What is market procurement trade?
According to the Announcement on Revising the Measures for Market Procurement Trade Supervision and Related Regulatory Matters (General Administration of Customs Announcement [2019] No. 221), market procurement trade is defined as a trade method in which qualified operators purchase goods from designated market clusters and complete export customs clearance procedures with the customs office at the procurement location, subject to a maximum value of USD 150,000 per customs declaration.
What are the advantages of market procurement trade?
First, it offers greater customs clearance convenience. For customs declarations covering more than five types of goods, simplified declaration procedures apply, which significantly streamlines the process. It implements fully automated document review and release, along with paperless declarations,enabling round-the-clock (24/7) release. For small-value, small-batch goods subject to legal inspection, automated document review and rapid inspection and release are applied. Additionally, low-risk prepackaged foods and cosmetics are included in the pilot program; all of which enhance trade facilitation.
Second, it provides exemption from value-added tax (VAT). Goods exported under market procurement trade by operators within designated market clusters are exempt from VAT.
Third, it introduces innovations in foreign exchange settlement mechanisms. Various trade entities, such as small and medium-sized enterprises, individual businesses, foreign-invested partnerships, and overseas purchasers engaged in entrusted exports, are allowed to open foreign currency settlement accounts. They can receive and settle foreign exchange based on the underlying trade transactions, thereby resolving payment and settlement challenges for merchants and foreign traders not directly involved in export activities.
Fourth, it lowers the barriers to trade. Small and medium-sized merchants with limited international trade experience orcapabilities can participate in foreign trade exports. As purchasers and suppliers are not required to engagedeeply in substantive foreign trade processes, exports become more straightforward.This helps stimulate market vitality and addresses the customs clearance challenges faced by market merchants dealing with numerous small orders of diverse goods.
What are the customs supervision requirements for exports under market procurement trade?
First, foreign trade operators engaged in market procurement trade must complete filing and registration as market procurement trade operators with the competent commercial authorities ofthe market cluster area where they operate. They must also register with customs as consignees/consignors of import and export goods in accordance with relevant regulations.
Second, the maximum value per customs declaration under market procurement trade is USD 150,000.
Third, goods exported under market procurement trade must be declared at the customs office of the procurement location. For goods under customs transit, supervision during transit is the responsibility of the customs office at the place of departure.
How is “simplified declaration” implemented for exports under market procurement trade?
“Simplified declaration” refers to a procedure that allows certain goods exported under market procurement trade to be consolidated and declared under a combined classification. For example, small accessories, which are generally low in unit price and come in great variety, can be exported using this model under market procurement trade.
For a customs declaration covering more than five types of goods, the simplified declaration procedure may be applied as follows: 1)The top five goods with the highest value must be declared separately on the export customs declaration form in descending order of value, in compliance with the Filling Requirements of the Customs Declaration Form for Import and Export Goods of the People’s Republic of China. 2)The remaining goods shall be consolidated by “chapter” according to the Customs Import and Export Tariff of the People’s Republic of China. The tariff number of the highest-value item in each chapter serves as the consolidated number, with value and quantity also consolidated accordingly.
It should also be noted that goods falling under any of the following circumstances are not eligible for simplified declaration: 1) goods subject to export tariffs; 2) goods requiring inspection and quarantine; 3) goods falling under other customs regulations that exclude simplified declaration. If deemed necessary, on-site customs may request the goods list from the comprehensive market management system, and enterprises should have it ready for provision upon request.
(Han Jia, Xie Shudong, Gao Zicheng)
Disclaimer：The above content is translated from Chinese version of China Inspection and Quarantine Times. The China Inspection and Quarantine Times version shall prevail.
