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15 July 2015

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Measures of the General Administration of Customs of the People's Republic of China on Classified Management of Enterprises

Measures of the General Administration of Customs of the People's Republic of China on Classified Management of Enterprises, which were adopted at the Executive Meeting of the General Administration of Customs of the People's Republic of China on January 4, 2008, are hereby promulgated and shall come into force as of April 1, 2008. Measures of the General Administration of Customs of the People's Republic of China on Adoption of Classified Management of Enterprises promulgated in the form of Decree No. 71 of the General Administration of Customs on March 31, 1999 and the Provisions on Examination and Approval for the Application of Facilitated Customs Clearance to Large New- and High-Tech Enterprises promulgated in the form of Decree No. 86 of the General Administration of Customs and the Ministry of Foreign Trade and Economic Cooperation of the People's Republic of China on July 20, 2001 shall be repealed simultaneously.


Mu Xinsheng
Minister
General Administration of Customs
January 30, 2008


Measures of the General Administration of Customs of the People's Republic of China on Classified Management of Enterprises


(Adopted at the Executive Meeting of the General Administration of Customs on January 4, 2008, promulgated by Decree No. 170 of the General Administration of Customs of the People's Republic of China on January 30, 2008, and effective as of  April 1, 2008)


Chapter I  General Provisions


Article 1  These Measures are formulated in accordance with the Customs Law of the People's Republic of China and other relevant laws and administrative regulations for the purposes of encouraging the compliance and self-discipline of enterprises, raising the effectiveness and efficiency of Customs management and safeguarding the security and facilitation of import and export.


Article 2  These Measures shall apply to the classified management of consignees and consigners of imports and exports and agent declaration enterprises that are registered with Customs.
 Measures on the classified management of other enterprises are to be formulated by the General Administration of Customs separately.


Article 3  In light of enterprises' level of compliance with laws, regulations, Customs rules and relevant anti-corruption provisions, their operational and managerial performance and records kept in the process of Customs control and Customs statistics compilation, Customs divides them into five (5) management categories, i.e., AA, A, B, C and D through evaluation, and then makes the results public.
Article 4 Under the principle of "compliance for facilitation", the General Administration of Customs has formulated differentiated management measures for enterprises of different categories. Enterprises of Class AA and Class A shall enjoy respective clearance facilitations, while Class B shall be subject to regular measures, and Class C and Class D to strict control.
  Customs across the country shall apply uniform enterprise classification standards, procedures and management measures.
  Customs and the enterprises shall strengthen cooperation, conduct regular information exchanges and keep operational contacts.
Article 5  The General Administration of Customs shall provide guidance and exercise supervision for the classified management of enterprises; while regional Customs shall be responsible for the evaluation and adjustment of the classification of enterprises under their jurisdiction. 


Chapter II  Setting of Management Categories


Section 1  Consignees and Consigners of Imports and Exports


Article 6  To be classified as Class AA, consignees and consigners of imports and exports shall meet all of the following requirements at the same time:
(1)Having been classified as Class A for more than one (1) year;
(2)The total import and export volume of the previous year was more than 30 million US dollars (10 million US dollars for enterprises of central and western areas  in China);
(3) Customs validation and audit-based control shows requirements have been met in terms of Customs management, the enterprise's operations and management, and trade security;
(4)Submitting the Report on Operations and Management and the auditing report of the previous year prepared by an accounting firm on a yearly basis; and submitting the Information Form of Import and Export Business every six (6) months.


Article 7  To be classified as Class A, consignees and consigners of imports and exports shall meet all of the following requirements at the same time:
(1)Having been classified as Class B for more than one (1) year;
(2)Not having committed any smuggling crime or been involved in any smuggling activity, or violated any Customs regulatory provisions for one (1) consecutive year ;
(3)Not having any administrative penalty from Customs for intellectual property rights (IPR) infringement of imports or exports for one (1) consecutive year;
(4)Not having any delinquent taxes payable, or delinquent fines and confiscations payable for one (1) consecutive year ;
(5)The total import and export volume of the previous year was more than 500,000 US dollars;
(6)The error rate of import and export declaration in the previous year was below 3%;
(7)Having a well-developed accounting system with faithful and complete business records;
(8)Cooperating with Customs on their own initiative, timely going through various Customs procedures and providing true, complete and valid documents and certificates;
(9)Submitting the Report on Operations and Management every year;
(10) Going through reissuing procedure and corresponding alteration procedures for the Certificate of the Customs of the People's Republic of China on Registration of Consignees and Consigners of Imports and Exports for Customs Declaration in accordance with applicable provisions;
(11)Not having any bad record in administrative departments or institutions such as foreign trade authorities, the People's Bank of China, departments of industry and commerce, taxation authorities, quality inspection authorities, foreign exchange authorities and anti-corruption supervisory departments.

        
Article 8  Should there be any of the following circumstances, consignees and consigners of imports and exports shall be classified as Class C:    
(1)Having been involved in smuggling activities;
(2) Having violated Customs regulatory provisions for more than three (3) times within one (1) year, or having been fined for violating Customs regulatory provisions more than RMB 500,000 in aggregate terms within one (1) year;
(3)Having received administrative penalty from Customs twice for IPR infringement of imports and exports within one (1) year;
(4) Having delinquent taxes payable or delinquent fines and confiscations payable with the amount being less than RMB 500,000.


Article 9  Should there be any of the following circumstances, consignees and consigners of imports and exports shall be classified as Class D:
(1)Having committed a smuggling crime;
(2) Having been involved in smuggling activities for more than twice within one (1) year;
(3)Having received administrative penalty from Customs for IPR infringement of imports and exports for more than three (3) times within one (1) year;
(4) Having delinquent taxes payable or delinquent fines and confiscations payable with the amount being more than RMB 500,000.


Article 10 Where none of the circumstances listed in Article 8 and Article 9 of these Measures has occurred and one of the following conditions has been met, consignees and consignors of imports and exports shall be classified as Class B:
(1)Being registered for the first time;
(2) Management classification remaining unchanged since the initial registration;
(3)Enterprises of Class AA no longer up to par with the management requirements for Class AA nor with the requirements for Class A ;
(4) Enterprises of Class A no longer up to par with the management requirements for Class A;.


Article 11  The classified management of enterprises engaging in processing trade registered with Customs shall follow the provisions applicable to consignees and consigners of imports and exports.


Section 2  Agent Declaration Enterprises
Article 12  To be classified as Class AA, agent declaration enterprises shall meet all of the following requirements at the same time: 
(1)Having been classified as Class A for more than one (1) year;
(2) Having lodged more than 20,000 (5,000 for central and western areas in China) import and export declaration forms or entry and exit recordation forms as agent in the previous year;
(3)Customs validation and audit-based control shows requirements have been met in terms of Customs management, the enterprise's operations and management and trade security;
(4)Submitting the Report on Operations and Management and the auditing report of the previous year prepared by an accounting firm on a yearly basis; and submitting the Information Form of Agent Declaration Business every six (6) months. Article 13 To be classified as Class A, agent declaration enterprises shall meet all of the following requirements at the same time:
(1)Having been classified as Class B for more than one (1) year;
(2) Enterprises themselves and their certified Customs brokers have not committed any smuggling crime or been involved in any smuggling activity or violated any Customs regulatory provisions for one (1) consecutive year;
(3)None of the goods declared under their agency has been confiscated by Customs due to IPR infringement for one (1) consecutive year ;
(4)Not having any delinquent taxes payable, or delinquent fines and confiscations payable for one (1) consecutive year ;
(5) Having lodged more than 3,000 import and export declaration forms or entry and exit recordation forms as agent in the previous year;
(6)The error rate of import and export declaration under their agency is below 3% in the previous year;
(7)Legally keeping the book of accounts and operation records, and faithfully, accurately and completely recording all activities involved in commissioned Customs clearance business;
(8)Submitting the Report on Operations and Management every year;
(9)Going through reissuing procedure and corresponding alteration procedures for the Certificate of the Customs of the People's Republic of China on Registration of Agent Declaration Enterprises for Customs Declaration in accordance with applicable provisions; 
(10)Not having any bad record in administrative departments or institutions such as foreign trade authorities, the People's Bank of China, departments of industry and commerce, taxation authorities, quality inspection authorities, foreign exchange authorities and anti-corruption supervisory departments. 


Article 14 Should there be any of the following circumstances, agent declaration enterprises shall be classified as Class C:
(1)Having been involved in smuggling activities;
(2) Having violated Customs regulatory provisions for more than three (3) times within one (1) year, or having been fined for violating Customs regulatory provisions more than RMB 500,000 in aggregate terms within one (1) year;
(3)Goods declared under their agency have been confiscated 3 times or more within one (1) year due to IPR infringement.
(4) The error rate of import and export declaration under their agency was above 10% in the previous year;
(5)Having delinquent taxes payable or delinquent fines and confiscations payable with the amount being less than RMB 500,000;
(6) Having refused to accept or assist Customs investigations when the goods declared under their agency are suspected of smuggling or violating Customs regulatory provisions;
(7)Agent declaration business has been suspended by Customs.


Article 15  Should there be any of the following circumstances, agent declaration enterprises shall be classified as Class D:
(1)Having committed a smuggling crime;
(2) Having been involved in smuggling activities more than twice within one (1) year;
(3)Goods declared under their agency have been confiscated more than 4 times within one (1) year due to IPR infringement;
(4)Having delinquent taxes payable or delinquent fines and confiscations payable with the amount being more than RMB 500,000.


Article 16 Where none of the circumstances listed in Article 14 and Article 15 of these Measures has occurred and one of the following conditions has been met, agent declaration enterprises shall be classified as Class B:
(1)Being registered for the first time ;
(2) Management classification remaining unchanged since the initial registration;
(3)Enterprises of Class AA no longer up to par with the management requirements for Class AA nor with the requirements for Class A;
(4) Enterprises of Class A no longer up to par with the management requirements for Class A.
Chapter III  Application and Adjustment of Management Categories


Article 17  Any enterprise satisfying Items (1) and (2) in either Article 6 or Article 12 under these Measures may apply to regional Customs through the Customhouse with which its registration has been made for Class AA management by submitting the following materials:
(1)Application for Class AA Management;
(2)Report on Operations and Management;
(3)Audit report for the previous year issued by an accounting firm.


Article 18  Any enterprise satisfying provisions of Article 7 or Article 13 under these Measures may apply to regional Customs through the Customhouse with which its registration has been made for Class A management by submitting the following materials:
(1)Application for Class A Management;
(2)Report on Operations and Management.


Article 19  Having received the application by an enterprise for Class AA or Class A management, the Customs registered with shall review and check the integrity and validity of the materials presented. Where the application satisfies all requirements, the Customs registered with shall immediately prepare a Decision on Acceptance of Application for Enterprise Classification Management on site and report to its regional Customs for approval.
  For enterprises applying for Class AA management, the regional Customs shall make an approval or disapproval decision within six (6) months as of the date of acceptance of the application.
For enterprises applying for Class A management, the regional Customs shall make an approval or disapproval decision within three (3) months as of the date of acceptance of the application.


Article 20 Application of the enterprise applying for Class AA or Class A management shall be rejected and approval denied under any of the following circumstances:
(1)The enterprise doesn not satisfy the requirements prescribed in these Measures when applying;
(2)The enterprise doesn not satisfy the requirements prescribed in these Measures when its application is being reviewed and checked;
(3)The enterprise is suspected of smuggling or violating Customs regulatory provisions or infringing upon intellectual property rights and thus still under investigation when its application is being reviewed and checked.


Article 21  Where none of the circumstances listed in Article 8 or Article 14 under these Measures has occurred to Class C enterprises in one (1) consecutive year as of the date the Customs decision on their classification adjustment is made, with the application of the enterprises, Customs shall change their classification into Class B.
  Where none of the circumstances listed in Article 9 or Article 15 under these Measures has occurred to Class D enterprises in one (1) consecutive year as of the date the Customs decision on their classification adjustment is made, with the application of the enterprises, Customs shall change their classification into Class C.


Article 22  Class C and D enterprises applying for Class B and C status respectively shall submit to the regional Customs an Application for Adjustment of Enterprise Classification through the Customs registered with, which shall review and check the integrity and validity of the materials presented. Where the application satisfies all requirements, the Customs registered with shall immediately prepare a Decision on Acceptance of Application for Enterprise Classification Management on site and report to its regional Customs for approval.
The regional Customs shall make an approval or disapproval decision within one (1) month as of the date of acceptance of the application.


Article 23  Under any of the following circumstances where degradation is required, Customs shall re-determine the classification granted to the concerned enterprise in accordance with the provisions in Chapter II under these Measures after detecting the case:
(1) No longer up to par with the requirements for the class under which it is originally classified in the case of an enterprise in Class AA or Class A;
(2)Having any of the circumstances as Class C or Class D enterprises are subjected to, in the case of an enterprise in Class B;
(3)Having any of the circumstances as Class D enterprises are subjected to, in the case of an enterprise in Class C.


Article 24  Where an approval or disapproval decision has been made by the regional Customs concerning enterprises' application for classification adjustment, the Customs registered with shall deliver the decision to the concerned enterprises within ten (10) working days as of the date the decision is made.
  Once a decision of adjustment has been made by Customs, the Customs shall adopt corresponding management measures for the concerned enterprise according to the latest classification of the enterprise.


Article 25  Class AA or A enterprises under investigation due to suspicions of smuggling shall be suspended from the management measures for the class under which they have been classified, and shall be managed as Class B enterprises during the suspension.


Article 26  When changes occur to an enterprise, if it is only a change of its name or its registration number with Customs, its management classification shall remain unchanged. However, under any of the following circumstances, adjustment shall be made pursuant to the following methods:
(1)Where a division by continued existence has occurred, the surviving enterprise inheriting the principal rights and obligations or debtor-creditor relationships from the original enterprise shall inherit the management classification of the original enterprise obtained before the division, while other enterprises formed as a result of the division shall be deemed as enterprises that have registered with Customs for the first time;
(2)Where a division by dissolution has occurred, enterprises formed as a result of the division shall all be deemed as enterprises that have registered with Customs for the first time.;
(3)Where a merger by absorption has occurred, the management classification of the enterprise formed as a result of the merger shall be that of the surviving enterprise of the merger.
(4)Where a merger by incorporation has occurred, the enterprise formed as a result of the merger shall be deemed as one that has registered with Customs for the first time.


Chapter IV  Implementation of Management Measures


Article 27 Where an agent declaration enterprise is declaring to Customs on behalf of the consignee and consigner of imports and exports, Customs shall apply corresponding management measures according to the respective management classes under which the agent declaration enterprise, the consignee and the consigner have been respectively classified.
  In case a discrepancy of management measures has arisen due to the different classes of enterprises involved, Customs shall proceed according to the following circumstances:
  (1)Where the agent declaration enterprise or the consignee and consigner of imports and exports are classified under Class C or Class D, the management measures for the lower class shall be adopted;
  (2)Where both the agent declaration enterprise and the consignee and consigner of imports and exports are classified under a class above Class B, the management measures shall be adopted based on the class of the agent declaration enterprise.


Article 28 Where the enterprise engaged in processing trade and the producing enterprise undertaking commissioned processing are classified under different management classes, Customs shall adopt management measures on this processing trade business based on the lower class.
Chapter V  Supplementary Provisions


Article 29  The time that a smuggling crime is constituted shall be determined as the time when the criminal verdict issued by the People's Court takes effect. 
  The time that smuggling activities, IPR infringements of imports and exports, and violation of Customs regulatory provisions are constituted shall be determined as the time when the Customs Administrative Penalty Decision takes effect.
Article 30 Violation of Customs regulatory provisions where only a warning or a fine of less than RMB 10,000 has been issued for punishment shall not be included in the record for evaluating the management classification of enterprises.
Article 31  Under these Measures: 
   "Other enterprises" means enterprises directly engaged in import and export activities stipulated by the General Administration of Customs other than Customs-registered consignees and consigners of imports and exports and agent declaration enterprises.
  "Central and western areas" means areas other than the eastern area. The eastern area includes Beijing, Tianjin, Shanghai, Liaoning Province, Hebei Province, Shandong Province, Jiangsu Province, Zhejiang Province, Fujian Province and Guangdong Province.
  "Delinquent taxes payable" means the sum of unpaid due tariffs and taxes levied by Customs on imported and exported goods or articles in arrears over three (3) months as of the expiration date of tax payment, including the unpaid due tariffs and taxes besides the fine, where Customs has ascertained that there is violation against Customs regulatory provisions.
  "Delinquent fines and confiscations payable" means unpaid Customs fines, confiscated illegal gains and money of equal value to smuggled goods and articles in arrears over three (3) months as of the expiration date of the payment time limit set by Customs in the Customs' decision of administrative penalty.
  "Total import and export volume", which is calculated based on both Customs trade statistics and single item statistics, shall take the Customs statistics as the standard; the data concerned shall only be used for classified management of enterprises by Customs.
  "Error rate of declaration" means the percentage obtained with the scoring times of all Customs declarers of the concerned enterprise divided by the total number of  its declaration forms in the previous year.
  "One year" means twelve (12) consecutive months.
  "Year" means a calendar year.
  "More than" includes the number itself.
  "Less than" excludes the number itself.
Article 32 These Measures shall be interpreted by the General Administration of Customs of the People's Republic of China.
Article 33  These Measures shall be effective as of April 1, 2008. The Measures of the General Administration of Customs of the People's Republic of China on Adoption of Classified Management of Enterprises promulgated in the form of Decree No. 71 of the General Administration of Customs on March 31, 1999 and the Provisions on Examination and Approval for the Application of Facilitated Customs Clearance to Large New- and High-Tech Enterprises promulgated in the form of Decree No. 86 of the General Administration of Customs and the Ministry of Foreign Trade and Economic Cooperation of the People's Republic of China on July 20, 2001 shall be repealed simultaneously.


(All information in this document is authentic in Chinese. English is provided for reference only. In case of any discrepancy, the Chinese version shall prevail.)