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| Decision of the State Council Regarding the Revision of Modifying the Interim Procedures of Supervision on Export Processing Zones by the Customs of the People s Republic of China |
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| In order to adapt to the requirements for the new situation of the
regulation by the Customs of the export-oriented processing areas, and safeguard
their healthy development, the Interim Provisions of the Customs of the PRC on
Regulation of Export-Oriented Processing Areas are modified as follows: I.
Article 20 is modified as follows: "The processed products of the enterprises in
the processing areas and the leftover materials, sub-standard products and
wastes generated during the processing production shall be re-transported
outside the territory of the PRC. If required to be transported to the areas
outside the processing areas in the territory of the PRC, the enterprises shall
submit application and upon ratification by the competent Customs, the
categorization thereof should be determined on the basis of the status of
domestic sales for levy of duties. If belonging to commodities under
administration of import licenses, the import licenses will be exempted; and in
belonging to commodities listed in the Catalogues of Wastes That May Be Used As
Raw Materials Restricted from Import, application should be submitted for
obtaining the import licenses from the competent environmental protection
authority according to the current provisions. In terms of leftover materials
and waste of no commercial use that should be transported outside the processing
areas for destruction, formalities for exit of the processing areas should be
handled with at the competent Customs with the approval of the administrative
commission of the export-oriented processing areas and the competent
environmental protection authority, and the Customs may exempt the import
licenses and the duties thereof. " II. Deleting Article 44. In addition, the
expressions of part of the clauses shall be modified and adjustment should be
made on the orders of the articles. This decision shall be implemented as of
November 1, 2003. Interim Procedures of Supervision on Export Processing Zones
by the Customs of the People's Republic of China shall be modified accordingly
and re-promulgated. Attachment: Interim Procedures of Supervision on Export
Processing Zones by the Customs of the People's Republic of China Chapter One
General Principles Article 1 In accordance with the "Customs Law of the People's
Republic of China" and other relative Chinese laws, rules and regulations, this
Interim Procedures hereby is formulated in order to strengthen and improve
administration on processing trade, normalize supervision of customs on export
processing zones, promote healthy development of export processing zones and
encourage expansion of export trade. Article 2 To avoid construction of
redundant projects, the export processing zones (hereinafter referred to as the
Processing Zone) in the People's Republic of China can only be set up in current
economic and technological development zones having been approved by the State
council. And the government of local provinces (autonomous regions or
municipalities directly under the Central Government) shall ask the State
council for approval. Article 3 The Processing Zone is a special area supervised
by customhouse. The customhouse shall establish agencies in the Processing Zone
to execute 24-hour supervision on goods transferring in and out and relative
places inside the Processing Zone in accordance with the Interim Procedures.
Article 4 Separation facilities and close-circuit television monitoring system
meeting the supervision requirements of the customhouse shall be set up between
the Processing Zone and other regions of the People's Republic of China
(hereinafter referred to as the Outside). Relative businesses inside the
Processing Zone can be carried out only after the separation facilities of the
Processing Zone have been approved by General Administration of Customs through
acceptance check. Article 5 Processing Zone Administration, export processing
enterprises, storage enterprises specially offering services to export
processing enterprises and transport enterprises verified by the customhouse
specially engaged in transportation of goods in the Processing Zone shall be set
up. Except security personnel and persons on duty in the enterprises, no other
persons are permitted to live in the Processing Zone. No money-earning
facilities for personal consumption are permitted to be set up in the Processing
Zone. Article 6 Retail business, general trade, entrepot trade and other
irrelevant businesses are prohibited. Article 7 Enterprises set up inside the
Processing Zone (hereinafter referred to as the Inside Enterprise) should be
registered at the customhouse. Article 8 The Inside Enterprises should establish
account books and report forms meeting the requirements of the customhouse in
accordance with the "Accounting Law of the People's Republic of China" and other
relative Chinese laws, rules and regulations. Book-entry and accounting should
be done with legal and effective vouchers to record the storage, conveyance,
transfer, sale, process, application and wastage of goods transferring in or out
the Processing Zone of the enterprise. Article 9 Computer networking management
system and customs inspecting system shall be carried out in the Processing
Zone. The Inside Enterprises should establish computer management databases
conforming to the supervisiory requirements of the customhouse and link up with
the computer system of the customhouse for electronic data interchange. Article
10 When the Inside Enterprises do processing trade, they won't carry out machine
account system of bank cash deposit for processing trade and the customhouse
won't perform management of "Registration Handbook for Processing Trade".
Article 11 The customhouse has right to inspect and check the goods, articles,
conveyances, persons in or out and any relevant places in the Processing Zone in
accordance with the "Customs Law of the People's Republic of China". Article 12
The state will not levy VAD on processed products in the Processing Zone.
Article 13 Goods and articles prohibited by the state for import and export are
not permitted in or out of the Processing Zone. Chapter Two Supervision on Goods
Transferred Between the Processing Zone and Overseas Article 14 The owner of
goods transferred between the Processing Zone and overseas or his agent should
make out a bill for export or import goods to file at the customhouse in
accordance with the approval of the Processing Zone Administration Commission.
Article 15 The customhouse shall supervise the goods transferred between the
Processing Zone and overseas with methods of straightway type or entrepot
transportation. Article 16 Except that export passive quota administration is
executed for export and import goods between the Processing Zone and overseas,
import and export quota administration and license management shall not be
executed. Article 17 Unless there are additional stipulations by laws and
regulations, the import tariff and import link tariff of goods entering the
Process Zone from overseas shall be levied according to following regulations:
1. Taxes on machines, equipment for construction of projects of productive
infrastructure or capital construction materials for workhouses and warehouses
shall be exempted; 2. Taxes on machines, equipment, models or parts needed by
Inside Enterprises for production shall be exempted; 3. Taxes on raw materials,
parts, components, packing materials and consumptive materials needed by Inside
Enterprises for processing of export products shall be exempted; 4. Taxes on
office articles with reasonable amount for the Inside Enterprises and
administration authorities shall be exempted; 5. Customs entry on vehicles and
consumer goods for the Inside Enterprises and administration authorities shall
be handled according to relative regulations on import goods. Taxes shall be
levied by the customhouse. Article 18 Unless there are additional stipulations
by laws and regulations, export duties shall be exempted on finished products
and leftover bits and pieces, offcuts, defectives and wastes during the process
of production of the Inside Enterprises. Chapter Three Supervision on Goods
In/Out between the Processing Zone and the Outside Article 19 Customs entry for
goods carried from the Processing Zone to the outside shall be handled in
accordance with relative regulations on import goods of the customhouse. And
taxes shall be levied according to finished products. In case the goods are of
license management, effective import licenses shall be presented to the
customhouse. Article 20 The processed products of the enterprises in the
processing areas and the leftover materials, sub-standard products and wastes
generated during the processing production shall be re-transported outside the
territory of the PRC. If required to be transported to the areas outside the
processing areas in the territory of the PRC, the enterprises shall submit
application and upon ratification by the competent Customs, the categorization
thereof should be determined on the basis of the status of domestic sales for
levy of duties. If belonging to commodities under administration of import
licenses, the import licenses will be exempted; and in belonging to commodities
listed in the Catalogues of Wastes That May Be Used As Raw Materials Restricted
from Import, application should be submitted for obtaining the import licenses
from the competent environmental protection authority according to the current
provisions. In terms of leftover materials and waste of no commercial use that
should be transported outside the processing areas for destruction, formalities
for exit of the processing areas should be handled with at the competent Customs
with the approval of the administrative commission of the export-oriented
processing areas and the competent environmental protection authority, and the
Customs may exempt the import licenses and the duties thereof. Article 21 The
Inside Enterprises are prohibited to entrust the outside enterprises for
processing products. In case the technology and process can't meet the
requirements of the products and entrustment for certain process to the outside
enterprise is needed, it should be approved by the customs head on the premise
that the basic shape and quantity of the original products are not changed. The
formalities for leaving the Processing Zone shall be handled after a deposit
equivalent to the goods has been paid to the customhouse in charge in the
Processing Zone by the entrusted enterprise in accordance with the
administrative provisions on temporary import goods. The duration of entrustment
is 6 months and there should be no delay. After processing is finished, the
processed products including defectives and wastes should be transported back to
the Processing Zone. Formalities for clearance and cancellation after
verification shall be handled at the customhouse in charge with the entrusting
application and relative documents. Article 22 Sales of machines, equipment and
models to the Outside from the Inside Enterprises shall be treated according to
the current national import policy and relative regulations. Article 23 With the
approval of the customhouse in charge, the Inside Enterprises may conduct test,
inspection and demonstration of the products Outside. Formalities on products
for test, inspection and demonstration out the Processing Zone shall be handled
in accordance with administrative provisions on temporary import goods of the
customhouse. Article 24 In case the machines, equipment, models and office
articles used in the Processing Zone need to be repaired, tested or checked
Outside, the Inside Enterprises should fill in the "Connection Form for
Examination on Goods Carried Outside for Repair" and make application to the
customhouse in charge. After being approved, recorded and examined by the
customhouse in charge, the machines, equipment, models and office articles can
be carried to the Outside for repair, test or check. When the Inside Enterprises
carry models to the Outside for repair, test or check, samples of the products
manufactured with the models shall be kept for examination and verification on
the models carried back to the Processing Zone by the customhouse. Machines,
equipment, models and office article carried to the Outside for repair, test or
check can't be used for process and application outside. Article 25 The
machines, equipment, models and office articles carried to the Outside for
repair, test or check should be carried back to the Processing Zone within 2
months since day they are carried out. In case they can't be carried back on
time because of special conditions, the Inside Enterprise should explain and
make application for delay to the customhouse in charge within 7 days before
expiration of the duration. There is only one application for delay and the
extended period should not exceed 1 month. Article 26 When the machines,
equipment, models and office articles repaired in the Outside are carried back
to the Processing Zone, it is impossible for the customhouse to identify whether
they are the original or new parts, new fittings or new accessories of the same
specifications. In case the parts, fittings or accessories have been changed,
the original parts, fitting and accessories should be carried back to the
Processing Zone together. Article 27 Entry of goods into the Processing Zone
from the Outside shall be regarded as export. Customs clearing procedure for
export shall be handled. Unless there are additional stipulations by laws and
regulations, the tax reimbursement for export shall refer to the following
regulations: 1. Customhouse clearing procedure for export shall be handled for
entry of homemade machines, equipment, raw materials, parts, fittings,
components, and packing materials with reasonable quantity for the Inside
Enterprises from the Outside, and materials or capital construction of
infrastructures, workhouses and office buildings of the processing enterprises
and administrative agencies. And the customs declaration for the tax
reimbursement for export shall be issued. The outside enterprises shall apply
for tax reimbursement for export or free export and handle the formalities at
tax authorities with the form for tax reimbursement for export of the customs
declaration. The specific administrative provisions on tax reimbursement or
exemption shall be issued later by the General Tax Bureau. 2. The customhouse
will not issue customs declaration for tax reimbursement for export for consumer
goods and vehicles entering into the Process Zone for the Inside Enterprises and
administrative authorities from the Outside. 3. The Inside Enterprise shall
present documents on imported machines, equipment, raw materials, parts,
fittings, components, packing materials and materials for capital construction
entering into the Processing Zone from the Outside and handle customs clearing
procedures for export. And they will be examined by the customhouse. The paid
import link tariff for the above-mentioned goods or articles will not be
returned. 4. In case it is necessary to carry some prohibited export commodities
or commodities under unified management by the state into the Processing Zone
for certain process because the domestic technique is unable to meet the
requirements of the products, it must be submitted to the Ministry of Foreign
Trade and Economic Cooperation (MOFTEC) for approval. The customhouse shall
supervise it in accordance with the administrative provisions on processing with
exported materials. The customs declaration for tax reimbursement for export
shall not be issued to these goods carried into the Processing Zone. Article 28
The goods and articles from the Outside shall be carried to the warehouses or
places appointed by the customhouse. And the outside enterprises shall fill in
export declaration and handle customs clearing procedures for export at the
customhouse in charge with domestic purchase invoices and packing list. Article
29 Goods from the Outside can be exported only after they have been
substantively processed by the Inside Enterprises. Chapter Four Supervision on
Goods in the Processing Zone Article 30 The Inside Enterprises should accurately
declare goods in or out of Processing Zone to the customhouse in charge. The
customhouse shall examine the goods, give clearance and cancel after
verification with lists on record and relevant documents. Procedures as record,
entry, examination, clearance and cancellation after verification for goods in
or out of the Processing Zone shall be handled inside. Article 31 After the
concrete name, quantity and amount of the goods in the Processing Zone have been
filed at the customhouse by both parties concerned, they can be transferred or
shifted between the Inside Enterprises. Article 32 The processors inside the
Processing Zone shall not sell the imported raw materials, parts and fittings to
the Outside before they are substantively processed. The Inside Enterprise
engaged in warehouses shall not supply raw materials, parts and fittings in the
warehouses to the Outside enterprises. Article 33 Since the day of starting
export processing or warehouses business, the Inside Enterprise shall handle
procedures for cancellation after verification at the customhouse in charge with
the account book and relative vouchers every half-year. Article 34 In case goods
in the Processing Zone are short or destroyed due to force majeure during the
period of process or storage, the Inside Enterprises shall report to the
customhouse in charge and explain the reasons within 10 days since the day of
discovery. After being verified by the customhouse, they are permitted to be
deducted from the account books. Chapter Five Supervision on Goods Transferred
between Processing Zones Article 35 The receiving party and the delivery party
shall jointly make an application for transfer of goods between the Processing
Zones to the customhouse in charge in the Processing Zone where the delivery
party is in. Procedures shall be handled according to relative regulations on
entrepot transportation. Article 36 When goods are transferred to other
Processing Zones, the customhouse in charge in the Processing Zone where the
receiving party is in shall check the goods. If the seal is intact and the goods
accord with the list, they shall immediately be given clearance by the
customhouse to enter the enterprise or warehouse. Article 37 In case procedures
can't be handled for goods transferred between Processing Zones according to
regulations on entrepot transportation, the receiving party shall pay deposit
equivalent the goods to the customhouse in charge in the Processing Zone where
it is in. After the goods have arrived in the destination Processing Zone and
been checked by the customhouse in charge, the deposit shall be returned to the
receiving party within 10 working days. Chapter Six Supervision on
Vehicles/Personal Effects In/Out of the Processing Zone Article 38 Vehicles and
individuals shall go in or out of the Processing Zone through special channels
appointed by the customhouse. Article 39 Processed products transported to
overseas and goods carried to the Outside from the Processing Zone shall be
examined by the customhouse. After clearance is given, they shall be ratified by
the customhouse and undertaken by special transportation enterprises in the
Processing Zone. The following goods can be carried by persons specially
assigned or transported by the enterprises themselves after they have been
examined by the customhouse: 1. Articles with value of US10,000 and the below;
2. Articles returned to the Outside for exchange due to poor quality; 3.
Articles whose taxes have been paid for import; 4. Other articles verified by
the customhouses. Article 40 The principal of the vehicles transporting goods in
and out of the Processing Zone shall handle procedures and file at the
customhouse with business license for incorporated enterprise and list of names
of vehicles, quantity, wagon numbers and names of drivers. All the operators of
the transportation enterprises undertaking transportation of goods in/out the
Processing Zone and entrepot transportation shall abide by the administrative
provisions on vehicles and the goods carried by the customhouse and bear
relevant legal responsibilities. Article 41 Without approval from the
customhouse, vehicles and individuals from the Processing Zone to the Outside
are prohibited to transport or carry any goods inside the Processing Zone to the
Outside. Chapter Seven Supplementary Articles Article 42 Goods imported to the
Processing Zone and goods exported from the Processing Zone shall be listed in
import and export statistics. Goods from the Outside to the Processing Zone and
goods from the Processing Zone to the Outside shall be recorded in statistics
one by one. The statistical methods shall be worked out by General
Administration of Customs later. Article 43 Persons or units violating the
Interim Procedures shall be punished in accordance with relative stipulations of
the "Customs Law of the People's Republic of China" and the "Implementing Rules
on Administrative Penalty of the Customs Law of the People's Republic of China".
Article 44 The Interim Procedures shall come into force on May 1,
2000. |
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