A new form of foreign trade business has emerged, wherein companies send damaged parts from either overseas or domestic areas to a bonded zone for repair. These components undergo testing, maintenance, and are subsequently returned to their original locations. This operational model allows businesses to leverage bonded storage advantages while streamlining customs clearance processes, ultimately enhancing operational efficiency.
To help Shenzhen's enterprises better understand the favorable policies of Shenzhen bonded maintenance, the official web portal of the Shenzhen Municipal Government, Shenzhen Government Online, hosted the "Government-Enterprise Online Interview," and invited Yuan Xiaofang, a member of the Party Group of the Municipal Commerce Bureau, to engage with enterprise representatives and online citizens on the theme of "Deepening the development of bonded maintenance" on July 10.
City's new business model: bonded maintenance
In recent years, both national and local governments have introduced a series of favorable policies to promote the development of new business models like bonded maintenance in Shenzhen.
Records show that in 2023, the output value of bonded maintenance projects in the city surged to 510 million yuan (US$71.2 million), with the total import and export value under bonded maintenance reaching an impressive US$960 million.
Bonded maintenance has significantly enabled enterprises to make use of bonded policies in the city, establishing a virtuous cycle where production orders drive maintenance demands, and repair orders, in turn, foster production orders.
For companies in Shenzhen looking to engage in bonded maintenance business, please be aware of the following key information:
1.Convenient policies for local companies
National policy
In 2019, the State Council issued the "Opinions on Promoting the High-level Opening-up and High-quality Development of Comprehensive Bonded Zones." This document proposed the establishment of globally influential and competitive testing and maintenance centers within comprehensive bonded zones. Enterprises within these zones are able to provide high-tech, high value-added, environmentally-friendly bonded testing, and global maintenance services.
In 2023, the General Administration of Customs introduced the "Implementation Plan for Promoting the Sustainable High-quality Development Reform of Processing Trade," which includes 16 measures, and the "Comprehensive Reform Measures to Promote the High-quality Development of Comprehensive Bonded Zones," comprising 23 measures. These directives clearly outline further support for bonded maintenance to enhance quality and upgrade services. They also establish a mechanism for ongoing research to understand enterprises’ needs and facilitate the dynamic adjustment of bonded maintenance product catalogs by relevant authorities.
Shenzhen's policy
To enhance the management of bonded maintenance within comprehensive bonded zones, Yantian, Pingshan, and Qianhai comprehensive bonded zones in the city have introduced supervision plans for enterprises operating within these zones to facilitate maintenance activities. Relevant departments are tasked with executing approvals, customs oversight, environmental protection monitoring, and regular assessments of bonded maintenance enterprises.
Furthermore, Shenzhen prides itself on a well-established "sea, land, air, and rail" cross-border logistics network. With 16 first-class ports and 9 cross-border e-commerce customs clearance facilities, import and export clearance processes are efficient, allowing goods to seamlessly reach global destinations through this strategic hub.
A scene from the "Government-Enterprise Online Interview."
2. Scope of business
Regarding permissible business scopes, enterprises within the comprehensive bonded zones must adhere to the approved categories listed in the three maintenance product catalogs jointly issued by the Ministry of Commerce, the Ministry of Ecology and Environment, and the General Administration of Customs of the People's Republic of China:
(1) Enterprises in comprehensive bonded zones can engage in bonded maintenance services for 97 product types related to aerospace, shipping, and rail transportation on a global scale.
(2) These enterprises are authorized to conduct bonded maintenance for domestically sold self-manufactured goods, allowing maintenance and returns within the domestic market without constraints from the maintenance product catalog.
(3) In accordance with the "Regulations for the Administration of the Import of Mechanical and Electrical Products," enterprises within these zones can undertake bonded maintenance for prohibited imported used mechanical and electrical products specified in the maintenance product catalog, provided they meet requisite legal, regulatory, and safety standards.
On March 13, products including "parts for magnetic resonance imaging equipment, SLR cameras, aerial drones, and floor-sweeping robots," actively pursued by the city, were included in the third batch of the comprehensive bonded zone maintenance product catalog jointly issued by relevant authorities.
Subsequently, the Commerce Bureau will enhance collaboration with customs and other relevant authorities, proactively engage with enterprises, and endeavor to include more products in the newly updated bonded maintenance catalog.
3.Conditions for engaging in bonded maintenance operations
Alongside these prerequisites, enterprises should also focus on the following key aspects:
Establishing operational norms: Enterprises within the zones must develop practical maintenance operating norms, safety procedures, and pollution prevention plans. These guidelines should align with industry management norms and technical standards, ensuring compliance with obligations related to quality assurance, safety production, standard emissions, and the prevention of soil and groundwater pollution as stipulated by law.
Prohibited activities: Enterprises are not permitted to engage in dismantling, scrapping, or any related activities through the maintenance process.
Permit requirements: If maintenance products necessitate permits for import, export, or entry into or exit from the zones, enterprises must truthfully declare and authenticate the required permit documents to the customs authorities.
Solid waste management: Enterprises within the zone must establish a comprehensive solid waste management account in accordance with national regulations. This includes declaring the types, quantities, and other information in compliance with relevant laws. Such data should be reported through the national solid waste management information system.
Waste disposal: Waste materials such as scraps, old parts, and defective components produced during the maintenance process are classified as solid waste and must be handled in accordance with laws governing solid waste environmental management. Failure to dispose of these waste materials within the specified time frame stipulated by regulations can result in the termination of the enterprise's bonded maintenance operations.
Electronic ledger establishment: Enterprises should apply to the customs authorities for the establishment of a bonded maintenance electronic ledger. This ledger should have an electronic sub-account that includes information on goods awaiting maintenance, goods already maintained, and bonded materials used in maintenance. By segregating goods awaiting maintenance from overseas or those from the mainland, enterprises can ensure efficient operation and compliance with regulatory requirements.
4.Can goods be sold domestically after bonded maintenance? Can goods that cannot be repaired be sent to other enterprises for processing?
After undergoing bonded maintenance, the destinations of goods depend on their origin:
Goods repaired after being imported must be re-exported. Domestically held goods within the maintenance scope can either be repaired within the comprehensive bonded zone and then resent to their owners or exported overseas.
Maintenance of products made by companies within the bonded zones and sold domestically are not subject to catalog restrictions and can be returned domestically after maintenance.
According to relevant regulations, if it is impossible to return goods for export, they should not be sold domestically. Generally, they should be disposed of in accordance with relevant regulations for destruction. If classified as solid waste, they must be disposed of according to the "Administrative Measures on the Import of Solid Waste" and the requirements of national ecological and environmental authorities. Parts and materials from goods brought into the area for maintenance can be registered through the regional auxiliary management system and then transported out of the zones to a domestic area, subject to environmental requirements.
If the maintenance enterprise in a comprehensive bonded zone is not able to fully repair the goods because of restrictions in techniques, they can send the goods to a domestic area outside the zone for partial maintenance. When enterprises in the zone need to send goods for partial maintenance to a domestic company outside the zone area, they must follow procedures and adhere to regulations. The receiving enterprise must not transfer the goods to another entity for maintenance.
Future development
The Commerce Bureau will drive the advancement of bonded maintenance business through a three-pronged strategy:
Enhanced supervision
The bureau will intensify its supervision capabilities tailored to the needs of bonded maintenance projects. Collaborating with the customs authority, the bureau will urge various districts to devise customs clearance models that are specifically suitable for bonded maintenance projects. Besides, the relevant authorities will streamline the approval process for goods verification and import/export clearances, reduce associated costs, including deposits, and ease the financial burden on bonded maintenance enterprises.
Enhancing cross-department digital co-management
Enterprises will be encouraged to connect with customs platforms to streamline the declaration and verification of bonded goods and maintenance materials, thus enhancing operational efficiency. The initiative will also focus on the development of collaborative supervision platforms across multiple departments to facilitate information exchange, bolster supervision efficiency, and drive the dynamic growth of the bonded maintenance model.
Establishing bonded maintenance industrial agglomeration zones
By partnering with authorities including customs and others, the Municipal Commerce Bureau aims to collaboratively explore and spearhead concentrating the city's dispersed bonded maintenance resources. Leveraging agglomeration, integration, and consolidation, this approach seeks to unlock the greater value of bonded maintenance in the industrial chain.
A scene from the "Government-Enterprise Online Interview."
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Source: Government Services and Data Management Bureau of Shenzhen Municipality
Commerce Bureau of Shenzhen Municipality
Shenzhen Government Online
Shenzhen News Network
Translated by Shenzhen Daily