No. 149

The Measures of the Customs of the People’s Republic of China for Administration of the Origin of Import Goods under the Special Preferential
Tariff Treatments were deliberated and adopted at the Executive Meeting of the General Administration of Customs on May 30, 2006
and are hereby promulgated, and shall come into force as of July 1, 2006. Provisions of the Customs of the People’s Republic of China
on the Implementation of the Rules of Origin of Goods under Special Preferential Tariff Treatments Given by the People’s Republic
of China to the Least-developed African Countries as promulgated as Decree No. 123 by the General Administration of Customs on December
30, 2004 shall be abolished simultaneously.

Mu Xinsheng, Director of the General Administration of Customs

May 31, 2006

Measures of the Customs of the People’s Republic of China for Administration of the Origin of Import Goods under the Special Preferential
Tariff Treatments

Article 1

The present Measures are formulated in accordance with the Customs Law of the People’s Republic of China, the Regulations of the
Origin of Imports and Exports of the People’s Republic of China, rules of origin of goods under the special preferential tariff treatments
of China as well as provisions of relevant laws and administrative regulations for the purposes of correctly determining the origin
of import goods under the special preferential tariff treatments and promoting the economic and trade contacts between China and
relevant countries.

Article 2

The present Measures shall apply to the goods which are imported from the beneficiary countries (see the name list in Appendix 1)
under special preferential tariff treatments. But goods imported in bond and for home use by means of processing trade shall be excluded.
Any change in the name list of beneficiary countries shall be otherwise promulgated by the General Administration of Customs.

Article 3

If the goods are directly imported from a beneficiary country and in accordance with one of the conditions as follows, their place
of origin shall be the said beneficiary country and the corresponding special preferential tariff rates provided in the Import and
Export Tariff Regulations of the People’s Republic of China (hereinafter referred to as Tariff Regulations) shall be applied.

(1)

entirely obtained from or manufactured in the beneficiary country; or

(2)

incompletely obtained from or manufactured in the beneficiary country but where the final substantial transformation is completed.

Article 4

Goods “entirely obtained from or manufactured in the beneficiary country” as mentioned in Item (1) of Article 3 of the present Measures
refer to:

(1)

The mineral products exploited and excavated from this country;

(2)

The plants or their products harvested from this country;

(3)

The live animals borne and raised in this country;

(4)

The products obtained from the animals of this country as mentioned in Item (3) of this Article;

(5)

The products obtained from hunting or fishing in this country;

(6)

The fish and other marine products obtained from the high seas by vessels registered in this country or lawfully flying the flag of
this country;

(7)

The products obtained from processing the articles as listed in Item (6) of this Article on the processing vessels registered in this
country or lawfully flying the flag of this country;

(8)

The waste and old articles that are gathered in the course of consumption in this country and that can only be suited to recycling
of raw materials;

(9)

The waste and piecemeal materials that are generated in the course of production in this country and that can only be suited to recycling
of raw materials; or

(10)

The products obtained from processing the articles as listed in Items (1) to (9) of this Article within this country.

Article 5

Any of the following types of minor processing or treatment, no matter whetherer it is completed independently or together with the
others, may not affect the determination on whether the products are entirely obtained from or produced in a country or not:

(1)

The processing or treating carried out in order to preserve the goods during transportation or storage;

(2)

The processing or treating carried out to facilitate the loading and unloading of the goods; or

(3)

The packing, exhibiting and other types of processing or treating carried out in order to sell the goods.

Article 6

The criteria on the determination of “substantial transformation” specified in Item (2) of Article 3 of the present Measures shall
be the criterion of “the change in tariff item classification” or the criterion of “ad valorem percentage”.

(1)

The criterion of “the change in tariff item classification” means that, the tariff code in the Tariff Regulations of the raw materials
which do not originate from the beneficiary country used during the production or processing of goods in the said country is any
code other than the 4-digit tariff code of the aforesaid goods.

(2)

The criterion of “ad valorem percentage” means that, following the manufacturing and processing in the beneficiary country using materials
which do not originate from the said country, the value added portion may not be less than 40% of the resulting goods. The calculating
formula shall be:

Price of Goods * Price of Materials Not Originating from the Beneficiary Country

￿￿￿￿￿￿￿￿￿￿￿￿￿￿￿￿￿￿￿￿￿￿￿￿￿￿￿￿￿￿￿￿￿￿￿￿￿￿￿￿￿￿￿￿￿￿￿￿￿￿￿￿￿￿￿￿￿￿￿￿￿￿￿￿￿￿￿￿￿￿￿￿￿￿ ￿￿100%￿￿0%

Price of Goods

“Price of Goods” refers to the price of FOB which, no matter what way the goods shall be transported, shall always be the price at
the final port of shipment or site.

“Price of Materials Not Originating from the Beneficiary Country” refers to the price of the materials used by the manufacturers which
do not originate from the beneficiary country, including the import costs as well as the insurance and freight for transporting them
to the port of destination or site.

The calculation of the above-mentioned “ad valorem percentage” shall comply with the universally acknowledged accounting rules as
well as the Customs Evaluation Agreement.

Article 7

The simple dilution, mix, packing, bottling, drying, assembly, classification or decoration may not be deemed as substantial transformation.
Any production or pricing measures, made by enterprises for the purpose of circumventing the present Measures, may not be deemed
as substantial transformation.

Article 8

In the determination of the origin of goods, the origin of the energy, workshops, equipment, machines and tools employed during the
production course of goods, as well as the origin of the materials that are employed during the production course but do not constitute
any component or constituent part of the goods, may not affect the determination of the origin of goods.

Article 9

The origin of the packages, packing materials and containers that are declared and uniformly classified into the same category of
the goods under the Tariff Regulations together with that of the accessories, spare parts, tools and introductory materials with
which the said goods are regularly accompanied, may not affect the determination of the origin of the goods.

Article 10

The imported goods that are to declare the special preferential tariff treatments shall be transported directly from the beneficiary
country into the territories of China without transiting a third country (region) apart from China and the beneficiary country (hereafter
referred to as a third country (region)).

As regards goods which transit a third country (region) into the territories of China, if the following conditions are satisfied,
it will be deemed as direct transportation:

(1)

merely for the geographical reason or for the need of transportation;

(2)

except for loading, unloading and other necessary work to keep the goods in good condition or for transportation, the goods haven’t
undergone any other type of processing when transiting a third country (region), and

(3)

the goods don’t enter a third country (region) for trade or consumption.

Article 11

When declaring goods under the special preferential tariff treatments, the consignee of imports shall offer the following documents
to the entry Customs:

(1)

A certificate of origin issued by an issuance institution of a beneficiary country bearing the seal of the Customs of the country
when exporting the goods (see the format in Appendix 2);

(2)

Through Bill of Lading issued by the beneficiary country or that issued by other countries (regions) as the departure station of international
through transport; and

(3)

The original invoice of the goods issued by the beneficiary country.

As regards imported goods transiting a third country (region), relevant documents that, according to the Customs of China, are necessary
to certify that the provisions specified in Item (2) of Article 10 are satisfied shall be offered.

Article 12

The certificate of origin offered by the consignee of imports to the Customs, shall be issued by an official institution of a beneficiary
country and shall be valid for a period of 180 days as of the date of issuance.

The certificate of origin shall be printed on A4 paper, and the words on the face shall be in English. A certificate of origin shall
consist of 1 original and 3 duplicates: color of the original shall be apricot cream and that of the duplicates light green. The
duplicates include the second duplicate, the third duplicate and the fourth. The second duplicate shall be prepared for the verification
where the Customs of the People’s Republic of China considers necessary, the third duplicate shall be kept by the issuance institution
of the export country and the fourth duplicate shall be kept by the exporter. When declaring the goods, the consignee of imports
shall offer the original certificate of origin and the second duplicate to the entry Customs.

The name and address of the issuance institution of the certificate of origin as well as the seal and the pattern hereof shall be
kept for record by the General Administration of Customs of the People’s Republic of China.

Article 13

When declaring the import goods, the consignee of import goods shall, on its own initiative, declare to the Customs that the relevant
goods are under the special preferential tariff and shall submit the certificate of origin bearing the seal of the Customs of the
export country. The entry Customs shall in line with files on record by the beneficiary country, verify the certificate of origin
of relevant goods, and permit the import goods to enjoy the special preferential tariff upon the strength of the valid certificate
of origin and relevant documents.

Article 14

When having any doubt about the authenticity of the certificate of origin, the General Administration of Customs of the People’s
Republic of China or its authorized institution may, via the economic and commercial counselor’s office of the embassy or consulate
of China based in the corresponding beneficiary country, require the Customs of the beneficiary country or the original issuance
institution of the certificate of origin to conduct verification, and to offer a reply within 90 days as from the day when it receives
the verification request. If the Customs of the beneficiary country or the original issuance institution of the certificate of origin
fails to offer a reply within 90 days, the goods may not enjoy the special preferential tariff treatments.

During the period of waiting for the result of verification of the certificate of origin of the beneficiary country, the entry Customs
may, at the request of the consignee of imports, release the goods after it charges a sum of security deposit equivalent to the amount
of tariff calculated under the most favored nation tariff rate applicable to the goods, and it shall handle the import procedures
in accordance with the relevant provisions and complete the corresponding statistical work of the Customs. After the Customs of the
export country or the issuance institution of the certificate of origin completes the verification, the entry Customs shall, in accordance
with the verification result, promptly handle the formalities for refunding the security deposit or converting the security deposit
to the import Customs tariff, and make correct the relevant statistic data. As for import goods on which the State place restrictions
or those suspected of being against the law, the Customs may not release the goods before the verification of the certificate of
origin comes to an end.

Article 15

The Customs shall have the obligation to maintain in confidence the trade secrets they obtained on the condition of being in compliance
with the provisions of the present Measures. Without the coonsignee’s consent, the Customs may not reveal or put these secrets into
other use, except as otherwise provided by law, administrative regulations and relevant judicial interpretation.

Article 16

Anyone who violates the present Measures shall be punished in accordance with the Customs Law of the People’s Republic of China,
and the Regulations on the Implementation of the Administrative Punishments of the Customs of People’s Republic of China and other
relevant laws and administrative regulations. If any crime is constituted, he shall be subject to the criminal liabilities according
to law.

Article 17

Definitions of the following terms as mentioned in the present Measures:

The “beneficiary country” refers to the country or region with whom China has signed exchange of notes concerning special preferential
tariff treatments.

“Customs Evaluation Agreement” refers to the Agreement on Implementation of Article VII of the General Agreement on Tariffs and Trade
1994, which serves as part of Marrakech Agreement Establishing the World Trade Organization.

The “materials” refer to components, spare parts, constituent parts, semi-assembly, etc. that have actually constituted part of another
product or has been used in the production course of another product.

The “production” refers to the ways of obtaining products, including planting, exploiting, harvesting, fishing, entrapping, hunting,
manufacturing, producing, processing or assembling of the products.

Article 18

The power to interpret the present Measures shall remain with the General Administration of Customs of the People’s Republic of China.

Article 19

The present Measures shall be implemented as of July 1, 2006. Provisions of the Customs of the People’s Republic of China on the
Implementation of the Rules of Origin of Goods under Special Preferential Tariff Treatments Given by the People’s Republic of China
to the Least-developed African Countries as promulgated as Decree No. 123 by the General Administration of Customs on December 30,
2004 shall be abolished simultaneously.

Appendix:

1. Name List of the Beneficiary Countries (Omitted)

2. Format of Certificates of Origin (Omitted)