Laws of the People's Republic of China

The General Administration of Customs, the Ministry of Foreign Trade and Economic Cooperation, the State Economic and Trade Commission

Circular of the General Administration of Customs, the Ministry of Foreign Trade and Economic Cooperation and the State Economic and Trade Commission on the Issues of Evaluating Standards and Examination and Approval Procedures for the Classified Management over the Processing Trade Enterprises

ShuJian [1999] No.522

July 12, 1999

The General Administration of Customs Guangdong branch, the various customs directly under the General Administration of Customs, foreign trade and economic cooperation commissions (departments, bureaus) and economic and trade commissions (economic commissions and economic planning commissions) of the various provinces, autonomous regions, municipalitie directly under the Central Government and municipalities separately listed on the State plan :

With a view to implementing the Opinions of the State Economic and Trade Commission and other Departments On further Perfecting the Bank Deposit Account System for Processing Trade Transmitted by the General Office of the State Council (GuoBanFa [1999] No. 35), in accordance with the spirit of instructions by the leaders of the State Council, the inter- ministerial conference on processing trade has adopted at its second session the evaluating standards and examination and approval procedures for the classified management of the processing trade enterprises, the relevant issues of which are notified as follows:

1.

Conditions for Processing Trade Enterprises Not to Implement the Bank Deposit Account System

Processing trade enterprises evaluated and approved by the Customs for applicable to the management under Category A, in accordance with the provisions of the Article 6 of the Implementation Procedures of the Customs of the People's Republic of China for the Classified Management of Enterprises, jointly distributed by the General Administration of Customs, the Ministry of Foreign Trade and Economic Cooperation and the State Economic and Trade Commission (ShuJian [1999] No. 240), and meeting one of the following conditions, the Customs may not implement to them the bank deposit account system:

(1)

Bonded factories where Customs commissioners are sent for supervision or a computer internet management system is established by the Customs in charge;

(2)

Processing trade engaged in processing in planes, ships and other special professions;

(3)

Enterprises whose total import and export value exceeds over 30 million U.S. dollars (including 30 million U.S. dollars) a year or self-operated productive enterprises whose total export value exceeds 10 million U.S. dollars (including 10 million U.S. dollars) a year, or enterprises whose total processing export value exceeds 10 million U.S. dollars (including 10 million dollars).

2.

Processing Trade Enterprises Applicable to Examination and Approval Standards for the Management under Category C

(1)

Enterprises having one of the conditions enlisted in the Article 9 of Document ShuJian No. 240, the Customs shall implement to them management under Category C.

(2)

The "infringement" called in Clause one of the Article 9 of Document ShuJian No. 240, is interpreted as fines decided by the Customs for the infringement of the enterprises as defined in Chapter 3 of the Detailed Rules for the Implementation of Administrative Penalties of the Customs Law of the People's Republic of China and that the decision for fines has come into force. But the fines for infringement below 1000 yuan RMB (including 1000 yuan RMB) shall not be recorded for evaluating enterprises.

(3)

The time limit for examining and approving the infringement and smuggling of the enterprises is August 1, 1998, namely the infringement and smuggling behaviours happened after this time shall be recorded as reference for evaluating classified management over the enterprises.

3.

Evaluating Procedures for Classified Management over Processing Trade Enterprises

(1)

Councils for classified management over the enterprises shall be established by the various Customs.

(2)

The Customs having jurisdiction over the enterprises shall raise the list of enterprises managed over under Category A that are not to apply the bank deposit account system, and send out copies of the list within 7 work days to the departments of foreign trade and economic cooperation commissions, economic and trade commissions, taxation, foreign exchange control and Bank of China, etc. where the enterprises are located (at regional and municipal level and above, the same below) for seeking their opinions. The above mentioned departments should feed back their opinions within 7 work days; if they disagree to the categories determined for certain enterprises, they should submit to the Customs detailed statement and demonstration material for reconsideration by the Customs; if the departments feed back no opinion within the prescribed time, it will be deemed that they have no different opinion.

(3)

Should the Customs find out that the enterprises have committed infringement or smuggling, they shall readjust at any time, in accordance with the relevant files, the management categories for these enterprises to Category C or D. For enterprises examined and approved for applicable to the management under Category C or D, the Customs should send on the date of examination and approval copies of a list of them to the departments of foreign trade and economic cooperation commissions, economic and trade commissions, taxation, foreign exchange control and Bank of China, etc. where the enterprises are located, and shall start management over them under Category C or D from 3 days (the third day) after the date of examination and approval.

(4)

The Customs shall not announce to the public the management categories applicable to the enterprises, but should inform these to the enterprises concerned (enterprises applicable to Category B are excluded). If the enterprises disagree to the categories approved by the Customs after examination, they may apply for reconsideration in accordance with the Law of Administrative Reconsideration of the People's Republic of China.

Please carry out the above completely.