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e00089,e01673
The State Council
Order of the State Council of the People’s Republic of China
No. 392
The Regulations of the People’s Republic of China on Import and Export Duties, which were adopted at the 26th executive meeting of
the State Council on October 29th, 2003, are hereby promulgated and shall come into force as of January 1st, 2004.
Wen Jiabao, Premier of the State Council
November 23rd, 2004
Regulations of the People’s Republic of China on Import and Export Duties
Chapter I General Provisions
Article 1
With a view to implementing the policy of opening to the outside world, promoting the development of foreign economic relations and
trade as well as the national economy, the present Regulations are formulated in accordance with the Customs Law of the People’s
Republic of China (hereinafter referred to as the Customs Law).
Article 2
All goods permitted to be imported into or exported out of and all articles allowed to enter into the People’s Republic of China shall,
unless otherwise provided for by the State Council, be subject to payment of customs duties on imports or exports according to the
present Regulations.
Article 3
The tariff items, tariff nomenclature heading numbers and tariff rates as prescribed in the Customs Import and Export Tariffs of the
People’s Republic of China (hereinafter referred to as the Tariffs) and the Import Tariff Rates of the People’s Republic of China
for Entry Articles (hereinafter referred to as the Import Tariff Rates for Entry Articles) which are formulated by the State Council
shall form an integral part of the present Regulations.
Article 4
The Customs Tariff Commission shall be established by the State Council. The Customs Tariff Commission shall be responsible for readjusting
and interpreting tariff items, tariff nomenclature heading numbers and tariff rates in the Tariffs and the Import Tariff Rates for
Entry Articles, which shall take effect upon the approval of the State Council; it makes decisions on the goods subject to temporary
tariff rates, the tariff rates and time limit; it makes decisions on the rate of tariff quota, the imposition of antidumping duties,
countervailing duties, duty under safeguard measures, retaliatory duties; makes decisions on the implementation of other measures
in relation to customs duties and the application of tariff rates under special circumstances, and exercises the other functions
as provided for by the State Council.
Article 5
The consignees of imported goods, the consignors of exported goods and the owners of entry articles are obligatory customs duty payers.
Article 6
The customs and the functionaries shall, according to the statutory powers and legal procedures, exercise their functions of collecting
the customs duties, safeguard the interests of the state, protect the legitimate rights and interests of the customs duty payers,
and accept supervision pursuant to law.
Article 7
Any customs duty payer shall have the right to request the customs office to keep its commercial secrets to itself, and the customs
shall do so pursuant to law.
Article 8
According to relevant regulation, the customs shall award the entities and individuals who disclose or help to find the acts in violation
of the present Regulations.
Chapter II Establishment and Application of Tariff Rates for Import and Export Goods
Article 9
Import tariffs cover the most-favored-nation tariff rate, conventional tariff rate, preferential tariff, general tariff rate and quota
tariff rate, etc. Temporary tariff rates may be applied to import goods within a certain time limit.
Export tariff rates are set up in export duties. Temporary tariff rates may be applicable to export goods within a certain time period.
Article 10
The most-favored-nation tariff rate shall be applied to the import goods whose place of origin is a member of the WTO, to whom the
clause of the most-favored-nation is commonly applied, and the import goods whose place of origin is a country or region that has
established with the People’s Republic of China a bilateral trade agreement that contains clauses reciprocal most-favored-nation
treatment, and the import goods whose place of origin is within the territory of the Peoples Republic of China.
The conventional tariff rate shall be applied to the import goods whose place of origin is a country or region that has concluded
with the People’s Republic of China a trade agreement that contains clauses of preferential duty.
The special tariff rate shall be applied to the import goods whose place of origin is a country or region that has concluded with
the People’s Republic of China a trade agreement that contains clauses of special preferential duty.
The general tariff rate shall be applied to the import goods except those as listed in Paragraphs 1 through 3 of this Article and
the import goods whose place of origin is unknown.
Article 11
Where a temporary tariff rate is set up for the import goods, to which the most-favored-nation tariff rate applies, the temporary
tariff rate shall prevail. With regard to the import goods to which the conventional tariff rate or the preferential tariff rate
applies, the lower one shall prevail. As for the import goods to which the general tariff rate applies, the temporary tariff rate
shall not apply.
Where a temporary tariff rate is set up for the export goods, to which the export tariff rate applies, the temporary tariff rate shall
prevail.
Article 12
As for the import goods subject to tariff quota management according to the provisions of the state, for those within the tariff quota,
the quota tariff rate shall be applied; and for those beyond the tariff quota, the applicable tariff rates shall be carried out in
accordance with Articles 10 and 11 of the present Regulations.
Article 13
As for the import goods, against which antidumping, countervailing or safeguard measure are taken according to relevant laws and administrative
regulations, the applicable rates shall be carried out in accordance with the Antidumping Regulations of the People’s Republic of
China, the Countervailing Regulations of the People’s Republic of China and the Regulations on Safeguard Measures of the People’s
Republic of China.
Article 14
As for a country or region that prohibits, limits, imposes additional duties or takes any other measures that affect the normal trade
with the People’s Republic of China in violation of the trade agreement or relevant convention concluded with the People’s Republic
of China or both parties have joined, a retaliatory duty may imposed on the import goods whose place of origin is the country or
region, and the retaliatory duty rate shall be applied.
The goods, applicable countries or regions, duty rates, time limits and collection measures shall be determined and announced by the
Customs Tariff Commission.
Article 15
As for the import and export goods, the valid tariff rate of the day when the customs accepts the import declaration or export declaration
shall be applied.
Where an import declaration is filed before the import goods arrives upon the approval of the customs, the valid tariff rate of the
day when an entry declaration is filed for the means of transportation that carries the goods shall be applied.
The date of the application of the tariff rate for transit goods shall be separately provided by the Customs General Administration.
Article 16
When it is required to pay duties under any of the following circumstances, the tariff rate of the day when the customs accepts the
declaration and handles the formalities for the payment of duties shall be applied:
(1)
Where, upon approval, the bonded goods are not to be re-carried out of China;
(2)
Where the goods that enjoy exemption or reduction of duties are transferred to others or whose purpose of use is changed upon approval;
(3)
Where, upon approval, the goods that are allowed to enter into China temporarily are not to be re-carried out of China and where,
upon approval, the goods that are permitted to exit China temporarily are not to be re-carried into China;
(4)
Where the import goods are leased and the duties are paid by installments.
Article 17
The applicable tariff rates for the makeup or refund of import or export duties shall be determined according to Article 15 or Article
16 of the present Regulations.
Where an obligatory duty payer is required to pay a duty due to violation of the present Regulations, the tariff rate of the day when
the violation occurs shall be applied. If it is unable to determine the exact day when the violation arises, the tariff rate of the
day when the customs discovers the violation shall be applied.
Chapter III Determination of Dutiable Value for Import and Export Goods
Article 18
The dutiable value for import goods shall be examined and determined by the customs on the basis of the transaction value in accordance
with the requirements as prescribed in the Paragraph 3 of this Article, and the freight, the associated expenses and the insurance
premiums incurred prior to the arrival and unloading of the goods at the destination within the People’s Republic of China.
The term “transaction value of import goods” means the actual total amount of the price, covering the direct payments and indirect
payments, that the buyer within the territory of the People’s Republic of China shall pay the seller for the goods after readjustments
have been made according to Articles 19 and 20 of the present Regulations.
A transaction value of import goods shall meet the following conditions:
(1)
There is no limitation to the disposal and use of the buyer except for the limitations as prescribed in the laws and administrative
regulations, the geographic limitation on the resale of goods and those without material impact on the price of goods;
(2)
It isn’t unable to determine the transaction value of the goods because of tied sale or other factors;
(3)
The seller shall not directly or indirectly get any yields from the resale, disposal or use of the goods after import, or the seller
may have some yields, but adjustments may be made according to Article 19 or 20 of the present Regulations.
(4)
There is no special relationship between the buyer and seller, or although there is any, it does not affect the transaction value.
Article 19
The following expenses on import goods shall be included into the dutiable value:
(1)
The commission and brokerage other than the commission on the purchase of goods that shall be paid by the buyer;
(2)
The expenses that shall be paid by the buyer for the containers that are considered as an integrated part of the goods when the dutiable
value is examined and determined;
(3)
The expenses for packing materials and packing labor shall be paid by the buyer;
(4)
The value of the materials, tools, moulds, consumable materials and like goods that are related to the production of the goods and
the sale within the territory of the People’s Republic of China and that are provided by the buyer gratuitously or at a price lower
than the costs and may be apportioned in accordance with a reasonable rate, and the expenses of relevant expenses such as the development
and design outside China, etc.;
(5)
The franchise royalties in relation to the goods that shall be paid by the buyer as a precondition for the sale of goods within the
territory of the People’s Republic of China;
(6)
The yields directly or indirectly obtained by the seller from the resale, disposal or use of the goods after import.
Article 20
The following duties, taxes, and expenses specified in the price of the goods in the process of import shall not be included into
the dutiable value of the goods hereof:
(1)
The expenses of construction, installation, assembly, maintenance and technical services after importing such goods as workshops,
machines, and equipments, etc.;
(2)
The freight and related expenses and insurance premiums after the arrival and unloading of the import goods at the destination within
the People’s Republic of China;
(3)
Import duties and domestic taxes.
Article 21
Where the transaction value of the import goods doesn’t meet the requirements as prescribed in Paragraph 3 of Article 18 of the present
Regulations, or the transaction value is unable to be determined, the customs shall assess the dutiable value of the goods according
to the following values arranged in descending order of precedence after it has learnt of relevant information and negotiated with
the obligatory duty payer about the price:
(1)
The transaction price of the identical goods sold to a buyer within the territory of the People’s Republic of China at the same time
or nearly at the same time;
(2)
The transaction price of the like goods sold to a buyer within the territory of the People’s Republic of China at the same time or
nearly at the same time;
(3)
At the same time or nearly at the same time when the goods is imported, the unit price of the import goods, the identical or like
import goods in the maximal quantity sold to the buyer without special relationship in the first link of distribution, in which the
items as listed in Article 22 of the present Regulations shall be deducted;
(4)
The price calculated according to the summation of the items, including the costs of the materials in producing the goods, and the
processing expenses, the general profit and the general expenses in selling goods of the same grade or like goods to a buyer within
the territory of the People’s Republic of China, the freight, the associated expenses and the insurance premiums incurred prior to
the arrival and unloading of the goods at the destination within the territory of the People’s Republic of China;
(5)
The price assessed by any other reasonable method.
After the obligatory duty payer has submitted relevant materials to the customs, it may apply to the customs for reversing the applicable
order of precedence between Items 3 and 4 of the preceding paragraph.
Article 22
With regard to the dutiable value assessed in accordance with the Item 3 of Paragraph 1 of Article 21 of the present Regulations,
the items that shall be deducted refer to:
(1)
The general profit, expenses and commission of the first link of distribution of the goods of identical grade or like goods sold to
the buyers within the territory of the People’s Republic of China;
(2)
The freight, the associated expenses and the insurance premiums after the arrival and unloading of the import goods at the destination
within the territory of the People’s Republic of China;
(3)
Import duties and domestic taxes.
Article 23
As for the goods imported by means of lease, the rent of the goods as verified and determined by the customs shall be the dutiable
value.
The obligatory duty payer, who requests to pay the duty in a lump sum, may choose to have the dutiable value assessed according to
Article 21 of the present Regulations or to deem the total amount of rent as verified and determined by the customs as the dutiable
value.
Article 24
As for the goods carried abroad for processing, in case they are declared to the customs and re-carried into China within the time
limit as specified by the customs, the dutiable value shall be verified and determined on the basis of the overseas processing fees,
the costs of the spare parts and raw materials used, and the freight, the associated expenses and the insurance premiums for re-carrying
the goods into China.
Article 25
As for the machines, tools, means of transportation or any other goods carried abroad for maintenance, in case they are declared to
the customs and re-carried into China within the time limit as specified by the customs, the dutiable value shall be verified and
determined on the basis of the overseas maintenance fees and the costs of the spare parts and raw materials used.
Article 26
The dutiable value of export goods shall be examined and determined by the customs on the basis of the transaction value of the goods,
and the freight, the associated fees and insurance premiums incurred prior to the arrival and unloading of the goods at the destination
within the territory of the People’s Republic of China.
The transaction value of export goods refers to the total amount of the price that shall be directly or indirectly paid by the buyer
to the seller for the export goods.
Export duties shall not be included into the dutiable value.
Article 27
Where the transaction value of the export goods is unable to be determined, the customs shall assess the dutiable value of the goods
according to the following prices arranged in descending of precedence after it has learnt of relevant information and negotiated
with the obligatory duty payer about the price:
(1)
The transaction price of the identical goods exported to the same country or region at the same time or nearly at the same time;
(2)
The transaction price of the like goods exported to the same country or region at the same time or nearly at the same time;
(3)
The price calculated in accordance with the summation of the items, including the domestic costs of the materials in producing the
identical or like goods and the processing expenses, the general profit and the general expenses, and the freight, associated expenses
and insurance premiums incurred within China;
(4)
The price assessed by any other reasonable method.
Article 28
The costs, expenses, duties and taxes that are included into or excluded from the dutiable value according to the present Regulations
shall be based on objective and quantifiable data.
Chapter IV The Collection of Import and Export Duties
Article 29
An obligatory duty payer of import goods shall, within 14 days as of the day when the means of carriage declares for entry, submit
a declaration to the customs office of the place of entry. An obligatory duty payer of export goods shall, unless approved otherwise
by the customs office, submit a declaration to the customs office of the place of exit after the goods arrive at the administrative
area of the customs but 24 hours prior to the loading of goods. With regard to the transit import and export goods, the regulations
of the Customs General Administration shall be implemented.
Prior to the arrival of the import goods, the obligatory duty payer may submit a declaration in advance upon approval of the customs.
The specific measures shall be separately formulated by the Customs General Administration.
Article 30
An obligatory duty payer shall, according to the law, faithfully file a declaration to the customs and provide the materials required
for determining the dutiable value, classifying the commodities, determining the place of origin and taking antidumping, countervailing
or safeguard measures. If necessary, the customs may demand the obligatory duty payer to make supplementary declarations.
Article 31
An obligatory duty payer shall, according to the table of contents, stipulations, the general principle of classification, category
notes, chapter notes, subheading notes and any other classification notes, classify the import or export goods that it declares,
and put them under the corresponding tariff nomenclature heading numbers. The customs shall examine and determine the commodity classification
of the goods pursuant to law.
Article 32
The customs may demand an obligatory duty payer to offer relevant materials required for determining the classification of the commodities.
If necessary, the customs may organize laboratory tests and inspections, and take the results of test and inspection as the basis
of determining the classification of the commodities.
Article 33
For the purpose of examining the authenticity and exactness of the declared value, the customs may inquire into and copy the contracts,
invoices, account books, evidences of settlement and payment vouchers, instruments, business letters and telephones, audio-visual
products and other materials reflecting the relationship between the buyer and seller and the transactions involved.
Where the customs is doubtful about the declared value of an obligatory duty payer and if the amount of the duty involved is quite
large, the customs may, upon the approval of the director of the customs directly under the Customs General Administration or of
the authorized director of its subordinate customs, inquire into the fund flow reflected in the accounts opened by the obligatory
duty payer in the banks or any other financial institutions on the strength of the assistance inquiry account notice in a uniform
format of the Customs General Administration and the employees’ cards of the relevant functionaries, and shall inform the banking
regulatory institutions of the relevant information.
Article 34
The customs office, that is doubtful about the price declared by an obligatory duty payer, shall notify the obligatory duty payer
the reasons in writing, and demand it to make written explanations or provide relevant materials within a prescribed time limit.
In case the obligatory duty payer fails to make any explanation or provide relevant materials within the specified time limit, or
it is still reasonable for the customs to be doubtful about the authenticity and exactness of the declared value, the customs may
refuse to accept the value as declared by the obligatory duty payer, and may assess the dutiable value according to Chapter III of
the present Regulations.
Article 35
After the customs has examined and determined the dutiable value of the import or export goods, the obligatory duty payer may request
the customs, in writing, to make written explanations about how to determine the dutiable value of the import or export goods. The
customs shall make explanations in writing to the obligatory duty payer.
Article 36
The import and export duties may be collected by ad valorem or by quantity or by any other means as provided by the state.
If collected by ad valorem, the formula is: Payable Duties = Dutiable Value Tariff Rate
If collected by quantity, the formula is: Payable Duties = Quantity of Goods Unit Duty Value
Article 37
An obligatory duty payer shall pay the duties in the designated bank within 15 days as of the day when the customs fills in and issues
a duty payment form. In case it fails to pay the duties within the time limit, it shall pay a late fee of 0.05% of the amount of
the defaulted duties per day as of the day when the duties are in default.
The customs may make an announcement about the information of the obligatory duty payers who default the duties.
The customs shall issue receipts when collecting customs duties and late fees. The formats of the receipts shall be formulated by
the Customs General Administration.
Article 38
The customs duties and late fees shall be calculated and collected in terms of RMB.
Where the transaction value of import or export goods and the associated expenses are calculated in terms of a foreign currency, the
dutiable value shall be calculated by converting the transaction value and the associated expenses into RMB in accordance with the
basic exchange rate announced by the People’s Bank of China. Where the transaction value of import or export goods and the associated
expenses are calculated in terms of a foreign currency beyond the scope of foreign currencies of basic exchange rate, the dutiable
value shall be calculated by converting them into RMB according to relevant regulation of the state. The date of the applicable exchange
rate shall be provided by the Customs General Administration.
Article 39
Where an obligatory duty payer fails to pay the duties because of force majeure or the change of duty policies of the state, it may,
upon approval of the Customs General Administration, extend the time limit for the payment of the duties, but the extended period
shall not exceed 6 months.
Article 40
Where any clear evidence shows that an obligatory duty payer of import or export goods transfers or conceals the dutiable goods or
other properties during the time period for paying duties, the customs may order the obligatory duty payer to provide a guaranty.
Where the obligatory duty payer fails to provide a guaranty, the customs may take duty preservation measures according to Article
61 of the Customs Law of the People’s Republic of China.
In case the obligatory duty payer or the guarantor still fails to pay the duties 3 months after the expiration of time limit for paying
the duties, the customs may take mandatory measures according to Article 60 of the Customs Law.
Article 41
As for the materials imported for processing trade, if they are imported under the provisions of the state on bonded imports, and
in case the finished products or the import materials fail to be exported within the specified time limit, the customs shall collect
import duties according to relevant provisions.
Where import duties are paid for the materials imported for processing trade when they enter into the territory of China according
to the provisions of the state, and the finished products or the import materials are exported within the specified time limit, the
customs shall refund the duties collected on entry.
Article 42
Any of the following goods permitted to enter or exit China temporarily by the customs, in case the obligatory duty payer shall pay
the customs office a sum of caution money equivalent to the value of the duties payable or provides other guaranty, it may be allowed
not to pay the duties for the time being, but shall re-carry the goods into or out of China within 6 months as of the day of entry
or exit. Upon the application of the obligatory duty payer, the customs may extend the time limit for re-carrying the goods out of
or into China according to the provisions of the Customs General Administration.
(1)
The goods exhibited or used in exhibitions, trade fairs, meetings and other similar activities;
(2)
The articles used in performances or competitions in cultural or sports exchange activities;
(3)
The instruments, equipment and articles used in making news reports or in producing films or TV programs;
(4)
The instruments, equipment and articles used in scientific research, teaching or medical activities;
(5)
The means of transport and special vehicles used in the activities as listed in Paragraphs 1 – 4 of this Article;
(6)
The samples of goods;
(7)
The instruments and tools used in installing, trial running and testing equipment;
(8)
The containers of the goods; and
(9)
Other goods used for non-commercial purposes.
Where the goods permitted to enter China temporarily as listed in Paragraph 1 aren’t re-carried out of China within the specified
time limit, or the goods permitted to exit China temporarily aren’t re-carried into China within the specified time limit, the customs
shall collect duties pursuant to law.
As for other goods permitted to enter China temporarily which are beyond the scope of good exempted from customs duties for the time
being as listed in Paragraph 1, the duties on the goods shall be calculated and collected in accordance with the dutiable value and
the ratio between the time when the goods stay in China and the depreciation time. The specific measures shall be formulated by the
Customs General Administration.
Article 43
Where, because of quality or specifications reasons, any of the export goods is re-carried into China in its original form within
1 year as of the day when they were exported, it is not subject to import duties.
Where, because of quality or specifications reasons, any of the export goods is re-carried out of China in its original form within
1 year as of the day when they were imported, it is not subject to export duties.
Article 44
As for the goods compensated without further charge or the identical goods gratuitously replaced by the consigner of the import or
export goods, the carrier or the insurance company because of damage, shortage, poor quality or incompatible specifications, no duty
shall be collected when they are imported or exported. With regard to the gratuitously replaced original import goods that are not
to be re-carried outside China or the original export goods that are not to be re-carried into China, the customs shall impose duties
on the original import or export goods in accordance with the relevant provisions.
Article 45
The following import and export goods are duty-free:
(1)
Where the customs duty of goods under a single invoice is not more than RMB 50;
(2)
The articles that are for advertising purposes or to be used as samples and therefore of no commercial value;
(3)
The materials gratuitously donated by foreign governments or international organizations;
(4)
The goods damaged prior to the customs clearance;
(5)
The fuel, materials, food and drinks necessary for the journey and carried by the means of transport that enter into or exit China;
As for the goods damaged prior to the customs clearance, the duties may be reduced on the basis of the seriousness of the damages
as determined by the customs.
As for other goods exempt from duties or at reduced duties as provided for in law, the customs shall exempt them from duties or reduce
the duties according to relevant provisions.
Article 46
As for the reduction or exemption of duties and the temporary reduction or temporary exemption of duties on the import goods or export
goods of special areas, special enterprises or specified purposes, the relevant provisions of the State Council shall be implemented.
Article 47
As for the reduction or the exemption of import link taxes levied by the customs on the import goods, the provisions of relevant laws
and administrative regulations shall be implemented.
Article 48
As for the import or export goods exempt from duties or at reduced duties, the obligatory duty payer shall, unless otherwise provided
for, handle the duty exemption or reduction formalities for examination and approval at the customs on the strength of relevant documents
according to the provisions before the goods are imported or exported.
Article 49
As for the duty-exempted or duty-reduced import goods whose use is subject to the supervision of the customs, if they are transferred
or if their purposes of use are changed within the term of supervision and thus it is necessary to make up the duties, the customs
shall depreciate and assess the duties in accordance with the import time, and make up the import tariffs.
The term of supervision for the special duty-exempted or duty-reduced import goods shall be provided by the Customs General Administration.
Article 50
Under any of the following circumstances, an obligatory duty payer may apply for the refund of
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e01709
State Administration of Radio, Film and Television
Order of the State Administration of Radio, Film and Television
No.21
The Provisional Regulation on Investment in Cinemas by Foreign Investors, which was passed at the executive meeting of the State Administration
of Radio, Film and Television on September 28, 2003 and approved by the Ministry of Commerce and the Ministry of Culture of the People’s
Republic of China, is hereby issued and shall go into effect on January 1, 2004.
Xu Guangchun, Director of the State Administration of Radio, Film and Television
Lv Fuyuan, Minister of Commerce of the People’s Republic of China
Sun Jiazheng, Minister of Culture of the People’s Republic of China
November 25, 2003
Provisional Regulation on Investment in Cinemas by Foreign Investors
Article 1
The present Regulation is formulated according to h the Law of the People’s Republic of China on Chinese-foreign Equity Joint Ventures,
the Law of the People’s Republic of China on Chinese-foreign Contractual Joint Ventures, the Regulation on Film Administration, and
other relevant laws and regulations with the aim to meet the demand of the reform and opening process, to absorb foreign capital,
to introduce advanced technology and equipment, and to promote the prosperous development of the film industry of China.
Article 2
The present Regulation shall be applicable to the foreign companies, enterprises, other economic organizations or individuals (hereinafter
referred to as foreign parties) who, according to the principle of equality and mutual benefit and upon approval of the Chinese government,
establish Chinese-foreign equity joint ventures or contractual joint ventures, construct or reconstruct cinemas, and engage in film
projection business cooperatively with the companies or enterprises registered within China (hereinafter referred to as the Chinese
party).
Article 3
Overseas investors are not permitted to establish any solely-owned cinemas or form any film network companies.
Article 4
Foreign investors who intend to invent in cinemas shall satisfy the conditions as follows:
1)
The arrangements and planning are in line with the local cultural facilities;
2)
The registered capital is no less than 6 million Yuan;
3)
There are fixed business (showing) premises;
4)
For the Chinese-foreign equity joint cinemas to be established, the share of the investment made by the Chinese party in the registered
capital shall account for no less than 51%; for the Chinese-foreign equity joint cinemas to be established in such pilot cities as
Beijing, Shanghai, Guangzhou, Chengdu, Xi’an, Wuhan, and Nanjing, the share of the investment made by the foreign party in the registered
capital may not be above 75%;
5)
The period of the equity or contractual joint venture shall not exceed 30 years; and
6)
The equity or contractual joint venture shall abide by the relevant laws, regulations and provisions of China.
Article 5
In the case that the Chinese party makes the investment with state-owned assets (excluding cash), the relevant formalities shall be
carried out in the light with the relevant provisions on the management of state-owned assets.
Article 6
The establishment of a foreign-funded cinema shall be reported for examination and approval in accordance with the procedures as follows:
1)
The Chinese party must submit an application to the provincial administrative department of commerce of the place where it is located,
providing the documents as follows:
1.
The project application form of the establishment of the foreign-funded cinema;
2.
The certificate of juridical person status of the Chinese party, the documents relating to the land use right of the cinema, and the
creditability certificate issued by the bank;
3.
The qualification certificate of the foreign party, the creditability certificate issued by the bank, and the financial status certificate
issued by the accounting firm;
4.
The notice for preliminary approval of the cinema name issued by the department of industry and commerce administration;
5.
The feasibility study report, contract, and articles of association; and
6.
Other documents required by the laws and regulations and the examination and approving authority.
2)
After obtaining consent from the provincial administrative department of film, the provincial administrative department of commerce
of the place where the applicant is located shall make the examination in accordance with the relevant laws and regulations of the
state on foreign investment, and report to the Ministry of Commerce, the State Administration of Radio, Film and Television, and
the Ministry of Culture for archival purposes. The Certificate of Approval for Foreign-funded Enterprises shall be issued to the
foreign-funded enterprise that has been approved to establish.
3)
For a foreign-funded cinema that has been permitted to establish, the applicant shall, within one month from the day of receiving
the Certificate of Approval for Foreign-funded Enterprises, carry out registration formalities with the provincial department of
industry and commerce administration by taking the Certificate of Approval for Foreign-funded Enterprises.
4)
After the construction or reconstruction of a foreign-funded cinema has been finished and after the said cinema has been checked and
accepted by the relevant departments, the applicant shall apply for the License for Film Projection with the provincial administrative
department of film by taking the Certificate of Approval for Foreign-funded Enterprises and the Business License before starting
the business of film projection.
Article 7
For any change of the shareholding or investment of a foreign-funded cinema that has been established, the procedures prescribed in
Article 6 herein shall be followed.
Article 8
A foreign-funded cinema must abide by the relevant laws and regulations of the state, run businesses in the light with the Regulation
on Film Administration, and subject itself to the supervision and administration of the relevant departments of the Chinese government.
For each film to be shown, the cinema must hold a License for Public Film Projection issued by the State Administration of Radio,
Film and Television (SARFT), and any smuggled or pirate films are not permitted to be shown, and any video tapes, VCD, or DVD are
not permitted to be shown for commercial purpose.
Article 9
Foreign investors who are engaged in any other entertainment business affiliated to the cinema shall comply with the relevant provisions
of the state.
Article 10
For investors from Hong Kong Special Administrative Region, Macao Special Administrative Region, and Taiwan area who establish any
enterprises engaging in film projection in the mainland of China, the present Regulation shall be referred to.
Article 11
The present Regulation and the appendix hereto shall go into effect on January 1, 2004. The Provisional Regulation on Investment in
Cinemas by Foreign Investors issued by the SARFT, the Ministry of Foreign Trade and Economic Cooperation and the Ministry of Culture
on October 25, 2000, shall be abolished at the same time when the present Regulation and the appendix hereto go into effect.
Appendix:
In order to promote the establishment of closer economic and trade relationship between Hong Kong, Macao and the mainland of China,
and to encourage the service providers from Hong Kong and Macao to establish enterprises engaging in film projection in the mainland
of China, and in the light with the Arrangements of the Mainland of China and Hong Kong on Establishing Closer Trade and Economic
Relationship and the Arrangements of the Mainland of China and Macao on Establishing Closer Trade and Economic Relationship, the
following special provisions are hereby made with respect to the investment in cinema made by service providers from Hong Kong and
Macao as provided for in the Interim Regulation on Investment in Cinemas by Foreign Investors:
1.
From January 1, 2004, service providers from Hong Kong and Macao shall be permitted to construct, reconstruct and operate cinemas
in the mainland of China through equity or contractual joint ventures. The service providers from Hong Kong and Macao may hold the
majority shares, but the proportion may not be over 75%.
2.
Other provisions on investment in cinemas by service providers from Hong Kong and Macao in the mainland of China shall still comply
with the Provisional Regulation on Investment in Cinemas by Foreign Investors.
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