Beijing Deploys Stricter Social Credits Scoring Program to Regulate International Trade

On Jan. 15, China’s General Administration of Customs (GAC) released GAC Order No. 282, “Measures of the Customs of the People’s Republic of China for the Administration of Enterprise Credit Registration and Filing.” The order updates the regulatory scheme governing China’s credit-based customs management system. Firms operating in China now face stronger penalties for customs violations, greater public disclosure requirements and a clearer credit reputational recovery process. The updated framework will enter into force on April 1, 2026.

Background

Starting in 2018, China implemented a customs credit system to better align with its social credit initiatives. The social credit system assigns individuals and organizations a reputational status based on a variety of factors, including unpaid debt or attempts to evade law enforcement. This status is then published on the Credit China platform and affects access to a variety of services such as loan applications or access to high-end consumption goods.

The customs credit system mirrors this dynamic, assigning enterprises a label based on their customs-related activity. At the highest level, enterprises are recognized as an Authorized Economic Operator (AEO) in accordance with the World Customs Organization (WCO) and enjoy expedited customs clearance and reduced inspections. At the lowest level, enterprises face severe restrictions, penalties, fines and public disclosure of violations on Credit China. Enterprises can rebuild their customs credit status via the credit repair process, which involves the correction of violations, verification and minimum durations of compliance.

Updates to Customs Credit System

Order No. 282 increases the number of credit status categories and clarifies both the punishment and credit repair process. It formally integrates an enterprise’s customs credit status within the social credit system on Credit China and improves interagency data sharing to allow for coordinated punishment or remediation. A breakdown of each level, from highest to lowest, is as follows:

The customs repair process is typically an interagency review process, led by the GAC, which considers whether an enterprise’s request for status upgrade or relief is granted. Firms must demonstrate sustained compliance and rectification of previous violations. Enterprises with a history of sustained customs violations, such as fines greater than 1 million RMB per year, failure to pay taxes three months after the deadline, or failure to pay fines for six months greater than 10,000 RMB, will face the Dishonest Enterprise rating. Firms with more severe violations, including bribing customs officials, obstruction of customs duties or repeated major infractions, face the Seriously Dishonest rating. As described above, these enterprises face major restrictions within China’s customs management process and business transactions across agencies.

Implications for Clients

Firms with operations in China will soon face greater customs compliance responsibilities to maintain positive credit standing, preserve access to trade facilitation benefits and avoid heightened restrictions and penalties under this new framework. Access to Authorized Economic Operator (AEO) benefits is a crucial competitive advantage for supply chain exposure in China and globally. Beyond increased inspections and higher compliance burdens, negative ratings now have spillover effects into Chinese business sectors at large, threatening financing opportunities and government partnerships. While certain information, such as sensitive trade secrets and national security concerns, will remain private, increased public disclosure of violations and status ratings presents significant reputational concerns. Customs compliance goes beyond administrative burdens and must be considered a core business risk to firms with supply chain exposure and operations in China.

THIS DOCUMENT IS INTENDED TO PROVIDE YOU WITH GENERAL INFORMATION REGARDING CHANGES TO CHINESE CREDIT SYSTEMS FOR IMPORTERS AND EXPORTERS. THE CONTENTS OF THIS DOCUMENT ARE NOT INTENDED TO PROVIDE SPECIFIC LEGAL ADVICE. IF YOU HAVE ANY QUESTIONS ABOUT THE CONTENTS OF THIS DOCUMENT OR IF YOU NEED LEGAL ADVICE AS TO AN ISSUE, PLEASE CONTACT THE ATTORNEYS LISTED OR YOUR REGULAR BROWNSTEIN HYATT FARBER SCHRECK, LLP ATTORNEY. THIS COMMUNICATION MAY BE CONSIDERED ADVERTISING IN SOME JURISDICTIONS.