Regulation of China on Customs Inspection

• Document Number：Order No. 670 of the State Council
• Area of Law： Customs
• Level of Authority： Administrative Regulations
• Date issued：06-19-2016
• Effective Date：01-03-1997
• Status： Effective
• Issuing Authority： State Council

Regulation of China on Customs Inspection
(Promulgated by Order No. 209 of the State Council of the People's Republic of China on January 3, 1997; revised for the first time in accordance with the Decision of the State Council on Abolishing and Amending Some Administrative Regulations on January 8, 2011; and revised for the second time in accordance with the Decision of the State Council on Amending the Regulation of the People's Republic of China on Customs Inspection by the Order No. 670 of the State Council on June 19, 2016)
Chapter I General Provisions
Article 1 These Regulations are hereby formulated according to the Customs Law of the People's Republic of China (hereinafter referred to as the “Customs Law”) with a view of establishing and perfecting the Customs check system and strengthening Customs supervision and control so as to maintain a normal import and export order, protect the legetimate rights and interests of parties concerned, guarantee national tax revenue, and promote the development of foreign trade.
Article 2 For the purpose of this Regulation, the term “customs inspection” means the inspection conducted by the Customs within three years of the release of the imported or exported goods, or within the customs supervision period of the bonded goods or imported goods enjoying duty reduction or exemption, and the following three years, of the account books, accounting vouchers, customs declaration documents and other relevant materials (hereinafter collectively referred to as “account books, documents, and other relevant materials”) and the relevant imported or exported goods of the enterprises and entities directly related to the imported or exported goods, to supervise the authenticity and legality of their import or export activities.
Article 3 The Customs shall carry out check on the following enterprises and units directly related to import and export activities:
(1) Enterprises and units engaged in foreign trade.
(2) Enterprises engaged in processing trade.
(3) Enterprises engaged in bonded business.
(4) Enterprises and units utilizing or handling imported goods with decucted duties or with duties exempted.
(5) Enterprises engaged in Customs declaration.
(6) Other enterprises and units engaged in businesses directly related to import and export activities set by the General Administration of Customs.
Article 4 The Customs may, according to the needs of the inspection work, collect information on specific commodities and industries related to import or export activities from relevant industry associations, government departments, and relevant enterprises, among others. Where the information collected involves trade secrets, the Customs shall keep them confidential.
Article 5 When carrying out checks, the Customs and its staff shall be objective, impartial, practical and realistic, honest and clean; keep commercial secrets of the units under check, and refrain themselves from infringing upon the legetimate rights and interests of the units under check.
Chapter II Management of Relevant Materials
Article 6 Activities related to import and export businesses shall be authentically, correctly and completely recorded in and reflected by account books, vouchers, accounting reports and other accounting materials established and worked out by the enterprises and units directly related to import and export activities.
Article 7 The enterprises and entities directly related to imported or exported goods shall keep the account books, vouchers, accounting reports and other accounting materials in accordance with the time limits prescribed in relevant laws and regulations for keeping them.
The Customs declaration documents, and documents for import and export and other materials directly related to import and export businesses shall be kept for a period as prescribed in Article 2 of this Regulation.
Article 8 Where an enterprise or entity directly related to the imported or exported goods has a sound accounting system and is able to accurately and completely keep accounts and conduct accounting through computers, its accounting records stored in and produced by the computers shall be treated as accounting materials.
Chapter III Implementation of Customs Checks
Article 9 The Customs shall, according to the requirements of customs inspection, determine the focus of customs inspection, according to the credit status and risk conditions of enterprises and entities directly related to the imported or exported goods and the specific circumstances of the imported or exported goods.
Article 10 When carrying out inspection, the Customs shall, three days before the inspection, notify the inspected enterprise or entity in written form. Under emergency circumstances that an inspected enterprise or entity is suspected of any serious violation of law, and its account books, documents, and other relevant materials, and the imported or exported goods are likely to be transferred, concealed, and destroyed, with the approval of the director general of the customs office directly under the General Administration of Customs or the director general of a subordinate customs office authorized thereby, the Customs may conduct inspection without prior notice.
Article 11 When the Customs implements checks, a check panel shall be formed. The check panel shall consist of two persons at least.
Article 12 When carrying out checks, Customs officers shall show their Customs Check Certificates.
The Customs Check Certificates shall be produced and issued by the General Administration of Customs in a unified way.
Article 13 Customs offiers who have a direct link with the unit being checked shall not take part in the check of these units.
Article 14 The Customs can exercise the following power when carrying out checks:
(1) To consult and copy relevant material.
(2) To enter the production and operation areas and storage areas of the units being checked to inspect the production and operation situation and the goods related to import and export activities.
(3) To inquire into situations and matters related to import and export activities with the legal representative, the person in charge and other related personnel of the units being checked.
(4) To inquire about the deposit accounts in commercial banks or other financial institutions of the units being checked with the approval of the director general of the customs office directly under the General Administration of Customs or the director general of a subordinate customs office authorized thereby..
Article 15 Where the Customs finds that an inspected enterprise or entity is likely to transfer, conceal, tamper with, or destroy account books, documents, and other relevant materials when conducting inspection, the Customs may, with the approval of the director general of the customs office directly under the General Administration of Customs or the director general of a subordinate customs office authorized thereby, seal up or seize its account books, documents, and other relevant materials, and relevant electronic data storage medium. This measure, when taken, shall not hinder the normal production or operation activities of the inspected enterprise or entity.
After the Customs ascertains the relevant circumstances or obtains the evidence, it shall release sealing up or seizure of the account books, documents, and other relevant materials, and relevant electronic data storage medium immediately.
Article 16 Should the Customs discover while conducting checks that the import and export goods of the units being checked are suspecious of breaking the Customs Law and other relevant laws and regulations, it can seal up or seize keep the relevant import and export goods with the approval of the director general of the customs office directly under the General Administration of Customs or the director general of a subordinate customs office authorized thereby.
Article 17 The units being checked shall cooperate with the Customs during its conduction of checks and provide necessary working conditions for the Customs.
Article 18 The units being checked shall accept Customs checks, make true reports to the Customs, and provide the relevant materials without refusal, delay or concealment.
In the case of book keeping by computers, the units being checked shall provide the Customs with softwares for book keeping, user's guide and relevant materials.
Article 19 When the Customs consults or copies the relevant materials of the units being checked or enters their production and operation areas or storage areas to make inspections, the legal representative or the chief leader or their authorized representatives shall be present to check account books, open storage areas, move goods or untie packings at the request of the Customs.
Article 20 During Customs checks, enterprises and units that have financial contacts or other business relations with the units being checked shall faithfully report relevant matters of the units being checked to the Customs and provide the Customs with relevant materials and evidences.
Article 21 When conducting inspection, the Customs may authorize professional institutions of accounting, and taxation, among others, to provide professional conclusions on relevant issues.
The professional conclusions provided by professional institutions of accounting, and taxation, among others, authorized by an inspected enterprise or entity may be taken as reference basis for customs inspection.
Article 22 After inspection, the customs inspection team shall submit an inspection report to the Customs. “Where it is held in an inspection report that an inspected enterprise or entity is suspected of violating the law, the opinions of the inspected enterprise or entity on the facts as ascertained in the inspection report shall be solicited before the inspection report is submitted to the Customs. The inspected enterprise or entity shall, within seven days of receipt of the relevant materials, submit its written opinions to the Customs.
Article 23 The Customs shall, within 30 days as from the date when it receives the check reports, make decisions on the checks and send these decisions to the units being checked.
The Customs shall explain in the inspection conclusion the reasons based on which the conclusion is reached and notify the inspected enterprise or entity of its rights.
Chapter IV Disposal of Results of Customs Checks
Article 24 If customs duties or other import taxes are discovered to be paid insufficiently or evaded, the Customs shall collect these duties or taxes according to stipulations in the Customs Law and other laws and regulations concerning taxation. Where the taxes are insufficiently paid or evaded due to infringement on stipulations on the part of the units being checked, the Customs shall impose taxes according to the Customs Law and other laws and regulations concerning taxation.
Units being checked that fail to pay taxes retrospectively within the period set by the Customs shall be subject to mandatory measures taken by the Customs according to the first clause of Article 60 of the Customs Law.
Article 25 The import and export goods sealed off or seized according to Article 16 of these Regulations shall be released immediately when suspicion of law infringement is ruled out through Customs checks. If these goods are proved to be illegal through Customs checks, the Customs shall deal with the units being checked according to the Customs Law and the Regulations on the Implementation of Administrative Punishments by the Customs.
Article 26 Units being checked shall be sanctioned by the Customs in accordance with the Customs Law and the Regulations on the Implementation of Administrative Punishments by the Customs should they be found during Customs checks to have broken Customs supervision and control rules.
An enterprise or entity directly related to the imported or exported goods that actively report its acts in violation of the provisions on customs supervision to the Customs and accepts handling by the Customs shall be subject to a lighter or mitigated administrative penalty.
Article 27 The units being checked that are discovered during Customs checks to have been engaged in smuggling and thereby committing crimes shall be subject to criminal prosecution pursuant to law. Smuggling cases that are not serious enough to become criminal shall be handled in accordance with the Customs Law and the Regulations on the Implementation of Administrative Punishments by the Customs.
Article 28 The taxes that are levied or collected retrospectively, the smuggled goods and illegal revenues that are consficated, and the fines that are imposed by the Customs during Customs checks shall be turned into the state coffers.
Article 29 Disputes concerning tax payment that may arise between the units being checked and the Customs shall be settled according to Article 64 of the Customs Law.
Chapter V Legal Responsibilities
Article 30 An inspected enterprise or entity that has one of the following acts shall be ordered by the Customs to take corrective action within a prescribed time limit and shall be subject to a fine of not less than 20,000 yuan but not more than 100,000 yuan where no corrective action is taken within the prescribed time limit; if the circumstances are serious, its customs declaration shall be deregistered; its directly responsible persons in charge and other directly liable persons shall be subject to a fine of not less than 5,000 yuan but not more than 50,000 yuan; and it shall be subject to criminal liabilities if any crime is constituted:
1. It provides the Customs with false information or conceals important facts;
2. It refuses or delays the provision of account books, documents, and other relevant materials, and relevant electronic data storage medium to the Customs;
3. It transfers, conceals, tampers with, or destroys customs declaration documents, import or export documents, contracts, other materials directly related to the import or export business, and relevant electronic data storage medium.
Article 31 An inspected enterprise or entity that fails to prepare or keep customs declaration documents, import or export documents, contracts, other materials directly related to the import or export business as required shall be ordered by the Customs to take corrective action within a prescribed time limit and shall be subject to a fine of not less than 10,000 yuan but not more than 500,000 yuan where no corrective action is taken within the prescribed time limit; if the circumstances are serious, its customs declaration shall be deregistered; and its directly responsible persons in charge and other directly liable persons shall be subject to a fine of not less than 1,000 yuan but not more than 5,000 yuan.
Article 32 An inspected enterprise or entity that fails to set up or prepare account books as required or transfers, conceals, tampers with, or destroys account books shall be subject to legal liability under relevant provisions of the Accounting Law.
Article 33 Customs staff who neglect their duties, engage in malpractices or irregularities, abuse their power, or receive or extort properties from the units being checked during performance of duties and consequently commit criminal offenses shall be subject to criminal prosecutions persuant to law. Those involved in cases not so serious as to be criminal shall be handled administratively.
Chapter VI Supplementary Rules
Article 34 These Regulations shall enter into force from the date of promulgation.