Promulgation Authorities:  State Council

Promulgation Date:  2011.01.08

Effective Date:  2011.01.08

Validity Status:  valid

Provisional Measures of the People’s Republic of China on Customs Supervision and Administration of Export Processing Zones

Provisional Measures of the People's Republic of China on Customs Supervision and Administration of Export Processing Zones

（Approved by the State Council on 17 April 2000

Issued by the General Administration of Customs on 24 May 2000

Amended in accordance with the Decision of the State Council on Amending the Provisional Measures of the People's Republic of China on Customs Supervision and Administration of Export Processing Zones, issued on 2 September 2003

Revised on 8 January 2011 pursuant to the Decision of the State Council on Revocation and Revision of Certain Administrative Regulations (State Council Order No. 588)）

CHAPTER I — GENERAL PRINCIPLES

Article 1.   

These Measures are formulated in order to strengthen and improve administration of the processing trade, to standardise Customs supervision and administration of export processing zones, to promote the healthy development of export processing zones, and to encourage the expansion of foreign exports, in accordance with the Customs Law of the People's Republic of China and relevant state laws and regulations.

Article 2.   

In order to prevent duplication of construction, where export processing zones (hereinafter referred to as "processing zones") are to be established within the territory of the People's Republic of China, they may only be established within the existing Economic and Technological Development Zones already approved by the State Council, and must be reported to the State Council for approval by the provincial (autonomous regional or centrally administered municipalities) people's governments.

Article 3.   

Processing zones are specially designated areas subject to Customs supervision and administration. Customs shall establish offices within processing zones, and shall carry out 24 hour supervision and administration of goods entering and leaving processing zones and related premises within the zones, in accordance with these Measures.

Article 4.   

Isolation facilities and a system of closed-circuit television surveillance must be installed between processing zones and other regions within the territory of the People's Republic of China (hereinafter referred to as "outside regions") which conform to Customs supervision and administration requirements. The relevant business of processing zones may only be carried out after the General Administration of Customs has inspected the processing zone's isolation facilities and has accepted that they are up to standard.

Article 5.   

Processing zone administrative committees shall be established together with export processing enterprises, storage enterprises which provide services specifically for the production of export processing enterprises and freight enterprises which specialise in the import and export of goods from processing zones, verified and approved by the Customs authorities.

Apart from health and safety personnel and persons on duty at enterprises, no other persons may reside in processing zones. Business-type facilities for everyday consumption must not be established.

Article 6.   

The business of retail sales, general trade, entrepót trade and other business which has no relation to processing zones must not be conducted within processing zones.

Article 7.   

Enterprises established in processing zones (hereinafter referred to as "processing zone enterprises") must go through registration procedures with Customs.

Article 8.   

Processing zone enterprises shall set up account books and report forms which conform to Customs supervision and administration requirements in accordance with the Accounting Law of the People's Republic of China and the provisions of relevant state laws and regulations. Bookkeeping and business accounting is to be carried out based on legal and valid receipts, and the warehousing, assignment, transfer, sale, processing, use, loss and other such circumstances of goods and articles related to the enterprise which enter and leave a processing zone are to be recorded.

Article 9.   

Processing zones shall implement a computer network administration and a Customs inspection system.

Processing zone enterprises shall establish a computer administration database which conforms to Customs supervision and administration requirements, and shall implement a computer network with Customs and engage in electronic data interchange.

Article 10.   

Where processing zone enterprises develop processing trade business, they need not implement a system of bank surety accounts for the processing trade. Customs need not implement management based on the Manual for Registration of Processing Trade.

Article 11.   

Pursuant to the provisions of the Customs Law of the People's Republic of China, Customs has the power to check and inspect goods, articles, means of transport and personnel entering and leaving processing zones and related premises within processing zones.

Article 12.   

The State may not levy a value-added tax on processed products within processing zones.

Article 13.   

Goods and articles which are prohibited by the State from being imported or exported must not enter or leave processing zones.

CHAPTER II — SUPERVISION AND ADMINISTRATION OF GOODS IMPORTED AND EXPORTED BETWEEN PROCESSING ZONES AND OVERSEAS

Article 14.   

With respect to goods entering and exiting between the processing zones and overseas, the owner of the goods or the agent of the owner shall complete a list for the record of goods entering or exiting China in accordance with the approval document of the processing zone administrative committee, which shall be filed with the responsible Customs office.

The list for the record shall be produced and issued by the General Administration of Customs.

Article 15.   

Customs shall carry out supervision and administration of goods imported and exported between processing zones and overseas in accordance with measures for direct transport through Customs or Customs transits.

Article 16.   

Apart from passive export quota administration, import and export quota and licensing administration shall not be invoked in respect of goods imported and exported between processing zones and overseas.

Article 17.   

Import duty and import related taxes on goods entering processing zones from overseas shall be handled in accordance with the following provisions except where laws and regulations stipulate otherwise:

(1) machinery and equipment required for production-type infrastructure construction projects within processing zones, and capital construction materials required for the construction of production factory buildings and storage facilities within processing zones shall be duty free;

(2) machinery, equipment and moulds which are required for a processing zone enterprise's production and spare parts used for maintenance shall be duty free;

(3) raw materials, spare parts, components, packaging materials and consumable materials required for processing the export products of a processing zone enterprise shall be treated as goods in bond;

(4) a reasonable quantity of office stationery for the sole use of processing zone enterprises and administrative organs shall be duty free;

(5) means of transport and consumer goods for daily use for the sole use of processing zone enterprises and administrative organs shall go through the procedures for Customs declaration in accordance with relevant regulations on imported goods, and Customs shall levy duty in accordance with regulations.

Article 18.   

Finished products of processing zone enterprises and other residual industrial material, surplus material, damaged or defective goods, waste products and other such products to be sold overseas which are produced in the course of processing shall be exempt from Customs export duty, except where laws and regulations stipulate otherwise.

CHAPTER III — SUPERVISION AND ADMINISTRATION OF GOODS ENTERING AND EXITING BETWEEN PROCESSING ZONES AND OUTSIDE REGIONS

Article 19.   

Goods which are transported from processing zones to outside regions shall go through the procedures for Customs declaration in accordance with relevant regulations on imported goods, and duty for finished products shall be levied. Where the goods are under licence administration, the valid import licence shall be presented to Customs.

Article 20.   

The processed goods and residual industrial materials, damaged or defective goods, waste products etc resulted from processing by enterprises in the processing zones shall be re-transported overseas. Enterprises may apply for approval for transportation outside the processing zones under special circumstances and pay duties in accordance with the categorisation based on the status of goods at time of domestic sale upon verification and approval by the customs in-charge. Goods which are subject to import licencing shall be exempt from import licensing. Applications for import licences shall be made for goods listed in the Catalogue of Waste Materials Classified as Restrictive Imports Usable as Raw Materials with the environmental protection department in accordance with prevailing regulations. The approval documents issued by the administrative committee of the processing zone and the environmental protection department shall be produced for exit formalities and exemption from import licence and duties with the customs in-charge for residual industrial materials and waste products with no commercial value to be transported out of the processing zones for destruction.

Article 21.   

Enterprises in the processing zones may transport relevant moulds, semi-manufactured goods etc out of the processing zone for processing where necessary. Upon approval from the director of the customs, enterprises outside the processing zone undertaking the processing on commission shall pay a security deposit equivalent to the amount of duties and import value-added tax payable for such goods or produce a letter of guarantee for such amount payable to the customs of the processing zone before completion of the exit formalities.

The term for processing by enterprises outside the processing zone on commission shall be determined by the customs in-charge based on the term of the contract. The processed goods shall be shipped back to the processing zone within the term. The enterprise in the processing zone shall present the application form for external processing and relevant invoices and certificates to complete clearance inspection and cancellation formalities with the customs of the processing zone. The customs of the processing zone shall refund the security deposit or letter of guarantee upon completion of clearance inspection and cancellation formalities.

Article 22.   

Where processing zone enterprises sell machinery, equipment, moulds and so on to outside regions, it shall be handled in accordance with state import policies currently in effect and relevant regulations.

Article 23.   

Processing zone enterprises may engage in product testing, inspection and display activities in outside regions with the approval of the responsible Customs. Products which are to be tested, inspected and displayed shall go through the procedures for leaving a processing zone in accordance with Customs administrative regulations on the temporary importation of goods.

Article 24.   

When machinery, equipment, moulds and office equipment and so on which are used in a processing zone must be transported to outside regions for maintenance and repair, testing or inspection, the processing zone enterprise or administrative organ shall fill out an Inquiry Form for Export Processing Zone Goods to be Transported to Outside Regions for Maintenance and Repair, Testing or Inspection, and submit an application to the responsible Customs, and may only transport the machinery, equipment, moulds and office equipment and so on to outside regions for maintenance and repair, testing or inspection after the responsible Customs has authorised, registered and examined them.

When a processing zone enterprise transports moulds to outside regions for maintenance and repair, testing or inspection, it shall keep a sample of the product the mould produces for Customs to conduct an examination and verification of the mould when it has been transported back into the processing zone.

Machinery, equipment, moulds and office equipment and so on which are transported to outside regions for maintenance and repair, testing or inspection must not be used for processing or utilised in the outside regions.

Article 25.   

Machinery, equipment, moulds and office equipment and so on which are transported to outside regions for maintenance and repair, testing or inspection shall be transported back into the processing zone within 2 months of the date on which they were transported out. In special circumstances where they cannot be transported back on schedule, the processing zone enterprise shall explain the circumstances to the responsible Customs within the final 7 days before the time period expires, and shall apply for an extension. An application for an extension can only be made once, and the period of extension must not exceed 1 month.

Article 26.   

When machinery, equipment, moulds and office equipment and so on which are transported to outside regions for maintenance and repair are transported back into a processing zone, Customs must be able to recognise them as the original objects or as objects of the same specifications but with new parts, fittings or accessories, but where the new parts, fittings or accessories have been used for replacement, the original parts, fittings or accessories shall also be transported back into the processing zone.

Article 27.   

Goods which enter processing zones from outside regions shall be regarded as exports, and procedures for Customs export declarations shall be handled with Customs. Export rebates shall be handled in accordance with the following except where laws and regulations stipulate otherwise:

(1) for machinery, equipment, raw materials, spare parts, components and packaging materials made in China which enter a processing zone from outside regions for the use of processing zone enterprises, as well as a reasonable quantity of capital construction materials etc required for the construction of infrastructure, buildings for production and office buildings for processing zone enterprises and administrative departments, Customs shall handle the procedures for Customs declaration in accordance with relevant regulations on exported goods, and shall issue an Export Rebate Customs Declaration Form. Enterprises from outside regions may apply to the department of taxation to handle the procedures for export rebates (exemptions) by producing the export rebates copy of the Customs Declaration Form. Specific regulations on rebates (exemptions) shall be issued separately by the State Administration of Taxation.

(2) for consumer goods for daily use, means of transport and so on, which enter a processing zone from outside regions for the use of processing zone enterprises and administrative organs, Customs shall not issue an Export Rebate Customs Declaration Form.

(3) for imported machinery, equipment, raw materials, spare parts, components, packaging materials, capital construction materials and so on, which enter a processing zone from other regions, enterprises from outside regions shall provide Customs with a list of the aforementioned goods or articles, and shall go through the procedures for Customs export declaration. The goods or articles shall be cleared after Customs inspection. Where import related taxes have already been paid on the aforementioned goods or articles, they shall not be refunded.

(4) where commodities that are prohibited by the State to be exported or commodities that are traded by the State in a unified way need to be transported to a processing zone to carry out processing of certain stages of production, due to the fact that domestic technology is unable to meet product requirements, it shall be reported to the Ministry of Commerce for approval. Customs shall carry out supervision and administration in accordance with administrative measures on the processing of export materials. Customs shall not issue an Export Rebate Customs Declaration Form for the goods that are transported into the processing zone.

Article 28.   

Goods and articles which enter a processing zone from outside regions shall be transported to a warehouse or locality designated by Customs in the processing zone. Enterprises from outside regions shall fill out an Export Declaration Form, and shall produce domestic purchase invoices and packing lists when going through procedures for Customs declaration with Customs responsible for the processing zone.

Article 29.   

Goods which enter processing zones from outside regions may only be transported overseas after they have undergone substantial processing at a processing zone enterprise.

CHAPTER IV — SUPERVISION AND ADMINISTRATION OF GOODS WITHIN PROCESSING ZONES

Article 30.   

Goods imported into or exported out of processing zones by processing zone enterprises must be accurately declared to Customs responsible for the processing zone enterprise. Customs shall conduct inspections, clearances and verification for cancellation of the goods imported into or exported out of the processing zone by the processing zone enterprises according to inventories made for the record, and relevant documents.

Customs shall conduct procedures for filing, declaring, inspecting, clearing, and verifying goods entering or leaving processing zones for cancellation within processing zones.

Article 31.   

Goods within processing zones may be assigned or transferred between processing zone enterprises. Both parties must file in advance with Customs the specific names, quantities, prices and other such matters relating to the goods.

Article 32.   

Processing zone enterprises must not sell imported raw materials or spare parts which have not undergone substantial processing, to outside regions. Processing zone enterprises engaged in providing storage services must not provide stored raw materials or spare parts to enterprises from outside regions.

Article 33.   

Every 6 (six) months from the date on which a processing zone enterprise first develops its export processing business or storage business, it must take its account books and relevant documents to Customs responsible for the processing zone enterprise and go through a procedure of verification for cancellation.

Article 34.   

Where force majeure has caused goods entering processing zones to be depleted or damaged during processing or storage, the processing zone enterprise or storage enterprise shall report to the responsible Customs within 10 (ten) days of the date on which the shortage or damage was discovered and shall provide explanations. After examination and verification, Customs shall permit the goods to be deducted from the enterprise's account books.

CHAPTER V — SUPERVISION AND ADMINISTRATION OF GOODS TRANSPORTED BETWEEN PROCESSING ZONES

Article 35.   

When transporting goods between processing zones, both the parties receiving and sending the goods shall jointly submit an application to Customs responsible for the processing zone where the goods will be sent from. After Customs has authorised it, it shall be handled in accordance with relevant regulations on Customs transits.

Article 36.   

When goods are transferred to other processing zones, Customs responsible for the zone where the goods are transferred to shall promptly clear the goods to enter factories or warehouses after checking that the seal marks are intact and that the inventory of goods corresponds.

Article 37.   

Where goods transported between processing zones cannot be handled according to Customs transits, Customs responsible for the zone where the goods are transferred to shall collect a security to the value of goods from the enterprise receiving the goods. After the goods arrive at the zone where they are being transferred to and Customs has checked that they are in proper order, the responsible Customs shall refund the security to the enterprise within 10 (ten) working days.

CHAPTER VI — SUPERVISION AND ADMINISTRATION OF MEANS OF TRANSPORT AND ARTICLES CARRIED BY INDIVIDUALS ENTERING AND LEAVING PROCESSING ZONES

Article 38.   

Means of transport and personnel shall enter and leave processing zones through special channels designated by Customs.

Article 39.   

Processed products which are transported overseas from processing zones and goods which are transported to outside regions from processing zones shall be delivered subject to Customs authorisation and shall be transported by the specialised freight enterprise established in the processing zone, after being inspected and cleared by Customs. After being inspected by the responsible Customs, the following goods may be transported by a person specially appointed by the enterprise to carry the goods or by the enterprise itself:

(1) small-priced articles with a value of USD$10,000 or less;

(2) replacement articles which are being re-transported to outside regions due to substandard quality;

(3) articles which have already gone through procedures for import tax;

(4) any other articles which have been authorised by Customs.

Article 40.   

Persons responsible for means of transport which deliver goods entering and exiting processing zones shall take the business licence of the enterprise legal person and a list of the names of the means of transport, the quantity, licence plate numbers, drivers' names and so on to Customs to go through registration and filing procedures.

All operators of freight enterprises which transport processing zone goods into and out of processing zones or by Customs transit shall abide by the administrative regulations of Customs relating to means of transport and goods to be loaded, and shall assume corresponding legal liability.

Article 41.   

Means of transport and personnel must not transport or carry processing zone goods from a processing zone to outside regions without Customs approval.

CHAPTER VII — SUPPLEMENTARY PROVISIONS

Article 42.   

Goods which are transported into processing zones from overseas and goods which are transported overseas from processing zones shall be listed in import and export statistics. Goods which enter processing zones from outside regions and are transported to outside regions from processing zones shall be entered as separate statistics. Measures on statistics shall be separately formulated by the General Administration of Customs.

Article 43.   

Where there is a violation of the provisions of these Measures, Customs shall handle the matter in accordance with the relevant provisions of the Customs Law of the People's Republic of China and the

Implementation Regulations of the Customs of the  People's Republic of China on Administrative Penalties.

Article 44.   

These Measures shall take effect from 24 May 2000.