MEASURES OF THE CUSTOMS OF THE PEOPLE'S REPUBLIC OF CHINA CONCER-NING THE ADMINISTRATION OF THE GOODS, MEANS OF TRANSPORT, AND ARTICLESCARRIED BY INDIVIDUALS TO BE BROUGHT INTO OR OUT OF THE BONDED AREA OFOUTER GAOQIAO IN SHANGHAI

MEASURES OF THE CUSTOMS OF THE PEOPLE'S REPUBLIC OF CHINA CONCER-NING THE ADMINISTRATION OF THE GOODS, MEANS OF TRANSPORT, AND ARTICLESCARRIED BY INDIVIDUALS TO BE BROUGHT INTO OR OUT OF THE BONDED AREA OFOUTER GAOQIAO IN SHANGHAI
Important Notice: This English document is coming from the "LAWS AND REGULATIONS OF THE PEOPLE'S REPUBLIC OF CHINA GOVERNING FOREIGN-RELATED MATTERS" (1991.7) which is compiled by the Brueau of Legislative Affairs of the State Council of the People's Republic of China, and is published by the China Legal System Publishing House.

In case of discrepancy, the original version in Chinese shall prevail.

Whole Document MEASURES OF THE CUSTOMS OF THE PEOPLE'S REPUBLIC OF CHINA CONCER- NING THE ADMINISTRATION OF THE GOODS, MEANS OF TRANSPORT, AND ARTICLES CARRIED BY INDIVIDUALS TO BE BROUGHT INTO OR OUT OF THE BONDED AREA OF OUTER GAOQIAO IN SHANGHAI (Approved by the State Council on September 8, 1990 and promul- gated by Decree No. 13 of the General Customs Administration on September 9, 1990) Chapter I General Provisions Article 1 These Measures are formulated in accordance with the Customs Law of the People's Republic of China and the provisions of other pertinent laws and regulations promulgated by the State in order to promote the construction in the bonded area of Outer Gaoqiao in Shanghai and develop the export- oriented economy.

Article 2 The bonded area of Outer Gaoqiao in Shanghai (hereinafter referred to as "the bonded area") is under the supervision and administration of the Customs, and the Customs shall carry out the task of supervision and administration in the bonded area according to law. On the demarcation line between the bonded area and the non-bonded areas (i.e., the other areas within the territory of China, the same below) shall be established well equipped separation installation.

Article 3 Goods, means of transport, or articles carried by individuals entering or leaving the bonded area must go through the entrance and exit of the Customs establishments. They shall be declared at the Customs truthfully and accept the inspection of the Customs. Enterprises engaged in import and export business and enterprises engaged in production and storage business in the bonded area, shall present document of approval, issued by the Shanghai People's Government or by the competent authorities designated by it, to the Customs for registration.

Article 4 With respect to import and export commodities in the bonded area, the consignee, the consignor, or their agent shall fill in the declaration form for import and export commodities, and present the relevant documents in accordance with provisions.

Article 5 Within the confines of the bonded area, only the competent administrative organs and relevant enterprises are to be established.

With the exception of the security personnel, no other personnel shall be permitted to reside in the bonded area.

Article 6 Within the confines of the bonded area, goods imported by the competent administrative organs or enterprises for their own use shall be used only in the bonded area; these goods are strictly forbidden to be transferred or sold in the non-bonded areas without approval. The bonded goods must be re-transported out of the territory, or be re-transported after being processed out of the territory.

If, under special circumstances, the aforesaid goods must be transferred to, or sold in non-bonded areas, they shall be regarded as imported goods, and the persons concerned shall present import licence as prescribed by the State, and pay import duty and product tax in the link of import (i.e.

tax on added value) or consolidated industrial and commercial tax.

Article 7 The establishment of production of projects, in the bonded area, which are restricted and controlled by the State, shall be approved by the competent authorities prescribed by the State.

Article 8 Goods and articles, whose import and export are forbidden by the State, shall not be brought into or out of the bonded area.

Goods intended to be sold in the non-bonded areas shall not be transported into the bonded area.

Article 9 The Customs has the right to inspect, according to the provisions of the Customs Law of the People's Republic of China, goods imported into or exported from the bonded area and the sites connected with them.

Chapter II The Basis for the Inspection and Clearance of Imported and Exported Goods and the Preferential Treatment in Taxation Article 10 Import or export licence shall be exempted in the following cases: the importation into the bonded area of machinery, equipment, goods and materials for capital construction, motor vehicles for production, means of transport, and articles for office use, which are to be used within the bonded area; the importation of raw and processed materials, spare and component parts, primary parts, fuels, and packaging supplies needed for processing export products; the transit goods for storage; and the products processed in the bonded areas and destined for export.

Article 11 Goods (including raw materials, spare parts and components, primary parts, and packaging supplies for the production of export products), transported from the non-bonded areas into the bonded areas, shall be regarded as export goods, and the Customs procedures shall be completed in accordance with the pertinent provisions promulgated by the State.

Article 12 With respect to the domestically manufactured machinery, equipment and articles for daily use, which are transported into the bonded area from the non-bonded areas and are for the use by administrative departments, enterprises and their personnel in the area, the interested units shall declare at the Customs, which shall give clearance after inspection. As regards those imported goods and articles transported into the bonded area from the non-bonded areas and which have been cleared after going through import procedures, the Customs duties already paid shall not be refunded.

Article 13 Customs duty and consolidated industrial and commercial tax (tax on products, or tax on added value) on the import and export goods of the bonded area shall be handled in accordance with the following provisions: (1) the machinery, equipment, and other goods and materials for capital construction needed for the construction of basic installations and facilities in the bonded area shall be exempted from duty; (2) the building materials, the equipment for production and administration, the fuels for production, motor vehicles within reasonable quantities for production, means of transport, articles for office use, and the spare parts and fittings needed for the maintenance of the aforesaid machinery, equipment and motor vehicles, which are imported by enterprises in the bonded area for their own use, shall be exempted from duty; (3) the means of transport within reasonable quantities, articles for office use, equipment for administration, imported by administrative departments in the bonded area for their own use, shall be handled by applying mutatis mutandis the provisions of Item (2) of this Article; (4) the raw and processed materials, spare and components parts, primary parts, and packaging supplies, imported by the enterprises in the bonded area to be used for production of export products, shall be held in bond; (5) transit goods shall be treated as bonded goods, and shall be exempted from duty if they are to be re-exported; (6) the importation of articles other than those within the scope as prescribed in Items (1) through (5) of this Article, shall be taxed in accordance with relevant regulations; (7) the exportation of products processed by enterprises in the bonded area shall be exempted from export duty and consolidated industrial and commercial tax in the production link (tax on products, or tax on added value).

Chapter III The Administration of the Import and Export Commodi- ties of Production Enterprises Article 14 Enterprises destined for production in the bonded area shall register at the Customs for the record, and obtain a "registration handbook".

The aforesaid enterprises shall set up specialized account books to keep separate records of the importation, storage, exportation, and marketing conditions of raw and processed materials, spare and component parts, primary parts and finished goods; and submit periodical statements to the Customs for future reference and for verification and cancellation.

Article 15 The finished products manufactured with imported raw materials and spare parts by production enterprises shall all be sold abroad. If, under special circumstances, it is necessary to sell finished products, substandard products, and leftover bits and pieces of raw materials in the non-bonded areas, such products shall be regarded as imported products, the procedures for importation shall be completed in accordance with the pertinent provisions of the State and duties be paid according to regulations. The Customs shall, in accordance with the quantities of the imported raw materials and spare and component parts of which the finished products consist, levy duties on them. In the event that the consignors or their agents cannot submit an accurate report on the names, quantities and value of such raw materials and spare and component parts, the Customs shall take the finished products as imported and levy duties as such.

Article 16 The imported raw materials and spare and component parts shall, within the period of one year after their importation, be processed into finished products and sold outside the Chinese territory; and the enterprise concerned shall, within the period of one month after the completion of the execution of the contract, approach the Customs for verification and cancellation be presenting the "registration handbook" and the declaration form for export commodities endorsed by the Customs.

In case the imported raw materials and spare and component parts are not processed into finished products within one year, with the exception of special approval for an extension, due procedures for obtaining a licence and paying the duty as import goods shall be completed.

Chapter IV Administration of Commodities Imported and Exported by Foreign Trade Enterprises Article 17 A foreign trade enterprise in the bonded area, which is approved by the State competent authorities to conduct import and export business, may transact transit trade and act as an agent for other enterprises in the bonded area to import raw and processed materials and spare and component parts for production, or to export products. However, it may not purchase goods manufactured by enterprises in the non-bonded area; nor may it act as an agent for enterprises in the non-bonded area to import goods.

Article 18 When a foreign trade enterprise in the bonded area conducts import and export of goods, the Customs shall give clearance after verifying the import and export agency contract signed between the foreign trade enterprise and the interested production enterprise, and other relevant documents.

Article 19 Goods imported by a foreign trade enterprise in the bonded area shall be stored in the warehouses and sites designated by the Customs within the bonded area, and the aforesaid enterprise shall keep specialized account books, and submit periodical statements to the Customs for verification.

Article 20 When a foreign trade enterprise delivers goods, imported by it as an agent, to a production enterprise for processing, or exports goods as an agent for the production enterprise, both buying and selling parties shall, by presenting the import and export agency contract to the Customs, go through the procedures for Customs declaration, carrying-over of accounts, and verification and cancellation.

With respect to the aforesaid goods carried over by the production enterprise, the Customs shall handle the matter in accordance with the provisions in Chapter III of these Measures.

Article 21 Goods imported through the agency of a foreign trade enterprise shall not be transferred or sold to the non-bonded areas without authorization.

Chapter V Administration of Warehousing and Storing Enterprises for Transit Goods Article 22 Transit goods imported from abroad into the bonded area shall be stored in warehouses and sites, designated by the Customs, in the bonded area.

Without the approval of the Customs, the aforesaid goods shall not be transferred or sold.

Article 23 Transit goods, with the approval of the Customs, may undergo simple processing in warehouses, such as grading, selecting, pasting trademark tags, and changing the packing. The warehousing and storing enterprises shall keep specialized account books for import, storage, transit, and marketing, and submit periodical statements to the Customs for verification.

Article 24 The time limit for the storage of transit goods in the bonded area shall be one year. If, under special circumstances, there is a need to extend the time limit, an application shall be filed with the Customs for an extension, which shall in no way exceed one year. In the event that the transit goods are not transported out of the bonded area within the time limit, the Customs shall handle the case in accordance with the provisions of Article 21 of The Customs Law of the People's Republic of China.

Chapter VI Administration of Means of Transport and Articles Carried Along by Individuals Article 25 The persons in charge or the owners of the means of transport entering or leaving the bonded area, or their agents, shall present the certification, approved by the Shanghai People's Government or the competent organs designated by it, for going through the procedures of registration for the record.

Article 26 Means of transport, on entering or leaving the bonded area, shall declare at the Customs, and accept the inspection by the Customs.

Article 27 Means of transport and personnel, while going from the bonded area to a non-bonded area, shall not, without approval, transport or carry out of the bonded area bonded goods or products made from bonded raw and processed materials and spare and component parts.

Chapter VII Supplementary Provisions Article 28 Cases concerning the supervision charges for goods with Customs duties reduced or exempted, or for bonded goods imported into the bonded area, shall be handled in accordance with Measures of the Customs of the People's Republic of China Concerning the Collection of Customs Supervision Charges for Goods Imported with Reduction of Exemption from Customs Duty, and for Bonded Goods.

Article 29 It is strictly prohibited to engage in illegal activities of smuggling by taking advantage of the preferential treatment and conveniences granted by the State to the bonded area. The Customs shall handle the smuggling activities which occur in the bonded area in accordance with the provisions of The Customs Law of the People's Republic of China.

Article 30 The right to interpret these Measures resides in the General Customs Administration. Rules for the implementation of these Measures may be formulated by the Shanghai Customs in accordance with these Measures. The implementation rules shall be put into effect after its approval by the General Customs Administration.

Article 31 These Measures shall be promulgated and put into effect by the General Customs Administration.

Note: On September 8, 1990, the State Council, while approving the promulgation by the General Customs Administration of these Measures, gave the following instruction: " A special, closed channel shall be constructed in between the bonded area of Outer Gaoqiao in Shanghai and the wharf. The Measures shall be put into effect after the separation installations in the bonded area have been completed, and checked strictly and accepted by the Customs". - The Editor.

ministration of Commodities Imported and Exported by Foreign Trade Enterprises Article 17 A foreign trade enterprise in the bonded area, which is approved by the State competent authorities to conduct import and export business, may transact transit trade and act as an agent for other enterprises in the bonded area to import raw and processed materials and spare and component parts for production, or to export products. However, it may not purchase goods manufactured by enterprises in the non-bonded area; nor may it act as an agent for enterprises in the non-bonded area to import goods.

Article 18 When a foreign trade enterprise in the bonded area conducts import and export of goods, the Customs shall give clearance after verifying the import and export agency contract signed between the foreign trade enterprise and the interested production enterprise, and other relevant documents.

Article 19 Goods imported by a foreign trade enterprise in the bonded area shall be stored in the warehouses and sites designated by the Customs within the bonded area, and the aforesaid enterprise shall keep specialized account books, and submit periodical statements to the Customs for verification.

Article 20 When a foreign trade enterprise delivers goods, imported by it as an agent, to a production enterprise for processing, or exports goods as an agent for the production enterprise, both buying and selling parties shall, by presenting the import and export agency contract to the Customs, go through the procedures for Customs declaration, carrying-over of accounts, and verification and cancellation.

With respect to the aforesaid goods carried over by the production enterprise, the Customs shall handle the matter in accordance with the provisions in Chapter III of these Measures.

Article 21 Goods imported through the agency of a foreign trade enterprise shall not be transferred or sold to the non-bonded areas without authorization.

Chapter V Administration of Warehousing and Storing Enterprises for Transit Goods Article 22 Transit goods imported from abroad into the bonded area shall be stored in warehouses and sites, designated by the Customs, in the bonded area.

Without the approval of the Customs, the aforesaid goods shall not be transferred or sold.

Article 23 Transit goods, with the approval of the Customs, may undergo simple processing in warehouses, such as grading, selecting, pasting trademark tags, and changing the packing. The warehousing and storing enterprises shall keep specialized account books for import, storage, transit, and marketing, and submit periodical statements to the Customs for verification.

Article 24 The time limit for the storage of transit goods in the bonded area shall be one year. If, under special circumstances, there is a need to extend the time limit, an application shall be filed with the Customs for an extension, which shall in no way exceed one year. In the event that the transit goods are not transported out of the bonded area within the time limit, the Customs shall handle the case in accordance with the provisions of Article 21 of The Customs Law of the People's Republic of China.

Chapter VI Administration of Means of Transport and Articles Carried Along by Individuals Article 25 The persons in charge or the owners of the means of transport entering or leaving the bonded area, or their agents, shall present the certification, approved by the Shanghai People's Government or the competent organs designated by it, for going through the procedures of registration for the record.

Article 26 Means of transport, on entering or leaving the bonded area, shall declare at the Customs, and accept the inspection by the Customs.

Article 27 Means of transport and personnel, while going from the bonded area to a non-bonded area, shall not, without approval, transport or carry out of the bonded area bonded goods or products made from bonded raw and processed materials and spare and component parts.

Chapter VII Supplementary Provisions Article 28 Cases concerning the supervision charges for goods with Customs duties reduced or exempted, or for bonded goods imported into the bonded area, shall be handled in accordance with Measures of the Customs of the People's Republic of China Concerning the Collection of Customs Supervision Charges for Goods Imported with Reduction of Exemption from Customs Duty, and for Bonded Goods.

Article 29 It is strictly prohibited to engage in illegal activities of smuggling by taking advantage of the preferential treatment and conveniences granted by the State to the bonded area. The Customs shall handle the smuggling activities which occur in the bonded area in accordance with the provisions of The Customs Law of the People's Republic of China.

Article 30 The right to interpret these Measures resides in the General Customs Administration. Rules for the implementation of these Measures may be formulated by the Shanghai Customs in accordance with these Measures. The implementation rules shall be put into effect after its approval by the General Customs Administration.

Article 31 These Measures shall be promulgated and put into effect by the General Customs Administration.

Note: On September 8, 1990, the State Council, while approving the promulgation by the General Customs Administration of these Measures, gave the following instruction: " A special, closed channel shall be constructed in between the bonded area of Outer Gaoqiao in Shanghai and the wharf. The Measures shall be put into effect after the separation installations in the bonded area have been completed, and checked strictly and accepted by the Customs". - The Editor.