China Customs has been steadily making changes to the Customs Declaration Form (CDF) in order to better capture the data they believe is important to compliance enforcement and trade policy. This is the fourth major change to the CDF, which was announced in June and went into effect on August 1, 2018.
All importers in China should be aware of the following important changes:
1. Additional digits added to the HS classification of goods
CIQ, the former inspection and quarantine agency, was integrated with China Customs earlier this year. In order for Customs to identify products that are subject to inspection and quarantine codes, three additional digit codes must be added to the declared China HS classification. Some products that are not subject to any import/export control will add a generic three digit ‘no control’ code. Products that are subject to control will need to add the correct three digit codes that applies to the product’s specifications. This can require extensive technical analysis that goes beyond what is normally needed to determine HS classification. Make sure you have the right HS classification.
2. The overseas exporter / importer is added to the CDF
A new field exists where the overseas exporter (on imports to China) or importer (on export from China) must be entered. If the overseas party has obtain a trusted trader Authorized Economic Operator (AEO) status, and the country where they are registered has a Mutual Recognition Agreement with China, the overseas party’s AEO number should also be entered on the China CDF. This will allow the reduced inspection and other AEO benefits to be realized.
Countries/Regions with current AEO Mutual Recognition Agreements with China are: Australia, EU, Hong Kong, Israel, Korea, New Zealand, Singapore, and Switzerland.
3. Other CDF changes
In addition to the above two changes, Customs also announced several other changes to the CDF that may impact some importers / shipments including:
- Specific filing requirements for CDF where a Free Trade Agreement treatment is being claimed.
- The ‘Remarks’ field of the CDF must contain certain types of information for certain types of special imports such as bonded goods, temporary import and export, Customs advanced-ruling, and pre-inspection & quarantine.
- Container details such as container number, container size, cargo weight, etc. must be included on the CDF.
Impact on importers / exporters
It will be more important than ever for importers in China to move their trade compliance management upstream to ensure that all the required information for the new CDF is accurate and in place prior to the goods arrival in China. This will reduce both clearance delays and the risk of non-compliance.
Importers in China must reassess their HS classifications to ensure the accurate 3 digit codes are declared. If this determination is left to customs brokers at the time of import it is very likely that clearance delays will occur.
Given the importance of HS classification to duty payment, FTA usage, and import/export licensing, this may also be a good time for a comprehensive clean-up of the HS codes declared in China.
Exporters to China in may also find that they are increasingly asked to achieve Trusted Trader / AEO status in order to expedite the import process in China.
If you need any help with HS classification, import/export consultancy services, or free trade agreements, reach out to Tradewin. We're happy to help.