China – China Issues new Customs valuation regulations

On December 25, 2013, the General Administration of Customs of the People’s Republic of China (GAC) issued two new regulations on customs valuation, both effective from February 1, 2014. GAC Order No. 213, entitled Measures of Customs of the People’s Republic of China for the Determination of Dutiable Value of Imports and Exports, will replace the existing regulation with the same title issued under GAC Order No. 148 on 28 March 2006. In addition, GAC Order No. 211, entitled Measures of Customs of the People’s Republic of China for the Determination of Dutiable Value of Domestic Sales of Bonded Goods, is an entirely new regulation specifically providing for the valuation of bonded goods sold within the territory of China.

Changes to the Customs Value Regulations under Order 213:

• Customs may consider the circumstances of a sale in determining the acceptability of transaction value between related parties
• Calculation of international freight for imported goods
• Commissions in the valuation of exported goods

Valuation topics covered by Order 211:

• Bonded materials or finished goods (including defective and substandard goods) sold by a contract manufacturer located within the territory of China
• Bonded waste and scrap materials, by-products and residue after accidents sold by a contract manufacturer located within the territory of China
• Bonded waste and scrap materials, by-products and residue after accidents sold by a contract manufacturer located within the territory of China
• Bonded materials or finished goods sold by a manufacturer located within a customs bonded area
• Bonded scrap, defective or substandard products and by-products sold by a manufacturer located within a customs bonded area
• Bonded goods imported into a customs bonded area for logistics, inspection and exhibition purposes and sold within the territory of China
• Bonded goods for Research and Development (“R&D”) in a customs bonded area and sold within the territory of China

Please see the client alert reviewing the two new regulations in detail and the implications on customs valuation in China. If you have any questions on this subject, please contact  William Marshall of the Hong Kong office or Jon Eichelberger of the Beijing office.