General Administration of Customs

Order of the General Administration of Customs

No. 138

The Measures for the Administration of the Customs of the People’s Republic of China for the Inspection of Imported and Exported Goods,
which were deliberated and adopted at the executive meeting of the General Administration of Customs on December 8, 2005, are hereby
promulgated and shall come into force as of February 1, 2006.

Director, Mou Xinsheng

December 28, 2005

The Measures for the Administration of the Customs of the People’s Republic of China for the Inspection of Imported and Exported Goods

Article 1

These Measures are formulated in accordance with the Customs Law of the People’s Republic of China (hereinafter referred to as the
Customs Law) and other relevant laws and administrative regulations for the purpose of regulating the customs houses’ inspection
of imported and exported goods and verifying the conditions of imported and exported goods.

Article 2

The “inspection of imported and exported goods” (hereinafter referred to as the inspection) as mentioned in these Measures refers
to the law enforcement act in which the customs house carries out actual verification of imported and exported goods so as to determine
whether the contents declared by the consignee or consigner of imported and exported goods conform to the actual situation of imported
and exported goods or to determine the classification, price and producing area of commodities.

Article 3

The inspection shall be jointly conducted by two or more customs inspectors. The inspectors shall, when carrying out the inspection,
wear customs uniforms.

Article 4

The inspection shall be conducted within the customs supervisory area.

Where the inspection is unfit to be conducted within the customs supervisory area because the goods can be easily affected by the
temperature, static electricity, dust or any other natural factor, or the inspection needs to be conducted outside the customs supervisory
area due to any other special factor, the customs house may assign officials to carry out inspection outside the customs supervisory
area upon written application of the consignee or consigner of imported and exported goods or the agent thereof.

Article 5

When carrying out the inspection, the customs house may conduct either thorough inspection or selective inspection. The inspection
may, in light of operational methods, be divided into manual inspection and machine inspection, and the former includes the outside
inspection and the inspection by package opening.

The customs house may, in light of the situation of goods and the actual requirements for law enforcement, determine the specific
inspection methods.

Article 6

The customs house shall, before carrying out the inspection of imported and exported goods, ask the consignee or consigner of imported
and exported goods or the agent thereof to enter an appearance.

Article 7

The consignee or consigner of imported and exported goods or the agent thereof shall, when the inspection of goods is carried out,
be on the scene to be responsible for moving goods, removing and re-sealing the package of goods as requested by the customs house,
and to faithfully answer the inquiries of inspectors and provide necessary materials.

Article 8

In case the imported and exported goods are special or easy to be damaged due to improper opening or moving and it is necessary for
inspectors to pay special attention during the course of inspection, the consignee or consigner of imported and exported goods or
the agent thereof shall declare it before the customs house carries out the inspection.

Article 9

Where it is necessary to pick up samples or conduct testing during the course of inspection to further determine or distinguish the
name, specification or any other nature of imported and exported goods, the customs house shall handle it in accordance with the
Provisions of the Customs of the People’s Republic of China on the Testing and Appraisal of Imported and Exported Goods.

Article 10

Upon inspection, the inspectors shall faithfully fill in the inspection records and affix their signatures thereon. The inspection
records shall be affirmed by the signature of the consignee or consigner of imported and exported goods or the agent thereof who
is present. If the consignee or consigner of imported and exported goods or the agent thereof refuses to affix his signature, the
inspectors shall indicate it in the inspection records, and affirm it by the signature of the operator of the supervisory area where
the goods are placed. The inspection records shall be kept by the customs house as the attached documents to the customs declaration.

Article 11

Under any of the following circumstances, the customs house may re-inspect those goods that have been inspected:

(1)

The true nature of goods has not been found upon the first inspection, and it is necessary to further determine some characteristics
of the goods that have been inspected;

(2)

The goods are suspected of being involved in a case of smuggling, and it is necessary to conduct a new inspection;

(3)

The consignee or consigner of imported and exported goods holds objection to the inspection conclusion of the customs house and requires
for re-inspection and the request has been approved by the customs house; or

(4)

Any other circumstance under which a new inspection is necessary as required by the customs house.

The re-inspection shall be conducted according to Articles 6 up to 10 of these Measures, and the inspectors shall indicate the words
of “re-inspection” on the inspection records.

Those inspectors who have participated in the first inspection shall not take part in the re-inspection of the same goods.

Article 12

Under any of the following circumstances, the customs house may directly open the package of goods for inspection even if the consignee
or consigner of imported and exported goods or the agent thereof is not on the scene:

(1)

The imported and exported goods are suspected as illegal; or

(2)

The consignee or consigner of imported and exported goods or the agent thereof does not enter an appearance on time after he is notified
by the customs house of the inspection.

When the customs house directly opens the package of goods for inspection, the operator of the customs supervisory area where the
goods are stored and the person responsible for the transport vehicle shall offer assistance on the scene, and affirm it by affixing
their names to the inspection records.

Article 13

As to those goods that are dangerous, fresh and live, decayable, perishable, or easy to lose efficacy or be deteriorated and are not
suitable for long-time storage or the goods for which urgent inspection and clearance is required due to any other special circumstance,
the customs house may arrange the inspection with priority upon application of the consignee or consigner of imported and exported
goods or the agent thereof.

Article 14

The consignee or consigner of imported and exported goods or the agent thereof who violates these Measures shall be punished by the
customs house according to the Customs Law, the Regulation of the People’s Republic of China for the Implementation of Customs Administrative
Penalties and other relevant provisions.

Article 15

In case the customs house causes any damage to the goods being inspected when it carries out the inspection of imported and exported
goods, the customs house shall assume the liability of compensation according to the Customs Law and the Measures of the People’s
Republic of China for Customs Administrative Compensation.

Article 16

Any inspector who violates the provisions during the course of inspection and makes use of his authorities to seek interests for himself
or any other, asks for or accepts bribes, misuses his authorities, intentionally creates difficulties or delays the inspection shall
be punished according to the relevant provisions.

Article 17

The customs house shall not collect fees when it carries out the inspection within the customs supervisory area. Where the customs
house affixes customs marks to containers, container trucks or other goods, it may collect the sealing cost.

The fees incurred from moving, opening or resealing of packages of imported and exported goods due to the inspection shall be borne
by the consignee or consigner of imported and exported goods.

In the case of goods inspection outside the customs supervisory area, the consignee or consigner of imported and exported goods or
the agent thereof shall pay fees to the customs house in accordance with the provisions.

Article 18

The following terms in these Measures shall have the meaning herein defined:

The “outside inspection” refers to an inspection method to examine the packages, marks and appearance, etc. of those goods that have
visual outside characteristics or whose basic natures are easy to judge.

The “inspection by package opening” refers to an inspection method to examine the actual situation of goods after the goods are taken
out of containers, container trucks or other boxes and be removed of their outside packages.

The “machine inspection” refers to an inspection method to examine the actual situation of goods by mainly making use of technical
inspection equipment.

The “selective inspection” refers to an inspection method to selectively examine the actual situation of a certain proportion of goods
among the goods of a consignment.

The “thorough inspection” refers to an inspection method to examine the actual situation of goods by opening packages article by article.

Article 19

The power to interpret these Measures shall remain with the General Administration of Customs.

Article 20

These Measures shall come into force as of February 1, 2006.