Customs Enterprise Classification System Explained
The Customs Enterprise Classification System is used by Chinese customs officials that ranks companies engaged in import and export activities. Companies in good standing receive top ratings and enjoy benefits including reduced restrictions, faster customs clearance, and support.
As you begin your research, planning, and due diligence activities in preparation for doing business with a potential Chinese company, you’ll likely encounter several terms, classification schemes, and rating systems that categorize Chinese companies according to various metrics. (Explore our articles on the China Foreign Trade Registration and the China Customs Registration). One important system is the China Customs Enterprise Classification system that ranks companies engaged in import and export activities.
China customs introduced a new Customs Enterprise Classification system in May 2018 to align more closely with a comprehensive nationwide overhaul of the country’s social credit system. (The previous system ranked companies along a five-point system: AA, A, B, D, or D; from highest to lowest ranking)
China Customs Enterprise Classification System: Decoded
There are four levels in the classification system:
- Advanced Certified Enterprise
- General Certified Enterprise
- General-Credit Enterprise
- Discredited Enterprise
In addition to these new classification levels, the new system also allows companies with stellar records to apply for an Authorized Economic Operator (AEO) status. AEO designation provides certain companies with simplified processes, release from excessive inspections, and other benefits. You’ll see that designation appear in the first two ranking levels below.
1. Advanced Certified Enterprises
- Rating: Three stars
- Certified: AEO status is confirmed
- Chinese: 高级认证企业
- Also referred to as: “Senior Certified Enterprise”, “Advanced Authorized Enterprise”
The highest authorization level affords companies with pre-arrival customs declaration, designated customs coordinators, and reduced inspection rates. Companies must apply to renew and reauthorize this status every three years.
2. General Certified Enterprises
- Rating: Two stars
- Certified: AEO status is confirmed
- Chinese: 一般认证企业
- Also known as: “General Authorized Enterprise”
Companies with this status enjoy priority status when clearing goods through customs and reduced inspection rates.
3. General-Credit Enterprises
- Rating: One star
- Certified: AEO status not granted
- In Chinese: 一般信用企业
- Other translations: “General Enterprise”
Companies with a regular social credit rating that have not applied for AEO status fall into this category.
4. Discredited Enterprises
- Rating: No stars
- Certified: AEO status not granted
- In Chinese: 失信
- Other translations: “Dishonest Enterprise”
Companies with this rating are subject to very strict rules and regulations with their import and export activities, including more stringent audits and inspections.
China Customs Enterprise Classification System: Comparison
The table below shows approximately how the new classification system compares with the previous one.
| Previous Classification System | New Customs Enterprise Classification System | Chinese Text on Customs Enterprise Classification System Logo |
|---|---|---|
| AA | Advanced Certified Enterprise | 高级认证企业 |
| A | General Certified Enterprise | 一般认证企业 |
| B | General-Credit Enterprise | 一般信用企业 |
| C, D | Discredited Enterprise | 失信企业 |
You’ll notice that the official logo for both the Advanced Certified Enterprise and the General Certified Enterprise also carry the “AEO” designation.
Additional Resources
We know doing business in China is complex and challenging…especially when you don’t know where to start. Nuna Network helps you navigate the complexities of partnering with Chinese companies, providing information on everything you need to know before you do business together.