China Customs Dispute Resolution Guide

Disputes with Chinese customs can significantly impact your import/export business. Whether it's a valuation disagreement, classification issue, or penalty, understanding your options is crucial.

Common Customs Disputes

Valuation Disputes

Customs disagrees with your declared value:

• Customs believes price is too low
• Related-party transaction adjustments
• Royalty and license fee inclusion
• Assist and tooling costs

Classification Disputes

Disagreement on HS code classification:

• Affects duty rate applied
• May trigger additional requirements
• Can impact export controls

Origin Disputes

• Questioning country of origin claims
• Free trade agreement eligibility
• Anti-dumping duty application

Penalties and Violations

• Smuggling allegations
• Misdeclaration penalties
• Documentation violations

Resolution Options

1. Informal Discussion

First step is often informal communication:

• Discuss with customs officer
• Provide additional documentation
• Clarify misunderstandings

2. Administrative Review

Formal internal review process:

• File within 60 days of decision
• Submit to customs authority that made decision
• Decision within 60 days

3. Administrative Reconsideration

Appeal to higher customs authority:

• File within 60 days of original decision
• Or after administrative review
• Decision within 60 days (extendable)

4. Administrative Litigation

Court challenge:

• File within 6 months
• Usually requires exhausting administrative remedies first
• Heard by administrative court

Preparing Your Case

Documentation

• Original customs declarations
• Commercial invoices and contracts
• Payment records
• Product specifications
• Comparable transaction evidence

Expert Support

• Customs brokers familiar with the issue
• Technical experts for classification
• Valuation specialists
• Legal counsel for formal proceedings

Penalty Mitigation

If facing penalties, factors that may reduce them:

• Voluntary disclosure
• Cooperation with investigation
• First-time violation
• Good compliance history
• Corrective measures taken

Prevention Strategies

• Advance ruling requests for classification
• Proper transfer pricing documentation
• Regular compliance audits
• Training for customs staff
• Clear record-keeping