On December 4, 2015, the Customs Tariff Commission of State Council (“Tariff Commission”), issued Announcement [2015] No. 23 (“Announcement”), announcing its amendments to the Customs tariff in 2016 (“Amendments”).

The Amendments adjust, at the 8-digit HS Code level, the import tariff rates for 787 tariff items, export tariff rates for 250 tariff items, and add another 9 tariff items into the PRC Tariff Schedule. Among them, the import tariff rates for 27 kinds of environmental products, such as waste incinerators and wind power generator sets, are lowered to 5%. Also, the import tariff rates for certain consumer or luxury products are substantially lowered. For example, the import tariff rates for diapers and napkins, sunglasses, suitcases of leather surface, and coats of wool or fur, respectively drop from 7.5% (MFN) to 2% (Interim), from 20% to 6%, from 15% to 10% and from 25% to 13%. At the exportation, the tariff rates for 31 kinds of products are lowered or exempted. The Amendments will take effect as from January 1, 2016.

China Customs tariff is set by the Tariff Commission, an inter-ministerial body composed of, inter alia, the Ministry of Finance, Customs, MOFCOM (Ministry of Commerce), NDRC (National Development and Reform Commission), and the State Council General Office. The Tariff Commission may set interim rates whenever it considers such rates necessary. Such interim adjustment scheme may increase or reduce the relevant tariff rates for imports or VAT (Value-added Tax) refund rates for exports, and loosen or tighten the supervision measures for imports and exports.  

Importers and exporters are encouraged to file the applications together with the supporting documents at the local customs offices for purposes of proposing favored adjustments. Our observation tells that a proposal involves a product of the following conditions is more likely to be considered and adopted eventually: (i) unable to be produced in China or (ii) urgently needed in the domestic market or (iii) beneficial to country’s welfare or planning or (iv) beneficial to the development of certain industries.