit requested materials before 1 April 2015. Automobile enterprises involved should therefore pay more attention to their import prices.
The Tianjin Customs released Notice No.1 and No.2 in January 2015, which announced that a new manifest management system would come into effect, with the aim to strengthen the supervision of goods imported by sea. Under the new system, the rules governing the comparison and verification of the shipment release information would be updated. In addition, non-container cargos exported by sea (including those products recorded-for-exit) would also be subject to the new manifest management system. Enterprises should pay attention to the new declaration requirements and inquiry method under the new system.
In January 2015, the Guangzhou Customs issued an announcement which set out the detailed supervision model and its declaration and inspection formalities to govern the inbound and outbound goods carried by passengers, manufacturing enterprises engaged in the business in which inbound and outbound goods carried by passengers, and transportation enterprises engaged in delivery of inbound and outbound goods carried by passengers. Companies involved shall pay attention to the requirements under this supervision model.