Spare Parts
Replacement
Attaining Trade Compliance with China Customs
Regulations and Efficient Operating Performance
Operating Environment
•
•
•
•
•
•
•
A multitude of choices exist in terms of which type of operation should
be used to support a forwarded inventory of bonded spare parts i.e.
Technical Service Station, Logistics Warehouse, Free Trade Zone
Warehouse or Bonded Repair Enterprise.
Each of the above has different advantages and disadvantages from a
customs, tax, foreign exchange and operational efficiency point of view.
Duty-paid spare parts replacement can attract scrutiny from in-charge
Customs in terms of the dutiable value and therefore customs duty and
import VAT liability.
Complex Automatic Import Licensing, Commodity Inspection and CCC
requirements may be applicable, depending on the HS Code of the
spare parts, which can impact cycle times.
Successful duty-exempt spare parts replacement requires complex
tracking and reconciliation both in terms of documentation and
inventory.
There is a tightening of supervision and control by China Customs
through more frequent and intensive post-importation audits and
investigations.
Financial penalties and temporary operational delays can arise in the
event of non-compliance.
Services and Solutions
•
•
•
•
•
•
•
•
•
Conduct a Feasibility Study to validate or assist with your choice of
the preferred bonded operating model from a customs, tax, foreign
exchange and operational efficiency perspective.
Obtain advance valuation rulings from Customs to confirm the correct
dutiable value of spare parts.
Validate the correct HS Code for the spare parts with reference to the
applicable customs duty rate, automatic import licensing, commodity
inspection and CCC requirements.
Seek exemptions from certain rules, such as CCC, so that operations
may run more efficiently.
Optimise the customs duty savings for duty-exempt spare parts
replacement.
Optimise the use of Free Trade Agreements to lower customs duties
for duty-paid spare parts replacement.
Design and implement trade compliance systems, procedures and
operating manuals.
Conduct Customs training for your import/export, logistics, and supply
chain managers.
Our former government officials can support you at meetings with
Customs, AQSIQ or MOFTEC in order to assist in resolving any disputes.
Worldtrade Management Services
Worldtrade Management Services (WMS) is the customs and international
trade advisory practice of PricewaterhouseCoopers. We have specialist
teams in Hong Kong and Taiwan as well as teams in several main locations
throughout Mainland China (Beijing, Tianjin, Dalian, Shanghai, Guangzhou
and Shenzhen).
Our practice is comprised of specialists drawn from a variety of
backgrounds, including ex-senior customs officers (both local and
expatriate) with international experience, international trade lawyers,
accountants, and individuals from the private sector who have experience
in logistics, customs and trade.
Our former senior China Customs officials worked in locations such as
Beijing, Shanghai and Shenzhen and have experience in the key areas of
import processing, audits/investigations, valuation and tariff classification.
We also have people that have specialist experience and knowledge of
unique trading environments, such as the Waigaoqiao Free Trade Zone.
Our local knowledge is combined with international expatriate expertise to
create a rich pool of skill and experience. These factors combined allow us
to draw on a depth of experience, technical expertise and relationships that
are unavailable to many companies and other customs and trade practices
alike.
The China team is part of a regional practice, which was originally formed
in 1992. The regional team now consists of approximately 80 full-time
advisors through Asia-Pacific.
Contact Details
John Robinson - Partner
john.p.robinson@cn.pwc.com
Colbert Lam - Partner
colbert.ky.lam@hk.pwc.com
Beijing/Tianjin/Dalian
Greg Nichols - Senior Manager
gregory.nichols@cn.pwc.com
Shanghai/Suzhou/Wuxi
Damon Paling - Director
damon.ross.paling@cn.pwc.com
Johnson Zhuang - Manager
johnson.zhuang@cn.pwc.com
Shenzhen/Guangzhou
Susan Ju - Senior Manager
susan.ju@cn.pwc.com
Authen Xiao - Manager
authen.xiao@cn.pwc.com
Tian Ying Chuan - Manager
ying.chuan.tian@hk.pwc.com
© 2007 PricewaterhouseCoopers. All rights reserved. “PricewaterhouseCoopers”
refers to the China firm of PricewaterhouseCoopers or, as the context requires, the
network of member firms of PricewaterhouseCoopers International Limited, each of
which is a separate and independent legal entity.