According to a notice and explanation issued by the General Administration of Customs in March, items shipped via foreign transport companies cannot be imported through the Chinese postal office channels and declared as personal “articles”. Instead, they must be shipped through more costly postal channels and courier channels. If shipped via transport companies, they will be processed through customs clearance procedures applicable to goods for resale.
The Customs Law of the PRC distinguishes “articles”, which generally refer to personal belongings, from “goods”, which generally refer to commodities for trade and resale. Separate regulations and tax rules apply to the import of “articles” and “goods”. Customs clearance procedures are simple and convenient for articles, but more strict and complicated for goods. Import duties, including customs duties, value-added tax and consumption tax, apply to articles at the time of import, but the rates are generally low. Higher rates apply to goods for resale upon import.
In the past, local agencies in China engaged in the business of receiving items from overseas via foreign transport companies at a relatively low cost. They then imported the items through Chinese postal office channels as personal articles to avoid the higher customs duties and strict clearance procedures that apply to goods.
In its March 30th explanation, the General Administration of Customs stated that such business does not meet the requirements of the UPU Convention and only items that are shipped through postal office channels of foreign countries/regions and China or through related express companies can be imported as personal articles. Items shipped via foreign transport companies and freight forwarders will be treated as goods and must be processed through customs as such.
This change is likely to substantially increase costs for Chinese purchasing agencies and Chinese customers when fully implemented.