On November 10, 2023, the General Administration of Customs of the People’s Republic of China (GACC) issued a notice to solicit public opinions for the latest drafted amendments to the Customs Law (the Draft).
According to the Draft, it contains 113 articles which involve multiple deletions, amendments, new additions, and so on, including but not limited to:
Reporting and disposition
In accordance to Article 13 of the Draft, any work unit or individual is entitled to report any violation of this law and other relevant laws, and regulations. The Draft enlarges the scope of the reporting from the previous “avoiding the Customs supervision” to “any violation against this law and other relevant laws, regulations”. It also provides that the Customs shall grant spiritual or physical rewards to those who are creditable for the reporting or assisting the investigation of the said case, and keep confidential of the reporting party.
Risk management
The Draft adds a whole chapter including 6 articles regarding Customs risk management, which is defined as “in accordance with the risk management principle, takes scientific measures to evaluate the information regarding the importing and exporting transportations, transporting equipment, personnel, goods, articles, and so on, and takes the supervision measures that match the risk level”.
The newly added chapter also provides that Customs can collect information regarding the importing and exporting transportation, transporting equipment, personnel, goods, articles, and so on; analyze and evaluate the risk possibility, development trend and danger level of the collected information to determine the risk level of the importing and exporting transportations, transporting equipment, personnel, goods, articles, and then issue the risk warning in according with laws.
The Customs can also take one or more of the following measures that match the risk level of the importing and exporting transportation, transporting equipment, personnel, goods, and articles, as well as their relevant enterprise:1) Suspending or ceasing to handle the customs procedure;2) Suspending or eliminating the relevant qualification to import certain goods to China;3) Restricting, forbidding certain goods, or articles from certain countries (regions) to import or export;4) Checking electronic equipment or facilities;5) Suggesting to the relevant department that add to the unreliable entity list or other restricting list;6) Appointing the import or export Customs supervision areas;7) Requesting the relevant enterprises and individuals to provide evidence that certain risk does not exist or are insufficient to cause damage;8) Other necessary measures.
Enterprise management
In the chapter on Enterprise Management, the Draft provides that those who operate bonded warehouses, duty-free stores, customs supervision and operation sites, as well as other related businesses that need to obtain customs administrative licenses in accordance with the laws, regulations and rules of the State Council, shall register to the Customs.
The Draft also adds new articles, including but not limited to the following regarding enterprise management: 1) Qualification requirement: in case it requires qualifications for certain business obtained by enterprise registered/recorded at the Customs, such enterprise shall obtain such qualification and report any change thereof to the Customs.2) Credit management: the Customs shall conduct credit management to the registered/recorded enterprise and apply to the relevant measures.3) Material storage: unless specified otherwise, the enterprise that is directly related to the import and export of goods shall keep the material that is directly related to the import and export business for three years from the release date thereof.4) Customs check: the Customs shall conduct checks on the relevant enterprise and supervise the authenticity and legality of their import and export activities.5) De-registration: in case the enterprise registered/recorded at the Customs needs to be de-registered, they shall conduct the relevant procedure.
Goods release
The Draft adds that the Customs shall release the imported and exported goods, after they have paid the duties or provided a guarantee, provided licenses and relevant documents, and passed quarantine. In case the goods imported and exported by individuals cannot be released on the spot, the Customs may require the bearer to temporarily store the goods in a place designated by the Customs and to complete the customs formalities within a specified period.
Duties
The Draft deletes the relevant articles regarding the duties since the relevant content has been covered in detail by the Law of the Duties (draft). Instead, the Draft provides that the Customs shall levy duties on the permitted exporting goods and importing articles in accordance with the PRC Law of Duties and other laws and regulations.
Liabilities
The chapter of Liabilities of the Draft also adds some new provisions, including but not limited to:1) Failure to keep a record of the material directly related to the import and export business may be ordered to rectify, given warning or fines; in case the circumstance is severe, it may be suspended or forbidden to conduct customs related business.2) In case of providing a guarantee by illegal means (e.g. deception, hiding, etc.) by the guarantor or guarantee, the Customs may impose fines.
Comment
The Customs Law was first implemented on January 22, 1987, and was amended in 2000 to adapt to the requirements of entering the WTO. After that, it was further amended five times from 2013 to 2021, and the current effective version was the amended 2021 version.
According to the draft statement of the Customs, due to new developments in the Customs practice, including but not limited to, incorporating the export and import inspection and quarantine into the responsibility of the Customs, new reforms in the risk management and credit management, the establishment of the “single window”, and so on, it is necessary to solidify such mature and effective reform results in the Customs Law.
As a result, based on the draft statement released by the Customs, the main amendments include but not limited to 1) deleting or merely providing a general guidance provision that is already provided in other relevant laws (e.g. duties, food safety, etc.) to avoid repetition in laws; 2) establishing the concept of the risk management by adding a new chapter of “Risk Management” mentioned above; 3) reflecting the new responsibilities of the Customs since the institutional reform in 2018, such as incorporating the inspection and quarantine requirement into the Customs supervision, and so on; 4) improving the enterprise management mechanism, such as clarifying the requirement on the enterprise registration and recordal at the Customs mentioned above, adding a new chapter of the Enterprise Management, and so on. The opinion solicitation will be finished on December 10, 2023.
According to the Draft, it contains 113 articles which involve multiple deletions, amendments, new additions, and so on, including but not limited to:
Reporting and disposition
In accordance to Article 13 of the Draft, any work unit or individual is entitled to report any violation of this law and other relevant laws, and regulations. The Draft enlarges the scope of the reporting from the previous “avoiding the Customs supervision” to “any violation against this law and other relevant laws, regulations”. It also provides that the Customs shall grant spiritual or physical rewards to those who are creditable for the reporting or assisting the investigation of the said case, and keep confidential of the reporting party.
Risk management
The Draft adds a whole chapter including 6 articles regarding Customs risk management, which is defined as “in accordance with the risk management principle, takes scientific measures to evaluate the information regarding the importing and exporting transportations, transporting equipment, personnel, goods, articles, and so on, and takes the supervision measures that match the risk level”.
The newly added chapter also provides that Customs can collect information regarding the importing and exporting transportation, transporting equipment, personnel, goods, articles, and so on; analyze and evaluate the risk possibility, development trend and danger level of the collected information to determine the risk level of the importing and exporting transportations, transporting equipment, personnel, goods, articles, and then issue the risk warning in according with laws.
The Customs can also take one or more of the following measures that match the risk level of the importing and exporting transportation, transporting equipment, personnel, goods, and articles, as well as their relevant enterprise:1) Suspending or ceasing to handle the customs procedure;2) Suspending or eliminating the relevant qualification to import certain goods to China;3) Restricting, forbidding certain goods, or articles from certain countries (regions) to import or export;4) Checking electronic equipment or facilities;5) Suggesting to the relevant department that add to the unreliable entity list or other restricting list;6) Appointing the import or export Customs supervision areas;7) Requesting the relevant enterprises and individuals to provide evidence that certain risk does not exist or are insufficient to cause damage;8) Other necessary measures.
Enterprise management
In the chapter on Enterprise Management, the Draft provides that those who operate bonded warehouses, duty-free stores, customs supervision and operation sites, as well as other related businesses that need to obtain customs administrative licenses in accordance with the laws, regulations and rules of the State Council, shall register to the Customs.
The Draft also adds new articles, including but not limited to the following regarding enterprise management: 1) Qualification requirement: in case it requires qualifications for certain business obtained by enterprise registered/recorded at the Customs, such enterprise shall obtain such qualification and report any change thereof to the Customs.2) Credit management: the Customs shall conduct credit management to the registered/recorded enterprise and apply to the relevant measures.3) Material storage: unless specified otherwise, the enterprise that is directly related to the import and export of goods shall keep the material that is directly related to the import and export business for three years from the release date thereof.4) Customs check: the Customs shall conduct checks on the relevant enterprise and supervise the authenticity and legality of their import and export activities.5) De-registration: in case the enterprise registered/recorded at the Customs needs to be de-registered, they shall conduct the relevant procedure.
Goods release
The Draft adds that the Customs shall release the imported and exported goods, after they have paid the duties or provided a guarantee, provided licenses and relevant documents, and passed quarantine. In case the goods imported and exported by individuals cannot be released on the spot, the Customs may require the bearer to temporarily store the goods in a place designated by the Customs and to complete the customs formalities within a specified period.
Duties
The Draft deletes the relevant articles regarding the duties since the relevant content has been covered in detail by the Law of the Duties (draft). Instead, the Draft provides that the Customs shall levy duties on the permitted exporting goods and importing articles in accordance with the PRC Law of Duties and other laws and regulations.
Liabilities
The chapter of Liabilities of the Draft also adds some new provisions, including but not limited to:1) Failure to keep a record of the material directly related to the import and export business may be ordered to rectify, given warning or fines; in case the circumstance is severe, it may be suspended or forbidden to conduct customs related business.2) In case of providing a guarantee by illegal means (e.g. deception, hiding, etc.) by the guarantor or guarantee, the Customs may impose fines.
Comment
The Customs Law was first implemented on January 22, 1987, and was amended in 2000 to adapt to the requirements of entering the WTO. After that, it was further amended five times from 2013 to 2021, and the current effective version was the amended 2021 version.
According to the draft statement of the Customs, due to new developments in the Customs practice, including but not limited to, incorporating the export and import inspection and quarantine into the responsibility of the Customs, new reforms in the risk management and credit management, the establishment of the “single window”, and so on, it is necessary to solidify such mature and effective reform results in the Customs Law.
As a result, based on the draft statement released by the Customs, the main amendments include but not limited to 1) deleting or merely providing a general guidance provision that is already provided in other relevant laws (e.g. duties, food safety, etc.) to avoid repetition in laws; 2) establishing the concept of the risk management by adding a new chapter of “Risk Management” mentioned above; 3) reflecting the new responsibilities of the Customs since the institutional reform in 2018, such as incorporating the inspection and quarantine requirement into the Customs supervision, and so on; 4) improving the enterprise management mechanism, such as clarifying the requirement on the enterprise registration and recordal at the Customs mentioned above, adding a new chapter of the Enterprise Management, and so on. The opinion solicitation will be finished on December 10, 2023.