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RULES ON THE ESTABLISHMENT OF FOREIGN-SHARED FUND MANAGEMENT COMPANIES

20041001

The China Securities Regulatory Commission

Decree of the China Securities Regulatory Commission

No.9

The Rules on the Establishment of Foreign-shared Fund Management Companies are hereby promulgated, and shall come into force on July
1, 2002.

Chairman of the China Securities Regulatory Commission Zhou Xiaochuan

June 1, 2002

Rules on the Establishment of Foreign-shared Fund Management Companies

Article 1

To meet the demand of opening the securities market, to strengthen and improve the supervision and administration of foreign-shared
fund management companies and to clarify the preconditions and procedures for the establishment of foreign-shared fund management
companies, the Rules is therefore formulated in accordance with relevant provisions of the Company Law and the Interim Measures for
the Administration of Securities Investment Fund (hereinafter referred to as the Interim Measures).

Article 2

The foreign-shared fund management companies as referred to in the Rules shall include domestic fund management companies whose shares
are transferred to or purchased by foreign shareholders or those that are co-funded by foreign and domestic shareholders.

Article 3

The China Securities Regulatory Commission (hereinafter referred to as the CSRC) shall be responsible for the examination, approval,
supervision and administration of foreign-shared fund management companies.

Article 4

The organizational structure of a foreign-shared fund management company shall be that of limited liability. The name, registered
capital, founding and functions of the departments of a foreign-shared fund management company shall be compliant with relevant provisions
of the Company Law, the Interim Measures and the CSRC.

Article 5

Foreign-shared fund management companies shall meet the requirements as provided for in the Interim Measures and those of the CSRC.

Article 6

The foreign shareholders of a foreign-shared fund management company shall possess the following qualifications:

1)

Financial institutions established in accordance with the laws of their home countries and continuing to exist legitimately without
severe punishment by securities regulatory bodies or judicial organs within the past 3 years;

2)

Their home countries shall have a sound legal and regulatory system on securities, and the securities regulatory bodies shall have
signed the memorandum of understanding on securities regulation with CSRC and have maintained effective cooperation with the latter;

3)

The actual realized capital shall be free convertible currency equivalent of no less than RMB 300,000,000 yuan;

4)

Other prudential conditions as provided for by the CSRC.

Article 7

The domestic shareholders of a foreign-shared fund management company shall have the qualifications as shareholders of fund management
companies as provided for by the CSRC.

Article 8

The shares held by foreign shareholders or the equity possessed by them (both directly and indirectly) in a foreign-shared fund management
company may not exceed one third of the total in the aggregate, and the percentage may not exceed 49% within 3 years after China’s
accession to the WTO. Foreign shareholders shall invest with free convertible currencies.

Article 9

The board chairman, general manager, and deputy general manager of a foreign-shared fund management company shall possess the qualifications
as senior management of securities companies as provided for by the CSRC.

Article 10

The domestic and foreign applicants of a foreign-shared fund management company shall submit the application materials to the CSRC
in compliance with the contents and format prescribed by the CSRC. The application materials submitted by the domestic and foreign
applicants to the CSRC must be in Chinese. Documents and materials in foreign languages provided by the foreign shareholders and
the securities bodies of their home countries shall be accompanied by their Chinese versions consistent with the original contents.

Article 11

The establishment of a foreign-shared fund management company by foreign shareholders and domestic shareholders shall follow two phases,
namely the preparation and the commencement of business.

Article 12

The CSRC shall decide on whether to approve the application for establishment preparation or otherwise within 60 working days upon
formal acceptance of the application. If the approval is granted, the reply document should be issued. If the approval is not granted,
the applicant should be notified in writing of the reasons.

Article 13

As for foreign-shared fund management companies that have already obtained the approval documents for preparation from the CSRC but
are yet to open to business, if there are substantial changes in the basic conditions of their foreign shareholders, or their foreign
shareholders have been punished or tightly controlled and supervised by the regulatory bodies of relevant countries and regions for
violation of related rules and regulations, then these foreign shareholders shall motion for a founders’ meeting within the company
without delay and shall clarify the situation. If the foreign shareholders no longer meet the requirements of the Rules, the founders’
meeting shall reach a treatment decision and the preparatory group of the company shall report to the CSRC and complete relevant
formalities as required.

Article 14

The domestic and foreign applicants shall, after the preparation for establishment of the fund management company has been accomplished,
submit the application materials for business operation to the CSRC. The CSRC shall decide on whether to approve, postpone the approval
or disapprove the business operation within 30 working days upon formal acceptance of the application. If the approval is granted,
the approval documents shall be issued; if the approval is a deferred one or not granted, the applicant shall be notified in writing
of the reasons.

Article 15

When the shares of a foreign-shared fund management company are transferred to or purchased by foreign shareholders, the fund management
company shall submit the application materials to the CSRC. The CSRC shall decide on whether to grant the approval within 60 working
days upon formal acceptance of the application. If the approval is granted, the reply documents shall be issued; if the approval
is not granted, the applicant shall be notified in writing of the reasons. With regard to the review of applications involving new
shareholders and the change of the largest shareholders who have the highest proportion of capital contribution and nominate the
most directors, the CSRC shall follow the procedures for reviewing preparation applications of fund management companies.

Article 16

As for some foreign shareholders of a foreign-shared fund management company, the authorities in where the company is registered or
its main business activities take place may require for records of overseas foreign investment. If these foreign shareholders, after
legitimately obtaining the approval documents from the CSRC, should need to submit the relevant materials to the above-mentioned
authorities for record-keeping purpose, they shall also submit copies of those materials to the CSRC.

Article 17

The shareholders of a foreign-shared fund management company shall, within 30 working days after obtaining the approval documents
from the CSRC, apply to competent administrations for industry and commerce for alteration or establishment.

Article 18

The Rules is applicable to investors from Hong Kong Special Administrative Region, Macao Special Administrative Region and Taiwan
Area holding shares of domestically-funded fund management companies.

Article 19

As for the establishment, alteration, termination, business activities, supervision and administration of foreign-shared fund management
companies, other relevant provisions of the CSRC shall be applicable if there are no corresponding provisions in the Rules.

Article 20

The Rules shall enter into force as of July 1, 2002.



 
The China Securities Regulatory Commission
2002-06-01

 







CIRCULAR OF THE STATE ADMINISTRATION OF FOREIGN EXCHANGE (SAFE) ON THE ADMINISTRATION OF FOREIGN EXCHANGE ACCOUNT OF NVOCC

The State Administration of Foreign Exchange

Circular of the State Administration of Foreign Exchange (SAFE) on the Administration of Foreign Exchange Account of NVOCC

HuiFa [2002] No.75

July 25, 2002

SAFE branches in all provinces, autonomous regions and municipalities directly under the Central Government, exchange administration
offices, and SAFE branches in the cities of Shenzhen, Dalian, Qingdao, Xiamen, and Ningbo; headquarters of all designated Chinese-funded
foreign exchange banks:

In order to normalize the foreign exchange administration related to ocean shipping, and ensure the normal foreign exchange income
and outlay of NVOCCs (non-vessel operating common carriers), a circular on issues related to the administration of foreign exchange
accounts of NVOCCs is given hereunder according to Regulations of the People’s Republic of China on International Ocean Shipping
(Decree [2001] No.335 of the State Council), Rules on the Administration of Domestic Foreign Exchange Account (promulgated by the
People’s Bank of China on October 7, 1997), and Circular on Issues Related to the Administration of Foreign Exchange Income and Outlay
Related to International Ocean Shipping (HuiFa [2001] No.058):

1.

An authorized NVOCC may apply to a local branch or sub-branch of the State Administration of Foreign Exchange (hereafter referred
to as the SAFE office) for opening a foreign exchange account under current account (hereinafter referred to as “foreign exchange
account”) upon the Certificate of Qualification of NVOCC issued by the Ministry of Transportation.

2.

Income items of the foreign exchange account are limited to freight and related fees for international ocean shipping paid by domestic
shipper, forwarder, shipping agency, and NVOCC, or remitted in from abroad; while its outlay items are confined to freight and related
fees remitted abroad for international ocean shipping, or paid to domestic forwarder, shipping agency, shipping company, NVOCC, and
wholly foreign-funded shipping company.

3.

When approving an NVOCC to open a foreign exchange account, the SAFE office shall set a balance ceiling for the account equal to 10
percent of the NVOCC’s foreign exchange income from current account transactions in the previous year. For a newly established NVOCC,
the initial balance ceiling may be set in principle at an equivalent of USD100,000. The SAFE office may adjust the initial balance
ceiling according to the grand total of the balance ceilings in the locality and adjust annually the balance ceiling of the account.
If the actual balance exceeds the ceiling, the surplus shall be sold to the bank in 5 working days.

4.

If the regulations on the administration of foreign exchange account is amended in the future, the amended will prevail.

On receiving this Circular, SAFE branches shall promptly transmit it to the sub-branches and foreign-funded banks and entities concerned
under their respective jurisdiction. The designated Chinese-funded foreign exchange banks shall transmit it to their branch offices
as soon as possible. Any problem encountered during the implementation shall be reported in time to the Current Account Department
of the State Administration of Foreign Exchange.



 
The State Administration of Foreign Exchange
2002-07-25

 







FOOD HYGIENE LAW

Food Hygiene Law of the People’s Republic of China

    

CHAPTER I GENERAL PROVISIONS

CHAPTER II FOOD HYGIENE

CHAPTER III HYGIENE OF FOOD ADDITIVES

CHAPTER IV HYGIENE OF CONTAINERS, PACKAGINGS, UTENSILS AND EQUIPMENT USED FOR FOOD

CHAPTER V FORMULATION OF FOOD HYGIENE STANDARDS AND MEASURES FOR FOOD HYGIENE CONTROL

CHAPTER VI FOOD HYGIENE CONTROL

CHAPTER VII FOOD HYGIENE SUPERVISION

CHAPTER VIII LEGAL RESPONSIBILITY

CHAPTER IX SUPPLEMENTARY PROVISIONS

   Article 1 This Law is enacted for the purpose of ensuring food hygiene, preventing food contamination and harmful substances from injuring
human health, safeguarding the health of the people and improving their physical fitness.

   Article 2 The State institutes a system of food hygiene supervision.

   Article 3 The administrative department of public health under the State Council shall be in charge of supervision and control of food
hygiene throughout the country.

Other relevant departments under the State Council shall, within the scope of their respective functions and duties, be
responsible for control of food hygiene.

   Article 4 Whoever engages in food production or marketing within the territory of the People’s Republic of China must observe this Law.

This Law applies to all foods and food additives as well as containers, packagings, utensils and equipment used for food,
detergents and disinfectants; it also applies to the premises, facilities and environment associated with food production
or marketing.

   Article 5 The State encourages and protects the social supervision exercised by public organizations and individuals over food hygiene.

Any person shall have the right to inform the authorities and lodge a complaint about any violation of this Law.

   Article 6 Food shall be nontoxic and harmless, conform to proper nutritive requirements and have appropriate sensory properties such
as colour, fragrance and taste.

   Article 7 Principal and supplementary foods intended specially for infants and preschool children shall conform to the nutritive
and hygienic standards promulgated by the administrative department of public health under the State Council.

   Article 8 In the process of food production or marketing, the requirements for hygiene stated below shall be conformed to:

(1) The environment inside and outside any food production or marketing establishment shall be kept clean and tidy; measures shall
be taken to eliminate flies, rodents, cockroaches and other harmful insects and to remove conditions for their propagation;
and a prescribed distance shall be kept from any toxic or harmful site;

(2) An enterprise engaged in food production or marketing shall have workshops or other premises for the preparation of raw
materials and for processing, packing and storage that are commensurate with the varieties and quantities of the products handled;

(3) Appropriate facilities shall be made available for disinfection, changing clothes, toilet, natural and artificial light,
ventilation, prevention of spoilage, protection against dust, elimination of flies and rodents, washing of equipment, sewage
discharge and the containment of garbage and other wastes;

(4) The layout of installations and the application of technological processes shall be rational in order to prevent contamination
between foods to be processed and ready-to-eat foods, and between raw materials and finished products; food must not be placed
in contact with any toxic substance or filth;

(5) Tableware, kitchenware and containers for ready-to-eat foods must be cleaned and disinfected prior to use; cooking utensils
and other utensils must be washed after use and kept clean;

(6) Any containers, packagings, utensils and equipment used for the storage, transportation, loading and unloading of food
as well as the conditions under which these operations are carried out must be safe, harmless and kept clean in order to
prevent food contamination;

(7) Ready-to-eat foods shall be kept in small packets or in nontoxic, clean packaging materials;

(8) All persons involved in food production or marketing shall maintain a constant standard of personal hygiene, taking care to
wash their hands thoroughly and wear clean work clothes and headgear while preparing or selling food; also, proper utensils
must be used when selling ready-to- eat foods;

(9) Any water used must conform to the national hygiene standards for drinking-water in urban and rural areas;

(10) The detergents and disinfectants used shall be safe and harmless to human health.

The hygienic requirements for food production or marketing undertaken by food vendors and persons engaged in the food business in
urban and rural markets shall be formulated specifically according to this Law by the standing committees of the people’s
congresses in the provinces, autonomous regions, or municipalities directly under the Central Government.

   Article 9 The production and marketing of foods in the following categories shall be prohibited:

(1) foods that can be injurious to human health because they are putrid or deteriorated, spoiled by rancid oil or fat, moulded,
infested with insects or worms, contaminated, contain foreign matter or manifest other abnormalities in sensory properties;

(2) foods that contain or are contaminated by toxic or deleterious substances and can thus be injurious to human health;

(3) foods that contain pathogenic parasites, microorganisms or an amount of microbial toxin exceeding the tolerance prescribed by
the State;

(4) meat and meat products that have not been inspected by the veterinary health service or have failed to pass such inspection;

(5) poultry, livestock, game and aquatic animals that have died from disease, poisoning or some unknown cause, as well as products
made from them;

(6) foods contaminated by use of filthy or seriously damaged containers or packages, or filthy means of conveyance;

(7) foods that impair nutrition or health because they are adulterated or misbranded;

(8) foods processed with non-food raw materials; foods mixed with non- food chemical substances, or non-food stuffs used as food;

(9) foods that has expired the date for guaranteed quality;

(10) foods of which the sale has been specifically prohibited, for the prevention of diseases or other special reasons, by the
administrative department of public health under the State Council or by the people’s governments of the provinces, autonomous
regions, or municipalities directly under the Central Government;

(11) foods that contain additives not approved for use by the administrative department of public health under the State
Council or residues of pesticides exceeding the tolerance prescribed by the State; and

(12) other foods that do not conform to the standards and requirements for food hygiene.

   Article 10 Food must not contain medicinal substances, with the exception of those materials that have traditionally served as both
food and medicaments and are used as raw materials, condiments or nutrition fortifiers.

CHAPTER III HYGIENE OF FOOD ADDITIVES

   Article 11 The production, marketing and use of food additives must conform to the hygiene standards for use of food additives and
the hygiene control regulations; the food additives that do not conform to the hygiene standards and the hygiene control
regulations may not be marketed and used.

CHAPTER IV HYGIENE OF CONTAINERS, PACKAGINGS, UTENSILS AND EQUIPMENT

   Article 12 Containers, packagings, utensils and equipment used for food must conform to the hygiene standards and the hygiene
control regulations.

   Article 13 The raw materials for making containers, packagings, utensils and equipment used for food must meet hygiene requirements. The finished
products should be easy to clean and disinfect.

CHAPTER V FORMULATION OF FOOD HYGIENE STANDARDS AND MEASURES FOR FOOD

   Article 14 The administrative department of public health under the State Council shall formulate or approve and promulgate the national
hygiene standards, hygiene control regulations and inspection procedures for food, food additives, the containers, packagings,
utensils and equipment used for food, the detergents and disinfectants used for washing food or utensils and equipment
used for food, and the tolerances for contaminants and radioactive substances in food.

   Article 15 If the State has not formulated hygiene standards for a certain food, the people’s governments of the provinces, autonomous
regions, or municipalities directly under the Central Government may establish local hygiene standards for that food and
report them to the administrative department of public health under the State Council and the competent standardization administration
department under the State Council for the record.

   Article 16 Norms of significance to the science of health to be included in the national quality standards for food additives must be examined
and approved by the administrative department of public health under the State Council.

Appraisals on the safety for use of agricultural chemicals, such as pesticides and chemical fertilizers, shall be examined
and approved by the administrative department of public health under the State Council.

Veterinary hygiene inspection procedures for slaughtered livestock and poultry shall be formulated jointly by the relevant
administrative departments under the State Council and the administrative department of public health under the State Council.

   Article 17 The departments in charge of control of food production or marketing of the people’s governments at various levels shall strengthen
control of food hygiene and oversee the implementation of this Law.

The people’s governments at various levels shall encourage and support efforts to improve food processing technology so as
to promote the improvement of hygienic quality of food.

   Article 18 Enterprises engaged in food production or marketing shall improve their own system for food hygiene control, appoint full-time
or part-time workers to control food hygiene and strengthen inspection of the foods they produce or market.

   Article 19 The selection of sites and the designs for construction, extension or renovation projects of enterprises engaged in
food production or marketing shall meet hygiene requirements, and the administrative department of public health
must participate in the examination of those designs and in the inspection and acceptance of finished projects.

   Article 20 Before starting production of new varieties of food or food additives with new resources, the enterprises engaged in
their production or marketing must submit the data required for evaluation of the hygiene and nutrition of such products; before
starting production of new varieties of containers, packagings, utensils or equipment used for foods, with new raw or processed
materials, the enterprises engaged in their production or marketing must submit the data required for evaluation of
the hygiene of such products. Before the new varieties mentioned above are put into production, it shall also be necessary
to provide samples of the varieties and the matter shall be reported for examination and approval in accordance with the
specified procedures for examining and approving food hygiene standards.

   Article 21 Any standardized packaged food or food additive must, according to the requirements for different products, have the name
of the product, the place of manufacture, the name of the factory, the date of manufacture, the batch number (or code number),
the specifications, the formula or principal ingredients, the date of expiration for guaranteed quality, the method
of consumption or use, and other such information indicated in the label of the package or the product description.
The product description for any food or food additive shall not contain exaggerated or false advertising.

The label of the food package must be clearly printed and easy to read. Foods sold on domestic markets must have labels in the
Chinese language.

   Article 22 With regard to the food indicated to have specific health functions, the products and its description must be submitted to
the administrative department of public health under the State Council for examination and approval; its hygiene standards
and the measures for control of its production and marketing shall be formulated by the administrative department of
public health under the State Council.

   Article 23 The food indicated to have specific health functions may not be harmful for human health; the content of the product description
shall be true, and the functions and ingredients of the product shall be identical with the information given in the product
description and there shall be no false information.

   Article 24 Food, food additives and containers, packagings and other utensils used specially for food may be dispatched from factory or
sold only after their producers have carried out inspection and found them to be up to the standards according to the hygiene
standards and the hygiene control regulations.

   Article 25 Whenever producers or marketers of food procure supplies, they shall, in accordance with the relevant State regulations, request
inspection certificates or laboratory test reports and the supplier must provide these. The scopes and types of food that requires
certificates shall be specified by the administrative department of public health of the people’s governments of the provinces,
autonomous regions, or municipalities directly under the Central Government.

   Article 26 All persons engaged in food production or marketing must undergo an annual medical examination; persons newly employed or serving
temporarily in this field must also undergo a medical examination and may not start work until they have obtained health certificates.

No persons suffering from dysentery, typhoid, viral hepatitis or other infectious diseases of the digestive tract (including
pathogen carriers), active tuberculosis, suppurative or exudative dermatosis or any other disease incompatible with food
hygiene, may be engaged in any work involving contact with ready-to-eat foods.

   Article 27 Enterprises engaged in food production or marketing as well as food vendors must obtain a hygiene licence issued by
the administrative department of public health before they shall be permitted to apply for registration with the
administrative departments of industry and commerce. No person who has not obtained a hygiene licence may engage in food
production or marketing.

Food producers or marketers may not forge, alter or lend the hygiene licence.

The measures for the issuance and control of hygiene licences shall be worked out by the administrative departments of public
health of the people’s governments of the provinces, autonomous regions, or municipalities directly under the Central
Government.

   Article 28 Persons who run a food market of any type shall be responsible for the food hygiene control of the market, set up necessary
public sanitary facilities in the market and maintain a good sanitary environment.

   Article 29 The administrative departments of industry and commerce shall be responsible for the control of food hygiene on urban and
rural markets; the administrative departments of public health shall be responsible for the supervision and inspection
of food hygiene.

   Article 30 Imported foods, food additives and containers, packagings, utensils and equipment used for food must comply with the national
hygiene standards and the hygiene control regulations.

The above-mentioned imports shall be subject to hygiene supervision and inspection by the frontier agencies for hygiene
supervision and inspection of imported food. Only those proved to be up to the standards through inspection shall be allowed
to enter the territory. The Customs authorities shall grant clearance of goods on the strength of the inspection certificate.

When declaring such products for inspection, the importer shall submit the relevant data and inspection reports on the pesticides,
additives, fumigants and other such substances used by the exporting country (region).

The imports mentioned in the first paragraph shall be subject to inspection in accordance with the national hygiene standards.
In the absence of the national hygiene standards for such imports, the importer must provide the hygiene evaluation data
prepared by the health authorities or organization of the exporting country (region) to the frontier agencies for hygiene
supervision and inspection of imported food for examination and inspection and such data shall also be reported to the
administrative department of public health under the State Council for approval.

   Article 31 Foods for export shall be subject to hygiene supervision and inspection by the national inspection agency for import and
export commodities.

The Customs authorities shall grant clearance of export commodities on the basis of the certificates issued by the national inspection
agency for import and export commodities.

CHAPTER VII FOOD HYGIENE SUPERVISION

   Article 32 The administrative departments of public health of the local people’s governments at or above the county level shall exercise
their functions and duties for food hygiene supervision within the scope of their jurisdiction.

The agencies for food hygiene supervision set up by the administrative departments of railways and communications shall
exercise their functions and duties for food hygiene supervision jointly prescribed by the administrative departments of
public health under the State Council and other relevant departments under the State Council.

   Article 33 The duties for food hygiene supervision shall be as follows:

(1) to provide monitoring, inspection and technical guidance for food hygiene;

(2) to contribute to the training of personnel for food production and marketing and to supervise the medical examination of such
personnel;

(3) to disseminate knowledge of food hygiene and nutrition, provide appraisals of food hygiene and publicize the existing situation
in food hygiene;

(4) to conduct hygiene inspection of sites selected or designs made for construction, extension or renovation projects of enterprises
engaged in food production or marketing and participate in the inspection and acceptance of finished projects;

(5) to undertake investigation of accidents involving food poisoning or food contamination and take measures of control;

(6) to make supervision and inspection rounds to see whether any act is committed against this Law;

(7) to pursue investigation of the responsibility of persons who violate this Law and impose administrative punishment on them according
to law; and

(8) to take charge of other matters that concern food hygiene supervision.

   Article 34 The administrative departments of public health of the people’s governments at or above the county level shall be manned
with food hygiene supervisors. Such supervisors shall be qualified professionals and issued with such certificates
by the administrative departments of public health at the corresponding levels.

The food hygiene supervisors appointed by departments in charge of railways and communications agencies shall be issued
with the certificates by the competent authorities at a higher level.

   Article 35 Food hygiene supervisors shall carry out the tasks assigned to them by the administrative department of public health.

Food hygiene supervisors shall enforce laws impartially, be loyal to their duties and may not seek personal gain by taking advantage
of their office.

While carrying out their tasks, food hygiene supervisors may obtain information from the food producers or marketers, request
necessary data, enter production or marketing premises to inspect them, and get free samples in accordance with regulations.
The producers or marketers may not turn down such requests or hold back any information.

Food hygiene supervisors shall be obliged to keep confidential any technical data provided by the producers or marketers.

   Article 36 The administrative department of public health under the State Council and those of the people’s governments of the provinces,
autonomous regions, or municipalities directly under the Central Government may, if the need arises, assign qualified
units as units for food hygiene inspection; these units shall undertake food hygiene inspection and provide inspection
reports.

   Article 37 The administrative department of public health of the local people’s governments at or above the county level may adopt
the following temporary measures of control over the food producer or marketer when a food poisoning accident has occurred
or when there is evidence of a potential food poisoning accident:

(1) to seal up the food and its raw materials that have caused food poisoning or that are likely to cause food poisoning;

(2) to seal up the contaminated utensils used for food and order the food producer or marketer to have them cleaned and disinfected.

The food that is found to be contaminated after inspection shall be destroyed, while the food that is found not contaminated
shall be unsealed.

   Article 38 The units where food poisoning accidents have occurred and the units that have admitted the victims for medical treatment shall,
in addition to taking rescue measures, submit prompt reports to the local administrative departments of public health in accordance
with relevant State regulations.

The administrative department of public health of a local people’s government at or above the county level shall, upon
receipt of such report, conduct prompt investigation and handle the matter and adopt control measures.

CHAPTER VIII LEGAL RESPONSIBILITY

   Article 39 Whoever, in violation of this Law, produces or markets food which is not up to the hygiene standards, thus causing an accident
of food poisoning or resulting in a disease caused by food-borne bacteria, shall be ordered to stop such production or marketing;
the food causing such food poisoning or disease shall be destroyed; the illegal gains shall be confiscated and a penalty
of not less than one time and not more than five times the illegal gains shall concurrently be imposed; if there are no illegal
gains, a penalty of not less than 1,000 yuan and not more than 50,000 yuan shall be imposed.

Whoever, in violation of this Law, produces or markets food which is not up to the hygiene standards, thus causing a serious accident
of food poisoning or resulting in a disease caused by food-borne bacteria, and seriously harming human health, or adulterates
food he produces or markets with toxic or harmful non-food raw materials, shall be investigated for criminal responsibility
according to law.

If a person commits any of the acts mentioned in this Article, his hygiene licence shall be revoked.

   Article 40 If anyone, in violation of this Law, engages in food production or marketing without obtaining a hygiene licence or with
a forged hygiene licence, such production or marketing shall be banned; the illegal gains shall be confiscated and a penalty
of not less than one time and not more than five times the illegal income shall concurrently be imposed; if there
are no illegal gains, a penalty of not less than 500 yuan and not more than 30,000 yuan shall be imposed. If anyone alters
or lends his hygiene licence, his hygiene licence and the illegal gains shall be confiscated; and a penalty of not less than
one time and not more than three times the illegal gains shall concurrently be imposed; if there are no illegal gains, a penalty
of not less than 500 yuan and not more than 10,000 yuan shall be imposed.

   Article 41 If, in violation of this Law, any food producer or marketer does not comply with the hygiene requirements, he shall be ordered
to set it right and given a disciplinary warning, and a penalty of not more then 5,000 yuan may be imposed; if he refuses to
set it right or other serious circumstances are involved, his hygiene licence shall be revoked.

   Article 42 If anyone, in violation of this Law, produces or markets food the production and marketing of which is prohibited, he shall be
ordered to stop producing or marketing such food, a public announcement shall be made immediately to recall the sold food
and the food shall be destroyed; the illegal gains shall be confiscated and a penalty of not less than one time and not
more than five times the illegal gains shall concurrently be imposed; if there are no illegal gains, a penalty of not less than
1,000 yuan and not more than 50,000 yuan shall be imposed; if the offence is serious, the offender’s hygiene licence shall be
revoked.

   Article 43 If anyone, in violation of this Law, produces or markets the principal and supplementary foods intended specially for infants
and preschool children which do not conform to the nutritive and hygiene standards, he shall be ordered to stop producing
and marketing such foods, a public announcement shall be made immediately to recall the sold foods and the foods shall
be destroyed; the illegal gains shall be confiscated and a penalty of not less than one time and not more than five times
the illegal gains shall concurrently be imposed; if there are no illegal gains, a penalty of not less than 1,000 yuan and not
more than 50,000 yuan shall be imposed; if the offence is serious, the offender’s hygiene licence shall be revoked.

   Article 44 If anyone, in violation of this Law, produces, markets or uses the food additives, food containers, packagings, utensils
and equipment used for food as well as the detergents and disinfectants which do not conform to the hygiene standards
and the hygiene control regulations, he shall be ordered to stop producing and using them; the illegal gains shall be confiscated
and a penalty of not less than one time and not more than three times the illegal gains shall concurrently be imposed; if
there are no illegal gains, a penalty of not more than 5,000 yuan shall be imposed.

   Article 45 If anyone, in violation of this Law, produces or markets the food indicated to have specific health functions without examination
and approval by the administrative department of public health under the State Council, or if the product description of
such food provides false information, he shall be ordered to stop producing or marketing such food, the illegal gains shall
be confiscated and a penalty of not less than one time and not more than five times the illegal gains shall concurrently
be imposed; if there are no illegal gains, a penalty of not less than 1,000 yuan and not more than 50,000 yuan shall be imposed;
if the offence is serious, the offender’s hygiene licence shall be revoked.

   Article 46 If anyone, in violation of this Law, does not indicate or falsely indicates specified matters such as the date of manufacture
and the date of expiration for guaranteed quality in the labels of packages of the standardized packaged food or food additives
or in the product descriptions, or in violation of the regulations, does not have labels in the Chinese language, he shall
be ordered to set it right and a penalty of not less than 500 yuan and not more than 10,000 yuan may concurrently be
imposed.

   Article 47 If a food producer or marketer, in violation of this Law, engages in food production or marketing without obtaining a
health certificate, or if the producers or marketers who suffer from diseases and may not contact with ready-to-eat foods are
not transferred to other posts according to relevant regulations, they shall be ordered to set it right and a penalty of not
more than 5,000 yuan may be imposed.

   Article 48 If anyone, in violation of this Law, causes an accident of food poisoning or a disease engendered by food-borne bacteria or
causes harm to another person by other acts against this Law, he shall bear the civil liability for compensation according to
law.

   Article 49 The administrative punishment provided in this Law shall be decided by the administrative department of public health of a
local people’s government at or above the county level. Other authorities exercising the power of food hygiene supervision
as provided by this Law shall, within the stipulated scope of functions and duties, make decisions on administrative
punishment in accordance with the provisions of this Law.

   Article 50 If a party is not satisfied with the decision on administrative punishment, he may, within 15 days from receipt of
the notice of punishment, apply for reconsideration to the organ at the next higher level over the one that has made the decision.
The party may also directly bring a suit in a People’s Court within 15 days from receipt of the said notice.

The reconsideration organ shall, withi

SUPPLEMENTARY PROVISIONS OF THE STANDING COMMITTEE OF NPC REGARDING THE PUNISHMENT OF THE CRIME OF EXCAVATING AND ROBBING SITES OF ANCIENT CULTURE OR ANCIENT TOMBS

Supplementary Provisions of the Standing Committee of NPC Regarding the Punishment of the Crime of Excavating and Robbing Sites of
Ancient Culture or Ancient Tombs

     The 20th Meeting of the Standing Committee of the Seventh National People’s Congress decides to make the following provisions supplementary
to the Criminal Law:

Whoever excavates and robs a site of ancient culture or ancient tomb of historical, artistic or scientific value shall be sentenced
to fixed- term imprisonment of not less than three years but not more than ten years, and may concurrently be punished with a fine;
if the circumstances are relatively minor, the offender shall be sentenced to fixed-term imprisonment of not more than three years
or criminal detention, and may concurrently be punished with a fine; and, under any of the following circumstances, the offender
shall be sentenced to fixed-term imprisonment of not less than ten years, or life imprisonment or death, and shall concurrently be
punished with a fine or confiscation of property:

(1) Excavating and robbing a site of ancient culture or ancient tomb which is designated as major sites to be protected for their
historical and cultural value at the national level or at the provincial level;

(2) Being the ringleader of a gang engaged in excavating and robbing sites of ancient culture or ancient tombs;

(3) Excavating and robbing sites of ancient culture or ancient tombs for many times;

(4) Excavating a site of ancient culture or ancient tomb, and robbing valuable cultural relics therein, or causing serious damage
to valuable cultural relics therein.

All cultural relics seized from excavating and robbing sites of ancient culture or ancient tombs shall be recovered.

    

MOFTEC P.R.C.

EDITOR:Victor






CIRCULAR OF THE STATE ADMINISTRATION OF FOREIGN EXCHANGE (SAFE) ON THE PRINCIPLES FOR THE DISPOSAL OF FOREIGN EXCHANGE L/C ADVANCE OF DESIGNATED CHINESE-FUNDED FOREIGN EXCHANGE BANKS

The State Administration of Foreign Exchange

Circular of the State Administration of Foreign Exchange (SAFE) on the Principles for the Disposal of Foreign Exchange L/C Advance
of Designated Chinese-funded Foreign Exchange Banks

HuiFa [2002] No.56

June 6, 2002

SAFE branches in all provinces, autonomous regions, and municipalities directly under the Central Government, exchange administration
offices, and SAFE branches in the cities of Shenzhen, Dalian, Qingdao, Xiamen and Ningbo; all designated Chinese-funded foreign exchange
banks:

In order to normalize the L/C business of Chinese-funded banks (including wholly state-owned commercial banks, joint-stock commercial
banks, policy banks, city commercial banks, rural commercial banks and rural credit cooperatives, hereinafter referred to as bank
for all), urge the banks to control L/C risks and improve the quality of foreign exchange assets, with the approval of the People’s
Bank of China, a circular on the principles for the disposal of foreign exchange L/C advance and related charges is given hereunder:

1.

Scope of Application

This circular applies to L/C advance paid by banks before September 30, 2001. It does not apply to foreign exchange L/C advance paid
by financial institutions in bonded areas after September 10, 1998.

2.

Repayment of foreign exchange L/C advance

2.1

In case an L/C applicant can submit the Verification Paper of Import Payment and Goods Delivery sealed “verified” by the verification
administration department of the SAFE or its branch/sub-branch (hereinafter referred to as SAFE office), the applicant or its guarantor
may apply at the SAFE office in the place of registration for purchasing foreign exchange on the strength of the evidential documents
related to the foreign exchange advance, and then purchase foreign exchange at a bank on the strength of the approval of the SAFE
office.

2.1.1

In case the L/C applicant purchases foreign exchange for repayment, the applicant shall submit to the SAFE office a valid Verification
Paper of Import Payment and Goods Delivery and evidential documents verifying the foreign exchange L/C advance paid by the bank.

2.1.2

In case the guarantor purchases foreign exchange for repayment on behalf of the L/C applicant, the guarantor shall submit to the SAFE
office the guarantee contract as well as the documents prescribed in the previous clause.

After the guarantor’s purchase of foreign exchange for repaying L/C advance, the L/C applicant shall not purchase foreign exchange
in the name of the same advance, and shall only repay equivalent amount of renminbi to the guarantor. In case the guarantor has used
its own foreign exchange to repay the L/C advance, the L/C applicant may still apply at the SAFE office for purchasing foreign exchange
by presenting the certificate testifying the repayment by the guarantor, and purchase foreign exchange at the bank on the strength
of the approval of the SAFE office to repay the guarantor.

2.2

In case the L/C applicant can not provide the Verification Paper of Import Payment and Goods Delivery sealed “verified” by the verification
administration department of the SAFE office, if the applicant or/and its guarantor has repaid renminbi to the bank forwardly, or
the bank has demanded repayment from the applicant or its guarantor in renminbi with the help of the judicial department or an arbitrator,
or the bank has got renminbi by selling off the assets of the debtor or/and the guarantor with the help of the judicial department,
or the applicant has repaid the bank with renminbi after liquidation, the bank as the purchasing subject may apply at the SAFE office
for purchasing foreign exchange.

3.

In case banks as purchasing subjects apply for purchasing foreign exchange to recover L/C advance, they shall follow the following
procedures:

3.1

Branches and sub-branches of banks shall apply at local SAFE offices and submit to the latter detailed lists of subject foreign exchange
L/C advances sum by sum in the form of attachment 1. The local SAFE offices shall verify the authenticity and legitimacy of each
sum of the listed foreign exchange advances.

3.2

Branches and sub-branches of banks shall submit the data of foreign exchange L/C advances and the detailed list verified by local
SAFE offices to their superior level or their headquarters, and shall not purchase foreign exchange of their own accord, nor recover
the advances with their revolving position for foreign exchange purchases and sales.

3.3

Headquarters of all banks are responsible for collecting the data of foreign exchange L/C advances of all respective branches and
sub-branches which have been verified by SAFE branches, submit breakdown of data province-by-province to the SAFE, and apply for
purchasing foreign exchange in a unified manner.

4.

When examining banks’ application for purchasing foreign exchange, SAFE offices shall follow the following procedures:

4.1

SAFE offices shall examine carefully all the documents related to the foreign exchange L/C advances submitted by the banks under their
jurisdiction, issue to banks written comments and detailed lists of foreign exchange L/C advances for which purchase of foreign exchange
has been certified, and send copies of the written comments and detailed lists to the supervisory departments of the local branches
of the People’s Bank of China and the SAFE offices of higher level respectively. In case endorsement for purchase of foreign exchange
to cover an L/C advance has been given to a bank, the SAFE office shall notify the banks under its jurisdiction not to sell foreign
exchange to the L/C applicant in the name of the same L/C advance, and shift the data of subject foreign exchange payment from a
status of overdue for verification to a status of for future reference. For L/C advance of an L/C applicant whose business license
has been nullified or who does not exist, the SAFE office shall not approve any bank’s application for the purchase of foreign exchange
thereto related.

4.2

SAFE branches are responsible for collecting the data of foreign exchange L/C advances of banks certified by sub-branches under their
jurisdiction, and submitting detailed lists of data (with breakdown for each bank) to the Balance of Payments Department of the SAFE
on a monthly basis.

4.3

The SAFE is in charge of examining the applications of the headquarters of commercial banks for purchasing foreign exchange, and schedule
their purchase in accordance with supply and demand of the inter-bank foreign exchange market. A list of foreign exchange L/C advances
for which purchase of foreign exchange by banks has been approved will be sent back to the SAFE branches concerned through the technical
supporting web-site of the SAFE Information Center.

The SAEF branches shall check carefully the feedback list sent by the SAFE with the list of L/C advances certified by themselves or
by sub-branches under their jurisdiction. Any inconsistency shall be reported to the Balance of Payments Department of the SAFE in
good time.

5.

A bank that fails in reclaiming a foreign exchange L/C advance after taking whatever measures, shall account the advance as a non-performing
loan dating from the payment of the advance in accordance with relevant provisions in the Provisional Rules on the Determination
of Non-performing Loans promulgated by the People’s Bank of China.

6.

Normal L/C settlement of foreign trade shall be conducted in accordance with relevant current foreign exchange regulations.

7.

This circular will go into effect as of the day of promulgation. Any contradictory stipulation in previous regulations will be nullified
at the same time.

Upon receiving this circular, all branches shall promptly transmit it to the sub-branches, banks and enterprises under their jurisdiction.
Any problems encountered in implementation shall be reported in good time to the Balance of Payments Department of the SAFE (by calling
010-68402310, 68402313, or faxing 010-68402315).

Attachment:

1. Application Form of Foreign Exchange Purchase by the Banks for Recovering L/C Advance (Omitted)

2. Examination Form of Foreign Exchange Purchase by the Banks for Recovering L/C Advance (Omitted)



 
The State Administration of Foreign Exchange
2002-06-06

 







CIRCULAR OF THE STATE ADMINISTRATION OF FOREIGN EXCHANGE (SAFE) ON THE DISTRIBUTION OF RULES ON FOREIGN EXCHANGE ADMINISTRATION IN BONDED AREAS

e01700

The State Administration of Foreign Exchange

Circular of the State Administration of Foreign Exchange (SAFE) on the Distribution of Rules on Foreign Exchange Administration in
Bonded Areas

HuiFa [2002] No.74

July 25,2002

SAFE branches in all provinces , autonomous regions and municipalities directly under the Central Government, exchange administration
offices, and SAFE branches in the cities of Shenzhen, Dalian, Qingdao, Xiamen, and Ningbo:

To meet the new situation of exchange administration in bonded areas, the SAFE has revised the Rules on Foreign Exchange Administration
in Bonded Areas promulgated on December 18, 1995 and put into force on January 1, 1996. The revised Rules on Foreign Exchange Administration
in Bonded Areas is hereby promulgated for implementation.

1.

According to Rules on Foreign Exchange Administration in Bonded Areas, an inside-area enterprise, whether Chinese or foreign-funded,
shall go through formalities of foreign exchange registration and apply for Foreign Exchange Registration Certificate in Bonded Areas.
Therefore, as from the day when Rules on Foreign Exchange Administration in Bonded Areas is officially implemented, branches and
sub-branches of the State Administration of Foreign Exchange (hereinafter referred to as SAFE offices) shall no longer issue Foreign
Exchange Registration Certificate of enterprise with foreign investment to an inside-area enterprise with foreign investment any
longer. Instead, they shall only issue Foreign Exchange Registration Certificate in Bonded Areas to such enterprise.

2.

As of promulgation of this circular, SAFE branches and exchange administration offices are required to reissue Foreign Exchange Registration
Certificate in Bonded Areas to inside-area enterprises, and collect from them the old Foreign Exchange Registration Certificate in
Bonded Areas and Foreign Exchange Registration Certificate of Enterprise with Foreign Investment. The changeover shall be finished
before January 1, 2003.

3.

During the changeover period, both old and new Foreign Exchange Registration Certificates in Bonded Areas are valid. If an inside-area
enterprise cannot acquire the new Foreign Exchange Registration Certificates in Bonded Areas in time to make foreign exchange payment
or collection due to reasons on the SAFE office’s side, according to Rules on Foreign Exchange Administration in Bonded Areas, its’
foreign exchange payment or collection may be made by a bank upon SAFE office’s approval on a temporary basis. As of January 1, 2003,
the old Foreign Exchange Registration Certificate in Bonded Areas and Foreign Exchange Registration Certificate of enterprise with
foreign investment shall become invalid without exception.

On receiving this circular, SAFE branches and exchange administration offices shall transmit it promptly to sub-branches and banks
under their jurisdiction, administrative organs of bonded areas, and inside-area enterprises, give publicity to the Rules and make
preparations to ensure timely issuance of the new Foreign Exchange Registration Certificate in Bonded Areas to the inside-area enterprises.
Any problem encountered during implementation shall be reported to the General Affairs Department of the State Administration of
Foreign Exchange in good time.

Attachment: Rules on Foreign Exchange Administration in Bonded Areas

Attachment:Rules on Foreign Exchange Administration in Bonded Areas

Chapter I General Provisions

Article 1

Pursuant to Regulations on the Exchange System of the People’s Republic of China and relevant laws and regulations, this Rules is
formulated with a view to improving foreign exchange administration in bonded areas and facilitating sound economic development.

Article 2

Bonded areas in this Rules refers to the special areas inside the People’s Republic of China (hereinafter referred to as inside China)
under closed supervision of the customs established with the approval of the State Council.

Article 3

Outside areas in this Rules refers to the areas inside China other than the bonded areas.

Article 4

Inside-area entities in this Rules referred to the administrative organs, enterprises, institutions, and other economic organizations
inside the bonded areas.

Inside-area Enterprises in the precious paragraph refer to both Chinese-funded and foreign-funded enterprises registered in the bonded
areas.

Article 5

The organ responsible for foreign exchange administration in the bonded areas is the State Administration of Foreign Exchange (SAFE),
its branches and sub-branches (hereinafter referred to as SAFE offices).

Article 6

Foreign exchange operational activities related to the bonded areas shall be conducted according to this Rules.

Article 7

Overseas economic transactions of the bonded areas shall be priced and settled in foreign exchange instead of in renminbi.

Bonded goods flowing between the bonded areas and outside areas shall be priced and settled in foreign exchange instead of in renminbi.
Goods other than bonded ones flowing between the bonded areas and outside areas may be priced and settled either in renminbi or in
foreign exchange. Non-trade transactions such as services shall be priced and settled in renminbi.

Transactions between inside-area enterprises in the same bonded area or between different bonded areas may be priced and settled either
in renminbi or in foreign exchange. Fees of administrative organs inside the bonded areas shall be priced and settled in renminbi.
Economic transactions between the bonded areas and other special areas under closed supervision of the customs, such as the processing
areas for export and the Shanghai Diamond Exchange are regarded as transactions between bonded areas.

Article 8

Banks shall abide by this Rules and other relevant foreign exchange administration regulations when opening or closing a foreign exchange
accounts for, purchasing foreign exchange from or selling foreign exchange to, and making payment or collection in foreign exchange
for inside-area enterprises. They shall verify and keep related certificates and vouchers and submit statistic statements and other
information to SAFE offices as required.

Article 9

All foreign exchange revenues earned by inside-area entities shall be repatriated in time and shall not be deposited overseas without
approval of SAFE offices.

Article 10

For economic transactions with overseas enterprises, inside-area entities shall go through formalities of balance of payment statistical
reporting as required. For economic transactions between inside-area and outside-area entities balance of payment statistical reporting
is not required of the entities concerned.

Chapter II Foreign Exchange Registration and Annual Inspection

Article 11

Within 30 days after acquiring the industrial and commercial business license, the inside-area enterprise shall go through formalities
of foreign exchange registration at a relevant SAFE office by presenting the industrial and commercial business license and its copy,
the approved contract and its articles of association, and the certificate of organizational code (in the case of an enterprise with
foreign investment, the approval document for its establishment is also required), and fill out the Registration Form of Basic Information
accurately.

After verifying the submitted documents, the SAFE office shall issue a Foreign Exchange Registration Certificate in Bonded Areas (hereinafter
referred to as registration certificate) to the inside-area enterprise. The registration certificate shall be designed by the SAFE
and printed by its branches. The registration certificate shall not be forged, altered, rented, lent, transferred, or sold to other
entities.

Article 12

In case of change of name, address, business scope, stock equity transfer, increase of capital, merger and split after foreign exchange
registration, the inside-area enterprise shall report to relevant SAFE office for record and go through formalities of altering foreign
exchange registration upon relevant materials within 30 days after acquiring altered industrial and commercial business license.

Article 13

In the case of liquidation due to expiration of business term or casual termination of business, the inside-area enterprise shall
hand in its registration certificate to the SAFE office and go through formalities of nullifying foreign exchange registration within
30 working days after liquidation is approved by the examining and approving body. Outward remittance of liquidated fund shall be
made upon presentation of “approval for foreign exchange business under capital account” issued by the SAFE office. The inside-area
enterprise shall hand in its registration certificate to the SAFE office and go through formalities of nullifying foreign exchange
registration when it applies for such remittance.

Article 14

If the inside-area enterprise loses its registration certificate, it shall make a statement in the newspaper and report to the SAFE
office within 5 days after the statement. The SAFE office shall re-issue a registration certificate upon the statement.

Article 15

The SAFE office shall inspect annually the inside-area enterprise’s foreign exchange income and expenditure as well as business operations
in the first quarter of each year. After the annual inspection, the SAFE office shall record the result in the registration certificate.

Article 16

An inside-area enterprise’s income and expenditure in foreign exchange shall only be handled upon inspected and required valid registration
certificate and prescribed valid certificates and commercial vouchers. The bank shall not immediately go through formalities of foreign
exchange sale, purchase, payment and receipt for an enterprise that cannot present a valid registration certificate.

If an inside-area enterprise has not taken or passed the annual inspection, or fails to provide valid registration certificate, the
SAFE office shall instruct it to rectify within a stated time. During the period of rectification, each of its receipt or payment
in foreign exchange shall be handled by the bank upon the SAFE office’s approval.

Chapter III Open, Use, and Administration of Foreign Exchange Accounts

Article 17

An inside-area enterprise, before opening a foreign exchange account, shall apply at the SAFE office in the locality where the enterprise
is registered by presenting its registration certificate and materials required by relevant regulations on foreign exchange account.
Foreign exchange account for current account transactions shall be opened on the presentation of the “Account-opening Notice” issued
by the SAFE office and the registration certificate. Special foreign exchange account for capital account transactions shall be opened
on the presentation of the “approval for foreign exchange business under capital account” issued by the SAFE office and the registration
certificate.

Foreign exchange account for current account transactions shall be opened at a bank in the locality where the enterprise is registered.
And in principle, only one such account can be opened.

Special foreign exchange account for capital account transactions may be opened at a bank inside or outside the locality where the
inside-area enterprise in registered. Before opening a special foreign exchange account for capital account transactions at a bank
outside the locality of its registration, the inside-area enterprise shall apply to the SAFE office in the locality where the account
is to be opened, and go through the formalities of account opening at a bank in the locality where the account is to be opened by
presenting the “approval for foreign exchange business under capital account” issued by the SAFE office and the registration certificate.

Article 18

When approving an inside-area enterprise to open a foreign exchange account, the SAFE office shall check and ratify the receipt and
payment scope and lifetime of the account according to the nature and purpose of the account in the “Account-opening Notice” or the
“approval for foreign exchange business under capital account”. But the SAFE office shall not set a balance ceiling for the foreign
exchange account for current account transactions of the inside-area enterprise.

Article 19

The bank shall open foreign exchange account for an inside-area enterprise upon the “Account-opening Notice” or the “approval for
foreign exchange business under capital account” issued by the SAFE office, indicate clearly in the relevant column of the enterprise’s
registration certificate the bank’s name, account number, currency denomination and date of opening, and affix its seal to the certificate.
The bank shall supervise the use by the inside-area enterprise of the foreign exchange account according to the scope of receipt
and payment and lifetime of account.

Article 20

The inside-area enterprise shall use its foreign exchange account according to the scope of receipt and payment and lifetime ratified
by the SAFE office.

Article 21

When an inside-area enterprise wants to close its foreign exchange account, it shall go through formalities of closing the account
at the SAFE office presenting the registration certificate and the account-closed certificate issued by the account-opening financial
institution within 10 working days after the account is cleared.

After the foreign exchange account of an inside-area enterprise is closed, the foreign exchange balance in it may be transferred into
its new foreign exchange account opened upon approval of SAFE office. In the case of terminating business operation, Article 35
of this Rules shall be acted upon.

Article 22

If an inside-area enterprise wants to open a foreign exchange account overseas, it shall apply for the approval of the SAFE office
concerned, according to regulations on overseas foreign exchange account; and open, use and close such account in accordance with
rules.

Chapter IV Administration of Foreign Exchange Receipt and Payment, Sale and Purchase

Article 23

Foreign exchange revenues of an inside-area enterprise from current account transactions shall be deposited in its foreign exchange
account for current account transactions. Sale of foreign exchange shall be made at the bank in the locality where the enterprise
is registered by presenting the registration certificate and relevant certificates.

After buying foreign exchange from an inside-area enterprise, the bank shall make a record in the registration certificate, copy it
after affixing its seal to the certificate. The copy, together with other relevant certificates, shall be kept for 5 years for future
check.

Article 24

Overseas payment by an inside-area enterprise for current account transactions shall be made from its foreign exchange account upon
the registration certificate, verification certificate of import payment in foreign exchange (acting reporting form), other valid

certificates and commercial vouchers required by rules on the administration of sale, purchase of, and receipt and payment in foreign
exchange. If the original of customs declaration form is required according to such rules, while the inside-area enterprise can not
get the original customs declaration form because the import is only subject to customs recording, the original detailed list of
customs recording shall be presented. Unless this Rules provides otherwise, purchase of foreign exchange for payment is prohibited.

Article 25

Overseas remittance of a foreign investor’s profit, dividend, and bonus from an inside-area enterprise shall be made from the enterprise’s
foreign exchange account upon the presentation of the registration certificate, profit distribution resolutions by the board of directors,
tax payment certificates, paid-in capital verification report and auditing report on profits, dividend and bonus prepared by an accountant
firm. If the account balance is not enough to cover the payment, the enterprise may purchase the shortfall at the bank upon the above-mentioned
documents and all the statements of the bank where its foreign exchange accounts are opened.

Article 26

In case an outside-area enterprise sells goods to an inside-area enterprise in the mode of pricing and settlement in foreign exchange,
the inside-area enterprise shall make the payment from its foreign exchange account upon the contract or agreement, invoice, the
original of customs declaration form, the registration certificate, and shall not purchase foreign exchange for that purpose. The
bank shall purchase foreign exchange from the outside-area enterprise or put the foreign exchange to its credit according to relevant
rules.

Article 27

In case an inside-area enterprise sells imported goods that have entered the bonded area to an outside-area enterprise, the outside-area
enterprise shall pay the inside-area enterprise with foreign exchange in its account or purchased foreign exchange upon a copy of
the inside-area enterprise’s registration certificate and valid certificates and commercial vouchers required by Rules on Foreign
Exchange Purchase, Sale and Payment. Unless the outside-area enterprise can provide the original detailed list of customs recording
of the inside-area enterprise, direct overseas payment is not permitted.

In case an inside-area enterprise sells to an outside-area enterprise imported goods that have not entered the bonded area and have
been declared outside, the out-side enterprise shall make the payment either overseas or to the inside-area enterprise with foreign
exchange in its account or purchased foreign exchange upon a copy of the inside-area enterprise’s registration certificate and valid
certificates and commercial vouchers prescribed by Rules on Foreign Exchange Purchase, Sale and Payment.If the inside-area enterprise
makes overseas payment after being paid by the out-side enterprise, the inside-area enterprise shall present its registration certificate,
certificate of the verification of the electronic account of the declaration form of the outside-area enterprise, and valid certificates
and commercial vouchers prescribed by Rules on Foreign Exchange Purchase, Sale and Payment.

Article 28

The outside-area enterprise shall handle the formalities of export proceeds verification and verification of import payment in foreign
exchange for bonded goods coming from the outside area to the bonded area or the other way around. For goods going from the bonded
area to overseas or vice versa, the inside-area enterprise need not go through such formalities.

Article 29

If an inside-area enterprise’s registered capital is paid in renminbi, its payment in foreign exchange to overseas or outside area
shall be made firstly with the foreign exchange balance in its account. If the balance is not sufficient for the payment, it may
apply to the SAFE office in its locality of registration for purchasing the shortfall upon its registration certificate, paid-in
capital verification report issued by an accountant firm, certificate of foreign exchange balance in its account issued by the bank,
and valid commercial vouchers and certificates listed below. Purchase of and payment in foreign exchange shall be made upon its registration
certificate and the SAFE office’s approval. Total purchase shall not exceed the equivalent of its renminbi paid-in capital.

(1)

In the case of import of goods, the contract of import, the verification paper of import payment (acting reporting form), the original
of customs declaration form (verifying copy) or the detailed list of customs recording shall be presented;

(2)

In the case of debt service or performance of external guarantee, the contract of external debt or external guarantee, the registration
certificate of external debt or guarantee, the notice of payment sent by overseas creditor shall be presented;

(3)

In the case of repayment of a domestic foreign exchange loan, the contract of loan, the registration certificate of domestic foreign
exchange loan, and the notice of repayment sent by the creditor shall be presented.

Article 30

Payment in foreign exchange to overseas by an inside-area enterprise authorized by the bonded area administrative committee and customs
to redistribute goods shall be made firstly with the balance in the enterprise’s foreign exchange account. If the balance is not
sufficient for the payment, in the case of goods import, the redistributing enterprise may apply to a bank in its locality of registration
for purchasing the shortfall by presenting its registration certificate, a certificate of the balance of its foreign exchange account
issued by the account-opening bank, the original of customs declaration form (verifying copy), invoice in renminbi, tariff clearance
certificate, the original of detailed list of customs recording, the contract of import, the verification paper of import payment
in foreign exchange (acting reporting form) and other valid commercial vouchers and certificates

In the case of debt service, performance of external guarantee and repayment of a domestic foreign exchange loan, the redistributing
enterprise shall apply to the SAFE office in the locality of its registration for purchasing the shortfall upon its registration
certificate, a certificate of the balance of its foreign exchange account issued by the account-opening bank, the original of customs
declaration form (verifying copy), invoice in renminbi, tariff clearance certificate, the contract and registration certificate of
external debt, domestic foreign exchange loan, or external guarantee, the notice of repayment sent by the creditor, and other valid
commercial vouchers and certificates. Purchase of and payment in foreign exchange shall be made upon its registration certificate
and the SAFE office’s approval.

Annual total purchase of foreign exchange by an inside-area redistributing enterprise shall not exceed its total import in the same
year.

Article 31

Foreign exchange payment to overseas by an inside-area processing enterprise that has been authorized by the bonded area administrative
committee to sell a portion of its products in the domestic market shall be made firstly with the balance in the enterprise’s foreign
exchange account. If the balance is not sufficient for the payment, in the case of goods import, the enterprise may apply to a bank
in the locality of its registration for purchasing the shortfall by presenting its registration certificate, a certificate of the
balance of its foreign exchange account issued by the account-opening bank, approval document on domestic sale, the contract of domestic
sale, the original of customs declaration form (verifying copy), invoice in renminbi, tariff clearance certificate and the original
of detailed list of customs recording, contract of import, verification paper of import payment in foreign exchange (acting reporting
form) and other valid commercial vouchers and certificates.

In the case of debt service, performance of external guarantee and repayment of domestic foreign exchange loan, the enterprise shall
apply to the SAFE office in the locality of its registration for purchasing the shortfall by presenting its registration certificate,
a certificate of the balance of its foreign exchange account issued by the account-opening bank, approval document on domestic sale,
contract of domestic sale, the original of customs declaration form (verifying copy), invoice in renminbi, tariff clearance certificate,
contract and registration certificate of external debt, domestic foreign exchange loan, or external guarantee, notice of repayment
sent by the creditor, and other valid commercial vouchers and certificates. Purchase of and payment in foreign exchange shall be
made upon its registration certificate and the SAFE office’s approval.

Total purchase of foreign exchange by a processing enterprise shall not exceed its total authorized sales in the domestic market.

Article 32

When selling foreign exchange to an inside-area enterprise, the bank shall examine submitted valid certificates and commercial vouchers
strictly according to this Rules, check previous purchases recorded in its registration certificate, affix a seal of “foreign exchange
provided” to the original of customs declaration form, and verify the original electronic account of the declaration form from the
verification network system for import customs declaration form and wind up the case. A customs declaration form with the seal of
“foreign exchange provided” shall not be used as a supporting document for foreign exchange purchase and payment.

Article 33

After selling foreign exchange to an inside-area enterprise, the bank shall record the date of purchase, source of renminbi, amount
and nature of the purchase in the registration certificate, copy the registration certificate after affixing the bank’s business
seal to it. The copy, together with other commercial vouchers and certificates submitted by the enterprise for the purchase, shall
be kept for 5 years for future check.

Article 34

An inside-area enterprise’s receipt or payment in foreign exchange and foreign exchange transactions under capital and financial accounts,
such as borrowing international commercial loan, foreign exchange on-lending loan, providing external guarantee, overseas bond issuance,
overseas investment, domestic increase of capital or re-investment with foreign investor’s profit, and so on, shall be handled upon
its registration certificate and other required documents according to relevant regulations effective in outside areas. Overseas
payment under capital and financial accounts shall be made from the enterprise’s foreign exchange account; and shall not be made
with purchased foreign exchange except where this Rules clearly provides for otherwise.

Guarantee provided by an outside-area enterprise to an inside-area enterprise for its borrowing of domestic foreign exchange loan
shall be regarded as external guarantee.

Article 35

An inside-area enterprise that is going to terminate its operations shall liquidate all its assets according to relevant regulations
effective in outside areas. Liquidated assets belonging to foreign investor may, with the SAFE office’s approval, be remitted abroad
from the enterprise’s foreign exchange account or with purchased foreign exchange or reinvested domestically. Those belonging to
the Chinese party, both in foreign exchange and in renminbi, shall be transferred to an outside area and disposed of according to
relevant regulations.

Chapter V Supplementary Provisions

Article 36

The bank shall report to the local SAFE office within the first 5 working days of each month the purchase of foreign exchange by inside-area
enterprises in the previous month, including their names, sources of renminbi, amounts purchased and purposes of the purchases.

Article 37

SAFE offices shall supervise and inspect the foreign exchange receipt and payment and foreign exchange business operations of banks
and inside-area enterprises periodically or occasionally; and punish violators of this Rules according to the Regulations on the
Exchange System of the People’s Republic of China and other foreign exchange regulations; and for offences not specified in Regulations
on the Exchange System of the People’s Republic of China and other foreign exchange regulations, may give warning to, circulate a
notice of criticism of, or impose fine up to RMB30000 on the violator. If an inside-area enterprise’s purchase of foreign exchange
with renminbi is not made according to this Rules, the SAFE office concerned may suspend or nullify its right to purchase foreign
exchange with renminbi.

Article 38

This Rules shall enter into force as of October 1, 2002. The SAFE is responsible for its interpretation. Rules on Foreign Exchange
Administration in Bonded Areas promulgated by the SAFE on December 16, 1995, Circular on the Implementation of Rules on Foreign Exchange
Adminstration in Bonded Areas promulgated by the SAFE on January 24, 1996, Official Reply of the SAFE to SAFE Zhejiang Branch’s Inquiry
on the Classification of Foreign Exchange Sale to and Payment for the Inside-area Enterprises by the Outside-area Banks promulgated
by the SAFE on July 27, 1998, Circular on Issues Related to Foreign Exchange Administration in Bonded Areas promulgated by the SAFE
on July 26, 2000, and Circular on Transmitting Circular on Issues Related to the Establishment of Subsidiaries by enterprise with
foreign investment in Bonded Areas promulgated by the General Affairs Department of the SAFE on January 29, 2002, and other supporting
rules and normative documents shall be nullified at the same time.



 
The State Administration of Foreign Exchange
2002-07-25

 







FOREIGN-CAPITAL ENTERPRISES

Law of the PRC on Foreign-Capital Enterprises

    

   Article 1. With a view to expanding economic cooperation and technical exchange with foreign countries and promoting the development of China’s
national economy, the People’s Republic of China permits foreign enterprises, other foreign economic organizations and individuals
(hereinafter collectively referred to as ” foreign investors “) to set up enterprises with foreign capital in China and protects
the lawful rights and interests of such enterprises.

   Article 2. As mentioned in this Law, ” enterprises with foreign capital ” refers to those enterprises established in China by foreign investors,
exclusively with their own capital, in accordance with relevant Chinese laws. The term does not include branches set up in China
by foreign enterprises and other foreign economic organizations.

   Article 3. Enterprises with foreign capital shall be established in such a manner as to help the development of China’s national economy; they
shall use advanced technology and equipment or market all or most of their products outside China.

Provisions shall be made by the State Council regarding the lines of business which the state forbids enterprises with foreign capital
to engage in or on which it places certain restrictions.

   Article 4. The investments of a foreign investor in China, the profits it earns and its other lawful rights and interests are protected by
Chinese law.

Enterprises with foreign capital must abide by Chinese laws and regulations and must not engage in any activities detrimental to China’s
public interest.

   Article 5. The state shall not nationalize or requisition any enterprise with foreign capital. Under special circumstances, when public interest
requires, enterprises with foreign capital may be requisitioned by legal procedures and appropriate compensation shall be made.

   Article 6. The application to establish an enterprise with foreign capital shall be submitted for examination and approval to the department
under the State Council which is in charge of foreign economic relations and trade, or to another agency authorized by the State
Council. The authorities in charge of examination and approval shall, within 90 days from the date it receives such application,
decide whether or not to grant approval.

   Article 7. After an application for the establishment of an enterprise with foreign capital has been approved, the foreign investor shall,
within 30 days from the date of receiving a certificate of approval, apply to the industry and commerce administration authorities
for registration and obtain a business licence. The date of issue of the business licence shall be the date of the establishment
of the enterprise.

   Article 8. An enterprise with foreign capital which meets the conditions for being considered a legal person under Chinese law shall acquire
the status of a Chinese legal person, in accordance with the law.

   Article 9. An enterprise with foreign capital shall make investments in China within the period approved by the authorities in charge of examination
and approval. If it fails to do so, the industry and commerce administration authorities may cancel its business licence.

The industry and commerce administration authorities shall inspect and supervise the investment situation of an enterprise with foreign
capital.

   Article 10. In the event of a separation, merger or other major change, an enterprise with foreign capital shall report to and seek approval
from the authorities in charge of examination and approval, and register the change with the industry and commerce administration
authorities.

   Article 11. The production and operating plans of enterprises with foreign capital shall be reported to the competent authorities for the record.

Enterprises with foreign capital shall conduct their operations and management in accordance with the approved articles of association,
and shall be free from any interference.

   Article 12. When employing Chinese workers and staff, an enterprise with foreign capital shall conclude contracts with them according to law,
in which matters concerning employment, dismissal, remuneration, welfare benefits, labour protection and labour insurance shall be
clearly prescribed.

   Article 13. Workers and staff of enterprises with foreign capital may organize trade unions in accordance with the law, in order to conduct
trade union activities and protect their lawful rights and interests.

The enterprises shall provide the necessary conditions for the activities of the trade unions in their respective enterprises.

   Article 14. An enterprise with foreign capital must set up account books in China, conduct independent accounting, submit the fiscal reports
and statements as required and accept supervision by the financial and tax authorities.

If an enterprise with foreign capital refuses to maintain account books in China, the financial and tax authorities may impose a fine
on it, and the industry and commerce administration authorities may order it to suspend operations or may revoke its business licence.

   Article 15. Within the scope of the operations approved, enterprises with foreign capital may purchase, either in China or from the world market,
raw and semi-processed materials, fuels and other materials they need. When these materials are available from both sources on similar
terms, first priority should be given to purchases in China.

   Article 16. Enterprises with foreign capital shall apply to insurance companies in China for such kinds of insurance coverage as are needed.

   Article 17. Enterprises with foreign capital shall pay taxes in accordance with relevant state provisions for tax payment, and may enjoy preferential
treatment for reduction of or exemption from taxes.

An enterprise that reinvests in China its profits after paying the income tax, may, in accordance with relevant state provisions,
apply for refund of a part of the income tax already paid on the reinvested amount.

   Article 18. Enterprises with foreign capital shall handle their foreign exchange transactions in accordance with the state provisions for foreign
exchange control.

Enterprises with foreign capital shall open an account with the Bank of China or with a bank designated by the state agency exercising
foreign exchange control.

Enterprises with foreign capital shall manage to balance their own foreign exchange receipts and payments. If, with the approval
of the competent authorities, the enterprises market their products in China and consequently experience an imbalance in foreign
exchange, the said authorities shall help them correct the imbalance.

   Article 19. The foreign investor may remit abroad profits that are lawfully earned from an enterprise with foreign capital, as well as other
lawful earnings and any funds remaining after the enterprise is liquidated.

Wages, salaries and other legitimate income earned by foreign employees in an enterprise with foreign capital may be remitted abroad
after the payment of individual income tax in accordance with the law.

   Article 20. With respect to the period of operations of an enterprise with foreign capital, the foreign investor shall report to and secure
approval from the authorities in charge of examination and approval. For an extension of the period of operations, an application
shall be submitted to the said authorities 180 days before the expiration of the period. The authorities in charge of examination
and approval shall, within 30 days from the date such application is received, decide whether or not to grant the extension.

   Article 21. When terminating its operations, an enterprise with foreign capital shall promptly issue a public notice and proceed with liquidation
in accordance with legal procedure.

Pending the completion of liquidation, a foreign investor may not dispose of the assets of the enterprise except for the purpose of
liquidation.

   Article 22. At the termination of operations, the enterprise with foreign capital shall nullify its registration with the industry and commerce
administration authorities and hand in its business licence for cancellation.

   Article 23. The department under the State Council which is in charge of foreign economic relations and trade shall, in accordance with this
Law, formulate rules for its implementation, which shall go into effect after being submitted to and approved by the State Council.

   Article 24. This Law shall go into effect on the day of its promulgation.

    






SURVEYING AND MAPPING TO BE ENACTED

Law of PRC on Surveying and Mapping to Be Enacted

     The 29th Session of the 9th Standing Committee of the National People s Congress revised and passed the Law of the People s Republic
of China on Surveying and Mapping on August 29th 2002, it will be put into effect since December 1st ,2002.

    

Source:ChinaCourtNet

Translator:Victor Editor:Jeff






MEASURES ON THE ADMINISTRATION OF FOREIGN-CAPITAL FINANCIAL INSTITUTIONS’ REPRESENTATIVE OFFICES IN CHINA

The People’s Bank of China

Decree of People’s Bank of China

No. 8

In accordance with the regulations of the Administration of Foreign-funded Financial Institutions, Measures on the Administration
of Foreign-capital Financial Institutions’ Representative Offices in China are adopted by the People’s Bank of China are hereby promulgated
and shall be come into force as of the day of July 18, 2002.

Minister of the People’s Bank of China, Dai Xianglong

June 13, 2002

Measures on the Administration of Foreign-capital Financial Institutions’ Representative Offices in China

Chapter I General Provisions

Article 1

These Measures are enacted in accordance with the relevant provisions in the Regulation of the People’s Republic of China on the Administration
of Foreign-capital Financial Institutions with a view to meeting the demands arising from the opening to the outside world and economic
development and strengthening the administration of foreign-capital financial institutions’ representative offices in China.

Article 2

Foreign-capital financial institutions mentioned in these Measures shall include foreign financial institutions and foreign-capital
financial institutions registered and established inside the territory of China.

A foreign financial institution shall refer to a financial institution registered outside the territory of the People’s Republic of
China and ratified by the financial supervision authority or financial industry association of the country or region where it is
located.

Foreign-capital financial institutions registered inside the territory of China shall include: foreign banks whose head offices are
inside the territory of China; joint venture banks inside the territory of China established jointly between foreign financial institutions
and Chinese companies or enterprises; foreign financial companies, currency brokerage companies and credit card companies whose head
offices are inside the territory of China; joint venture financial companies, currency brokerage companies and credit card companies
established jointly by foreign financial institutions and Chinese companies or enterprises inside the territory of China; and other
foreign-capital financial institutions established upon the approval of the People’s Bank of China. Foreign-capital financial institutions’
representative offices (hereinafter referred to as “representative offices”) mentioned in these Measures shall include representative
offices and general representative offices established inside the territory of China by foreign-capital financial institutions to
engage in non-operation activities such as consultancies, contacts and market investigations, etc. The main responsible person of
a representative office is called a chief representative, and the main responsible person of a general representative office is called
a general representative.

Article 3

Representative offices must abide by the laws and regulations of the People’s Republic of China, and their lawful rights and interests
are protected by the laws of the People’s Republic of China.

Chapter II Application and Establishment

Article 4

Where a foreign financial institution intends to establish a representative office, the applicant shall meet the following conditions:

(1)

The country or region where the applicant is located has a complete financial supervision system;

(2)

The applicant is a financial institution established upon the approval of the financial supervision authority of the country or region
where it is located, or is a member of the financial industry association;

(3)

The applicant is in good operative condition, and has no record of major violation of law or regulation;

(4)

Other prudential conditions stipulated by the People’s Bank of China.

Where a foreign-capital financial institution registered inside the territory of China intends to establish a representative office,
the applicant shall meet the conditions in the above Items (3) and (4).

Article 5

When applying for establishing a representative office, the applicant shall obtain an application form from the branch of the People’s
Bank of China at the locality where the office is to be established, and shall submit the filled-in application form together with
the following documents to the said branch:

(1)

An application letter to the president of the People’s Bank of China signed by the board chairman or the president (chief executive
officer, general manager);

(2)

The business license (duplicate) or the attestation on lawfully opening business (duplicate) checked and issued by the relevant competent
authority of the country or region where the applicant is located;

(3)

The company’s articles of association, the name list of members in the board of directors and of the largest ten shareholders or the
name list of the main partners;

(4)

Annual financial statements for the latest 3 years before this application;

(5)

A written opinion issued by the financial supervision authority of the country or region where the applicant is located on the establishment
of such a representative office inside the territory of China, or a recommendation letter issued by the financial industry association
of which the applicant is a member;

(6)

The identity certificate, academic credentials and resume of the chief representative to be appointed, and the statements signed by
the persons to be appointed on whether there is any delinquent record;

(7)

A power of attorney signed by the board chairman or president (chief executive officer, general manager) or his authorized signatory
on appointing the chief representative;

(8)

Other documents required by the People’s Bank of China.

The documents submitted by a foreign-capital financial institution registered inside the territory of China do not include those provided
for by Item (5) of this Article.

Article 6

Except for the annual financial statements, any document required by these Measures to be submitted shall have a Chinese translation
attached if it is written in a foreign language.

Among the documents submitted, the “power of attorney”, the “business license (duplicate)” or “attestation on opening business (duplicate)”
must be notarized by a notarial office ratified by the country or region where the applicant is located, or authenticated by the
Chinese embassy or consulate accredited to that country.

Article 7

The branch of the People’s Bank of China shall, after preliminarily examining the application documents submitted by a foreign-capital
financial institution, submit them to the head office of the People’s Bank of China for examination and approval.

Article 8

The Chinese name of a representative office shall be composed of the following parts, which, in turn, are: the name of the foreign-capital
financial institution, the name of the city where the office is to be located and the words “representative office”.

Article 9

A foreign financial institution that has established 5 or more branches inside the territory of China may apply for establishing a
general representative office.

The procedures of application for the establishment of a general representative office and the administration thereof are identical
with those of a representative office.

The Chinese name of a general representative office shall be composed of the following parts, which, in turn, are: the name of the
foreign financial institution, and the words “general representative office in China”.

Article 10

The qualification for the general representative of a general representative office and for the chief representative of a representative
office to hold the position shall be subject to a system of approval.

The head office of the People’s Bank of China shall be responsible for approving or canceling the qualification for the general representatives
of general representative offices and the chief representatives of representative offices to hold their positions.

Article 11

Whoever intends to hold the position of general representative in a general representative office or the position of chief representative
in a representative office shall meet the following conditions:

(1)

To hold the position of a general representative in a general representative office, one should usually have 5 years or more of work
experiences in finance or in the relevant economic affairs, and have 3 years or more of experiences in holding the position of business
department manager or similar positions or above;

(2)

To hold the position of a chief representative in a representative office, one should usually have 3 years or more of work experiences
in finance or in the relevant economic affairs;

(3)

He should have the academic qualification of regular course education or above in a higher education institution; anyone who fails
to meet this condition shall have an additional 6 years of work experiences in finance or in the relevant economic affairs to hold
the position of a general representative in a general representative office, and shall have an additional 3 years of work experiences
in finance or in the relevant economic affairs to hold the position of a chief representative in a representative office.

Article 12

A foreign-capital financial institution that applies for changing the general representative or the chief representative of its representative
office shall submit the following documents to the branch bank of the People’s Bank of China at the locality of the representative
office:

(1)

The application letter to the president of the People’s Bank of China, which is signed by the authorized signatory of the foreign-capital
financial institution;

(2)

The power of attorney signed by the authorized signatory of the foreign-capital financial institution;

(3)

Resumes of the persons to be appointed;

(4)

Duplicates of identity certificates and academic credentials of the persons to be appointed;

(5)

The statements signed by the persons to be appointed on whether there is any delinquent record;

(6)

Other documents required by the People’s Bank of China.

Article 13

The branch bank of the People’s Bank of China shall, after preliminarily examining the application documents for changing the general
representative or the chief representative of a representative office, which are submitted by a foreign-capital financial institution,
submit them to the head office of the People’s Bank of China for approval.

Article 14

A representative office established upon approval shall be issued the approval certificate by the head office of the People’s Bank
of China, and the validity period for the office shall be 6 years.

A representative office shall, after obtaining the approval certificate, go through the registration in the administrative department
for industry and commerce in accordance with the relevant provisions. Where a representative office has failed to go through the
registration within the specified time limit, it must submit an application letter signed by the board chairman or president (chief
executive officer, general manager) of the foreign-capital financial institution it represents to the People’s Bank of China for
re-obtaining the approval certificate. A representative office must, within 6 months as of the day it receives the approval of the
People’s Bank of China, move into fixed office sites, otherwise the original approval for establishment shall be automatically invalidated.

Chapter III Supervision and Administration

Article 15

Neither the representative office nor its employees shall conclude with any entity or natural person an agreement or contract which
might bring income to the representative office or the foreign-capital financial institution it represents, or engage in any form
of operative activities.

Article 16

When a representative office is established, terminated, modified or its period is extended, it shall, within 15 days after the industrial
and commercial registration is made, make an announcement in a newspaper designated by the head office of the People’s Bank of China,
and shall report to the branch bank of the People’s Bank of China at its locality.

Article 17

A representative office must have its independent office sites, office facilities and full-time employees.

Article 18

The period for the position held by the general representative or the chief representative of a representative office shall usually
be 2 years or more, during this period the general representative or chief representative shall not concurrently hold the managing
position in any other operative organization.

The general representative or chief representative shall reside in the representative office to preside over the daily work. If he
needs to depart from his position for 1 month or more, he shall designate a special person to exercise his duties on behalf of him,
and report to the branch bank of the People’s Bank of China at his locality. If he needs to depart from his position for 3 months
or more and has no particular reasons, his position shall be taken place by another person upon the approval of the head office of
the People’s Bank of China.

Article 19

A representative office shall, before the end of February of each year, submit the work report of the last year to the branch bank
of the People’s Bank of China at its locality, and the branch bank shall then submit it to the head office of the People’s Bank of
China. The work report of a representative office shall be filled out in Chinese in accordance with the format specified by the People’s
Bank of China.

Article 20

A representative office shall, within 6 months after the end of the fiscal year of the foreign-capital financial institution it represents,
provide the branch bank of the People’s Bank of China at its locality with the annual financial statements of the foreign-capital
financial institution.

Article 21

Where a foreign financial institution that has established a representative office is under any of the following circumstances, the
representative office shall report to the branch bank of the People’s Bank of China at its locality in time, and then the branch
shall report to the head office of the People’s Bank of China:

(1)

The articles of association, registered capital or registration address of the institution is modified;

(2)

The institution is restructured, the share rights are modified or the main responsible person is changed;

(3)

The institution suffers from serious losses in the operation;

(4)

A major case occurs;

(5)

The supervision authority of the country or region where the foreign financial institution is located imposes major supervision measures
on it;

(6)

Other events which are of major impact to the operation of the foreign financial institution.

Article 22

Where a new foreign-capital financial institution is to be established due to merger, division or other restructuring causes and therefore
the name of its representative office inside the territory of China is to be changed, the institution shall apply to the head office
of the People’s Bank of China in advance, and shall submit the following documents:

(1)

The application letter signed by the board chairman or president (chief executive officer, general manager) of the new institution;

(2)

The approval letter of the financial supervision authority of the country or region where the new institution is located on approving
the institutional restructuring;

(3)

The financial statements on the merger of the new institution;

(4)

The new institution’s articles of association, the name list of members in the board of directors and of the largest ten shareholders
or the name list of the main partners;

(5)

The business license (duplicate) or attestation on lawfully opening business (duplicate) checked and issued by the relevant competent
authority of the country or region where the new institution is located;

(6)

The resume, academic credentials and identity certificate of the chief representative or the general representative of the new institution’s
representative office inside the territory of China, and the statements signed by the representative on whether there is any delinquent
record

(7)

A power of attorney signed by the new institution’s board chairman or president (chief executive officer, general manager) or his
authorized signatory on appointing the chief representative or the general representative of the representative office inside the
territory of China;

(8)

Other documents required by the People’s Bank of China.

A foreign-capital financial institution shall meanwhile submit the above said documents (duplicates) to the branch bank of the People’s
Bank of China at the locality of its representative office.

Article 23

Where a foreign-capital financial institution changes the name of its representative office inside the territory of China due to other
reasons, it must submit to the head office of the People’s Bank of China an application letter signed by its board chairman or president
(chief executive officer, general manager), and shall meanwhile submit the duplicate of the application letter to the branch bank
of the People’s Bank of China at the locality of the representative office.

Article 24

A foreign-capital financial institution shall, after obtaining the approval letter of the People’s Bank of China on approving its
changing of the name of the representative office inside the territory of China, go through the modification registration formalities
in the administrative department for industry and commerce in accordance with the relevant provisions.

Article 25

Where a representative office is to be under any of the following circumstances, it shall report to the branch bank of the People’s
Bank of China at its locality for approval:

(1)

Extension of the period of the representative office. The office shall, 2 months before the expiry of its validity period, submit
an application letter signed by an authorized signatory of the foreign-capital financial institution and the work reports of the
latest 3 years, which are signed by the chief representative or general representative of the representative office, to the branch
bank or business management department of the People’s Bank of China at its locality for examination and approval. The time limit
of each extension of the period of the representative office shall be 6 years.

(2)

Change of address. The office shall submit an application letter for change of address, which is signed by its chief representative
or general representative, to the branch bank or business management department of the People’s Bank of China at its locality for
examination and approval, which shall report to the head office of the People’s Bank of China. The representative office must move
to the new address within 3 months after being approved.

Chapter IV Termination of Representative Offices

Article 26

Whoever applies for closing a representative office shall submit to the branch bank of the People’s Bank of China at its locality
an application letter to the president of the People’s Bank of China, which is signed by the board chairman or president (chief executive
officer, general manager) of the foreign-capital financial institution. The said branch shall, after preliminary examination, then
submit the letter to the head office of the People’s Bank of China for examination and approval. The applicant shall, after being
approved, apply to the administrative department for industry and commerce for canceling the registration, and shall go through the
relevant formalities in the relevant government departments.

Article 27

After a representative office is approved by the People’s Bank of China to upgrade itself as an operative branch or general representative
office, the original representative office shall be automatically closed, and it shall apply to the administrative department for
industry and commerce for canceling the registration.

Article 28

After a representative office is closed or cancelled by the People’s Bank of China in accordance with the law, its general representative
office, if any, shall be responsible for the remaining matters; after a general representative office, or a representative office
with no general representative office is closed or cancelled by the People’s Bank of China in accordance with the law, the foreign-capital
financial institution it represents shall be responsible for the remaining matters.

Chapter V Penalty Provisions

Article 29

Where, without the approval of the People’s Bank of China, an entity or natural person violates these Measures by establishing a foreign-capital
financial institution’s representative office in China or by hanging up a plaque with a name provided for in Article 9 of these
Measures at a fixed office site, it shall be banned by the People’s Bank of China in accordance with the law; if a crime is constituted,
the offender shall be investigated for criminal liabilities in accordance with the law.

Article 30

Where a foreign-capital financial institution establishes a representative office without being approved by the People’s Bank of China,
the People’s Bank of China shall not accept any application filed by this institution for establishing a representative office or
other operative office inside the territory of China within 5 years as of the date when the representative office is banned.

Article 31

Where a representative office has failed to submit the reports or documents provided for in Articles 19, 20 and 21 of these Measures
to the branch bank of the People’s Bank of China at its locality within the specified time limit, it shall be imposed upon a warning
by the branch; where the office has failed to provide the reports or documents during 2 consecutive years, the branch of the People’s
Bank of China at its locality shall report to the head office of the People’s Bank of China to cancel the representative office.

Article 32

Where a representative office or any of its employees violates Article 15 of these Measures by engaging in financial business activities,
it/he shall be penalized by the People’s Bank of China in accordance with the relevant provisions in the Measures for Penalizing
Illegal Financial Acts; where a representative office or any of its employees engages in any operative activity other than its financial
business, it/he shall be imposed upon a warning by the People’s Bank of China, or, if the case is serious, the representative office
shall be cancelled.

Article 33

Where a representative office has failed to submit an application for the extension of the period 2 months before the expiry of its
validity period, it shall submit an apology letter issued by the foreign-capital financial institution it represents to the branch
of People’s Bank of China at its locality, explaining the reason.

The branch (business management department) of the People’s Bank of China at the representative office’s locality shall, on the basis
of the specific situation, make a decision on whether to approve the extension.

Article 34

If any of the following circumstances occurs, the People’s Bank of China may, according to the seriousness and consequences, suspend
the qualification for the chief representative or general representative of the representative office to hold the position for a
period and even cancel his qualification for life:

(1)

A representative office or any of its employees engages in financial business activities or other operative activities;

(2)

The representative office provides documents containing false information or concealing important facts, and the case is serious;

(3)

A representative office violates Article 20 or 21 of these Measures by not submitting annual reports or not reporting the major events
of the foreign-capital financial institution it represents to the People’s Bank of China;

(4)

The chief representative or general representative is investigated for criminal liabilities in accordance with the law;

(5)

A representative office refuses, disturbs, impedes or seriously hinders the lawful supervision of the People’s Bank of China;

(6)

The People’s Bank of China finds that a general representative or chief representative was, prior to his holding the position, in
violation of the law or regulation or under any other circumstance not proper for him to hold the position of a senior manager.

Article 35

A representative office that provides documents containing false information or concealing important facts shall be imposed upon a
warning by the People’s Bank of China.

Article 36

Where any representative office violates any other provisions in these Measures, it shall be imposed upon a warning by the People’s
Bank of China, or the foreign-capital financial institution it represents shall be suggested by the People’s Bank of China to change
the chief representative or general representative.

Chapter VI Supplementary Provisions

Article 37

The establishment of representative offices by financial institutions from Hong Kong Special Administrative Region, Macao Special
Administrative Region and Taiwan Region as well as by the wholly-owned banks, joint venture banks, wholly-owned financial companies
and joint venture financial companies established in the mainland of China by the said financial institutions, shall refer to these
Measures.

Article 38

These Measures shall enter into force as of July 18, 2002. The Measures on the Administration of Foreign Financial Institutions’ Representative
Offices in China promulgated by the People’s Bank of China on April 29, 1996 shall be nullified simultaneously.

Article 39

The power to interpret these Measures shall remain with the People’s Bank of China.



 
The People’s Bank of China
2002-06-13

 







INTERIM MEASURES GOVERNING THE ESTABLISHMENT OF CHINESE-FOREIGN EQUITY JOINT FOREIGN TRADE CORPORATIONS

The Ministry of Foreign Trade and Economic Cooperation

The Decree of the Ministry of Foreign Trade and Economic Cooperation of the People’s Republic of China

No. 1

In order to open wider to the outside world and to promote the development of foreign trade of our country, the Interim Measures Governing
the Establishment of Chinese-foreign Equity Joint Foreign Trade Corporations adopted at the 2nd minister￿￿s executive meeting, and
is hereby promulgated and shall be come into force after 30 days as of its promulgation. Beginning from its implementation, the Interim
Measures Governing the Establishment of Chinese-foreign Equity Joint Foreign Trade Corporations on a trail basis, which was ratified
on September 2, 1996 by the State Council, and promulgated on September 30, 1996 by the Ministry of Foreign Trade and Economic Cooperation,
will be abolished at the same time.

Minister of the Ministry of Foreign Trade and Economic Cooperation, Shi Guangsheng

January 31, 2003

Interim Measures Governing the Establishment of Chinese-foreign Equity Joint Foreign Trade Corporations

Article 1

For the purpose of opening wider to the outside world and promoting the developments of foreign trade of our country, these measures
are formulated in accordance with the Foreign Trade Law of the People’s Republic of China and the Law of the People’s Republic of
China on Chinese-foreign Equity Joint Ventures, and other related laws and regulations.

Article 2

The measures are applicable to the Chinese-foreign equity joint foreign trade corporations (hereinafter referred to as “equity joint
foreign trade corporation”) specializing in the import and export trade business, jointly established by foreign corporations and
enterprises (hereinafter referred to as “Foreign investor”) and Chinese enterprises and companies (hereinafter referred to as “Chinese
investor”) within the Chinese territory.

Article 3

An equity joint foreign trade corporation is a company with limited liabilities. The foreign investor shall provide at least 25 per
cent of the total registered capital.

Article 4

The following conditions shall be met when establishing a equity joint foreign trade corporation:

1.

The foreign investor’s average annual foreign trade value with China shall reach US$30 million or more in the three years before application;
If the equity joint foreign trade corporation is to be registered in the Midwest of China, the foreign investor’s average annual
foreign trade value with China shall reach US$20 million or more in the three years before application.

2.

The Chinese investor shall have the right to do foreign trade business and its average import & export value shall be more than US$30
million in the three years before application; If the equity joint foreign trade corporation is to be registered in the Midwest of
China, its average import & export value shall be more than US$20 million in the three years before application.

3.

A Chinese-foreign equity joint foreign trade corporation shall meet the following conditions:

a.

Its registered capital shall be no less than 50 million Yuan; If registered in the Midwest, the registered capital shall be no less
than 30 million Yuan;

b.

It has its own name and organizations;

c.

It has operation area suitable for foreign trade business, specialized professionals and other necessary conditions.

Article 5

When applying for the establishment of an equity joint foreign trade corporation, the Chinese investor shall submit the following
documents to the Ministry of Foreign Trade and Economic Cooperation (hereinafter referred to as the MFTEC) through the local foreign
trade supervisory department:

1.

Project proposal, feasibility study report signed by all parties involved, contracts, and articles of incorporation;

2.

The proof documents for company registration (copy version), company credit, and legal representatives from all parties involved;

3.

The catalogue of the import & export commodities of the proposed equity joint foreign trade corporation;

4.

The recent three years’ annual account report forms audited by an accountant office from all parties involved;

5.

Other documents requested by the MFTEC The MFTEC shall review the documents it received from various places and it shall give an official
reply to and issue Certificates of Approval for Foreign-invested Enterprises to the qualified corporations within 90 days as of the
acceptance of the whole set of documents.

Article 6

After obtaining state approval for establishing an equity joint foreign trade corporation, the applicant shall file an application
for registration at the State Administration of Industry and Commerce or at local bureaus with its authorization within one month
from the date of the approval, and it shall, in accordance with the law, file an application for tax registration at tax authorities.

Article 7

Both of the foreign investor and the Chinese investor can provide funds for the registered capital in currency, physical objects,
intangible assets (including industrial properties, special technologies and a right to use a site). All the parties to the equity
joint foreign trade corporation shall pay up the investment to the prescribed volume within the time limit as provided for in relevant
provisions of the state.

Article 8

The equity joint foreign trade corporation shall, in accordance with the state’s pertinent regulations, deal in or serve as agent
for the import and export of cargo and technology and relevant services, and deal in the whole business for the commodities imported
by itself within the approved business scope.

Article 9

For the import and export commodities under the state quota and permit control, the equity joint foreign trade corporation cannot
handle them unless they have applied to the related state supervisory department in accordance with related laws and regulations
and obtained approval. As for the import and export commodities under the state control of quota bidding, the equity joint foreign
trade corporation shall tender for bids in accordance with the bidding regulations set down by the supervisory department.

Article 10

The foreign exchange revenue and expenditure of an equity joint foreign trade corporation shall be in conformity with the relevant
provisions of the state concerning foreign exchange.

Article 11

An equity joint foreign trade corporation shall pay taxes according to relevant laws and regulations and rules on taxation. Its shall
be enpost_titled to enjoy tax rebates or tax exemption on export cargoes in accordance with relevant laws, regulations and rules of the
state.

Article 12

An equity joint foreign trade corporation shall submit statements of finance, accounting, and statistics on a regular basis to the
local supervisory departments in accordance with the related laws and regulations on finance, accounting and statistics.

Article 13

An equity joint foreign trade corporation shall apply to join the Import and Export Chamber or the Association for Foreign-funded
Enterprises and shall obey the coordination of the Chamber or the Association.

Article 14

An equity joint foreign trade corporation shall comply with the Chinese laws and regulations, and is under the jurisdiction of Chinese
laws and regulations. Its legal rights and interests shall be subject to the protection of Chinese laws and regulations. If the equity
joint foreign trade corporation violates Chinese laws and regulations, it shall be subject to punishment accordingly.

Article 15

The present measures shall apply to the equity joint foreign trade corporations jointly established by companies or enterprises from
Hong Kong, Macao, and Taiwan with counterparts from the Chinese mainland.

Article 16

Before December 11, 2003, the application for the establishment of an equity joint foreign trade corporation, in which the registered
capital provided by the Chinese investor is less than 51%, shall not be accepted for the time being.

Article 17

The power to interpret the present Measures shall remain with the Ministry of Foreign Trade and Economic Cooperation.



 
The Ministry of Foreign Trade and Economic Cooperation
2003-01-31

 







CONSTITUTION ACT, 1982 – page 22

NOTES (1) The enacting clause was repealed by the Statute Law Revision Act, 1893, 56-57 Vict., c. 14 (U.K.). It read as...