Bonded Operations, Special Supervision Areas and Processing Trade
Bonded questions test whether you understand that duty is suspended, not cancelled, and that suspension ends with export, domestic sale or destruction. The exam focuses on the differences between bonded formats and on the processing-trade reconciliation cycle.
Bonded formats
- Bonded warehouse, export supervision warehouse, bonded logistics centre A and B, comprehensive bonded zone, bonded port area, and free trade zone.
- A comprehensive bonded zone is treated as outside the customs territory for duty purposes: production equipment imported into it is exempt, and domestic goods entering for export may obtain a VAT refund.
Processing trade
- 来料加工: the foreign party owns the materials and the finished goods; the enterprise earns a processing fee.
- 进料加工: the enterprise buys the materials, owns the finished goods and bears the price risk.
- Operations run on paper/e-manuals or e-account books; unit consumption (单耗) must be filed within the set period.
- The bonded period is normally no more than one year, and reconciliation (核销) is due within 30 days after the last export or the manual's expiry.
- Domestic sale (内销) of bonded goods requires approval, duty on the imported materials, and deferred-payment interest.
Worked example
A 进料加工 enterprise sells 100 tonnes of bonded plastic pellets on the domestic market. Duty and import VAT are computed on the original imported material value at the rate in force on the date the domestic sale is approved, plus deferred-payment interest for the period the duty was suspended.
Traps that cost marks
- Treating 来料加工 materials as if the enterprise owned them, which distorts the duty base.
- Forgetting deferred-payment interest on domestic sales.
- Missing the 30-day reconciliation window and triggering a compliance finding.