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Trade and Industry Department The Government of the Hong Kong Special Administrative Region
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Certificate of Origin Circulars

24-hour hotline : 23 922 922

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

Ref: FRCP 1000/2/1

31 December 2012

Dear Sirs,

Certificate of Origin Circular No. 11/2012

Commercial Information Circular No. 1111/2012

Mainland and Hong Kong Closer Economic Partnership Arrangement (CEPA)

Mainland 2013 Tariff Codes for Application for Certificate of Hong Kong Origin - CEPA ("CO(CEPA) ")

Introduction

This circular informs traders about the Mainland 2013 tariff codes (i.e. Harmonized System (HS) codes) for the goods entitled to zero tariff preference under CEPA for the purpose of applying for CO(CEPA)s.

Details

2.Consignments claiming for CEPA zero tariff preference must be supported by a CO(CEPA) issued by the Trade and Industry Department (TID) or one of the Government Approved Certification Organizations (GACOs)1 .n lodging CO(CEPA) applications in 2013, traders are required to use the applicable Mainland 2013 tariff codes. The 1,746 Mainland 2012 tariff codes under CEPA have been re-classified into 1,757 Mainland 2013 tariff codes. List of goods entitled to CEPA zero tariff preference and their corresponding rules of origin (ROO) are set out in the table "Goods entitled to CEPA Zero Tariff Preference - Mainland 2013 Tariff Codes, Product Description and Rules of Origin". This table can be downloaded from the TID's webpage
<http://www.tid.gov.hk/english/cepa/tradegoods/files/mainland_2013.pdf> or obtained from the Factory Registration and Origin Certification (FR&OC) Branch of TID.

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

3.All CO(CEPA) applications (including fresh submissions, re-submissions and amendment requests) have to be lodged through electronic trade document submission services. Traders may register with the relevant Certificate of Origin ("CO") Service Providers appointed by the Government2 in order to use the electronic trade document submission services. Traders who are not registered with the Service Providers can also make use of the designated Service Centres provided by the Service Providers for lodging CO(CEPA) applications.

4.For CO(CEPA)s issued in 2012 (with the Mainland 2012 tariff codes quoted therein), even if they will only be used to claim for CEPA zero tariff preference in 2013, traders are not required to amend for the 2013 tariff codes. The Mainland Customs has agreed to accept CO(CEPA)s bearing Mainland 2012 tariff codes in 2013 as long as they are issued in 2012 and remain valid.

5.In case the CO(CEPA) concerned was issued in 2012 and has to be amended before being used to claim for zero tariff preference in 2013, traders should continue to quote the Mainland 2012 tariff codes. Since the amendment will not alter the issue date of the CO(CEPA) concerned, applicants are not required to amend for the Mainland 2013 tariff codes.

Conditions for Issuing of CO(CEPA)

(i) Rules of Origin (ROO)

6.Goods manufactured in Hong Kong must satisfy their corresponding CEPA ROO, in order to claim for Hong Kong origin and enjoy the zero tariff preference under CEPA. List of goods entitled to CEPA zero tariff preference and their corresponding ROO are set out in the table "Goods entitled to CEPA Zero Tariff Preference - Mainland 2013 Tariff Codes, Product Description and Rules of Origin" mentioned in paragraph 2 above. In addition, to claim for zero tariff preference under CEPA, goods must be transported directly to the Mainland from Hong Kong.

(ii) Factory Registration and Manufacturer's Authorized Signatory

7.Manufacturers must be registered with TID for Factory Registration (FR) before they are eligible to apply for CO(CEPA)s. Operators in the fisheries sector who would like to apply for CO(CEPA)s 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 can be downloaded from TID's webpage
<http://www.tid.gov.hk/english/aboutus/form/publicform/others/allforms.html#Factory> or obtained from the FR&OC Branch of TID.

8.FR registrants are legally bound to observe all conditions of registration and they have to ensure all registration particulars (e.g. address, ownership, products, line of production, machinery, etc) are accurate and up-to-date. FR registrants are also required to register with TID the up-to-date Hong Kong HS codes for the goods they produce. If FR registrants fail to update their registration particulars or their CO(CEPA) applications cover goods of Hong Kong HS codes that are not registered with TID, their CO(CEPA) applications will be deferred or rejected. It is therefore in the interest of manufacturers/subcontractors to provide TID with up-to-date information by returning completed form "Application for Amendment of Registration Particulars under Factory Registration (FR)" as and when necessary. The form can be downloaded from TID's webpage
<http://www.tid.gov.hk/english/aboutus/form/publicform/others/allforms.html#Factory>

9.Traders were informed via the Certificate of Origin Circular No. 16/2003 and No. 9/2004 on "Factory Registration Manufacturer's Authorized Signatories" issued on 2 June 2003 and 28 July 2004 respectively of the revised requirements regarding authorized signatories of manufacturer on applications for, inter alia, Certificate of Origin (CO). Manufacturers, who make use of the electronic trade document submission services should ensure that the persons registered with the Service Providers for signing electronic applications should be identical to the authorized signatories registered with TID.

10.To protect the interest of the trade and as a measure to uphold the integrity of Hong Kong's origin certification system, any CO(CEPA) application which is not signed by the authorized signatory of the FR registrant will be deferred or rejected. Traders should therefore make sure that their CO(CEPA) applications are lodged by their authorized signatories.

(iii) Labelling Requirements

11.Origin marking or labelling is not mandatory for goods exported to the Mainland for CEPA zero 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 ROO is 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

12.Traders who wish to include product development cost in their CO(CEPA) applications for products with "value-added content" as ROO 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.

(v) If the Value of Raw Materials and Component Parts of Mainland Origin is Included in Calculating the "Value-Added Content"

13.Traders who wish to include the value of raw materials and component parts originating from the Mainland when calculating the "value-added content", in addition to complying with the original FR requirements under CEPA, they have to submit to TID the additional Declaration and Undertaking Form (Form FRVAC 1). Manufacturers should return the abovementioned Declaration and Undertaking Form to TID's FR&OC Branch at least 7 working days before submitting CO(CEPA) applications. Upon acceptance of the relevant additional Declaration and Undertaking Form, TID will issue a "reference number" to the manufacturer. Details are set out in Certificate of Origin Circular No. 2/2012 on "Requirements for including the value of raw materials and component parts of Mainland origin in the "value-added content" origin rule" issued on 19 March 2012.

Applications for CO(CEPA)

14.In lodging a CO(CEPA) application, traders should provide all required information 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 product items with their Mainland 8-digit tariff codes, and all of them must be goods eligible for zero tariff preference 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. Rules of Origin: Manufacturers should clearly state the principal manufacturing processes performed in the field "Principal Process(es) Done by Manufacturer and Outworker in HK". Where "Change in Tariff Heading" and/or "Value-added content requirement" is the origin criterion of the concerned products, it should be so stated.
  7. Some fields will require the input of data codes to allow certain information to be printed in Chinese on the CO(CEPA) :
  8. The port of discharge declared on the CO(CEPA) applications should be the customs port to which the importer will submit the claim for zero tariff preference.
  9. The consignee's information will be printed on the CO(CEPA). Exporters cannot choose to hide such information on the CO(CEPA).
  10. Under normal circumstances, the departure date should be at least 2 clear working days after the date of lodging of the application. Request for retrospective issuance of CO(CEPA) will not be entertained.
  11. Materials imported into the Mainland for processing trade are not covered by the zero tariff preference under CEPA and hence should not be included in CO(CEPA) application.

15.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 TID's webpage
<http://www.tid.gov.hk/english/aboutus/publications/registcert/cocepa_note.html>
or obtained from the FR&OC Branch of TID.

Processing and Approval of CO(CEPA) Applications

16.Target turnaround time for processing CO(CEPA) application is 1.5 clear working days (excluding day of receipt)3 . Traders are reminded that TID will no longer count Saturday as a working day since the implementation of "5-Day Week" from 1 July 2006. Notwithstanding this, GACOs will continue to maintain services on Saturday mornings and they will count Saturdays as working days.

17.Approved CO(CEPA) will be printed on green A4-sized paper bearing watermark of the issuing organization [CO(CEPA) specimen is at the Annex (pdf format)]. Upon approval, information on the CO(CEPA) will be transmitted to the Mainland by electronic means, in order to facilitate checking and verification by the Mainland Customs.

Collection of CO(CEPA)

18.Upon approval of the CO(CEPA) applications, issuing organization will send out electronic approval message. Exporters may print out the collection slip, apply its company chop on it, and collect the CO(CEPA) from the issuing organization.

Validity Period of CO(CEPA)

19.CO(CEPA) is valid for 120 days from the date of issue. An expired CO(CEPA) cannot be accepted for claiming zero tariff preference.

Request for Amendment

20.If amendment is required after the lodging of CO(CEPA) applications, traders can lodge an amendment request. For an approved CO(CEPA), the issuing organization will only consider the request for amendment provided that the CO(CEPA) has not yet been used for claiming zero tariff preference and has not yet expired. Such request should be lodged within 30 days from the date of issue and all copies of the CO(CEPA) must be returned to the issuing organization. Issuing organizations will consider each amendment request on its own merits. If the amendment request is approved, an amended set of CO(CEPA) bearing the original issue date will be issued.

Request for Cancellation

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

Application for Certified True Copy

22.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. providing supporting documents to substantiate the claim of theft, loss or damage, and a photocopy of the CO(CEPA) concerned, where available.

23.Application for a certified true copy of CO(CEPA) must be fully substantiated by documentary evidence. Issuing organizations will consider each case on its own merits and reserve the full right to approve or reject the application. Traders are reminded that if the original CO(CEPA) had been used in claiming for CEPA zero 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 CO(CEPA) will become invalid.

Customs Clearance

24. The purpose of a CO(CEPA) is to support the Mainland importer's claim for CEPA zero tariff preference. Mainland importers are also required to provide other documentation as required by the Mainland Customs, such as import declarations, etc. Hong Kong exporters should make sure that the information declared on CO(CEPA) corresponds to that in the import declaration and other relevant documentation.

25.The Mainland Customs at the port of clearance will verify the information on CO(CEPA) against the information transmitted by TID 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 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.

26.Moreover, if the Mainland Customs 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 (C&ED) 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.

27.In the event that traders encounter problems in customs clearance of goods covered by a CO(CEPA), they may seek assistance from the FR&OC Branch of TID (tel. no. 3403 6432 or email addresss cepaco@tid.gov.hk). However, TID will not accept any liability in cases where the Mainland authorities do not accept the claim for CEPA zero tariff preference.

Handling of Information

28.CO(CEPA) issuing organizations will keep the data provided by traders in strict confidence. However, TID may under certain circumstances disclose such data to C&ED 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 issuing conditions for 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 TID and GACOs work closely with C&ED, 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/individuals 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, TID 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 CO including CO(CEPA); suspension of all kinds of certification facilities; suspension/cancellation of FR 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 -

Address : Factory Registration and Origin Certification Branch 3/F, Trade and Industry Department Tower 700 Nathan Road, Kowloon
Telephone No. : 3403 6432
Fax No. : 2787 6048
E-mail Address : cepaco@tid.gov.hk

Yours faithfully,

(Miss Janice LAU)

for Director-General of Trade and Industry

1. The 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. Through an open tender exercise in April 2008, the Government appointed Tradelink Electronic Commerce Limited ("Tradelink") to continue providing CO electronic service, and a new service provider, Brio Electronic Commerce Limited ("Brio") to provide CO electronic service, during the period from 1 January 2010 to 31 December 2016. The contact details of Tradelink and Brio can be found in the first information box at the end of this Circular.

3. If the CO(CEPA) application is selected for pre-issue inspection, the processing time would be longer.