How import-export enterprises can set up customs compliance systems

Since the General Administration of Customs (Customs) began fully implementing its economic operator accreditation system, authorized economic operators (AEO) have benefited from measures to facilitate customs clearance and are also eligible for corresponding facilitation measures from jurisdictions which have mutual recognition arrangements with Customs. It is extremely valuable for enterprises to set up their own customs compliance mechanisms and become customs AEO.

The Customs Law sets out three types of illegal acts – smuggling, violation of regulations and infringing import-export goods – that are subject to administrative investigation and prosecution. An import-export enterprise in violation of these provisions will be subject to administrative penalties and this will directly affect its enterprise credit rating.

The Regulations on Implementing Customs Administrative Penalties stipulates the types of smuggling acts and those acts treated as smuggling for penalty purposes. Smuggling consists of two main elements. The first is a subjective deliberate intent to circumvent customs oversight. The second is that the smuggled items are goods or articles which are restricted or prohibited by the state for import or export, or on which duties and taxes are payable under law, or bonded goods, specific goods with reduced or exempted duties and taxes or other goods subject to customs surveillance on which duties and taxes have not been paid without the permission of customs or the permit or certificate for which has not been presented for verification.

Jia Xiaoning is a senior partner of AllBright Law Offices