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Sunday, December 10, 2006

Circular Concerning the Administration of Insurance Companies with Foreign Investment

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Decree [2001] No.336 of the State Council The Regulation of the People's Republic of China on the Administration of Insurance Companies with Foreign Investment has been passed at the 49th executive meeting of the State Council on December 5, 2001 and is hereby promulgated for implementation as of February 1, 2002.Premier of the State Council: Zhu Rongji December 12, 2001(11-26 10:47)

Chapter I General Provisions


HuiFa [2003] No.44
March 29, 2003
Branches and foreign exchange administration departments under the State Administration of
Foreign Exchange in provinces, autonomous regions and municipalities directly under the Central
Government, and branch administrations of Shenzhen, Dalian, Qingdao, Xiamen, Ningbo:
For the purpose of regulating the administration on foreign exchange of fund management
companies with foreign shares, this Circular is hereby issued to you concerning administration of
foreign exchange of the fund management companies with foreign shares:

I. "Fund management companies with foreign shares" mentioned in this Circular shall include the
fund management companies which corporate form are changed through acquirement by transfer of
or through subscribing stock equity of a domestic fund management company by foreign
shareholders, or the fund management companies established through joint capital contribution by
foreign shareholders and domestic shareholders.

II. No fund management company with foreign shares shall open foreign exchange account before
obtaining approval from the China Securities Regulatory Commission (hereinafter referred to as the
"CSRC") for granting commencement of its business.
(I) Where the CSRC has granted approval for commencement of business to a fund management
company established through joint capital contribution by domestic shareholders and foreign
shareholders, the company may apply to local administration of foreign exchange for opening
foreign exchange capital account at a domestic designated bank of foreign exchange by presenting
the following documents and materials:
1. A written application to open account;
2. Joint venture agreement/contract;
3. The approval document from the CSRC for granting commencement of its business.
4. The Approval Certificate of Foreign Investment Enterprise issued by the foreign economic and
trade department;
5. The Notice for Advance Examination and Approval of an Enterprise Name issued by the
administration of industry and commerce of the State; and
6. Other documents and materials required by the Administration of Foreign Exchange.
(II) A fund management company with foreign shares which corporate nature has been changed
through subscribing the stock equity of an already established domestic fund management company
by foreign shareholders may apply to local administration of foreign exchange to open foreign
exchange capital account at a domestic-designated foreign exchange bank by presenting the
necessary documents including subscription agreement/contract, approval documents of CSRC and
approval certificate of foreign economic and trade department.

III. Verification on input of capital fund from foreign shareholders into a fund management
company with foreign shares shall be conducted in accordance with this Circular of Ministry of
Finance and the State Administration of Foreign Exchange on Further Strengthening Capital
Verifications on Enterprises with Foreign Investment and on Improving the System of Foreign
Investment and Foreign Exchange Registration (CaiKuai [2002] No.1017).

IV. The scope of income for a foreign exchange capital account of the fund management company
with foreign shares shall be the capital contribution remitted by foreign shareholders. The scope of
expenditure shall be payment under current account and other foreign exchange payments approved
by the administration of foreign exchange.

V. In case a fund management company with foreign shares needs to settle the exchange at the
foreign exchange capital account, it shall make application to the local administration of foreign
exchange by presenting the following documents and materials, and handle settlement procedures at
a designated foreign exchange bank based on approval documents of the administration of foreign
exchange:
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(I) A written application for settlement;
(II) Vouchers representing usage of the settled fund or description of the same;
(III) Bank statements of the foreign exchange capital account in current period of the company;
and
(IV) Other documents required by the administration of foreign exchange.

VI. In the case a fund management with foreign shares needs to pay profits to foreign shareholders, it
shall make applications to the administration of foreign exchange at its locality by presenting the
following documents and materials, and handle purchase and payment of exchange procedures at
designated foreign exchange bank on basis of approval documents of the administration of foreign
exchange:
(I) A written application for purchase and payment of exchange;
(II) Tax payment receipt and tax declarations form;
(III) Auditing report issued by an accounting firm on profits and profits distribution at the year of
realization of profit of the company;
(IV) Resolution passed by the board of directors of the company on profit distribution;
(V) Bank statements of the foreign exchange capital account in current period of the company.
(VI) Other materials required by the administration of foreign exchange.
Within four months after the expiry of each fiscal year, the fund management with foreign
shares that fails to purchase and remit outside country the exchanges to pay profits to foreign
shareholders due in that year shall report to the administration of foreign exchange for record. The
record documents of the administration of foreign exchange shall be the necessary document for
purchase or remittance of profits to foreign shareholders thereafter.

VII. Where the corporate nature is changed through stock transfer from a domestic fund management
company to foreign shareholders, such fund management company shall report to the administration
of foreign exchange for record at its locality within five working days after obtaining formal
approval documents from the CSRC. Where the transferor is a domestic organization, it shall make
application to the administration of foreign exchange at its locality, within five working days after
receiving the foreign exchanges from the transferee, and present the documents including written
application, transfer agreement, approval document of the CSRC and approval certificate of foreign
economic and trade department.

VIII. Where transfer of stock equity of a fund management company with foreign shares is approved
by CSRC and foreign economic and trade department, it shall report to the administration of foreign
exchange at its locality record within five working days of obtaining approval documents from the
foreign economic and trade department. Where stock equity is transferred from foreign shareholders
to domestic organizations and the transferee needs to pay to the foreign investor for the transfer, it
shall apply to the administration of foreign exchange at its locality for approval of purchase and
payment of exchange by presenting the following documents and materials:
(I) A written application for purchase and payment of exchange;
(II) The stock equity transfer agreement;
(III) Approval documents from the CSRC and foreign economic and trade department granting
approval to the transfer;
(IV) Bank statements on all foreign exchange account of the transferee;
(V) If proceeds are accrued by the transfer on part of the foreign party, the transferee shall present
tax payment receipt on withholding income tax.
(VI) Other materials required by the administration of foreign exchange.

IX. Where the foreign shareholder of a fund management company with foreign shares has obtained
approval from the CSRC and foreign economic and trade department to reduce or withdraw its
investment therein, the company shall apply to the administration of foreign exchange at its locality
for approval of purchase and payment of exchange by presenting the following documents and
materials:
(I) A written application for purchase of exchange;
(II) Resolution passed by the board of directors of the company on reduction (withdrawal) of
investment by foreign party;
(III) Approval documents from the CSRC and foreign economic and trade department granting
approval to the reduction (withdrawal) of investment;
(IV) Latest capital verification report and auditing report of the company issued by an accounting
firm;
(V) Bank statement of foreign exchange capital account of the company;
(VI) If proceeds are accrued by the reduction (withdrawal) of investment on part of the foreign
party, tax payment receipt on withholding income tax shall be presented.
(VII) Other materials required by the administration of foreign exchange.

X. Fund management companies with foreign shares shall only conduct businesses specified by
CSRC. Without approval of the State Administration of Foreign Exchange, they shall not conduct
any foreign exchange business under capital items such as financing from abroad or providing
guarantees to foreign parties etc.

XI. The State Administration of Foreign Exchange and its branches shall have the power to make onsite
investigations to the foreign exchange capital account of fund management companies with
foreign shares and to their settlement and payment of exchange. Fund management companies with
foreign shares shall actively render assistance to relevant investigations and shall not provide false
information.

XII. Where a fund management company with foreign shares acts in breach of this Circular and
other regulations on administration of foreign exchange, the State Administration of Foreign
Exchange and its branches may impose sanctions on it in accordance with the Regulations of the
People's Republic of China on Administration of Foreign Exchange and other regulations on foreign
exchange control.

XIII. This Circular shall enter into force as of May 1, 2003. The State Administration of Foreign
Exchange shall be responsible for the interpretation of this Circular.

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Provisions Concerning the Administration of Foreign-funded Business-starting Investment Enterprises

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The Provisions Concerning the Administration of Foreign-funded Business-starting Investment Enterprises were adopted at the 11th ministerial meeting of the Ministry of Foreign Trade and Economic Cooperation. It is hereby promulgated and shall be implemented as of March 1, 2003.

Chapter I General Provisions


Article 1
The present Provisions are formulated to encourage foreign-funded companies, enterprises and other economic organizations or individuals (hereinafter referred to as foreign investors) to come to China to engage in business-starting investments, and to establish and perfect the mechanism of business-starting investments in China in accordance with the Law of the People's Republic of China on Chinese-foreign Contractual Joint Ventures, the Law of the People's Republic of China on Chinese-foreign Equity Joint Ventures, the Law of the People's Republic of China on Foreign-capital Enterprises, the Company Law of the People's Republic of China and other related laws and regulations.
Article 2
The term "foreign-funded business-starting investment enterprise " (hereinafter referred to as FBIE" refers to the foreign-funded investment enterprises established by foreign investors or by foreign investors jointly with companies, enterprises or other economic organizations established and registered in China in accordance with the Chinese law (hereinafter referred to as Chinese investors). To establish an FBIE shall be in conformity with the present Provisions. It shall mainly engage in business-starting investments.

Article 3
The term "business-starting investment" means making principal equity investments to high and new tech enterprises that haven't been listed in the stock market (hereinafter referred to as invested enterprises), and providing management services to them for the prospective capital gains.

Article 4
An FBIE is allowed to take the form of the non-legal-person organization or the corporate organization.
As to a non-legal-person organization, the investors shall bear joint liabilities for its debts.
The investors may also specify in the contract of the FBIE that: When the assets of an FBIE are not enough to clear the debts of this enterprise, the indispensable investors as stated in Article 7 shall bear joint liabilities and the other investors shall bear the liabilities to the company within the limit of contributions made by each of them.
For a corporate-form FBIE, the investors shall bear the liabilities to the company within the limit of the amount of investment made by each of them.

Article 5
The FBIEs shall abide by relevant laws and regulations of China, shall be in conformity with the policies of foreign investment industries and shall not damage the public interests of China.
The legitimate businesses and lawful rights and interests of the FBIE within the borders of China shall be subject to the protection of Chinese law.

Chapter II Establishment and Registration

Article 6
To establish an FBIE, the following requirements shall be met:
(1) There are more than 2 but less than 50 investors, and at least one shall be an indispensable
investor as stated in Article 7;
(2) The investors of a non-legal-person organization shall subscribe to a minimum total contribution in the sum of 10, 000, 000 U.S. $. The investors of an incorporated FBIE shall subscribe to a minimum total capital in the sum of 5, 000, 000 U.S. $. Except for the indispensable investors as provided in Article 7, each of the other investors shall subscribe to a minimum capital contribution no less than 1, 000, 000 yuan. Foreign investors may contribute their investments in convertible currencies and Chinese investors may contribute their investments in Renminbi.
(3) It shall have definite organization form;
(4) It shall have a definite and legitimate investment direction;
(5) Except that the operations of such an enterprise are subject to the management of a businessstarting
investment management company under authorization, an FBIE shall have at least 3
professional managerial persons who have practical experience in business-starting investment;
(6) It shall meet the other requirements as provided in laws and administrative regulations.

Article 7
An indispensable investor shall meet the following requirements:
(1) Business-starting investment is its main business;
(2) The accumulative total capital managed by it in the three years before the application is not less than 100, 000, 000 U.S. dollars, and of which no less than 50, 000, 000 U.S. dollars have been used in business-starting investment If the indispensable investor is a Chinese investor, the accumulative total capital managed thereby in the three years before the application is submitted is not less than 100, 000, 000 Yuan, and of which no less than 50, 000, 000 yuan have been used in business-starting investment; (3) It shall have at least 3 professional managerial persons who have practical experience in business-starting investment;
(4) If the affiliated entity of an investor meets the above-mentioned requirements, the investor may apply for the status of an indispensable investor. The term "affiliated entity" in this paragraph refers to an entity controlled by the investor, or an entity that controls the investor, or another entity that subject to the control of the same entity that controls the investor. The term "control" in this paragraph means that the controlling party has a voting power of more than 50 % over the controlled party.
(5) Neither the above-mentioned indispensable investor nor its affiliated entity shall have any record of being prohibited from engaging in business-starting investment or business of investment consultancy, or being punished for the reason of cheat, by the judicial departments and other relevant agencies of the country where it is located;
(6) An indispensable investor of a non-legal-person enterprise shall subscribe to and actually pay not less than 1 % of the subscribed contributions and the actual total contributions respectively, and it shall bear joint liabilities for the debts of this enterprise. An indispensable investor of an incorporated FBIE shall subscribe to and actually pay not less than 30% of the subscribed contributions and the actual total contributions respectively.

Article 8
The following procedures shall be observed in the establishment of an FBIE:
(1) The investors shall submit the establishment application and relevant documents to the administrative departments in charge of foreign trade and economic cooperation at the provincial level of the place where the FBIE is to be established.
(2) The administrative departments in charge of foreign trade and economic cooperation at the provincial level shall complete the original examination and report to the Ministry of Foreign Trade and Economic Cooperation (hereinafter referred to as the MOFTEC) within 15 days as of the acceptance of the above-mentioned materials.
(3) The MOFTEC shall, with the consent of the Ministry of Science & Technology£¬make a written decision on approval or disapproval within 45 days as of the acceptance of all the abovementioned materials. And it shall issue a Certificate of Approval for Foreign-invested Enterprises to the approved enterprises.
(4) With the approved of establishing an FBIE, the applicant shall file an application for registration at the State Administration of Industry and Commerce or at local bureaus with its authorization by presenting the Certificate of Approval for Foreign-invested Enterprise within one month as of the acceptance of the Certificate of Approval for Foreign-invested Enterprise.

Article 9
The following documents shall be submitted to the MOFTEC when applying for the establishment of an FBIE:
(1) an establishment application signed by the indispensable investors;
(2) contracts and articles of association of the FBIE signed by all the investors;
(3) a written declaration made by the indispensable investors (covering: a. the investors meet the equirements as provided in Article 7; b. all the materials submitted are genuine; and c. the investors
will strictly abide by the present provisions and other relevant Chinese laws and regulations);
(4) a letter of legal advice issued by a law firm affirms that the legal indispensable investors exist and the above-mentioned declaration has got valid authorization and has been signed;
(5) explanations of the business-starting operations of the foreign investors, explanations of the capital managed by them of the three years before the application is submitted, explanations of the investment made among the capital managed by them of the three years before the application is submitted, resumes of its professional managerial persons of business-starting investment;
(6) the registration certificate of the investors (photocopy) and the certificate of the legal representative (photocopy);
(7) the notice of pre-approval of the name of the FBIE issued by the name registration organ;
(8) If the qualifications of the indispensable investors are based on the requirements as provided
in paragraph (4) of Article 7, they shall submit relevant materials of the affiliated entity that meets the requirements;
(9) other documents related to the establishment application as required by the examination and approval authority.

Article 10
The FBIEs shall give a clear indication of "Business-starting Investment" in its name.
Except for business-starting investment enterprises, none of the other foreign investment enterprises
may use the aforesaid words in their name.

Article 11
In applying for establishing an FBIE, the following documents shall be submitted to the
registration organ and shall be responsible for their authenticity and effectiveness:
(1) registration application signed by the chairman of the board of directors or by the person-incharge
of the joint management committee;
(2) contracts, articles of association, the documents and certificate of approval issued by the
approving authorities;
(3) legal license to do business or the certification of the ID of the investor;
(4) credit certification of the investor;
(5) appointment documents and the certification of the ID of the legal representative and archival
documents of the directors and managers of this enterprise;
(6) notice of pre-approval of its name;
(7) the certification of the address of the enterprise and the certification of its business offices.
In the case of applying for establishing a non-legal-person organization, the applicant shall
submit the articles or agreement of overseas indispensable investors besides the aforesaid materials.
Where an enterprise includes investors as provided in Article 7 (4) of the present Provisions, the
applicant shall submit the letter of undertaking issued by its affiliated entity, which is to bear the
joint liabilities of investments. All of the aforesaid documents should be written in Chinese. Those
written in foreign languages other than Chinese shall be accompanied by good Chinese translations.
An FBIE should apply to the original registration organ for the modification registration of its
modified registration matters.

Article 12
Upon the approval of the registration organ, the incorporated FBIEs shall be issued the
business license of legal entity, and the non-legal-person FBIEs shall be issued a business license.
A business license shall clearly states the total registered capital of the investors and the names
of the dispensable investors.

Chapter III Capital Contributions and Relevant Modifications

Article 13
The capital contributions made by the investors of a business-starting enterprise without
qualifications of legal entity and the relevant modifications shall be in conformity with the
following:
(1) The investors may pay the their subscribed capital by installments according to the
proceedings of the business-starting investment, but the longest term shall be no more than 5 years.
The amount of capital to be invested at each stage shall be decided by the FBIE itself according to
the contract of the enterprise and the agreement concluded by it and its invested enterprise. In the
contract, the investors shall stipulate liabilities of the investors who do not pay the subscribed capital
contributions and relevant measures.
(2) During the period of the continuous existence of the FBIE, the investors generally shall not
reduce their subscribed amount of capital. Upon approval of the examination and approval organ, an
investor may reduce its subscribed amount of capital if the said amount exceeds 50 % of the total
provided that it has obtained the consent of the indispensable investors and the business-starting
FBIE isn't in violation of the requirement of minimum registered capital of 1, 000, 000 U.S. $ (The
present provision shall not be applicable to a case where an investor reduces its invested amount of
capital in accordance with item (5) of this Article or the FBIE reduces the untapped capital when its
term of investment expires). In this case, the investors shall stipulate the conditions, procedure and
methods for reducing the subscribed amount of capital in the contract of the FBIE;
(3) Indispensable investors shall not withdraw from the FBIE during the period of its continuous
existence. A necessary withdrawal under a special circumstance shall be upon the consent of the
investor whose investment amount exceeds 50% of the total amount, and the relevant rights and
interests shall be assigned to the new investor who satisfies the conditions as provided in Article 7.
The contract and the articles of association of this enterprise shall be modified and shall be reported
to the check and approving authority for approval.
The transference of the other investors' subscribed amount of capital or invested amount of
capital shall be done in compliance with the contract of the FBIE and the assignee shall meet the
requirements as provided in Article 6. All investors shall make relevant modifications in the contract
and the articles of association of the FBIE and report to the examination and approval organ for
archival purposes.
(4) After an FBIE has been established, the investment application of new investors shall be in
conformity with the present Provisions and the stipulations in the contract, and shall be consented by
the indispensable investors. Relevant modifications shall be made in the contract and the articles of
association of the FBIE and shall be reported to the examination and approval organ for archival
purposes.
(5) Among the incomes of an FBIE arising from selling or disposing of the interests of its invested
enterprise by other means, the part equivalent to its original amount of investment may be directly
allocated to all the investors. Such allocation constitutes a reduction of the invested amount of the
investors. An FBIE shall stipulate concrete methods of allocation in its contract, and at least 30 days
before it makes such allocation, it shall submit an archival statement on the request of reducing the
relevant invested amount of the investors. In the said statement, it shall prove that the amount of the
investments to be made by the investors and the other capital it has at that time is at least in
conformity with the investment obligations that the FBIE shall undertake at that time. However,
such allocation shall not be a plea to the litigation resulted from its violation of any of the
investment obligations.

Article 14
When a non-legal-person organization files an application to the registration authority for
modifying its registration, the archival evidential documents issued by the above-mentioned
examination and approval organ may replace relevant documents for examination and approval.

Article 15
Having made investments according to the proceedings of business-starting investments
and upon relevant capital verification report, the investors of the FBIE shall file an application to the
original registration organ for handling the archival procedures for their investments. The
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registration organ shall fill up the number of its actual amount of capital behind the item of
"Capital Amount" on its Business License.
Where an FBIE makes no investment or fails to make the total investment, it shall be subject to
penalties imposed by the registration organ in accordance with the existing regulations.

Article 16
The investors of an FBIE shall make investments and relevant modifications in accordance
with the existing regulations.
Chapter IV Institutional Structure

Article 17
An FBIE in the form of non-legal-person organization shall establish a joint management
committee. An FBIE in the form of company shall establish a board of directors. The investors shall
stipulate on how to organize the joint management committee or the board of directors in the
contract and in the articles of association of the FBIE. The joint management committee and the
board of directors shall manage the enterprise on behalf of its investors.

Article 18
The subordinate administrative departments of the joint management committee and the board of directors shall, in accordance with the power as specified in the contract and the articles of association of the FBIE, take charge of the routine managerial work and execute the investment decisions made by the joint management committee and the board of directors.

Article 19
The person-in-charge of an administrative department shall satisfy the following conditions:
(1) shall have full capacity for civil conduct;
(2) shall have no record of criminal offence;
(3) shall have no record of bad operations;
(4) shall be experienced in business-starting investments and have no record of illegal practices.
(5) shall meet the other requirements of the examination and approval organ.

Article 20
The administrative departments shall regularly report the following to the joint management committee and the board of directors:
(1) significant investments under authorization;
(2) metaphase & annual performance reports and financial statements;
(3) other matters as provided in laws and regulations;
(4) relevant matters as stipulated in the contract and in the articles of association of the FBIE.

Article 21
The joint management committee and the board of directors may grant the power of
routine administration to a business-investment management enterprise or another FBIE rather than
establish administrative departments. The business-investment management enterprise may be a
domestically-funded business-starting investment enterprise or a foreign-funded one or an overseas
enterprise. In this case, the business-starting investment enterprise and the business-starting
investment management enterprise shall conclude a managerial contract, stipulating respective rights
and interests. Such a contract shall not come into effect until it has been agreed by all the investors
and has been approved by the examination and approval organ.

Article 22
The investors of an FBIE may, by reference to the international practices, stipulate interior system for income allocations and incentive mechanism in the business-starting investment contract.

Chapter V Business-Starting Investment Management Enterprise

Article 23
An entrusted business-starting investment management enterprise shall meet the following conditions:
(1) To accept the entrustment of the FBIEs and to manage the investments made by them shall be
its main business;
(2) It shall have at least 3 professional managerial persons who have at least three years of
practical experience in business-starting investment;
(3) Its registered capital or its total investments shall not be less than 1, 000, 000 yuan or
equivalent foreign exchange;
(4) It shall have a perfect interior control system.

Article 24
A business-starting investment management enterprise is allowed to take the form of the corporate organization or the partnership organization.

Article 25
A business-starting investment management enterprise may be entrusted to manage different FBIEs.

Article 26
A business-starting investment management enterprise shall report the matters as listed in Article 20 to the joint management committee and the board of directors of the entrusting party.

Article 27
The establishment of a foreign-funded business-starting investment management enterprise shall be in conformity with the conditions as provided in Article 23 and shall be reported to the examination and approval organ for approval via the administrative departments of foreign trade and economic cooperation at the provincial level where the company to be established is located. The examination and approval organ shall make a written decision on whether to approve or not within 45 days as of the acceptance of the complete set of the above-mentioned documents. It shall issue a Certificate of Approval for Foreign-invested Enterprises to the approved enterprises, which shall file an application to the registration organ by holding the Certificate within a month as of their acceptance of the Certificate.

Article 28
The following documents shall be submitted to the examination and approval organ in applying for the establishment of a foreign-invested business-starting investment management company:
(1) establishment application;
(2) contract and articles of association of foreign-funded business-starting investment
management company;
(3) the investors' registration certificate (photocopy) and the certificate of the legal representative
(photocopy);
(4) relevant documents required by the examination and approval organ;

Article 29
A foreign-invested business-starting investment management enterprise shall give a clear indication of "INVESTMENT MANAGEMENT" in its name. Except for the foreign-invested business-starting investment management enterprises any other foreign-funded enterprises shall not do so.

Article 30
An overseas business-starting investment management enterprise, which has acquired the approval of engaging in business-starting investment management under the authorization of FBIEs, shall file an application to the registration organ to handle the business registration procedures within 30 days as of the approval day of the management contract.
An applicant shall submit the following documents to the business registration organ and shall
be responsible for their authenticity and effectiveness:
(1) an application for registration signed by the chairman of the board of directors of the overseas business-starting investment management enterprise, or by a competent person;
(2) a management contract and the approval documents of the examination and approval organ;
(3) articles of association or partnership agreement of the overseas business-starting investment management enterprise;
(4) the overseas business-starting investment management enterprise' legal license to do business;
(5) the credit certification of the overseas business-starting investment management enterprise;
(6) the power of attorney, resume and the certification of the identification of the person-in-charge
of the Chinese project appointed by the overseas business-starting investment management enterprise;
(7) the certification of its business offices in China; All of the aforesaid documents should be
written in Chinese, those written in foreign languages other than Chinese shall be accompanied by
good Chinese translations

Chapter VI Business Management

Article 31
An FBIE may engage in the following businesses:
(1) It may make equity investments with all of its own capital through establishing new
enterprises, or investing into an established enterprise, or accepting the stock equities transferred by
the investors of an established enterprise, or through other means as permitted in the laws and regulations of the state;
(2) It may offer business-starting investment consultancy services;
(3) It may offer management consultancy to the invested enterprises;
(4) It may engage in other businesses as approved by the examination and approval organ. The capital of an FBIE may be largely used to make equity investments into its invested enterprise.

Article 32
A business-starting enterprise shall not engage in the following activities:
(1) It shall not make investments into the areas in which foreign investments are prohibited by the state;
(2) It shall not make direct or indirect investments into the listed securities and bonds of an enterprise, but after the invested enterprise is listed, the shares held by the FBIE shall be an exception.
(3) It shall not make direct or indirect investments into real property not for its own use;
(4) It shall not make investments by way of loans;
(5) It shall not make investments by embezzling the capital not in its ownership;
(6) It shall not provide a loan or guaranty to others, but the bonds with a term of more than 1 year issued by its invested enterprise and the investments in the nature of bonds that may be converted into equity investments to the invested enterprise shall be excluded (this paragraph doesn't concern whether the invested enterprise is entitled to issue such bonds or not);
(7) It shall not engage in other activities as prohibited in the law and regulations and the contract of the FBIE.

Article 33
The investors shall stipulate a term for foreign investments in the contract of the FBIE.

Article 34
The incomes of an FBIE shall be generated largely from selling the stock equities it holds in the invested enterprise or from disposing of the stock equities by other means. When an FBIE sell the stock equities it holds in the invested enterprise or dispose of the stock equities by other means, it may, in accordance with the law, choose one of the following available methods of withdrawing:
(1) It may transfer part of or all of the stock equities it holds to other investors;
(2) It may sign an agreement of stock equity counter-purchase with the invested enterprise, which
may counter-purchase the stock equities held by the business-starting investment enterprise under certain circumstances;
(3) Where the invested enterprise satisfies the conditions of listing as provided by laws and administrative regulations, it may apply for listing in the securities markets of home and abroad. In accordance with the law, the FBIE may transfer the shares it holds in the invested enterprise through the securities markets;
(4) The other methods that are allowed by the laws and administrative regulations of China. The concrete regulatory measures concerning the invested enterprise' counter-purchase of the stock equities held by the FBIE shall be separately formulated by the examination organ jointly with the registration organ.

Article 35
An FBIE shall make tax declaration in accordance with the tax laws of the state. As to a non-legal-person organization, in accordance with the law, it may request all the investing parties to file returns for enterprise income taxes on their own, or file an application by itself, after the application has been approved, it shall, in accordance with the law, calculate and pay the enterprise income tax in a consolidated way.
The concrete regulatory measures concerning the levy of enterprise income tax upon the nonlegal- person FBIEs shall be promulgated separately by the State Administration of Taxation.

Article 36
Where the profit or other income obtained by a foreign investor from an FBIE is to be remitted abroad, it shall be paid from the foreign currency account of the FBIE, or shall be remitted through an entrusted bank with the foreign currencies purchased from the bank. Such payment or remittance shall be made on the basis of the allocation decision made by the joint management committee or the board of directors, the audit report issued by an accountant office, the certification of inflow of foreign investments and the report on the verification of capital, the certification of tax payment and the tax return (where an enterprise enjoys tax concession, it shall present the evidential documents of tax concession issued by the tax authorities).
In accordance with the law, a foreign investor may request to purchase foreign currencies to remit the investments withdrawn from the FBIE. As to an FBIE in the form of company, the opening and access of foreign currency account, changes of capital and other matters involving the incomes and expenses of foreign currencies shall be handled pursuant to the existing regulations concerning the administration of foreign exchange. But relevant regulations on the non-legal-person FBIEs shall be formulated separately by the State Administration of Foreign Exchange.

Article 37
The investors shall stipulate the business term of the FBIE in the contract and in the Articles of association, generally speaking, the term shall not exceeds 12 years. When the business term expires, it may be extended upon the approval of the examination and approval organ. Upon the approval of the examination and approval organ, an FBIE may be dissolved, terminate the contract and the articles of association ahead of the schedule. However, if a non-legalperson
organization has sold out all the investments or sold them off by other means, have paid off all its debts and have allocated all the residual properties to the investors, it may, without being
subject to approval, enter into the dissolving and terminating procedure, but it shall submit a written
explanation for archival purposes to the examination and approval organ at least 30 days before the
dissolve comes into effect.
Where an FBIE is to be dissolved, it shall liquidate in compliance with pertinent regulations.

Article 38
An FBIE shall file an application to the original registration organ for deregistration within 30 days as of the completeness of the liquidation.
It shall submit the following documents in applying for the cancellation and it shall be responsible for their authenticity and effectiveness:
(1) an application for deregistration signed by the chairman of the board of directors, or by the
person-in-charge of the joint management committee, or by the person-in-charge of the liquidation
organ;
(2) decision made by the board of directors or the joint management committee;
(3) liquidation report;
(4) certifications for the cancellation of registration issued by tax authorities and the custom;
(5) the approving documents or archival documents of the examination and approval organ;
(6) other documents as required in the laws and administrative regulations. Where an application for deregistration has been approved by the registration organ, the FBIE terminates. The joint liabilities of the indispensable investors of a non-legal-person organization shall not be immune for the termination of the enterprise.

Chapter VII Examination and Supervision

Article 39
The domestic investments of an FBIE shall be made by referring to Rules for Guiding Foreign Investments and the Guiding Catalogue of Industries for Foreign Investments.

Article 40
Where an FBIE invests in any of the encouraged and approved enterprises, it shall go through archival procedures at the entrusted departments of foreign trade and economic cooperation where the invested enterprise is located. Within 15 days as of the acceptance of the archival materials, the said entrusted departments shall complete the examination and issue a Certificate of Approval for Foreign-invested Enterprise to the invested enterprise, which shall file an application for registration to the registration organ upon the Certificate. The registration organ shall decide whether to approve the registration or not in accordance with relevant laws and administrative regulations, and it shall issue a Business License of Foreign Invested Corporate Enterprise to the approved enterprises.

Article 41
Where an FBIE invests in any of the restricted enterprises, it shall file an application to the provincial authorities of foreign trade and economic cooperation where the restricted enterprise is located, and it shall offer the following materials:
(1) its statement on having sufficient investment funds;
(2) its approval certificate and business license (copies);
(3) the contract and the articles of association of the invested enterprise signed by the FBIE (and
the other investors of the invested enterprise).
Within 45 days as of the acceptance of the above-mentioned materials, the provincial authorities of foreign trade and economic cooperation shall make a written reply of approval or disapproval to the applicant, to whom it shall issue a Certificate of Approval for Foreign-invested Enterprise. The invested enterprise shall file an application to the registration organ for registration upon the approving documents and the Certificate. The registration organ shall decide whether to approve the registration or not. It shall issue a Business License of Foreign Invested Corporate Enterprise to the approved enterprises.

Article 42
Where an FBIE invests into the projects in the area of service trade that is open to the foreign investors gradually, it shall be subject to the examination and approval in compliance with pertinent regulations of the state.

Article 43
To increase or transfer any of its investment into the invested enterprise, an FIBE shall go through the procedures in accordance with Articles 40, 41 and 42.

Article 44
An FBIE shall report to the examination and approval organ for archival purposes as of the completeness of the procedures of Articles 40 through 43.

Article 45
Moreover, in March every year, an FBIE shall report the information of fund collection and utilization in the previous year to the examination and approval organ for archival purposes. Within 5 days as of the acceptance of the archival materials, the examination and approval organ shall issue a certification of archival registration, which shall be one of the requisite materials for an FBIE to accept annual joint examination. Where an enterprise that fails to follow the abovementioned procedures, it shall be subject to the relevant punishment by the examination organ after discussing with the pertinent department of the State Council.

Article 46
In the registered capital of the enterprise invested by an FBIE, if the proportion of the actual contributions paid in by a foreign investor or the proportion of the total contributions paid in by the foreign investors in the proportion of the FBIE is not less than 25%, the invested enterprise is entitled to enjoy relevant preferential treatments granted to foreign-invested enterprises. If the said proportion is less than 25 %, the invested enterprise shall not enjoy relevant preferential treatments granted to foreign-invested enterprises.

Article 47
Where an already established domestically-funded enterprise with domestic investor (s) of natural person may continue to keep their status of shareholder(s) after this enterprise has accepted the investments of an FBIE and has changed into a foreign-invested enterprise.

Article 48
Where the person-in-charge of the administrative department of a business-starting investment enterprise or the person-in-charge of the investment management enterprise has illegal practices, he shall be held responsible. If the circumstances are serious, the FIBE shall not continue to engage in business-starting investments and relevant activities of investment management.
z

Chapter VIII Supplementary Provisions

Article 49
The present Provisions shall be applicable to the FBIEs to be established in the mainland by the investors from the Hong Kong Special Administrative Region, Macao Special Administrative Region and Taiwan Region.

Article 50
The power to interpret the present Provisions shall remain with the Ministry of Foreign Trade and Economic Cooperation, the Ministry of Science and Technology, the State Administration for Industry and Commerce, the State Administration of Taxation and the State administration of Foreign Exchange.

Article 51
The present Provisions shall enter into force as of March 1, 2003. The Interim Provisions on the Establishment of Foreign-Funded Business-starting Investment Enterprises promulgated by the Ministry of Foreign Trade and Economic Cooperation, the Ministry of Science and Technology and the State Administration for Industry and Commerce on August 28, 2001 shall be abolished on the same day.

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Provisions on the Administration of Telecommunications Enterprises

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Decree [2001] No.333 of the State Council Provisions on the Administration of Telecommunications Enterprises with Foreign Investment have been passed at the 49th executive meeting of the State Council on December 5, 2001 and are hereby promulgated for implementation as of January 1, 2002.

Chapter I General Provisions

Article 1
The present Provisions have been formulated according to relevant laws and administrative regulations concerning foreign investment and the Telecommunications Regulation of the People's Republic of China for the purpose of satisfying the demand of opening the telecommunications industry to the outside world and promoting the development of the telecommunications industry.
Article 2
A foreign-funded telecom enterprise is one established by foreign investors and Chinese investors within the territory of the People's Republic of China by way of a sino-foreign equity joint venture for engagement in the telecom services.

Article 3
Foreign-funded telecom enterprises shall, apart from observing the present Provisions in their telecom business activities, abide by the provisions of the Telecommunications Regulation and other relevant laws and administrative regulations.

Article 4
Foreign-funded telecom enterprises may be engaged in the basic telecom services and value-added services, the specific business classifications shall be implemented according to the provisions of the Telecommunications Regulation. The geographical areas in which foreign-funded telecom enterprises may do business shall be provided by the administrative department of the information industry under the State Council according to relevant provisions.

Article 5
A foreign-funded telecom enterprise shall meet the following provisions in terms of its registered capital: 1. If the enterprises is engaged in the basic telecom business of the whole country or involving more than 1 province or autonomous region or municipality directly under the Central Government shall have a registered capital of not less than 2 billion yuan; if it is engaged in the value-added telecom businesses, it shall have a registered capital of not less than 10 million yuan; 2. If the enterprise is engaged in the basic telecom business of a province or autonomous region or municipality directly under the Central Government, it shall have a registered capital of not less than 200 million yuan; if it is engaged in the value-added businesses, it shall have a registered capital of not less than 1 million yuan;

Article 6
The ultimate proportion of contribution of the foreign investors of a foreign-funded telecom enterprise that is engaged in the basic telecom services (except the radio paging services) shall not be more than 49%. The ultimate proportion of contribution of the foreign investors of a foreign-funded telecom enterprise that is engaged in the value-added services (including the radio paging business in the basic telecom services) shall not be more than 50%. The different proportions of contribution of the Chinese and foreign investors in a foreignfunded telecom enterprise at different stages shall be determined by the administrative department of the information industry under the State Council according to relevant provisions.

Article 7
In order to engage in the telecom businesses, a foreign-funded telecom enterprise shall not only meet the conditions as mentioned in Articles 4, 5 and 6 of the present Provisions but also those as provided in the Telecommunications Regulation for engaging in the basic telecom businesses and 1/5 value-added telecom businesses.

Article 8
The major Chinese investor of a foreign-funded telecom enterprise that is engaged in the basic telecom businesses shall meet the conditions as mentioned below: 1. It is a legally established company; 2. It has capitals and a staff that suit its business operations; 3. It satisfies the requirements of the administrative department of the information industry under the State Council for discreet and special industries. The term "major Chinese investor in a foreign-funded telecom enterprise" as mentioned in the preceding paragraph shall be the investor that makes the largest contribution among all the Chinese investors and has a share of over 30% of the total investment made by all the Chinese investors.

Article 9
The major foreign investor of a foreign-funded telecom enterprise that is engaged in the basic telecom businesses shall meet the conditions as mentioned below: 1. It has the status of a legal person enterprise; 2. It has obtained a license for engaging in the basic telecom businesses in the country or region where it is registered; 3. It has the capitals and a staff that suit its business operations; 4. It has good performances and operation experiences in the basic telecom businesses. The term "major foreign investor of a foreign-funded telecom enterprise" as mentioned in the preceding paragraph shall refer to one that makes the largest contribution among all the foreign investors and has a share of more than 30% of the total investment made by all the foreign investors.

Article 10
The major foreign investor of a foreign-funded telecom enterprise that is engaged in the value-added telecom businesses shall have good performances and operation experiences in managing the value-added telecom businesses.

Article 11
To establish a foreign-funded telecom enterprise for engaging in the basic telecom businesses or in value-added telecom businesses within the area of more than 1 province, autonomous region or municipality directly under the Central Government, the major Chinese investor shall file an application to the administrative department of the information industry under the State Council and submit the documents as mentioned below: 1. A project proposal; 2. A feasibility study report; 3. Credentials of qualifications of the investors of the joint venture or other relevant certification documents as mentioned in Article 8, 9 and 10 of the present Provisions: 4. Certificates of meeting other conditions for engaging in the business of the basic telecom businesses or value-added telecom businesses and other certification documents as mentioned in the Telecommunications Regulation. The department of the information industry under the State Council shall examine the relevant documents as mentioned in the preceding paragraph as of the day when the application is received. If the application is for engaging in the basic telecom businesses, the examination shall be completed within 180 days and a decision shall be made concerning whether to approve or disapprove the application; if the application is for engaging the value-added telecom businesses, the examination shall be completed within 90 days and a decision shall be made whether to approve or disapprove the application. If the application is to be approved, an Examination Decision of Foreign Investment in the Telecommunications; if the application is to be disapproved, the applicant shall be inform in writing together with a statement of the reasons.

Article 12
To establish a foreign-funded telecom enterprise for engaging in the basic telecom businesses or the value-added telecom businesses within an area of more than 1 province, autonomous region or municipality directly under the Central Government, the major Chinese investor may, when filing an application according to Article 11 of the present Provisions, submit documents other than the feasibility report according to the practical situations and, after being approved and informed in writing by the administrative department of the information industry under the State Council after examination beforehand, then submit a feasibility study report. However, the time period between the day when the applicant is informed in writing of approval and the day when the applicant files a feasibility study report shall not be longer than 1 year, and this time period shall not be included in the time period for examination. 2/5

Article 13
To establish a foreign-funded telecom enterprise for engaging in the value-added telecom businesses within a province, autonomous region or municipality directly under the Central Government, the major Chinese investor shall file an application to the telecom administrative organ of the provinces, autonomous region or municipality directly under the Central Government concerned together with the documents as mentioned below: 1. A feasibility study report; 2. Credentials of qualifications or certification documents as provided in Article 10 of the present Provisions; 3. Certificates or other certification documents of meeting the other conditions for engaging in the value-added telecom businesses as mentioned in the Telecommunications Regulation. The administrative organ of the provinces, autonomous regions and municipalities directly under the Central Government shall make a decision within 60 days after receiving the application. If application is to be approved, it shall be transferred to the administrative department of the information industry under the State Council; if the application is to be disapproved, the applicant shall be informed in writing together with a statement of the reasons. The administrative department of the information industry under the State Council shall, within 30 days after receiving the decision of approving the application made by the telecom administrative organ of the provinces, autonomous regions and municipalities directly under the Central Government, complete the examination and decide whether to approve or disapprove. If approval is to be granted, an Examination Decision of Foreign Investment in the Telecommunications; if the application is to be disapproved, the applicant shall be inform in writing together with a statement of the reasons.

Article 14
The main contents of the project proposal for establishing a foreign-funded telecom enterprise shall include: the titles and basic information of the parties to the joint venture, the total amount of investment and registered capital of the joint venture to be established, the proportion of contributions to be made by the parties concerned, the type of business to be engaged in and the term of the joint venture, etc. The main contents of the feasibility study report for establishing a foreign-funded telecom enterprise shall include: the basic information to the enterprise to be established, the items of services, prediction of business and development planning, analysis of investment results, predicted time for starting business, etc.

Article 15
To establish a foreign-funded telecom enterprise, if the investment project shall be subject to the examination and approval of the administrative department of planning under the State Council or the comprehensive administrative department of economy under the State Council as pursuant to the provisions of the State, the administrative department of the information industry under the State Council shall, prior to issuing an Examination Decision of Foreign Investment in the Telecommunications, transfer the application materials to the administrative department of planning under the State Council or the comprehensive administrative department of economy under the State Council for examination and approval. If the application materials are transferred to the administrative department of planning under the State Council or the comprehensive administrative department of economy under the State Council for examination and approval, the time limit for examination and approval as stipulated in Articles 11 and 13 of the present Provisions may be extended for 30 days.

Article 16
To establish a foreign-funded telecom enterprise that is to be engaged in the basic telecom businesses or the value-added telecom businesses within an area of more than 1 province, autonomous region or municipality directly under the Central Government, the major Chinese investor shall, on the basis of the Examination Decision of Foreign Investment in the Telecommunications, submit to the administrative department of foreign trade and economic cooperation under the State Council the contracts and articles of association of the foreign-funded telecom enterprise to be established; if the foreign-funded telecom enterprise is to be engaged in the value-added telecom businesses within the area of a province, autonomous region or municipality directly under the Central Government, the major Chinese investor shall, on the basis of the Examination Decision of Foreign Investment in the Telecommunications, submit to the administrative department of foreign trade and economic cooperation of the people's government of 3/5 the province, autonomous region or municipality directly under the Central Government the contracts and articles of association of the foreign-funded telecom enterprise to be established. The administrative department of foreign trade and economic cooperation under the State Council and the administrative department of foreign trade and economic cooperation of the people's governments of the provinces, autonomous regions and municipalities directly under the Central Government shall, within 90 days after receiving the contracts and articles of association of the foreign-funded telecom enterprise to be established, complete the examination and decide whether to approve or disapprove. If approval is to be granted, an Approval Certificate of Establishing A Foreign-funded Enterprise shall be issued; if disapproval is to be granted, the applicant shall be informed in writing together with a statement of the reason.

Article 17
The major Chinese investor of a foreign-funded telecom enterprise shall apply for a License of Telecom Business Operations at the administrative department of the information industry under the State Council on the basis of the Approval Certificate of Establishing A Foreignfunded Enterprise. The major Chinese investor of the foreign-funded telecom enterprise shall apply to the administrative department for industry and commerce for registration as a foreign-funded telecom enterprise on the basis of the Approval Certificate of Establishing A Foreign-funded Enterprise and the License of Telecom Business Operations.

Article 18
To engage in cross-border telecom business, a foreign-funded telecom enterprise shall obtain the approval of the administrative department of the information industry under the State Council and does the business through the Entry and Exit Bureau of International Telecommunications established upon the approval of the administrative department of the information industry under the State Council.

Article 19
Any one who violates Article 6 of the present Provisions shall be ordered by the administrative department of the information industry under the State Council to make corrections and be fined not less than 100,000 yuan but not more than 500,000 yuan. In case the violator fails to make the corrections within the time limit, the administrative department of the information industry under the State Council shall revoke the License of Telecom Business Operations and the department of foreign trade and economic cooperation that issued the Approval Certificate of Establishing A Foreign-funded Enterprise shall revoke the Approval Certificate of Establishing A Foreign-funded Enterprise.

Article 20
Any one who violates Article 18 of the present Provisions shall be ordered by the administrative department of the information industry under the State Council to make corrections and be fined not less than 200,000 yuan but not more than 1 million yuan. In case the violator fails to make the corrections within the time limit, the administrative department of the information industry under the State Council shall revoke the License of Telecom Business Operations and the department of foreign trade and economic cooperation that issued the Approval Certificate of Establishing A Foreign-funded Enterprise shall revoke the Approval Certificate of Establishing A Foreign-funded Enterprise.

Article 21
Any one who obtains approval by presenting false or counterfeited credentials or certification materials in its application for establishing a foreign-funded telecom enterprise, the approval shall be invalidated and the violator shall be fined not less than 200,000 yuan but not more than 1 million yuan by the administrative department of the information industry under the State Council, its License of Telecom Business Operations shall be revoked and the department of foreign trade and economic cooperation that issued the Approval Certificate of Establishing A Foreignfunded Enterprise shall revoke the Approval Certificate of Establishing A Foreign-funded Enterprise.

Article 22
Any foreign-funded telecom enterprise violates the Telecommunications Regulation and other relevant laws or administrative regulations in its telecom business operations shall be punished by relevant administrative organs.

Article 23
Any intra-territorial telecom enterprise that applies for getting listed in overseas stock exchanges shall obtain the consent of the administrative department of the information industry under the State Council after examination and shall obtain the approval of relevant administrative organs according to relevant provisions.

Article 24
The present Provisions shall be applicable, by reference, to the companies and enterprises from the Hong Kong and Macao Special Administrative Regions and Taiwan in their investment in the Mainland of China to engage in the telecom businesses.

Article 25
The present Provisions shall take effect as of January 1, 2002.
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Foreign Trade Law of the People's Republic of China

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Adopted at the Seventh Session of the Standing Committee of
the Eighth National People's Congress on May 12, 1994

Chapter I General Provisions


Chapter I Principles
Article 1
This Law is formulated with a view to developing the foreign trade, maintaining the foreign trade order and promoting a healthy development of the socialist market economy.

Article 2
Foreign trade as mentioned in this Law shall cover the import and export of goods, technologies and the international trade in services.

Article 3
The authority responsible for foreign trade and economic relations under the State Council is in charge of the administration of the foreign trade of the entire country pursuant to this Law.

Article 4
The State shall apply the foreign trade system on a uniform basis and maintain a fair and free foreign trade order in accordance with law.
The State encourages the promotion of its foreign trade, exercises the initiative of localities and safeguards the autonomy of business operation of the foreign trade dealers.

Article 5
The People's Republic of China promotes and develops trade ties with other countires and regions on the principles of equality and mutual benefit.

Article 6
The People's Republic of China shall, under international treaties or agreements to which the People's Republic of China is a contracting party or a participating party, grant the other contracting parties or participating parties, or on the principles of mutual advantage and reciprocity, grant the other party most - favored - nation treatment or national treatment within the field of foreign trade.

Article 7
In the event that any country or region applies discriminatory prohibition, restriction or other like measures against the People's Republic of China in respect of trade, the People's Republic of China may, as the case may be, take counter - measures against the country or region in question.

Chapter II Foreign Trade Dealers

Article 8
Foreign trade dealers as mentioned in this Law shall cover the legal entities and other organizations engaged in foreign trade dealings in compliance with the provisions of this Law.

Article 9
A foreign trade dealer who intends to engage in the import and export of goods and technologies shall fulfill the following requirements and acquire the permit from the authority responsible for foreign trade and economic relations under the State Council:
1. having its own name and corporate structure;
2. having definite scope of business in foreign trade;
3. having place of business, financial resources and professional personnel essential to the foreign trade dealings which it intends to engage in;
4. having a required record of import and export which were effected on its behalf or having necessary sources of goods for import or export:
5. other requirements provided in relevant laws and administrative regulations.
The detailed rules for the implementation of the preceding paragraph are to be laid down by the State Council.
The enterprises with foreign investment shall be exempt from the permit requirement provided in paragraph 1 with respect to their import of non-productive articles for their own use, import of equipment's and raw materials and other articles necessary for their production as well as the export of the products they produce under the relevant provisions of laws and administrative regulations governing enterprises with foreign investment.

Article 10
The establishment and operation of enterprises and organizations engaged in international trade in services shall be in compliance with the provisions of this Law and other relevant laws and administrative regulations.

Article 11
Foreign trade dealers shall enjoy full autonomy in their business operation and be responsible for their own profits and losses in accordance with law.

Article 12
In foreign trade activities foreign trade dealers should honor their contracts, ensure the quality of the commodity and perfect the after-sale services.

Article 13
Any organization or individual without foreign trade operation permit may entrust a foreign trade dealer located in China as it s agent to conduct its foreign trade business within the business scope of the latter.
The entrusted foreign trade dealer shall provide the principal with actual business information such as market situation, commodity prices and client position. The agent and the principal shall conclude and sign an agency agreement, in which the rights and obligations of both parties should be specified.

Article 14
Foreign trade dealers are obligated to provide documents and information in relation to their foreign trade dealings to the relevant authorities pursuant to the regulations of the authority responsible of foreign trade and economic relations under the State Council. The relevant authorities shall not disclose the business proprietary information provided by the dealers.

Chapter III Import and Export of Goods and Technologies

Article 15
The State allows free import and export of goods and technologies except where laws or administrative regulations provided otherwise.

Article 16
The State may impose restrictions on the import or export of goods and technologies in any of the following circumstances:
1. where the import or export shall be restricted in order to safeguard the national security or public interest;
2. where the export shall be restricted on account of domestic shortage in supply or effective protection of exhaustible domestic resources;
3. where the export shall be restricted due to the limited market capacity of the importing country or region;
4. where the import shall be restricted in order to establish or accelerate the establishment of a particular domestic industry;
5. where the restriction on the import of agricultural, animal husbandry or fishery products in any form is necessary;
6. where the import shall be restricted in order to maintain the State's international financial status and the balance of international payments;
7. where, as the international treaties or agreements to which the People's Republic of China is a contracting party or a participating party require, the import or export shall be restricted.

Article 17
The States prohibits the import or export of any goods or technologies in any of the following circumstances;
1. where such goods or technologies will endanger national security or public interest;
2. where the import or export of such goods or technologies must be prohibited in order to protect human life or health;
3. where such goods or technologies will disrupt the ecological environment;
4. where the import or export of such goods or technologies shall be prohibited in accordance with the provisions of international treaties or agreements to which the People's Republic of China is a contracting party or a participating party.

Article 18
The authority responsible for foreign trade and economic relations under the State Council shall, in collaboration with the relevant authorities under the State Council and in accordance with the provision of Article 16, Article 17 of this Law, formulate, adjust and publish the list of goods and technologies whose import or export are subject to restrictions or prohibitions.
Upon the approval of the State Council the authority responsible for foreign trade and economic relations under the State Council may, within the framework of Article 16 and Article 17, independently or in collaboration with the relevant authorities under the State Council determine, on a temporary basis, to impose restriction or prohibition on the import or export of particular goods or technologies not included in the list mentioned in the preceding paragraph.

Article 19
Goods whose import or export is restricted shall be subject to quota and /or licensing control; technologies whose import or export is restricted shall be subject to licensing control.
Import or export of any goods and technologies subject to quota and /or licensing control will be effected only with the approval of the authority responsible for foreign trade and economic relations under the State Council or the joint approval of the preceding authorities and other authorities concerned under the State Council in compliance with the provisions of the State Council.

Article 20
Import and export quotas of goods shall be distributed on the basis of the conditions including but not limited to the actual import or export performance and capability of the applicants in foreign trade dealings and on the basis of the principles of efficiency, impartiality, transparency and fair competition by the authority responsible for foreign trade and economic relations under the State Council or the relevant authorities under the State Council within their respective responsibilities.
The ways and means of the distribution of quotas are to be regulated by the State Council.

Article 21
Where the import or export of goods, articles such as cultural relics, wildlife animals, plants and the products there of are prohibited or restricted by other laws or administrative regulations, the provisions of the laws and regulations in question shall be observed.

Chapter IV International Trade in Service

Article 22
The State promotes the progressive development of the international trade in services.

Article 23
With respect to international trade in services, the People's Republic of China , pursuant to the commitments made in international treaties or agreements to which the People's Republic of China is a contracting party or participating party, grants the other contracting parties and participating parties market access and national treatment.

Article 24
The State may restrict international trade in services on the basis of any of the following considerations:
1. In order to safeguard the national security or public interest;
2. In order to protect the ecological environment;
3. In order to establish or accelerate the establishment of a particular domestic service industry;
4. In order to maintain the State*s balance of international payments;
5. Other restrictions provided in relevant laws and administrative regulations.

Article 25
The Sate prohibits any international trade in services which:
1. may endanger national security or public interests;
2. is contrary to the international obligations undertaken by the People's Republic of China;
3. is prohibited by relevant laws and administrative regulations.

Article 26
The authority responsible for foreign trade and economic relations under the State Council and relevant authorities under the State Council are responsible for the administration of international trade in services in accordance with this Law and other relevant laws and administrative regulations.

Chapter V Foreign Trade Order

Article 27
In foreign trade activities, foreign trade dealers shall operate their business in accordance with law and abide by the principle of fair competition, and are prohibited from the following acts:

1. Forgery, distortion or trading of certificates of country of origin and import or export licenses;
2. Infringement on the intellectual property rights protected by the laws of the People's Republic of China;
3. Squeezing out competitors with undue conducts of competition;
4. Defrauding the State of refunded tax on exports;
5. Other acts contrary to the provisions of laws and administrative regulations.

Article 28
In foreign trade activities, foreign trade dealers shall settle and use foreign exchanges in accordance with relevant regulations of the State.

Article 29
Where a product is imported in such increased quantities as to cause or threaten to cause serious injury to domestic producers of like or directly competitive products, the State may take necessary safeguard measures to remove or ease such injury or threat of injury.

Article 30
Where a product is imported at less than normal value of the product and causes or threatens to cause material injury to an established domestic industry concerned, or materially retards the establishment of a particular domestic industry, the State may take necessary measures in order to remove or ease such injury or threat of injury or retardation.

Article 31
Where an imported product is subsidized in any form directly or indirectly by the country of export and causes or threatens to cause material injury to an established domestic industry concerned or materially retards the establishment of a domestic industry, the State may take necessary measures in order to remove or ease such injury or threat of injury or retardation.

Article 32
In the events referred to in Article 29, Article 30 and Article 31, the authority or agency designated by the State Council shall conduct investigations and make determinations in accordance with relevant laws and administrative regulations.

Chapter VI Promotion of Foreign Trade

Article 33
The State shall establish and improve financial institutions for foreign trade and establish funds for foreign trade development and risk as the development of foreign trade requires.

Article 34
The State may take foreign trade promotion measures such as import or export credit and export tax refund for the purpose of the development of foreign trade.

Article 35
Foreign trade dealers may establish or join Chambers of Commerce for Importers and Exporters in accordance with law.
Chambers of Commerce for Importers and Exporters shall abide by relevant laws and administrative regulations, coordinate and guide the foreign trade activities of their members under their Articles of Association, provide advisory services, report to the relevant authorities of the Government the suggestions of their members with respect to foreign trade promotion, and actively promote foreign trade.

Article 36
The international trade promotion organization of China shall, in accordance with its Articles of Association, engage in development of foreign trade relations, sponsor exhibitions, provide information and advisory services and carry out other foreign trade primitive activities.

Article 37
The State shall support and promote the development of foreign trade in national autonomous areas and economically under - developed areas.

Chapter VII Legal Liabilities

Article 38
Anyone who smuggles goods that are subject to import or export prohibitions or restrictions, and hereby commits criminal offenses, shall be subject to criminal prosecution pursuant to the Supplementary Decision on the Punishment of Smuggling Crimes. Those offenses of smuggling which do not constitute crimes shall be subject to sanctions under the provisions of the Customs Law. In addition, the authority responsible for foreign trade and economic relations under the State Council may withdraw the foreign trade operation permit of the offender in question.

Article 39
Anyone who commits forgery, distortion of certificates of country of origin or license for import or export shall be subject to criminal prosecution under Article 167 of the Criminal Law. Anyone who commits trading of certificates of country of origin or license for import or export or trading of forged or distorted certificates of country of origin of license for import or export shall be subject to criminal prosecution in the light of Article 167 of the Criminal Law.
Where the criminal offenses referred to in the preceding paragraph are committed by an entity, the entity in question shall be imposed fine while the persons in charge of the entity directly responsible for the offenses and other persons directly responsible for the offenses shall be subject to criminal prosecutions in accordance with or in the light of Article 167 of the Criminal Law. In addition, the authority responsible for foreign trade and economic relations under the State Council may withdraw the foreign trade operation permit of the entity in question.
Anyone who knowingly uses forged or distorted import or export license in importing or exporting goods shall be imposed sanctions in accordance with the provisions of Article 38 of this Law.

Article 40
Anyone who imports or exports technologies that are subject to import or export prohibitions or restrictions in violation of this Law and commits criminal offenses, shall be subject to criminal prosecutions in the light of the Supplementary Decision of the Punishment of Smuggling Crime.

Article 41
Personnel serving in the State's foreign trade authorities who commit any neglect of duty, malpractice, irregularities or abuse of power, which constitute criminal offenses, shall be subject to criminal prosecutions pursuant to law; as to those offenses which do not constitute crimes, administrative sanctions shall apply.
Personnel serving in the State's foreign trade authorities who extort property from others with job convenience or illegally receive others' property and seek advantages for them in return and thus commit criminal offenses shall be subject to criminal prosecutions in accordance with the Supplementary Decision on the Punishment of Embezzlement and Bribery Crimes; where such conducts do not constitute criminal offenses, administrative sanctions shall apply.

Chapter VIII Final Provisions

Article 42
The State applies flexible measures, provides favorable conditions and convenience to the trade between the towns on the frontier and those towns of neighboring countries on frontier as well as trade among border residents. Detailed rules are to be laid down by the State Council.

Article 43
This Law shall not apply to the separate customs territories of the People's Republic of China.

Article 44
This Law shall enter into force as of July 1st, 1994


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Regulations of the People's Republic of China on the Administration of the Import and Export of Goods

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Decree [2001] No.332 of the State Council The Regulation of the People's Republic of China on the Administration of the Import and Export of Goods has been passed at the forty-sixth executive meeting of the State Council on October 31, 2001 and is hereby promulgated for implementation as of January 1, 2002.

Chapter I General Provisions

Chapter I General Provisions
Article 1
The present Regulation has been enacted according to the relevant provisions of the Foreign Trade Law of the People's Republic of China (hereinafter referred to as the Foreign Trade Law) for the purpose of standardizing the administration of the import and export of goods, maintaining the order of import and export of goods and promoting the healthy development of foreign trade.

Article 2
The present Regulation shall be observed in the importation of goods to within the customs boundary of the People's Republic of China or exportation of goods to beyond the customs boundary of the People's Republic of China.

Article 3
The state exercises uniform administration over the import and export of goods.

Article 4
The state allows the free importation and exportation of goods and maintains the fairness and orderliness of the import and export of goods according to law. Unless it is clearly provided in laws or administrative regulations to forbid or restrict the import or export of goods, no entity or individual may establish or maintain prohibitive or restrictive measures over the import or export of goods.

Article 5
The People's Republic of China grants the most-favored-nation treatment or national treatment to other contracting parties or member states to the international treaties or pacts that it has concluded or acceded to, or grants the most-favored-nation treatment or national treatment to its counterparts according to the principle of mutual benefit and reciprocity.

Article 6
Any country or region that takes discriminatory prohibitive or restrictive measures or other similar measures against the People's Republic of China in terms of the import or export of goods, it may, according to the specific situations, take corresponding measures against such country or region.

Article 7
The department of the State Council in charge of foreign trade and economic cooperation (hereinafter referred to as the foreign trade department of the State Council) takes charge of the import and export of goods within the whole country according to the provisions of the Foreign Trade Law and the present Regulation. The relevant departments of the State Council shall, on the basis of the functions and duties as determined by the State Council, be responsible for the administration of the import and export of goods according to the provisions of the present Regulation. Chapter II Administration of Import of Goods Section I Goods Prohibited from Importation

Article 8
In any of the circumstances as provided in Article 17 of the Foreign Trade Law, the goods concerned shall be prohibited from importation. If there are relevant provisions in other laws or regulations on prohibiting the importation of goods, such provisions shall be abided by. The list of goods prohibited from importation shall be formulated, adjusted and promulgated by 1/9 the foreign trade department of the State Council in collaboration with other relevant departments of the State Council.

Article 9
No goods that are prohibited from importation may be imported. Section II Goods Limited in Importation

Article 10
In any of the circumstances as provided in Clauses 1, 4, 5, 6, and 7 of Article 16 of the Foreign Trade Law, the goods concerned shall be limited in importation. Where there are provisions in other laws or regulations on limiting the importation of goods, such provisions shall be abided by. The list of goods limited in importation shall be formulated, adjusted and promulgated by the foreign trade department of the State Council in collaboration with other relevant departments of the State Council. The list of goods limited in importation shall be promulgated at least 21 days prior to the implementation thereof; where the circumstances are urgent, it shall be promulgated at no later than the day of implementation.

Article 11
Where there are quantitative limits of the state on the goods limited in importation, the goods shall be subject to the administration of quotas, and other goods limited in importation shall be subject to the administration of licenses. When importing the goods subject to the administration of quotas in customs tariffs, the provisions of Section IV of the present Chapter shall be followed.

Article 12
The goods limited in importation that are under the administration of quotas shall be subject to the administration of the foreign trade department of the State Council and the relevant economic administrative departments of the State Council (hereinafter referred to as administrative departments of import quotas) on the basis of the functions and duties as provided by the State Council.

Article 13
For the goods limited in importation that are under the administration of quotas, the administrative departments of import quotas shall promulgate the total amount of import quotas for the next year at no later than July 31 of each year. An applicant of quotas shall apply to the administrative departments of import quotas for the next year between August 1 and 31 of each year. The administrative departments of import quotas shall allocate the quotas for the next year to the quota applicants before October 31 of each year. The administrative departments of import quotas may, where it is necessary, make adjustments to the total amount of the year and promulgate it at 21 days prior to its implementation.

Article 14
The quotas may be allocated according to the principle of uniform handling of all applications.

Article 15
Where the quotas are allocated according to the principle of uniform handling of all applications, the administrative departments of import quotas shall decide whether to grant quotas or not within 60 days prior to the prescribed deadline for filing applications.

Article 16
When allocating quotas, the administrative departments of import quotas shall take the following elements into consideration: 1. the performances of the applicant in import; 2. whether the quotas in the past have been fully used; 3. the productive capacity, management scale and the sales of the applicant; 4. the applications filed by new import business operators; 5. the quantity of quotas applied; 6. other elements that need to be considered.

Article 17
An import business operator shall present the quotas certificate issued by the administrative departments of import quotas to the customs offices for handling the formalities of customs declaration and examination. The relevant economic administrative departments of the State Council shall report such information as the total amount of quotas of the year, the plans of allocation, the issuance of quota certificates, etc to the foreign trade department of the State Council for archivist purposes.

Article 18
A holder of quotas who has not used up its quotas for the year shall return the unused 2/9 quotas to the administrative departments of import quotas prior to September 1 of the current year. In case it fails to return the unused quotas and fails to use them up by the end of the current year, the administrative departments of import quotas may make corresponding deductions to the quotas of the holder for the next year.

Article 19
For the goods limited in importation that are subject to the administration of licenses, the import business operators shall file applications to the foreign trade department of the State Council or relevant departments of the State Council (hereinafter referred to as the administrative departments of import licenses). The administrative departments of import licenses shall decide whether to grant a license or not within 30 days after receiving the application. The import business operators shall present the import license issued by the administrative departments of import quotas to the customs office for handling the formalities of customs declaration and examination. The term "import license" as mentioned in the preceding paragraph shall refer to the various kinds of certificates and documents that are of import nature as provided in laws and administrative regulations.

Article 20
The administrative departments of import quotas and the administrative departments of export licenses shall, on the basis of the provisions of the present Regulation, formulate specific measures of administration so as to clarify the qualifications of the applicant, the departments for accepting applications, the principles and procedures of inspections, etc. and shall promulgate the measures prior to their implementation. The department for accepting applications shall, as a general rule, be one department. The documents requested by the administrative departments of import quotas and the administrative departments of import licenses for submission shall be limited to those documents and materials that are necessary for effecting the administration and the departments may not refuse to accept the applications under the pretext of trifle, immaterial mistakes or errors. Section III Goods Subject to Free Importation

Article 21
The goods subject to free importation shall not be limited.

Article 22
The foreign trade department of the State Council and the relevant economic administrative departments of the State Council may, on the basis of the demand for monitoring the importation of goods, exercise automatic import license administration over some of the goods subject to free importation according to the functions and duties determined by the State Council. The list of goods that are under automatic import license administration shall be promulgated at no later than 21 days prior to its implementation.

Article 23
The import of goods that are under automatic import license administration shall be allowed.

Article 24
When importing the goods that are under automatic import license administration, the import business operators shall, prior to handling the formalities of customs declaration, file an application to the foreign trade department of the State Council or the relevant economic administrative departments of the State Council for automatic import licenses. The foreign trade department of the State Council or the relevant economic administrative departments of the State Council shall issue automatic import licenses immediately after receiving the applications; if the circumstances are special, the time space shall no longer than 10 days. The import business operators shall present the automatic import license issued by the foreign trade department of the State Council or the relevant economic administrative departments of the State Council to the customs offices for handling the formalities of customs declaration. Section IV Goods under the Administration of Tariff Quotas

Article 25
The list of goods that are under the administration of tariff quotas shall be formulated, adjusted and promulgated by the foreign trade department of the State Council in collaboration with the relevant economic administrative departments of the State Council.

Article 26
For the goods imported within the tariff quotas, the tariffs shall be levied according to the rates within the quotas; for the goods imported beyond the tariff quotas, the tariffs shall be levied 3/9 according to the rates beyond the quotas.

Article 27
The administrative departments of import quotas shall publicize the total amount of quotas for the next year between September 15 and October 14 of each year. An applicant for quotas shall file its applications to the administrative departments of import quotas between October 15 and October 30 of each year.

Article 28
The tariff quotas may be allocated according to the principle of uniform handling of all applications.

Article 29
Where the tariff quotas are allocated according to the principle of uniform handling of all applications, the administrative department of import quotas shall decide whether to grant quotas or not before December 31 of each year.

Article 30
The import business operators shall present its certificate of tariff quotas issued by the administrative departments of import tariff quotas to the customs offices for handling the formalities of customs declaration and examination of the goods within the tariff quotas. The relevant economic administrative departments of the State Council shall submit in a time way such information as the total amount of tariff quotas for the year, the plans of allocation and the issuance of certificates of tariff quotas, etc. to the foreign trade department of the State Council for archivist purposes.

Article 31
A holder of tariff quotas who has not used up its quotas for the year shall return the unused quotas to the administrative departments of import quotas prior to September 15 of the current year. In case it fails to return the unused quotas and fails to use them up by the end of the current year, the administrative departments of import quotas may make corresponding deductions to the quotas of the holder for the next year.

Article 32
The administrative departments of import quotas shall, on the basis of the provisions of the present Regulation, formulate specific measures of administration so as to clarify the qualifications of the applicant, the departments for accepting applications, the principles and procedures of inspections, etc. and shall promulgate the measures prior to their implementation. The department for accepting applications shall, as a general rule, be one department. The documents requested by the administrative departments of import quotas for submission shall be limited to those documents and materials that are necessary for effecting the administration and the departments may not refuse to accept the applications under the pretext of trifle, immaterial mistakes or errors. Chapter III Administration of the Export of Goods Section I Goods Prohibited from Exportation

Article 33
In any of the circumstances as provided in Article 17 of the Foreign Trade Law, the goods concerned shall be prohibited from exportation. If there are relevant provisions in other laws or regulations on prohibiting the importation of goods, such provisions shall be abided by. The list of goods prohibited from exportation shall be formulated, adjusted and promulgated by the foreign trade department of the State Council in collaboration with other relevant departments of the State Council.

Article 34
No goods that are prohibited from exportation may be exported. Section II Goods Limited in Exportation

Article 35
In any of the circumstances as provided in Clauses 1, 2, 3, and 7 of Article 16 of the Foreign Trade Law, the goods concerned shall be limited in exportation. Where there are provisions in other laws or regulations on limiting the exportation of goods, such provisions shall be abided by. The list of goods limited in exportation shall be formulated, adjusted and promulgated by the foreign trade department of the State Council in collaboration with other relevant departments of the State Council. The list of goods limited in exportation shall be promulgated at least 21 days prior to the implementation thereof; where the circumstances are urgent, it shall be promulgated at no later than 4/9 the day of implementation.

Article 36
Where there are quantitative limits of the state on the goods limited in exportation, the goods shall be subject to the administration of quotas, and other goods limited in importation shall be subject to the administration of licenses.

Article 37
The goods limited in exportation that are under the administration of quotas shall be subject to the administration of the foreign trade department of the State Council and the relevant economic administrative departments of the State Council (hereinafter referred to as administrative departments of export quotas) on the basis of the functions and duties as provided by the State Council.

Article 38
For the goods limited in exportation that are under the administration of quotas, the administrative departments of export quotas shall promulgate the total amount of export quotas for the next year at no later than October 31 of each year. An applicant of quotas shall apply to the administrative departments of export quotas for the next year between November 1 and 15 of each year. The administrative departments of export quotas shall allocate the quotas for the next year to the quota applicants before December 15 of each year.

Article 39
The quotas may be allocated directly or by way of invitation for bids.

Article 40
The administrative departments of export quotas shall decide whether to grant quotas within 30 days after receiving the applications and at no later than December 15 of the current year.

Article 41
The export business operators shall present the certificate of quotas issued by the administrative department of export quotas to the customs offices for handling the formalities of customs declaration and examination. The relevant economic administrative departments of the State Council shall submit such information as the total amount of quotas for the year, the plans for allocation and the issuance of certificates of quotas, etc. to the foreign trade department of the State Council for archivist purposes.

Article 42
A holder of quotas who has not used up its quotas for the year shall return the unused quotas to the administrative departments of export quotas prior to October 31 of the current year. In case it fails to return the unused quotas and fails to use them up by the end of the current year, the administrative departments of export quotas may make corresponding deductions to the quotas of the holder for the next year.

Article 43
For the goods limited in exportation that are subject to the administration of licenses, the export business operators shall file applications to the foreign trade department of the State Council or relevant departments of the State Council (hereinafter referred to as the administrative departments of export licenses). The administrative departments of export licenses shall decide whether to grant a license or not within 30 days after receiving the application. The import business operators shall present the export license issued by the administrative departments of export quotas to the customs office for handling the formalities of customs declaration and examination. The term "export license" as mentioned in the preceding paragraph shall refer to the various kinds of certificates and documents that are of export nature as provided in laws and administrative regulations.

Article 44
The administrative departments of export quotas and the administrative departments of export licenses shall, on the basis of the provisions of the present Regulation, formulate specific measures of administration so as to clarify the qualifications of the applicant, the departments for accepting applications, the principles and procedures of inspections, etc. and shall promulgate the measures prior to their implementation. The department for accepting applications shall, as a general rule, be one department. The documents requested by the administrative departments of export quotas and the administrative departments of export licenses for submission shall be limited to those documents and materials that are necessary for effecting the administration and the departments may not refuse to accept the applications under the pretext of trifle, immaterial mistakes or errors. Chapter IV State-run Trade and Designated Administration

Article 45
The state may administer the import and export of some goods by way of state-run trade. The list of goods for import and export under the state-run trade administration shall be formulated, adjusted and promulgated by the foreign trade department of the State Council in collaboration with other relevant economic administrative departments of the State Council.

Article 46
The foreign trade department of the State Council and other relevant economic administrative departments of the State Council shall determine and publicize the list of state-run trade enterprises according to the functions and duties as determined by the State Council.

Article 47
For the goods that are subject to the state-run trade administration, the state may allow non-state-run trade enterprises to import and export some of the goods.

Article 48
The state-run trade enterprises shall provide to the foreign trade department of the State Council on the semi-annual basis such information as the prices for buying or selling the goods subject to the state-run trade administration, etc.

Article 49
The foreign trade department of the State Council may, upon the demand for maintaining the management order of import and export, exercise designated management over some of the goods during certain periods. The list of goods subject to designated management shall be formulated, adjusted and promulgated by the State Council.

Article 50
The specific standard and procedures for determining the enterprises to engage in designated management shall be promulgated by the foreign trade department of the State Council before implementation. The list of enterprises to engage in designated management shall be publicized by the foreign trade department of the State Council.

Article 51
Unless provided in Article 47 of the present Regulation, the enterprises or other organizations that have not been included in the list of state-run trade enterprises and enterprises to engage in designated management may not engage in the import or export of goods that are subject to state-run trade administration and designated management.

Article 52
The state-run trade enterprises and the enterprises to engage in designated management shall carry out their business activities under normal commercial conditions, and may not choose provider according to non-commercial considerations, nor may they reject the entrustment of other enterprises or organizations on the basis of non-commercial considerations. Chapter V Monitoring of Import and Export and Provisional Measures

Article 53
The foreign trade department of the State Council shall be responsible for the monitoring and appraisal of the import and export of goods, shall report regularly to the State Council about the import and export of goods, and give suggestions.

Article 54
In order to maintain the international balance of payments equilibrium including the occurrence of serious international unbalance of payments or the threat of serious unbalance of payments, or to maintain a level of foreign exchange reserves that is suitable for carrying out the plans of economic development, the state may take provisional restrictive measures with regard to the value or quantity of the goods to be imported.

Article 55
In order to establish or quicken up the establishment of a certain domestic industry, the state may, in case this target cannot be achieved through the incumbent measures, take provisional measures for restricting or prohibiting the import of goods.

Article 56
To take any of the following measures, the state may, when it is necessary, take provisional measures to restrict the import of any form of agricultural products or aquatic products: 1. Taking restrictive measures over the domestic production or sale of the products that are of the same kind or that directly compete with each other; 2. Clearing up, by way of subsidizing consumptions, the domestic superfluous products that are of the same kinds or that directly compete with each other; 3. Limiting the yield of animal products whose production is completely or mainly dependent upon the import of the agricultural products or aquatic products.

Article 57
In any of the following circumstance, the foreign trade department of the State Council may take provisional measures to restrict or prohibit the export of certain goods: 6/9 1. It is necessary to restrict or prohibit the export due to the occurrence of abnormalities such as serious natural disasters; 2. It is necessary to restrict the export of goods due to serious disorder of export management; 3. It is necessary to restrict or prohibit the export of goods as pursuant to the provisions of Articles 16 and 17 of the Foreign Trade Law.

Article 58
In case provisional measures are to be taken for restricting or prohibiting the export of goods, the foreign trade department of the State Council shall make public announcements prior to the implementation of the measures. Chapter VI Promotion of Foreign Trade

Article 59
The state takes the measures like export credit insurance, export credit, export rebates, establishing funds for developing foreign trade, etc. to promote the development of foreign trade.

Article 60
The state takes effective measures to promote the technological innovation and technological development of the enterprises and to enhance the international competition capacity of the enterprises.

Article 61
The state helps the enterprises to exploit the international market by way of providing information consultation services.

Article 62
The business operators that import or export goods may establish or join chambers of commerce for import and export so as to achieve self-disciplinary and coordination.

Article 63
The state encourages the enterprises to actively respond to the discriminatory antidumping, anti-subsidy or safeguard measures of foreign countries so as to protect the lawful rights and interests of the enterprises in normal trade. Chapter VII Legal Liabilities

Article 64
Any one who imports or exports goods that are prohibited from import or export or imports or exports goods that are limited in importation or exportation without approval or permission shall be subject to investigation for assuming penal liabilities according to the provisions of the Criminal Law on smuggling; if the activities are not serious enough for assuming criminal liabilities, they shall be punished according to the relevant provisions of the Customs Law, and the foreign trade department of the State Council may revoke their business licenses for foreign trade at the same time.

Article 65
Any one who imports or exports goods that are limited in importation or exportation beyond the scopes approved or permitted shall be subject to investigation for assuming penal liabilities according to the provisions of the Criminal Law concerning the crime of smuggling or the crime of illegal management; if the activities are not serious enough for assuming criminal liabilities, they shall be punished according to the relevant provisions of the Customs Law, and the foreign trade department of the State Council may suspend or even revoke their business licenses for foreign trade at the same time.

Article 66
Any one who counterfeits or alters or buys or sells certificates of import or export quotas, approval documents, licenses or automatic import licenses shall be subject to assume criminal liabilities according to the Criminal Law concerning the crime of illegal management or the crime of counterfeiting, altering, buying or selling official documents, certificates, seals of state organs; if the activities are not serious enough for assuming criminal liabilities, they shall be punished according to the relevant provisions of the Customs Law, and the foreign trade department of the State Council may revoke their business licenses for foreign trade at the same time.

Article 67
In case any business operator of import or export who obtains quotas for the import or export of goods, certification documents or automatic import licenses by deception or other unfair means, the quotas for the import or export of goods, certification documents or automatic import licenses shall be taken back, and the foreign trade department of the State Council may suspend or even revoke their business licenses for foreign trade at the same time.

Article 68
In case any one who violates the provisions of Article 51 of the present Regulation by engaging in the import or export of goods that are subject to state-run trade administration or designated management and thus disrupts the market order and if the circumstances are serious, it shall be subject to assume criminal liabilities according to the provisions of the Criminal Law on the crime of illegal management; if the activities are not serious enough for assuming criminal liabilities, they shall be given administrative punishments by the administrations for industry and commerce, and the foreign trade department of the State Council may suspend or even revoke their business licenses for foreign trade at the same time.

Article 69
Any state-run trade enterprise or designated management enterprise violates the provisions of Articles 48 and 52 of the present Regulation shall be given a warning by the foreign trade department of the State Council; if the circumstances are serious, its qualifications as a state-run trade enterprise or designated management enterprise may be suspended or even revoked by the foreign trade department of the State Council.

Article 70
Any staff member engaged in the administration of the import or export or goods that, in the process of performing its functions of administration over the import or export of goods, abuses its power or neglects its duties or accepts or exacts property or money from other people by taking advantage of its functions shall be subject to assuming criminal liabilities according to the provisions of the Criminal Law concerning the crime of abusing power or the crime of neglecting duties or the crime of accepting bribes or other crimes; if the activities are not serious enough for assuming criminal liabilities, it shall be given administrative punishments. Chapter VIII Supplementary Provisions

Article 71
Any one who refuses to accept the decision of the administrative organs as provided in the present Regulation on the granting of quotas, tariff quotas, licenses or automatic licenses or to accept the decision on determining the qualifications of state-run trade enterprises or designated management enterprises or accept the decision on administrative punishments may plead for administrative reconsideration or institute a lawsuit at the people's court.

Article 72
The provisions of the present Regulation shall not foreclose the taking of measures such as tariff, inspection and quarantine, security, environmental protection, intellectual property, etc. according to the provisions of laws or administrative regulations over the goods imported or exported.

Article 73
The export of goods under export control like nucleus products, nucleus-related civil products, monitored chemical products, military products, etc shall handled according to the provisions of relevant administrative regulations.

Article 74
Where it is necessary to take antidumping, anti-subsidy or safeguard measures against imported goods, the provisions of the Foreign Trade Law and other relevant laws and administrative regulations shall be observed.

Article 75
Where there are otherwise provisions in laws or regulations concerning the import or export of goods of special economic zones like the bonded areas or export processing areas, etc, such provisions shall be observed.

Article 76
The foreign trade department of the State Council shall be responsible for the bilateral or multilateral discussions and negotiations concerning the import and export of relevant goods, and shall be responsible for settling trade disputes.

Article 77
The present Regulation shall take effect as of January 1, 2002. The Interim Regulation of the People's Republic of China on the License of Import of Goods which was promulgated by the State Council on January 10, 1984, the Interim Measures on the Administration of Export Commodities which was ratified by the State Council on December 21, 1992 and issued by the MOFTEC on December 29, 1992, the Interim Measures on the Administration of the Import of Machinery and Electrical Equipments which was jointly issued by the State Economic and Trade Commission and the MOFTEC on October 7, 1993, the Interim Measures on the Administration of Quotas for the Import of General Commodities which was ratified by the State Council on December 22, 1993 and jointly issued by the State Development Planning Commission and the MOFTEC on December 29, 1993, and the Interim Measures on the Administration and Management of Imported Goods which was ratified by the State Council on June 13, 1994 and jointly issued by the MOFTEC and the State Development Planning Commission on July 19, 1994 shall be concurrently repealed.

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