Commercial Information Circulars

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Ref. : CR EIC 612/1/5

30 December 2010

Dear Sirs,

Commercial Information Circular No. 621/2010

The Mainland of China and Taiwan: Economic Cooperation Framework Agreement between the Mainland and Taiwan (ECFA) - Service on handling goods routed through Hong Kong

INTRODUCTION

This circular promulgates and sets out details of the service provided by Hong Kong Customs from 1 January 2011 onwards for voluntary use by traders to enjoy tariff reduction under ECFA.

ECONOMIC COOPERATION FRAMEWORK AGREEMENT

ECFA was signed by the Mainland and Taiwan on 29 June 2010. Under ECFA, 267 items of goods exported from the Mainland to Taiwan and 557 items of goods from Taiwan to the Mainland are eligible for import tariff reduction. The tariff will be reduced to zero in phases within two years starting from 1 January 2011. For details about ECFA, please visit the following websites:

http://tga.mofcom.gov.cn
http://www.ecfa.org.tw

Article 16 of Annex II to ECFA requires consignments to be shipped directly between the Mainland and Taiwan (the Clause). However, consignments routed through a third party shall still be regarded as direct consignment under certain circumstances¹ . In particular, the Clause requires that the ECFA consignments routing through a third party have to be under the supervision of the third party customs, and that the consignments may stay in the third party for not more than 60 days.

CUSTOMS SERVICE

To help traders enjoy the tariff reduction mentioned above, Hong Kong Customs has developed a new service in consultation with the Mainland and Taiwan sides. To fulfil the requirements in the Clause, Hong Kong Customs will provide confirmation certificates for such routing consignments in order to assist traders in proving the integrity of the ECFA cargoes ((ii) and (iii) in Note 1 above refer). The service will be provided as from 1 January 2011 onwards. The procedures, set out in the ensuing paragraphs, are designed to minimise the costs to traders. They will be subject to review in the light of actual experience.
Upon the arrival of ECFA consignment in Hong Kong, Hong Kong Customs will apply a Customs seal onto the consignment at the earliest opportunity. If the consignment is required to go through a consolidation process (i.e. (iii) in Note 1 above), the whole consolidation process will be under the supervision of Hong Kong Customs to ensure the goods will not be tampered with. Upon completion of the process, Hong Kong Customs will issue a Confirmation Certificate.

APPLICATION METHOD

Traders who wish to apply for the said Customs services are required to submit their applications to Hong Kong Customs at least two calendar days in advance of the arrival of the ECFA consignments. The application forms can be obtained at Hong Kong Customs' website: www.customs.gov.hk. Supporting documents, such as airway bill, Certificate of Origin, packing list, manifest and Certificate of Business Registration should also be provided. Under exceptional circumstances where the application cannot be made in time, Hong Kong Customs may assist the traders as far as possible.

FEES

The Customs service is voluntary for use and the user-pay principle applies. Hong Kong Customs will collect, from the applicant before delivering the service, a fee set on the “cost recovery” principle taken into account the need to minimise the cost. Different fee levels are set for different scenarios as follows -

Type	Mode of Transport	Processing Location	Further Processing	Fee
A	For ECFA consignment arriving from Air/Land/Sea	Inside Customs facilities	Without consolidation	$280
B	For ECFA consignment arriving from Sea	Outside Customs facilitie	Without consolidation	$910
C	For ECFA consignment arriving from Air/Land/Sea	Outside Customs facilities	With consolidation (vanning/devanning)	$625
D	For ECFA consignment arriving from Air	Outside Customs facilities	With consolidation (repacking and others)	$910
E	For ECFA consignment arriving from Land/Sea	Outside Customs facilities	With consolidation (repacking and others)	$1,470

Note: The above standard fees will be charged on the basis of a continuous service not exceeding 8 hours on each occasion. Service beyond the first 8 continuous hours will be charged a standard fee for each 8 continuous hours or part thereof.

For the detailed arrangements of Hong Kong Customs, please visit www.customs.gov.hk.

ENQUIRIES

For enquiries and suggestions, please contact Hong Kong Customs through the following channels:

Address:	(For sea cargo) Ports and Maritime Command Room 920, 9/F, Kwai Chung Customhouse, 63 Container Port Road South, Kwai Chung, New Territories	(For air cargo) Airport Command Customs Command Centre, 1/F, HACTL ST-1, HK Int’l Airport, Chek Lap Kok.
Telephone No.:	(852) 3152 0233	(852) 2116 2024
Fax No.:	(852) 3152 0183	(852) 2116 4202

For enquiries about the content of this circular, please contact the undersigned at 2398 5650.

Yours faithfully,

(Miss Audrey HON)

for Director-General of Trade and Industry

¹ Consignments routed through a third party shall still be regarded as direct consignments provided that:
(i) the routing is justified for geographical reasons or for consideration related exclusively to transportation requirement;
(ii) the consignments have not been entered into trade or consumption in the third party; and
(iii) the consignments have not undergone any manufacturing process with the exception of vanning/devanning, repacking or treatment necessary to maintain the condition of goods.

Note ：

While every effort is made to ensure the accuracy of the above information, the Department cannot guarantee this to be so and will not be held liable for any reliance placed on the same.

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