Announcement of Shanghai Customs on Developing Domestic and Overseas Maintenance Service in China (Shanghai) Pilot Free Trade Zone

To advance the construction of China (Shanghai) Pilot Free Trade Zone (hereinafter referred to as the Pilot Zone), in accordance with the Customs Law of the People’s Republic of China and Notice of the State Council on Promulgation of the Framework Plan for China (Shanghai) Pilot Free Trade Zone (Guofa [2013] No.38), upon approval by the General Administration of Customs, matters about developing domestic and overseas maintenance service in the Pilot Zone are hereby announced as follows:

    I. Maintenance service in this announcement means the business activity done by enterprises registered with the customs in the Pilot Zone (hereinafter referred to as the enterprise in the Zone) in maintaining goods with parts damaged, partial function lost or with defects that come from inland and from abroad and re-transporting the goods out of the border (zone).

    II. To conduct maintenance service, enterprises in the Zone shall comply with the following requirements:

    1. Compliance with the requirements of high value-added, high technology and pollution-free, with approval of the China (Shanghai) Pilot Free Trade Zone Administration (hereinafter referred to as the “Pilot Zone Administration”).

    2. Set up a computer management system in line with the customs supervisions requirements, able to network with the China (Shanghai) Pilot Free Trade Zone Customs Supervisions Informatization System (hereinafter referred to as the “Informatization System”) via the data exchange platform or other computer network according to the attestation mode prescribed by the customs and submit to the customs relevant data that can satisfy the customs supervision requirements. (For detailed networking conditions and handling formalities, see Shanghai Customs Announcement No.5, 2014).

    3. Be able to distinguish maintenance goods coming from inland and abroad; able to exercise specialized management of goods maintained and to be maintained, and bonded materials for maintenance consumption, maintenance defective components replaced (hereinafter referred to as “maintenance defectives”), and leftover bits and pieces produced from bonded materials for maintenance consumption.

    III. Eligible enterprises in the Zone conducting maintenance service shall complete formalities for setting up maintenance service account books with the competent customs in the Pilot Zone (hereinafter referred to as the “competent customs”) and make the following submissions:

    1. China (Shanghai) Pilot Free Trade Zone Domestic and Overseas Maintenance Filing Form (see Annex);

    2. The original and copy of Registration Certificate of the People’s Republic of China Customs Declaration Authority;

    3. Approval documents of the Pilot Zone Administration or relevant state departments; and

    4. Other submissions as required by the customs.

    The competent customs shall make feedback customs opinions within 3 days from the day of accepting the complete submissions.

    IV. The maintenance goods of enterprises in the Zone shall, in principle, be returned to abroad or inland (outside of the Zone) according to their origin place.

    V. When overseas goods to be maintained enter the Zone from abroad and return to abroad, except for otherwise provided for, enterprises in the Zone shall use the supervision mode “bonded maintenance” (code 1371, the same below) to declare entry(exit) filing bill to the competent customs.

    When domestic goods enter the Zone from inland (outside of the Zone) to be maintained, enterprises outside of the Zone shall use the supervision mode “bonded maintenance” to declare the bill of export to the customs. Enterprises in the Zone using H account books shall use the supervision mode “bonded maintenance” to declare entry filing bill to the competent customs; enterprises in the Zone not using H account books may not declare.

    When returning the domestic goods already maintained to inland (outside of the Zone), under conditions of enterprises in the Zone using H account books, the enterprises in the Zone shall declare exit filing bill to the competent customs, and as for declaration of goods already maintained, the supervision mode is “bonded maintenance”; enterprises outside of the Zone shall at the same time declare customs entry for goods already maintained.If the supervision mode is “bonded maintenance”, the declared price is the total of bonded materials consumed for maintenance and repair fees, and the exemption provision is “in accordance with the regulations”.

    Under conditions of enterprises in the Zone not using H account books, enterprises outside of the Zone shall declare customs entry to the competent customs, and as for declaration of goods already maintained, the supervision mode is “bonded maintenance”, the declared price is the total of bonded materials consumed for maintenance and repair fees, and the exemption provision is “in accordance with the regulations”.

    VI. Enterprise in the Zone shall, according to the supervision mode in force, go through formalities for declaration of entry, exit and transfer of bonded materials for maintenance purpose with the competent customs.

    VII. The maintenance defectives and leftover bits and pieces produced from overseas goods to be maintained in the Zone, shall, in principle, be returned to abroad; in case of no way to return to abroad, domestic sale out of the Zone or destruction may be made according to relevant regulations; among them, solid waste shall be disposed of according to relevant provisions of the Procedures for Management of Solid Waste Import (Decree No.12 of Ministry of Environmental Protection, Ministry of Commerce, Commission of Development & Reform, General Administration of Customs, General Administration of Quality Inspection, hereinafter referred to as Decree No.12).

The maintenance defectives produced from domestic goods to be maintained coming from outside of the Zone into the Zone shall, in the account book write-off period, upon verification by the competent customs, be returned to inland (outside of the Zone); the leftover bits and pieces produced from bonded materials consumed for maintenance may be sold on the domestic market outside of the zone or destroyed according to relevant regulations; among them, solid wastes shall be disposed of according to relevant provisions of Decree No. 12.

VIII. For maintenance goods from inland and outside of the Zone entering and leaving the Zone, declaration formalities may be completed in a centralized manner and the formalities for centralized declaration shall be completed within the account book write-off period, no declaration beyond the year being permitted.

    IX. While making declaration to the competent customs, enterprises in the Zone shall submit the declaration data to the Informatization System, which is to complete the account book write-off.

    Enterprises in the Zone shall declare data of entry, exit, transfer, deposit and consumption of maintenance goods to the competent customs on a regular basis via the Informatization System.

    X. The maintenance service write-off period shall not exceed one year in principle, and enterprises in the Zone shall, at the end of a write-off period, receive the inventory check by the customs. If enterprises in the Zone fail to dispose of maintenance defectives and leftover bits and pieces produced in the write-off period and maintenance goods that cannot be maintained as required, no declaration may be made to the customs.

    XI. If enterprises in the Zone have any of the following cases, the competent customs shall suspend their maintenance service:

1. non-compliance with the conditions for business conducting;

    2. goods involved in suspected smuggling or import-export IP tort are put on file for investigation and prosecution by the customs; or

    3. suspension as required by the customs for other illegalities.

    After compliance with the conditions for business conducting once again or after the investigation finished, the competent customs shall determine whether or not to restore the service according to actual circumstances.

    Enterprises in the Zone may request for stopping the maintenance service on their initiative.

XII. The supervision mode “bonded maintenance” (code 1371) applies to goods entering the Zone from abroad to be maintained or detected by bonded way by enterprises in the Zone or goods maintained or detected (excluding foreign ships and aircraft) returned to abroad after maintenance or detection, as well as goods transported from inland outside of the zone to the Pilot Zone to be maintained or detected and goods maintained or detected transported out of the Zone after maintenance or detection. The foregoing “foreign ships and aircraft” are still subject to supervision according to the supervision mode “repair goods” (code 1300).

This announcement comes into force on May 1, 2014

Annex:  China (Shanghai) Pilot Free Trade Zone Domestic and Overseas Maintenance Filing Form

Shanghai Customs    

April 21, 2014

Annex: 

China (Shanghai) Pilot Free Trade Zone Domestic and Overseas Maintenance Filing Form

Note: This form is printed on the right and wrong sides, in duplicate, the competent customs and filed enterprise each keeping a copy.