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China Gives Go-ahead for Commissioned Processing in Comprehensive Bonded Zones

Enterprises operating in comprehensive bonded zones may now use duty free equipment to process work commissioned from outside such zones, as well as on goods supplied from outside the zone.

This change was announced by the General Administration of Customs (GAC) and came into effect as of 29 January.

Details of its more specific application are as follows:

  • Qualified enterprises active in a comprehensive bonded zone may utilise duty-free equipment (within special customs supervision periods) to undertake work commissioned by enterprises outside the zone related to processing goods supplied from outside the zone. Any such processed goods may then be shipped to domestic destinations outside the zone, with due processing fees then duly charged and all customs duties paid. No commissioned processing of import- or export-prohibited goods, however, will be permitted without prior permission
  • In principle, the materials used in the commissioned processing should be supplied by enterprises outside the bonded zones. If bonded materials from enterprises inside the zone need to be utilised then the processing enterprise must report this requirement to the customs authority in advance
  • Should the materials supplied by a domestic enterprise outside the zone for use in commissioned processing within the bonded zone be subject to statutory export duties, then the supplier must complete the required tax guarantee formalities in accordance with the prevailing customs regulations

For further details (in Chinese), please access the following links:

Announcement of the GAC on Supporting Enterprises in Comprehensive Bonded Zones in Undertaking Processing Business Commissioned by Domestic Enterprises (Outside Comprehensive Bonded Zones) (Announcement No. 28 [2019])

China Looks to Widen Remit of Comprehensive Bonded Zones

Content provided by Picture: HKTDC Research
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