Guangdong Official Explains New Customs Procedures

by Mary Swire, Tax-News.com, Hong Kong

17 May 2002

Sun Songpu, director-general of Guangdong Sub-Customs, gave details yesterday of the simplification of customs procedures foreshadowed by Guangdong Province Vice-governor Tang Bingquan at the weekend, and Hong Kong traders gave an immediate welcome to measures they said would cut costs and reduce transit times.

Under current rules, if a Hong Kong firm with a factory in one Guangdong city sells raw materials to another Hong Kong-owned factory in another part of the province, both the seller and the buyer need to report to their local Customs offices. Mr Tang said that more than 40,000 Hong Kong firms have relationships with Guangdong manufacturers which involve product transfers from factory to factory and that the proposed reforms would slash the time it takes for goods to clear checkpoints by more than 50% per cent

Sun Songpu said that for shipments originating in Hong Kong, customs procedures at the staging post on Dachan Island, near the western mouth of the Pearl River, would be substantially reduced. Initiatives would include electronic submission of cargo manifests, allowing river vessels to bypass customs. The cargo is to be sealed in Hong Kong and monitored by global positioning system satellites while random inspections would take the place of mandatory checks. At present, about 400 to 600 vessels from Hong Kong have to drop anchor at Dachan every day to report and declare to customs.

Mr Sun said the new method was being tested in some ports such as Guangzhou and the administration had invited eight shipping companies to join the pilot project.

Mr Sun also described the new customs procedures for clearing processed goods, saying: "Processed-trade procedures at present are too complicated and the whole process may take five to seven days and the enterprise must visit customs offices four times for each clearance." The new measures, which will come into force in all Guangdong cities at the start of next month, would cut the number of procedures from eight to four.

"Enterprises' expenses from customs declarations are to be reduced by a quite a large margin with the measures. When the reforms come in force in all Guangdong cities, enterprises' total costs on such procedures can be reduced by 500 million yuan [about HK$468.5 million] a year," Mr Sun said.

A river trade executive told the South China Morning Post: "This was one of the barriers to an efficient river trade that we suggested to the Government they should remove to help the flow of cargo. This is a very positive development as it not only benefits the users of the River Trade Terminal and public cargo working areas, it benefits the trade transport industry and South China as a whole."

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