Questions and Answers for Trade in Goods

(Courtesy Translation)

Q: What are the criteria for the Macao producer to apply for a Certificate of Origin (CO(CEPA))?
A: The manufacturer has to hold a valid industrial license, and the relevant product must comply with the CEPA rules of origin.

Q: If an exporter would like to claim the CEPA zero tariff, is it necessary to apply for the “Certificate of Service Supplier”?
A: Not necessary.

Q: Which government department is in charge of the issuance of CO(CEPA)?
A: The issuing authority of certificates of Macao origin is the Economic Services of the Macao Special Administrative Region Government. Applicant can submit the application to the Certificate of Origin Issuance Division at Rua Dr. Pedro José Lobo, 1-3, 3/F, Macao.

Q: What are the procedures for applying for a CO(CEPA)?
A: Before applying for a CO(CEPA), the applicant is required to submit the “Application Form for the Certificate of Origin”, which details the production information of the product and this form is available for sale in the Government Printing Bureau, to the Certificate of Origin Issuance Division. Upon the approval, the applicant is required to submit the following documents to the Certificate of Origin Issuance Division:-

1. Application form (form ECO-026), available for sale in the Government Printing Bureau;
2. The completed CO (form ECO-090), available for sale in the Government Printing Bureau; and
3. The relevant commercial invoice, in duplicate

If the documents are duly completed, the Macao Economic Services will issue the CO(CEPA) within two days, and the applicant can collect the CO from the reception counter at Rua Dr. Pedro José Lobo, 1-3, 2/F, and the fee is MOP70.00 per certificate.

Q: How long is the approved “Application Form for the Certificate of Origin” valid for?
A: The approved “Application Form for the Certificate of Origin” is valid for one year.

Q: How to make enquiry for the application procedures of a CO(CEPA)?
A: Interested parties can consult the Certificate of Origin Issuance Division or through telephone at 85972328/85972338.

Q：What are CEPA rules of origin?
A: The Rules of Origin of CEPA goods are determined in accordance with the principles set out below:

1. goods wholly obtained in Macao are regarded as originating in Macao; or
2. goods not wholly obtained in Macao are considered as originating in Macao only if they have undergone “substantial transformation” in Macao. “Substantial transformation” includes: 
   1. “manufacturing or processing operations” refers to the principal manufacturing or processing operations carried out Macao which confer essential characteristics to the goods derived after the operations;
   2. “change in tariff heading” refers to the processing and manufacturing operations of non-originating materials carried out in Macao and resulting in a product of a different four-digit tariff heading under the “Product Description and Harmonised System Codes”.  Moreover, no production, processing or manufacturing operations will be carried out in countries or territories other than Macao which will result in a change in the four-digit tariff heading;
   3. “value-added content” refers to the total value of raw materials, component parts, labour costs and product development costs exclusively incurred in Macao being greater than or equal to 30% of the FOB value of the exporting goods, and that the final manufacturing or processing operations should be completed in Macao. The formula for calculation is as follows:
      
      

      value of raw materials + value of component parts + labour costs + product development costs
      	x 100% ≥ 30%
      FOB value of the exporting goods

      
      
   4. “other criteria” refers to methods agreed by the Mainland and Macao in determining origin, other than “manufacturing or processing operations”, “change in tariff heading” and “value-added content”.
   5. “mixed criteria” refers to the use of two or more of the above criteria in determining origin

Whereas the rules of origin have not been fully justified in the context of substantial transformation, the Mainland and Macao may agree upon to adopt other additional conditions (such as brand requirement, etc.) for such determination.

Q: If the goods have only undergone packaging process in Macao, can the goods be determined as conforming to the CEPA Rules of Origin?
A: According to the CEPA rules of origin, simple diluting, mixing, packaging, bottling, drying, assembling, sorting or decorating will not be regarded as substantial transformation. As such, packaging process cannot fulfill the CEPA rules of origin.

Q: Can Macao origin CEPA goods be transshipped via Hong Kong into the Mainland?
A: In accordance with the provisions of article 10 of the Annex 2 of the CEPA, CEPA goods can be transshipped via Hong Kong.

Q: How long will a CO(CEPA) be valid for?
A: In accordance with the provisions of article 6 of the Annex 3 of the CEPA, a CO(CEPA) will be valid for 120 days from the date of issue.

Q: What language should be used to fill in a CO(CEPA)?
A: A CO(CEPA) should be input in Traditional Chinese and it is suggested to have the CO printed to avoid illegibility of handwriting, however, handwritten application will still be accepted.

Q: From 1st January 2006, can all the Macao origin goods benefit from the CEPA zero tariff preference?
A: In accordance with the provisions of the Supplement II to the CEPA, from 1st January 2006, the Mainland fully implements zero tariff on imported goods of Macao origin. Imported goods subject to zero tariff must fulfill the rules of origin confirmed after consultation by both sides. However, goods prohibited from imports into the Mainland are excluded.
For goods not covered by the CEPA rules of origin, the Macao manufacturers can submit requests for developing the CEPA rules of origin, and the procedures are as follows:
As the CEPA rules of origin consultations will be held twice a year, the manufacturers can submit the duly completed “Application Form for the Request of Zero Tariff for Macao Origin Goods” (form can be downloaded from our website) to the Macao Economic Services before 15th February or 15th August every year. Applications received before 15th February can enjoy the zero tariff treatment from 1st July of the same year, while applications received before 15th August can enjoy the zero tariff from 1st January of the following year.
The application form can be sent in person or by post to CEPA Centre (Rua Dr. Pedro José Lobo, 1-3, 3/F) or the reception counter (Rua Dr. Pedro José Lobo, 1-3, 2/F).

Q: A pair of men’s 100% cotton woven pants, with panels imported into Macao from the Mainland and being assembled in Macao, and then transported to the Mainland for packaging into plastic bags, and transported back to Macao afterwards, does this product comply with the CEPA rules of origin?
A: The product described above should be categorized into the Mainland tariff code 6203.4290, and the relevant rules of origin are “Assembly of parts into garment. The principal process is sewing of parts into garment.” As such, this product complies with the CEPA rules of origin.

Q: For goods imported into the Mainland under the CEPA, can the goods be exempted from the value-added tax?
A: For goods imported into the Mainland under the CEPA, the goods can benefit from the zero tariff treatment, however, if there are other regulations, the goods must also comply with the relevant provisions. In other words, the value-added tax is required.

Q: How to fill in the column “vessel/ flight/ train / vehicle number” in a CO(CEPA)?
A: This column must be filled in according to the mode of transport, such as by sea, by air, by train or by vehicle; and the number can be filled in if necessary.

Q: If the CEPA goods do not bear any brand names, what is needed to fill in the column “Brand Name” in a CO(CEPA)?
A: It can be left blank or completed with “-”.

Q: In the event of loss of a CO(CEPA), can it be re-issued?
A: In accordance with the provisions of article 6.9 of the Annex III of the CEPA, in the event of theft, loss or damage of a certificate of origin, the exporter or manufacturer may make a written request to the Macao Economic Services for the issue of a duplicate certificate. The exporter or manufacturer will ensure that the original copy has not been used. The duplicate certificate will bear the words “certified true copy”. If the original certificate has been used, the duplicate certificate will be invalid. If the duplicate certificate has been used, the original certificate will be invalid.

Q: How to fill in the column “Port of Discharge” in a CO(CEPA)?
A: To fill in the name and code of the international trade port (customs establishment) for customs clearance.

Q: If the import of CEPA goods is to be declared at the Zhuhai Heng Qin Port, what is the name and code of international trade port (customs establishment) to be filled in the column “Port of Discharge”?
A: As the Zhuhai Heng Qin Port is under the authority of the Gong Bei Trade Port, therefore, the code “5700 Gong Bei Trade Port” should be filled in the column “Port of Discharge”.

Q: How to fill in the column “Quantity (Unit)”in a CO(CEPA)?
A: Reference should be made to the unit of the specific goods for import into the Mainland, for example, the unit for a pair of men’s cotton woven pants (Mainland Tariff Code 6203.4290) is piece or kilogram.

Q: What are the current CEPA rules of origin for Instant Noodle?
A: With regard to the origin criteria for Instant Noodle (Mainland Tariff Code：19023030), after the consultation between the relevant departments of both the Mainland and Macao, it was agreed to revise the origin criteria with effect from 1st July 2006 as “(1) Manufactured from cereals or flour. The principal processes are mixing, cooking and forming. If baking is required, it must be done in Macao; or (2) Manufactured from dried noodle, meat and vegetables. The principal processes are cooking, flavouring, mixing and cooling.”

Q: What are the current CEPA rules of origin for Other Portland Cement?
A: With regard to the origin criteria for Other Portland Cement (Mainland Tariff Code of 25232900), after the consultation between the relevant departments of both the Mainland and Macao, it was agreed to revise the origin criteria with effect from 15th June 2004 as “Manufactured from cement clinkers. The principal processes are averaging of clinkers, formulation, grinding and classification.”

Q: For the exports of CEPA goods, what type of declaration form the exporter needs to submit to the Macao Customs Service for export formalities?
A: The exporter needs to submit the Declaration Form (B) to the Macao Customs Service, the relevant declaration form is available for sale in the Government Printing Bureau.

Q: If the Macao CEPA goods are transshipped via Hong Kong into the Mainland, what types of documents are required by the Mainland Customs?
A: If the Macao CEPA goods are transshipped via Hong Kong, the “Certificate of Non-Manipulation” issued by the China Inspection Company Limited (HK) and the bills of lading from Macao to each place of transshipment are required for customs declaration into the Mainland.

Q: What specifics need to be taken notice of for filling in the Declaration Form (B) for the export declaration in the Macao Customs Service?
A: Apart from the usual requirement for filling in the Declaration Form (B), the 8-digit Mainland Tariff Code and the FOB price (in MOP) should be taken notice of.

Q: What are the control measures for the origin of CEPA goods?
A: The control measures for the origin of CEPA goods can be categorized into three areas:

1. The archive of production record: the manufacturer is required to keep the production-related documents at the location of production or office, and this information should be kept for at least three years and made available upon request by the Macao Economic Services
2. Verification of the production capacity of the manufacturer: the Macao Economic Services perform the verification on a non-periodical and sampling basic. The investigation is aimed to analyze if the production capacity matches with the production volume and if there are any violations of the rules of origin. The investigation composed of two parts, the first part is the examination of documents, while the second part is on-site survey.
3. Verification of certificate of origin: information on the certificate of origin will be transmitted by means of electronic data interchange to the Customs General Administration. In making an import declaration, the Mainland Customs will verify the certificate of origin against the electronic data.

Q: How many items can be put in one CO(CEPA)?
A: In accordance with the provisions of article 6 of Annex III of the CEPA, each certificate of origin will only cover one batch of goods that enter the Mainland at the same time. A CO(CEPA) will contain not more than five eight-digit tariff heading items.

Q: Can the labour costs, value of the raw materials and product development costs for the process operations carried out in the Mainland be included in the calculation of the “value-added content” of the CEPA rules of origin?
A: According to the CEPA rules of origin, only the total value of raw materials, component parts, labour costs and product development costs exclusively incurred in Macao can be included in the “value-added content”. Therefore, the labour costs, value of the raw materials and the product development costs for the process operations carried out in the Mainland cannot be included in the calculation.

Q: For the application of a CO(CEPA), does the applicant need to collect the CO from the bank?
A: The applicant does not need to collect the CO(CEPA) from the bank, the applicant can collect the CO at the reception counter at Rua Dr. Pedro José Lobo, 1-3, 2/F, and the fee is MOP70.00 per certificate.

Q: Under the CEPA rules of origin, what is meant by “change in tariff heading”?
A: “Change in tariff heading” refers to the processing and manufacturing operations of non-originating materials carried out in Macao and resulting in a product of a different four-digit tariff heading under the “Product Description and Harmonised System Codes”. Moreover, no production, processing or manufacturing operations will be carried out in countries or territories other than Macao which will result in a change in the four-digit tariff heading. For example, if a product is made up of two types of imported raw materials, and their four-digit tariff heading are 1234 and 1235 respectively. When the raw materials are transformed into a product after the manufacturing operations in Macao, the four-digit tariff heading is 1236. This implies that after the manufacturing operations of the raw materials, there is a change to the four-digit tariff heading of the product. And in this case, the product conforms to the “change in tariff heading” criteria.