List of Commodity Restricted for Processing Trade is now released upon approval of the State Council. Related issues are now announced as follows:

1. This announcement shall take effect as from Aug 23, 2007.
2. Enterprises undertaking processing trade of commodity of restricted category shall pay standing book deposit at the same time of contract filling; when enterprises export processed goods within time limited and finish formalities of cancel after verification, deposit and interests shall be handed back.
Enterprises shall pay standing book deposit in line with administrative category of the Customs. Enterprises of A and B category shall pay deposit of 50 percent; enterprises of C category deposit of 100 percent, which shall be equivalent to sum of the import tariff and VAT of the import link of all bonded imported materials.
The standing book deposit of enterprises of A and B category shall be accounted as follows:
(1) commodity restricted from import
Standing book deposit=import tariff and VAT of import link of all commodity restricted from import * 50%
(2) commodity restricted from export
Standing book deposit= registered sum of bonded imported materials * (registered sum of commodity restricted from export / registered sum of commodity restricted for processing trade)* composite tax rate * 50%
(3) When the imported materials belong to category restricted from import, and the processed goods are restricted from export, the standing book deposit shall be calculated in line with formula of commodity restricted from import in item (1).
In case both operation enterprise and processing enterprise are located in central and western areas, when undertaking processing trade businesses of restricted category, related departments shall adopt deposit standing book “idle transferring” administration on enterprises of A and B category, and 100% real transferring administration on enterprises of C category.

3. When applying processing trade business, related issues on application of deep processing transferring business of restricted category commodity in addition to remark of restricted category commodity in application materials. When examining and approving processing trade business, departments of commercial administration shall remark the commodity of restricted category and deep processing transferring business in approval document. Customs shall file in line with approval document, and collect standing book deposit in accordance with Article 2.
Network supervision enterprises undertake processing trade of restricted commodity shall follow this article as well.

4. Transitional administrative measures on processing trade business of commodities listed in Appendix 1 and 2.
(1) where the departments of commercial administration approve the processing trade and enterprises apply for file with all required materials before Aug 23, 2007, those administrated in line with contract shall follow the former regulations; those administrated in line with enterprises shall follow the former regulations before Aug 23, 2008.
Above mentioned business shall be altered except those involving commodity name, code, quantity, sum or valid period of restricted commodity. If enterprises need to add commodity name, code, quantity, sum, or prolong valid period of restricted commodity, Article 2 of this announcement shall be followed to go through formalities of approval and filing again.

(2). As from Aug 23, 2007, Certification of Processing Trade business shall automatically cease to be effective if the business shall be approved by departments of commercial administration but fail to file at the Customs before Aug 23, 2007. Enterprises need to go through formalities at departments of commercial administration again. Customs shall file in line with Article 2 of this announcement.

5. Enterprises of eastern area that fail to obtain foreign trade rights before Jul 23, 2007 will not have their application for processing trade of restricted category accepted.

6. Central and western area refers to other areas except eastern area, which including Beijing, Tianjin, Shanghai, Liaoning, Hebei, Shandong, Jiangsu, Zhejiang, Fujian, and Guangdong.

7. Enterprises shall make declaration of processing trade truthfully. If any false information about commodity name and code is founded, departments of commercial shall not approve the processing trade business, and the Customs shall not file.

8. This announcement is not applicable for specially supervised districts of the Customs such as export processing area and bonded area, as well as processing trade of commodities outside of specially supervised districts of the Customs shifted to commodities restricted from import or export inside the country by means of deep processing.

9. Before information system adjustment of related administrative departments, Customs shall decide simple measures to account and impose standing book deposit in line with above-mentioned principles.

10. Any inconsistent regulations before shall be subject to this announcement.

Appendix: 1. List of Newly-added Commodities Restricted form Processing Trade
2. List of Commodities Restricted form Processing Trade Released before 2007

Ministry of Commerce
General Administration of Customs