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09 July 2010
Contract manufacturing scrap-rate standards for 31 products
Policy on administration of security bank deposit system issued
Exemption from taxation for charity organizations' collectibles
Amendments to customs supervision method codes
Emergency inspection measures for imported rapeseed oil
Trial measures for scrap steel imports
The General Administration of Customs (GAC) and the National Development and Reform Commission jointly issued Announcement 78/2009 on December 10 2009. The two bodies have approved 31 standards for unit consumption for processing trade operations involving various finished products, including stainless steel wire, iron wire, steel cord, books, bonding sheet materials, plastic containers, plastic tableware and palladium jewellery.
The announcement abolished the Standard for Unit Consumption of the Processing Trade Handbooks (HDB0003 - 1999). The updated and adjusted standards give enterprises engaged in the contract manufacturing of such products more flexibility in tracking and supervising bonded materials and inventory used in their production processes.
The GAC streamlined the administration of the security bank deposit system by issuing Announcement 5/2010, which came into effect on February 1 2010.
Announcement 5/2010 states that an electronic system will be implemented for the processing trade industry, enhancing the efficiency and quality of its administration. Under the new system, an enterprise must first register with its local customs house, where it will be issued with certain licences. On receipt of the licences, the enterprise can open an account in one of the designated banks for the first security bank deposit that it makes. Since the system allows data to be transmitted electronically, enterprises are no longer required physically to deliver licences from banks to Customs.
The State Council recently approved the duty-free import of collectibles into China by way of donation, return, recall and purchase by any state-owned charity for charitable purposes (eg, for permanent collection, display and research). These items are exempt from customs duty, import value-added tax (VAT) and consumption tax. These collectibles cannot be transferred, charged, pledged or leased to other parties. In order to execute the State Council decision, the Ministry of Finance, the GAC and the State Administration of Tax jointly issued the Provisional Regulations on Tax Exemption on Collectibles Imported by State-Owned Charities. Announcement 7/2010, which was issued by the GAC on January 29 2010, explains how the regulations will be implemented.
On February 2 2010 the GAC issued Announcement 10/2010, adjusting 10 customs supervision method codes with effect from March 1 2010. The changes do not apply to bonded zones or bonded logistics parks, but cover all other types of bonded area. The changes affect two codes in particular.
Customs Supervision Method Code 5000
This code relates to (i) the import and export of materials into or out of a specific area, and (ii) the import and export of materials into or out of special customs supervision areas. It applies to materials transferred between bonded areas for processing, logistics or research and development. It includes the exchange and return of such materials.
Customs Supervision Method Code 5010
This code relates to (i) special areas for research and development products, and (ii) special customs supervision areas for the transfer of research and development products between foreign locations and special areas for research and development products. The code applies to materials and finished products purchased by enterprises within the customs special supervision areas from abroad or the return of such products abroad; however, this does not include equipment used by the enterprise itself.
These changes reflect a broadening of the scope and nature of activities that can be undertaken by enterprises in customs-supervised areas or zones. Such activities now include research and development and related activities.
The Administration of Quality Supervision, Inspection and Quarantine issued Announcement 101/2009 on November 9 2009. Since November 15 2009, traders have been required to obtain a licence for quarantine examination and approval of imported animals and plants before signing agreements for trading rapeseed oil.
In relation to rapeseed oil imported from Canada and Australia, the announcement imposes transitional measures, which took effect from November 15 2009. Among other things, it provides that: (i) the quarantine and inspection authorities in Canada and Australia must inspect each batch of rapeseed oil to be imported to China, and must state the result of the inspection on the certificate of plant quarantine examination; and (ii) if rapeseed oil contains the fungus Leptosphaeria maculans, it can be imported only through designated points of entry. Rapeseed oil can be transported through areas such as Hainan, Guangdong, Hebei, Liaoning and Tianjin - which are not major rapeseed production areas - and can be processed by specified factories.
Furthermore, the Chinese quarantine authorities have the power to inspect rapeseed oil at its port of arrival. If the fungus is detected, China may return, re-export or destroy the oil, or transport it to other ports.
The announcement gives no termination date for the transitional measures.
On December 10 2009 the Ministry of Environmental Protection issued the Trial Environmental Protection Measures for the Administration of Imports of Scrap Steel by promulgating Announcement 66/2009. The measures took effect from January 1 2010, repealing the Notice Concerning the Further Improvement of the Approval and Administration of Imports of Scrap Steel (158/2005).
The measures provide general and specific regulations for different types of enterprise dealing in scrap steel. The regulations apply generally to all enterprises processing imported scrap steel, whereas the special regulations apply to scrap steel enterprises only.
All enterprises that process imported scrap steel are subject to general regulations which (among other things) provide that an enterprise must:
The measures set out a detailed application process for importing scrap steel. For first-time applications, the documents to be submitted include (i) copies of tax documents, such as the importer's general VAT taxpayer status certificate, and (ii) environmental assessment documents and approvals.
Where an import agent is appointed, copies of the industrial and commercial business certificate, the domestic consignee registration certificate and a valid agency agreement are required.
In addition to specifying the type, quantity, price and quality requirements for imported waste, the agreement must stipulate that: (i) the imported waste must meet Chinese environmental protection standards, with non-compliant waste being subject to a right to return; and (ii) waste covered by the agreement cannot be transferred to any party other than the contract-processing enterprise.
The measures also provide application procedures for repeat applications. In addition to certain limited documentary requirements, the measures require that an agency agreement contain the provisions stated above where an import agent is appointed.
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