Decree of the General Administration of Customs of the People’s Republic of China No.197

The Measures of the Customs of the People’s Republic of China for the Classified Administration of Enterprises , which were adopted at the executive meeting of the General Administration of Customs on October 14, 2010, are hereby promulgated, and shall come into force as of January 1, 2011. 

Sheng Guangzu
Minister
General Administration of Customs
October 15, 2010

Measures of the Customs of the People's Republic of China for the Classified Administration of Enterprises

Chapter I General Rules

Article 1 For the purposes of encouraging enterprises to abide by laws and be self-disciplined, enhancing the efficiency of Customs administration, and safeguarding the safety and trade facilities, these Measures are formulated in accordance with the Customs Law of the People's Republic of China and other relevant laws and administrative regulations.

Article 2 These Measures shall apply to the classified administration of consignees and consigners of import and export goods and customs declaration enterprises registered with the Customs.
The classified administration of other enterprises shall be separately formulated by the General Administration of Customs.
 

Article 3 The Customs shall, in light of the enterprises' performances in observing laws, administrative regulations, customs rules, anti-corruption provisions, their respective business management situations as well as the Customs supervision and statistical records, etc., establish five administrative categories of AA, A, B, C and D to evaluate and classify relevant enterprises, and announce the administrative categories of enterprises.

Article 4 The General Administration of Customs shall, by following the principle of law-abidingness and convenience, formulate corresponding differential management measures for enterprises in different management categories, of which the enterprises in categories of AA and A shall be subject to corresponding convenient customs clearance measures, enterprises in category of B subject to common management measures, and enterprises in categories of C and D subject to strict control measures.
The Customs across the country shall carry out uniform enterprise classification standards, procedures and administrative measures.
The Customs shall intensify cooperation with enterprises, and conduct regular information exchange and business contact therewith.

Article 5 The General Administration of Customs shall guide and supervise the work on classified administration of enterprises; and the Customs directly under the General Administration of Customs shall be responsible for reviewing, approving and adjusting the management categories of enterprises within their respective jurisdictions.

Chapter II Establishment of Administrative Categories

Section 1 Consignees and Consignors of Import or Export Goods

Article 6 A consignee or consignor of import or export goods in the category of AA shall simultaneously meet the following requirements:
1. It has met the conditions for the administrative category of A and has been subject to the administrative category of A for at least one year;
2. Its import and export declaration error rate in the previous year has been lower than 3%;
3. it has met the requirements for customs administration, enterprise business management and trading safety upon Customs auditing; and
4. it submitted a Report on Business Management Status and the audit report for the previous year as issued by an accounting firm every year; and submitted a Form on the Import and Export Business every half a year.
 

Article 7 The consignee or consignor of import or export goods in the category of A shall simultaneously meet the following requirements:
1. Having been subject to the administrative category of B for more than one year;
2. Having never committed the crime of smuggling, the act of smuggling or violating Customs regulations for one consecutive year;
3. Having never been subject to any customs administrative punishment due to importing or exporting goods infringing on intellectual property rights for one consecutive year;
4. Having no defaulted taxes or fines for one consecutive year;
5. Having the gross import or export value more than 500,000 US Dollars in the previous year;
6. Having the error rate of import or export declaration below 5% during the previous year;
7. Having sound accounting rules, as well as truthful and complete business records;
8. Having taken initiatives in cooperation with customs administration, timely handling various customs formalities, and provided truthful, complete and valid documents and certificates to the Customs;
9. Submitting a Report on Business Management Status every year;
10. Handling the formality for reissuing and altering the Register Document for Customs Declaration of Consignees or Consigners of Import or Export Goods of the Customs of the People's Republic of China according to provisions; and
11. Having no bad records in the administrative departments and institutions of commerce, people's bank, industry and commerce, taxation, quality inspection, foreign exchange and procuratorate, etc consecutively for one year.
 

Article 8 The consignee or consignor of import or export goods under any of the following circumstances shall be subject to the administrative category of C:
1. Having committed the act of smuggling;
2. Having violated the provisions on customs supervision and control for more than three times in one year, with the number of violations exceeding 1‰ of the total number of customs declaration forms and entry and exit archival filing lists in the previous year, or having been accumulatively fined more than 1,000,000 Yuan due to the violation of the provisions on customs supervision and control within one year;
3. Having been subject to the customs administrative punishments twice within one year for importing or exporting goods infringing on intellectual property rights; or
4. Having defaulted in payment of taxes or fines payable in the amount of less than 500,000 Yuan.

Article 9 The consignee or consignor of import or export goods under any of the following circumstances shall be subject to the administrative category of D:
1. Having committed the crime of smuggling;
2. Having committed the act of smuggling more than twice in one year;
3. Having been subject to customs administrative punishments thrice or more within one year for importing or exporting goods infringing on intellectual property rights; or
4. Having defaulted in payment of taxes or fines payable in the amount more than 500,000 Yuan.

Article 10 Any consignee or consignor of import or export goods that has not been under any of the circumstances as mentioned in Articles 8 and 9 and meets any of the following conditions, shall be subject to the administrative category of B:
1. Having been registered for the first time;
2. Its administrative category has never been adjusted after the initial registration;
3.An enterprise in the category of AA neither satisfies the relevant requirements for original administrative category nor meets relevant requirements for the administrative category of A; or
4. An enterprise in the category of A does not satisfy the relevant requirements for the original category.

Article 11 Processing enterprises registered at the Customs shall be subject to classified administration in light of the consignees or consigners of import or export goods.

Section 2 Customs Broker Enterprises

Article 12 A customs broker enterprise in the category of AA shall meet the following requirements simultaneously:
1. It has met the conditions for the administrative category of A and has been subject to the administrative category of A for more than one year;
2. It has deputized more than 20,000 (5,000 for central and western regions) import or export declaration forms and archival filing lists for entry or exit of the country in the previous year;
3. Its import and export declaration error rate in the previous year has been lower than 3%;
4. It has met the requirements for customs administration, enterprise business management and trading safety upon the inspection of the Customs; and
5. It has submitted a Report on Business Management Status and the audit report for the previous year as issued by an accounting firm every year, and submitted a Form on Import or Export Business every half a year.

Article 13 A broker enterprise in the category of A shall simultaneously meet the following requirements:
1. Having been subject to the administrative category of B for more than one year;
2. Neither the enterprise nor its practicing customs declarers have committed the crime of smuggling, the act of smuggling or violation of the provisions on customs supervision and control for one consecutive year;
3. The goods declared under its agency have never been confiscated by the Customs due to the infringement on intellectual property rights for one consecutive year; or although the goods have been confiscated, it has performed the obligation of reasonable examination with respect to the intellectual property right condition of the goods;
4. Having no defaulted taxes or fines for one consecutive year;
5. Having deputized more than 3,000 import or export declaration forms and archival filing lists for entry or exit of the country in the previous year;
6. Having the error rate of import and export declaration under its agency below 5% during the previous year;
7. Having made accounts and business records according to law, and having recorded down all the activities regarding the commissioned declaration business in a truthful, accurate and complete manner;
8. Submitting a Report on Business Management Status every year;
9. Handling the formalities for extension of licensing and for reissuing and altering the Register Document for Customs Declaration of Consignees or Consigners of Import or Export Goods of the Customs of the People's Republic of China according to provisions; and
10. Having no bad records in the administrative departments and institutions of commerce, people's bank, industry and commerce, taxation, quality inspection, foreign exchange and supervision, etc consecutively for one year.

Article 14 A broker enterprise under any of the following circumstances shall be subject to the administrative category of C:
1. Having committed the act of smuggling;
2. Having violated the provisions on customs supervision and control for more than three times within one year, or having been accumulatively fined more than 500,000 Yuan due to violation of the provisions on customs supervision and control within one year;
3. The goods declared under its agency have been confiscated by the Customs twice within one year due to the infringement on intellectual property rights and the obligation of reasonable examination has not been performed;
4. Having the error rate of import and export declaration under its agency at 10 % or above during the previous year;
5. Having defaulted in payment of taxes or fines payable in the amount of less than 500,000 Yuan;
6. Failing to accept or assist in the investigations by the Customs when the goods declared under its agency are suspected of smuggling or violation of the provisions on customs supervision and control; or
7. Its declaration business has been suspended by the Customs.

Article 15 A broker enterprise under any of the following circumstances shall be subject to the administrative category of D:
1. Having committed the crime of smuggling;
2. Having committed the act of smuggling more than twice in one year;
3. The goods declared under its agency have been confiscated for more than three time within one year due to the infringement on intellectual property right and the obligation of reasonable examination has not been performed;
4. Having defaulted in payment of taxes or fines payable in the amount more than 500,000 Yuan.

Article 16 Any broker enterprise that is not under any of the circumstances as mentioned in Articles 14 and 15 and also meets one of the following conditions shall be subject to the administrative category of B:
1. Being registered for the first time;
2. Its administrative category has never been adjusted after the initial registration;
3. An enterprise in the category of AA neither satisfies relevant requirements for the original administrative category nor meets the requirements for the administrative category of A; or
4. An enterprise in the category of A does not satisfy the relevant requirements for the original administrative category.

Chapter III Application and Adjustment of Administrative Categories

Article 17 An enterprise, which accords with Article 6 (1) or Article 12 (1) and (2) of these Measures, may file an application for the administrative category of AA with the Customs directly under the General Administration of Customs via the Customs at the place of its registration, and simultaneously submit the following documents:
1. A Written Application for the Administrative Category of AA;
2. A Report on Business Management Status; and
3. An Audit report issued by an accounting firm for the previous year.

Article 18 An enterprise, which accords with Article 7 or 13 of these Measures, may file an application for the administrative category of A with the Customs directly under the General Administration of Customs via the Customs at the place of its registration, and simultaneously submit the following documents:
1. A Written Application for the Administrative Category of A; and
2. A Report on Business Management Status.

Article 19 After acceptance of an application for the administrative category of AA or A as filed by an enterprise, in case the documents submitted by the enterprise are complete and in statutory forms upon examination, the Customs at the place of registration shall make a Written Decision on Acceptance of the Application for the Classified administration of Enterprises on the spot and report it to the Customs directly under the General Administration of Customs for examination and approval.
If an application for the administrative category of AA is filed and the customs directly under the General Administration of Customs deems upon examination that it is not necessary to make check verification, it shall make a decision on disapproval of the application within a month of the date on which the application is accepted.
If the Customs directly under the General Administration of Customs deems that it is necessary to make check verification, it shall make a decision on approval or disapproval of the application within two months of the date on which the conclusion of check is made.
The Customs directly under the General Administration of Customs shall make a decision on approval or disapproval of the application within three months after acceptance for an application for the administrative category of A.

Article 20 Where an enterprise applying for the administrative category of AA or A is under any of the following circumstances, the Customs directly under the General Administration of Customs shall return its application and make a decision on disapproval of it:
1. Failing to satisfy the requirements as prescribed in these Measures at the time of application;
2. Failing to satisfy the requirements as prescribed in these Measures during the period of examination; or
3. During the period of examination , having any act suspected of smuggling or violating the provisions on customs supervision and control or infringing on intellectual property rights and thereby being placed on file for investigation or investigated by the customs.

Article 21 Where an enterprise in the administrative category of C has not committed any act prescribed in Article 8 or 14 of these Measures for one year since the Customs made the decision on adjustment of its administrative category, the Customs may adjust its administrative category into B upon application of the enterprise.
Where an enterprise in the administrative category of D has not committed any act prescribed in Article 9 or 15 of these Measures for one year since the Customs made the decision on adjustment of its administrative category, the Customs may adjust its administrative category into C upon application of the enterprise.
If enterprises in the administrative categories of C and D which apply to be adjusted to become those in the administrative categories of B and C fall under any of the circumstances set out in Article 20 hereof, the Customs directly under the General Administration of Customs shall return the application and make a decision not to make the adjustment.

Article 22 Where an enterprise in the administrative category of C or D applies for adjustment into the administrative category of B or C, it shall submit a Written Application for Adjustment of the Management Categories of Enterprises to the Customs directly under the General Administration of Customs via the Customs at the place of its registration. In case the documents submitted by the enterprise are complete and in statutory forms upon examination, the Customs at the place of registration shall make a Written Decision on Acceptance of the Application for the Classified Administration of Enterprises on the spot and report it to the Customs directly under the General Administration of Customs for examination and approval.
The Customs directly under the General Administration of Customs shall make a decision on approval or disapproval of the application within one month after acceptance.

Article 23 Where an enterprise is under any of the following circumstances in which its category shall be degrade, the Customs directly under the General Administration of Customs at the place of its registration shall, within one month of the date of discovery, make a new decision on the administrative category for the enterprise according to the provisions of Chapter II of these Measures:
1.An enterprise in the administrative category of AA or A fails to meet relevant requirements for the original administrative category;
2. An enterprise in the administrative category of B is under any of the circumstances for the administrative category of C or D; or
3. An enterprise in the administrative category of C is under any of the circumstances for the administrative category of D.

Article 24 Where a decision is made by the Customs directly under the General Administration of Customs to or not to adjust the administrative category of an enterprise, the Customs at the place of registration shall serve the relevant decision on the enterprise within ten workdays after the decision is made.
As of the day when an adjustment decision is made, the Customs shall implement corresponding management measures over the enterprise in light of the adjusted administrative category.
If an enterprise withdraws the application for the adjustment of the administrative category before the customs makes a decision to or not to adjust the administrative category of the enterprise, the customs shall terminate the examination of the administrative category and make a decision on terminating the examination of administrative category.

Article 25 Where an enterprise in the administrative category of AA or A is suspected of smuggling and is being placed on file for criminal investigation or investigation, the Customs shall suspend corresponding management measures for its administrative category; and the enterprise shall be subject to the management measures for enterprises in the category of B during the period of the foresaid suspension.

Article 26 Where an enterprise only changes its name or registered customs ID, it may continuously be subject to its original administrative category; however, if it is under any of the following circumstances, its administrative category shall be adjusted in the following methods:
1. In case the enterprise is split off, and the surviving enterprise will inherit main rights and obligations or main creditor's rights and debts of the enterprise before split-off, it shall be subject to the administrative category of the enterprise before split-off; and other enterprises produced through the split-off shall be regarded as enterprises of initial registration;
2. In case an enterprise is split up, the enterprises produced through the split-up shall be regarded as enterprises of initial registration;
3. In case an enterprise is merged, it shall be subject to the administrative category of the surviving enterprise after merger; and
4.In case an enterprise is consolidated, the consolidated enterprise shall be regarded as an enterprise of initial registration.

Chapter IV Enforcement of Administrative Measures

Article 27 Where a customs broker enterprise engages in declaration business on behalf of a consignee or consignor of import or export goods, the Customs shall separately implement corresponding administrative measures in light of the administrative categories applied by the declaration enterprise and the consignee or consignor of import or export goods.
In case the management measures to be implemented over the enterprises in different management categories are conflicting with each other, the Customs shall implement management measures in the following methods:
1.In case the declaration enterprise or the consignee or consignor of import or export goods is in the category of C or D, the corresponding administrative measures for the lower administrative level shall be implemented; and
2. In case both the declaration enterprise and the consignee or consignor of import or export goods are in the administrative category of B or above, the corresponding management measures for the administrative category of the declaration enterprise shall be implemented.

Article 28 Where the administrative category of a processing and trading enterprise is different from that of a production enterprise undertaking commission processing, the Customs shall implement corresponding management measures for the lower administrative level to the foresaid processing and trading business.

Chapter V Supplementary Provisions

Article 29 For the crime of smuggling which serves as the record for the assessment of the classified administration of enterprises, its assessment time shall be the time when the criminal judgment made by the people's court comes into force.
For smuggling acts, acts in violation of the provisions on customs supervision and control, acts of importing or exporting goods infringing upon intellectual property rights which serve as the record for the assessment of the classified administration of enterprises, their assessment time shall be the time when the written decision on customs administrative punishment comes into force.

Article 30 The warning and the fine of less than 30,000 Yuan for an act against the provisions on customs supervision and control may not be taken as the records for appraisal of the management categories of enterprise.

Article 31 The meanings of the following terms and expressions used in these Measures are:
The term "other enterprises" refers to the enterprises engaging in businesses directly related to the import and export activities as prescribed by the General Administration of Customs, excluding the consignees and consignors of import or export goods and the declaration enterprises as registered at the Customs.
The expression "central and western regions" refers to the regions other than the eastern region which includes Beijing Municipality, Tianjin Municipality, Shanghai Municipality, Liaoning Province, Hebei Province, Shandong Province, Jiangsu Province, Zhejiang Province, Fujian Province and Guangdong Province.
The expression "defaulted taxes" refers to the sum of the import and export customs duties and the taxes vicariously collected by the Customs during the import and export process on the import and export goods and articles, which have not been paid for three months after expiration of the time limit, including the taxes other than the fines that need to be paid where the Customs affirms any violation of the provisions on customs supervision and control.
The expression "defaulted fines" refers to the fines, illegal proceeds as confiscated and smuggled goods and articles etc. as recovered by the Customs, which have not been delivered to the Customs for three months after expiration of the time limit as prescribed in the customs administrative punishment decision.
The expression "gross import and export value" includes the customs' trade statistics and statistical data for single items, of which the customs statistics shall prevail and the relevant data shall only be used for the customs' classified administration of enterprises.
the term "error rate of declaration" refers to percentage of dividing the total number of times when scores are recorded with respect to declarations made by all customs declarers of the enterprise with the enterprise as the declaring unit in the previous year, by the total number of customs declaration forms and entry and exit archival filing lists declared with the enterprise as the declaring unit in the current year.
(The term "error rate of declaration" refers to the percentage of dividing the total times of scoring made by all customs declarers by the gross amount of declaration forms in the previous year.)
The term "one year" refers to the consecutive twelve months.
The word "year" refers to one Gregorian calendar year.
In the case of upgrading the administrative category of enterprises, the term "within one year" refers to the 12 months before the date on which the Written Decision on Acceptance of the Application for the Classified Administration of Enterprises is made; in the case of degrading the administrative category of enterprises, the term "within one year" refers to the 12 months before the date on which the latest decision on administrative penalty is made.
The term "more than" and "less than" both include the figure itself.

Article 32 The General Administration of Customs shall be responsible for the interpretation of these Measures.

Article 33 These Measures shall come into effect as of January 1, 2011. The Measures of the Customs of the People's Republic of China for Implementing Classified administration over Enterprises promulgated by the Order No.170 of the General Administration of Customs on January 30, 2008 shall be simultaneously abolished.