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< Processing trade contract record >
■ Definition
Processing trade enterprises bring the legal processing trade contracts to the competent customs for bonded application and process record procedures for receiving "Processing trade manuals".
■ Processing trade with supplied materials contract record
After signed the processing contract, enterprises should bring the contract to customs for recording "processing trade manuals" before arrival of the goods. And process import and export custom declaration based on the manuals.
☉ Business processes
1.Enterprises should firstly fill in boned contract record pre-input report and "Processing Trade Manuals". After the first review by Customs, pre-input data would be processed at pre-input companies.
2.The following documents should be provided for processing trade with supplied materials contract registration record procedures:
ㅇProcessing trade with supplied materials contract or agreement (copy);
ㅇ"Processing trade business permit" issued by Foreign economic and trade competent authority;
ㅇProof of production capacity for processing trade enterprises (as proof of production capacity for short);
ㅇTechnical process of production processing and proof of Material quantity applied per unit
ㅇApproved and registered processing project with supplied materials by the Ministry of Commerce should provide permit documents issued by the Ministry of Commerce;
ㅇCommodities belonging to State special permission should provide permit certificate issued by competent authority.
ㅇIndustrial enterprises, foreign trade enterprises should provide domestic processing contract (or the commission contract of foreign trade) and warranties of processing enterprises.
ㅇ"Processing Trade Manuals" and Application form for processing trade record, Boned contract pre-input report;
ㅇOther certificates required by customs
3.Competent customs will review applied materials of enterprises and issue "Bank deposit account opening contact list" for qualified enterprises.
4.Enterprises go to designated Bank of China for processing bank deposit account procedures.
5.Enterprises provide "Bank deposit account opening notice" issued by the Bank of China to customs and receive "Processing trade manuals" after customs’verification.
☉ Processing time
For complete and effective certificates submitted by enterprises, the customs will issue within 5 working days (not including additional time for approval of higher authorities under special circumstances).
■ Processing trade with imported materials contract record
After signed the processing contract, enterprises should bring the contract to customs for recording "processing trade manuals" before arrival of the goods. And process import and export custom declaration based on the manuals.
☉ Processes
1.Enterprises should firstly fill in boned contract record pre-input report and "Processing Trade Manuals". After the first review by Customs, pre-input data would be processed at pre-input companies.
2.The following documents should be provided for processing with imported materials contract registration record procedures:
ㅇProcessing with imported materials contract signed with foreign enterprises (export contract should be provided for counterpart contract).
ㅇ"Processing trade business permit" issued by Foreign economic and trade competent authority;
ㅇProof of production capacity for processing trade enterprises
ㅇTechnical process of production processing and proof of material quantity applied per unit
ㅇApproval certificate issued by tax competent authority;
ㅇApproved and registered processing project with supplied materials by the Ministry of Commerce should provide permit documents issued by the Ministry of Commerce;
ㅇCommodities belong to State special per mission should provide permit certificate issued by competent authority.
ㅇIndustrial enterprises, foreign trade enterprises should provide domestic processing contract (or the commission contract of foreign trade) and warranties of processing enterprises.
ㅇ"Processing Trade Manuals" and Application form for processing trade record, Boned contract pre-input report;
ㅇOther certificates required by customs
3.Competent customs will review applied materials of enterprises and issue "Bank deposit account opening contact list" for qualified enterprises.
4.Enterprises go to designated Bank of China for processing bank deposit account procedures.
5.Enterprises provide "Bank deposit account opening notice" issued by the Bank of China to customs and receive "Processing trade manuals" after customs’ verification.
☉ Processing time
For complete and effective certificates submitted by enterprises, the customs will issue within 5 working days (not including additional time for approval of higher authorities under special circumstances).
■ Processing trade contract review and contents of the record
☉ Review the contents of the record
Customs focuses mainly on the following review of processing trade contract record:
ㅇWhether the quantity of imported raw materials record is reasonable, the nature and use of materials and parts are correct, and declared price is normal.
ㅇWhether the total amount of imported materials and parts matches with production capacity of enterprises.
☉ Reasons for not recognizing the processing trade business
For applications with the following problems, the Customs shall not handle the contract registration procedures, and issue the decisions of not accepting processing trade business.
ㅇImported raw materials or export finished products are prohibited by the State
ㅇProcessing products are not allowed in processed in domestic by the State( mainly approved by the Ministry of Commerce);
ㅇImported materials and parts cannot be bonded supervised by customs;
ㅇBusiness enterprises or processing enterprises are not allowed to carry out the processing trade (not registered at customs or enterprises have been canceled the processing trade qualification)
ㅇBusiness enterprises which fail to submit application for processing trade registration manuals write-off within expiration resubmit application (therefore, enterprises must apply for manuals write-off procedures within the deadline in order to avoid unnecessary troubles during the process of new manuals registration).
☉ Contents of the processing trade contract record
1.Basic information of enterprises’ manuals
ㅇbusiness name and customs registration number, consignee's name and customs registration number;
ㅇSupervision ways for counterpart processing with imported materials, non-counterpart processing with imported materials, processing with supplied materials, equipments provided free of charge
ㅇValid period
2.Imported materials and parts;
3.Export of finished products;
4.Situation of finished products with material quantity applied per unit of materials and parts.
■ Processing trade manuals
☉ "Customs Processing Trade Manuals of China" management regulations
In accordance with the new trend and development needs of processing trade, and in order to standardize the management of processing trade and simplify processing trade procedures, the original registration manuals have been integrated into "Processing Trade Manuals" system since January 1, 2006.
※ The manuals refer to a kind of processing trade management account issued by customs after the record of processing trade contract. The manuals contain paper manual and electronic manual.
☉ Notes for processing trade enterprises
Processing trade manuals management is one of the core elements of the processing trade, manuals recorded in the note are as below:
1.The processing trade manuals are used for processing trade contract record (change), import and export of products and write off. The manuals are applicable for processing with imported materials and processing with supplied materials.
2.Business enterprises must go to the local competent customs for processing trade products record procedures. Processing trade enterprises which need guarantee should process guarantee procedures according to relevant regulations.
3.Business enterprises process processing trade products for registration should submit the following documents:
ㅇCompetent commercial department (Foreign Economic and Trade) issued valid "Processing trade business permit"
ㅇCompetent commercial department (Foreign Economic and Trade) issued " Proof of processing trade enterprises operating conditions and production capacity"
ㅇContracts signed with foreign enterprises
ㅇBusiness enterprises processing trade with supplied materials should submit the processing with supplied contract signed between business enterprises and processing enterprises.
ㅇOther materials required by customs
4.Business enterprises already processed processing trade products record can apply for processing trade sections and continuations at customs.
5.Business enterprises can process outward processing business after approved by the customs and outward processing business must within the valid period of processing trade.
6.When business enterprises process import and export goods procedures, "Processing trade manuals" and special certificates and materials for processing trade import and export goods should be held for import and export of processing trade customs clearance.
7.If the contents of processing trade record changed, business enterprises should process the change procedures within the valid period of processing trade manuals. For change required back to original approval authority should also within the valid period.
8.Processing trade export of finished products within the scope of restricted export goods by State, the business enterprises shall submit export permit to the customs. And customs collect export tariff for export of finished products with export tariffs payable.
9.Without the permission of the Customs, processing trade products are forbidden to mortgage, pledge or lien.
10.Processing trade products without the permission of customs or not paying for the tax payable and relevant permits of products need to be inspected; the enterprises shall dispose or sell by themselves.
As transferring processing trade products into domestic sales, the customs in accordance with valid certificate of domestic sales approval issued by the competent commercial department (Foreign Economic and Trade) ask for taxes of bonded imported materials and parts, and interests of suspended taxes.For imported materials and parts belonging to restricted products by State, the enterprises shall submit the import licence to customs.
11.Processing trade enterprises must follow "Accounting Law of China" and relevant laws, administrative regulations, specifications to possess account books, reports and other relevant documents according to the requirements of customs supervision. And related information like import of processing trade products, storage, domestic sales, processing, use, losses and export conditions should be recorded.
12.According to supervision requirements, the customs can conduct inspection of processing trade enterprises, and the enterprises have the obligation to actively cooperate with customs inspection.
13.Within the valid period of manuals, business enterprise can process import materials and parts, processing and re-export, and conduct customs formalities as domestic sales taxation, deep processing transit, remaining materials transit, giving up and sending back within the valid period.
The last processing trade export finished product or within30 days after the expiration of processing trade manuals, write off procedures should be applied to the customs.
Early termination of contract signed by business enterprises and foreign enterprises must be applied to customs for write off procedures within 30 days from the date of contract termination. Transit, taxation, sending back and giving up of remaining materials and parts should be processed before write off.
14.As business enterprises applying for write off, the declaration of import materials and parts, export of finished products, scraps, remaining materials, defective products, by-products and material quantity applied per unit must be truthful, and submit processing trade manuals, special Customs Clearance certificate of processing trade and other documents required by customs.
15.Business enterprises should safe keep the manuals. If the processing trade manuals are lost, enterprises should give declaration to the customs in time and take relevant responsibility. In accordance with relevant regulations, the customs will write off processing trade manuals.
16.Processing trade enterprises in the events of separation, merger, bankruptcy, etc., should declare for relevant customs formalities. If processing trade goods are stored and sealed by people's court or relevant administrative law enforcement departments, the processing trade enterprises should declare to the customs within 5 days from the event occurs.
17.When processing trade enterprises process processing trade, smuggling or irregularity happened in accordance with relevant laws and regulations, the customs will investigate and seek for criminal responsibility according to "Customs Law of China " and "Regulations for the Implementation of Customs Administrative Punishment".
18.For not mentioned in these notes or conflicting with current laws and regulations, take current laws, regulations and specifications as standard.
19.The manuals are printed by customs.
☉ Sections of processing trade manuals
ㅇDefinition of sections
Sections system of processing trade manuals aims to alleviate the difficult situation of customs clearance and distribution in several ports and customs.
Sections and the original processing trade registration manuals (general manuals) correspond with each other.
With the applications of enterprises and consent of competent customs, part of the processing trade registration manuals (general manuals) is recorded again, and issued with another "Registration Manuals" with independent sequence number by customs.
ㅇTypes of sections
Processing trade manuals can be divided into direct customs declaration sections (start with F) and the deep processing transit sections (start with G).
Direct customs declaration sections include local direct customs declaration sections and remote direct customs declaration sections for enterprises processing import and export customs declaration procedures in local or remote.
Deep processing transit sections include local deep processing transit sections and remote deep processing transit sections. Local deep processing transit sections are used for enterprises processing import and export customs declaration procedures after secondary processing in local area; while remote deep processing transit sections are used for enterprises processing import and export customs declaration procedures after secondary processing in remote area.
ㅇApplication of sections
Enterprises should bring general manuals issued by the customs, "Application Form for Processing Trade sections", input "Processing trade sections reports" and other documents required by Customs for sections application. After approval of customs, processing trade sections with independent sequence number will be sealed and issued by customs.
ㅇUse of sections
Valid period of the sections must be within the expiration of general manuals. Business enterprises of sections, processing enterprises, commodity code, product name, specifications, unit of measurement, price of unit and monetary system should be in accordance with general manuals.
Import and export commodities of sections must be within the scope of approval commodities of general manuals.
In addition, the quantity of commodities must be within the scope of corresponding commodities of general manuals record.
The general manuals and sections can be used separately, and one section is limited to use in a customs for customs declaration.
Use of remote direct declaration sections must within the jurisdiction of customs, but the deep processing transit sections can be used out of the jurisdiction of customs.
The content of export sections after remote deep processing transit contains the export of finished products or semi-finished part only but without imported materials and parts. And only applicable for export business after deep processing transit.
☉ Continuations of processing trade manuals
ㅇDefinition
As frequent customs declaration of processing trade manuals leads to insufficient column of import and export record, the competent customs accept enterprises’ application and issue the continuations.
The continuations have the same sequence number with original manuals and binding use with original manuals. In fact just as adding a record field.
ㅇApplication and use of continuations
The premise of continuations application is that the original manuals are already used or running out of import and export record.
If the manuals have formed balance of import and export, the enterprises should apply for new manuals and not for continuations.
For continuations application, the enterprises should submit "Application form for continuations" and original"Registration manuals". Enterprises which have applied for continuations application should mark with the quantity of applied continuations on "Application form for continuations".
After receiving the continuations, they should be jointly managed with the original manuals. During import and export customs declarations, continuations shall be used with original manuals.
☉ Exception of manuals issuing
In order to simplify the procedures, 78 kinds of auxiliary materials regulated by the State and total value not exceeding $ 5,000 can pass the procedures of contract record and manuals issuing and process import and export customs declaration directly.
Above situations without the need of registration manuals just process export contract record and get bonded permission. According to the seal and sequence number of export contract record, enterprises can directly handle import and export customs declaration.
