Operational Process for Importing Used Mechanical Equipment

Used equipment import process and import costs

　　 Currently, the most common approach in the market is: the foreign seller ships the goods to Hong Kong, where intermediate inspection (CCIC) is conducted after transit, then the goods are barged to an inland port for commodity inspection and customs clearance, and finally delivered to the importer. Of course, this is a rather general statement, and anyone with some experience would say the same.

　　 Lately, I've been thinking about one thing: How can we make it easier and more intuitive for clients to understand and learn the process of importing used equipment? And what are the logistics costs involved? Regarding the real concerns our clients want to know, I will elaborate on these two points in detail below:

Logistics flow chart for import from port to door:

Client provides equipment information and pictures for import→Our company calculates various import costs→Quotation→Sign import processing agreement→We handle the filing and inspection application for importing used machining centers in China→Germany export, sea freight booking→Ocean shipping to Hong Kong→Exchange documents, pick up cargo→At our Hong Kong warehouse→Contact Hong Kong CCIC for inspection→After passing CCIC→Apply for mechanical and electrical equipment import license→Arrange barge from Hong Kong to inland port→Exchange original filing and inspection certificate at local commodity inspection bureau→We apply for commodity inspection→Receive inspection release notice→On-site inspection by commodity inspection bureau→We prepare customs clearance documents→Customs import verification→Receive tax bill, pay duties→Customs inspection→Release and pick up cargo→We arrange domestic sea freight booking→Truck to shipping terminal→Client's designated port→Truck to client's facility

Practical case analysis:
Taking the import of used lathes from Germany for Jiangsu XX Company handled by our company earlier this year as an example:
First, Jiangsu XX Company negotiated the machine equipment details with the German supplier. Afterward, they provided the basic packing documents of the equipment to us. Our company pre-applied for the Pre-shipment Inspection Certificate for Used Mechanical and Electrical Products Import. The German supplier then arranged export shipping, delivering the cargo to Hong Kong. Upon receiving the machines in Hong Kong, we applied for a Hong Kong CCIC inspection. The CCIC issued the Pre-shipment Inspection Certificate for Used Mechanical and Electrical Products Import. Only after passing this inspection could we process the New (Used) Mechanical and Electrical Products Import License, commonly known as the O License; In the next step, we arranged a barge from Hong Kong to an inland river port (Dongguan Shatian Port) for customs declaration. First, we reported to the local commodity inspection bureau, had the goods inspected (all used mechanical and electrical products require 100% inspection), and then obtained a commodity inspection clearance notice. Only with this notice could we declare to customs—pay duties and value-added tax, then after customs inspect (mainly checking if the product names and documents properly correspond), which marks the second release. After paying container rental to the shipping company and storage fees to the terminal, congratulations, the goods could be picked up! After picking up, we first transported the machines to our warehouse. Subsequently, personnel from Jiangsu XX Company visited to inspect the goods and made payment. Finally, we arranged vehicles or combined sea/land transport (Dongguan → Shanghai → Jiangsu) to deliver the machines to the designated location of Jiangsu XX Company.

Contents of the Hong Kong CCIC pre-shipment inspection for imported used equipment include:
(I) Open-package inspection:
1. Verify whether the imported used mechanical and electrical products match the national approval. According to current entry inspection regulations, check compliance with mandatory product certification regulations, import quality license management, and other regulatory requirements.
2. Inspect the exterior and packaging condition of imported used mechanical and electrical products for defects, damage, etc.
3. Confirm if the goods' name, specification, model, quantity, origin, manufacturing date, condition, price, and physical status match the contract or agreement.
(II) Safety inspections according to Chinese mandatory standards for electrical and mechanical safety of mechanical and electrical products:
1. Check external safety signs and warning markings on goods.
2. Check the safety of protective devices, electrical components, and mechanical components under static conditions.
3. Inspect the safety, reliability, and stability of the goods under operating conditions.
(III) Hygiene and environmental inspections according to national mandatory hygiene and environmental protection standards:
1. Inspect the sanitary condition of goods; 2. Test noise levels, dust content, radiation, and emissions during operation for compliance.
(IV) Verify the effectiveness of technical adjustments and corrective measures for non-compliant items found in the pre-shipment inspection.
(V) Other inspection items shall follow relevant regulations for the inspection of similar mechanical and electrical products.

State regulations for the age limit of importing second-hand used equipment are generally based on the average service life. During import, customs or commodity inspection bureaus follow these guidelines:
Mechanical equipment 10¬¬─14 years | Power equipment 11─15 years | Transmission equipment 13─15 years | Transportation equipment 8─14 years
Automated and semi-automated control equipment 8─12 years | Electronic computers 4─10 years | General test and measurement equipment 7─12 years | Industrial kilns 7─13 years | Tools and other production equipment 9─14 years | Equipment tools 12─15 years | Printing presses 8─10 years
Metallurgical industry specialized equipment 9─15 years | Power generation and heating equipment 12─20 years | Transmission lines 30─35 years | Distribution lines 14─16 years | Transformer and distribution equipment 18─22 years | Nuclear power generation equipment 20─25 years | Machinery industry specialized equipment 8─12 years | Petroleum industry specialized equipment 8─14 years | Chemical and pharmaceutical industry specialized equipment 7─14 years | Electronics, instrumentation, and telecommunications industry specialized equipment 5─10 years | Building materials industry specialized equipment 6─12 years | Textile and light industry specialized equipment 8─14 years | Mining, coal, and forestry specialized equipment 7─15 years | Shipbuilding industry specialized equipment 15─22 years | Nuclear industry specialized equipment 20─25 years | Construction-vehicle specialized equipment 8─10 years
The above provides reference information on the age limits for importing general second-hand used machines. Specific requirements shall be subject to the verification of customs or commodity inspection authorities.

Import timeline:
Filing for used mechanical/electrical products: 5¬¬─15 working days
Hong Kong CCIC inspection: 1¬¬─2 days, with certification issuance time approx. 5-7 days
Import license: 5¬¬─10 working days
Barge: 1¬¬─3 days
Commodity inspection: 2¬¬─3 days
Customs declaration: 3¬¬─5 days

Required documents:
Packing list, commercial invoice, contract, machine manual (Chinese and English), brand, model, certificate of origin, and other customs-related documents; additionally, ensure consistency between the documents and the actual goods.

Second-hand equipment import costs:
Hong Kong portion: Exchange document fees, terminal charges, pickup fees, warehouse storage, CCIC inspection and processing fees, transit costs
Dongguan portion: Customs duties, VAT, terminal and exchange document fees, customs clearance costs, domestic customs declaration and inspection, commodity inspection fees, transport costs from Hong Kong to Dongguan, used equipment filing fee, used equipment license/certificate costs, processing fees, miscellaneous

Why only ship equipment to Hong Kong, and not directly to the mainland?
Direct shipment is possible, under these prerequisites: confirmed filing of pre-shipment inspection and used equipment status, acquired import license, in addition, a guarantee that your processing company handling the import will succeed, then you may ship to the processing company's designated domestic port. Otherwise, it's best to first ship to Hong Kong and undergo the CCIC inspection there (foreign CCIC inspections are often costlier, more time-consuming, and less convenient); if unexpected circumstances arise, output e.g. the handling company fails to clear customs or needs to send goods back to origin, handling it from Hong Kong is easier. As everyone knows, Hong Kong is a free port and a transshipment hub.