No.9, 2014

    To advance the construction of China (Shanghai) Pilot Free Trade Zone (hereinafter referred to as the “Pilot Zone”), in accordance with the Customs Law of the People’s Republic of China and Notice of the State Council on Promulgation of the Framework Plan for China (Shanghai) Pilot Free Trade Zone (Guofa [2013] No.38), upon approval by the General Administration of Customs, matters about developing bonded display trade business in the Pilot Zone are hereby announced as follows:
    I. Bonded display trade business means enterprises registered with the customs in the Pilot Zone (hereinafter referred to as “enterprises in the Zone”) conducting business activities of bonded display trade in or out of the Pilot Zone.
    II. Enterprises in the Zone conducting bonded display trade shall set up a computer management system in line with the customs supervision requirements, able to network with the China (Shanghai) Pilot Free Trade Zone Customs Supervision Informatization System (hereinafter referred to as the “Iinformatization System”) via the data exchange platform or other computer network according to the attestation mode prescribed by the customs, and submit relevant data that can satisfy the customs supervision requirements.(For specific networking conditions and handling formalities, see Announcement of Shanghai Customs No.5, 2014)
    III. Where enterprises in the Zone conduct bonded display trade in the Pilot Zone, the competent customs in the Pilot Zone (hereinafter referred to as the “competent customs”) shall supervise goods according to relevant provisions of the special area under customs supervision. 
    IV. Enterprises in the Zone in need of conducting bonded display trade in the special display place in the comprehensive office area inside the planned area of the Pilot Zone and outside of enclosure (hereinafter referred to as the “comprehensive office area”) and in other place outside of the Zone shall provide guarantee of full tax payment.
    Enterprises in the Zone shall handle formalities for displaying goods outside of the Zone with the competent customs via the Informatization System, and shall make the following submissions:
    1. documents such as display contracts, agreements, invitation letters or booth confirmation letters;
    2. bill of goods to be displayed outside of the Zone;
    3. deposit or letter of guarantee; and
    4. other submissions as required by the customs.
    V. Enterprises in the Zone conducting bonded display trade outside of the Zone shall strictly manage goods on display, and shall not use such goods for other purposes than display activity.
    Conducting bonded display in the comprehensive office area, enterprises in the Zone shall submit the detailed sales and inventory record and deposit place of goods to the customs every 14 days; conducting bonded display in other place outside of the Zone, enterprises in the Zone shall make submissions every day.
    After the end of goods display outside of the Zone, enterprises in the Zone shall handle formalities for goods returning to the Zone via the informatization system, at most 6 months from the day of goods leaving the Zone. In need of extension for special cases, enterprises in the Zone shall complete extension formalities with the competent customs, extension made 3 times at most, each extension not exceeding 6 months. At the expiration of extension, goods shall be transported back to the Zone or subject to the import duty formalities. 
    VI. Domestic sales of goods occur in the period of display outside of the Zone, enterprises in the Zone shall make the following submissions to the competent customs to handle import duty formalities: 
    1. bill of goods on bonded display sold on the domestic market;
    2. invoices;
    3. permits (delivery of related goods); and
    4. other submissions as required by the customs.
    As for centralized declaration, enterprises in the Zone shall, within 30 days from the day of domestic sale, go through the import duty formalities in a centralized manner with the customs; no centralized declaration shall be done beyond the year.  
    VII. Where goods turn duty free during the period of display outside of the Zone, enterprises in the Zone shall handle the customs formalities in reference to the Procedures of the People’s Republic of China Customs for Supervision over Duty-free Stores and Duty-free Goods (Decree No.132 of GAC). As for centralized declaration, enterprises in the Zone shall go through formalities for centralized declaration with the competent customs within 30 days from the day of goods turning non-dutiable.
    VIII. If goods are damaged or lost due to force majeure during the period of display out of the zone, enterprises in the Zone shall report timely to the competent customs and submit certification issued by relevant departments, in respect of those damaged due to force majeure, the enterprises shall go through formalities for transportation back to the Zone; as for those lost due to force majeure, upon verification by the competent customs, write-off formalities may be handled. 
    If goods are damaged or lost for other reasons than force majeure, enterprises in the Zone shall handle the customs formalities according to relevant provisions on import goods.
    IX. If enterprises in the Zone have any of the following cases, the competent customs shall suspend their goods display business outside of the Zone:
    1. non-compliance with the conditions for business conducting;
    2. goods involved in suspected smuggling or import-export IP tort are put on file for investigation and prosecution by the customs; or
    3. suspension as required by the customs for other illegalities. 
    After compliance with the conditions for business conducting once again or after the end of investigation, the competent customs shall, according to actual circumstances, decide whether or not to restore the business.
This announcement comes into force on the day of promulgation.

Shanghai Customs
April 21, 2014