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We want to export about $150,000 worth of parts to our customer in Chengdu
. We want to export about $150,000 worth of parts to our customer in Chengdu (http://www.csstco.com/english/index.aspx). There is no money involved as these parts are shipped under warranty for an equipment they have already purchased and imported into their plant. However, if we just ship these parts without some kind of paperwork, we know that the Chinese customs in Chengdu will demand from us a payment of 20% of the insured value of the shipment! My question is: what is the procedure to prevent this charge?
By  
fnadeau
12/08/2010
Keywords:
2010-08-12
Dear Sir or Madam,
 
Thanks for your attention to ETCN!
 
According to the "Rules of the General Administration of Customs of the People's Republic of China on the Levying of Duties and Taxes on Imported and Exported Goods", When the import of any raw materials or spare/component parts is needed for fixing the goods temporarily admitted for repair, the duty and/or tax payer shall, when going through the import declaration procedure for the raw materials or spare/component parts, submit to Customs the maintenance and repair contract of the goods (or the original export contract that contains a warranty clause) and the import declaration form for the goods (not required for the raw materials or spare/component parts which are imported and declared together with the goods), and provide a security on the import duties and/or taxes or subject the goods to the administration of Customs under the category of bonded goods. The raw materials or spare/component parts thus imported shall be used exclusively for repairing the goods. All of their residuals upon completion of the repair shall be re-exported out of the Chinese mainland together with the goods.
 
The rule clearly states that parts import should pay the insured value, it is unavoidable. If the company does not want to pay the insured value, it can be imported as general trade, but it should pay the import tariff.
 
If you have any other question about Customs clearance in China, please feel free to contact us.