GAC Provides Clarity on Formalities to Change Administration on Substantial Transfer of Margin Money to Deposit Account into the Guarantee-based Administration
The General Administration of Customs ("GAC") has recently issued the announcement [2018] No.18 to provide clarity on formalities concerning the substitution of "guarantee items in connection with customs affairs" for "administrative items regarding the substantial transfer of margin money to a deposit account". The announcement comes into force immediately as of the issue date.
The announcement contains provisions in the following five aspects. First, after the administrative items concerning substantial transfer of margin money to a deposit account have been converted into guarantee items in connection with customs affairs, the circumstances where enterprises have to pay the margin money and the amount of margin money are still subject to the Announcement of the Ministry of Commerce ("MOFCOM") and the GAC [2015] No.63. Second, enterprises may choose the margin money or the letter of guarantee when handling the guarantee business. Third, if the guarantee business is handled based on the letter of guarantee, an enterprise has to submit the original letter of guarantee issued by a bank or a non-banking financial institution to the customs office, and the customs office shall issue a receipt to such enterprise. Fourth, if the guarantee business is handled based on the margin money, an enterprise has to pay the margin money in Renminbi according to the Payment Notice of the Customs issued by the customs office, into the escrow account designated by the customs office. Fifth, where changes to the manual result in an increase in the margin money or an extension of the guarantee period, the customs office shall process formalities for the enterprise to update the content of the guarantee.