China Tax Alert - Issue 17, July 2014
Chinese enterprises with an AA rating and which engage in trade with Korea will now be able to enjoy expanded and preferential customs clearance benefits with the implementation of the Mutual Recognition Arrangement (MRA) between the General Administration of Customs of the PRC (GAC) and the Korea Customs Service (KCS) for Classified Management of the Enterprises System of the PRC and Certified Enterprises in Foreign Trade of the Republic of Korea.
This development can help reduce customs processing times and simplify clearance procedures for qualified enterprises. Companies with a rating lower than AA will now have more reason to consider applying for an enterprise rating upgrade, especially if they are currently transacting with Korea-based businesses (or are planning to transact with them). Meanwhile, Class AA enterprises and enterprises which will apply for this rating will need to have health checks done in advance in order to deal with customs validation.