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INTERIM REGULATIONS ON THE MANAGEMENT OF INTERNATIONAL NETWORKING OF COMPUTER INFORMATION

Interim Regulations of the PRC on the Management of International Networking of Computer Information

     Article 1 These Regulations are promulgated hereby with the aim of strengthening management of international networking of computer
information and promoting the healthy development of international exchange of computer information.

   Article 2 International networking of computer information within the People’s Republic of China shall be carried out in accordance with stipulations
in these Regulations.

   Article 3 Denotations of the following terms as used in these Regulations:

(1) International networking of computer information (hereinafter referred to as international networking) refers to the linking of
networks of computer information within the People’s Republic of China to foreign networks of computer information for the purpose
of international exchange of information.

(2) Inter-connected networks refers to networks of computer information directly linked to international networking. Inter-connected
units refer to units in charge of operation of inter-connected networks.

(3) Insertion networks refer to networks of computer information that are inserted into inter-connected networks for the purpose of
international networking. Insertion units refer to units in charge of operation of insertion networks.

   Article 4 The State shall implement the principle of unified planning, unified standards, and level-by-level management of international networking
to promote its development.

   Article 5 The Information Working Group of the State Council (hereinafter referred to as the Leading Group) shall take charge of coordinating
and solving problems concerning international networking.

The office of the Leading Group shall work out, in line with stipulations in these Regulations, specific management rules to clarify
the rights, obligations and responsibilities of units providing international output and input channels, inter-connected units, insertion
units, and customers. It shall also take charge of examination and supervision of international networking.

   Article 6 To carry out international networking of computer information, the output and input channels provided by the Ministry of Posts and
Telecommunications in its public telecommunication network shall be used.

No units or individuals shall establish or use other channels for international networking on their own accord.

   Article 7 Inter-connected networks that have already been established shall be readjusted and put into management by the Ministry of Posts
and Telecommunications, the Ministry of Electronics Industry, the State Education Committee, and the China Academy of Sciences.

Establishment of new inter-connected networks shall be reported to the State Council for approval.

   Article 8 Insertion networks shall carry out international networking via inter-connected networks.

Insertion units that plan to engage in the business of international networking shall apply for license for doing the business of
international networking from departments or units in charge of inter- connected units empowered to handle applications for engagement
in the business of international networking. Those that have not obtained these licenses shall not engage in activities related to
international networking.

Insertion units that plan to engage in activities of a non-business kind shall report for examination and approval to departments
or units in charge of inter-connected units empowered to handle applications for these activities. Those that have not obtained approval
shall not carry out international networking via inter-connected networks.

Those applying for licenses for doing businesses related to international networking or reporting for examination and approval shall
provide information on the character of their computer information, scope of information, and location of their host computers.

The form of the license for doing businesses relationed to international networking shall be produced by the Leading Group in a unified
way.

   Article 9 Insertion units doing businesses related to international networking or engaged in non-business activities related to international
networking shall all meet the following requirements:

(1) They shall be legal person enterprises or institutions set up in accordance with law.

(2) They shall have corresponding computer networks, equipment, and relevant technical and management personnel.

(3) They shall have perfect safety and security systems and measures for technical protection.

(4) They shall meet other requirements stipulated in laws or raised by the State Council.

Insertion units doing businesses related to international networking that no longer meet requirements in clauses (1) and (2) due to
changes in their situation shall have their licenses revoked by the departments that have originally issued these licenses, and insertion
units engaged in non-business activities related to international networking that no longer meet the requirement in clause (1) due
to changes in their situation shall have their qualifications for international networking nullified by the departments that have
originally granted the approval.

   Article 10 International networking of the networks of computer information used by individuals, legal persons, and other organizations (hereinafter
referred to as customers) shall be carried out via insertion networks.

If the computers or networks of computer information as referred in the preceding clause are to be inserted into networks, consent
shall be won from insertion units, and registration procedures shall be gone through.

   Article 11 Units providing international input and output channels, inter-connected units, and insertion units shall set up corresponding network
management centres, enhance management of themselves and their customers according to law and relevant stipulations of the State,
do a good job in the safety management of network information, and provide excellent and safe services to customers.

   Article 12 Inter-connected units and insertion units shall take charge of technical training and management education related to international
networking for themselves and for their customers.

   Article 13 Units and individuals doing businesses related to international networking shall abide by relevant laws and administrative decrees
of the State, strictly implement the system of safety and security, refrain from illegal and criminal activities that endanger national
security and leak State secrets through international networking, and stay away from producing, consulting, duplicating, or spreading
information that interrupts social order or pornographic information.

   Article 14 Those that violate stipulations in articles 6, 8 and 10 shall be ordered by public security departments to stop networking, with
a warning issued to them. They may also be imposed a fine below 15,000 yuan. If they have earned any illegal incomes, these incomes
shall be confiscated.

   Article 15 Those that violate these Regulations and violate stipulations in other laws or administrative decrees shall be punished according
to the relevant laws and administrative decrees. If the cases are so serious as to be criminal, criminal responsibilities shall be
affixed.

   Article 16 Networking of computer information with Taiwan, Hong Kong and Macao shall be carried out with reference to these Regulations.

   Article 17 These Regulations shall take effect on the date of promulgation.

    





PROCEDURES FOR INSPECTION OF INTENATIONAL NAVIGATION SHIPS ENTERING AND EXITING PORTS

Procedures for Inspection of Intenational Navigation Ships Entering and Exiting Ports of the People’s Republic of China

     Article 1 This set of procedures are formulated for the purpose of strengthening the administration of the international navigation
ships entering and exiting the ports of the People’s Republic of China to facilitate their entry and exit and improve the uses of
the ports.

   Article 2 Upon the entry in or exit from ports of the People’s Republic of China international navigation ships (hereinafter referred as the
ships)as well as their crew and the passengers, cargoes and other goods they carry shall be inspected by organs stipulated in Article
3 of this set of procedures according to this set of procedures except stipulated by law of the State Council for other ways of inspection.

   Article 3 The inspection shall be carried out by harbour superintendent department of China (HSD), China’s General Administration of Customs
(GAC), border checking departments (BCD) of health quarantine departments (HQD) of China and China’s quarantine departments of animal
and plant (QAP), which are referred to hereinafter as the inspection organs.

   Article 4 The inspection organs carry out their inspection according to relevant laws and regulations and deal with the acts of violating laws
and administrative regulations.

HSD is responsible for calling other inspection organs to participate in associated meetings for the study of related problems arising
from the inspection of the ships upon their entry in and exit from China’s ports.

   Article 5 When a ship enters and exits China’s ports, its owner or agent should go through formalities in line with relevant stipulations the
procedures. The personnel of inspection organs shall not go on board of the ship for inspections except in the cases stipulated in
the second clause of Article 10 and Article 11 of the procedures or in other special cases.

In going through all the formalities concerning the entry in or exit from China’s ports, owner or agent of the ship concerned should
accurately fill in the forms and provide related certificates and data in line with the stipulations of the inspection organs.

   Article 6 The owner or the agent of a ship should fill in an “Application Form for International Navigation Ships Entering and Exiting Chinese
Ports” 7 days before the arrival of the ship to the port (before exiting the previous port if the voyage takes less than 7 days),
and report to the HSD of the arriving port for approval.

The owner or the agent of a ship which is to enter the Yangtze River should fill in an “Application Form for International Navigation
Ships Entering and Exiting Chinese Ports” 7 days before the ship is expected to arrive at the Shanghai port (before exiting the previous
port if the voyage takes less than 7 days), and report to the HSD for approval.

   Article 7 The owner or the agent of a ship should report the time of arrival, the site of anchorage, and the plan for anchoring and moving
as well as related information about the crew and passengers to the inspection organs concerned 24 hours before its arrival at the
port (before exiting the previous port if the voyage takes less than 24 hours).

   Article 8 The owner or the agent who has not gone through the formalities of entering the port before the arrival of the ship should go through
the formalities at the inspection organs within 24 hours after its arrival.

If the anchoring time is less than 24 hours, the owner or the agent may, with the agreement of the inspection organ, go through the
formalities of exiting the port while going through the formalities of entering the port.

   Article 9 If the formalities of entering the port have been gone through by the owner or the agent of a ship the people concerned can move
and cargoes can be loaded on or out of the ship as soon as the arrival of the ship to the port.

If formalities of entering the port have not been gone through by the owner or the agent of a ship upon its arrival of a port all
people must not move and cargoes and other goods must not be loaded on and out of the ship after its arrival except inspection personnel
and navigators; if the previous entering and exiting port of the ship is a Chinese port, people may leave and go on board the ship
and cargoes and other goods may be loaded and unloaded after its arrival, but the owner or the agent should immediately go through
the formalities of entering the port.

   Article 10 The HQDs carry out telecommunications quarantine. The owner or the agent of a ship with a sanitation certificate may apply to the
HQDs for telecommunications quarantine.

HQDs should carry out quarantine at the site of the anchorage if the ships come from epidemic areas and ships carrying people who
have or are suspected to have contracted infectious diseases or bodies of those who have died of non-accidental causes or of unclear
causes, or ships without sanitation certificate or with an expired sanitation certificate only or the sanitation conditions not up
to the required standards.

   Article 11 QDAPs may carry out the quarantine at the site of the anchorage if the ships or animals and plants, animal and plant products or
other goods carried by the ship come from animal and plant epidemic areas that need quarantine

   Article 12 The ship owner or the agent of a ship should go through the necessary formalities of exiting at the inspection organs within 4 hours
before the ship exits the port (or at the time of entering the port if the anchoring time is less than 4 hours). The relevant inspection
organs should notify this by signing the “Ship Exiting Formalities Certificate”; and the owner or the agent should go to the HQD
to apply for an exiting license with the certificate and other certificates and data as required by the HQD.

   Article 13 If any changes happen or the ship does not exit the port after getting the license, the owner or the agent should report to the HQD,
which will discuss with other inspection organs to decide whether it is necessary for the owner or the agent to go through the exiting
formalities again.

   Article 14 For the ships that have a regular shipping route and fixed crew and come and go one or more than one voyage, the owner or the agent
may apply in a written form to the HQD to go through the formalities of regular entering and exiting China’s ports. The HQD concerned
which handles the application will discuss with other inspection organs to decide whether to approve it or not, and after their approval,
the HQD will issue a regular exiting license valid for 7 days.

   Article 15 The inspection organs and their personnel must implement the procedures impartially, scrupulously abide by their duties, and carry
out the inspections and handle the applications for entering and exiting Chinese ports in time.

   Article 16 The following related terms of the procedures can be defined as:

(1) International navigation ships are referred to the ships of foreign origin which enter and exit China’s ports and the ships of
Chinese origin which sail international navigation routes;

(2) Ports are referred to the Chinese ports which have been approved by the Chinese government for international navigation ships
to enter and exit; and

(3) The ship owner is referred to the owner or the operator of the ship.

    





PROMOTION OF CLEANER PRODUCTION LAW

Law of the People’s Republic of China on Promotion of Cleaner Production

(Adopted at the 28th Meeting of the Standing Committee of the Ninth National People’s Congress on June 29, 2002 and
promulgated by Order No. 72 of the President of the People’s Republic of China on June 29, 2002) 

Contents 

Chapter I    General Provisions 

Chapter II   Popularization of Cleaner Production 

Chapter III  Implementation of Cleaner Production 

Chapter IV   Incentive Measures 

Chapter V    Legal Responsibility 

Chapter VI   Supplementary Provisions 

Chapter I 

General Provisions 

Article 1  This Law is enacted for the purpose of promoting cleaner production, increasing the utilization ratio of resources,
reducing and preventing pollutant-generating, protecting and improving the environment, protecting human health, and promoting the
sustainable development of the economy and society. 

Article 2  For purposes of this Law, cleaner production means, by continuous adopting measures to improve designing, use cleaner
energy and raw materials, introduce advanced techniques and equipment, improve management and make comprehensive use of resources
as well as other measures, to reduce pollution from its source, increase the utilization ratio of resources, reduce or prevent the
generation and discharge of pollutants in the course of production, services and use of products, in order to alleviate or eliminate
harm to human health and the environment. 

Article 3  Within the territory of the People’s Republic of China, units engaged in production and service activities and the
departments engaged in administration of such activities shall, in accordance with the provisions of this Law, organize efforts to
implement cleaner production. 

Article 4  The State encourages and promotes cleaner production. The State Council and the local people’s governments at or
above the county level shall incorporate cleaner production into their plans for national economic and social development and plans
for environment protection, recourses utilization, industrial development, regional development, etc. 

Article 5  The administrative department for the economy and trade under the State Council shall be responsible for organizing
efforts to coordinate the work of promoting cleaner production nationwide. The administrative departments under the State Council
for environment protection, planning, science and technology, agriculture, construction, water resources and technical supervision
over quality shall, within their respective functions and responsibilities, be responsible for the relevant work of promoting cleaner
production. 

The local people’s governments at or above the county level shall be responsible for directing the work of promoting cleaner production
within their own administration areas. The administrative departments for the economy and trade under the said people’s governments
shall be responsible for organizing efforts to coordinate the work of promoting cleaner production within their own administrative
areas. The administrative departments under the said people’s governments for environment protection, planning, science and technology,
agriculture, construction, water resources and technical supervision over quality shall, within their respective functions and responsibilities,
be responsible for the relevant work of promoting cleaner production. 

Article 6  The State encourages scientific research, technological development and international cooperation in the field of
cleaner production, organizes efforts to disseminate knowledge about cleaner production and spreads the use of technologies for cleaner
production. 

The State encourages public organizations and the general public to participate in the promotion of, education in, popularization
and implementation of and supervision over cleaner production. 

Chapter II 

Popularization of Cleaner Production 

Article 7  The State Council shall formulate financial and taxation policies for the benefit of implementation of cleaner production. 

The State Council, the relevant administrative departments under it and the people’s governments of provinces, autonomous regions
and municipalities directly under the Central Government shall formulate industrial policies and policies for technological development
and popularization for the benefit of implementation of cleaner production. 

Article 8  The administrative departments for the economy and trade under the local people’s governments at or above the county
level shall, together with the relevant administrative departments for environment protection, planning, science and technology,
agriculture, construction, water resources, etc., formulate plans for popularization of cleaner production. 

Article 9  The local people’s governments at or above the county level shall make rational plans for the economic layout within
their own administrative areas, readjust industrial structures, develop cycling economic sectors and promote cooperation among enterprises
in the comprehensive use of recourses and waste materials and in other fields, in order to realize highly effective use and recycling
of resources. 

Article 10  The administrative departments for the economy and trade, environment protection, planning, science and technology,
agriculture and other relevant administrative departments under the State Council and under the people’s governments of provinces,
autonomous regions and municipalities directly under the Central Government shall organize efforts to support the establishment of
an information system for cleaner production and a system for technical consultancy, in order to provide information and services
in respect of the methods and technologies for cleaner production, supply and demand of recyclable waste, policies for cleaner production,
etc.  

Article 11  The administrative department for the economy and trade under the State Council shall, together with the related
administrative departments under the State Council, regularly publish directories on technologies, techniques, equipment and products
for cleaner production. 

The administrative departments for the economy and trade, environment protection, agriculture and construction and other departments
concerned under the State Council and under the people’s governments of provinces, autonomous regions and municipalities directly
under the Central Government shall organize efforts to compile guidebooks and technical manuals for cleaner production in respect
of certain trades or regions, for the purpose of guiding the implementation of cleaner production.  

Article12  With respect to out-dated production technologies, techniques, equipment and products which cause waste of recourses
and serious pollution of the environment, the State applies a system of elimination within a time limit. The administrative department
for the economy and trade under the State Council shall, together with the other related administrative departments under the State
Council, compile and publish catalogues of technologies, techniques, equipment and products to be eliminated within a time limit. 

Article 13  The relevant administrative departments under the State Council may, where necessary, grant approval to marks for
products made for the benefit of environment and resources protection, such as energy- or water-conservation products and products
made out of recycled waste, and they shall lay down corresponding standards according to State regulations.  

Article 14  The administrative departments for science and technology and other relevant administrative departments under the
local people’s governments at or above the county level shall provide guidance to and support research in and development of technologies
for cleaner production and products conducive to protection of the environment and resources and the demonstration and wide use of
technologies for cleaner production. 

Article 15  The administrative department for education under the State Council shall incorporate the courses of cleaner production
technology and management into the related systems of higher education, vocational education and technical training. 

The relevant administrative departments under the local people’s governments at or above the county level shall organize efforts
to disseminate knowledge about cleaner production and conduct training in this area, in order to enhance the awareness of the importance
of cleaner production among government functionaries, enterprise managers and the general public and train managerial and technical
personnel for cleaner production.  

The press, publishing, radio, films, television and cultural institutions and relevant public organizations shall give play to their
own advantages and make a success of promotion for cleaner production.   

Article 16  People’s governments at various levels shall give first priority to purchasing energy- and water-conservation products
and products made out of recycled waste which are conducive to protection of the environment and resources. 

People’s governments at various levels shall, through promotion and education or by other means, encourage the general public to
purchase and use energy- and water-conservation products and products made out of recycled waste which are conducive to protection
of the environment and resources. 

Article 17  The administrative departments for environment protection under the people’s governments of provinces, autonomous
regions and municipalities directly under the Central Government shall exercise strict supervision over the implementation of cleaner
production and they may, in light of the need to promote cleaner production and the discharge of pollutants by enterprises, regularly
publish, through the principal local media, name lists of the enterprises which cause serious pollution by exceeding the norms specified
for the pollutants discharged or for the total amount of the pollutants discharged, providing the basis for public supervision over
the enterprises’ implementation of cleaner production. 

Chapter III 

Implementation of Cleaner Production 

Article 18  For new construction, reconstruction and expansion projects, their impact on the environment shall be assessed,
the use of raw materials, consumption and comprehensive use of resources, generation and disposition of pollutants shall be analysed
and expounded and employment of technologies, techniques and equipment for cleaner production, which serve to make highly effective
use of resources and generate less pollutants, shall be given first priority. 

Article 19  In the course of technological updating, enterprises shall adopt the following measures for cleaner production: 

(1) replacing highly toxic and harmful raw materials with nontoxic and harmless or less toxic and harmful ones; 

(2) replacing techniques and equipment which serve to make less effective use of resources to generate greater amount of pollutants
with ones which serve to make highly effective use of resources and generate pollutants;  

(3) making comprehensive or cycle use of solid waste and waste water and heat discharged in the course of production; and 

(4) adopting technologies for prevention and control of pollution which help keep the pollutants discharged and within the norms
specified by the State or local authorities and keep the total amount of the pollutants discharged within the control norms specified
by the State or local authorities.  

Article 20  In the designing of products and packages, consideration shall be given to their effects on human health and the
environment during their life cycles, and priority shall be given to options for products and packages that are toxicant-free, harmless,
easily dissolved or recycled.  

Enterprises shall properly pack their products, refraining from overusing the packages and preventing the generation of package waste. 

Article 21  Enterprises producing large mechanical and electrical equipment, motor-driven means of transport and other products
designated by the administrative department for the economy and trade under the State Council shall, in adherence to the technical
specifications laid down by the administrative department for standardization under the State Council or the institutions authorized
by the department, indicate the standard brand of the material composition on the principal component parts of the product.  

Article 22  Agricultural producers shall use chemical fertilizers, pesticides, agricultural film and feed additives in a scientific
way and improve planting and breeding technologies, so as to produce quality and harmless agricultural products, turn agricultural
waste into resources, and prevent the agricultural environment from pollution. 

Toxic and harmful waste is prohibited to be used as fertilizers or for cultivating new farmland. 

Article 23  Service enterprises providing food and drinks, entertainment or hotel services shall use energy- and water-conservation
and other technologies and equipment conducive to environment protection and shall refrain from using or use less consumer goods
which lead to waste of resources and pollution of the environment.   

Article 24  For construction projects, the designing, construction and decoration materials, construction component and accessory
parts and equipment, which are energy- and water-conserving and conducive to environment protection, shall be adopted or used. 

Construction and decoration materials shall conform to the norms of the State. Production, marketing and use of such materials, the
toxic and harmful substances which contain exceed State norms, are prohibited. 

Article 25  In prospecting and exploiting mineral resources, the methods, techniques and technologies which are conducive to
rational use of resources, environment protection and prevention of pollution shall be adopted for better use of resources. 

Article 26  Enterprises shall, where feasible in financial and technological terms, retrieve wastes and waste heat discharged
in the course of production and services, or transfer them to other enterprises or individuals that have the ability of using them. 

Article 27  Enterprises producing and marketing products or packages included in the catalogue of products or packages for compulsory
recycling shall recycle the scrapped products and used packages. The catalogue of products and packages for compulsory recycling
and the specific measures for compulsory recycling shall be compiled and formulated by the administrative department for the economy
and trade under the State Council. 

With regard to the products and packages listed in the catalogue of products and packages for compulsory recycling, the State adopts
economic measures favorable to their recycling; the administrative departments for the economy and trade under the local people’s
governments at or above the county level shall regularly inspect the recycling of such products and packages and make the result
of inspection known to the public. The specific measures shall be formulated by the administrative department for the economy and
trade under the State Council. 

Article 28  Enterprises shall monitor the consumption of resources and discharge of waste in the course of production and services
and, where necessary, examine whether their production and services conform to the requirements of cleaner production. 

Enterprises that discharge pollutants in excess of the norms specified by the State or local authorities or of the control norms
for the total amount of pollutants discharged approved by the local people’s governments concerned shall conduct examination for
cleaner production. 

Enterprises that use toxic or harmful raw materials in production or discharge toxic or harmful substances in the course of production
shall conduct regular examination for cleaner production and report the results to the administrative departments for environment
protection and for the economy and trade under the local people’s governments at or above the county level where the enterprises
are located. 

The measures for examination for cleaner production shall be formulated by the administrative department for the economy and trade
under the State Council, together with the administrative department for environment protection under the State Council. 

Article 29  Enterprises that have succeeded in keeping the pollutants they discharge within the norms specified by the State
and the local authorities of their own free will, sign agreements on further conservation of resources and reduced amount of pollutants
discharged with the administrative departments for the economy and trade and for environment protection, which have jurisdiction
over them. The said departments shall, through the principal local media, make public the names of the enterprises and their achievements
in conserving resources and preventing and controlling pollution. 

Article 30  Enterprises may, on the principle of voluntariness and in accordance with the State regulations on verification
by environment management system, apply for verification to the verification authority authorized by the government department for
supervision and control over verification and approval and go through the verification for environment management, so as to raise
their level of cleaner production.  

Article 31  According to the provisions in Article 17 of this Law, enterprises included in the name list of the enterprises
which cause serious pollution shall, in compliance with the regulations of the administrative department for environment protection
under the State Council, make public their discharge of the main pollutants to accept public supervision. 

Chapter IV 

Incentive Measures 

Article 32  The State establishes a commending and awarding system for cleaner production. The people’s governments shall commend
and award units and individuals that achieve remarkable successes in their efforts to bring about cleaner production. 

Article 33  Projects designed for research, demonstration and training in cleaner production, key technological updating projects
of the State for cleaner production, and other technological updating projects clearly stated in the agreements on voluntary reduction
of pollutants discharged, as prescribed in Article 29 of this Law, shall be included in the projects for which special funds are
arranged by the State Council and the finance department at the same level as the local people’s government at or above the county
level in support of their technological updating. 

Article 34  From the funds established for developing small and medium-sized enterprises in accordance with State regulations,
an appropriate amount shall, where necessary, be set aside to support such enterprises in their efforts to engage in cleaner production.
 

Article 35  Where enterprises manufacture products out of waste and obtain raw materials out of recycled waste, the taxation
authority shall, in accordance with relevant State regulations, reduce their value-added tax or exempt them from such tax. 

Article 36  Enterprises may incorporate into their operational cost the fees paid for examination and verification regarding
cleaner production and for training in this respect. 

Chapter V 

Legal Responsibility 

Article 37  Where an enterprise that, in violation of the provisions in Article 21 of this Law, fails to indicate the composition
of product materials or indicates the said composition untruthfully, the administrative department for quality and technical supervision
under the local people’s government at or above the county level shall instruct it to rectify within a time limit; if it refuses
to do so, it shall be fined not more than RMB 50,000 yuan. 

Article 38  Where an enterprise, in violation of the provisions in the second paragraph of Article 24 of this Law, produces
or markets construction and decoration materials, the toxic or harmful substances which contain exceed State norms, it shall be investigated
for administrative, civil or criminal responsibility in accordance with the provisions in the law on product quality and the relevant
civil and criminal laws. 

Article 39  Where an enterprise, in violation of the provisions in the first paragraph of Article 27 of this Law, fails to fulfill
the obligation of recycling scrapped products or used packages, the administrative department for the economy and trade under the
local people’s government at or above the county level shall instruct it to rectify within a time limit; if it refuses to do so,
it shall be fined not more than 10,000 yuan. 

Article 40  Where an enterprise, in violation of the provisions in the third paragraph of Article 28 of this Law, fails to conduct
examination for cleaner production, or to provide truthful report on the result of the examination which it conducts, the administrative
department for environment protection under the local people’s government at or above the county level shall instruct it to rectify
within a time limit, if it refuses to do so, it shall be fined not more than 10,000 yuan. 

Article 41  Where an enterprise, in violation of the provisions in Article 31 of this Law, fails to make public its discharge
of pollutants or fails to do so in compliance with the requirements specified, its discharge shall be made public by the administrative
department for environment protection under the local people’s government at or above the county level, and it may also be fined
not more than 10,000 yuan. 

Chapter VI 

Supplementary Provisions 

Article 42  This Law shall go into effect as of January 1, 2003.

Notice: All Rights Reserved to the Legislative Affairs Commission of the Standing Committee of the National People’s Congress.






PROMOTION OF SMALL AND MEDIUM-SIZED ENTERPRISES LAW

Law of the People’s Republic of China on Promotion of Small and Medium-sized Enterprises

(Adopted at the 28th Meeting of the Standing Committee of the Ninth National People’s Congress on June 29, 2002 and
promulgated by Order No. 69 of the President of the People’s Republic of China on June 29, 2002) 

Contents 

Chapter I    General Provisions 

Chapter II   Funding 

Chapter III  Support for Establishment of Enterprises 

Chapter IV   Technological Innovation 

Chapter V    Market Development 

Chapter VI   Public Services 

Chapter VII  Supplementary Provisions 

Chapter I 

General Provisions 

Article 1  This Law is enacted for the purpose of improving the business environment for small and medium-sized enterprises,
promoting their sound development, creating more job opportunities in both urban and rural areas, and giving play to the important
role of such enterprises in national economic and social development.     

Article 2  For purposes of this Law, small and medium-sized enterprises refer to the different forms of enterprises under different
ownerships that are established within the territory of the People’s Republic of China according to law, that help to meet the social
needs and create more job opportunities, that comply with the industrial policies of the State and that are small and medium-sized
in production and business operation.  

The criteria for determining small and medium-sized enterprises shall be laid down by the department under the State Council in charge
of work in respect of enterprises, on the basis of the number of employees, volume of sale, total assets, etc. of an enterprise and
in light of the characteristics of different trades and shall be submitted to the State Council for approval. 

Article 3  With regard to small and medium-sized enterprises, the State applies the principles of active support, strong guidance,
perfect service, lawful standardization and guaranteed rights and interests, in order to create a favorable environment for their
establishment and development. 

Article 4  The State Council shall be responsible for formulating policies regarding small and medium-sized enterprises and
make overall planning for their development.  

The department under the State Council in charge of work in respect of enterprises shall arrange for the implementation of the State
policies and plans concerning the small and medium-sized enterprises, making all-round coordination and providing guidance and services
in the work regarding such enterprises throughout the country. 

The related departments under the State Council shall, according to the policies and overall planning of the State for small and
medium-sized enterprises and within the scope of their respective functions and responsibilities, provide guidance and services to
such enterprises.  

Local people’s governments at or above the county level, the administrative departments under them in charge of work in respect of
enterprises and other departments concerned shall, within the scope of their respective functions and responsibilities, provide guidance
and services to small and medium-sized enterprises located within their respective administrative areas.  

Article 5  The department under the State Council in charge of work in respect of enterprises shall, according to the industrial
policies of the State and in light of the characteristics of the small and medium-sized  enterprises and the conditions of their
development, determine the key ones for support by formulating a catalogue of small and medium-sized  enterprises to be provided
with guidance for their industrial development or by other means, in order to encourage the development of all such enterprises.
 

Article 6  The State protects the lawful investments made by small and medium-sized enterprises and their investors, as well
as the legitimate profits earned from the investments. No unit or individual may infringe upon the property and lawful rights and
interests of such enterprises. 

No unit may, in violation of laws and regulations, charge fees to or impose fines on small and medium-sized enterprises, nor collect
money or things of value from them. The enterprises shall have the right to refuse to make the payment and the right to report and
accuse violations of the provisions mentioned above. 

Article 7  Administrative departments shall safeguard the lawful rights and interests of small and medium-sized enterprises,
protect their right to participate in fair competition and transaction according to law, and they may not discriminate against the
enterprises or add unequal conditions to their transactions. 

Article 8  small and medium-sized  enterprises shall observe State laws and regulations governing occupational safety,
occupational health, social security, resources, environment protection, product quality, public finance, taxation, finance, etc.,
and manage business according to law, and they may not infringe upon the lawful rights and interests of their employees or impair
public interests. 

Article 9  small and medium-sized  enterprises shall observe professional ethics, abide by the principle of good faith,
work hard to raise their business level and increase the ability to develop themselves. 

Chapter II 

Funding 

Article 10  In the budget of the Central Government there shall be a heading for small and medium-sized enterprises, under which
to arrange special funds for supporting the development of such enterprises. 

Local people’s governments shall, in light of actual conditions, provide financial support to small and medium-sized enterprises. 

Article 11  The special funds provided by the State for supporting the development of small and medium-sized enterprises shall
be used to promote the establishment of a service system for such enterprises, to carry out work in their support, to supplement
their funds for development and to support their development in other areas. 

Article 12  The State establishes development funds for small and medium-sized enterprises, which are composed of the following:
 

(1) the special funds arranged in the budget of the Central Government for supporting the said enterprises; 

(2) profits yielded by the funds; 

(3) donation; and 

(4) others. 

The State encourages donations to the development funds for small and medium-sized enterprises through taxation policies. 

Article 13  The State development funds for small and medium-sized enterprises shall be used to support the following fields
of endeavor: 

(1) instructions on and services for establishment of enterprises; 

(2) establishment of a credit guaranty system for the enterprises; 

(3) technological innovation; 

(4) encouragement for their specialization and their cooperation with large enterprises; 

(5) personnel training and information consultancy, etc. provided by the service institutions for the enterprises; 

(6) creation of international market; 

(7) cleaner production; and 

(8) others. 

The administrative measures for establishment and use of the development funds for small and medium-sized enterprises shall be formulated
separately by the State Council.  

Article 14  The People’s Bank of China shall give better guidance in credit policies and help improve the financing environment
for small and medium-sized enterprises. 

The People’s Bank of China shall give more vigorous support to small and medium-sized financial institutions and encourage commercial
banks to readjust their credit structure and provide greater credit support to small and medium-sized enterprises. 

Article 15 All financial institutions shall provide financial support to small and medium-sized enterprises, make efforts to improve
financial service, change their style of service, enhance their awareness of the importance of service and improve service quality. 

All commercial banks and credit cooperatives shall improve credit management, expand the areas of services and develop financial
products that are suited to the development of small and medium-sized enterprises, readjust their credit structure, and provide the
enterprises with such services as loans, balancing of accounts, financial consultancy and investment management. 

State policy-oriented financial institutions shall, within their business scope, provide financial services to small and medium-sized
enterprises. 

Article 16  The State takes measures to broaden the channels of direct financing for small and medium-sized enterprises and
gives them active guidance in their efforts to create conditions for direct financing through various ways as permitted by laws and
administrative regulations. 

Article 17  The State, through taxation policies, encourages various kinds of risk investment institutions established according
to law to increase investment in small and medium-sized enterprises. 

Article 18  The State promotes the development of the credit system for small and medium-sized enterprises by establishing a
collection and assessment system of credit information, in order to socialize the inquiry about and the exchange and sharing of credit
information concerning such enterprises. 

Article 19  People’s governments at or above the county level and related departments shall promote and arrange for the establishment
of a credit guaranty system for small and medium-sized enterprises, encourage credit guaranty for them and create conditions for
their financing.  

The administrative measures for credit guaranty for small and medium-sized enterprises shall be formulated separately by the State
Council. 

Article 20  The State encourages all kinds of guaranty institutions to provide credit guaranty to small and medium-sized enterprises.
 

Article 21  The State encourages small and medium-sized enterprises to enter into different forms of mutual-help financing guaranty
according to law. 

Chapter III 

Support for Establishment of Enterprises 

Article 22  The government departments concerned shall actively create conditions to provide necessary and suitable information
and consultancy and, when working out plans for urban and rural construction, make rational arrangements for the necessary places
and facilities to meet the needs for the development of small and medium-sized enterprises and support the establishment of such
enterprises.  

Where unemployed or disabled establish small and medium-sized  enterprises, the local government shall actively support them,
provide conveniences and better guidance. 

The government departments concerned shall take measures to broaden channels for the small and medium-sized enterprises to employ
graduates of colleges and specialized secondary schools.  

Article 23 The State supports and encourages, through relevant taxation policies, the establishment and development of small and
medium-sized enterprises. 

Article 24 With regard to the small and medium-sized enterprises that are established by unemployed persons or that employ laid-off
workers in the year of their establishment, the number of whom reaches the percentage fixed by the State, the ones that use new and
high technologies and conform to State policies for supporting and encouraging the development of such enterprises the ones that
are established in minority ethnic areas and poverty-stricken areas, and the ones that provide jobs to disabled persons, the number
of whom reaches the percentage fixed by the State, the State reduces the rate of tax or exempts them from income tax during a certain
period of time, and adopts preferential taxation policies. 

Article 25  Local people’s governments shall, in light of actual conditions, provide persons who establish enterprises with
policy consultancy and information services concerning industrial and commercial administration, public finance, taxation, financing,
labor, employment, social security, etc. 

Article 26  Government departments in charge of enterprise registration shall, in compliance with the statutory requirements
and procedures, handle registration for the small and medium-sized  enterprises established, increase their work efficiency
and provide conveniences to the registrants. They may not impose preconditions for registration of enterprises beyond the provisions
of laws and administrative regulations; and they may not collect fees beyond the ones or rates specified by laws and administrative
regulations. 

Article 27  The State encourages small and medium-sized  enterprises, in accordance with the State policies for the use
of foreign funds, to introduce foreign investment and advanced technology and management expertise and to establish Chinese-foreign
equity joint ventures and contractual joint ventures. 

Article 28  The State encourages individuals and legal persons, in accordance with law, to take part in the establishment of
small and medium-sized  enterprises by investing their industrial property right, nonpatented technology, etc. 

Chapter IV 

Technological Innovation 

Article 29  The State formulates policies to encourage small and medium-sized  enterprises to develop new products and
to adopt advanced technology, manufacturing technique and equipment to meet market needs and to improve product quality and make
technological progress. 

When launching projects for technological innovation and projects for technological updating in support of the products of large
enterprises, small and medium-sized enterprises may enjoy the policy of discount interest on loans.  

Article 30  The government departments concerned shall give policy-related support to small and medium-sized  enterprises
in terms of planning, land use and finance, promote the establishment of different kinds of technical service institutions and establish
centers for advancing the productive forces and bases for creating science- and technology-oriented enterprises, in order to provide
small and medium-sized  enterprises with services relating to technological information, consultancy and transferring and services
for the development of products and technologies, and to help promote the transformation of scientific and technological achievements
and upgrade the technology and product of the enterprises. 

Article 31  The State encourages technological cooperation, development and exchange between small and medium-sized  enterprises
on the one hand and research institutions and institutions of higher education on the other, in order to promote the industrialization
of scientific and technological achievements and actively develop small and medium-sized enterprises that make use of scientific
and technological achievements.  

Chapter V 

Market Development 

Article 32  The State encourages and supports large enterprises to establish, on the basis of resources allocation by the market,
stable relations of cooperation with small and medium-sized enterprise in respect of the supply of raw and semi-processed materials,
production, marketing, and technological development and updating, in order to help promote the development of small and medium-sized 
enterprises. 

Article 33  The State gives guidance to, promotes and regulates the restructuring of the assets of small and medium-sized 
enterprises through merge, purchase, etc., in order to optimize the allocation of resources. 

Article 34  When purchasing goods or service, the government shall give first priority to small and medium-sized  enterprises. 

Article 35  The government departments and institutions concerned shall provide guidance and assistance to small and medium-sized 
enterprises to stimulate the export of their products and promote their economic and technological cooperation and exchange with
other countries.  

The policy-oriented financial institutions of the State concerned shall, by means of providing loans for import and export, export
credit insurance, etc., support small and medium-sized enterprises in their efforts to develop market abroad.  

Article 36  The State formulates policies to encourage qualified small and medium-sized enterprises to invest abroad, participate
in international trade and develop international market.  

Article 37  The State encourages the service institutions for small and medium-sized  enterprises to hold exhibitions and
fairs for their products and to conduct information consultancy activities. 

Chapter VI 

Public Services 

Article 38  The State encourages all sectors of the society to establish and improve the service system for small and medium-sized 
enterprises and to provide them with services. 

Article 39  The government shall, in light of actual needs, support the institutions established in the service of small and
medium-sized enterprises and see that they provide top-notch services to the enterprises. 

The service institutions for small and medium-sized enterprises shall make full use of computer networks and other advanced technologies
to gradually establish and improve the information service system opening to the entire community. 

The service institutions for small and medium-sized enterprises shall contact the various kinds of public intermediary agencies and
encourage them to serve such enterprises. 

Article 40  The State encourages the various kinds of public intermediary agencies to provide the small and medium-sized 
enterprises with such services as instructions on establishment of enterprises, business consulting, information consultancy, marketing,
investment, financing, credit guaranty, property right transaction, technological support, bringing in of talents, personnel training,
cooperation with other countries, exhibitions, fairs and legal advice. 

Article 41 The State encourages related institutions and institutions of higher education to train managerial, technical and other
personnel for small and medium-sized  enterprises, in order to help raise the enterprises’ level of marketing, management and
technology. 

Article 42  The self-regulating trade organizations shall actively serve the small and medium-sized  enterprises. 

Article 43  The self-regulating organizations in charge of the self-restricting and self serving small and medium-sized 
enterprises shall safeguard the legitimate rights and interests of the enterprises, express their suggestions and requirements, and
serve them in market development and increase of their management ability. 

Chapter VII 

Supplementary Provisions 

Article 44  The provinces, autonomous regions and municipalities directly under the Central Government may, in light of the
conditions of the local small and medium-sized enterprises, formulate measures for implementation of this Law. 

Article 45  This Law shall go into effect as of January 1, 2003.

Notice: All Rights Reserved to the Legislative Affairs Commission of the Standing Committee of the National People’s Congress.






PROVISIONAL REGULATIONS ON THE MANAGEMENT OF INTERNATIONAL NETWORKING OF COMPUTER INFORMATION NETWORKS

Provisional Regulations of the PRC on the Management of International Networking of Computer Information Networks

     Article 1 These regulations are hereby formulated to strengthen management of the international networking of computer information
networks and guarantee the healthy development of international exchanges of computer information.

   Article 2 International networking of all computer information networks within the People’s Republic of China shall be handled in accordance
with these Regulations.

   Article 3 The following terms used in these Regulations mean:

(1) International networking of computer information networks (hereinafter referred to as international networking) refers to the
networking of the computer information networks inside the People’s Republic of China and those in foreign countries with the purpose
of international exchange of information.

(2) Internets refers to computer information networks with direct international networking; networking units refer units responsible
for the operation of internets.

(3) Cut-in networks refer to computer information networks cut into internets for international networking; and cut-in units refer
to units responsible for the operation of cut-in networks.

   Article 4 The State shall implement the principle of overall planning, unified standardization, and level-by-level management of international
networking to promote its management.

   Article 5 The Economic Information Group of the State Council (hereinafter referred to as the Group) shall take charge of coordination and
solution of major issues concerning international networking.

The office of the Group shall work out specific management rules in line with stipulations of these Regulations; clarify the rights,
obligations and responsibilities of units providing import and export outlets of international channels, networking units, cut-in
units, and end users; and carry out inspection and supervision of international networking across the country.

   Article 6 Computer information networks shall the international channels of import and export outlets provided by the Ministry of Posts and
Telecommunications in the country’s public telecommunications network when they carry out direct international networking.

No units or individuals shall be allowed to establish or use other channels for international networking without authorization.

   Article 7 The internets that have already been established shall be assigned to management by the Ministry of Posts and Telecommunications,
the Ministry of Electronics Industry, the State Education Committee, and the Chinese Academy of Sciences respectively after readjustment
in line with relevant regulations of the State Council.

The establishment of new internets shall be reported to the State Council for approval.

   Article 8 Cut-in networks shall carry out international networking via internets.

The units planning to establish cut-in networks shall report their plan to departments or units in charge of internets for examination
and approval. When going through examination and approval procedures, these units shall provide data on the nature and scope of application
of their computer information networks and the addresses of the mainframe computers they need.

   Article 9 Cut-in units shall meet the following qualifications:

(1) Being enterprise or institutional legal persons set up in accordance with law.

(2) Possessing corresponding computer information networks, equipment, and technical and management personnel.

(3) Having established a perfect security system and technology protection measures.

(4) Conforming with laws and other conditions stipulated by the State Council.

   Article 10 Individuals, legal persons and other organizations (hereinafter referred to as the end users) hoping to carry out international networking
of their computers or computer information networks shall do so via cut-in networks.

If the computers and computer information networks as mentioned in the preceding clause need by cut into cut-in networks, approval
shall be won from the cut-in units and registration procedures shall be gone through.

   Article 11 Providers of international channels of import and export outlets, internets, and cut-in units shall establish corresponding network
management centres, strengthen management of themselves and the end users in accordance with laws and relevant State regulations,
do a good job in guaranteeing the security of information networks, and be sure to provide excellent and safe services to the end
users.

   Article 12 Internets and cut-in units shall hold responsibility over the technical training and management education on international networking
to themselves and their end users.

   Article 13 The units and individuals in charge of international networking businesses shall abide by relevant State laws and administrative
decrees and strictly follow safety and security rules. They shall use international networking for law-breaking or criminal activities
that may endanger national security or divulge State secrets; or producing, consulting, duplicating or propagating information that
may disturb social order or pornographic information.

   Article 14 Those who violate stipulations in articles 6, 8 and 10 of these Regulations shall be warned by security departments or by security
departments according to the opinions of providers of international channels of import and export outlets, internets, or cut-in units,
criticized, ordered to cut off international networking, as well as asked to pay fines below 15,000 yuan.

   Article 15 Those who violate stipulations of these Regulations and at the same time violate other relevant laws or administrative decrees shall
be punished according to relevant laws and administrative decrees, or brought to hold legal responsibilities if crimes are committed.

   Article 16 Networking with computer information networks in Taiwan, Hong Kong and Macao shall be handled with reference to these Regulations.

   Article 17 These Regulations shall take effect on the date of their promulgation.

    





MEASURES FOR IMPLEMENTATION ON MARITIME ADMINISTRATIVE PUNISHMENTS

The Ministry of Land Resources

The Decree of the Ministry of Land Resources of the People’s Republic of China

No. 15

Measures for Implementation on Maritime Administrative Punishments adopted by the 6th executive meeting of the Ministry of Land Resources
on December 12, 2002 are hereby promulgated and shall be come into force as of the day of March 1, 2003. Measures for Implementation
on Maritime Administrative Punishments will be monitored compliance by the State Oceanic Administration.

Minister of the Ministry of Land Resources, Tian Fengshan

December 25, 2002

Measures for Implementation on Maritime Administrative Punishments

Chapter I General Provisions

Article 1

The present Measures have been formulated on the basis of the Law of the People’s Republic of China on Administrative Punishments
and other relevant laws and administrative regulations for the purpose of regulating the maritime administrative punishment acts
and defending the lawful rights and interests of the entities and individuals.

Article 2

Where any entity or individual violates any of the maritime laws, regulations or ministerial rules concerning the use of the sea areas,
the protection of the maritime environment, the laying of sea-bed cables and pipelines, and the scientific research and management
of foreign-related seas, and thus the executing authority of the maritime administrative punishments needs to mete out maritime administrative
punishments according to law, the present Measures shall apply.

Article 3

The department of maritime administration of the people’s government on various levels above the county level is the organ for enforcing
maritime administrative punishments according to law (hereafter referred to as “enforcing organ”).

Where a maritime supervision section is established within the enforcing department, the work of maritime administrative punishments
shall be specifically undertaken by the Chinese maritime supervision section affiliated thereto. Where no maritime supervision section
has been established therein, the work shall be implemented by the maritime administration department on the same level.

The Chinese maritime supervision organs enforce maritime administrative punishments in the name of the maritime administration department
on the same level.

Article 4

The enforcing authorities on higher levels shall be enpost_titled to supervise and put right the maritime administrative punishments implemented
by the enforcing authorities on lower levels.

The higher-level Chinese maritime supervision authorities may, upon the consent of the enforcing authority on the identical level,
supervise, in the name of the enforcing authority on the identical level, the maritime administrative punishments implemented by
the lower enforcing authorities, and assist the government supervision departments to investigate in to relevant administrative liabilities
according to law.

Chapter II Jurisdiction

Article 5

The maritime administrative punishments shall be under the jurisdiction of the enforcing organ of the place where the violation takes
place, unless it is otherwise provided for in any law or regulation.

Article 6

In case it is not clear or it is impossible to find out where the violation has taken place, and there are clear provisions in any
law or regulation, the jurisdiction shall be determined according to such provisions. If there are no clear provisions in any law
or regulation, the jurisdiction shall be determined according to the provisions of ministerial rules and the division of power and
duties.

Article 7

In case the parties concerned have disputes over the jurisdiction, they shall report to the enforcing authority on a higher level
than both parties to designate which party shall have jurisdiction.

Article 8

Where any of the maritime administrative punishments that should be enforced by a lower level enforcing authority, but it deems it
necessary for the enforcing authority on a higher level to exercise jurisdiction, it may report to the next higher enforcing authority
to decide.

Article 9

The enforcing authorities may transfer the maritime administrative punishments that do not fall within their respective jurisdictions
to the enforcing authorities that have jurisdiction over the case or other relevant administrative organs by formulating letters
of transferring cases.

Article 10

In case any violation has constituted a crime, it shall be delivered to the judicial organs according to law.

Chapter III Simplified Procedures

Article 11

Where a violation meets both of the conditions as mentioned below, the corresponding decision of maritime administrative punishments
may be made on-spot by applying the simplified procedures:

a.

The facts about the violation are conspicuous and are supported with irrefutable evidences, and the violation is not serious;

b.

The maritime administrative punishment is a fine of not more than 50 Yuan imposed upon an individual or not more than 1,000 Yuan imposed
upon an entity or is a warning according to the provisions of the maritime laws, regulations or ministerial rules.

Article 12

When meting out maritime administrative punishments on the spot by apply the simplified procedures, the maritime supervisors shall
observe the following procedures:

a.

Showing their certificates of law enforcement to the parties concerned;

b.

Finding out the facts about the violation on the spot, collecting and keeping all necessary evidences, making written records which
shall be signed or sealed by the parties concerned after verification;

c.

Informing the parties concerned of the facts about violation, the grounds for meting out punishments, and that they are enpost_titled to
make statements and defenses;

d.

Listening to the statements and defenses of the parties concerned, and reviewing the facts, reasons and evidences submitted by the
parties concerned, unless the they have given up their right of making statements and defenses;

e.

Filling in the On-spot Decision on Maritime Administrative Punishments formulated in preset formats and having a predetermined number,
and delivering it to the parties concerned on the spot after it is signed or sealed by the maritime supervisors.

Chapter IV Ordinary Procedures

Article 13

All other maritime administrative punishments other than those that can be meted out on the spot according to Article 11 of the present
Measures for violations of relevant provisions shall be placed on files as cases for investigation.

Maritime supervisors shall fill in a form of placing a maritime violation on file as a case for approval, and the case shall be established
after approval is granted.

Article 14

Any maritime supervisor that is directly interested in the case shall withdraw.

Article 15

There shall be no fewer than two maritime supervisors present in the investigation of cases or in inspections, who shall show their
certificates of law enforcement to the parties concerned. They may make investigations or inspections in any of the ways as described
below:

a.

Entering into the scene of violation to make surveys and inspections, consulting or duplicating relevant materials, and making video
records or taking pictures of the scene of violation. Written records shall be made for the relevant surveys and inspections, which
shall be signed or sealed by those under the survey or inspection or any other witnesses;

b.

Inquiring the parties concerned or the witnesses or any other people concerned, and making written records of the inquiries, which
shall be signed or sealed by those under investigation upon verification. In case any of the people under investigation refuses to
sign or seal, it shall be remarked by not fewer than two maritime supervisors who shall put their signatures or seals on the written
records;

c.

The professional or technical matters such as measuring, monitoring, testing or authenticating, etc. may be entrusted to the eligible
institutions to make relevant reports. Such report may be used as evidences.

Article 16 Maritime supervisors may, in the process of collecting evidences, employ the method of taking samples.

Article 17

If, in the process of collecting evidences, any evidence may disappear or would be difficult to obtain thereafter; the maritime supervisors
may, upon approval, and register the evidences for keeping beforehand. A notice of Registering Evidences for Keeping Beforehand shall
formulated for the evidences that are registered for keeping beforehand and be serviced to the parties concerned.

The evidences that are registered for keeping beforehand shall be handled within seven days as of the day when they are registered
keeping.

During the term when the evidences are registered for keeping, neither the parties concerned nor any other relevant personnel may
destroy or transfer any of the evidences.

Article 18

In the process of taking samples for evidences or registering evidences for keeping beforehand, the parties concerned shall be present
on the scene. Where the parties concerned are not present on the scene or refuses to be present on the scene, the maritime supervisors
may invite relevant persons to bear witness on the scene.

Article 19

Maritime supervisors shall, within five days after the investigations are completed, submit a report of investigating maritime violations,
and suggesting punishments according to the results of investigation.

Article 20

The persons in-charge of the enforcing authorities shall review the investigation results and suggestions for punishment, and make
decisions as described below by taking the different circumstances into consideration:

a.

If the facts about the violation are well grounded, maritime administrative punishments shall be meted out according to the seriousness
and the specific situation of the violation;

b.

If the violation is not serious and may be exempt from maritime administrative punishments according to law, no maritime administrative
punishment will be meted out;

c.

If the facts about the violation are not well-grounded, no maritime administrative punishment may be meted out;

d.

If the violation has constituted any crime, it shall be delivered to the judicial organs for handling.

Article 21

If a case for which maritime administrative punishments are to be meted out is complex in circumstances or is a serious violation
as provided for in Article 41 of the present Measures, the enforcing authorities shall arrange for a joint hearing of the case.

Article 22

Before making a decision of maritime administrative punishments, the enforcing authorities shall inform the parties of the facts,
reasons and grounds for meting out the punishments and the decision of suggested maritime administrative punishments, and shall inform
the parties concerned that they are enpost_titled to make statements and appeals.

Article 23

To enforce a maritime administrative punishment; a written decision of maritime administrative punishment shall be formulated according
to the provisions of Article 39 of the Law of the People’s Republic of China on Administrative Punishments.

Article 24

If, in the investigation of maritime violations by applying the ordinary procedures, it would be difficult to enforce a maritime administrative
punishment unless it is enforced on the spot or if it is so requested by the parties concerned, the maritime supervisors may make
a decision of maritime administrative punishment and enforce it on the spot. However, relevant written formalities shall be made
up within five days after they come ashore.

Before making a decision of maritime administrative punishment, the maritime supervisors shall inform the parties concerned on the
spot that they are enpost_titled to make statements and appeals.

The present Measures are not applicable to the investigation of serious maritime violations.

Chapter V Procedures of Hearing

Article 25

The enforcing authorities shall, prior to making any decision of maritime administrative punishments concerning any serious maritime
violations according to Article 41 of the present Measures, inform the parties concerned that they are enpost_titled to request for holding
hearings. Where any of the parties concerned requests for holding a hearing, a hearing shall be held.

The parties concerned shall file their applications for holding hearings within three days after being informed. In case they fail
to file any application within the time limit, it shall be deemed that they have waived their right.

Article 26

The notice of maritime administrative punishment shall be serviced to the parties concerned seven days before a hearing is held.

Article 27

The hearings shall be presided by the persons designated by the enforcing authorities.

None of the maritime supervisors that handle cases (hereafter “case-handling supervisors”) or any person who has any direct interest
in the cases involved may not preside the hearing concerned.

Article 28

Where any of the parties concerned believes that the presider of the hearing has direct interests in the case; he is enpost_titled to request
him to withdraw. Whether the presider is to withdraw or not shall be subject to the decision of the person-in-charge of the enforcing
authority.

Article 29

The parties concerned, the case-handling supervisors and the third parties that may have interests in the conclusion of case may participate
in the case hearings.

The parties concerned may also entrust one or two agents to appear at the hearing on their behalf. The entrusted agents shall, prior
to the holding of the hearing, submit a power of attorney.

Article 30

A case hearing shall be held in public unless any of the state secrets, commercial secrets or personal privacies is involved.

Article 31

A hearing shall be held according to the order as described below:

a.

The presider announces the facts of the case and the disciplines of the hearing, verifies the identities of the participants, and
inform the parties concerned of their rights and obligations, and declares the commencement of the hearing;

b.

The case-handling supervisors present the facts of violation of the parties concerned, the evidences, grounds for punishments, and
the suggestions for punishment;

c.

The parties concerned or the entrusted agents thereof make statements or defenses concerning the facts of the case, present relevant
evidences for cross-examination;

d.

The presider of the case interrogates the case-handling supervisors, the parties concerned and witnesses with regard to the facts
of the case, the evidences and legal grounds;

e.

The case-handling supervisors, parties concerned or the entrusted agents thereof make their final statements

f.

The presider of the hearing announces the concluding of the case hearing.

Article 32

Written records shall be made for hearings. The written records shall bear the signatures or seals of the case-handling supervisors,
the parties concerned or the entrusted agents thereof after verification.

The testimony of the witnesses in the written records shall be subject to the verification of the witnesses and bear the signatures
or seals thereof.

The written records of hearing shall be subject to the examination and review of the presider of the case hearing, and shall bear
the signatures or seals of the presider and the recorder.

Article 33

After a hearing is concluded, the presider of the hearing shall make a written comment with regard to the case facts, evidences, grounds
for punishment and the suggested punishment.

Chapter VI Servicing

Article 34

The decisions of maritime administrative punishments shall be serviced to the parties concerned within seven days after they are made.

Article 35

The decisions of maritime administrative punishments shall be serviced directly to the parties concerned. If the party concerned is
a natural person and if he is not present, the decision may be received by any of his adult family members that lives together with
him. Where the party concerned has designated any one to receive the decision on his behalf, it shall be serviced to the designated
person. If the party concerned is an entity, it shall be serviced to the legal representative of the entity or the major person-in-charge
of the entity or any person of the entity who take care of receiving letters.

The date signed by the party concerned, the adult family member that lives together therewith, the designate person, the legal representative
of the entity, the major person-in-charge of the entity or the person who takes care of receiving letters on the receipt shall be
the date of service.

Article 36

Where any of the parties concerned refuses to receive the decision of maritime administrative punishments, the serviceman shall invite
relevant persons to be present at the scene, explain the situation and mark the refusal and date on the service receipt, have it
signed by both the serviceman and the witnesses, and leave the decision of maritime administrative punishment to the person who takes
care of receiving letters or at the dwelling place of the person subject to punishment, and the service shall be deemed as having
been effected.

Article 37

Where it is difficult to service the decision of maritime administrative punishments directly, it may be serviced by mail.

In the case of service by mail, the date marked by the party concerned on the receipt shall be the date of service. Where the date
as marked on the service receipt is not identical to the date as marked on the receipt of the registered letter, or if the service
receipt fails to be sent back, the date as marked on the receipt of the registered letter shall be the date of service.

Article 38

In case any decision of maritime administrative punishments cannot be serviced by any of the ways as described in Articles 35, 36
and 37, it may be serviced by public announcement. Sixty days after the public announcement is made, it shall be deemed that the
service has been effected.

In the case of service by public announcement, the reasons and process shall be recorded.

Chapter VII Supplementary Provisions

Article 39

In case there are no corresponding provisions in the present Measures, the relevant provisions of the Law of the People’s Republic
of China, the Law of the People’s Republic of China on Administrative Reconsideration, and the Administrative Procedure Law of the
People’s Republic of China, etc. shall be implemented.

Article 40

The basic formats of the instruments of maritime administrative punishments shall be subject to the uniform formulation of the administrative
department of seas under the State Council.

Article 41

A serious maritime violation refers to any of the cases of maritime administrative punishment as described below:

a.

Ordering the stop of an offshore operation of laying seabed cables and pipelines that has been approved, ordering the stop of foreign-related
maritime scientific research activities that have been approved, ordering the stop of the construction or production or use of the
maritime construction projects that have been approved, and the ordering the stop of any other operations that have been approved.

b.

Canceling the permit for dumping wastes into the sea;

c.

Writing off the certificates for using sea areas and withdrawing the right to use sea areas;

d.

A maritime administrative punishment such as a fine of more than 5,000 Yuan imposed upon a natural person or a fine of more than 50,000
Yuan imposed upon an entity, etc.

Article 42

The present Measures shall enter into force as of March 1, 2003.



 
The Ministry of Land Resources
2002-12-25

 






CIRCULAR OF THE STATE TAXATION ADMINISTRATION ON REGULATING AND STRENGTHENING INTERNATIONAL TAXATION ADMINISTRATION

The State Taxation Administration

Circular of the State Taxation Administration on Regulating and Strengthening International Taxation Administration

GuoShuiHan [2002] No.1153

December 26, 2002

The state taxation bureaus and local taxation bureaus of all provinces, autonomous regions, municipalities directly under the Central
Government and municipalities separately listed on the State plan, and Yangzhou Taxation Institute:

The State Taxation Administration has determined in the Experimental Work Proposals of the State Taxation Administration on Accelerating
the Information Construction of Taxation Administration and Carrying out the Levy Reform(GuoShuiFa [2001] No.137) the direction of
levy reform towards informationization and specialization, and has also clarified in the Circular of the State Taxation Administration
on the Relevant Issues concerning the Submission by the Relevant Departments in all Places of Experimental Work Proposals on Accelerating
the Information Construction of Taxation Administration and Carrying out the Levy Reform (GuoShuiFa [2002] No.100) the international
taxation administration offices of the experimental entities for levy reform and their duties. In order to ensure the implementation
of the said two documents, regulate and strengthen the international taxation administration, we hereby give our notice as follows
regarding the relevant issues:

I.

Work Contents

The main contents of the work of the international (foreign) taxation administration offices in all experimental regions are:

(a)

Implementation of taxation agreements, namely, ascertainment of residents and issuance of the identity proof of Chinese residents;
ascertainment and administration of permanent offices; ascertainment of restricted tariff rates; determination of taxation jurisdiction;
taxation administration; check, ascertainment and administration of overseas tax credits; implementation of special clauses in agreements;
research and formulation of administrative measures on implementing taxation agreements; special investigations and punishments on
abuse of taxation agreements; and so on.

(b)

Carrying out anti-avoidance of tax, namely: actual investigations on anti-avoidance of tax; organizing and carrying out assistant
and joint investigations of anti-avoidance of tax; investigations and punishments on various tax avoidance acts; negotiation, conclusion,
administration and implementation of subscribed pricing; investigations and punishments on the issues of weakening of capital, tax
avoidance at tax avoidance ports and tax avoidance of controlled foreign companies; investigations and punishments on the tax avoidance
issues of the global concentrative services by trans-national companies such as cost allocation agreements, intra-group labor service,
and so on.

(c)

Taxation supervision over foreign residents, namely, regulating, organizing and implementing the taxation administration of the local
business offices of foreign companies in accordance with the relevant taxation administration rules; administration of withholding
of income tax upon foreign companies that have no offices in but have income from China; issuance and administration of documents
on non-trade payment of exchanges and sale of exchanges under some capital; administration of individual income tax of foreign residents;
determination of levy and exemption of taxes on permanent representative offices of foreign enterprises and the taxation administration
thereof; investigations and punishments on tax evasion by foreign residents.

(d)

Information exchange, namely, organizing the implementation of administrative rules on information exchange; collection, transmission,
investigation, check, translation and submission of the taxation information involved in automatic information exchange, voluntary
information exchange, special information exchange, industrial scope information exchange and authorized representatives’ visits;
such confidentiality maintenance work as classification, declassification, making, use, preservation and destruction of taxation
information according to the rules on maintaining confidentiality for information exchange, etc., simultaneous trans-national taxation
inspections.

(e)

Cooperation in international taxation administration, namely, organizing the implementation of the relevant taxation administration
rules on the income of domestic residents from outside of the territory; providing taxation assistance according to taxation agreements
to domestic residents in their overseas business activities; cooperating with foreign taxation administrations in investigations
on tax evasion issues of the domestic residents’ income from outside of the territory; organizing the implementation of international
exchanges and cooperation with international organizations and foreign taxation administrations in the relevant taxation levy and
administration matters.

(f)

Implementation of present taxation policies involving foreign interest, namely, organizing the implementation of the present taxation
laws and regulations for enterprises with foreign investment and foreign enterprises as well as the relevant administrative measures
on taxation; dealing with the administrative examination and approval.

II.

Work Requirements

(a)

The relevant departments in all places shall strengthen the training on specialized administration of international taxation matters,
improve their realization of the importance. Facing the trend of economic globalization and China’s accession to WTO, China and the
countries in the world will have increasing frequent transactions in the fields of commodity, capital, technology and service, etc.,
which will definitely lead to the complexity of various international taxation matters such as determination of the identities of
Chinese and foreign residents and sources of their income, control of trans-national proceeds, international anti-avoidance of tax,
coordination in international taxation disputes, etc.. Therefore, we must strengthen the specialized administration of international
taxation matters.

(b)

The international (foreign) taxation administration offices in all places shall make work schedules and work rules according to the
above said work contents; all-roundly regulate and strengthen international taxation administration; and organize the implementation
of the present laws, regulations and administrative measures on foreign taxation; stop up the loopholes in international taxation
and foreign taxation; make great efforts to arrange income; and maintain the taxation benefits of the state.

(c)

Equipping and stabilizing professionals. International taxation administration is a kind of work with strong specialty, thus the relevant
departments in all places shall equip the international (foreign) taxation administration offices with enough professionals and keep
them stabilized accordingly, pursuant to the work requirement of giving full scope to all the above said duties in international
taxation administration, especially the special investigations, inspections and joint investigations on anti-avoidance of tax, which
need to be actually carried out.

Where a taxation bureau of a city at the county level in the coastal area, which has a large quantity of international taxation matters,
needs to set up a division (section) of international taxation administration, it shall, upon the approval of the State Taxation
Administration, strengthen the administration of international taxation matters according to the above said work contents and requirements.

(d)

We should actively search for a new mechanism for the taxation administration of large enterprises. The experimental entities under
levy reform shall, by following the spirit of GuoShuiFa [2002] No.100, do well in the preparation of concentrative administration
of both domestically-funded and foreign-funded large enterprises and trans-national enterprises, and implement the proposals after
the State Taxation Administration has determined the work proposals on taxation administration of large enterprises.



 
The State Taxation Administration
2002-12-26

 






AMENDMENT IV TO THE CRIMINAL LAW

Amendment IV to the Criminal Law of the People’s Republic of China

(Adopted at the 31st Meeting of the Standing Committee of the Ninth National People’s Congress on December 28, 2002
and promulgated by Order No. 83 of the President of the People’s Republic of China on December 28, 2002) 

In order to punish the crimes of disrupting the order of the socialist market economy, obstructing the administration of public order,
and of dereliction of duty committed by functionaries of State organs, and to guarantee smooth progress of the socialist modernization
drive, the following revisions and supplements are made to the Criminal Law: 

1. Article 145 is revised to read: “Whoever produces medical apparatus and instruments or medical hygiene materials that are not
up to the national or trade standards for safeguarding human health or sells such things while clearly knowing the fact, which is
harmful enough to seriously endanger human health, shall be sentenced to fixed-term imprisonment of not more than three years or
criminal detention and shall, in addition, be fined not less than half, but not more than two times, the amount of earnings from
sales; if serious harm is caused to human health, he shall be sentenced to fixed-term imprisonment of not less than three years but
not more than ten years and shall, in addition, be fined not less than half, but not more than two times, the amount of earnings
from sales; if the consequences are especially serious, he shall be sentenced to fixed-term imprisonment of not less than ten years
or life imprisonment, and shall, in addition, be fined not less than half, but not more than two times, the amount of earnings from
sales or be sentenced to confiscation of property. ” 

2. One paragraph is added to Article 152 as the second paragraph, which reads: “Whoever, evading Customs supervision and control,
transports solid waste, liquid waste or gaseous waste from outside China into the territory of China, if the circumstances are serious,
shall be sentenced to fixed-term imprisonment of not more than five years and shall in addition, or shall only, be fined; if the
circumstances are especially serious, he shall be sentenced to fixed-term imprisonment of not less than five years and shall in addition
be fined. ” 

The original second paragraph of Article 152 is revised as the third paragraph, which reads: “Where a unit commits any of the crimes
as mentioned in the preceding two paragraphs, it shall be fined, and the persons who are directly in charge of the unit and the other
persons who are directly responsible for the crime shall be punished in accordance with the provisions of the preceding two paragraphs.
” 

3. Article 155 is revised to read: “Whoever commits any of the following acts shall be deemed to have committed the crime of smuggling
and shall be punished in accordance with the relevant provisions of this Section: ( 1 ) directly and illegally purchasing from smugglers
articles, the import of which is forbidden by the State, or directly and illegally purchasing from smugglers other smuggled goods
or articles and in and of relatively large quantities and values; ( 2 ) transporting, purchasing or selling in inland seas, territorial
waters, boundary rivers or boundary lakes articles the import and export of which are forbidden by the State, or transporting, purchasing
or selling, without legal certificates and in and of relatively large quantities and values, goods or articles the import and export
of which are restricted by the State. ” 

4. One article is added after Article 244 as Article 244(a), which reads: “Where a unit, in violation of the laws and regulations
on labor administration, employs a minor under the age of 16 to do physical labor of ultra-intensity, or to work high above the ground
or in a pit, or to work under explosive, inflammable, radioactive, poisonous and other dangerous conditions, if the circumstances
are serious, the person who is directly responsible shall be sentenced to fixed-term imprisonment of not more than three years or
criminal detention and shall, in addition, be fined; if the circumstances are especially serious, he shall be sentenced to fixed-term
imprisonment of not less than three years but not more than seven years and shall, in addition, be fined. 

“Whoever commits the act mentioned in the preceding paragraph, which results in an accident and at the same time constitutes another
crime, shall be punished in accordance with the provisions on combined punishment for several crimes. ” 

5. The third paragraph of Article 339 is revised to read: “Whoever, under the pretext of using it as raw material, imports solid
waste , liquid waste or gaseous waste that cannot be used as such shall be convicted and punished in accordance with the provisions
of the second and the third paragraph of Article 152 of this Law. ” 

6. Article 344 is revised to read: “Whoever, in violation of the regulations of the State, illegally fells or destroys precious trees
or other plants under special State protection, or illegally purchases, transports, processes or sells such trees or plants as well
as the products thereof, shall be sentenced to fixed-term imprisonment of not more than three years, criminal detention or public
surveillance and shall, in addition, be fined; if the circumstances are serious, he shall be sentenced to fixed-term imprisonment
of not less than three years but not more than seven years and shall, in addition, be fined. ” 

7. Article 345 is revised to read: “Whoever stealthily fells trees, bamboo, etc. in forest or woods, if the amount involved is relatively
large, shall be sentenced to fixed-term imprisonment of not more than three years, criminal detention or public surveillance and
shall in addition, or shall only, be fined; if the amount involved is huge, he shall be sentenced to fixed-term imprisonment of not
less than three years but not more than seven years and shall, in addition, be fined; if the amount involved is especially huge,
he shall be sentenced to fixed-term imprisonment of not less than seven years and shall, in addition, be fined. 

“Whoever, in violation of the provisions of the Forestry Law, arbitrarily fells trees, bamboo, etc. in forest or woods, if the amount
involved is relatively large, shall be sentenced to fixed-term imprisonment of not more than three years, criminal detention or public
surveillance and shall, in addition, or shall only, be fined; if the amount involved is huge, he shall be sentenced to fixed-term
imprisonment of not less than three years but not more than seven years and shall, in addition, be fined. 

“Whoever illegally purchases or transports trees, bamboo, etc. which he clearly knows are felled stealthily or arbitrarily, if the
circumstances are serious, shall be sentenced to fixed-term imprisonment of not more than three years, criminal detention or public
surveillance and shall, in addition, or shall only, be fined; if the circumstances are especially serious, he shall be sentenced
to fixed-term imprisonment of not less than three years but not more than seven years and shall, in addition, be fined. 

“Whoever stealthily or arbitrarily fells trees, bamboo, etc. in forest or woods of nature reserves at the national level shall be
given a heavier punishment. ” 

8. Article 399 is revised to read: “Any judicial officer who, bending the law for selfish ends or twisting the law for a favor, subjects
to investigation for criminal responsibility a person he knows to be innocent or intentionally protects from investigation for criminal
responsibility a person he knows to be guilty or, intentionally running counter to the facts and law, twists the law when rendering
judgments or orders in criminal proceedings shall be sentenced to fixed-term imprisonment of not more than five years or criminal
detention; if the circumstances are serious, he shall be sentenced to fixed-term imprisonment of not less than five years but not
more than ten years; if the circumstances are especially serious, he shall be sentenced to fixed-term imprisonment of not less than
ten years. 

“Any judicial officer who, in civil or administrative proceedings, intentionally runs counter to the facts and law and twists the
law when rendering judgments or orders, if the circumstances are serious, shall be sentenced to fixed-term imprisonment of not more
than five years or criminal detention; if the circumstances are especially serious, he shall be sentenced to fixed-term imprisonment
of not less than five years but not more than ten years. 

“Any judicial officer who, being seriously irresponsible or abusing his power in execution of judgments or orders, does not take
preservation measures in litigation in accordance with law, or does not perform his statutory duty of execution, or unlawfully takes
preservation measures in litigation or takes compulsory enforcement measures, thus causing heavy losses to the interests of the parties
or other persons, shall be sentenced to fixed-term imprisonment of not more than five years or criminal detention; and if especially
heavy losses are caused to the interests of the parties or other persons, he shall be sentenced to fixed-term imprisonment of not
less than five years but not more than ten years. 

“Any judicial officer who accepts bribes and commits one of the acts mentioned in the preceding three paragraphs, which at the same
time constitutes a crime as provided for in Article 385 of this Law, shall be convicted and punished in accordance with the provisions
for a heavier punishment. ” 

9. This Amendment shall go into effect as of the date of promulgation.

Notice: All Rights Reserved to the Legislative Affairs Commission of the Standing Committee of the National People’s Congress.






INTERPRETATION BY THE STANDING COMMITTEE OF THE NATIONAL PEOPLE’S CONGRESS REGARDING THE APPLICATION OF THE SUBJECT OF THE CRIME OF DERELICTION OF DUTY IN CHAPTER IX OF THE CRIMINAL LAW

Interpretation by the Standing Committee of the National People’s Congress Regarding the Application of the Subject of the Crime of
Dereliction of Duty in Chapter IX of the Criminal Law of the People’s Republic of China

(Adopted at the 31st Meeting of the Standing Committee of the Ninth National People’s Congress on December 28, 2002) 

On the basis of the problems encountered in judicial practice, the Standing Committee of National People’s Congress has discussed
the application of the subject of the crime of dereliction of duty in Chapter IX of the Criminal Law, and gives the interpretation
as follows: 

When exercising power on behalf of a State organ, a person, engaged in public service in an organization which exercises the administrative
power of the State according to laws and regulations, or in an organization entrusted by a State organ with the exercise of power
on its behalf, or engaged in public service in a State organ although not included in the staff of the State organ, who commits dereliction
of duty, which constitutes a crime, shall be investigated for criminal responsibility in accordance with the provisions on the crime
of dereliction of duty as provided for in the Criminal Law. 

This Interpretation is hereby announced.

Notice: All Rights Reserved to the Legislative Affairs Commission of the Standing Committee of the National People’s Congress.






CIRCULAR OF THE MINISTRY OF FOREIGN TRADE AND ECONOMIC COOPERATION (MOFTEC), STATE ADMINISTRATION OF TAXATION (SAT), STATE ADMINISTRATION OF INDUSTRY AND COMMERCE (SAIC), AND STATE ADMINISTRATION OF FOREIGN EXCHANGE (SAFE) ON ISSUES RELATED TO IMPROVING THE ADMINISTRATION OF ENTERPRISES WITH FOREIGN INVESTMENT IN TERMS OF EXAMINATION AND APPROVAL, REGISTRATION, FOREIGN EXCHANGE AND TAXATION

The Ministry of Foreign Trade and Economic Cooperation, the State Administration of Taxation, the State Administration for Industry
and Commerce, the State Administration of Foreign Exchange

Circular of the Ministry of Foreign Trade and Economic Cooperation (MOFTEC), State Administration of Taxation (SAT), State Administration
of Industry and Commerce (SAIC), and State Administration of Foreign Exchange (SAFE) on Issues Related to Improving the Administration
of Enterprises with Foreign Investment in Terms of Examination and Approval, Registration, Foreign Exchange and Taxation

WaiJingMaoFaFa [2002] No.575

December 30, 2002

Commissions (departments, bureaus) of foreign trade and economic cooperation in all provinces, autonomous regions, municipalities
directly under the Central Government, and municipalities separately listed on the State plan; administration bureaus of industry
and commerce in all provinces, autonomous regions, municipalities directly under the Central Government, and other authorized bureaus;
SAFE, and its branches and exchange administration offices in all provinces, autonomous regions and municipalities directly under
the Central Government, and SAFE branches in Shenzhen, Dalian, Qingdao, Xiamen and Ningbo; bureaus of state taxation and of local
taxation in all provinces, autonomous regions, municipalities directly under the Central Government, and municipalities separately
listed on the State plan:

In order to keep abreast with the new situation of utilizing foreign funds and normalize the administration of enterprises with foreign
investment, in view of the new circumstances and problems arising out of the recent utilization of foreign funds, the Circular on
Issues Related to Improving the Administration of Enterprises with Foreign Investment in Terms of Examination and Approval, Registration,
Foreign Exchange and Taxation (see attachment) has been formulated jointly by the MOFTEC, SAT, SAIC, and SAFE and is hereby distributed
to you for implementation.

Attachment:Circular on Issues Related to Improving the Administration of Enterprises with Foreign Investment in Terms of Examination and Approval,
Registration, Foreign Exchange and Taxation

Pursuant to the Law of the People’s Republic of China (PRC) on Chinese-foreign Equity Joint Ventures, the Law of the PRC on Chinese-foreign
Contractual Joint Ventures, the Law of the PRC on Foreign-capital Enterprises, the Company Law of the PRC, the Contract Law of the
PRC, the Regulations on the Exchange System of the PRC, and other relevant laws and regulations, a circular on issues related to
improving the administration of enterprises with foreign investment in terms of examination and approval, registration, foreign exchange
and taxation is given hereunder with a view to keeping abreast of the new situation of absorbing foreign funds, normalizing the administration
of enterprises with foreign investment, ensuring the sound development of enterprises with foreign investment, and protecting the
lawful rights and interests of Chinese and foreign investors:

1.

The establishment of an enterprise with foreign investment as well as its contract and articles of association (including the modification
of the contract and articles of association) shall be examined and approved according to the current approving procedures of enterprises
with foreign investment provided by relevant laws and regulations of the State.

2.

According to the current laws and regulations related to foreign investment, the proportion contributed by foreign investors in a
Chinese-foreign equity joint venture or a Chinese-foreign contractual joint venture shall in general not be less than 25 percent
of its registered capital. In case the proportion of the foreign investment is less than 25 percent, unless otherwise provided in
law or administrative regulations, examination and approval as well as registration shall be handled according to the current examining,
approving and registering procedures for the establishment of enterprises with foreign investment. A certificate of approval of enterprise
with foreign investment marked with the words “Proportion of foreign investment is less than 25 percent” shall be issued to the approved;
a business license of enterprise with foreign investment with the words “Proportion of foreign investment is less than 25 percent”
marked in the column of “type of enterprise” shall be issued to the registered.

3.

An enterprise with foreign investment in which the proportion of foreign investment is less than 25 percent shall, unless otherwise
provided in law or administrative regulations, not enjoy the preferential treatment of tax reduction or exemption for importing self-satisfying
equipment and articles under the item of its total investment and other taxation treatment given to enterprises with foreign investment.

A foreign-funded stock limited company that has enjoyed the treatment given to enterprises with foreign investment, after increasing
its registered capital and stocks or transferring its stocks to foreign investors, may still enjoy the treatment given to enterprises
with foreign investment according to relevant provisions.

4.

As to an enterprise with foreign investment in which the proportion of foreign investment is less than 25 percent, if the investor
contributes in cash, the full contribution shall be made within three months after receiving the business license; if the investor
contributes in kind, industrial property rights and etc, the full contribution shall be made within six months after receiving the
business license.

5.

In case a foreign investor purchases the stock of a domestic enterprise of any nature and any type, the said domestic enterprise shall,
according to the provisions of relevant laws and regulations of the State and the current examining and approving procedure for enterprises
with foreign investment, be altered into an enterprise with foreign investment upon the approval of the approving agency concerned
and follow the industrial policy on foreign investment. After the approval, the approving agency shall issue a certificate of approval
of enterprise with foreign investment, and the administration agency of industry and commerce shall issue a business license of enterprise
with foreign investment.

A Chinese natural person shareholder in the said domestic enterprise who has owned its stock for more than one year may, if approved,
still be the Chinese investor of the enterprise with foreign investment established after the alteration.

A domestic Chinese natural person shall not, for the time being, establish an enterprise with foreign investment with a foreign company,
enterprise, other economic organization, or individual in the form of new establishment or purchase.

6.

A foreign investor that has purchased the stock of a domestic enterprise shall make full payment of the purchase within three months
after the issuance of the business license of enterprise with foreign investment. If deferred payment is necessary due to special
reasons, with the approval of the approving agency concerned, no less than 60 percent of the total amount shall be paid within six
months after the issuance of the business license of enterprise with foreign investment, and the total amount shall be fully paid
within one year, and the net profit shall be distributed in proportion to the actual contributions to the registered capital. Before
making full payment for the purchase, the controlling investor shall not obtain the decision-making power of the enterprise, and
may not incorporate his/her equity and assets in the said enterprise into his/her own financial statements in the form of a consolidated
statement. The certificate of foreign exchange registration of foreign funds issued by the SAFE office in the locality where the
stock transferor resides shall be the valid document verifying the payment for the purchase by the foreign investor.

In case a foreign investor purchases the stock of a domestic enterprise, the two parties of the stock transfer shall set a deadline
for the payment for the purchase of stock by the foreign investor in the agreement of stock transfer. In case the said deadline is
not prescribed in the agreement, the approving agency shall not approve the transfer.

7.

An enterprise with foreign investment shall apply to the SAFE office in its place of registration for foreign exchange registration
with the certificate of approval of enterprise with foreign investment and the business license of enterprise with foreign investment.

When allowing a foreign investor to purchase the stock of a domestic enterprise, the approving agency shall send a duplicate of the
approval to the SAFE offices in the localities where the said domestic enterprise is located and where the transferor of the stock
resides. The SAFE office in the locality where the transferor of the stock resides shall supervise the collection of foreign exchange.

8.

Approving agencies, agencies of industrial and commercial registration, and SAFE offices in all localities shall strictly implement
the provisions of this Circular. As from the day when this Circular is put into effect, approval, industrial and commercial registration,
and foreign exchange registration shall not be handled for those that fail to go through the procedure of approval according to this
Circular.

An enterprise established before the implementation of this Circular with the proportion of foreign investment below 25 percent shall
make up the procedure of approval and registration within half a year after the day when this Circular is put into effect. For those
that fail to make up the procedure, the relevant agency of industrial and commercial registration shall order them to do so in a
prescribed time limit. Anyone that does not make up the procedure beyond the time limit shall be punished by the relevant agency
of industrial and commercial registration according to article 63 of the Regulations on the Administration of the Registration of
Company. An enterprise that does not go through the relevant procedures after being punished shall not be let pass the annual inspection
for the current year.

The administration agencies of industrial and commercial registration in all localities shall, according to the provisions of this
Circular, count up the number of enterprises concerned, adjust the jurisdiction of registration, and do a good job in the transfer
of enterprises’ files. The registration alteration for enterprises that have made up the procedure of approval shall be exclusively
under the jurisdiction of the agencies of registration with the authority to register enterprises with foreign investment in the
localities where the said enterprises reside.

9.

In the case of conflict with previous provisions, this Circular shall prevail.

10.

This Circular shall apply to the establishment of enterprises with foreign investment in the mainland by investors from the regions
of Taiwan, Hong Kong and Macao.

11.

This Circular shall enter into force as of January 1, 2003.



 
The Ministry of Foreign Trade and Economic Cooperation, the State Administration of Taxation, the State Administration
for Industry and Commerce, the State Administration of Foreign Exchange
2002-12-30

 






12Page 1 of 2

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...

CONSTITUTION ACT, 1982 – page 21

CONSTITUTION ACT, 1982 – page 20

CONSTITUTION ACT, 1982 – page 19

CONSTITUTION ACT, 1982 – page 18

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