On January 1, 2022, the General Administration of Customs (GAC) issued the Measures of the Customs of the People's Republic of China for the Administration of Comprehensive Bonded Zones (hereinafter referred to as “the Measures”) effective from April 1, 2022. The Measures are aimed at facilitating administration and trades in comprehensive bonded zones of kinds (hereinafter referred to as “the zones”).

The following are major points that are covered in the Measures:

1.     Newly added types of businesses are allowed to be carried out in the zones: based on Interim Measures of the Customs of the People's Republic of China for the Administration of Bonded Port Areas, the Measures have added new types of businesses, such as: finance lease, cross-border e-commerce, etc.

2.     Clarification of the application of certain special policies:

(1)   Selective levies on tariffs for domestic sales: according to the Measures, when the goods processed and produced by enterprises in the zones are sold to China’s market, the enterprises in the zones or consignee/ consignor outside of the zones are allowed to choose to pay customs duties whether on the corresponding imported materials and pay the interest of deferred customs duties or on finished goods.

(2)   The policy of granting the general value-added taxpayer status in the zones: the implementation of this policy shall be in accordance with the corresponding provisions according to the Measures.  

3.     Optimization of customs supervision:

Extending the outside inspection and maintenance period: the Measures specifies that the time limits for outside inspection and maintenance should not exceed 60 days. If the goods cannot be transported back to the zones as scheduled for any reason, the enterprise needs to apply for an extension within 7 days before the expiration of the time limit to Customs. The extension period will also not exceed 30 days.

4.     Clarification of the quarantine inspection: According to the Measures, goods transported to the zones from overseas areas and their outer packaging and containers shall be subject to quarantine inspection at the entry port by Customs.

For MNCs and stakeholders, the Measures is the latest regulation as well as guide of China’s management on comprehensive bonded areas. Compliance teams of relevant enterprises should carefully check changes in the newly released document compared with its previous pilot version in case of any impact. Meanwhile, different departments (finance, strategy etc.) within companies in bonded areas should work together to figure out the best combination for a successful business model (especially the newly-added ones in the Measures) and tax application, so that the company’s best interest would be achieved. 

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