Laws of the People's Republic of China

No. 123

The Provisions of the Customs of the People's Republic of China on the Implementation of "the Rules of Origin of Goods under the Special Preferential Tariff Treatments Given by the People's Republic of China to the Least-developed African Countries" were deliberated and adopted at the executive meeting of the General Administration of Customs on December 29, 2004. They are hereby promulgated and shall be implemented as of January 1, 2005. Director, Mu Xinsheng

December 30, 2004

Provisions of the Customs of the PRC on Implementation of "the Rules of Origin of Goods under the Special Preferential Tariff Treatments Given by the People's Republic of China to the Least-developed African Countries"

Article 1

The present Provisions are formulated in accordance with the Customs Law of the People's Republic of China and the Rules of Origin of Goods under the Special Preferential Tariff Treatments Given by the People's Republic of China to the Least-developed African Countries for the purposes of promoting the economic trade between China and the least-developed African countries (hereinafter referred to as the "beneficiary countries", see the name list in Annex 1) and correctly determining the origin of goods, which are exported to China by the beneficiary countries under the special preferential tariffs treatment.

Article 2

The present Provisions shall apply to the goods, which are imported from the beneficiary countries under the item of enjoying special preferential tariff treatments (for the list of those products, please refer to the Import and Export Tariff Regulations of the People's Republic of China), but the goods for processing trade shall be excluded.

Article 3

If the goods directly imported from a beneficiary country and included in the list of goods under special preferential tariff treatments, their place of origin shall be determined according to the following principles:

(1)

As to the products entirely obtained from a beneficiary country, their place of origin shall be the country from which the goods are obtained; and

(2)

As to the products incompletely obtained from a beneficiary country, their place of origin shall be the country where the final substantial processing is completed.

Article 4

The phrase "products entirely obtained from a beneficiary country" as mentioned in Item (1) of Article 3 of the present Provisions, namely the entire obtainment criterion, refers to the following products:

(1)

The mineral products exploited or extracted from this country;

(2)

The plants or their products harvested or collected from this country;

(3)

The animals borne and raised in this country;

(4)

The products obtained from the animals of this country as mentioned in Item (3) of this Article;

(5)

The products obtained from hunting or fishing in this country;

(6)

The fish and other marine products obtained from the high seas by vessels registered in this country or hanging the flag of this country,

(7)

The products obtained from processing the articles as listed in Item (6) of this Article on the processing vessels registered in this country or hanging the flag of this country;

(8)

The waste and old articles that are gathered in the course of consumption in this country and that can only be suited to recycling of raw materials;

(9)

The waste and piecemeal materials that are generated in the course of production in this country and that can only be suited to recycling of raw materials ; and

(10)

The products obtained from processing the articles as listed in Items (1) to (9) of this Article within this country.

Article 5

If any of the following types of processing or treatment is used for any of the following purposes, no matter it is completed independently or together with the others, it shall be deemed as minor processing or treatment and shall not be taken into account in the determination about whether the products are entirely obtained or not from a country:

(1)

The processing or treating conducted for preserving or transporting the goods;

(2)

The processing or treating conducted for facilitating the loading and unloading of the goods; or

(3)

The packing, exhibiting and other types of processing or treating conducted for selling the goods.

Article 6

The criterions on the determination of "substantial processing" as mentioned in Item (2) of Article 3 of the present Provisions shall be the criterion of the change of tariff code or the criterion of ad valorem percentage.

(1)

The "criterion of the change of tariff code" refers to the change of the classification of the 4-digit tariff items in the Commodity Names and Code Coordination System for the goods obtained from a beneficiary country after they are manufactured or processed with the materials not originated in this country, and the aforesaid goods will not undergo any more production, processing or manufacturing in any other country or region that will cause any change of the classification of the 4-digit tariff items, such goods shall be deemed to have undergone substantial processing.

(2)

The criterion of ad valorem percentage refers to the total value of the materials, parts or products not originated in a beneficiary country is less than 60% of the FOB price of the products manufactured or obtained by this beneficiary country, and the final production procedure is completed within this beneficiary country, the aforesaid products shall be deemed to have undergone substantial processing. The count formula shall be:

　The Value of Materials Not Originated from a Beneficiary Country + The Value of Materials of Unidentified Origin

------------------------------------------------------------------------------------------------------------------------------------------------------〜 100% lt 60%

　　　　　　　　　　　　　　　　　　　　　Price of FOB

(a)

The value of the materials not originated from a beneficiary country refers to the import CIF price.

(b)

The value of materials of unidentified origin refers to the price paid for the materials of unidentified origin in the manufacturing or processing beneficiary country, which is determined at the earliest.

The above-mentioned criterion's calculation of the " ad valorem percentage" shall be comply with the universally acknowledged accounting rules as well as the Agreement on Implementation of Article VII of the General Agreement on Tariffs and Trade 1994.

Article 7

The simple dilution, mix, packing, bottling, drying, assembly, classification or decoration shall not be deemed as substantial processing. If the purpose of enterprise production or pricing measures is for avoiding the present Provisions, it shall not be deemed as substantial processing.

Article 8

In the determination of the origin of goods, one shall not take into account the origin of the energy, workshops, equipment, machines and tools employed during the production course of goods, nor shall one take into account the origin of the materials that are employed during the production course but do not constitute any component or constituent part of the goods.

Article 9

In the determination of origin of goods, the following items shall be neglected:

(1)

The packages, packing materials and containers that are declared and uniformly classified into the same category of the goods under the Import and Export Tariff Regulation of the People's Republic of China.

(2)

The accessories, spare parts, tools and introductory materials accompanying that are declared and uniformly classified into the same category of the goods under the Import and Export Tariff Regulation of the People's Republic of China.

Article 10

The goods under the special preferential tariff treatments shall be complied with the rules on direct transportation. The direct transportation means that:

(1)

the goods are directly transported from a beneficiary country to a customs port of China;

(2)

the goods transit a third country (region) but

(a)

merely for the geographical reason or for the need of transportation;

(b)

don't enter a third country (region) for trade or consumption;

(c)

except for loading, unloading and other necessary work to keep the goods in good condition, the goods haven't undergone any other type of processing in a third country (region);

(3)

As to the imports that are transported by transiting a third country (region), the following documents shall be offered to the customs of the declaration place:

(a)

The joint transportation bills of lading issued by the export country;

(b)

The certificate of origin issued by the issuance institution of the export country;

(c)

The invoice of goods of the original producer; and

(d)

The certification documents meeting the 3 conditions as listed in Item (2) of this Article.

Article 11

When declaring the goods under special preferential tariff treatments, the importer shall submit the certificate of origin (see the format in Annex 3) issued by the government institution designated by the export country (see Annex 2).

Article 12

A certificate of origin issued by an issuance institution of a beneficiary country shall be valid for a period of 180 days as of the date of issuance. The certificate of origin shall be printed on A4 paper, the words on the face shall be in English. A certificate of origin shall consist of 1 original and 3 duplicates and the following colors: the original color shall be apricot cream and the duplicates color shall be light green.

Article 13

When goods are imported, the consignee of imports shall offer the original certificate of origin and the second duplicate to the entry customs. The second duplicate shall be prepared for the verification where the Customs of the People's Republic of China considers necessary. The third duplicate shall be kept by the issuance institution of the export country. The fourth duplicate shall be kept by the exporter.

Article 14

When the goods under the special preferential treatments are exported, the customs of the export country shall sign and affix its seal on the certificate of origin after it ascertains that the documents conform to the goods. When declaring the import goods, the consignee of import goods shall, on its own initiative, declare to the customs that the relevant goods are under the special preferential tariff and shall submit the certificate of origin bearing the seal of the customs of the export country. The entry customs shall permit the imports goods to enjoy the special preferential tariff upon strength of the valid certificate of origin.

Article 15

When having any doubt about the authenticity of the certificate of origin, the General Administration of Customs of the People's Republic of China or its authorized institution may, via the economic and commercial counselor's office of the embassy or consulate of China based in the corresponding beneficiary country, require the customs of the beneficiary country or the original issuance institution of the certificate of origin to conduct verification, and to give it a reply within 90 days from the day when it receives the verification request. If the customs of the beneficiary country or the original issuance institution of the certificate of origin fails to offer a reply within 90 days, the goods shall not enjoy the special preferential tariff treatments. Where necessary, the customs of China may assign some workers to conduct on-site inspection upon consent of the counterpart country.

During the period of waiting for the result of verification of the certificate of origin of the beneficiary country, the entry customs may, at the request of the consignee of imports, release the goods after it charges a sum of security equivalent to the amount of tariff calculated under the most favored nation tariff rate applicable to the goods, and it shall handle the import procedures in accordance with the relevant provisions and complete the corresponding statistical work of the customs. After the customs of the export country or the issuance institution of the certificate of origin completes the verification, the entry customs shall, in accordance with the verification result, promptly handle the formalities for refunding the security or converting the security to the import customs tariff, and make correct the relevant statistic data.

Article 16

Definitions of the following terms as mentioned in the present Provisions:

The "materials" shall include components, spare parts, constituent parts, semi-assembly and / or products that have actually constituted part of another product or has been used in the production course of another product.

The "production" refers to the ways of obtaining products, including planting, exploiting, harvesting, raising, breeding, extracting, collecting, gathering, capturing, fishing, entrapping, hunting, manufacturing, producing, processing or assembling of the products.

The "customs ports of China" refer to the ports within the area coverage to which the Customs Law of the People's Republic of China applies.

Article 17

Anyone who violates the present Provisions shall be punished according to the Customs Law of the People's Republic of China, Regulation on the Implementation of the Administrative Punishments of the Customs of People's Republic of China and other relevant laws and administrative regulations. If any crime is constituted, he shall be subject to the criminal liabilities according to law.

Article 18

The power to interpret the present Provisions shall remain with the General Administration of Customs of the People's Republic of China.

Article 19

The present Provisions shall be implemented as of January 1, 2005.

Annexes:

1. Name List of the African Beneficiary Countries

2. Institutions Issuing Certificates of Origin of the "Beneficiary Countries"

3. Format of Origin of Certificates (Omitted)

Annex 1. Name List of the African Beneficiary Countries

The "beneficiary countries" refer to the African least-developed countries that have completed the procedures for exchanging the documents on the special preferential tariff treatments with China, which include: Benin, Burundi, Cape Verde, Central African, Comoros, Democratic Republic of Congo, Djibouti, Eritrea, Ethiopia, Guinea, Guinea-Bissau, Lesotho, Liberia, Madagascar, Mali, Mauritania, Mozambique, Niger, Rwanda, Sierra Leone, Sudan, Tanzania, Togo, Uganda and Zambia.

Annex 2. Institutions Issuing Certificates of Origin of the "Beneficiary Countries"