Suggestion: Watch the 10 minutes video tutorial before reading this article
Managing customs clearance can be a time consuming process in China and some exporters even see their goods demolished or sent back.
It’s important that you understand what preparations you need to do in advance, for example product testing and correct labelling. You should also know what import taxes and tariffs that apply for your products.
In this article, I explain the key info you need to know when handling the China customs clearance.
China customs clearance procedure
In order to pass the customs clearance swiftly, it’s crucial that you confirm what certifications and standards you need to meet, and prepare all other documents needed.
Keep in mind that your importer should manage most of the customs clearance, but you need to prepare and provide documents when needed. Be sure to communicate closely with your importer and manage the customs clearance together, to avoid time consuming issues.
Prior to shipping, some of the most basic and important items you need to confirm beforehand are listed below.
Common Chinese quality certificates include CCC (China Compulsory Certification) and CFDA (CFDA is used for health food and baby formula for example).
If needed, you need to get your products certified and provide the certification documents, for the customs to review when your products arrive in China.
As explained in previous articles, HS stands for Harmonized Codes and are used worldwide to classify products traded in a country.
One of the biggest issues exporters confronts is that the customs have difficulties to specify what HS codes apply for your products.
Simply put: They’re not capable to exactly determine what kind of products you export, hence they don’t know what standards and regulations you need to follow.
It’s important that you’re able to classify your products with the correct HS codes, so that the customs understand what regulations and certifications that apply to your products.
The HS codes will determine what GB (Guobiao) standards you need to meet. There are unique GB standards for everything from packaging, labelling and food products, just to mention a few.
You need to provide test reports showing that your products comply with the GB standards required for your products.
If any certifications or test reports are missing, you need to provide the missing documents or a CIQ declaration.
An import license should be provided if needed. Normally, the Chinese importer should apply for an import license, make sure that he or she has an import license in an early stage.
Other important documents needed to clear your goods
- Bill of lading
- Packing list
- Customs invoice
- Insurance policy
- Sales/trading contract
- Import quota certificate
- Customs declaration
- Inspection certificate/licenses
- Quality certificates
- Health and sanitary certificates for your specific products, where needed
- Authorization and Entrustment Agreement for Customs Clearance
- Cargo manifest
- Handbook of processing trade
Confirm with your Chinese importer beforehand what documents are needed for your specific products when clearing the customs.
Taxes & tariffs
It’s crucial that you know what costs are involved to pay for different tariffs and import taxes when exporting to China. You also need to know how the taxable amount is calculated.
Let’s have a review of the different tariffs and import taxes that apply.
Tariffs are divided into 6 categories, namely:
- MFN rates (Most Favored Nation)
- General rates
- Preferential rates
- Tariff quota rates
- Provisional rates
- Agreement rates
MFN rates are mostly applied and used for countries members of the WTO (the World Trade Organization).
Let’s have a look at the most common import taxes you need to pay as an exporter.
Is the same as for domestically produced products and stretches up to 17% (depending on the products. The VAT is paid on top of the tariffs mentioned above.
I put excise in brackets as it’s applied for a limited amount of products, for example tobacco and wine.
It’s important that you provide documentation stating the CIF price (Cost, Insurance and Freight).
The CIF price includes the ‘normal’ price with the following items added:
- Packing costs
- Insurance costs
- Freight costs
- Commissions for the seller
The China customs have a database where they can check your CIF price and see if it’s in line with local tariffs and taxes, if the price difference is too big, additional costs will apply.
China customs declaration form
Previously, the system used for customs declarations was called H883, the new one is called H2000. Keep in mind that the declarations are often managed electronically nowadays.
The China customs have made an extensive guide explaining how the different systems work and how the forms are filled out.
What is a CR number?
After your importer has registered at the China customs, you’ll receive a so called CR code (Customs Registration code). The code is required for both imports and exports into China.
The CR code should be stated i n the customs declaration to pass the customs clearance.
China customs tracking
You can check the status of your customs clearance on the China customs website. To check the status, you need to provide a declaration number and a verification code.
For more information, I recommend you to visit their website.
Contact information to the China customs
Telephone numbers: Phone numbers differ depending on which city you ship to. The number of the Shanghai customs is 021-6889000 for example.
Managing customs clearance in China can be a difficult task and you should make sure that your importer helps you through the process, hiring a professional company should also be considered.
Preparing the documents needed, with everything from test reports to health certificates, will minimize the risk with cost some and time consuming issues.
Common issues include:
a. That you haven’t specified the correct HS codes for your goods. HS codes are used to classify products traded in a country and determine what product testing is required for your products
b. Complications with the correct labelling of products (see what GB standards that apply and provide documentation where needed)
c. Missing test reports (see what GB standards that apply for your products, conduct testing and get the documentation needed)
To learn more, I recommend you to read the whole article.
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