The General Administration of Customs ("GAC") has recently issued the Announcement on Fully Promoting the Reform in Processing Trade Regulation Regarding an Enterprise as a Unit (the "Announcement"), immediately effective from the issue date.
The Announcement explicitly states that, enterprises subject to the reform of the new regulatory mode must be production-oriented enterprises that engage in processing trade business in their own name and meet either of two given conditions, one of which states that "the customs credit rating should be the general accreditation or above". According to the Announcement, the business scope under the new regulatory mode includes: establishment (change) of account books, import and export, outward processing, transfer of goods for further processing, domestic sales, carryover of surplus materials, checking and declaration, verification and cancelation, and after-sales maintenance by the company or the group. The Announcement sets out provisions for relevant business, such as the establishment of account books, verification and cancellation cycle, outward processing, intensive domestic sales, transfer of goods for further processing, and carryover of surplus materials. Moreover, the Announcement notes that, within a verification and cancelation cycle, an enterprise shall handle verification and cancelation formalities with the customs by means of independent checking and declaration; specifically, if the verification and cancelation cycle is longer than one year, the enterprise shall make the declaration on an annual basis.