On November 23, 2021, the General Administration of Customs of China issued the Administrative Measures of the Customs of the People's Republic of China for the Origin of Imported and Exported Goods under the Regional Comprehensive Economic Partnership Agreement (hereinafter referred to “the Regulation”). The Regulation specifies the Rule of Origin in RCEP, the responsibility of China’s Customs regarding the importation and exportation of goods, and the obligation of relevant individuals. Ten member countries (China, Japan, Australia, New Zealand, Brunei, Cambodia, Laos, Singapore, Thailand, and Vietnam) of the Regional Comprehensive Economic Partnership (RCEP) completed their domestic ratification on November 12, 2021. This means that RCEP has officially taken effect as of 1 January 2022 in those 10 countries.
Some of the important concepts and policies of the Regulation include:
- specifying the concepts of Originating Status and Originating Country/Area. The importers identified with originating status and originating country/area could enjoy relevant preferential tariff reduction. Originating Status is a must for tariff reduction, but the identification of originating country is optional. Importers that are only identified with originating status can apply for the top tax rate that importing countries apply to other member countries as long as the goods are the same.
- The Regulation also recognizes the formats for proof of origin in RCEP, including certificate of origin and declaration of origin. The former one is issued by the issuing body of the member countries while the latter is written by the approved exporter or producer.
- The Regulation reiterates the concept of the Back-to-Back Proof of Origin specified in the RCEP. This proof of origin is applied to the consignment which is to be re-exported. Using the Back-to-Back Proof of Origin will allow importers of the consignment to be relieved from any further processing in the Intermediate Party. The expiration date of the Back-to-Back Proof of Origin is the same as the initial one which means that invalidity of the initial proof of origin will affect the validity of the Back-to-Back Proof of Origin.
The issuance of the Regulation indicates that China has officially started to fulfill its obligations as a member of RCEP. The official kick-off of the RCEP will stimulate cross-border trade within the member states and could ultimately affect the global market.
The qualified enterprises from those 10 countries will gain price advantage for entering the Chinese market in relevant fields, which will weaken the competitiveness of traders elsewhere. MNCs with products that could be covered under the Regulation, and those whose global competitors are from the 10 mentioned countries should be aware of the potential trade change and take necessary actions.
The Regulation details reporting requirements and procedures for foreign traders for the application. Relevant enterprises are suggested to pay close attention to further details. BESTAO will also continue to provide further information and news on the topic. Please stay tuned.
If you need more information or any question you may have on the topic, please contact:
assistant@bestao-consulting.com