New Customs Credit Measures

The General Administrations of Customs issued the Interim Measures of the Customs of the People's Republic of China for the Administration of Enterprise Credit (the "Interim Measures") on October 8th, 2014, which is effective as of December 1, 2014.

Under the Interim Measures, companies are classified by the China Customs into the following three categories based on their credit status: (i) authorized enterprise (认证企业); (ii) general credit enterprise (一般信用企业); and (iii) uncreditable enterprise (失信企业).

Uncreditable Enterprise

Pursuant to Article 10 of the Interim Measures, company will be classified as "uncreditable enterprise" if: (i) it has engaged in smuggling activity; (ii) for company engaging agent to perform Customs declaration, the number of Customs violations in the current year exceeds 1/1000 of the number of Customs declaration in the prior year and company has received Customs administrative penalty of more than RMB 100,000 for at least two times;