International Trade and Customs Affairs Newsletter, March, 2020
Customs Tariff Commission Public Notice No. 2 : Products from the US Subject to Additional Tariffs Can Apply for Market-Oriented Purchase Exclusion
On February 18, 2020, the Customs Tariff Commission of the State Council published Notice on Market-Oriented Purchase Exclusion for Products from the US subject to Additional Tariffs (hereinafter referred to as “Tariff Commission Notice No. 2 ”). According to this Notice, Chinese enterprises can apply for market-oriented purchase exclusion for products from the US subject to additional tariffs. After approval, the product shall not be imposed additional tariffs within one year.
I. The difference between Market-Oriented Purchase Exclusion and Previous Exclusion
The previous exclusion is implemented based on the Announcement of the Customs Tariff Commission of the State Council on the Trial Implementation of the Exclusion of U.S. Products Subject to Additional Tariffs (hereinafter referred to as “Trial Implementation”) and Chinese enterprises can apply for exclusion of US products subject to additional tariffs for products in the first batch $50 billion of US products and second batch $60 million of US products. As of now, the Customs Tariff Commission has finished the review and announcement of the exclusion application for the first batch of US products and is working on the examination and review for the application of the second batch of US products. According to the Trial Implementation, for the products listed in the exclusion list, all importers can enjoy the preferential treatment during the specified period. The importers can apply for refund for the duties collected.
This market-oriented exclusion application is aimed at U.S. products of the applicant within the approved amount. The exclusion period is one year since approval and no refund will be made for tariffs already levied before the approval.
II. Applicants of Market-Oriented Purchase Exclusion and Scope of Products that can be Excluded
The applicants should be Chinese enterprises that have concluded contracts or are going to conclude contracts to purchase relevant products from the U.S.
The products that can be excluded are 696 products with 8 HTS code, including soybean, crude oil and wood products, energy products, etc. In addition, for other products that are included in the first batch and second batch of the list of imports from the US subject to additional tariffs, the enterprises can also apply for exclusion.
1. If an enterprise plans to import the products that can be excluded from the US, it can apply through the website https://gszx.mof.gov.cn. It should report the HTS code of the products, purchase plan and purchase amount, etc. The Tariff Commission haven’t announced the exclusion standard, however, considering that Chinese government needs to perform the China-US phase- one economic and trade agreement and relieve the effect on import & export caused by nCoV-EMC, the possibility of obtaining the exclusion is higher than the HTS code exclusion.
2.For an enterprise who is going to import the products that are not included in the list from the US, it is also suggested applying for an exclusion. From the quantity of the products that are excluded from HTS, it is very difficult to obtain a good result. Therefore, the enterprise needs to
focus on market-oriented purchase exclusion to obtain the opportunity to import without additional tariffs.
Announcement of the Customs Tariff Commission of the State Council on the First Set of U.S. Products to be Excluded from the Second Batch of U.S. Products Subject to Additional Tariffs
On February 21, 2020, the Customs Tariff Commission of the State Council announced public notice No. 3 , announcing the first set of US products to be excluded from the second batch of U.S products subject to additional tariffs.
According to the notice, for the 55 products included in List I, they will not be subject to additional tariffs from Feb 28, 2020 to Feb 27, 2021.The imposed tariff shall be refunded accordingly. For the 10 products included in List II, they will not be subject to additional tariffs from Feb 28, 2020 to Feb 27, 2021. The imposed tariff shall not be refunded
Chinese Government and Customs Published Policies to Respond to Epidemic
Since the beginning of 2020, the Novel Coronavirus swept China from Wuhan. Chinese government and Customs have published a number of policies to respond to the epidemic. The following are the relevant policies in respect of the import and export of emergency supplies and entry-exit of people issued by the Chinese Government and Customs by the end of Feb 2020.
I. Entry-Exit of People
Entry-exit people need to declare health situation to Customs and cooperate with the temperature measurement, medical check and medical screening, etc.
II. Import of Emergency Supplies
The import of donated supplies can be cleared
quickly at the Customs. Expand the scope for duty- free supplies, donators and donees. For supplies used for epidemic that are organized by health authorities, they are duty free and the duties paid are refundable. For the emergency supplies imported from the US that comply with the tax-free policies, the additional tariffs are exempted.
Adjust the period of paying tax, overdue fine and collection date of overdue fine and extend the period of write-off for processing trade handbook according to the start date issued by the government. The Customs shall give priority to enterprise on the registration or filing for importing epidemic prevention and control supplies. The consignee and consignor may be exempted from the scene during the inspection of Customs goods during the epidemic.
Zhao Jing Ma Rong Hua
Edited : Wanruo Zhang and Yuqing Wang
This is legal information provided by DHH to clients and other lawyers. The information contained in this letter shall not be regarded as a legal opinion of DHH or its attorneys. If you are interested in learning more about the content of this newsletter, please contact an attorney practicing in this field.
DHH International Trade and Customs Affairs Team ("DHH Customs Team") is composed of lawyers with extensive experience in the international trade and customs fields. Areas of expertise include anti-dumping, countervailing duties, anti-smuggling, Customs legal system regulations, customs inspections, trade in value-added -manufacturing products, enterprise management, and customs supervision and control. We are devoted to maintaining our position as one of the top international trade and customs affairs teams in China. Our scope of services include: representing clients in administrative and criminal cases; duty disputes resolution; advising concerning customs clearance; protection of intellectual property rights during the customs process; review of and advising on company customs compliance and risk management policies and procedures; advising concerning AEO applications; as well as servicing all other legal needs arising in the customs and international trade areas.
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