Customs Policy Update – June 2016
The State Council Issued Modified Customs Audit Rules
In order to adapt to the development of the current situation and enhance the norms of enforcement, on 19 June 2016, the State Council signed and passed the Decision of the State Council on Revising Customs Audit Rules of the People’s Republic of China (hereinafter referred to as “Audit Rules”) (State Council Announcement  No.670), which will take effect from 1 October 2016. In the new Audit Rules, three Articles and two Clauses were added, two Articles were deleted and over 30 modifications were made. The revisions are mainly made to clarify the scope and period of a customs audit, explain the basis on which customs determines focus in a customs audit, regulate the procedures and processes of a customs audit and clarify regulations related to self-discipline management and the involvement of third party intermediaries in a customs audit.
KPMG China published a China Tax Alert article to provide an introduction and analysis of the captioned matter. For details, please refer to the link below:
China Customs further promotes bonded supervision mode over goods imported for international service outsourcing business
The General Administration of Customs issued the Announcement on Further Promoting the Bonded Supervision Mode over Goods Imported for International Service Outsourcing Business (GAC Circular No.  36) on 1 June 2016 to promote the supervision mode in 14 newly added provinces and cities (districts) – including Hainan province, Shenyang, Nantong, Zhenjiang and Ningbo cities – on top of the current 21 exemplary service outsourcing cities. Goods Imported by advanced technology service enterprises accredited by the competent authorities in above areas and engaged in international service outsourcing business shall be under bonded supervision, except for goods not granted tax reduction or exemption by the state.
General Administration of Quality Supervision Announcement: give full play to inspection and quarantine functions and promote the stability and upswing of foreign trade
The General Administration of Quality Supervision, Inspection and Quarantine issued the Circular on Utilizing Inspection and Quarantine Functions and Promoting Foreign Trade on 1 June 2016 (AQSIQ Announcement No.  272). The Announcement proposes a series of specific measures such as to strengthen the development of demonstration zones for quality safety of exported goods, support the development of new forms of foreign trade (e.g. cross-border e-commerce), promote parallel import of automobiles, improve trade facilitation, push forward the establishment of a credit system of inspection and quarantine and promote cooperation in the Belt and Road initiative. The Announcement will be conducive to the stability and development of China’s foreign trade.
China Customs adjusted the description and applicable scope of certain supervision model codes
The General Administration of Customs issued the Circular on Adjusting the Description and Applicable Scope of Certain Supervision Model Codes (GAC Circular  No.37) on 20 June 2016. According to the Announcement, the supervision model code “3010” was modified from “samples and advertising articles A: samples and advertising articles imported or exported by entities with import and export operation rights” to “import and export samples and advertising articles: applicable to samples and advertising articles imported or exported by entities with import and export operation rights”. At the same time, the supervision model code “3039” (samples and advertising articles B: samples and advertising articles imported or exported by entities without import and export operation rights) was cancelled. The Announcement took effect from 1 July.
China Customs Announced Administrative Rulings on Commodity Classification for 2016 (IV)
The General Administration of Customs published the Announcement on Issuing the Administrative Rulings on Commodity Classification for 2016 (IV) (GAC Announcement  No. 31) on 6 May 2016 to classify amorphous alloy ribbon (strip) (No. Z2016-010) into tariff no. 7226.9199 and thin-film evaporators (no. Z2016-011) into tariff no. 8419.8990. The Announcement took effect from 1 July.
China Customs launched pilot bonded warehousing program regarding parallel import of automobiles
The General Administration of Customs issued the Notice on Launching the Pilot Bonded Warehousing Program for Parallel Import of Automobiles (Shujiafa  No.119) on 23 June 2016. According to the Notice, enterprises are able to carry out bonded warehousing business regarding parallel import of automobiles in areas under special customs supervision within the pilot free trade zone. For the parallel imported automobiles, enterprises shall make import declaration to the customs or handle re-exportation formalities within the prescribed bonded warehousing period - 3 months allowing no extension. The Customs will manage its account books for the parallel imported automobiles based on the vehicle identification code.
China Customs modified the electronic network of origin administration and the guidelines for customs declaration forms for imported and exported goods under the Sino-Korea Free Trade Agreement
On 26 June 2016, the General Administration of Customs published the Announcement on Issues Concerning the Electronic Network of Origin Administration and the Guidelines for Customs Declaration Forms for Imported and Exported Goods under the Sino-Korea Free Trade Agreement (“FTA”) (GAC Announcement  No.39). From 1 July 2016, the electronic origin information exchange system developed by China Customs and Korea Customs will exchange on real time the goods origin data under the FTA. The Announcement also clarified the guidelines for filling out customs declaration forms for imported and exported goods. It is noteworthy that the same batch of commodities eligible for or not eligible for the conventional tariff rates under the FTA can be declared in the same declaration form.
Updates on Local Customs Regulations
Shanghai export processing zones will implement paperless customs clearance forms
The Shanghai Entry-Exit Inspection and Quarantine Bureau and Shanghai Customs issued the Announcement on Implementing Paperless Customs Clearance Forms within Export Processing Zones (Shanghai Entry-Exit Inspection and Quarantine Bureau and Shanghai Customs Announcement No.  5) on 30 May 2016 to replicate and promote paperless customs clearance forms in China (Shanghai) Pilot Free Trade Zone, and implement paperless customs clearance forms for goods under the Exit/Entry Customs Clearance Notice (except for imported solid wastes) within Shanghai export processing zones. The Announcement took effect from 1 July 2016.
Guangzhou Customs fully implemented the “unified information system of cross-border e-commerce imports”
Guangzhou Customs issued the Announcement on Fully Implementing the “Unified Information System of Cross-border E-commerce Imports” (Guangzhou Customs Announcement No.  6) on 3 June 2016 to fully switch to the unified system by 30 June. After the switch, it’s not acceptable to file declaration through the “administration system of cross-border e-commerce import customs clearance” (Guangzhou version). Companies carrying out cross-border e-commerce retail import business (including bonded model and direct purchase model) are required to follow procedures according to the Switch Instructions for Cross-border E-commerce Enterprises issued by the Customs.
Nanjing Customs decided to further expand the scope of the pilot reform of integrated processing trade supervision
On 7 June 2016, Nanjing Customs issued the Announcement on Deciding to Further Expand the Scope of the Pilot Reform of Integrated Processing Trade Supervision (Nanjing Customs Announcement No.  4) to expand the pilot reform to cover processing trade enterprises that are engaged in processing trade under online supervision model and those under logbook model within Zhenjiang and Yancheng cities. Therefore, processing trade enterprises in Zhenjiang and Yancheng cities shall pay close attention to policy changes.
Tianjin Customs implemented new manifest management system on goods exported by Sea
On 22 June 2016, Tianjin Customs issued the Announcement on Implementing New Manifest Management System for Sea Freight Export via Tianjin (Tianjin Customs Announcement  No.3) and decided to implement new manifest management system for sea freight via Tianjin from 0:00 on 23 June 2016. The manifest release order will be applied to such exported goods.