China Customs Measures (Trial) on Supervision of Hengqin New Area

Chapter 1 General Rules

Article 1 These Measures are formulated in accordance with the Customs Law of the People’s Republic of China and other relevant China laws and regulations for the purposes of regulating Customs supervision on Hengqin New Area.

Article 2 These Measures are applicable to China Customs' control and check inward and outward means of transport, goods and articles via Hengqin, vehicles, goods and articles into and out of Hengqin, and enterprises and places registered within the Hengqin Customs authorities.

Article 3 The port between Hengqin and Macao is supervised as the "first line" coverage; the channels between Hengqin and other regions within China Customs territory are supervised as the "second line" coverage. The Customs shall implements hierarchical management under the rule of “A relaxation of the first line; a strict supervision over the second line; a separation of person and goods as well as a classified management”.

Article 4 Hengqin shall establish as required island-wide patrol, monitoring facilities and Customs information platform in accordance with China Customs supervision. The "first line", "second line" Customs supervision zones and intra-Hengqin Customs supervision places shall be established with compliant facilities and workplaces usable for supervision. Only based upon the General Administration of Customs of the People’s Republic of China’s (GACC hereinafter) acceptance shall Hengqin carry out relevant operations.

Article 5 Registration with the Customs shall be required over the intra-Hengqin importing and exporting business eligible for bonded treatment, tax reliefs and tax refund, and related logistical enteprises, Customs brokers and enterprises (enterprises hereinafter). The enterprises shall establish the account book, report forms, etc. in accordance with Customs requirements and accept Customs audit or investigation.

The computerized management system shall be required over the enterprises to do computer networking and electronic data exchanging with Customs.

Article 6 Unless otherwise regulated, the Customs shall maintain electronic handbook management concerning goods inward and outward Hengqin, the bonded goods, tax-relievable goods stored in Hengqin, and tax-refundable goods that are carried into Hengqin.

Article 7 The goods banned from entry according to laws, administrative regulations and ministerial rules shall not be carried into Hengqin through the "first line"; the goods banned from exit according to laws, administrative regulations and ministerial rules shall not be carried into Hengqin through the "second line" through the means of customs clearing.

The intra-Hengqin enterprises shall not undertake the inward processing involving any goods listed in The Catalogue of Commodities Prohibited from Processing Trade.

Chapter 2 Supervision over Goods Entry and Exit between Hengqin and Abroad

Article 8 Unless otherwise regulated, the Customs shall conduct record-filing management over the bonded goods, tax-relievable goods and tax-refundable goods that are imported and exported between Hengqin and abroad, and conduct Customs clearance procedures as required over other kinds of goods moving between Hengqin and abroad.

Article 9 The Customs shall conduct bonded or tax-relief treatment for production-related goods importing from abroad to Hengqin, except the following goods:

(1) Imported goods for living, consumption, and commercial estate development projects;

(2) Goods banned by law, administrative regulations and ministerial rules from the bonded or tax-relievable treatment;

(3) Goods under the list banned from the bonded or tax-relievable treatment at the "first line" by the Ministry of Finance, the State Administration of Taxation and GACC.

Article 10 Unless otherwise regulated, the record-filing goods from abroad to Hengqin shall not be subject to import quota nor import license management.

The goods exporting from Hengqin to abroad shall be subject to export quota and export license.

Chapter 3 Supervision over Goods Entry and Exit between Hengqin and other regions of Chinese Mainland

Article 11 The intra-Hengqin bonded, tax-relievable and tax-refundable goods sold to other regions of Chinese mainland shall be subject to China Customs' import clearance formalities. The tax-refundable goods sold from other regions of the mainland to Hengqin shall be subject to China Customs' export clearance formalities. The goods aforesaid shall be carried in and out of Hengqin through the declaration channel appointed by Customs. After relevant Customs formalities, those goods aforesaid may be collectively declared to the Customs but may not be declared by spanning more than one month or one year.

The Customs may inspect other goods which enter in and out of Hengqin through the un-declaration channel appointed by Customs.

The intra-Hengqin supervised goods without completion of Customs formalities, where in need of transfer to other customs supervised places out of Hengqin, shall be subject to the declaration formalities according to Customs-shifting transportation.

Article 12 Production-related goods sold to Hengqin from other mainland regions shall be regarded as export and eligible for China Customs' export-tax refund, but excluding the following goods:

(1) Goods purchased outside for living, consumption, and commercial estate development projects;

(2) Goods banned by law, administrative regulations and ministerial rules from the tax refund;

(3) Goods under the list banned from the tax refund at the "second line" by the Ministry of Finance, the State Administration of Taxation and the General Administration of Customs.

The tax-refundable goods entering Hengqin shall be stored in Customs approved places.

Article 13 As regards the bonded goods made in Hengqin and sold to other mainland regions, the Customs shall levy import value-added tax and consumption tax as per the declared real state of the goods.

As regards the bonded goods made in Hengqin and sold to other mainland regions, the enterprises may apply for paying the import duties as per materials or as per the declared real state of the goods.

If the application for paying the import duties as per materials is un-submitted, the Customs shall levy the import duties as per the declared real state of the goods.

Where the enterprises apply for paying the duties as per materials, the following rules shall prevail:

(1) The enterprises shall apply to the Customs at the time of record-filing of their handbook; before the Customs levy of duties, the enterprises may alter their applications;

(2) The Customs shall levy the duties as per the bonded materials of the goods;

(3) Where the materials are covered by preferential origins, the enterprises shall declare and submit relevant certificates at the time of record-filing of the materials, otherwise they shall not be eligible for preferential duty rates on their mainland sales. If the relative bonded materials of the goods are involved in anti-dumping, anti-subsidy and other trade remedy measures, these measures are applicable.

Article 14 As regards the goods transported outward from Hengqin under China's preferential trade policies, where in compliance with Customs rules of origin, the enterprises may apply for eligibility for preferential duty rates.

Article 15 The goods carried from Hengqin to other mainland regions shall be subject to import quota and import license management. For the goods subject to the same import quota and license, if the Customs has verified the import quota and license in the procedure of import declaration, the Customs may not verify the quota and license again when the goods aforesaid exit.

The goods carried to Hengqin from other mainland regions shall not be subject to export quota and export license.

Chapter 4 Supervision over Intra-Hengqin Goods

Article 16 Where the goods under electronic handbook managment transfer between intra-Hengqin enterprises, the enterprises involved shall timely declare relevant electronic data information to the Customs.

Article 17 Where the intra-Hengqin enterprises do not keep the bank deposit accounting system for processing trade, the Customs may not conduct the unit consumption standards on intra-Hengqin goods under processing trade.

Upon relevant Customs formalities, the further-processing transfer and outsourcing business under the processing trade may be undertaken between intra-Hengqin enterprises and the enterprises based in other mainland regions.

As regards the enterprises engaged in international service outsourcing business, the import and export formalities of which shall be processed per relevant regulations.

Article 18 Where selling bonded goods within Hengqin under any of the following circumstances, the sellers shall undertake Customs formalities in advance and pay import duties, value-added tax and consumption tax as per Article 13 aforesaid:

(1) Sale to individual persons;

(2) Sale to intra-Hengqin enterprises and not for production use anymore;

(3) Other circumstances to pay tax

Article 19 Intra-Hengqin goods under tax reliefs shall be supervised according to the Customs regulations on tax reliefs.

Article 20 The tax-refundable goods into Hengqin from other mainland regions shall be supervised as per the regulations below:

(1) Management of record-filing shall be applied to the exit via the "first line" of the goods in original state or of the finished products from tax-refundable goods;

(2) Management of Electronic handbook shall be applied to the intra-Hengqin sale and use for production regarding the goods in original state or the finished products from tax-refundable goods;

(3) Regulations on bonded goods shall be applied to the sale of the goods in original state or of the finished products from tax-refundable goods to mainland-based processing-trade enterprises and also applied to their transportation to Customs supervision zones or bonded supervision venues;

(4) Where the goods in original state or the finished products from tax-refundable goods fall into the infrastructure building materials of Hengqin, they shall be verified as per authorities' approvals and as per their consumed quantity;

(5) Regulations on import declaration shall be applied to intra-Hengqin sale of the goods in original state or of the finished products from tax-refundable goods, not covered by the descriptions of Items (2) and (4) herein; or to mainland-oriented sale which may not be covered by bonded goods management;

(6) Regulations on import declaration also shall be applied to other circumstances.

Article 21 The Customs shall continue bonded supervision over the bonded goods transferred between Hengqin and other Customs special supervision zones, bonded supervision venues or processing trade enterprises.

Article 22 Where the intra-Hengqin goods bonded, tax-relievable or tax-refundable temporarily entry to or exit from Hengqin for repair purpose, etc., the relevant Customs formalities are required.  Such goods shall not be applied to other usage, processing, or production on the mainland and shall be returned to Hengqin within prescribed time.

Article 23 With respect to leftover materials and by-products produced during processing of imported bonded materials by intra-Hengqin enterprises, the Customs shall conduct supervision as per relevant regulations.

Article 24 With respect to any of the following circumstances, the intra-Hengqin enterprises shall timely report to the Customs in writing:

(1) The Customs supervised goods suffer disasters such as force majeure;

(2 The Customs supervised goods suffer damage or loss from factors other than force majeure;

(3) The Customs supervised goods suffer enforcement measures such as sealing and detainment;

(4) Enterprise division, merger or bankruptcy.

Article 25 Where Customs-supervised goods are damaged or lost owing to force majeure, the enterprises shall immediately declare in writing to the Customs and submit certificates issued by insurance and appraisal authorities. The Customs may conduct as per the following rules:

(1) With respect to loss of goods or goods that lose totally use value, the Customs may conduct reconciliation formalities;

(2) With respect to the goods damaged and deprived of original use but still recyclable, the Customs shall keep them supervised.

Article 26 The Customs-supervised goods that are damaged or lost by the factors other than force majeure shall be disposed as per the following rules:

(1) With respect to the bonded goods into Hengqin from abroad, the intra-Hengqin enterprises shall pay import tax to the Customs by using Customs prescribed duty-paid value before the goods are damaged or lost, tax rates and exchange rates of the day when Customs accepts goods declaration, and also shall submit import quota and license certificates as required.

(2) With respect to the tax-relievable goods into Hengqin from abroad, the intra-Hengqin enterprises shall pay import tax to the Customs by using Customs-prescribed duty-paid value before the goods are damaged or lost, tax rates and exchange rates of the day when Customs accepts goods declaration, and also shall submit import quota and license certificates as required.

(3) With respect to the tax-refundable goods into Hengqin from other mainland regions, the intra-Hengqin enterprises shall declare as per relevant regulations on importation.

Article 27 With respect to the supervised goods enter to or exit from Hengqin as below, the intra-Hengqin enterprises may, after fulfilling Customs formalities, assign special carriers or conduct transportation by themselves:

(1) Small amount of goods worth not more than USD 10,000;

(2) Defective goods entering and exiting via Hengqin for replacement;

(3) Other goods fulfilled Customs formalities.

Without fulfillment of relevant Customs formalities, any person entering to or exiting from Hengqin shall not carry or transport goods that are bonded, tax-relievable and/or tax-refundable within Hengqin.

Chapter 5 Supervision over Means of Transport and Personal Belongings via Hengqin

Article 28 The means of transport via the "first line" shall be supervised as per China Customs Measures on Supervision of Entry-Exit Means of Transport (GACC Decree No. 196) and China Customs Administrative Measures on Manifests of Entry-Exit Means of Transport (GACC Decree No. 172).

The Customs may conduct inspection of all means of transport via the "second line", which shall not transport any supervised goods without fulfillment of relevant Customs formalities.

Article 29 With respect to the vehicles only using Macao-registered license plates moving between Hengqin and abroad, the Customs shall conduct supervision as per relevant pacts made between Guangdong Province and Macao Special Administrative Region; such vehicles after their entry shall travel within Hengqin only.

Article 30 Personal belongings in the entry and exit shall be subject to the Customs measures that are separately formulated by GACC and other relevant departments.

Chapter 6 Supplementary Provisions

Article 31 Unless otherwise regulated, Customs statistics shall cover the goods moving via the "first line" between Hengqin and abroad, and the goods moving via the "second line" between Hengqin and other mainland regions shall be listed into separate statistics of the Customs.

The goods that are transferred or moved between the intra-Hengqin enterprises, and the goods moved between Hengqin and other Customs supervised zones and bonded supervision venues, shall not be listed into Customs statistics.

Article 32 Violation of these Measures and China Customs Law and Regulations shall be subject to Customs administrative penalty or even to criminal liability.

Article 33 These Measures shall be construed by GACC.

Article 34 These Measures shall go into effect as of August 1, 2013.