The free tradesystem

The Free Trade Zone is the special area, which is set up in china with the permission of the state consul and is under the inspection of the customs. There are equipments that separate FTZ and non-FTZ. The customs will inspect the goods, transporting tools and personal objects that are in and out of the FTZ according to relevant regulations. The imported goods can be stored in the stores of the FTZ without paying the importing taxation, and when exporting, they can also not pay the exporting taxation. However, when the goods are transported to Chinese mainland markets, they should pay the importing taxation.

At present, there are 15 FTZs in china: the Shanghai Wai Gaoqiao FTZ, Tianjin port, Shenzhen Futian FTZ, Shenzhen Shatoujiao, Da Lian, Guangzhou, Jiangsu Zhangjiagang, Shandong Qingdao, Ningbo, Fuzhou, Xiamen, Shantou, Haikou, Shenzhen Yantian and Zhuhai FTZ.

The declaration systems for the imported and exported goods of the enterprises in FTZ are Accreditation system and Declaration system. The goods that apply to the accreditation system are the imported materials for processing, the via goods, the stored goods and exported goods that are transported from the FTZ. The goods that apply to the declaration system are the goods that are in and out between FTZ and non-FTZ, the self-using equipments, management equipments and stationeries for the enterprises in the FTZ, and self-using objects for the employees.

The inspection to the goods in the FTZ

According to the customs regulations, the goods in the FTZ can be assigned and transferred over the enterprises in the FTZ. The privies of both parties should apply to the customs for the accreditation of these matters. The via goods in the FTZ can be classified, picked and changed the packaging forms in the store or other places of the FTZ.

The declaration of the goods that are transported to FTZ

There are two ways for general goods being transported into the FTZ: directly transported from the outbound; transported from the non-FTZ.

For goods that are transported from non-FTZ to the FTZ, the customs will arrange the procedures as the imported goods; for the machineries and equipments that are transported from the non-FTZ to the FTZ for the FTZ usage, the users should provide the lists of goods or materials to the customs. If the goods or materials are imported, the imported taxation, VAT and consuming taxation will not be refunded.

The declaration of the goods that are transported out of the FTZ

For the goods that are transported from the FTZ to non-FTZ, the customs will arrange the procedures as imported goods and inspect the goods according to Chinese import and export management regulations.

For the goods in the FTZ need to be imported and exported from the ports in the FTZ, or the goods in one FTZ are transported to another FTZ, the enterprises should hand over the writing application to the customs. After its permission, the goods will be arranged according to the trans-customs transportation regulations.

The management of the imported and exported goods for the production enterprises in the FTZ

There are the inspection regulations as follows:

The production enterprises in the FTZ should have separate accounting books for importing and exporting, storing and selling abroad of the productions and materials.

The imported materials of the production enterprises can be produced and sold outbound in one year beginning from the imported day. For those pass one year, the enterprise can apply the customs to extent to one year.

The imported machinery and the materials of the production enterprises can be assigned, bought and sold and borrowed from each other in the FTZ for processing usage. But the enterprises should accredit in the customs in 30 days.

If the imported materials of the production enterprises need to be processed in the non-FTZ, the enterprises should apply the customs to register the accreditation. The products processed in the non-FTZ should be arranged the cancel of verification procedures in 30 days after the finish of commission processing contract. And the products and the resting materials should be transported to the FTZ in limited times.

The procedures of materials of non-FTZ transported into FTZ are the same as the exported goods transported from non-FTZ to FTZ. If the enterprises want to use the imported materials, they should be permitted by the customs.

The inspection of the processing and trading goods in FTZ

The needed imported materials of the production enterprises in the FTZ should be arranged the accreditation procedures in and out of the FTZ by the customs.

When the finish productions and the resting materials that are produced in processing are transported outbound, the enterprises in the FTZ should ask the customs to arrange the procedures. Except for other regulations, they are free of the exporting taxation.

When the finish productions and the resting materials that are produced in processing are transported to the non-FTZ, the enterprises in the FTZ should ask the customs to arrange the procedures and they should pay the taxations.

When the finish productions whose materials are all transported from outbound are sold to the cities in non-FTZ, the customs will levy them as the imported finish productions.

When the finish productions that are used the exported materials, the customs will levy the enterprises according to the ratio of exported materials in the finish productions. If the names, quantities and value of the exported materials are untrue, the customs will levy the enterprises according to the imported finish production.

The customs will not use the process and trade bank margin accounting system for the enterprises’ businesses of accepting the custom’s materials for processing and importing materials for processing in the FTZ.

The inspection of the committed and accepting to commit the processing goods

The enterprises in the FTZ commit the enterprises in non-FTZ or accept the commission of the enterprises in the non-FTZ to do the processing business should be permitted by the customs, and the qualification terms are as follows:

The enterprises have production places in the FTZ and have been done businesses;

The main procedures of processing businesses that are committed to the enterprises in the non-FTZ are done in the FTZ.

The limited time for the committed businesses is 6 months. If there is special situation, the enterprises should apply the customs to extend the term to 6 months;

The productions that are finished in non-FTZ should be transported to FTZ. For those that should be exported from non-FTZ, the enterprises should apply the customs to arrange the cancel of verification procedures.