Certificate of Origin Circulars

24-hour hotline : 23 922 922

e-mail address : enquiry@tid.gov.hk

Ref : FRCP 1000/2/1

2 January 2008

Dear Sirs,

Certificate of Origin Circular No. 1/2008

Commercial Information Circular No. 7/2008

The Mainland and Hong Kong
Closer Economic Partnership Arrangement (CEPA)

Mainland 2008 Tariff Codes
for Application for Certificate of Hong Kong Origin - CEPA ("CO(CEPA)")

Introduction

This circular informs traders about the Mainland 2008 tariff codes (i.e. Harmonized System (HS) codes) for the goods entitled to tariff preference under CEPA for the purpose of applying for CO(CEPA).

Details

2. Consignments claiming CEPA tariff preference must be supported by a CO(CEPA) issued by the Trade and Industry Department or one of the Government Approved Certification Organizations (GACOs)¹ . In submitting CO(CEPA) applications, traders are required to use the 2008 Mainland tariff codes. The 1,481 Mainland 2007 tariff lines under CEPA have been re-grouped and re-classified into 1,502 Mainland 2008 tariff lines. The applicable tariff codes and the corresponding origin criteria are set out in the table "CEPA Tariff Preference - Mainland 2008 Tariff Codes, Product Description and Origin Criteria" which can be downloaded from the Department's webpage <http://www.tid.gov.hk/english/cepa/files/mainland_2008.pdf>. Hard copies of the table are also available at the Factory Registration and CO(CEPA) Branch. 

Certificate of Hong Kong Origin - CEPA("CO(CEPA)")

3. All CO(CEPA) applications (including fresh submission, re-submission and amendment request) must be submitted via Electronic Data Interchange (EDI). In order to make use of the EDI service, traders are advised to register with the Tradelink Electronic Commerce Limited (Tradelink). Traders who are not yet registered with Tradelink can make use of the Electronic Trading Access Service (ETAS) centres located at Room 1802, 18/F, 168 Sai Yeung Choi Street, Mongkok, Kowloon or the GACO offices for submission of CO(CEPA) applications.

Conditions of Issuing CO(CEPA)

(i) Rules of Origin

4. Traders who are exporting Hong Kong origin products to the Mainland and claiming CEPA tariff preference must satisfy the CEPA rules of origin, which are set out in the table "CEPA Tariff Preference - Mainland 2008 Tariff Codes, Product Description and Origin Criteria" referred to in paragraph 3 above. In addition, to claim zero tariff under CEPA, goods must also be transported directly to the Mainland from Hong Kong.

(ii) Factory Registration and Manufacturer's Authorized Signatory

5. Manufacturers must be registered with the Trade and Industry Department for Factory Registration (FR) before they are eligible to apply for CO(CEPA). Operators in the fisheries sector who would like to apply for CO(CEPA) to cover fish or aquaculture products in the capacity of "manufacturer" in a CO(CEPA) application should likewise be registered for FR. FR Application Form specifically applicable to these operators are available at the Factory Registration and CO (CEPA) Branch at 3/F, Trade and Industry Department Tower, 700 Nathan Road, Kowloon. A FR registrant is legally bound to observe all conditions of registration. Any material change in registration particulars (e.g. address, ownership, products, line of production, machinery, etc) must be notified in writing to the Department. Failure to update the registration particulars may render its application for CO(CEPA) deferred or rejected.
   
   
6. In this regard, FR registrants are required to, inter alia, furnish up-to-date Hong Kong HS codes of the articles they produced with the Department. CO(CEPA) applications covering goods the Hong Kong HS code of which does not tally with the manufacturer/subcontractor's FR record will be deferred/rejected. It is therefore in the interest of manufacturers/subcontractors to provide the Department with up-to-date information on the goods they produced by returning completed "Application for Up-to-date Factory Registration Particular on Articles Produced" (blank form available at < http://www.tid.gov.hk/english/aboutus/form/publicform/cert/files/tid99a.pdf > ) whenever necessary.
   
   
7. The trade has been informed via the Certificate of Origin Circular No. 16/2003 on "Factory Registration Manufacturer's Authorized Signatories" dated 2 June 2003 of the revised requirement regarding authorized signatories of the manufacturer on applications for, inter alia, Certificate of Origin (CO). Manufacturers who make use of the EDI service provided by Tradelink have also been reminded to ensure that the persons registered with Tradelink for signing electronic applications are identical to the authorized signatories provided to the Department.
   
   
8. To protect the interest of the trade and as a measure to step up the integrity of Hong Kong's origin certification system, any CO(CEPA) application not signed by an authorized signatory of the FR registrant concerned as kept in the Department's record will be deferred/rejected. Traders should therefore make sure that their CO(CEPA) applications are lodged by their authorized signatories.
   

(iii) Labelling Requirements

9. Origin marking or labelling is not mandatory for goods exported to the Mainland for CEPA tariff preference. However, if a trader would like to apply origin markings on goods for export under CEPA, they should mark their goods as "Made in Hong Kong" provided that the CEPA origin rules are met. For fish and aquaculture products, the marking or labelling of "Made in Hong Kong" can be applied only if the fish and aquaculture products are (a) born and bred in Hong Kong, or (b) obtained in Hong Kong waters.

(iv) Additional Requirements for Traders Who Wish to Include Product Development Cost in the CO(CEPA) Applications

10. In addition to the conditions for issuing CO(CEPA) set out in paragraphs 7-12 above, traders who wish to include product development cost in their CO(CEPA) applications for products with "value-added content" as origin rule must fulfill additional conditions. Details are set out in Certificate of Origin Circular No. 24/2003 on "Additional Conditions for Including Product Development Cost in CO(CEPA) Applications" issued on 14 November 2003.

Application for CO(CEPA) 

11. In lodging a CO(CEPA) application, traders should provide all required details accurately. Applicants have to comply with the following requirements -

1. The exporter, manufacturer, and subcontractor (if applicable) have to make the following declaration in the CO(CEPA) application:
   
   CEP - I declare that the goods described in this application comply with the origin requirements specified for those goods in the Closer Economic Partnership Arrangement (CEPA).
   
   
2. Each CO(CEPA) can only be used to cover one batch of goods entering into the Mainland at the same time.
   
   
3. Traders are required to provide the Mainland 8-digit tariff codes corresponding to the goods concerned according to the applicable "Customs Import and Export Tariff of the People's Republic of China". The Mainland tariff codes will be printed on the CO(CEPA).
   
   
4. Each CO(CEPA) can cover a maximum of 5 Mainland 8-digit tariff codes, and all of them must be goods eligible for zero tariff under CEPA.
   
   
5. For each product item that corresponds to a Mainland 8-digit tariff code, a separate entry has to be provided for each of the following:

•     number and type of packages;
  
  
•     quantity and quantity unit; and
  
  
•      FOB value in Hong Kong dollars.

6. Some fields will require the input of data codes to allow certain information to be printed in Chinese on the CO(CEPA) :

• Mode of Transport - please refer to Annex 1 (pdf format) for the input codes. The corresponding mode of transport will be printed on the CO(CEPA) in Chinese.
  
  
• Port of Loading - the port of loading must be Hong Kong and will be printed on the CO(CEPA).
  
  
• Port of Discharge - please refer to the web portal of the Mainland customs at <http://www.customs.gov.cn> for the Mainland customs port codes. The corresponding port of discharge will be printed on the CO(CEPA) in Chinese.
  
  
• Quantity Unit - please refer to Annex 2 (pdf format) for the input codes. The corresponding quantity unit will be printed on the CO(CEPA) in Chinese.

The above input codes are subject to change. Traders should check the webpages of the Department or the Mainland customs as appropriate from time to time for the latest set of input codes.

7. The port of discharge declared on the CO(CEPA) applications should be the customs port to which the importer will submit the claim for tariff preference.
   
   
8. The consignee's information will be printed on the CO(CEPA). Exporters' request for hiding the information on the certificate will not be accepted.
   
   
9. Under normal circumstances, the departure date should be at least 2 clear working days after the date of submission of the application. Request for retrospective issuance of CO(CEPA) will NOT be entertained.
   
   
10. Materials imported into the Mainland for processing trade are not covered by the tariff preference under CEPA and hence should not be included in CO(CEPA) application.

12. Traders are advised to read the "Note for Traders Lodging CO(CEPA) Applications" carefully before applying for CO(CEPA). The Note can be downloaded from the Department's webpage <www.tid.gov.hk/english/aboutus/publications/registcert/ registcert.html> and copies are available at the Factory Registration and CO(CEPA) Branch.

Processing and Approval of CO(CEPA) Applications

13. The target turnaround time for processing a CO(CEPA) application is 1.5 clear working days (excluding day of receipt)² . Traders are reminded that Saturday is no longer counted as a working day for Trade and Industry Department because of the implementation of "5-Day Week" with effect from 1 July 2006. Notwithstanding this, GACOs will continue to maintain services on Saturday mornings and Saturdays will continue to be counted as working days for the GACOs. 
    
    
14. Approved CO(CEPA) will be printed on green A4- size paper bearing watermark of the issuing organization (specimen is at Annex 3 (pdf format)). Upon approval of the CO(CEPA) application, information on the certificate will be transmitted to the Mainland by electronic means to facilitate checking and verification by the Mainland customs and at the port of clearance.
    

Collection of Certificate

15. Upon receipt of the approval message, the approved CO(CEPA) can be collected from the certificate issuing organization upon presentation of the collection slip.

Validity Period of CO(CEPA)

16. CO(CEPA) is valid for 120 days from the date of issue. An expired certificate will not be accepted by the Mainland Customs for claiming zero tariff.

Request for Amendment

17. Traders may submit a request for amendment when changes are required after the CO(CEPA) application is submitted. In case the CO(CEPA) concerned, which was issued in 2007, has to be amended before being used to claim zero tariff, traders should continue to quote the Mainland 2007 tariff code instead of revising it to 2008 tariff code, as the amendment will have no effect on the issuance date of the Certificate.
    
    
18. For an approved CO(CEPA), the issuing organization will only consider a request for amendment provided that the certificate has not yet been used for claiming tariff preference and has not yet expired. Such request should be submitted within 30 days from the date of issue and all copies of the certificate must be returned to the issuing organization. If the amendment request is approved, a new set of CO(CEPA) bearing the same date of issue as that of the original certificate will be issued.
    

Request for Cancellation 

19. If a CO(CEPA) is subsequently not used for claiming CEPA tariff preference, the trader concerned should submit a request for cancellation. All copies of the certificate must be returned to the issuing organization for cancellation. Traders should note that a CO(CEPA) will expire 120 days after the date of issue, irrespective of whether the certificate is cancelled or not.

Application for Certified True Copy

20. In the event of theft, loss or damage of a CO(CEPA), traders may apply for a certified true copy of the CO(CEPA) by :

1. explaining in writing the circumstances leading to the request; and
   
   
2. submitting supporting documents to substantiate the claim of theft, loss or damage, and a photocopy of the CO(CEPA) concerned, where available.

21. The application for a certified true copy must be fully substantiated by documentary evidence and each case will be considered on its own merits. The issuing organization reserves the full right to approve or reject the application.
    
    
22. Traders are reminded that if the original certificate had been used in claiming for CEPA tariff preference, the certified true copy of the CO(CEPA) will at once become invalid. Likewise, if the certified true copy had been used, the original certificate will become invalid.
    

Customs Clearance 

23. The purpose of a CO(CEPA) is to support the Mainland importer's claim for CEPA tariff preference. Mainland importers are required to fulfill other Mainland customs clearance and documentation requirements, including import declarations. It is in the interest of Hong Kong exporters to make sure that the information declared on CO(CEPA) corresponds to that in the import declaration and other relevant documentation.
    
    
24. The Mainland customs administration at the port of clearance will verify the information on CO(CEPA) against the record transmitted by the Trade and Industry Department through electronic means. If the information is verified to be in order, the imported goods will be granted zero tariff treatment. In the event that the information cannot be verified through electronic means, the customs administration at the port of clearance may, at the request of the importer, act in accordance with the stipulated import procedures and release the goods. However, a deposit of an amount equal to the tariff charged at the applicable non-CEPA import tariff rate will be collected for the goods concerned pending the result of subsequent verification.
    
    
25. Moreover, if the customs administration at the port of clearance has doubts about the authenticity of the content of a CO(CEPA), it may collect a deposit of an amount equal to the tariff charged at the applicable non-CEPA import tariff rate before releasing the goods. The Mainland customs may then request the Hong Kong Customs and Excise Department for verification of the status of the CO(CEPA) concerned. The Mainland customs at the port of clearance will, in accordance with the verification results, proceed with the procedure to either return the deposit or convert the deposit to import tariff.
    
    
26. In the event that traders encounter problems in customs clearance of goods covered by CO(CEPA), they may seek assistance from the Factory Registration and CO(CEPA) Branch of the Trade and Industry Department at tel. no. 3403 6432 or email address <cepaco@tid.gov.hk>. However, the Department will not accept any liability in cases where the Mainland authorities do not accept the claim for CEPA tariff preference.
    

Review of the Conditions of Issuing CO(CEPA) and Application Procedures

27. The application procedures and conditions of issuing CO(CEPA) will be subject to review from time to time. Traders will be kept informed of any changes.

Handling of Information

28. The certificate issuing organizations will keep the data provided by traders in strict confidence. However, the Trade and Industry Department may under certain circumstances disclose such data to the Customs and Excise Department or other government departments, or to third parties within or outside Hong Kong. These circumstances include the following : the disclosure is necessary to facilitate the consideration or verification of the CO(CEPA) in question; the disclosure is authorized or required by the laws; or an explicit consent to the disclosure is given by the traders concerned.

Important Note

29. It is the responsibility of traders to complete the application for CO(CEPA) fully and truthfully, and provide the supporting documents as required under the conditions of CO(CEPA). Failure to provide accurate and complete information may affect the consideration and processing of the application, and may result in the application being deferred or rejected.

Warning

30. The Trade and Industry Department and GACOs work closely with the Customs and Excise Department, through checks and inspections, to ensure compliance with the provisions of Import and Export Ordinance, Cap. 60 and its subsidiary legislations as well as the Protection of Non-Government Certificates of Origin Ordinance, Cap. 324. Companies/registered businesses/individual may be liable to criminal prosecution for circumventing the conditions of CO(CEPA). A company/registered business/individual which commits an offence under the above Ordinances is liable to a maximum penalty of a fine of HK$500,000 and 2 years' imprisonment. Moreover, the Trade and Industry Department and GACOs may take administrative actions against the traders concerned irrespective of whether they have been prosecuted. Such administrative actions may involve, but shall not necessarily be confined to, any or all of the following: refusal to issue a certificate including CO(CEPA); suspension of all kinds of certification facilities; suspension/cancellation of Factory Registration of the company/registered business/individual concerned.

Enquiries

31. Should you require further information on the content of this circular, please contact us through any of the following channels –

Yours faithfully,

(Miss Kathy CHAN)

for Director-General of Trade and Industry

1. The five GACOs are the Hong Kong General Chamber of Commerce; the Federation of Hong Kong Industries; the Chinese Manufacturers' Association of Hong Kong; the Chinese General Chamber of Commerce and the Indian Chamber of Commerce, Hong Kong.

2. The processing time may be longer if an application is selected for pre-issue inspection. In this case, the Department will, on a best endeavour basis, send out the approval message 2 clear working days after completion of the inspection, provided that the inspection reveals no discrepancy.

　

Electronic services for Production Notification and Certificate of Origin enable traders to make the relevant applications directly through their office computer faster and easier. Electronic service has now been extended to the lodgement of Cargo Manifests and Textiles Notifications. For details and enquiries, please call the following service providers: Global e-Trading Services Limited (Tel. : 8109 1820) Tradelink Electronic Commerce Limited (Tel. : 2599 1700)