Implementation of Processing Trade Policy Change Postponed
According to the latest reports, China will postpone the date for the implementation of processing trade policy adjustments to 22 November. Meanwhile, certain raw materials which are commonly used in processing trade and were classified under the prohibited category earlier have now been removed from this category. On 1 November 2006, the Ministry of Commerce, General Administration of Customs and State Environmental Protection Administration jointly issued Public Announcement No.82 on details of the Catalogue of Products under the Prohibited Category in Processing Trade based on Circular No.139 [2006] issued earlier by the Ministry of Finance and State Administration of Taxation in conjunction with three other ministries on the expansion of the prohibited category under export processing trade. Public Announcement No.82 will become effective on 22 November. Under the new announcement, processing trade contracts which have been approved by the commerce departments before 22 November 2006 are allowed to be filed with Customs according to relevant regulations and completed within the validity period. Meanwhile, enterprises under online supervision are allowed to complete their processing trade contracts before 22 November 2007. Upon expiry of the validity period, if the contracts are still not completed, no extension will be granted and the regulations on processing trade will apply.The newly announced Catalogue of Products under the Prohibited Category in Processing Trade further classifies products under the prohibited category into three sub-categories, namely "prohibited for export", "prohibited for import" and "prohibited for import and export". It is also stated that certain products used for deep processing transfer will not be subject to prohibition. In the new catalogue, all products are listed clearly under 10-digit commodity codes. Products such as raw hides and skins, zinc alloys and aluminium alloys which were included in the prohibited category under Circulars No.139 [2006] and No.145 [2006] issued jointly by the Ministry of Finance, State Administration of Taxation and three other ministries earlier have now been removed from the prohibited category in the new catalogue. However, according to Public Announcement No.82, the regulations forbidding the import of wood, wood chips and wood pulp under processing trade for the production of paper and paperboard for re-export as prescribed in Public Announcement No.105 [2005] issued by the Ministry of Commerce, General Administration of Customs and State Environmental Protection will remain in force.
