GAC taking steps to further simplify customs procedures for firms

China Customs at Beijing Capital International Airport, January 19, 2013. [Photo/VCG]

The General Administration of Customs is redoubling efforts to improve enterprise credit management, in a bid to further strengthen corporate integrity and simplify customs procedures.

GAC has been, for the past decade, promoting and improving its Authorized Economic Operator classification system. Companies that are certified as an AEO are qualified for simplified customs procedures like clearance facilitation, while the discredited ones are subject to stricter customs controls.

Chen Hongqin, a manager in charge of customs affairs at Guangzhou Fiedle Leather Bag Co, said the company has gained a lot from the AEO certification it obtained last November.

She said that the certification has helped increase the company's orders by 20 percent and annual sales by approximately 70 million yuan ($10.3 million).

Chen Junqing, chief of the warehousing section at Nantong COSCO KHI Ship Engineering Co, said the AEO certification has led to substantial efficiencies in customs clearance, with robust systems and improved daily operations.

In 2014, GAC formulated interim measures for enterprise credit management. It embraces the advanced philosophy of standards of the AEO legislations advocated in the World Customs Organization framework, to secure and facilitate global trade.

Enterprises that are AEOs of China Customs are eligible for the preferential treatment and clearance facilitation granted by China Customs and its foreign counterparts with mutual recognition.

According to the data from GAC, there are about 3,000 companies that have obtained advanced AEO certification mutually recognized by China's customs body and other countries and regions.

Such companies account for less than 1 percent of China's total trade enterprises, but their combined import and export value accounts for more than 30 percent of the country's total.

On average, only 0.47 percent of certified companies go through customs inspection. For others, the average proportion stands at around 3 percent.

The credit management system gives easier access to certified entities while discredited companies are subject to stricter customs controls.

For instance, ASM Pacific Technology paid about 8 million yuan more for customs procedures than it would have paid had it been an AEO certified company after its credit status was downgraded by the GAC for misconduct.

Not only does the AEO system promote corporate integrity, simplify procedures, but also create greater benefits internationally.

China is stepping up the efforts to enhance cooperation in AEO mutual recognition with other countries and regions.

So far, the country has achieved mutual recognition in AEO with 35 economies including Singapore, South Korea, the European Union, New Zealand, Switzerland, Israel and Australia. It also reached such cooperation with 14 economies participating in the Belt and Road Initiative.

According to GAC, it is now seeking such cooperation with countries such as Malaysia, Kazakhstan, Mongolia and Serbia.