Customs Policy Update – July 2017
Notification on Taxing Policy for Beijing 2022 Olympic and Paralympic Winter Games (No. 60 of 2017 of the MOF and SAT)
To support the development of Olympic Games and ensure the successful holding of Beijing 2022 Olympic and Paralympic Winter Games, the Ministry of Finance (or MOF), State Administration of Taxation (or SAT) and General Administration of Customs have decided that imported goods donated for free by foreign governments and international organizations for Beijing 2022 Winter Olympic Games be exempted from import tariff and import value-added tax; equipment imported under general trade and required for the construction of Beijing 2022 Olympic Games stadium which cannot be removed from fixed stadium facilities, and consumables imported under general trade and directly used in Beijing 2022 Winter Olympic Games be exempted from tariff and import value-added tax; other special-purpose goods imported by Beijing Organising Committee for the 2022 Olympic and Paralympic Winter Games be governed by regulations for temporary admission of goods during the Games, while official importing procedures be observed and import tariff be levied if such goods are retained or sold after the Games; documents, books, audios, videos and CDs in association with Beijing 2022 Winter Olympic Games mailed from oversea by International Olympic Committee, International Federations, and other social associations that do not enter the domestic market be exempted from tariff and import value-added tax; imported models, drawing sheets, drawing boards, CDs with electronic documents, design illustration, edition in reduced format and other planning designs required for the construction of the stadium be exempted from tariff and import value-added tax.
Notification on Tax-exempt Import Plans for Seed and Provenance for 2017 (No. 19  of the MOF, GAC and SAT)
The Ministry of Finance (or MOF), the General Administration of Customs (or GAC) and the State Administration of Taxation (or SAT) released the Notification (No.19  of the MOF, GAC and SAT) on July 21, 2017, announcing that imported seeds (seedlings), breeding stock (poultry), fingerlings (fries) and provenance of wild animals and plants for breeding shall continue to be exempted from import value-added tax. The tax-exempt import plan of the Ministry of Agriculture for seeds (seedlings), breeding stock (poultry), and fingerlings (fries) for 2017 and the tax-exempt import plan of the State Forestry Administration for seeds (seedlings) and provenance of wild animals and plants for breeding for 2017 have been approved. Relevant situations shall be governed by the provisions of the Notification of the MOF, GAC, and SAT on Tax Policy Management Plan for Imported Seeds and Provenance during the 13th Five-year Plan Period (No. 64  of the MOF, GAC and SAT).
Announcement on Conducting Follow-up Verification (GAC Announcement  No. 28)
In addition to announcing bonded verification, the General Administration of Customs (GAC) has also released GAC Announcement  No. 28 on July 4th, 2017 to regulate the verification process and ensure the standardized implementation of the regulations, so as to protect the legitimate rights of the applicants. The announcement specifies that follow-up verification refers to verifications on risk elements including price, HS code classification, and country of origins. The follow-up verification process requirements and the rights and obligations of the customs and companies are also articulated in the announcement. The announcement shall come into force upon romulgation.
Announcement on Establishing Reform Pilot Zone for Company-based Processing Trading Supervision Model Development (GAC Announcement  No. 29)
The General Administration of Customs (or GAC) has decided to implement a company-based processing trading supervision model (hereinafter referred to as the New Supervision Model) in a selected list of companies that are being governed by the E-handbook management model to fully deepen the reform on processing trading and bonded supervision, improve the processing trading supervision and service of the General Administration of Customs, and guide companies in self-discipline management. The GAC Announcement  No. 29 has been released on July 13th, 2017, and the pilot customs include the custom of Tianjin, Shenyang, Nanjing, Hangzhou, Wuhan, Gongbei, Huangpu, Chongqing and Chengdu.
The New Supervision Model refers to a GAC-launched processing trading supervision model where each individual company is managed as a whole. Focused on E-handbooks, the New Supervision Model is based on customs HS code corresponding to the relevant company material number. Featuring import and export turnover control and periodical verification/ cancellation, the New Supervision Model covers a wide range of functions including handbook setup (modification), import and export, outsourcing, factory transfer, domestic sales, transfer of remaining materials, application for verifications and cancellation.
The announcement specifies the requirements of the companies to which the new supervision applies. These companies may choose the verification and cancellation period and unit consumption application time at their discretion and enjoy beneficial policy including consolidated customs declaration, centralized process and streamlining required documents. The announcement shall come into effect as of August 1st, 2017.
Announcement on Issues Concerning the Catalogue of Industries for Guiding Foreign Investment (Revised 2017) (GAC Announcement  No. 30)
The General Administration of Customs (GAC) has released the GAC Announcement  No. 30 on July 18th, 2017 to address the issues concerning the Catalogue of Industries for Guiding Foreign Investment (Revised 2017) published by the National Development and Reform Commission and the Ministry of Commerce (effective as of July 28th, 2017, hereinafter referred to as the New Catalogue). The announcement specifies in article one that as of July 28th, 2017, self-used equipment imported within the total amount of investment and the technology, components, accessories and spare parts imported along with the above-mentioned equipment in accordance with contracts under the foreign-invested projects (including capital increment projects) that falls into the encouraged category of the New Catalogue, excluding the goods listed in the Catalogue of Non-tax-exempt Goods for Foreign-invested Projects and Catalogue of Non-tax-exempt Imported Crucial High-tech Equipment and Products, shall be exempt from customs duty, but still subject to import value-added tax in accordance with Notice of the State Council on the Adjustment of Tax Policies for Imported Equipment (Guo Fa  No 37) and GAC Announcement  No.103. Meanwhile, the announcement standardizes the code for the project industry policy catalogue.
In addition, the announcement also specifies the transition treatment of applicable scope of the New Catalogue and the Catalogue of Industries for Guiding Foreign Investment (Revised 2015).
Announcement on Issuing Administrative Ruling on Commodity Classification for 2017 (Ⅱ) (GAC Announcement  No. 31)
In accordance with the Interim Measures of the Customs of the People’s Republic of China for the Administration of Administrative Ruling (GAC Decree No.92) and the Provisions of the Customs of the People’s Republic of China on the Administration of the Commodity Classification of Imported and Exported Goods (GAC Decree No. 158), the Customs accepted an application for administrative ruling on master braking cylinder, a request from a Shanghai company. According to the GAC Announcement  No. 31 released on July 20th, 2017, the product is classified to 8708.3099.
Announcement on Further Specifying Issuing Concerning Late Tax Payment Surcharge Relief (Ⅱ) (GAC Announcement  No. 32)
The General Administration of Customs (GAC) released on July 20th, 2017 the GAC Announcement  No. 27 in an attempt to deepen paperless customs declaration reform and further specify the issues concerning late tax payment surcharge relief. The announcement specifies that taxpayers that are qualified to enjoy late tax payment surcharge relief in accordance with the first article of GAC Announcement No. 27 shall input and submit relevant electronic data through the China E-port Enforcement System. Meanwhile, the announcement emphasizes that “self-discovered” mentioned in item 3 of article one in the GAC Announcement  No. 27 refers only to the situation where the voluntary disclosure requirements specified in chapter 4 of Measures for the Implementation of the Regulation of the People’s Republic of China on Customs Inspection (GAC Decree No. 230) are fulfilled and the relevant customs procedures are observed. The announcement shall come into effect as of August 1st, 2017.
Announcement on Cancelling the System of Bank Surety Accounts for Processing Trade (GAC and MOC Announcement  No. 33)
To enforce the regulations of the Several Opinion of the State Council on Promoting the Innovation and Development of Processing Trade (No.4, 2016, State Council), the System of Bank Surety Accounts for Processing Trade (hereinafter referred to as Bank Surety Accounts) is to be repealed nationwide, which has been approved by the State Council. The General Administration of Customs (GAC) and the Ministry of Commerce (MOC) have jointly released the GAC and MOC Announcement  No. 33.
Where “On Paper” Bank Surety Accounts management is adopted, companies are not required to set up Bank Surety Accounts when applying for processing trade handbooks, nor are they required to provide warranties concerning processing trade of regulated commodities. The processing trade handbook for “On Paper” Bank Surety Accounts shall be observed in accordance with the System of Bank Surety Accounts until it expires.
Where “Actual Deposit” Bank Surety Accounts management is adopted, a transition period from August 1st, 2017 to Feb 1st, 2018 is provided to ensure the stable transition of the policy. During the transition period, companies continue to observe “Actual Deposit” Bank Surety Accounts. Another announcement will be released by the GAC after the transition period expires.
The announcement comes into effect as of August 1st, 2017.
Update on Local Customs Policies
Announcement of Shenzhen Customs District on Launching Bonded Display and Trading Business ( No. 2)
To support the development of emerging business trends and regulate supervision on bonded display and trading, the Shenzhen Customs District has released an announcement to address issues concerning bonded display and trading business on July 24th, 2017. The announcement specifies that bonded display and trading refers to business operations of the registered companies located within areas under special customs supervision to transport bonded goods upon guarantee out of the areas to conduct display and trading business. In principle, companies conducting bonded display and trading business in customs district of Shenzhen shall be those registered at the Shenzhen Customs District. The in-charge customs for areas under special customs supervision shall supervise the goods for bonded display and trading in accordance with the laws.