Laws of the People's Republic of China

the General Administration of Customs, the National Development and Reform Commission, the Ministry of Finance, the Ministry of Commerce

Order of the General Administration of Customs, the National Development and Reform Commission, the Ministry of Finance and the Ministry of Commerce of the People's Republic of China

No. 125

The Measures for the Administration of Import of Automobile Components and Parts Featuring Complete Vehicles, which were formulated by the General Administration of Customs, the National Development and Reform Commission, the Ministry of Finance and the Ministry of Commerce according to the Policies on Developing the Automobile Industry and other relevant provisions, are hereby promulgated and shall come into force as of April 1, 2005.

The Director General of the General Administration of Customs

The Director of the National Development and Reform Commission

The Minister of the Ministry of Finance

he Minister of the Ministry of Commerce

February 28, 2005

Measures for the Administration of Import of Automobile Components and parts Featuring Complete Vehicles

Chapter I General Provisions

Article 1

For the purpose of regulating and strengthening the administration of import of automobile components and parts, and promoting the healthy development of the automobile industry, the present Measures are formulated in accordance with relevant laws.

Article 2

The present Measures shall apply to the supervision and administration on the import of automobile components and parts featuring complete vehicles, which are necessary for the manufacture of automobiles, of automobile manufacturing enterprises ratified or archived by the relevant departments of the State.

Where an automobile manufacturing enterprise imports automobile components and parts on completely knocked down (CKD) or semi-knocked down (SKD) basis, it may make declarations and pay duties to the Customs at its locality, which does not need to follow the present Measures.

Article 3

Automobiles mentioned in the present Measures shall refer to power-driven vehicles of Class M and Class N prescribed in the "Classification of Power-Driven Vehicles and Trailers" (GB/T15089-2001 the National Standards of the People's Republic of China).

The power-driven vehicle of Class M shall refer to a power-driven vehicle that has at least 4 wheels and is used for carrying passengers; the power-driven vehicle of Class N shall refer to a power-driven vehicle that has at least 4 wheels and is used for carrying cargo.

Article 4

The automobile assembly (system) mentioned in the present Measures shall include vehicle body (including cab) assembly, engine assembly, transmission assembly, drive axle assembly, non-drive axle assembly, vehicle frame assembly, steering system, braking system, and etc.

Article 5

The "Featuring complete vehicles" and "featuring assemblies (systems)" referred to as in the present Measures shall mean that the imported automobile components and parts used by an automobile manufacturing enterprise bear the features of a complete vehicle when they are assembled or the features of the assembly (system) when they are assembled.

Article 6

The General Administration of Customs, the National Development and Reform Commission (hereinafter referred to as the NDRC), the Ministry of Commerce and the Ministry of Finance shall administer the import of automobile components and parts featuring complete vehicles in accordance with the present Measures.

The General Administration of Customs, the NDRC, the Ministry of Commerce and the Ministry of Finance shall form a Leading Group for Administration of the Import of Automobile Components and parts Featuring Complete Vehicles (hereinafter referred to as the Leading Group). The Office of the Leading Group shall be set up at the General Administration of Customs, and be responsible for daily affairs of the Leading Group. The National Special Center for the Verification of Complete Vehicle Features (hereinafter referred to as the Verification Center) shall accept the entrustment of the General Administration of Customs to be responsible for verifying whether or not certain imported components and parts bear the features of complete vehicles or assembly (system).

Chapter II Archival Administration

Article 7

Where an automobile manufacturing enterprise uses imported automobile components and parts to make automobiles for sale on domestic markets, it shall, according to the present Measures, make a self-test on whether or not the imported components and parts used in the vehicles bear the features of a complete vehicle. If they are determined to bear the features of a complete vehicle after the self-test, the manufacturing enterprise shall, prior to the import of the automobile components and parts, submit the relevant types of vehicles to the General Administration of Customs for archival purposes. The different vehicle types of a same automobile-manufacturing enterprise shall be archived separately.

If the manufacturing enterprise believes that the foresaid components and parts do not bear the features of a complete vehicle after the self-test, it shall apply to the General Administration of Customs for reexamination. The General Administration of Customs shall entrust the Verification Center to make a simple reexamination or an on-spot reexamination. If they are found upon reexamination to bear the features of a complete vehicle, the manufacturing enterprise shall conduct a supplementary archival filing; however, if they are found upon reexamination not to bear the features of a complete vehicle, they do not need to be archived.

An automobile-manufacturing enterprise shall, when applying to the NDRC to be listed into the "Announcement of Road Power-Driven Vehicle Manufacturing Enterprises and Products" or applying to the Ministry of Commerce for an automatic import license, provide the result of self-test on the vehicle type involved; if the imported components and parts do not bear the features of a complete vehicle, it shall provide the reexamination opinions of the General Administration of Customs in addition.

The NDRC shall mark the words of "complete vehicle features" in the "Announcement of Road Power-Driven Vehicle Manufacturing Enterprises and Products" for the vehicle types produced with the imported components and parts and bearing the features of a complete vehicle, while the Ministry of Commerce shall mark the words of "complete vehicle features" on the automatic import license for the imported components and parts featuring complete vehicles.

Article 8

The archived vehicle types shall be the products which have been listed into the "Announcement of Road Power-Driven Vehicle Manufacturing Enterprises and Products" of the NDRC.

Article 9

When applying for archiving, the manufacturing enterprise shall provide the following materials:

(1)

basic information of the enterprise;

(2)

the annual manufacture plan of the archived vehicle types;

(3)

a list on the classification of the components and parts of the archived vehicle types and the price ratios thereof; the total price of the archived vehicle types, the price of domestically produced components and parts, and the price of imported components and parts (calculated on the basis of tax-free prices);

(4)

a list of domestic and foreign suppliers of all components and parts purchased for producing the archived vehicle types, and a list of the varieties of goods they supply;

(5)

the certification proving that the enterprise is listed into the "Announcement of Road Power-Driven Vehicle Manufacturing Enterprises and Products".

Article 10

The General Administration of Customs shall, after receiving the application materials for archiving, distribute the relevant materials for archiving to the NDRC, the Ministry of Commerce and the directly subordinate Customs office at the enterprise's locality which shall conduct archival administration upon their respective duties receiving the materials for archiving.

Article 11

The directly subordinate Customs at the enterprise's locality shall, after receiving the materials for archiving as sent by the General Administration of Customs, check them up, register and archive the qualified automobile manufacturing enterprises and qualified vehicle types, and notify such automobile manufacturing enterprises as well.

Article 12

The automobile manufacturing enterprise shall, after registration and archival filing, provide the Customs at the locality with a guaranty for the total amount of duties in light of the import plan on the automobile components and parts before such automobile components and parts are imported. The amount of the guaranty for the total amount of duties shall not be lower than the total amount of duties paid by the enterprise for its average amount of monthly import of components and parts.

The automobile manufacturing enterprise shall, in light of the quantity of archived vehicle types and the adjusted import plan, timely apply to the Customs office at its locality for modifying the amount of guaranty for the total amount of duties. The Customs shall, after verifying the amount to be unerring, go through the relevant procedures for modifying the guaranty amount.

Chapter III Administration on Customs Clearance

Article 13

When importing automobile components and parts featuring complete vehicles, the automobile manufacturing enterprise shall make declaration to the Customs office at its locality and pay duties as well.

Where an automobile manufacturing enterprise imports automobile components and parts featuring complete vehicles from a port other than ports at its locality, it shall, after finishing the procedures for archival registration and guaranty for the total amount of duties, apply to the Customs office at its locality for the customs transfer transport.. And the Customs shall go through the customs transfer procedures according to the relevant provisions on the customs transfer transport.

The preceding paragraph shall not apply to the import of other automobile components and parts not featuring complete vehicles.

Article 14

When making declaration to the Customs, the enterprise shall submit to the Customs the customs declaration of imported goods, the permit for automatic import of automobile components and parts which bears the mark of "complete vehicle features", other related permits as well as the attached documents required by the Customs.

Article 15

When some automobile components and parts featuring complete vehicles are imported, if permit certificates are involved, such certificates shall be verified during the customs clearance. The column concerning the nature of duties levy or exemption in the customs declaration of imported goods shall be filled with the words "complete vehicle character"; while the column of consignee shall be filled with the name of the automobile manufacturing enterprise.

As to automobile components and parts of different vehicle types, the custom declarations shall be filled separately.

Article 16

When some automobile components and parts featuring complete vehicles are imported, the Customs shall go through the relevant import procedures pursuant to the relevant provisions on the administration of bonded goods, and shall list them into the Customs' statistics in light of the import situation.

Chapter IV Standards for Verification of Complete Vehicle Features and the Verification thereof

Article 17

To verify the complete vehicle features, the automobile manufacturing enterprise shall file an application to the General Administration of Customs, who shall entrust the Verification Center to conduct the verification. The Customs shall, according to the "Verification Report" issued by the Verification Center, determine the applicable duty rate and duty-paid price, and handle the procedures for levying duties. The measures for verifying the complete vehicle features of the imported automobile components and parts shall be separately formulated and promulgated by the General Administration of Customs.

Article 18

The Verification Center shall, in pursuance of the instruction of the General Administration of Customs, make verification of relevant vehicle types of the automobile manufacturing enterprises, and issue the verification reports accordingly.

Article 19

The automobile manufacturing enterprise shall, within 10 days after the archived vehicle types have been assembled into the first batch of complete vehicles, apply to the General Administration of Customs for verification of complete vehicle features. The Verification Center shall, within 1 month after accepting the instruction of the General Administration of Customs, finish the verification of the relevant vehicle types and issue the verification report.

As for the vehicle types put into production before the present Measures come into force, the automobile manufacturing enterprise shall finish the self-test within 1 month after the present Measures come into force, and report the self-test result to the General Administration of Customs. If the self-test result indicates that the components and parts bear the complete vehicle features, the automobile manufacturing enterprise shall, within 10 days after finishing the self-test, have them archived in the General Administration of Customs, and apply to the General Administration of Customs for verification of complete vehicle features; however, if the foresaid result indicates that they do not bear the complete vehicle features, the automobile manufacturing enterprise shall apply to the General Administration of Customs for reexamination. If they are found upon the reexamination to bear the complete vehicle features, the automobile manufacturing enterprise shall, within 10 days after the reexamination result is promulgated, file an application to the General Administration of Customs for supplementary archiving, and apply to the General Administration of Customs for verification of complete vehicle features. The Verification Center shall, in pursuance of the instruction of the General Administration of Customs, finish the verification of the archived vehicle types that have been put into production within 3 months, and issue a verification report.

Article 20

The vehicle type verified by the Verification Center shall be the basic-type vehicle. Where any imported components and parts are selected on the base of the verified basic-type vehicle, the automobile manufacturing enterprise shall provide the Customs office at its locality and the Verification Center with the selected type, and truthfully make declaration at the time of selection. After the Verification Center has reexamined the said type and issued a report, the Customs office shall make adjustments when verifying the duty-paid value and calculating the duties.

Where the situation of complete vehicle features changes during the process of manufacture, the automobile manufacturing enterprise may apply to the General Administration of Customs for re-verification of the basic-type vehicle. The Customs shall, on the basis of the new verification report issued by the Verification Center, determine the duty-paid value for the calculation of duties. If the vehicle type is verified no longer to bear the features of a complete vehicle, the Customs shall no longer conduct administration on this vehicle type according to the present Measures.

Article 21

Under any of the following circumstances, the imported automobile components and parts shall be considered bearing the features of a complete vehicle:

(1)

importing CKD or SKD to assemble automobiles;

(2)

if, within the scope as prescribed in Article 4 of the present Measures:

1.

importing both the vehicle body (including the cab) assembly and engine assembly to assemble vehicles;

2.

importing either the vehicle body (including the cab) assembly or engine assembly, and 3 or more other assemblies (systems) to assemble vehicles;

3.

importing 5 or more assemblies (systems) other than the vehicle body (including the cab) assembly and the engine assembly to assemble vehicles.

(3)

The total price of the imported components and parts is not less than 60% of the total price of the complete vehicle type. The standard for verifying complete vehicle features as described herein shall go into effect on July 1, 2006.

Article 22

Under any of the following circumstances, the imported automobile components and parts shall be considered bearing the features of an automobile assembly (system):

(1)

importing whole sets of knocked-down components and parts to assemble an assembly (system);

(2)

importing key components and parts or sub-assemblies to assemble an assembly (system), and the import of key components and parts or sub-assemblies reaches or exceeds the specified quantity (see attachments 1 and 2 for detail);

(3)

The total price of the imported components and parts is not less than 60% of the total price of the assembly (system).

Article 23

Where the imported components and parts used by a domestic automobile assembly (system) manufacturing enterprise to produce assemblies (systems) do not bear the features of the assembly (system), such assembly (system) shall be deemed as a home-made assembly (system).

Article 24

Where a domestic automobile manufacturing enterprise or a manufacturing enterprise of components and parts essentially processes the imported components and parts (excluding assemblies, sub-assemblies) and the semi-finished articles used for making components and parts, the produced auxiliary components and parts shall be deemed as home-made components and parts.

The "essentially processes" mentioned herein shall mean that products, after being processed, can reach the standards of essential change as described in the "Ordinance of the People's Republic of China on the Place of Origin of Imported and Exported Goods".

Article 25

When the Verification Center verifies the complete vehicle features of an archived vehicle type, the automobile manufacturing enterprise shall actively cooperate with it, and submit the following documents:

(1)

an application report for verification;

(2)

the self-test report of the enterprise;

(3)

the "List of Components and parts to be Purchased for the Archived Vehicle Type" (see Attachment 3 for detail);

(4)

other documents that are considered necessary by the Verification Center.

Article 26

Where an automobile manufacturing enterprise should but fails to file an application for archiving or for verification of complete vehicle features, the General Administration of Customs may instruct the Verification Center to make verification.

Chapter V Duty-Levying Principles and the Calculation of Duties

Article 27

The imported automobile components and parts of complete vehicle features shall, from the time of the customs clearance until the duties are paid, be subject to the supervision of the Customs office at the enterprise's locality by according to the bonded goods. In order to improve the efficiency of administration, the automobile manufacturing enterprises shall, where it is possible, have connected with the Customs office at their respective localities through electronic network.

Article 28

After the imported automobile components and parts are produced and assembled into complete vehicles, the automobile manufacturing enterprise shall file duty returns to the Customs which shall make classification and levy duties according to the relevant provisions in the "Customs Law of the People's Republic of China" (hereinafter referred to as the Customs Law), the "Regulation of the People's Republic of China on Import and Export Duties" and the "Customs Import and Export Tariff of the People's Republic of China".

As to the imported components and parts believed to be of the features of a complete vehicle by the Verification Center, the Customs shall classify them as complete vehicles, and shall calculate and levy the Customs duties and import value-added taxes at the rates for complete vehicles; for those that are found not bearing the features of a complete vehicle, the Customs shall classify them as components and parts, and shall calculate and levy the Customs duties and import value-added taxes at applicable rates.

Article 29

When the Customs classifies the imported components and parts of complete vehicle features as complete vehicles for the purpose of levying duties, if the import Customs duties and import value-added taxes for those components and parts as supplied by matched manufacturers have been paid at the time of import, and the automobile manufacturing enterprise can provide certificates on payment of such duties or taxes, the already paid duties and taxes shall be deducted.

Where an enterprise does not use the automobile components and parts imported according to the present Measures to produce complete vehicles within 1 year, it shall, within 30 days as of expiry of the 1-year term, file duty returns to the Customs which shall levy duties in accordance with the relevant provisions.

Article 30

The present Measures shall apply to the automobiles manufactured under the processing trade but sold in domestic market.

The enterprise engaging in manufacture of automobiles for processing trade shall, before applying for domestic sale of its automobile products assembled with the imported automobile components and parts that bear the complete vehicle features, apply to the General Administration of Customs according to the present Measures for supplementing the archival filing procedures, and accept the verification by the Verification Center. With respect to those that bear the complete vehicle features, the Customs shall, on the basis of the verification result, calculate and levy duties at applicable rates as prescribed in the present Measures upon the strength of the "Approval Certificate for Domestic Sale of Bonded Imported Materials, Components and Parts for Processing Trade" and corresponding import permit certificates submitted by the enterprise, and levy the supplemental interest on the tax paid in delay of all the imported components and parts.

Automobile manufacturing enterprises within a bonded zone, an export processing zone or any other particular Customs supervision area shall, before applying for domestic sale of its automobile products assembled with the automobile components and parts which have entered the zone or area and bear the features of a complete vehicle, apply to the General Administration of Customs according to the present Measures for supplementing the archival filing procedures, and accept the verification by the Verification Center. As to those components and parts featuring complete vehicles, the Customs shall, on the basis of the verification result, handle the relevant procedures upon the strength of the relevant import permit certificates and levy duties in light of the actual conditions of domestic sale.

Article 31

The automobile manufacturing enterprise shall, as of the next month after the Verification Center issues the verification report on the components and parts featuring complete vehicles, file duty returns to the Customs office at the enterprise's locality before the 10th working day of each month. The Customs office shall calculate and levy the Customs duties and import value-added taxes, at the rate for complete vehicles, in a centralized way on the imported components and parts used by the automobile manufacturing enterprise in the last month to make relevant vehicle types.

When filing duty returns for the first time, the automobile manufacturing enterprise shall as well file the duty returns on the imported components and parts which have been used for making complete vehicles before the verification report is issued.

Article 32

The automobile manufacturing enterprise shall, within 30 days after the Verification Center issues a verification report on failure to bear the features of a complete vehicle, declare to the Customs office at its locality the imported automobile components and parts for which the duties has not been paid. The Customs office shall calculate and levy the Customs duties and import value-added taxes at the rates for automobile components and parts, and no longer conduct administration on the relevant vehicle types in accordance with the present Measures.

Article 33

Where none of the archived vehicle types of an automobile manufacturing enterprise is verified to be of complete vehicle features by the Verification Center, and the enterprise has paid off the duties, the Customs office shall notify the enterprise to go through procedures for canceling the guaranty for the total amount of duties.

Article 34

When filing duty returns to the Customs office at its locality, the automobile manufacturing enterprise shall submit the following documents:

(1)

the verification report by the Verification Center;

(2)

the manufacture quantity of complete vehicles of the type in the last month (except that the vehicle type is found, upon verification, not to bear the features of a complete vehicle);

(3)

a list of automobile components and parts of relevant vehicle types which were imported last month and have been used for assembling complete vehicles (except that the components and parts are found, upon verification, not to bear the features of a complete vehicles);

(4)

other documents considered necessary by the Customs.

Article 35

The enterprise shall, when declaring to the Customs its automobile components and parts featuring complete vehicles, fill out the words "Duty Levied upon Complete Vehicle" in the column on the nature of levy or exemption and "CIF" in the column of methods of bargain; when declaring to the Customs its automobile components and parts not featuring complete vehicles, the enterprise shall fill out the words "Duty Levied on Components and parts" in the column on the nature of levy or exemption and "CIF" in the column of methods of bargain.

Chapter VI Legal Liability

Article 36

Whoever violates the present Measures by smuggling or by committing any act in violation of the Customs supervision provisions shall be punished by the Customs in light of the "Customs Law" and the "Implementing Regulation of the People's Republic of China on Administrative Penalties Imposed by the Customs". If a crime is constituted, he shall be subject to criminal liabilities according to the law.

Article 37

Where an automobile manufacturing enterprise violates the relevant provisions of the present Measures when applying for listing itself into the "Announcement of Road Power-Driven Vehicle Manufacturing Enterprises and Products" and applying for archiving and not truthfully declaring the imported components and parts featuring complete vehicles, or the components and parts imported by it in bulk delivery bears the features of a complete vehicle and it fails to apply to the General Administration of Customs for archiving prior to the import, the NDRC shall suspend its relevant vehicle types from being listed into the "Announcement of Road Power-Driven Vehicle Manufacturing Enterprises and Products" and resume its qualification after the automobile manufacturing enterprise has made a correction.

Chapter VII Supplementary Provisions

Article 38

The present Measures shall come into force as of April 1, 2005.

Attachments:

1.

Table for Defining Assemblies (Systems)(omitted)

2.

Defined Scope of Components and parts of Automobile Assemblies (Systems)(omitted)

3.

List of Components and parts to Be Purchased for the Archived Vehicle Type(omitted)