China Changes Customs Form for First Time in Eight Years

China Customs forms have new fields for trade region, country of origin/final destination, special relation confirmation, price impact confirmation, and royalty payment confirmation, according to a directive of the General Customs Administration (GAC) of China cited by global logistics company Expeditors (here). The forms also no longer have fields for foreign exchange permit number, customs remarks, release date, declaration form print date, and broker contact information, said the company. Those changes and others went into effect March 30, two days after GAC published Announcement No. 20 (here), which ordered revisions to China’s Import/Export Declaration Form. They are the first revisions to the form since 2008, said the company.

According to guidance released by PricewaterhouseCoopers (here), changes include a boost of the maximum number of items allowed for declaration from 20 to 50, an “[a]dditional checkbox for inputting the 18-digit unified social credit code.” The forms also now include inquiries on special relationships, the effect of any special relationships on import prices and "confirmation on royalty payments," said PwC.

The new inquiries amount to “strengthened supervision” by Chinese authorities of customs valuation at the time of clearance, PwC said. China can reassess dutiable values of imports if GAC officials doubt the exclusivity of “special” buyer-seller relationships associated with imports from the corresponding dutiable values of imported goods.

To ensure customs duty assessment exemption, PwC advised importers to verify that their royalty and license fees are not related to imported goods that they do not constitute a condition of sale. “The upcoming changes will enable Customs to filter companies with potential customs valuation risks quickly and efficiently,” PwC said in its guidance. PwC is also advising companies to review whether they have in-house documentation or information to demonstrate compliance with the three-inquiry disclosure. If companies do not, they should quickly assess compliance with existing China customs valuation rules and regulations, determine the degree of current valuations risks and historical exposure, and “carry out rectification work to minimize customs exposure.”

Increased Chinese customs scrutiny could disrupt customs clearance, raise duty costs if a “relationship impairment” is found, result in penalty and duty clawback or a review of the past three years of shipments if certain information is omitted, and could prompt enterprise downgradings for importers who are assessed penalties, PwC said.