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MEASURES OF THE CUSTOMS OF THE PEOPLE’S REPUBLIC OF CHINA ON THE SUPERVISION OF PROCESSING TRADE GOODS

the General Administration of Customs

Order of the General Administration of Customs of the People’s Republic of China

No.113

The Measures of the Customs of the People’s Republic of China on the Supervision of Processing Trade Goods, which were approved after
deliberation at the executive meeting of the Administration on January 7th, 2004, are hereby promulgated and shall come into force
as of April 1st, 2004.

Mu Xinsheng, the Director of the General Administration of Customs

February 26th, 2004

Measures of the Customs of the People’s Republic of China on the Supervision of Processing Trade Goods

Chapter I General Provisions

Article 1

In order to promote the healthy development of processing trade, and to regulate the customs’ administration of processing trade goods,
the present Measures are formulated in accordance with the Customs Law of the People’s Republic of China and other relevant laws
and administrative regulations.

Article 2

The present Measures apply to the formalities for the filing for records, import and export customs declaration, processing, supervision,
and the verification and writing-off of processing trade goods.

The filing for records, import and export customs declaration, processing, and the verification and writing-off of goods under processing
trade shall be conducted through paper documents and electronic data.

Article 3

Meaning of the following terms used herein:

The term “processing trade” refers to the business activities in which the operating enterprise imports all or part of the raw or
ancillary materials, spare parts, components, and packaging materials (hereinafter referred to as materials), and after processing
or assembling, re-exports the finished products. It includes processing of supplied materials and processing of imported materials.

The term “processing of supplied materials” refers to the business activities in which the imported materials are supplied by the
overseas enterprise, and the operating enterprise need not pay foreign exchange for the import, but just carries out processing or
assembling in accordance with the requirements of the overseas enterprise, and charges for the processing, with the finished products
being marketed by the overseas enterprise.

The term “processing of imported materials” refers to the business activities in which the operating enterprise pays foreign exchange
for the import, and exports the finished products.

The term “goods under processing trade” refers to the imported materials, and finished processed products under processing trade,
as well as the leftover materials, inferior products, and byproducts generated during the processing, etc.

The term “processing trade enterprises” shall include the operating enterprises and processing enterprises that have been registered
with the customs.

The term “operating enterprise” refers to the various kinds of import and export enterprises and foreign-funded enterprises that conclude
the contracts of processing trade import and export with foreign parties, as well as the foreign processing and assembling service
companies that have obtained the license for processing of imported materials upon approval.

The term “processing enterprise” refers to the manufacturing enterprises that, upon entrustment by the operating enterprises, assume
the processing or assembling of the imported materials and that have the status of legal person, as well as the factories without
the status of legal person established by the operating enterprises, but employing relatively independent accounting and having obtained
the business certificate (license) of industry and commerce.

The term “unit consumption quantity” refers to the quantity of the imported materials consumed per finished export product by the
processing trade enterprise under normal production conditions, and it is referred to as “unit consumption” for short.

The term “deep processing and transfer” refers to the business activities in which the processing trade enterprise transfers the products
processed by using bonded imported materials to another processing trade enterprise for further processing and re-export.

The term “undertaking enterprise” refers to the production enterprise that concludes the processing contract with the operating enterprise
and undertakes the outward processing operations entrusted by the operating enterprise. The undertaking enterprise must register
with the customs and have the corresponding production capacity.

The term “outward processing” refers to the act of the processing trade enterprise to, as a result of the restriction of its own production
operations and upon approval of the customs and after finishing the relevant formalities, entrust the undertaking enterprise to process
a certain operation procedure with respect to the processing trade goods, and transport back the processed goods back to the operating
enterprise within a prescribed time limit for final re-export.

The term “inspection” refers to the act of the customs to check and verify whether the processing and production capacity, as well
as the import, transport, storage, processing, assembling, assignment, transfer, sale or export of processing trade goods, etc.,
declared by the processing trade enterprise conform to the facts and are in compliance with the relevant laws, administrative regulations
and rules, through such methods as verification of data, examination of documents, verification of goods against the relevant account
books, etc.

The term “verification and writing-off” refers to the act of the customs, at the application of the processing trade operating enterprise
for lift of control after completing the formalities for re-export or domestic sale etc., to lift the control if the application
of the operating enterprise is genuine and complies with the relevant laws, administrative regulations and rules upon examination
and inspection.

Article 4

Except there being other provisions by the State, if the imported materials under processing trade fall within import restrictions
imposed by the State, the operating enterprise shall be exempted from submitting the import license to the customs; if the finished
export products of processing trade fall within the export restrictions imposed by the State, the operating enterprise shall submit
the export license to the customs.

Article 5

Where the imported materials under processing trade are among those under bonded supervision, the customs shall, after the finished
goods are exported, make verification and writing-off according to the verified quantity of the goods actually processed and exported.
Where taxes are collected in advance pursuant to the provisions, the customs shall, after the finished goods are exported, return
the collected taxes according to the verified quantity of the goods actually processed and exported.

Where export customs duties shall be levied on the export products under processing trade, the customs shall collect the export customs
duties pursuant to the relevant provisions.

Article 6

The customs shall apply the system of guarantee with respect to processing trade goods pursuant to the provisions of the State.

Article 7

Processing trade goods may not be mortgaged, pledged, or placed under lien.

Article 8

The customs may, according to the needs of supervision, make inspections over the processing trade enterprises, which shall render
cooperation. Customs inspections shall not affect the normal business activities of the enterprises.

Article 9

Processing trade enterprises shall, in accordance with the Accounting Law of the People’s Republic of China and the relevant laws,
administrative regulations and rules of the State, establish account books, statements, and other relevant documents that comply
with the requirements of customs supervision to record the information of import, storage, assignment, transfer, sale, processing,
use, wearing-off, and export, etc., relating to its processing trade goods, keep accounts and make assessments on the basis of legal
and valid certificates.

A processing trade enterprise shall, pursuant to the provisions, submit to the customs the annual statements of the business operations
of the previous year and other relevant documents.

Chapter II Putting Processing Trade Goods on File

Article 10

An operating enterprise shall go through the formalities for putting processing trade goods on file with the customs of the place
where the processing enterprise is located.

Where the operating enterprise and the processing enterprise are not within the jurisdiction of the same customs directly under the
General Administration of Customs (GAC), the formalities for putting goods on file shall be carried out pursuant to the provisions
of the customs on the administration of processing trade in different places.

Article 11

When going through the formalities for putting processing trade goods on file, an operating enterprise shall faithfully report the
trade method, unit consumption, ports of import and export, as well as the commodity names, commodity numbers, specifications and
types, prices, and origins, etc., of the imported materials and export products.

Article 12

When going through the formalities for putting processing trade goods on file, an operating enterprise shall submit the following
documents:

1)

Valid documents issued by the competent authority approving the operation of processing trade;

2)

Certificate of Production Capacity of Processing Enterprise in Processing Trade issued by the competent authority, if the operating
enterprise itself has the capacity of processing;

3)

Contract of entrusted processing and the Certificate of Production Capacity of Processing Enterprise in Processing Trade of the processing
enterprise issued by the competent authority, if the operating enterprise entrusts the processing to the processing enterprise;

4)

Contract concluded by the operating enterprise with the foreign party; and

5)

Other certificates and materials that the customs deems necessary to be submitted.

Article 13

If the documents are complete and valid and comply with Articles 10 to 12 herein upon examination by the customs, the customs shall
put the record on file within 5 workdays from the day of receipt of the application filed by the enterprise, and shall issue the
manual of processing trade.

Where it is necessary to handle the formalities for guarantee, the customs shall issue the manual of processing trade after the operating
enterprise finishes the formalities for guarantee pursuant to the provisions.

Article 14

Under any of the following circumstances, the customs shall refuse to put the record on file and notify the operating enterprise in
writing:

1)

The imported materials or export products fall within those prohibited by the State from import and export;

2)

The products to be processed fall within those prohibited by the State from being processed and produced within China;

3)

The imported materials are those for which the customs is unable to apply bonded supervision;

4)

The operating enterprise or processing enterprise is one that is not permitted to carry out processing trade as provided for by the
State; or

5)

The operating enterprise applies to the customs for filing for record without reporting and surrendering the manual of processing
trade, upon its expiration, to the customs within the prescribed time lime.

Article 15

Where the operating enterprise or processing enterprise is under any of the following circumstances, the customs may put on record
for it after the operating enterprise provides guarantee of the same value as that of the payable taxes or provides a letter of indemnity
from the bank;

1)

Being suspected of smuggling or rule breaking, and the customs has put the case on file for investigation and the case has not been
concluded yet; or

2)

Being required by the customs to make rectification as a result of poor management and the rectification has not ended yet.

If the operating enterprise or processing enterprise is under any of the following circumstances and the customs has good reason to
believe that there is high risk in supervision, the customs may handle the case by analogy with the preceding paragraph and notify
the relevant enterprise in writing:

1)

Leasing the factory or equipment;

2)

Engaging in the processing trade for the first time;

3)

Having applied for an extension of the Manual of Processing Trade for twice or more; or

4)

Having filed for a record of processing trade in different places.

Article 16

Where the customs has found that the documents submitted by the operating enterprise for putting on record processing trade goods
are not in conformity with the facts, it shall deal with the case pursuant to the following provisions:

1)

Where the goods have not been imported, the customs shall write off the record thereof; or

2)

Where the goods have been imported, the enterprise may apply for returning them or may continue to perform the contract after providing
the customs with a cash deposit of the same value as that of the payable taxes or providing a letter of indemnity from the bank.

Article 17

An operating enterprise that has put on record the processing trade goods may apply to the customs for the sub-volume or follow-up
volume of the Manual of Processing Trade.

Article 18

Where there is any alteration in the record of the processing trade goods, the operating enterprise shall go through the formalities
for alteration within the valid term of the manual of processing trade. Where it is necessary to report to the original examining
and approving organ for approval, such a report shall be made.

Chapter III Import, Export and Processing of Goods Under the Processing Trade

Article 19

Where an operating enterprise imports goods under processing trade, it may either import them from foreign counties, areas under special
supervision by the customs, or bonded warehouses, or transfer them into China by way of deep processing and transfer. Where an operating
enterprise exports goods under processing trade, it may export the goods to foreign countries, areas under special supervision by
the customs, or bonded warehouses, or transfer them out of China by way of deep processing and transfer.

Article 20

An operating enterprise shall make import and export customs declaration of processing trade goods by taking with it such relevant
documents as the manual of processing trade, and the special customs declaration form for import and export processing trade goods,
etc.

Article 21

The goods imported and exported by operating enterprises by way of processing trade shall be included in the customs statistics.

Article 22

An operating enterprise, upon approval of the competent authority, may carry out deep processing and transfer, and shall go through
the relevant formalities pursuant to the provisions of the customs on the administration of deep processing and transfer of processing
trade goods.

Article 23

An operating enterprise may carry out outward processing business upon approval of the customs. Outward processing trade shall be
carried out within the valid term of the manual of processing trade.

When contracting out the processing trade, an operating enterprise may not sell the processing trade goods to the undertaking enterprise.
The undertaking enterprise may not contract the processing of the processing trade goods to any other enterprise again.

Article 24

An operating enterprise shall transport back to itself such processing trade goods as the finished products, leftover materials, residual
materials, inferior products, and byproducts, etc., generated in the outward processing.

Article 25

Under any of the following circumstances, the customs shall not approve the outward processing operation:

1)

The operating or undertaking enterprise is suspected of smuggling or rule breaking, and the case has been put on file by the customs
for investigation and has not been concluded;

2)

The operating enterprise contracts the major operation out to others for processing; or

3)

The management of production and operation of the operating enterprise or undertaking enterprise is not in conformity with the requirements
of customs supervision.

Article 26

The operating enterprise and undertaking enterprise shall both subject themselves to the customs supervision. The operating enterprise
shall, in accordance with the customs requirements, faithfully report the consignment, processing, unit consumption, and storage,
etc., of the goods contracted out for processing.

Article 27

In the case of urgent need for the processing of export goods, the operating enterprise may, upon ratification of the customs, interchange
bonded materials with non-bonded materials.

The interchange between bonded materials with non-bonded materials shall be limited to the same enterprise, and shall stick to the
principle of being the same type, same specification, same quantity, and not for profit.

Bonded imported materials for processing of supplied materials may not be interchanged with non-bonded materials.

Article 28

If the operating enterprise must use some non-bonded materials due to the needs of processing techniques, it shall first faithfully
declare to the customs the proportion, category, specification, type, and quantity of the non-bonded materials to be used, and the
customs shall write off those non-bonded materials from the total materials consumed for the export products.

Article 29

Where an operating enterprise needs to return to or change the imported materials with the original supplier as a result of quality
problem, or non-conformity of the imported materials with the specification or type with that stipulated in the contract, it may
go through the formalities for customs declaration directly with the port customs. Bonded imported materials that have already been
processed may not be returned or changed.

Chapter IV Verification and Writing-off of Processing Trade Goods

Article 30

The operating enterprise shall process and re-export the imported materials within the prescribed time limit, and shall report to
the customs for verification and writing-off within 30 days from the day of export of the last batch of finished products under the
Manual of Processing Trade or the day of expiration of the Manual of Processing Trade.

Where the contract concluded by an operating enterprise with the foreign party is terminated before expiration, the enterprise shall
report to the customs for verification and writing-off within 30 days from the day of termination of the contract.

Article 31

The operating enterprise shall, when reporting for verification and writing-off, faithfully declare the information about the imported
materials, the finished products, for export leftover materials, residual materials, inferior products, byproducts, and unit consumption,
etc, and shall submit to the customs the Manual of Processing Trade, the special customs declaration form for import and export of
processing trade goods, as well as the other documents that the customs requires.

Article 32

The customs shall accept the report for verification and writing-off if the documents are complete and valid upon examination. If
the customs rejects the application, it shall notify the enterprise of the reasons in writing, and the enterprise shall report for
verification and writing-off again pursuant to the provisions.

Article 33

The customs may make the verification and writing-off through paper documents or electronic data, and may go to the factories to make
inspections if necessary, and the enterprise shall render cooperation.

The customs shall make the verification and writing-off within 30 days from the day of the acceptance of the report. Where it is necessary
to extend the period due to special circumstances, it may be extended for 30 days upon approval of the director of the customs directly
under the GAC or the director of the subordinate customs authorized thereby.

Article 34

Where the imported materials or finished products under processing trade are instead sold on the domestic market due to certain reasons,
the customs may, on the strength of the valid document of approval for domestic sale issued by the competent authority, collect taxes
on the bonded imported materials according to law and collects additional interest for late tax collection. Where the imported materials
fall within the import restrictions imposed by the state, the operating enterprise shall also submit the import license to the customs.

Article 35

Where the operating enterprise returns the imported materials under processing trade out of China, the customs shall make the verification
and writing-off on the strength of the relevant certificate of returning.

Where the operating enterprise abandons the processing of goods upon approval of the customs, the provisions of the customs on the
administration of abandoned import goods shall be followed. And the customs shall make the verification and writing-off on the strength
of the relevant certificates of acceptance of the abandoning.

Article 36

The leftover materials, residual materials, inferior products, and byproducts generated by the operating enterprise in the production
process, and the bonded goods suffering losses from disasters shall be dealt with in accordance with the provisions of the customs
on the administration of such materials and goods. The customs shall make the verification and writing-off on the strength of the
relevant documents.

Article 37

If an operating enterprise loses its manual of processing trade, it shall report to the customs in good time.

The customs shall write off the lost manual of processing trade after handling the case in accordance with the relevant provisions.

Article 38

With respect to the Manual of Processing Trade that is allowed to write off upon verification, the customs shall issue the Notification
of the Conclusion of Verification and Written-off to the operating enterprise.

Article 39

Where the operating enterprise has provided guarantee, the customs shall discharge the guarantee pursuant to the provisions after
the verification and writing-off is concluded.

Article 40

The records of processing trade goods and the written-off documents shall be kept for 3 years from the day of conclusion of the verification
and writing-off of the manual of processing trade.

Article 41

Where a processing trade enterprise is split, merged, or becomes insolvent, it shall report to the customs in good time and finish
the customs formalities.

Where the processing trade goods are sealed by the people’s court or the relevant law enforcement department, the processing trade
enterprise shall report to the customs within 5 workdays from the day of the sealing of those goods.

Chapter V Legal Liabilities

Article 42

If any party, in violation of the provisions hereof, commits smuggling or any other acts against customs control, the customs shall
deal with the offender in accordance with the relevant provisions of the Customs Law of the People’s Republic of China and the Implementation
Rules of Administrative Punishment of the Customs Law of the People’s Republic of China. And if a crime has been constituted, the
offender shall be subjected to criminal liabilities.

Chapter VI Supplementary Provisions

Article 43

Where a bonded factory carries out processing trade, the provisions on the administration of bonded factories in the processing trade
shall be followed.

Article 44

Where a bonded group in the processing of imported materials carries out processing trade, the provisions of the customs on the administration
of bonded groups in the processing of imported materials shall be followed.

Article 45

Where a processing trade enterprise subject to computer network supervision carries out processing trade, the provisions of the customs
on the administration of computer network control of processing trade enterprises shall be followed.

Article 46

Where a processing trade enterprise carries out processing trade in such areas under special customs supervision as bonded zones or
export processing zones, the provisions of the customs on the administration of areas under special customs supervision such as bonded
zones and export processing zones shall be followed.

Article 47

The declaration and verification of unit consumption shall be carried out in accordance with the provisions of the customs on the
administration of unit consumption of processing trade.

Article 48

Separate provisions shall be formulated with respect to the administration of the tax refund by the customs after the export of processing
trade goods on which taxes have been collected upon import.

Article 49

The power to interpret the present Measures shall remain with GAC.

Article 50

The present Measures shall come into force as of April 1st, 2004.



 
the General Administration of Customs
2004-02-26

 






NOTICE OF THE STATE ADMINISTRATION OF FOREIGN EXCHANGE ON RELEVANT ISSUES CONCERNING THE ADMINISTRATION ON COMMISSION SALE OF FOREIGN CURRENCY TRAVELERS CHECK

State Administration of Foreign Exchange

Notice of the State Administration of Foreign Exchange on Relevant Issues concerning the Administration on Commission Sale of Foreign
Currency Travelers Check

HuiFa [2004] No.15

March 1st, 2004

The branches and departments of foreign exchange administration of the State Administration of Foreign Exchange of all provinces,
autonomous regions, and municipalities directly under the Central Government, the branches of Shenzhen, Dalian, Qingdao, Xiamen,
and Ningbo, and all the Chinese-funded designated foreign exchange banks:

With a view to strengthening supervision over the flowing of foreign currency, and regulating the administration on foreign currency
travelers check, and in accordance with the “Provisions on the Management of Settlement, Sales and Payment of Foreign Exchange” (HuiFa
[1996] No.210), the Interim Measures for the Administration on Carrying Foreign Currency Cash to Enter and Exit the Territory (HuiFa
[2003] No.102), and the relevant provisions, we hereby make the following notice on the relevant issues concerning the commission
sale of foreign currency travelers check.

I.

The term “foreign currency travelers check” as mentioned in this Notice refers to the note, which is sold on commission basis by domestic
commercial banks (hereinafter referred to as the “banks”), and printed by overseas banks or special financial institutions, with
the issuing institution as the final payer and with the convertible currency as the price calculation and settlement currency as
well as with fixed denomination.

II.

The objects to whom the foreign currency travelers check is commissioned to sell, may be the domestic institutions, foreign institutions
within the territory of China, or domestic resident individuals or non-resident individuals.

III.

The term “non-resident individuals” as mentioned in this Notice shall refer to foreign natural persons (including person without nationality),
Hong Kong, Macao, and Taiwan compatriots, and Chinese natural persons who hold the passport of the People’s Republic of China but
have obtained the right of permanent residence overseas.

IV.

The foreign currency travelers check sold by the banks on commission basis is limited in principle to overseas traveling, going on
a pilgrimage to sacred places, visiting or meeting relatives, overseas hospitalization, studying abroad and other foreign payment
under the non-trade item, and shall not be used for foreign payment under trade item or capital item.

V.

When handling the business of commission sale of foreign currency travelers check, the banks shall make examination strictly in accordance
with the “Provisions on the Management of Settlement, Sales and Payment of Foreign Exchange” and the “Detailed Rules for the Implementation
of the Administration on Purchase of Foreign Exchange by Domestic Residents” (HuiFa [2002] No.68) and the Notice on Relevant Issues
concerning Regulation of Foreign Exchange Management on Non-resident Individuals (HuiFa [2004] No. 6) and the pertinent provisions,
and handle purchasing formalities for those meeting the requirements. No bank shall handle purchase formalities for those not meeting
the requirements.

VI.

A domestic institution or a foreign institution within the territory of China, applying for purchasing foreign currency travelers
check, shall buy it with the capital under the current foreign exchange account, foreign exchange capital account, and in other foreign
exchange accounts specifying that the money may be used for outlays under current account, or with the foreign exchange purchased
by using the capital of the Renminbi account. No foreign currency travelers check shall be purchased by using foreign currency cash
or Renminbi cash.

VII.

A domestic institution or a foreign institution within the territory of China shall, when purchasing foreign currency travelers check,
submit the following certification documents:

1.

Application for purchase;

2.

Official documents of approval for task of going abroad or passport with effective visa;

3.

Budget form for fees for going abroad; and

4.

Other certification documents.

The banks shall examine and verify the truthfulness of the aforesaid certification documents, and handle formalities for purchase
of foreign currency travelers check for those meeting the requirements.

VIII.

The domestic resident individuals may purchase foreign currency travelers check with the capital in their foreign exchange deposit
accounts or with foreign currency cash, or with the capital in their Renminbi accounts or with the foreign exchange purchased by
using Renminbi cash.

IX.

Non-resident individuals may purchase foreign currency travelers check with the capital in their foreign exchange deposit accounts
or with foreign currency cash.

The legal Renminbi income of the non-resident individuals within the territory of China may be used for purchasing foreign currency
travelers check after being converted into foreign exchange in accordance with the pertinent provisions.

X.

Where a resident individual or non-resident individual purchases foreign currency travelers check with the capital in his foreign
exchange cash accounts, he shall handle it according to the provisions as follows:

1.

Where the foreign currency travelers check purchased at one time is equivalent to 10 thousand dollars or less, he shall file an application
to the bank with the certification documents as follows:

(1)

Application for purchase;

(2)

Effective identification certificate of the person himself;

(3)

Passport with effective entry visa of the country or region, which has been properly handled, or the pass to Hong Kong and Macao regions
(including the pass for coming-and-going to Hong Kong and Macao regions).

The banks shall examine and verify the truthfulness of the aforesaid certification documents, and handle formalities for purchasing
foreign currency travelers check for those in conformity with the provisions.

2.

Where the foreign currency travelers check purchased at one time is equivalent to over 10 thousand dollars up to 50 thousand dollars,
he shall file an application to the bank with the following certification documents:

(1)

Application for purchase;

(2)

Effective identification certificate of the person himself;

(3)

Passport with effective entry visa of the country or region, which has been properly handled, or the pass to Hong Kong and Macao regions
(including the pass for coming-and-going to Hong Kong and Macao regions); and

(4)

Relevant documents, which can prove the truthfulness of the purpose of the use of the foreign currency travelers check.

The banks shall examine and verify the truthfulness of the aforesaid certification documents, and handle formalities for purchasing
foreign currency travelers check for those in conformity with the provisions.

3.

Where the foreign currency travelers check purchased at one time is equivalent to over 50 thousand dollars, he shall, on the strength
of the certification documents as prescribed in paragraph 2 of the present Article, file an application to the foreign exchange administration
at the place where it is located, who shall then examine and verify the truthfulness thereof. And the banks shall handle formalities
for purchasing foreign currency travelers check for him according to the approval documents issued by the local foreign exchange
administration.

XI.

Where a domestic resident individual or non-resident individual purchases foreign currency travelers check with the capital in their
foreign currency cash deposit accounts or with foreign currency cash, he shall handle it according to the provisions as follows:

1.

Where the foreign currency travelers check purchased at one time is equivalent to 10 thousand dollars or less, he shall file an application
to the bank with the certification documents as follows:

(1)

Application for purchase;

(2)

Effective identification certificate of the person himself;

(3)

Passport with effective entry visa of the country or region, which has been properly handled, or the pass to Hong Kong and Macao regions
(including the pass for coming-and-going to Hong Kong and Macao regions); and

(4)

A domestic resident individual shall also provide the bank withdrawal certificate and other certification documents that can prove
his legal foreign exchange resources. A non-resident individual shall also provide the customs declaration form for the amount of
foreign currency cash declared by him when he enters China, and other certification documents that can prove his legal foreign exchange
resources.

The banks shall examine and verify the truthfulness of the aforesaid certification documents, and handle formalities for purchasing
foreign currency travelers check for those in conformity with the provisions.

2.

Where the foreign currency travelers check purchased at one time is equivalent to over 10 thousand dollars up to 20 thousand dollars,
he shall file an application to the bank with the certification documents as follows:

(1)

Application for purchase;

(2)

Effective identification certificate of the person himself;

(3)

Passport with effective entry visa to the country or region, which has been properly handled, or the pass to Hong Kong and Macao regions
(including the pass for coming-and-going to Hong Kong and Macao regions); and

(4)

A domestic resident individual shall also provide the bank withdrawal certificate and other certification documents that can prove
his legal foreign exchange resources. A non-resident individual shall also provide the customs declaration form for the amount of
foreign currency cash declared by him when he enters China, and other certification documents that can prove his legal foreign exchange
resources; and

(5)

Relevant documents that can prove the truthfulness of its purpose.

The banks shall examine and verify the truthfulness of the aforesaid certification documents, and handle formalities for purchasing
foreign currency travelers check for those in conformity with the provisions.

3.

Where the foreign currency travelers check purchased at one time is equivalent to over 20 thousand dollars, he shall, on the strength
of the certification documents as prescribed in paragraph 2 of the present Article, file an application to the foreign exchange administration
at the place where it is located, who shall then examine and verify the truthfulness thereof. And the banks shall handle formalities
for purchasing foreign currency travelers check for him according to the approval documents issued by the local foreign exchange
administration.

XII.

Where a domestic resident individual purchases foreign currency travelers check with the foreign exchange purchased in Renminbi, the
bank shall handle the formalities for purchase of foreign exchange with Renminbi in accordance with the pertinent provisions of the
“Detailed Rules for the Implementation of the Administration on Purchase of Foreign Exchange by Domestic Resident Individuals”. The
domestic resident individuals may decide by themselves the amount of foreign currency travelers check they will purchase within the
quota of the approved foreign exchange purchase.

XIII.

When purchasing foreign currency travelers check, in case the purchaser can not obtain the effective visa beforehand because of special
circumstances, he shall file an application to the banks or foreign exchange administrations respectively according to the limits
as follows:

1.

Where the equivalence is 10 thousand dollars or below, the purchaser shall file an application to the bank with the pertinent certification
documents, and the bank shall handle the formalities for him by referring to the aforesaid provisions after making examination on
the truthfulness thereof; and

2.

Where the equivalence is over 10 thousand dollars, the purchaser shall file an application to the local foreign exchange administration
with the pertinent certification documents. After the local foreign exchange administration has made examination on it, the bank
shall handle formalities for the purchase of foreign currency travelers check upon the strength of the approval documents issued
by the local foreign exchange administration.

XIV.

When handling formalities for purchasing foreign currency travelers check, the banks shall handle formalities for declaration of the
statistics on balance of international payment as prescribed.

XV.

Where a purchaser purchases foreign currency travelers check at one time by using the capital in his foreign currency cash account
or using foreign currency cash, and the amount of the foreign currency travelers check exceeds the equivalence of 10 thousand dollars,
the bank shall have them itemized, and handle formalities for report on large and doubtful payment transaction in accordance with
the “Provisions on Anti-money- laundering through Financial Institutions” (HuiFa [2003] No.1) and the “Measures for the Administration
of Reporting Large and Doubtful Payment Transactions”(HuiFa [2003] No. 3) and the relevant provisions.

XVI.

The banks shall make statistics separately on the number and amount of the business of commission sale for foreign currency travelers
check and the business of foreign currency exchange, and have them kept for future reference.

XVII.

This Notice shall enter into force as of April 1st, 2004.

All the branches shall, after receiving this Notice, transmit it to their subordinated sub-branches, foreign-funded banks and relevant
entities as soon as possible. And all the Chinese-funded designated foreign exchange banks shall transmit it to the branches or sub-branches
subject to them as soon as possible. In case any problem arises in the implementation, please feedback it to the State Administration
of Foreign Exchange in good time.



 
State Administration of Foreign Exchange
2004-03-01

 






THE PROVISIONS ON THE ADMINISTRATION OF FOREIGN-FUNDED ADVERTISING ENTERPRISES

State Administration for Industry and Commerce, Ministry of Commerce

Order of the State Administration for Industry and Commerce and the Ministry of Commerce

No. 8

The Provisions on the Administration of Foreign-funded Advertising Enterprises, which were deliberated and adopted by the State Administration
for Industry and Commerce and the Ministry of Commerce, are hereby promulgated.

Wang Zhongfu, Director General of the State Administration for Industry and Commerce

Bo Xilai, Minister ofthe Ministry of Commerce

March 2nd, 2004

The Provisions on the Administration of Foreign-funded Advertising Enterprises

Article 1

With a view to strengthening the administration on the foreign-funded advertising enterprises, and promoting the sound development
of advertising industry, the present Provisions are formulated in accordance with the laws and administrative regulations governing
the management of foreign investments and advertisements.

Article 2

“Foreign-funded advertising enterprises” as mentioned in the present Provisions refers to the Sino-foreign equity joint enterprises
and Sino-foreign contractual joint ventures lawfully engaging in advertising operations (hereinafter referred to as Sino-foreign
equity joint or contractual advertising enterprises, the same below) and foreign-funded advertising enterprises.

Article 3

Establishing a foreign-funded advertising enterprise, one shall abide by the present Provisions as well as the Law of the People’s
Republic of China on Sino-foreign Equity Joint Enterprises, the Law of the People’s Republic of China on Sino-foreign Contractual
Joint Enterprises, the Law of the People’s Republic of China on Foreign-funded Enterprises, the Advertising Law of the People’s Republic
of China, Regulations on the Management of Advertisements, the Regulations on the Qualifications of Advertising Operators or Issuers
of Advertisements and the Phraseology for Determining the Business Scope of Advertising, and other relevant laws, regulations and
rules.

Article 4

The project proposal and the feasibility study report of a foreign-funded advertising enterprise shall be subject to the examination
and approval of the State Administration for Industry and Commerce (SAIC) and its authorized administration for industry and commerce
of provincial level. The contracts and articles of associations of a foreign-funded advertising enterprise shall be subject to the
examination and approval of the Ministry of Commerce and its authorized administrative department of the provincial level.

Article 5

A foreign-funded advertising enterprise that meets the prescribed conditions may engage in designing, making, issuing, or agency of
various advertisements businesses both home and abroad. The specific business scope shall be subject to the examination and approval
of the SAIC and its authorized administration for industry and commerce of provincial level in pursuance of the Regulations on the
Qualifications of Advertising Operators or Issuers of Advertisements and the Phraseology for Determining the Business Scope of Advertising.

Article 6

The establishment of a Sino-foreign equity joint and contractual advertising enterprise, one shall conduct according to the procedures
as follows:

(1)

The main Chinese partner shall submit the documents as listed in Article 12 to the local administration for industry and commerce
competent for examining and approving the registration of foreign-funded enterprises, who shall give an opinion on the preliminary
examination, then submit the aforesaid documents to the administration for industry and commerce of the provincial level authorized
by the SAIC for examination and approval, or submit them to the SAIC for examination and approval via the administration for industry
and commerce of a province, autonomous region, municipality directly under the Central Government or city directly under State planning
upon examination and approval.

The SAIC and its authorized administration for industry and commerce of the provincial level shall make a decision on approval or
disapproval within 20 days as of the day when they received the complete set of documents.

(2)

After obtaining the Opinion on the Examination and Approval of Foreign-funded Advertising Enterprise Project issued by the SAIC or
its authorized administration for industry and commerce of the provincial level, the main Chinese partner shall submit the documents
as listed in Article 13 to the administrative department of commerce of the provincial level where the to-be-established enterprise
is located. After it is approved by the administrative department of commerce of the provincial level upon examination, a Foreign-funded
Enterprise Approval Certificate shall be issued. If it is disapproved, written explanations shall be given.

(3)

The main Chinese partner shall, pursuant to the relevant regulations on enterprise registration, handle the enterprise registration
formalities in the SAIC or in its authorized administration for industry and commerce competent for examining and approving the registration
of foreign-funded enterprise on the strength of the Opinion on the Examination and Approval of the Foreign-funded Advertising Enterprise
Project issued by the SAIC and its authorized administration for industry and commerce, the Foreign-funded Enterprise Approval Certificate
issued by the administrative department of commerce of the provincial level and other documents as required by the laws and regulations.

Article 7

The establishment of a foreign-funded advertising enterprise, one shall conduct according to the procedures as follows:

(1)

The foreign investor shall submit to the SAIC the documents as listed in Article 14 .

The SAIC shall make a decision on approval or disapproval within 20 days as of the day it receives the complete set of documents.

(2)

After obtaining the Opinion on the Examination and Approval of Foreign-funded Advertising Enterprise Project issued by the SAIC, the
foreign investor shall submit the documents listed in Article 15 to the administration for industry and commerce of the provincial
level where the to-be-established enterprise is located. The administration for industry and commerce of the provincial level shall
give a preliminary examination opinion and submit the aforesaid documents to the Ministry of Commerce for examination and approval
within 20 days.

The Ministry of Commerce shall make a decision on approval or disapproval within 20 days as of the day it receives the documents.
After examination and approval, a Foreign-funded Enterprise Approval Certificate shall be issued.

(3)

The foreign investor shall, according to the relevant regulations on the enterprise registration, go through the enterprise registration
formalities in the SAIC on the strength of the Opinion on the Examination and Approval of the Foreign-funded Advertising Enterprise
Project issued by the SAIC, the Foreign-funded Enterprise Approval Certificate issued by the administrative department of commerce
of the provincial level and other documents as prescribed in the laws and regulations.

Article 8

Where a foreign-funded advertising enterprise files an application for establishing a branch, it shall conduct according to the procedures
as follows:

(1)

It shall submit the documents as listed in Article 16 to the local administrative department of commerce and the administration for
industry and commerce of the provincial level separately;

(2)

The local administrative department of commerce of the provincial level shall make a decision on approval or disapproval after consulting
the administration for industry and commerce of the same level. Where it approves, it shall simultaneously send a copy of approval
document to the administrative department of commerce of the provincial level where the to-be-established branch is located and the
administration for industry and commerce of the provincial level; if it disapproves, it shall give written explanations; and

(3)

It shall handle the enterprise registration formalities in the administration for industry and commerce competent for examining and
approving the registration of foreign-funded enterprises where the to-be-established branch is located on the strength of the approval
documents on establishment of branches and other documents as prescribed by the laws and regulations.

Article 9

Establishing a Sino-foreign equity joint or contractual advertising enterprise, the applicant shall not only meet the conditions as
provided for in the relevant laws and regulations, but also meet the following requirements:

(1)

All partners shall be enterprises engaging in advertising business;

(2)

All partners shall have existed and have engaged in advertising business for not less than 2 years since establishment; and

(3)

Having advertising achievements.

Article 10

Establishing a foreign-funded advertising enterprise, the applicant shall not only meet the relevant conditions as provided for in
the laws and regulations, but also meet the following conditions:

(1)

The investor shall be an enterprise mainly engaging in advertising business; and

(2)

The investor has existed and has engaged in advertising business for not less than 3 years since establishment.

Article 11

Where a foreign-funded advertising enterprise files an application for establishing a branch, it shall meet the following basic conditions:

(1)

Having paid up the registered capital; and

(2)

Its annual business volume is not less than RMB 20 million Yuan.

Article 12

Applying for the establishment of a Sino-foreign equity joint or contractual advertising enterprise, the main Chinese partner shall
submit the following documents to the SAIC or its authorized administration for industry and commerce of the provincial level according
to the procedures as provided for in Article 6 :

(1)

The application for the establishment of Sino-foreign equity joint or contractual enterprise;

(2)

The Notice on the Pre-approval of Enterprise Name;

(3)

The resolutions made by the partners’ shareholders’ assembly (board of directors);

(4)

The project proposal for the establishment of Sino-joint equity joint or contractual enterprise and the feasibility research report
jointly formulated by all partners;

(5)

The registration certifications of all partners;

(6)

The credit-standing certifications of all partners;

(7)

The bylaws for advertising management; and

(8)

The preliminary examination opinions of the local administration for industry and commerce.

Article 13

Applying for the establishment of a Sino-foreign equity joint or contractual advertising enterprise, the applicant shall, in accordance
with Article 6 , submit the following documents to the administrative department of commerce of the provincial level:

(1)

The Opinion on the Examination and Approval of Foreign-funded Advertising Enterprise Project issued by the SAIC or its authorized
administration for industry and commerce of the provincial level;

(2)

The contract for establishing a foreign-funded advertising enterprise and articles of association;

(3)

The project feasibility research report;

(4)

The registration certifications of all partners;

(5)

The credit-standing certifications of all partners;

(6)

The Notice on the Pre-approval of Enterprise Name;

(7)

The bylaws for advertising management; and

(8)

The preliminary examination opinions of the local administrative department of commerce.

Article 14

Applying for the establishment of a foreign-funded advertising enterprise, the investor shall submit the following documents to the
SAIC according to the procedures prescribed in Article 7 :

(1)

The application for the establishment of foreign-funded advertising enterprise;

(2)

Resolutions of the investor’s shareholder’s assembly (board of directors);

(3)

The project proposal formulated by an investor and the feasibility research report;

(4)

The registration certification of the investor;

(5)

The credit-standing certification of the investor; and

(6)

The Notice on the Pre-approval of Enterprise Name.

Article 15

Establishing a foreign-funded advertising enterprise, the foreign investor shall submit the following documents to the Ministry of
Commerce according to the procedures prescribed in Article 7 :

(1)

The application for establishing a foreign-funded advertising enterprise;

(2)

The Opinion on the Examination and Approval of Foreign-funded Advertising Enterprise Project;

(3)

The project proposal and feasibility research report formulated by the investor;

(4)

The registration certification of the investor;

(5)

The credit-standing certification of the investor; and

(6)

The articles of association for the establishment of the foreign-funded advertising enterprise.

Article 16

Where a foreign-funded advertising enterprise files an application for establishing a branch, it shall submit the following documents
to the administrative department of commerce of the provincial level and the administration for industry and commerce of the same
level:

(1)

The application of a foreign-funded advertising enterprise for establishing a branch;

(2)

The resolution of the board of directors;

(3)

The annual audit report on advertising operations;

(4)

The Enterprise Business License;

(5)

The business place certification; and

(6)

The enterprise’ capital verification report.

Article 17

After establishing a foreign-funded advertising enterprise, it shall, if any of the following circumstances occurs, report for approval
separately and modify the registration of the enterprise according to the procedures as provided for in Articles 6 and 7:

(1)

Modifying a partner or transferring equity;

(2)

Modifying the scope for advertising business; or

(3)

Modifying the registered capital.

Article 18

while establishing an advertising enterprise, a foreign investor may entrust a qualified agency to handle the application formalities
for it.

Article 19

All the documents required to submit according to the present Provisions shall be expressed in Chinese.

Article 20

Where a foreign investor who invests in advertising industry by merging a domestic advertising enterprise, he shall handle the formalities
as provided for in the relevant regulations and the present Provisions on merge of domestic enterprises by foreign investors.

Article 21

Where investors from Hong Kong, Macao and Taiwan establish advertising enterprises in the Mainland of China, they shall handle the
formalities by referring to the present Provisions.

Article 22

Where a foreign-funded enterprise files an application for increasing advertising business, it shall handle the formalities by referring
to the present Provisions.

Article 23

Foreign investors are allowed to hold majority equity as of the promulgation date of the present Provisions, which shall be not more
than 70% of the total equity. Foreign investors are allowed to establish foreign-funded advertising enterprises as of December 10th,
2005.

Article 24

The responsibility to interpret the present Provisions shall remain with the SAIC and the Ministry of Commerce.

Article 25

The present Provisions shall come into effect as of the promulgation. Some Provisions on the Establishment of Foreign-funded Advertising
Enterprises ([1994] No. 304) printed and distributed by the State Administration for Industry and Commerce shall be repealed simultaneously,
and any other documents contradictory to the present Provisions shall be null and void simultaneously.

Attachment:

With a view to promoting the establishment of Hong Kong and Mainland and Macao and Mainland closer economic partnership, encouraging
Hong Kong service providers and Macao service providers to establish advertising enterprises in the Mainland, the following supplementary
provisions governing Hong Kong and Macao investors’ investments in advertising industry are formulated in accordance with the Mainland
and HK Closer Economic Partnership Arrangement and the Mainland and Macao Closer Economic Partnership Arrangement:

1. As of January 1st, 2004, Hong Kong service providers and Macao service providers are allowed to establish wholly-funded advertising
enterprises.

2. Hong Kong service providers or Macao service providers shall meet the definition of “the service providers” and other relevant
requirements in the Mainland and HK Closer Economic Partnership Arrangement or in the Mainland and Macao Closer Economic Partnership
Arrangement.

3. A Hong Kong service provider or Macao service provider shall be a legal person engaging in advertising operations (including the
circumstance that the advertising isn’t its major business).

4. Where any other provisions on investments in the Mainland advertising industry made by Hong Kong service providers and Macao service
providers contradictory to the present Provisions, the latter shall prevail.



 
State Administration for Industry and Commerce, Ministry of Commerce
2004-03-02

 






CIRCULAR OF THE STATE ADMINISTRATION OF TAXATION ON INTENSIFYING THE ADMINISTRATION OF COLLECTION OF INDIVIDUAL INCOME TAX OF FOREIGN EMPLOYEES

the State Administration of Taxation

Circular of the State Administration of Taxation on Intensifying the Administration of Collection of Individual Income Tax of Foreign
Employees

Guo Shui Fa No. 27 [2004]

March 5, 2004

aus of state taxation and those of local taxation of all provinces, autonomous regions, municipalities directly under the Central
Government and cities directly under state planning, and all the entities of the Administration,

With the economic globalization and the continuous advance of the opening to the outside world, more and more foreign employees work
in our country or engage in business activities. Due to the great mobility of foreign employees, the individual income tax policies
involved become more complicated, which has brought about some difficulties for foreign employees to make accurate judgment on their
tax paying obligations and for taxation authorities to supervise tax resources. And there frequently occurs the under-declaration
and underpayment of individual income tax. With a view to intensifying the administration on individual income tax of foreign employees
and on tax payment services, and further improving the quality and efficiency of the administration of tax collection, the relevant
issues are hereby notified as follows:

I.

Enhanrstanding and perfecting administration mechanismThe individual income tax of foreign employees is strongly policy-related, which
relates to not only the issues on the determination and division of the international taxation jurisdiction, but also the specific
policies and procedures for computing the taxable income and the tax payable and is the important content of international taxation
administration. Therefore, it has to do with not only the guarantee of the state revenue, but also the maintenance of tax sovereignty
of the state to intensify the administration of the collection of individual income tax of foreign employees and to make them to
properly perform their obligations of tax payment. All the localities shall sharpen the awareness of the importance of the administration
work for collecting individual income tax of foreign employees, set up and perfect the system of post and responsibility for the
international taxation administration, enrich professionals, and improve and regulate the procedures for administration, so as to
provide safeguards for the administration of individual income tax of foreign employees.

II.

Standardizing the law enforcement to ensure the fulfillment of the policiesThe policies applicable to the individual income tax of
foreign employees include the tax laws and regulations of China, tax agreements signed between the Chinese government and the foreign
governments. All the localities shall strengthen the self-capability training, improve the vocational skills of tax staff members
and accurately grasp the relevant policies. The law enforcement acts shall be further standardized to make strict the tax laws and
disciplines and rectify the procedures for the administration of tax collection so as to ensure the fulfillment of the policies concerning
the individual income tax of foreign employees and provide an open, fair and just taxation environments for foreign employees.

III.

Improving services to facilitate foreign employees to pay taxes according to law It is the function and duty of tax authorities to
intensify the administration of collection of individual income tax of foreign employees and to provide high-quality tax payment
services. All the localities shall take effective measures to earnestly solve difficulties and problems encountered by foreign employees
in their declaration of tax payment. Tax policies shall be propagated through internet, newspapers and periodicals, televisions,
broadcast and other media. Tutorships shall be made especially to foreign employees and their withholding agents, and smooth consultation
channels shall be provided for them, so as to help them understand the relevant tax laws and regulations of China, be familiar with
the procedures for the administration of tax collection and improve their observance of tax laws. The inter-department cooperation
shall be strengthened, and smooth information communication channels shall be established by strengthening the cooperation between
the departments of entry and exit administration, industry and commerce, customs, foreign trade and economy, education, culture,
physical education, science and technology and etc., as so to timely grasp the information on employment and flow of foreign employees
and to lay a good foundation for supervision of tax resources.

IV.

Intensifying the administration of tax collection and doing a good job for recovering the overdue taxesAll the localities shall carry
out a recovery of overdue taxes before the end of 2004, which is mainly designed to encourage taxpayers to make self-examination
and corrections. And the specific requirements are as follows:

1.

Where a foreign employee or a withholding agent declares the unpaid tax of the previous years on his/its own initiative before the
end of June 2004, he/it shall, in addition to making up the unpaid taxes according to law, pay a surcharge for overdue payment at
0.5 percent of the overdue tax for each day in arrears; but he/it may not be punished;

2.

Where a foreign employee still fails to make up the taxes on his/her own initiative within the above-mentioned time limit, if he/she
has disguised the relevant facts, or falsely report or failed to report the taxable income for a long time, he/she shall be ordered
to pay the overdue taxes and a surcharge for overdue payment according to the provisions of the Law of the People’s Republic of China
on the Administration of Tax Collection, and shall be imposed a fine as well.

V.

This Circular shall be referred to in the administration of collection of individual income tax of compatriots from Hong Kong, Macao,
Taiwan and oversea Chinese.



 
the State Administration of Taxation
2004-03-05

 






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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