Q: What is the concept of a bonded warehouse and what is its historical background?

A: A bonded warehouse refers to a warehouse established with the approval of the customs authorities, specifically for storing bonded goods and other goods for which customs formalities have not yet been completed.

In the early days of international trade, the attitude of open countries was: “You may do business, but you must pay first.” After World War II, internationalized mass production became the main driving force of economic development in various countries.

Facing the new situation, open countries formulated new policies to adapt to the changes. As a result, bonded supervision places offering preferential policies such as deferred payment of duties for temporarily stored foreign goods—such as bonded logistics centers and bonded warehouses—were established within the territories of these countries.

Q: What advantages does a bonded warehouse have over a Bonded Logistics Center (Type B)?

A:

Table 1: Comparison of Bonded Warehouse and Bonded Logistics Center (Type B)

It is not hard to see that, compared with the larger Bonded Logistics Center (Type B), bonded warehouses offer the advantages of a lower establishment threshold and greater flexibility.

Q: What goods can be stored in a bonded warehouse?

A: In accordance with the relevant provisions of Order No. 105 of the General Administration of Customs, the following goods may be stored in a bonded warehouse:

1.     Imported goods for processing trade;

2.     Fuel, materials and spare parts for maintenance supplied to international vessels and aircraft;

3.     Imported consignment spare parts for the repair of foreign products;

4.     Goods temporarily stored by foreign traders;

5.     General trade goods for which customs formalities have not been completed;

6.     Other goods approved by the customs for which customs formalities have not been completed.

Q: What are the functions and uses of a bonded warehouse?

A:

7.     Bonded warehousing — Under traditional general trade, imported goods may enter domestic circulation only after declaration, duty payment and customs clearance. Goods in a bonded warehouse, however, may defer the corresponding duty payment within the storage period, paying only when they are formally imported. This greatly eases the working-capital pressure on enterprises and brings convenience.

8.     Logistics distribution — A bonded warehouse can serve as a link in the global supply chain: in the process of global allocation and dispatch of goods, it acts as a connection point between the domestic and international markets, playing a bridging role between producers and consumers. This helps enterprises establish logistics distribution centers and significantly improves transport efficiency.

9.     Simple processing — Bonded warehoused goods may undergo non-substantive processing and value-added services for circulation, such as repackaging, grading and classification, marking, splitting and consolidation, to meet the growing demands of modern logistics development.

10.  Centralized customs declaration — For goods that leave the warehouse in small batches but at high frequency, bonded warehouse enterprises may submit a written application to the competent customs office to activate centralized customs declaration. Enterprises approved for centralized declaration may declare all goods leaving the warehouse within a certain period in one consolidated submission, greatly improving clearance efficiency.

Q: What are the practical applications of bonded warehouses?

A:

11.  Company A is a processing trade enterprise in China whose products are sold overseas. The imported raw materials needed for its daily production can be stored in a bonded warehouse and withdrawn as needed, greatly improving production efficiency.

12.  Company B is a large airline that has established several bonded warehouses around Beijing Capital International Airport, providing fuel, maintenance parts and catering supplies for its international flights operating at the airport.

13.  Company C is a domestic electronic products manufacturer that has imported several production lines from abroad. Imported spare parts for routine maintenance and consumable replacement of these lines can be stored in a bonded warehouse for fast and convenient release, saving the time of shipping from abroad and ensuring uninterrupted production.

14.  Company D is a large multinational group with stable global sales, having set up several goods distribution centers around the world. The bonded warehouse it established in China serves as the distribution center for the East Asia region: once customers in the region sign trade contracts, goods are dispatched directly from this bonded warehouse, saving both time and logistics costs.