Laws of the People's Republic of China

Customs General Administration

Decree of the Customs General Administration of the People's Republic of China

No.108

The Provisions of the Customs of the People's Republic of China on Implementing the Rules of Origin for the China-ASEAN Free Trade Zone under the Framework Agreement on Comprehensive Economic Cooperation between China and ASEAN was deliberated and adopted at the executive meeting of this Administration on December 24th, 3003. It is hereby promulgated and shall be implemented on January 1st, 2004.

Mou Xinsheng, Director of the Customs General Administration

December 30th, 2003

Provisions of the Customs of the People's Republic of China on Implementing the Rules of Origin for the China-ASEAN Free Trade Zone under the Framework Agreement on Comprehensive Economic Cooperation between China and ASEAN

Article 1

With a view to promoting the economic and trade activities between China and ASEAN, and to correctly determining the origin of the goods imported under the Framework Agreement on Comprehensive Economic Cooperation between China and ASEAN (hereinafter referred to as the Agreement), the present Provisions are formulated in accordance with the Customs Law and the Agreement.

Article 2

The present Provisions shall be applied to the goods imported from ASEAN countries under the Agreement (see the Customs Import and Export Tariff of the People's Republic of China for details of the list of goods), however, the goods imported by way of processing trade shall be excluded.

Article 3

The following import goods directly transported from an ASEAN country shall be regarded as goods of ASEAN origin, and the China-ASEAN conventional tariff shall be applicable:

1)

Products fully obtained or produced in an ASEAN country; and

2)

Products that are not fully obtained or produced but that are consistent with Articles 5 and 6 of the present Provisions.

Article 4

The term "products fully obtained or produced in an ASEAN country" as mentioned in Item 1) of Article 3 of the present Provisions refers to:

1)

Plants and their products harvested, picked or collected in that ASEAN country;

2)

Live animals borne and bred in that ASEAN country;

3)

Products that are obtained from the animals mentioned in Item 2) of this Article in that ASEAN country and that have undergone no further processing;

4)

Products obtained from hunting, trapping, fishing, aqua breeding, collecting, or catching in that ASEAN country;

5)

Minerals or other natural materials other than those above-mentioned in Items 1) through 4) that are exploited or extracted from the territory, territorial waters, seabed, or seabed subsoil of that ASEAN country;

6)

Products that are obtained from the waters, seabed or seabed subsoil outside the territorial waters of that ASEAN country, provided that the said country has the right to develop the above-mentioned waters, seabed and seabed subsoil pursuant to the provisions of the international law;

7)

Aquatic and other marine products obtained from the high sea by ships registered with that ASEAN country or hanging the flag of that country;

8)

Products obtained from processing or manufacturing of the products above-mentioned in Item 7) on the processing ships registered with that ASEAN country or hanging the flag of that country;

9)

Discarded or waste materials collected in that ASEAN country that can neither be used for their original purpose nor be restored or repaired, and that are only fit for discarding or recovery of raw materials, or for recycling purpose; and

10)

Products obtained from processing of the products listed above only in Items 1) through 9) in that ASEAN country.

Article 5

The "products that are not fully obtained or produced" as mentioned in Item 2) of Article 3 of the present Provisions shall meet either of the following conditions:

1)

Products of which the origin is of any ASEAN country and the contents of China-ASEAN Free Trade Zone (hereinafter referred to as the Free Trade Zone) shall be no less that 40%; or

2)

The total value of the materials, spare parts, or products not originating from the Free Trade Zone shall not exceed 60% of the FOB price of the products produced or obtained, and the last production operation is finished within an ASEAN country.

Article 6

The term "contents of China-ASEAN Free Trade Zone" as mentioned in Article 5 of the present Provisions is illustrated by the following formula:

100% - (value of the materials not originating from the Free Trade Zone + value of the materials of unidentified origin) / FOB price ¡Á100%¡Ý40%

The "value of the materials not originated in the Free Trade Zone origin or of those of unidentified origin" used in the formula refers to the CIF price of the materials, or the price, as determined in the first place, paid for the materials of unidentified origin within the ASEAN country in which the manufacturing or processing is carried out.

Article 7

Unless there are otherwise provisions, where the products of origin of an ASEAN country that meet the requirement of Article 3 of the present Provisions are manufactured or processed into other products within any ASEAN country, and the accumulated contents from the member states of the Free Trade Zone in those products are no less than 40%, the origin of those finished products shall be the ASEAN country in which the manufacturing or processing is carried out, and the China ASEAN conventional tariff shall be applied to such products.

Article 8

Where the products processed or manufactured in an ASEAN country meet the standards of special origin of products under the Rules of Origin for the China-ASEAN Free Trade Zone, the processing or manufacturing country shall be the country of origin of those products. The aforesaid standards are a part of the present Provisions and will be promulgated by the General Administration of Customs (GAC) separately.

Article 9

The following processing or disposal, no matter whether they are finished separately or conjunctly, shall all be regarded as minor processing and disposal, and shall be disregarded in determining whether the goods are fully obtained:

1)

Processing or disposal conducted for the transport or storage of the goods to keep them in good conditions;

2)

Processing or disposal conducted for the convenience of the shipping of the goods; and

3)

Processing or disposal, such as packing or display, etc., conducted for the sale of the goods.

Article 10

The term "directly transported" as mentioned in Article 3 of the present Provisions refers to that the goods imported under the Agreement are transported from an ASEAN country directly to China, or are transported from an ASEAN country to China via any other member state of the Free Trade Zone, but have not passed any non-member state of the Free Trade Zone on the way.

Where the import goods are transported to China via any non-member state of the Free Trade Zone (including the change of vehicle or temporary storage) and meet the following conditions simultaneously, they shall be regarded as being directly transported from the ASEAN country:

1)

Simply due to geographic reasons or transport needs;

2)

Not being traded or consumed when passing through the above-mentioned country; and

3)

Not going through any processing in the above-mentioned country other than such processing that is needed for loading and unloading and for keeping the goods in good conditions.

Article 11

Where the packages, package materials, and containers, as well as the accessories, spare parts, tools, and introductive materials shall be declared for import together with the goods, and are categorized together with those goods in the Regulations of Import and Export Customs Tariff of the People's Republic of China, they shall be ignored in the determination of the origin of the goods.

Article 12

Unless there are otherwise provisions, the origins of the energy, fuel, plants, equipment, machines, and tools used in the manufacturing of the products, as well as the origins of the materials that are not contents or components of the products, shall be disregarded in determining the origin of the products.

Article 13

When declaring of the goods imported under the Agreement, the consignee shall voluntarily declare to the customs that the China-ASEAN conventional tariff shall be applicable to those goods, and shall submit the certificate of origin (including the original and the third page) issued by the governmental agency designated by the exporting ASEAN country.

Where the import goods are transported via any non-member state of the Free Trade Zone, apart from complying with the preceding paragraph, the consignee of the import goods shall also supplement the following documents to the customs:

1)

The through bill of lading issued by the exporting ASEAN country;

2)

Duplicate of the original business invoice of the goods; and

3)

The relevant certificates in conformity with Paragraph 2 of Article 10 hereof.

If the certificate of origin is found, upon check by the customs where the declaration is made, to be consistent with the Procedures for Issuing and Checking of the Certificate of Origin, and if the contents of the certificate are in conformity with the import goods, that certificate shall be regarded as valid.

Article 14

If the FOB price of any import goods of the origin of an ASEAN country is less than 200 US dollars, there is no need to submit the certificate of origin.

Article 15

The certificate of origin of the goods imported from of an ASEAN country shall, within 4 months as of the day of issuing by the relevant government agency of the ASEAN country, be submitted to the customs within China where the customs declaration is made.

Where the import goods are transported through any non-member state of the Free Trade Zone according to Paragraph 2 of Article 10 of the present Provisions, the time limit for submission of the certificate of origin of those goods will be extended to 6 months.

Where the consignee of the import goods fails to submit the certificate of origin within the above-mentioned time limit because of force majeure or any other justified reasons, the customs where the declaration is made may accept the certificate upon examination.

Where the import goods have been actually imported within the period prescribed in Paragraphs 1 and 2 of this Article, the time limit for submission of the certificate of origin may not be restricted by the provisions of Paragraphs 1 and 2.

Article 16

Where the customs where the declaration is made has any doubt over the validity of the contents of the certificate of origin, it may request the relevant government agency of the ASEAN country to verify the certificate of origin, and the agency receiving the request shall make a reply within 6 months. During the verification period before any result comes out, the customs where the declaration is made may release the goods after collecting a cash deposit of the same value as the amount of the taxes payable at the rate applied to those goods as if not under the Agreement, handle the import formalities and do the customs statistics. After the verification is finished, the customs where the declaration is made shall, in accordance with the result of the verification, immediately refund the cash deposit or change the cash deposit into import tariff, and modify the customs statistics data correspondingly.

Where the import goods are those prohibited or restricted by the State from importing, or where any suspect of illegal offence is involved, the customs may not release the goods before the verification of the certificate of origin is finished.

Article 17

The customs shall keep confidential the materials exchanged with the ASEAN countries for verification of the certificates of origin, other than the customs import and export trade statistic data.

Article 18

Where, after the goods imported from an ASEAN country are declared for customs clearance but before the customs grants the clearance, the destination of those goods is changed and the goods need to be transported to another country, the consignee shall file a written application with the customs.

The customs shall indicate and confirm the change of the destination of the goods on the certificate of origin before returning the original certificate to the consignee of the import goods and returning the third page of the certificate to the issuing agency.

Article 19

Where the products with the origin of any ASEAN country are transported to another ASEAN country or China for exhibition, and are sold to China during or after the exhibition, and if the following conditions are met simultaneously, the China-ASEAN conventional tariff may be applied:

1)

The exporter has transported the products from the exporting ASEAN country to the ASEAN country where the exhibition is held and the goods have actually been exhibited in that country;

2)

The exporter has transferred the goods to the consignee within China; and

3)

The conditions of the products that are sold into China during or after the exhibition are consistent with their conditions at the exhibition.

Where the exhibition products meeting the preceding paragraph are declared for import, the consignee shall submit to the customs the certificate of origin of the exporting ASEAN country, and shall simultaneously provide the certificate specifying the name and address of the exhibition issued by the relevant government agency of the country where the exhibition is held, as well as the relevant certificates meeting Paragraph 2 of Article 10 of the present Provisions.

The term "exhibition" as used in this Article shall include the business, agricultural, and handcraft industry exhibitions or trade fairs especially held for the sale of foreign products, as well as the similar exhibitions or displays held in shops and business places. The products shall be subject to customs control during the exhibition.

Article 20

The following terms as used in the present Provisions refer to:

1)

The term "ASEAN countries" refers to the other member states signed the Agreement jointly with China, namely Brunei Darussalam, Kingdom of Cambodia, the Republic of Indonesia, the Lao People's Democratic Republic, Malaysia, the Union of Burma, the Republic of the Philippines, the Republic of Singapore, the Kingdom of Thailand, and the Socialist Republic of Viet Nam.

2)

The term "Materials" shall include constituents, accessories, components, semi-assembled parts, and the products that actually constitute a part of another product or are used in the production of another product.

3)

The term "Goods of origin" refers to the products that are determined to be in conformity with the conditions for origin in accordance with Article 3 .

4)

The term "Production" refers to the method of obtaining a product, including planting, exploiting, harvesting, breeding, reproducing, extracting, collecting, gathering, seizing, fishing, trapping, hunting, manufacturing, producing, processing and assembling.

5)

The term "Plants" refers to all the plants such as fruits, flowers, vegetables, trees, algae, epiphytes, and live plants, etc.

6)

The term "Animals" refers to all the animals such as mammals, birds, fishes, carapaces, mollusks, reptiles, bacteria, and virus, etc.

7)

The term "Discarded or waste materials" refers to the all the discarded and waste machines, packages, and materials, etc., that are generated in the course of processing, manufacturing and consuming in industrial, mining, agricultural, construction, smelting, and sewage disposal industries.

8)

The term "Standards of the special origin of products" refers to the rules of change of tax code of the prescribed materials, specific processing or manufacturing operation of those materials, satisfaction of a certain standard of ad valorem percentage, or a combination of the above-mentioned standards.

Article 21

The customs shall deal with any act in violation of the present Provisions in accordance with the Customs Law of the People's Republic of China and the Detailed Rules for the Implementation of the Administrative Punishment for the Customs Law of the People's Republic of China. If a crime has been constituted, the offender shall be subject to criminal liabilities according to law.

Article 22

The responsibility to interpret the present Provisions shall remain with the Customs General Administration.

Article 23

The present Provisions shall be implemented as of January 1st, 2004.