Regulations of the People's Republic of China on Guarantee Relating to Customs Affairs
The Regulations of the People's Republic of China on Guarantee Relating to Customs Affairs (the “Regulations”) are aimed at standardizing guarantees relating to customs affairs, enhancing the efficiency of customs clearance and safeguarding the supervision and administration operations of the Customs. The Regulations were adopted at the 124th executive meeting of the State Council on September 1, 2010, promulgated on September 14, 2010, and shall come into effect on January 1, 2011.
Guarantees relating to Customs affairs shall mainly apply under the following circumstances:
- A party may apply to Customs for a guarantee before going through customs formalities and requests for advance clearance of the goods involved under any of the following circumstances:
- If the categorization, dutiable value, place of origin of goods imported or exported have not been ascertained;
- If a valid customs declaration has not been provided;
- If duty has not been paid within the duty payment time limit;
- If late declaration fees have not been paid; or
- If any other customs formalities have not been gone through.
- If a party submits an application to Customs for any of the following specific services, it shall provide a guarantee as required by Customs:
- If the transportation enterprise is responsible for the highway transportation of goods between the mainland, Hong Kong and Macao, and for the highway transportation of goods under the supervision of Customs within the territory of China;
- If cargos or goods are to be temporarily transported into or out of the territory of China;
- If goods are to be transported into the territory of China for repair or out of the territory of China for processing;
- If goods are to be imported for the purpose of leasing;
- If goods and the transportation vehicle involved are to pass through the territory of China;
- If goods under the supervision of Customs are to be temporarily kept outside the area under the supervision of the Customs;
- If goods under the supervision of Customs are to be mortgaged to a financial institution; or
- If any customs services for bonded goods are to be handled.
- If there is visible evidence that a taxpayer of imports or exports transfers or hides dutiable goods or other property within the prescribed tax payment time limit, Customs may require the taxpayer to provide a guarantee.
- For goods, cargo or transportation vehicles suspected of being illegal that should be or have been seized or sealed, the party may provide a guarantee to Customs and apply for exemption from or release of such seizure or sealing
- (V) If the legal representative or principal in charge of any legal person or organization that is punished by Customs desires to leave China prior to making full payment of fines, illegal gains or a sum equivalent to the value of goods, cargo or transportation vehicle used for smuggling purpose that is recovered in accordance with law, such legal representative or principal shall provide a guarantee to Customs. Otherwise, Customs may notify the administrative organ for exit affairs to prevent such person from leaving China. If any natural person punished by Customs desires to leave China, this shall also apply.
However, it is expressly specified in the Regulations that the guarantee relating to Customs affairs shall not apply under the following circumstances:
- If a license should be provided in accordance with the restrictive provisions of the State on inbound and outbound goods or cargo and the party fails to do so, or under any other circumstances in which a guarantee is inapplicable in accordance with laws or administrative regulations, Customs shall not release the goods.
- If goods, cargo or transportation vehicles suspected of being illegal are prohibited from being transported into or out of the territory of China, must be preserved as proof, or shall be confiscated in accordance with laws, Customs shall not handle a guarantee service for the party.
There are certain convenient measures regarding Customs affairs guarantees, including exemption from guarantees and general guarantees, with details as follows:
- Any party who satisfies all of the following conditions for two consecutive years may apply to Customs directly under the General Administration of Customs for exemption from providing a guarantee and from going through related formalities in accordance with the provisions of Customs:
- The party has passed the examination and inspection of Customs;
- The error rate in the party's annual import and export declaration has been below three percent;
- The party has not defaulted in paying duty payable;
- The party has neither received administrative punishment by Customs nor has any bad records in relevant administrative organs; and
- The party has not been punished for criminal or other liabilities.
If the party ceases to satisfy any of the conditions specified above, Customs shall discontinue the party’s exemption from providing a guarantee.
- In addition, if a party requires repetitive services to be provided by Customs within a specified period, the party may apply to Customs for a general guarantee. If Customs accepts the general guarantee, the party will not be required to provide a separate guarantee for such Customs service, provided that the applicable scope, sum, time limit, conditions for termination and other details of the general guarantee be provided for by the General Administration of Customs.
- Regulations of the People's Republic of China on Guarantee Relating to Customs Affairs
- Issuing Authority: State Council
- Date of Issuance: September 14, 2010 / Effective Date: January 1, 2011