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Advantages of a port-bonded logistics center in Dongguan
http://www.dongguantoday.com    8/7/2009 6:13:00 PM

The government of Dongguan and the Customs Administration are working together to construct a "port-bonded logistics center that integrates the functions of a bonded warehouse and export-supervised warehouse. Although a tax rebate cannot be issued when entering the warehouse, the functions of a port-bonded logistics center can all be realized as follows:

1. Processing trade products made with supplied materials may be transferred to domestic carry-over supervised warehouses for domestic sales rather than going through the previous procedure of a “one-day tour by way of Hong Kong”.

In this way, enterprises engaged in processing trade with supplied materials can take advantage of the following benefits:

(1) Retain an operation mode of importing and exporting bulk shipments while conducting processing trade with supplied materials

(2) Avoid interest expenses on delayed taxation while bonded materials of processing trade are being transferred to domestic sales

(3) Simplify the approval procedure of transferring bonded materials of processing trade to domestic sales.

(4) Do not need to follow the old practice of exporting products and re-importing them to sell their products domestically, taking the mode of “tour within supervised warehouses” instead of a "one-day tour by way of Hong Kong". Doing this promotes operational efficiency while cutting down transportation costs.

(5) Avoid “separation of equipment, warehouse and materials” for domestic sales required by the Customs Administration.

2. Final products processed with supplied materials can be exported and imported through supervised warehouses rather than by “one-day tour by way of Hong Kong”.

In this way, enterprises engaged in processing trade with supplied materials can take advantage of the following benefits:

(1) Retain an operation mode of importing and exporting bulk shipments while conducting processing trade with supplied materials

(2) Do not need to follow the old practice of exporting products processed domestically with supplied materials to Hong Kong and re-importing them. Instead, the products can be exported and imported through supervised warehouses to increase efficiency and lower transportation costs.

(3) Avoid mismatch of codes and unit price of goods because under the previous rules, goods had to be re-labeled during carry-over.

(4) Distribute their products through domestic logistics distribution warehouses rather than through warehouses in Hong Kong, resulting in lower expenses on logistics and warehousing.

(5) Increase the number of processing and trade contracts on products in restricted categories. Doing this reduces payment of guarantee deposits.

3. Vendor-managed inventory (VMI) services

(1) Using the VMI operation mode, an enterprise self-owned inventory can be developed into supplier inventory. This can be done at the time raw materials are stored to a bonded warehouse. The property rights remain with the suppliers, and do not turn into self-owned inventory until raw materials are picked up from the bonded warehouses with tariff paid due and put on the production lines, thus reducing financial pressure on enterprises.

(2) Enterprises may perform value-added processing of goods stored in bonded warehouses, by packaging, grading and classification, adding shipping marks, dismantling and assembling.

(3) An enterprise may provide services on goods stored in a warehouse if the enterprise has gone through customs formalities, such as product storage and bonded logistics distribution, as well as circulative value-added services, including quality inspection, grading and classification, shipping mark additions, marking of labels, fixing films and changing packages.

Source:www.dgtoday.com.cn/ Dongguan Bureau of Foreign Trade and Economic Cooperation  Editor: Tan Jing
 
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