On May 16, 2008, the GAC issued the Procedures for the Recheck of Unit Consumption of Processing Trade to implement the recheck requirement under the Measures on the Administration of Unit Consumption in Processing Trade issued by the GAC on January 4, 2007.
According to the Measures, “unit consumption” means the amount of materials consumed in producing a unit amount of the end-product in processing trade. The customs will verify the unit consumption declared by a processing trade enterprise. Where any processing trade enterprise disputes the customs’ verification results, it may petition in writing to the next higher level of the customs (the Supervising Customs) to recheck the results, and the Supervising Customs must make a decision based on its recheck within 45 days after receiving the petition. In China, there are three tiers of customs. The top tier is the GAC, the middle tier consists of provincial-level customs, and the local customs that conduct direct customs supervision are at the base level.
The Recheck Procedures provide detailed procedures for the recheck. Where any processing trade enterprise disputes the verification results of its unit consumption, it may send a written petition to the Supervising Customs for recheck within five business days after receiving the verification results. The department responsible for the receipt of the petition is the department in charge of bonded goods supervision of the Supervising Customs, or the Department of Processing Trade and Bonded Goods Supervision of GAC, when GAC acts as the Supervising Customs.
The Recheck Procedures further require that, in seeking Supervising Customs’ recheck, the applicant must fill in the petition form and submit other supporting materials, such as the material used for processing trade, sample of finished product, images, specifications, processing contracts, plans, and statements, accounting records, other materials that reflect the technical requirements, technical processing process and corresponding consumption of materials of the finished products, as well as the calculating method and formula for the verification of unit consumption. If before the Supervising Customs delivers a decision on the recheck, the petitioner wants to withdraw the application, the Supervising Customs may terminate the recheck process and notify the relevant parties.
The Recheck Procedures further provide that, if the applicant objects to the decision the Supervising Customs makes on the recheck, the petitioner may appeal to the GAC for administrative review within 60 days after receiving the decision on the recheck. Alternatively, the processing trade enterprise may directly appeal to the Supervising Customs for administrative review of the examining customs’ verification results within 60 days of the enterprise’s receipt of the results without having petitioning for a recheck.