Laws of the People's Republic of China

The General Customs Administration

Announcement of the General Administration of Customs on Further Clarifying the Provisions Governing the Administration of Non-evaluated Equipment Imports Provided by Foreign Investors

[2001] No.16

December 7, 2001

On November 7, 2001, the General Administration of Customs of the People's Republic of China, the Ministry of Foreign Trade and Economic Cooperation of the People's Republic of China and the General Administration of Quality Supervision, Inspection and Quarantine of the People's Republic of China jointly issued the Circular of the General Administration of Customs, the Ministry of Foreign Trade and Economic Cooperation and the General Administration of Quality Supervision, Inspection and Quarantine on Further Clarifying Relevant Issues Concerning the Termination of Customs Supervision over Non-evaluated Equipment Imports Provided by Foreign Investors (ShuFaFa [2001] No.420, hereinafter referred to as the Circular) to further clarify the administrative provisions governing non-evaluated equipment imports provided by foreign investors. Notified as follows are some administrative issues related to the Circular:

I.

Non-evaluated equipment imports with tariff exemption (hereinafter referred to as "non-evaluated equipments") provided by foreign investors are subject to customs supervision for a period of 5 years.

II.

In applying for the termination of customs supervision over their "non-evaluated equipments" to remain in China, enterprises shall pay the overdue tariff and import value-added tax. The relevant customs shall handle the relevant procedures for terminating the supervision upon presentation of the import license and some other documents.

III.

III. "Non-evaluated equipments" shall be shipped out of the country when the supervision period ends. For those fail to be shipped out of the country due to some special reasons, their supervision shall be terminated through the following procedures:

If the enterprise applies to the customs for not shipping its disowned "non-evaluated equipments" out of the country, the customs shall handle relevant procedures for the termination of the supervision with no other requirements attached, and deal with the disowned "non-evaluated equipments" in accordance with relevant stipulations.

For its "non-evaluated equipments" to remain in domestic use instead of being shipped out of the country, the enterprise must apply to the competent administrative authority of mechanical and electronic imports for import examination and approval. The competent customs shall handle relevant procedures for the termination of supervision only upon presentation of the approval document, and exempt the enterprise from import duty and import value-added tax accordingly.

In cases where enterprises fail to ship the "non-evaluated equipments" out of the country before the supervision period ends, or to go through relevant procedures for terminating the supervision and for keeping the "non-evaluated equipments" within the boundaries of the country, the competent customs investigation authority shall regard such practice as violating relevant regulations, and shall not handle any procedures for a new processing trade record before the settlement of the case.

IV.

"Non-evaluated equipments" shall first go through inspection and quarantine on items such as security, environmental protection, and hygiene. Only with the Inspection and Quarantine Certificate issued afterwards can relevant procedures for terminating the supervision ahead of time and for keeping the "non-evaluated products" in domestic use be handled.

V.

"Non-evaluated equipments" with the supervision terminated ahead of time or with permission to remain in domestic use after the supervision period ends shall be regarded as used mechanical and electronic imports, and is therefore subject to the provisions provided in the Circular on Intensifying Import Administration of Used Mechanical and Electronic Products (WaiJingMaoJiDianFa [1998] No.555), and the Circular to Restate the Administration of Used Mechanical and Electronic Imports (GuoZhiJianLian [2001] No.42). However, used "non-evaluated equipments" that have, upon their import, gone through relevant procedures required for the import of used mechanical and electronic products may now be waived of the examination and approval procedures for the import of used mechanical and electronic products.

This announcement will enter into force as of January 1, 2002.