Starting June 1, 2018, the Chinese Customs authorities will begin implementing Uniform Social Credit Code, or USCC. The USCC is a pathway to bringing consistency and efficiency to the shipping industry. However, shippers and carriers will need to make certain adjustments to cope with the new procedures and requirements.
The most important changes relate to the data requirements when presenting your shipping instructions. The authorities will require your USCC number to complete the CCAM filing. It is important to remember that the USCC code belongs to the consignee.
The nearest equivalent to the USCC is the Tax Payer Identification Number, or TIN. The USCC is made up of a combination of 18 digits and letters. Where the transaction is to order B/L, you are required to provide the tax ID number of the first notify party.
The authorities will also require the shipper’s Enterprise Code. This code could originate from anywhere around the globe depending on where the items are being sent. For example, in some cases, an EU VAT number will suffice. This information must be submitted before the cut off time that is highlighted in the booking confirmation. Chinese authorities have indicated that they will seize any shipments without all of this information.
These instructions are mandatory to ship with Chinese companies, shores, and systems. The legal framework is contained within Notice of the General Administration of Customs of the People’s Republic of China No. 56 of 2017. The measures were brought in place to control the inward and outward shipping of vehicles and manifests. The measure aims to standardize the declaration process to reduce inconsistencies.
Officials also hope that the measures will increase the integrity of the data that is being held about shipments. Having accurate information is an essential tool of customs management, which is something the Chinese take very seriously. Affected companies must take into consideration the security and administrative iplications necessary for compliance with the measure’s requirements.
Key Procedures and Processes
- Follow Orders 196 and 172 to the letter of the law
- Pay particular attention to time limits, packing specifications, data items, and the manifest
- Complete and refer to the change in record form within 10 working days
- Ensure that the time adjustments are made to meet all deadlines
- Ensure that all descriptions of goods are complete and accurate
The Registration Certificates
The Chinese government has started issuing the Unified Social Credit Code Registration Certificates. These certificates are meant to be issued to “social organizations.” Once the code is available, only one certificate is required. Credit information will be traced using this code as well as other important information. A “WeChat” account has been set up for qualifying organizations to share information about transitioning to the new system. Shipping agents and carriers can apply to join the forum to discuss the issues that are relevant to their line of business.
Administrative Efficiency and Compliance
It is important to remember that the Chinese government takes these measures very seriously. Failure to comply with the new measures may result in a fine or having the goods impounded. The new certificate replaces the old identification tools including the:
- Industrial and commercial registration number
- Institutional credit code
- Taxpayer identification number
The previous system which required multiple identification tools confused shipping agents and carriers. Shippers struggled to reconcile and individually follow the many previous identification tools. In that sense, USCC will help to bring rationality into the administrative processes. It also means not having to keep a long paper trail for a significant period of time. Chinese officials are very stringent about records and the explanations for them. Shippers will have to pay special attention to all the little details in the rules.
Requirements for Carriers
The authorities do not set out a supervisory framework, but customs officials will likely be conducting spot checks. Goods or shipments that are found to be out of compliance may be impounded and have fines imposed on them, accordingly. Certainly, it is advisable to keep good records of transactions and procedures so that they can be used to back up any queries from the authorities. Shippers must be informed about the new changes and their responsibilities for implementing the new measure. The Chinese government has put in place transitional arrangements for those goods that will be on the old system during transit while the measure is being rolled out.
Banned Travelers and Goods
There are bans on goods and travelers that are considered to have a bad social credit. These bans may be an alien concept to many shippers from outside China, but it basically means that the Chinese government will want to control who and what enters their borders. China will engage in a comprehensive monitoring of its own citizens and will ban those who fall outside the minimum acceptable score for traveling. Most of the low social credit scores arise from certain crimes against the Chinese state.
The civil liberties issues are unlikely to affect the shipping industry since it primarily carries goods. However, there may be certain goods that are on the banned list. It is best to consult with the authorities before accepting shipments that are not regularly done or for products that are not accurately and fully described. The issues of stowaways are likely to be dealt with using the normal procedures. However, carriers should continue to take precautions through careful checks and verification.
These changes will primarily impact carriers of the shipping industry. That means that carriers must institute certain changes in their working procedures to be able to quickly implement and abide by the new requirements. Carriers may also find it beneficial to task a specific officer with ensuring that the new system is implemented without a hitch. All members of staff must be fully trained on the new system so they can work together to implement the new practices and watch out for potential problems. The support of Chinese government departments during the implementation of the Uniform Social Credit Code measures will be invaluable.