International trade terms customs terms

1. Bonded

Bonded refers to the retention of taxation under customs supervision for imported goods without immediate tax collection, as approved by customs. Bonded goods are those that enter the country without going through tax payment procedures but are stored, processed, or assembled domestically before being re-exported. When bonded goods are imported, a customs supervision fee is levied based on the CIF value assessed by customs. According to customs regulations, entities engaged in bonded operations must meet customs supervision requirements, obtain customs approval, and complete registration procedures.

2. Processing with Imported Materials

This is a primary form of processing trade. The operating entity uses foreign exchange to purchase imported raw materials, auxiliary materials, components, spare parts, and packaging materials specifically for processing export goods. These materials are processed by the production enterprise into finished or semi-finished products and then re-exported.

Customs issues a manual to the processing trade operating entity and manages the imported raw/auxiliary materials, components, spare parts, and packaging materials under bonded supervision according to processing trade regulations.

3. Processing with Supplied Materials

Another primary form of processing trade. Foreign parties provide all or part of the raw materials, auxiliary materials, parts, components, spare parts, and packaging materials free of charge, and sometimes provide certain equipment. The Chinese processing unit processes and assembles the goods according to the foreign party's requirements. The finished products are sold by the foreign party, and the Chinese party collects a processing fee. If the foreign party provides priced equipment, the Chinese party repays the cost through the processing fees.

Customs issues a manual to the processing trade operating entity and manages the imported raw/auxiliary materials, components, spare parts, and packaging materials under bonded supervision according to processing trade regulations.

4. Customs Manual

Customs issues a manual for imported materials and finished products under processing trade, as well as for non-duty-paid equipment under processing trade. The manual manages these supervised materials, products, and equipment under the bonded system. The customs manual process typically includes issuance, customs declaration registration for import/export, and verification and cancellation.

5. Tax Exemption/Reduction Certificate

According to national regulations, customs issues the "Certificate of Tax Exemption/Reduction for Import and Export Commodities" for goods that meet national policy requirements. The importing or exporting entity uses this certificate to import goods tax-free or at a reduced tax rate, often referred to as an "Exemption Certificate" (usually for duty-free purposes).

6. Import Equipment List

According to national regulations, the Ministry of Commerce or authorized local foreign trade and economic departments approve the import of equipment for specific policy-compliant purposes (e.g., encouraged foreign-invested enterprise production equipment). The import entity must have the import equipment list stamped for tax reduction/exemption application procedures to obtain the "Certificate of Tax Exemption/Reduction for Import and Export Commodities."

7. Project Confirmation Letter

Based on relevant policies, the Ministry of Commerce or authorized local foreign trade and economic departments issue a Project Confirmation Letter for projects that meet tax reduction/exemption policies. Customs reviews the Confirmation Letter to verify the eligibility of the import applicant for tax reduction/exemption.

8. Import/Export License Documents

Based on national trade and sovereignty needs, the state implements foreign trade controls such as import/export licenses, quotas, and automatic registration for imported and exported goods, along with administrative approval requirements for foreign exchange, customs, agriculture, forestry, pharmaceuticals, environmental protection, safety, health, and culture. These are collectively referred to as import/export license documents.

9. Customs Audit

A customs audit is an administrative act in which customs reviews the account books and related materials of enterprises engaged in import/export activities, as well as those enjoying import tax benefits, within a specified period. The purpose is to determine whether their import/export activities are legal, whether import duties have been paid according to law, and whether goods under customs supervision are used in compliance with legal regulations. The audit period is within three years from the customs clearance date for general import/export goods, within three years from the bonded goods' entry date until three years after customs verification is completed, and during the entire customs supervision period for duty-exempted/reduced goods.

10. Smuggling

Smuggling refers to the intentional evasion of customs supervision by parties engaged in import/export activities, including evading payable duties, violating national import/export management regulations, and circumventing restrictions, thereby violating the "Customs Law" and relevant laws and regulations.