Last week,an importer named Lao Chen at Shanghai Port almost lost everything due to the "recycled aluminum ingots" in three containers.

This batch of goods was imported from Southeast Asia,and the contract specified ADC12 (a common die-casting aluminum alloy ingot).Mr.Chen thought this was a standard product and classified it according to his usual experience.7601.2000The aluminum ingots (unforged and unrolled aluminum alloys) were successfully declared.However,during the customs inspection,it was found that the surface of the aluminum ingots was rough and contained a large number of impurities.Consequently,samples were taken for further inspection.

A week later,the inspection results came out: the impurity content exceeded the standard and did not meet the national standard of "Recycled Cast Aluminum Alloy Raw Materials" (GB/T 38472-2023).The customs directly classified it as "solid waste".Mr.Chen not only faced the huge loss of having the goods ordered to be returned,but also was transferred to the anti-smuggling department for administrative investigation.

In the import of metal raw materials,Is it raw material or waste,Is it pure metal or alloyOften,the differences lie in the components after the second decimal point.Today,we will conduct an in-depth analysis of the import process and classification pitfalls of common metal ingots such as copper,aluminum,and zinc.

I."Chemical Warfare" of Metal Ingot Classification: 0.1% Ingredient Decides Tax Code

The core of classifying unwrought metal ingots is not to look at their appearance,but to focus on their characteristics.Chemical Composition Analysis Report (COA)The Customs Tariff (HS Code) has extremely strict definitions for "pure metals" and "alloys".

The following table shows the classification logic and misconceptions of common metal ingots:

II.Standard procedures for the entire import process

The import of bulk metals involves huge amounts of money (often millions of dollars per transaction),and the prices fluctuate with the LME (London Metal Exchange).The process has an extremely low tolerance for errors.

Step 1: Contract and Pricing

Output:

• PricingModel:Metalsimportsarerarelypricedatfixedrates.Instead,theyareusuallypricedbasedonmarketfluctuations.LMEMonthlyAveragePrice+Premium/Discountor"Pricing"Thepattern.
• SOPAction:Inthecontract,itisnecessarytoclearlydefinethe"quotingperiod(QP)"andtheformulafordeterminingthefinalprice.
• CustomsDeclarationAttention:Ifthepricehasnotbeendeterminedatthetimeofcustomsdeclaration(temporaryprice),itisnecessarytofilea"formulapricingrecord"withthecustoms.Otherwise,thecustomswillquestionwhetheryourdeclaredpriceisinconsistentwiththemarketpriceonthatday,leadingtotheriskofpriceverification.

Step 2: Quality Control and Documentation

Output:

• CoreDocuments:
  • MTC(MillTestCertificate):Thequalitycertificatesissuedbysteelmillsorsmeltersmustspecifythespecificchemicalcomposition.
  • COA(CertificateofAnalysis):Third-partyinspectionreport(tobeconductedbeforeshipment).
  • CertificateofOrigin:Forcountrieswithagreedtariffrates(suchasChileancopperandAustralianzinc),Itisduty-free.
• SOP Action: Before shipping,we require the supplier to send the MTC to the domestic customs broker for processing.Pre-review classificationDon’t wait until the goods arrive before realizing that the ingredients exceed the standard and have turned into "alloy".

Step 3: Arriving at the port and making a declaration

Output:

• SingleWindowDeclarationElements:
  • GT_STATE(GoodsAttribute):Youmusttruthfullyselecteither"Normal"or"Recycled".
  • Ingredientcontent:Itisnecessarytoreportthedatainpercentages(forexample:Cu99.993%,Ag0.002%…).
  • PricingMethod:Checktheoptionfor"FormulaPricing"or"SpotPrice".
• SOP Action: If it is recycled metal,the number of the national standard that it complies with (such as "complies with GB/T 38471-2023") must be filled in the remarks column of the customs declaration form.

Step 4: Inspection and Release

Output:

• Painpoints:Metalingotsareveryheavy,andinspectionusuallyrequires"unloadingthecontainer".
• SOPAction:Preparetheworkersandforkliftsinadvance.Ifit’srecycledmetal,thecustomswillpayspecialattentiontoitWasteidentificationOncetheidentificationprocessbegins,thecustomsclearancetimewillbeextendedby15-30days,anditisnecessarytocommunicatewiththeclientinadvanceaboutthefreestorageperiod(FreeTime).

III.Invisible Risk Warning from an Expert’s Perspective

1.The Life and Death Line between "Recycled Raw Material" and "Foreign Garbage"

This is currently the biggest pitfall in metal imports.China has completely banned the import of solid waste,but allows the import of "recycled cast aluminum alloy raw materials" and "recycled copper raw materials" that meet the standards.

• Expertssuggest:Whenimportingrecycledingots,theappearancemustbeclean,freefromoilstains,impurities,andradioactivity.Donotmixloading!Ifasmallamountofwasteelectricalwiresorscrapmetalismixedintoacontainerofgoods,theentirecontainerwillbereturnedforre-export.

2.Tax risks of weight discrepancy

For metal ingots transported in bulk or in containers,there is often an error of about 3% between the shipping weight (the weight indicated on the bill of lading) and the actual weight unloaded at the port of destination.

• Expertssuggest:Iftheshortageinweightexceedsthescopestipulatedinthecontract,anapplicationmustbesubmitted.TheCIQInspectionBureauissuesaweightcertificateAndusethistoclaimcompensationfromtheforeignbusinesspartner.Atthesametime,applytothecustomstomodifythedeclarationformweight,refundtheoverpaidtaxesandmakeupfortheshortageoftaxes.Don’tdeclaretheweightaccordingtothebillofladingdirectlyforconvenience,otherwise,itwillleadtodiscrepanciesbetweentheinventoryandtheactualsituation,affectingthesubsequenttaxdeduction.

3.Hedging against exchange rate and futures risks

Metal imports are often accompanied by futures hedging.

• Expertssuggest:Thefinancedepartmentneedstonotethatimporttariffsandvalue-addedtaxesarecalculatedbasedonthe"exchangerateonthedayofdeclaration",whileforeignexchangepaymentsaremadeatthe"actualexchangerateonthedayofpurchase".Theexchangeratedifferencebetweenthesetwoandtheprofitandlossfromfuturestradingrequiremeticuloustaxprocessing.

Four,Quick Action List

For your metal ingot order,please make the payment or open a letter of credit.Before issuing the Letter of Credit (L/C),please immediately conduct the following three checks:

• IngredientPre-review:ObtainthelatestMTCfromthesupplierandcompareitwiththeannotationsoftheChinesecustomstarifftoconfirmwhethertheimpuritycontentwillleadtoachangeinthetariffcode(forexample,whetherthesiliconcontentinaluminumingotsexceedsthestandard).
• StandardCheck:Ifit’srecycledmetal,downloadthelatestGB/Tnationalstandardandsendittoforeignsuppliers,clearlystating:"Itmustcomplywiththisstandard.Otherwise,theresponsibilityforreturningthegoodsshallbebornebytheseller."
• FormulaFiling:Ifthecontractisforafloatingprice,immediatelycontactthecustomsdeclarationagencytohandlethe"formulapricingfiling"atthecustomstoavoidthehassleoffrequentamendments,cancellations,andpriceauditsinthefuture.