Circular of the State Council on Issuing the Program for Optimizing the Port Business Environment to Enhance the Facilitation of Cross-border Trade (Mainland China)

Di Wu

To further optimize the port business environment, implement higher-level measures for facilitating cross-border trade, and promote the stable and healthy development of foreign trade, the State Council formulated the Program for Optimizing the Port Business Environment to Enhance the Facilitation of Cross-border Trade (the “Program”) and released it on October 13, 2018.  The Program primarily stipulates rules regarding the basic principles, objectives, missions, organization and implementation, etc.  In particular, the missions include the following details:

(1) Streamlining administration, delegating powers and reducing review and regulatory matters for import and export

To this end, the Program indicates the need to simplify regulatory certificates for import and export by eliminating a number of them, as well as remove items that may be eliminated from port inspection.  In addition, the procedures for handling regulatory certificates will be optimized.  Except for special circumstances such as security and confidentiality, all regulatory certificates will be applied and processed online.

(2) Intensifying the efforts in reform, and optimizing the process and operations of customs clearance at ports

The Program proposes to push forward an one-time customs, border and maritime joint inspection, a “double-blind, single announcement” supervision regime, and the application of the “advance declaration” model for innovating the customs tax collection and management models, optimizing inspection and quarantine operations, and encouraging a third-party certification system to improve the customs clearance operations at the ports.

(3) Improving customs clearance efficiency and enhancing the efficiency of port logistics services

The Program will improve the efficacy of port logistics services through improving the efficiency of inspection and preparation work, accelerate the development of multimodal transport, innovate a new management model for customs clearance, and quicken the customs clearance process for fresh goods.

(4) Strengthening the application of science and technology and improving the intelligence and informatization level of port management

The Program is requiring enhancements to the “single window” development of international trade.  Except special circumstances where there are security and confidentiality concerns, the “single window” function will cover the entire international trade management chain as a one-stop trade service platform by 2021.  In addition, there is a push for digitization of port logistics information by formulating and improving the electronic data exchange message standards for different transportation modes of containers and ground transportation, as well as promoting the use of such standards by the port inspection units and transportation enterprises.  It is expected that the circulation of information such as ocean bills of lading, bills of lading and packing lists for the main sea transportation routes will be done electronically by the end of 2019.  The level of smart port inspection will be enhanced, and centralized examination by use of online large container inspection equipment will be completely realized by the end of 2021.

(5) Improving the management system and promoting a more open and transparent business environment at the ports

To achieve this objective, the Program indicates that it is necessary to speed up the formulation and revision of bilateral and multilateral agreements on international transportation, promote cooperation over technological standards, document rules, data exchange and other matters with relevant countries, and strengthen international cooperation in port customs clearance and transportation.  An administrative agency fee list management system will be strictly implemented without additional import and export fee items, and the required standards will be strictly implemented along with the reduction of import and export compliance costs by reducing service charges.  Also, a port charge list system will be implemented, the customs clearance procedure and the time limit for logistics operations will be disclosed, and an evaluation mechanism for port clearance timeliness will be established.

In general, the Program is primarily focused on streamlined administration, delegation of powers, reform and innovation, international benchmarking, efficiency and convenience, goal-orientation, and collaborative governance.  The implementation of such principles up to the end of 2018 will cut the volume of regulatory certificates for import and export verification by over one-third in comparison with 2017.  Except for special circumstances such as security and confidentiality concerns, a full implementation of the networked verification process will reduce customs clearance time by one third.  By the end of 2020, container import and export compliance costs will be halved relative to those in 2017; and the overall customs clearance time by the end of 2021 will be halved relative to that in 2017, while China’s ranking in the World Bank Cross-border Trade Facilitation Index will improve by 30 in making the first steps in realizing a modernized port governance system and capability, thereby achieving a more dynamic, efficient, open and convenient port business environment.