PRC Origin of Imports and Exports Regulations

(Promulgated by the State Council on September 3 2004 and effective as of January 1 2005.)

Order of the State Council No.416

Article 1: These Regulations have been formulated in order to correctly determine the origin of imports and exports, effectively implement various trade measures and promote the development of foreign trade.

Article 2: These Regulations shall govern the determination of the origin of imports and exports in relation to non-preferential trade measures, such as in the application of most-favoured-nation treatment, anti-dumping and countervailing duties, safeguard measures, origin marking requirements, discriminatory quantitative restrictions and tariff quotas as well as in relation to activities such as government procurement and trade statistics.

These Regulations shall not govern the determination of the origin of imports and exports in relation to preferential trade measures. The specific measures therefor shall be formulated separately pursuant to the relevant provisions of the international treaties and agreements concluded or acceded to by the People's Republic of China.

Article 3: For goods that have been wholly obtained in a country (region), the relevant country (region) shall be the origin, and for goods where more than one country (region) is concerned in their production, the country (region) where the last substantial transformation has been carried out shall be the origin.

Article 4: For the purposes of Article 3 hereof, the phrase "goods that have been wholly obtained in a country (region)" means:

(1) live animals born and raised in the relevant country (region);

(2) wild animals that have been captured, caught or collected in the relevant country (region);

(3) non-processed articles obtained from live animals of the relevant country (region);

(4) plants or plant products harvested in the relevant country (region);

(5) minerals mined in the relevant country (region);

(6) natural articles other than those falling within the scope of Items (1) to (5) hereof obtained in the relevant country (region);

(7) waste and scrap materials generated during a production process in the relevant country (region) that can only be discarded or recycled as materials;

(8) articles collected in the relevant country (region) that cannot be restored or repaired or the components or materials recovered from such articles;

(9) marine things and other articles obtained by vessels lawfully flying the flag of the relevant country in seas outside the country's territorial waters;

(10) products derived from the processing of the articles mentioned in Item (9) hereof on processing vessels lawfully flying the flag of the relevant country;

(11) articles obtained from the sea bed or sea bed bottom soil outside the relevant country's territorial waters and to which such country enjoys the exclusive exploitation rights; and

(12) products produced in the relevant country (region) entirely from the articles described in Items (1) to (11) hereof.

Article 5: When determining whether goods have been wholly obtained in a country (region), the following minor processing or treatment shall not be considered:

(1) processing or treatment carried out in order to preserve the goods during transportation or storage;

(2) processing or treatment carried out to facilitate loading and unloading of the goods; or

(3) processing or treatment, such as packaging, etc., carried out in order to sell the goods.

Article 6: The criterion for determining the "substantial transformation" specified in Article 3 hereof shall refer to the change in tariff classification as the basic criterion. If a change in tariff classification does not reflect a substantial transformation, ad valorem percentages, and/or manufacturing or processing operations shall be used as supplementary criteria. The specific criteria shall be formulated by the General Administration of Customs in concert with the Ministry of Commerce and the General Administration of Quality Supervision, Inspection and Quarantine.

For the purposes of the first paragraph hereof, the phrase "change in tariff classification" means that, following manufacture or processing in a certain country (region) using materials not originating in the said country (region), the resulting goods cause a change in the tariff subheading or heading of the PRC Import and Export Tariffs.

For the purposes of the first paragraph hereof, the term "ad valorem percentage" means that, following manufacture or processing in a certain country (region) using materials not originating in the said country (region), the value added portion exceeds a certain percentage of the value of the resulting goods.

For the purposes of the first paragraph hereof, the term "manufacturing or processing operations" means the main operations that give the resulting goods their basic features after manufacture or processing.

Until the World Trade Organization's Harmonization of Non-preferential Rules of Origin is implemented, the specific criteria for determining substantial transformation in relation to the origin of imports and exports shall be formulated separately by the General Administration of Customs in concert with the Ministry of Commerce and the General Administration of Quality Supervision, Inspection and Quarantine based on actual circumstances.

Article 7: The origin of the energy resources, factory buildings, equipment, machinery and tools used in the production of a good as well as the origin of the materials that do not constitute a physical constituent or assembled component of a good shall not influence the determination of the origin of such good.

Article 8: The origin of packaging, packaging materials and containers imported or exported with the goods that they contain and which are classified together with the goods in the PRC Import and Export Tariffs shall not influence the determination of the origin of the goods that they contain. The origin of such packaging, packaging materials and containers shall not be subject to further separate determination, and the origin of the goods that they contain shall be the origin of such packaging, packaging materials and containers.

The origin of packaging, packaging materials and containers imported or exported with the goods that they contain and which are not classified together with the goods in the PRC Import and Export Tariffs shall be determined in accordance with these Regulations.

Article 9: The origin of accessories, spare parts, tools and explanatory materials of a normal type and in a normal quantity accompanying imports or exports and which are classified together with the goods in the PRC Import and Export Tariffs shall not influence the determination of the origin of the goods which they accompany. The origin of such accessories, spare parts, tools and explanatory materials shall not be subject to further separate determination, and the origin of the goods that they accompany shall be the origin of such accessories, spare parts, tools and explanatory materials.

The origin of accessories, spare parts, tools and explanatory materials accompanying imports or exports and which are classified together with the goods in the PRC Import and Export Tariffs but which exceed the normal type or quantity, as well as the origin of those which are not classified together with the goods in the PRC Import and Export Tariffs shall be determined in accordance with these Regulations.

Article 10: When determining the origin of goods that have undergone any processing or treatment in order to circumvent relevant provisions of the People's Republic of China on anti-dumping, countervailing duties and safeguard measures, etc. customs may ignore such processing or treatment.

Article 11: When a consignee of imported goods carries out the customs declaration procedures for the goods in accordance with the PRC Customs Law and relevant provisions, he shall truthfully report the origin of the imports based on the criteria for determining origin specified in these Regulations. If a single batch of goods has different origins, the origins shall be reported separately.

Article 12: If a consignee of imported goods or other party with a direct connection to the imported goods has a valid reason, he may, prior to the import of the goods, apply in writing to customs to issue a preliminary decision on the origin of the goods to be imported. The applicant shall provide to customs the information required to issue the decision on the preliminary determination of origin.

Customs shall issue its decision on the preliminary determination of the origin of the said imports and publicly announce the same in accordance with these Regulations within 150 days of the date of receipt of the written application for preliminary determination of origin and all of the necessary information.

Article 13: After customs receives a declaration, it shall carry out an examination to determine the origin of the imported goods in accordance with these Regulations.

If goods for which a decision on preliminary determination of origin was issued are actually imported within three years of the date on which the decision was issued and if, after examination by customs, the goods actually imported are found to be consistent with the goods described in the decision on preliminary determination of origin and if the criteria for determining origin specified in these Regulations have not changed, customs shall not determine anew the origin of such imported goods. If, after examination by customs, the goods actually imported are found to be inconsistent with the goods described in the decision on preliminary determination of origin, customs shall carry out an examination to determine the origin of the said imported goods anew in accordance with these Regulations.

Article 14: When carrying out an examination to determine the origin of imported goods, customs may require the consignee of the goods to submit a certificate of origin for the goods and shall examine the same. If necessary, customs may request the relevant authorities of the country (region) that exported the goods to conduct a check of the origin of the goods.

Article 15: Pursuant to an application submitted by a foreign trade operator, customs may, in accordance with Article 43 of the PRC Customs Law, render an administrative ruling making a preliminary determination of the origin of goods that are about to be imported and publicly announce the same.

If identical goods are to be imported, an identical administrative ruling shall apply.

Article 16: The state effects control over marks of origin. If goods or their packaging carry a mark of origin, the origin indicated on the mark of origin shall be consistent with the origin as determined in accordance with these Regulations.

Article 17: A consignor of export goods may apply to and collect a certificate of origin for export goods from the local entry and exit inspection and quarantine agency of the General Administration of Quality Supervision, Inspection and Quarantine, the China Council for Promotion of International Trade or its local branch (the Certification Authority).

Article 18: When a consignor of export goods applies for a certificate of origin for the goods, he shall carry out registration procedures with the Certification Authority, truthfully report the origin of the export goods in accordance with provisions and provide to the Certification Authority the information necessary for the issuance of the certificate of origin for the goods.

Article 19: After accepting the application of the consignor of export goods, the Certification Authority shall conduct an examination to determine the origin of the export goods and issue the certificate of origin for the goods in accordance with provisions. It shall refuse to issue a certificate of origin for export goods whose origin is not in the People's Republic of China.

The specific procedures for the administration of the issuance of certificates of origin for exports shall be formulated separately by the General Administration of Quality Supervision, Inspection and Quarantine in concert with other departments and authorities of the State Council.

Article 20: At the request of the relevant authorities of a country (region) that has imported export goods, customs or the Certification Authority may conduct a check of the origin of the exported goods and report the results of its check to the relevant authorities of the importing country (region) in a timely manner.

Article 21: Customs or the Certification Authority shall maintain the confidentiality of the materials and information provided in order to determine the origin of goods, unless the same may be provided pursuant to relevant provisions or otherwise permitted by the work unit or individual that provided such materials and information.

Article 22: If these Regulations are violated when reporting the origin of imports, punishment shall be imposed in accordance with the relevant provisions of the PRC Foreign Trade Law, the PRC Customs Law and the PRC Customs, Administrative Penalties Implementing Regulations.

Article 23: If fraudulent materials are submitted to obtain a certificate of origin for exports or if a certificate of origin for exports is forged, altered, bought, sold or stolen, the entry and exit inspection and quarantine authority or customs shall impose a fine of not less than Rmb5,000 and not more than Rmb100,000. If a certificate of origin for exports that serves as the supporting documentation for release thereof by customs is fraudulently obtained, forged, altered, bought, sold or stolen, a fine of not more than the value of the goods shall be imposed; however, if the value of the goods is less than Rmb5,000, a fine of Rmb5,000 shall be imposed. If there is illegal income, it shall be confiscated by the entry and exit inspection and quarantine authority or customs. If a criminal offence is constituted, criminal liability shall be pursued in accordance with the law.

Article 24: If the mark of origin of imported goods is inconsistent with the origin as determined in accordance with these Regulations, customs shall order rectification of the matter.

If the mark of origin of export goods is inconsistent with the origin as determined in accordance with these Regulations, customs or the entry and exit inspection and quarantine authority shall order rectification of the matter.

Article 25: If a member of the working personnel responsible for determining the origin of imports and exports violates the procedures specified in these Regulations when determining origin, or divulges trade secrets that he has learned or abuses his authority, is derelict in his duties, practises favouritism or commits irregularities, he shall receive administrative punishment in accordance with the law. If he has obtained illegal income, such income shall be confiscated. If a criminal offence is constituted, his criminal liability shall be pursued in accordance with the law.

Article 26: The meanings of the terms in these Regulations are set forth below:

The term "obtain" means to capture, catch, collect, harvest, mine, process or produce, etc.

The term "origin of goods" means the country (region) from which a good is obtained as determined in accordance with these Regulations.

The term "certificate of origin" means a written document issued by the country (region) of export pursuant to the rules of origin and relevant requirements and that expressly states that the goods listed thereon originate from a certain country (region).

The term "mark of origin" means the text and graphics on goods or packaging that are used to indicate the origin of the goods.

Article 27: These Regulations shall be implemented as of January 1 2005. The PRC Origin of Exports Rules promulgated by the State Council on March 8 1992 and the PRC Customs, Origin of Imports Tentative Provisions promulgated by the General Administration of Customs on December 6 1986 shall be repealed simultaneously.