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Executive Summary:

In March 2018, China’s State Council announced a government reorganization aimed atimproving efficiency and customer service in many parts of the Chinese government. The reorganization merged most of the General Administration of Quality Supervision, Inspectionand Quarantine (AQSIQ) into the General Administration of Customs of the People’s Republicof China (GACC). This merger includes the integration of all former China Inspection andQuarantine (CIQ) offices located at Chinese ports into GACC’s existing import/export inspectionstructure.

In early September 2018, the State Council published the “Regulations on the Allocation ofFunctions, Internal Bodies and Staffing of the General Administration of Customs,” which outline GACC’s organization and functions. The document also describes GACC’sresponsibilities when interacting with other Chinese ministries.

GACC is primarily concerned with public security and border protection, entry-exit inspection ofgoods, and collection of import and export duties and taxes. With the addition of AQSIQ’s foodand agricultural functions and personnel, GACC is now directly responsible for a wider variety of duties, including agricultural inspections at the port of entry and managing food and agricultural import/export policies. However, how these former AQSIQ functions are effectively integrated into the existing GACC mission and ministry culture remains to be seen.

In terms of food and agriculture, the former AQSIQ Import and Export Food Safety Bureau and Plant and Animal Health Department have largely retained their functions, structure, and personnel. Nevertheless, this reorganization represents a major reshuffling of roles and responsibilities and there have been, and will continue to be, issues that arise as a result of the reorganization. Articles 4(8), 4(9), and 4(13) generally capture the core functions of the formerAQSIQ’s food and agricultural trade issues.

Article 3(15) of this document lays out how GACC will interact with the newly reorganized Ministry of Agriculture and Rural Affairs (formerly the Ministry of Agriculture), the newly reorganized National Health Commission, and the newly formed State Administration of Market Regulations (SAMR).

This report contains an unofficial translation of the State Council’s “Regulations on theAllocation of Functions, Internal Bodies and Staffing of the General Administration ofCustoms.” For the original Chinese version, please use this link:http://www.gov.cn/zhengce/2018-09/10/content_5320815.htm.

Disclaimer: In the event of a discrepancy or discrepancies between this unofficial translation and the complete regulation or announcement as published in Mandarin, the latter shall prevail.

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BEGIN TRANSLATION

Regulations on the Allocation of Functions, Internal Bodies, and Staffing of the General Administration of Customs

Article 1 These Regulations are formulated in accordance with the Decision of the CPC Central Committee on Deepening the Reform of Party and State Institutions and the Plan for Deepening the Reform of Party and State Institutions adopted at the third plenary session of the 19th CPC Central Committee and the Plan for Restructuring the State Council adopted at the first session of the 13th National People’s Congress.

Article 2 The General Administration of Customs is a full-ministerial-level government agency that directly reports to the State Council.

Article 3 The General Administration of Customs shall implement the guidelines, policies, decisions, and arrangements of the Party Central Committee on customs work, and adhere to and enhance the centralized and unified leadership of the Party on customs work in the process of performance of its functions. Its main functions are as follows:

(1) Being responsible for national customs work. Proposing policies on customs work (including entry-exit inspection and quarantine, similarly hereinafter), drafting relevant laws and regulations; and formulating customs plans, departmental rules, and related technical specifications.

(2) Being responsible for organizing and promoting the construction of “General Customs Clearance” in ports. Formulating port administration rules and regulations jointly with the departments concerned, organizing and drawing up the port development plans and coordinating their implementation, taking the lead in drawing up the joint prevention and control system for port security, and coordinating and carrying out port related information collection, risk analysis, research and judgment, and disposal. Coordinating the work relations of all departments involved in port clearance, directing and coordinating the port related work of local governments.

(3) Being responsible for customs supervision. Formulating the supervisory regulations on inbound and outbound means of transport, goods, and articles and organizing their implementation. Undertaking work related to the technical measures to trade as prescribed. Carrying out import and export trade regulatory policies according to law; being responsible for the customs protection for intellectual property rights and for the administration of customs markings. Organizing and carrying out counter-terrorism, stability maintenance, non- proliferation, and export control work in the link of customs administration. Formulating the customs supervision regulations on bonded businesses such as processing trade and organizing their implementation, taking the lead in reviewing the establishment and adjustment of the special areas under customs control.

(4) Being responsible for the collection and administration of import and export duties and other taxes. Proposing the collection and administration regulations, working out the classified catalogue for import and export commodities, and organizing its implementation and

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interpretation. Taking the lead in conducting negotiations with foreign countries based on the multilateral and bilateral rules of origin, drawing up the rules of origin for import and export commodities, and being responsible for the organization and implementation of work such as visa management according to law. Enforcing anti-dumping and anti-subsidy measures, supporting such measures and other tax measures according to law.

(5) Being responsible for the entry-exit health quarantine, and the inspection and quarantine for entry-exit of animals and plants and their products. Collecting and analyzing overseas epidemic information, organizing and implementing port disposal measures, and undertaking work related to emergencies such as public health emergencies in ports.

(6) Being responsible for the legal inspection of imported and exported commodities. Supervising and administering the identification, verification, and quality safety of imported and exported commodities. Being responsible for the inspection, quarantine, supervision, and administration of import food and cosmetics, and carrying out work related to export food on the basis of multilateral and bilateral agreements.

(7) Being responsible for customs risk management. Organizing customs trade investigation, market investigation, and risk monitoring; establishing a risk assessment index system, a risk monitoring early warning and tracking system; and a prevention and control mechanism for risk management. Carrying out customs credit management and being responsible for customs inspection.

(8) Being responsible for customs statistics such as the trade in imported and exported State goods. Releasing customs statistical information and statistical data, organizing and implementing dynamic monitoring and evaluation, and establishing a public information service platform that is to serve import and export enterprises.

(9) Being responsible for the nationwide crackdown on smuggling and comprehensive treatment thereof. Investigating and treating smuggling and illegal cases according to law, being responsible for the reconnaissance, detention, arrest, and preliminary hearing of smuggling cases under its jurisdiction; organizing and carrying out customs anti-smuggling work.

(10) Being responsible for formulating and organizing implementation of the scientific and technological development plans, and the laboratory construction and technical support plans for customs. Organizing relevant scientific research and technology imports.

(11) Being responsible for the international cooperation and exchanges in the field of customs. Joining relevant international organizations on behalf of the State; executing and implementing relevant international cooperation treaties, agreements, and memorandums of agreement.

(12) Vertically administering China customs.

(13) Accomplishing other tasks assigned by the Central Committee of the Communist Party of China and the State Council.

(14) Transformation of functions.

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1. Strengthening supervision and strictly guarding the security of the country. Focusing on the risk management, speeding up the establishment of a prevention and control mechanism for risk management with respect to the gathering of risk information, unified analysis, research, and judgment, and the centralized command and disposal; extending and expanding the supervision range from port clearance to the whole entry and exit chains and broader fields, and changing the mode of supervision from the separate operation to the overall and intensive operation, further improving the supervisory intelligence and accuracy, practically safeguarding the economic security, and firmly keeping the goods and articles that endanger ecologicalsecurity and people’s health such as foreign garbage and smuggled ivory and the infectiousdiseases, plant diseases, and insect pests out of the country.

2. Streamlining administration and delegating power to the lower levels to facilitate trades. Integrating the customs operations, further reducing the examination and approval items, reducing the in-process operation links and formalities, promoting “the unification of inspection and examination”, expanding “the unification of multiple inspections”, optimizing the customs clearance procedures, and shortening the clearance time. Integrating the service resources anddata from all kinds of government affairs, speeding up the promotion of “single window” for international trade, and realizing “one-time login enables full network access” for enterprises. Expediting the “Internet + Customs” construction, making documents and materials submitted inone place available throughout the country and available for repeated uses. Expediting the construction of the public information service platform which is to serve the import and export enterprises; collecting and sorting out the access standards, technical specifications, and customs regulatory policies and measures for import and export products of all countries; providing convenient inquiry and consultation services for import and export enterprises, and providing free information access or access at lower cost.

3. Deepening Port Reform. Proceeding from the whole situation of the national security and overall interests, optimizing port layouts, integrating the ports that are close in distance, closing the ports with small business volumes, strictly controlling the opening of new ports, and reducing disorderly port competition and low-level redundant development.

(15) Division of related functions.

1. Division of related functions with the Ministry of Agriculture and Rural Affairs: (1) The Ministry of Agriculture and Rural Affairs shall draw up the laws and regulations on the quarantine of entering/exiting animals and plants in collaboration with the General Administration of Customs; the Ministry of Agriculture and Rural Affairs and the General Administration of Customs are responsible for determining and adjusting the catalogue of animals and plants prohibited from being carried into China and shall publish it jointly; the General Administration of Customs shall formulate and publish the bans and the lifting of the bans on the entry and exit of animals, plants, and their products jointly with the Ministry of Agriculture and Rural Affairs. (2) In terms of international cooperation, the Ministry of Agriculture and Rural Affairs is responsible for signing the inter-governmental agreements and treaties on animal and plant quarantine; the General Administration of Customs is responsible for signing and implementing the agreements and memorandums of agreement relating to the inter-

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governmental agreements and treaties on animal and plant quarantine, and the agreements among animal and plant quarantine authorities. (3) The two Ministries should coordinate and closely cooperate with each other and jointly carry out the quarantine for entering/exiting animals and plants.

2. Division of related functions with the National Health Commission: The National Health Commission is responsible for the overall prevention and control of infectious diseases and the responses to public health emergencies, as well as the preparation of the catalog of infectious diseases under frontier sanitary quarantine supervision as well. The National Health Commission and the General Administration of Customs shall establish and improve a cooperation mechanism to deal with port infectious diseases and public health events, a reporting and exchanging mechanism for infectious diseases and public health events, and a reporting and cooperative handling mechanism for port imported epidemics.

3. Division of related functions with the State Administration for Market Regulation: (1) The two Administrations shall establish a mechanism to avoid repeated inspection, charging and penalties against import and export commodities, import and export foods, and cosmetics to ease the burden on enterprises. (2) The General Administration of Customs is responsible for the supervision and administration of the safety of imported food. The imported food and food related products should conform to the food safety standards of the State. Where a food safety incident occurred outside China may impose impacts on our country or a serious food safety problem is found in the imported food, the General Administration of Customs shall take early warning or control measures in a timely manner, report it to the State Administration for Market Regulation, and the State Administration for Market Regulation shall take appropriate measures without delay. (3) The two Administrations shall establish a reporting and cooperation mechanism for defect information on imported products. Where the General Administration of Customs finds any substandard imported product or imported product with a potential safety hazard during port inspection and supervision, it shall conduct technical processing, return or destroy it, and then notify the State Administration for Market Regulation about it. The State Administration for Market Regulation shall exercise unified management over the recall of defective products. Where it is learned that any imported product is defective through consumer reports, incident investigation, injury surveillance, and others, the State Administration for Market Regulation shall take recall measures according to law; in case of a refusal to perform the recall obligation, the State Administration for Market Regulation shall inform the General Administration of Customs, and the General Administration of Customs shall take appropriate measures according to law.

Article 4 The General Administration of Customs has the following internal bodies:

(1) General Office (National Office of Port Administration) It is responsible for the routine operation of the Administration and undertaking work such as security, confidentiality, letters and visits, and publicity on governmental affairs. Taking the lead in drafting the port administration rules and regulations, organizing and drawing up the port development plans, the e-port specifications and coordinating their implementation; taking the lead in drawing up the joint prevention and control regulations for port security; coordinating the working relations of

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all departments involved in port clearance; directing and coordinating the port work of local governments.

(2) Department of Policy and Legal Affairs Drafting relevant laws and regulations and departmental rules, undertaking the legality review on the drafts of relevant international cooperation treaties, agreements, and memorandums of agreement as well as normative documents, undertaking the customs standardization work and the relevant administrative reviews and administrative responses.

(3) Department of Integrated Services Undertaking the planning and coordination and the comprehensive management of routine businesses, and the work related to the nationwide integration of customs clearance. Taking the lead in drawing up the comprehensive development plans for customs businesses, organizing and drawing up the technical specifications relating to customs. Coordinating and carrying out technical measures to trade that are related to the customs administration, drawing up the customs supervisory regulations on the goods and articles that are prohibited or restricted by the State from entry into and exit from China. Undertaking the customs clearance process standardization, declaration normalization, and clearance of administration work. Organizing and implementing the customs protection on intellectual property rights. Undertaking the overall planning, comprehensive coordination, whole advancement, and the urging and fulfillment of major customs reforms.

(4) Department of Free Trade Zone and Special Areas Taking the lead in drawing up the development plans and supervisory regulations for the free trade zones and other areas under special customs supervision; undertaking the establishment, in-process and ex-post supervision over the free trade zones and other areas under special customs supervision.

(5) Department of Risk Management Drawing up the customs risk management regulations and organizing their implementation; undertaking and organizing customs risk monitoring work; establishing a risk assessment index system, a risk monitoring early warning and tracking system, and a prevent