DETAILED RULES FOR APPLYING AND DISTRIBUTING IMPORT TARIFF QUOTA OF SUGAR

Ministry of Commerce

Announcement of the Ministry of Commerceof the People’s Republic of China

[2005] No. 64

Detailed Rules for Applying and Distributing Import Tariff Quota of Sugar were drawn up in accordance with Temporary Measures on Management
of Import Tariff Quota of Agricultural Products (Decree No. 4 2003 of Ministry of Commerce and National Development and Reform Commission),
and are hereby published.

Ministry of Commerce

September 26, 2005

Detailed Rules for Applying and Distributing Import Tariff Quota of Sugar

According to Temporary Measures on Management of Import Tariff Quota of Agricultural Products (Decree No. 4 2003 of Ministry of Commerce
and National Development and Reform Commission), detailed rules of sugar tariff quota quantity, application requirements and allocation
principles in 2006 are hereby published as follows:

1.

The quantity of tariff quota for import of sugar in 2006 is 1.945 million ton, and 70 percent is state run trade.

2.

The basic requirements of the applicants for sugar import tariff quota: registered in industrial and commercial administrations before
October 1, 2005 and passed the latest annual examination made by industrial and commercial administrations in accordance with rules.
No activities breaking the rules in import of sugar in customs, foreign exchange, industry and commerce, taxation and quality examination.
No activities that violate Temporary Measures on Management of Import Tariff Quota of Agricultural Products.

On the basis of satisfying above requirements, quota applicants should also qualify one of following requirements:

(1)

State run trade enterprise;

(2)

Central enterprise that has state reserve function;

(3)

The enterprise that has real achievements of sugar import in 2005;

(4)

Sugar producing enterprises that process raw sugar more than 600 ton (including 600 ton) everyday, have registered funds of more than
10 million yuan (including 10 million yuan), and yearly sales volume is more than 200 million yuan (including 200 million yuan);

(5)

The enterprises that take sugar as raw materials and are engaged in processing trade.

3.

Tariff quota applicants should provide following materials:

(1)

Application report on import tariff quota of agricultural products;

(2)

Application Form for import tariff quota of agricultural products;

(3)

Copy of business license (duplicate) of enterprise corporation that pass the latest annual examination made by industrial and commercial
administrations in accordance with rules;

(4)

The enterprise’s 2004 annual audit report provided by qualified accountant firm or copy of “Registration Form of Ordinary Taxpayer
for 2004 Added Value Tax” submitted when handling 2004 tax annual examination.

The applicants that have real achievements of import should provide only above materials stipulated in 1 to 3. The enterprises that
make the application for the first time should provide all materials above. If the enterprises that make the application for the
first time is established for production after 2004, they should provide reply documents (reply documents to project recommendations)
to feasibility report on construction project made by competent authorities and project completion acceptance report.

4.

Basic principles of distributing sugar import tariff quota is based on real import achievements, production ability, sales volume
of last year and other related commercial standard.

(1)

If the quantity of import tariff quota for allocation can satisfy the total quantity of the qualified applicants, tariff quota will
be distributed according to the quantity the applicants applied for.

(2)

If the quantity of import tariff quota for allocation can not satisfy the total quantity of the qualified applicants, the applicants
who have real import achievements may have priority to obtain equal-proportional quota that take the real import achievements of
last year as the base. To the applicants who have no real import achievements, The quantity of import tariff quota will be distributed
among them according to proportion mainly on the basis of the processing ability and sales volume. If the application quantity is
lower than the quantity allocated according to the proportion, the quantity is distributed according to application quantity.

5.

2006 import tariff quota of sugar may be applied for from October 15 to 30, 2005. The applicant should submit the application to the
organs authorized by Ministry of Commerce in industrial and commercial registration area. Quota applicants may obtain the Application
Form for Import Tariff Quota of Agricultural Products from the organs authorized by Ministry of Commerce or download (copy) it from
the network of Ministry of Commerce: https://www.mofcom.gov.cn. (See Appendix 1).

6.

The organs authorized by Ministry of Commerce is responsible for accepting and handling the application of the enterprises registered
in this area and submit the application of the enterprises that satisfy above requirements to Ministry of Commerce before November
30 2005, and report to National Development and Reform Commission at the same time.

7.

Ministry of Commerce distributes License for Import Tariff Quota of Agricultural Products to final consumers through authorized organs
before January 1, 2006.

Appendix :

(1)

Application Form for Import Tariff Quota of Agricultural Products

(2)

Tax Items and Rate Schedule of Sugar Import in 2006