MEASURES FOR COMPULSORY LICENSING OF PATENT IMPLEMENTATION

The State Intellectual Property Office

Order of the Director of the State Intellectual Property Office

No.31

The Measures for Compulsory Licensing of Patent Implementation has passed the review of the directorate meeting, which are hereby
promulgated and will come into force on as of July15, 2003.

The State Intellectual Property Office

June 13, 2003

Measures for Compulsory Licensing of Patent Implementation

Chapter I General Provisions

Article 1

In order to standardize implementing the granting, expenses determination and termination procedures for compulsory licensing of invention
patent or patent of utility models (hereinafter referred to as the compulsory licensing), the Measures are hereby formulated in accordance
with the Patent Law of the PRC (hereinafter referred to as the Patent Law), the Implementation Rules of the Patent Law of the PRC
(hereinafter referred to as the Implementation Rules of the Patent Law) and the relevant laws and regulations.

Article 2

The State Intellectual Property Office is in charge of the acceptance and investigation of the petitions and makes decisions on compulsory
licensing, the adjudication of the use fees of compulsory licensing and the termination of compulsory licensing.

Article 3

The petitions for granting compulsory licensing, for adjudication of the use fees of compulsory licensing and for termination of compulsory
licensing shall be handled with in Chinese in a written form.

In case the certificates, certification document submitted in compliance with the Measures are in foreign languages, the parties concerned
shall provide the translation version in Chinese at the same time, and failure to submit the Chinese version will be deemed as failure
to provide the relevant certificates or certification documents.

Article 4

When petitioning for the right holders of invention or patent of utility models to offer licenses in implementing their patents but
failing to obtain such licenses in a reasonable term, the unit eligible for such implementation may petition for granting of the
compulsory licensing in implementing the invention patent or patent of utility models according to the provision of Article 48 of
the Patent Law.

In case an invention or utility model obtaining patent is of material technological advancement in obvious economic significance as
compared with the previous one that has obtained patent and its implementation depends on the implementation of the previous invention
or utility model, the patent holder thereof may according to the provision of Article 50 of the Patent Law petition for granting
the compulsory licensing in implementing the former patent, and vise versa.

In emergency or irregular event of the state, or for the purposes of public interest, the competent department under the State Council
is enpost_titled to grant the compulsory licensing for implementing the invention patent or patent of utility models as per the petitions
based on the provisions of Article 49 of the Patent Law.

Article 5

When authorizing the patent agency to submit the petition for compulsory licensing, the petitioner shall provide the power of attorney
and the authority indicated.

When there are no less than two petitioners without authorized patent agency, unless otherwise stated in the petition, the first petitioner
indicated in the petition shall be deemed as the representative.

Chapter II Review and Decisions of Petitions for Compulsory Licensing

Article 6

When petitioning for grant of compulsory licensing, an application for compulsory licensing should be submitted to the State Intellectual
Property Office, indicating the following items:

(I)

Name and address of the petitioner;

(II)

Nationality of the petitioner or the country where the headquarters is located;

(III)

The name, patent number, date of application and date of authorized announcement of the invention patent or patent of utility models
relating to the petitioned compulsory licensing;

(IV)

Name of the right holders of the invention patent or patent of utility models relating to the petitioned compulsory licensing;

(V)

Reasons and facts for petitioning for grant of the compulsory licensing;

(VI)

When authorizing a patent agency, the petitioner shall indicate the relevant items; and in case there is no authorized patent agency,
name, address, postcode and contact telephone of the contact person should be indicated;

(VII)

The signature or stamp of the petitioner; and if there is an authorized agency, the stamp of the agency is required also;

(VIII)

List of the attached documents;

(IX)

Other items required to state.

The petition and attached documents should be executed in two copies.

Article 7

In case a petition for compulsory licensing relating to multiple invention patent or patent of utility models involves two or more
patent right holders, different petitions should be submitted to different patent right holders.

Article 8

In any of the following cases relating to the compulsory licensing, the State Intellectual Property Office will not accept the petition
with notification to the petitioner:

(I)

the patent number of the invention patent or patent of utility models relating to the petitioned compulsory licensing is not clear
or is hard to identify;

(II)

The petitioning documents without Chinese version;

(III)

Obviously no reason available for petitioning compulsory licensing.

Article 9

In case the petitioning documents do not meet the provisions of Articles 6 and 7 of the Measures, the petitioner shall within 15 days
upon receipt of the notice make up for the documents. In case of failure to making up for the documents required, the petition will
be deemed as no submission.

The petitioner shall within a month upon the petition for compulsory licensing pay the petitioning fees of compulsory licensing; and
in case of nonpayment or insufficient payment of such petitioning fees, the petition will be deemed as no submission.

Article 10

In terms of the petitions for compulsory licensing in compliance with the provisions of the Patent Law, the Implementation Rules of
the Patent Law and the Measures, the State Intellectual Property Office shall send the copy of the petition to the patent right holders.
The patent right holders shall state their opinions within the time schedule specified. In case of no reply beyond the time schedule,
the State Intellectual Property Office may make a decision as usual.

Article 11

The State Intellectual Property Office shall review the reasons stated by the petitioner and the relevant certification documents.
In case of field verification required, the State Intellectual Property Office shall assign no less than two persons to carry out
the field verification.

In case the reasons stated by the petitioner and the relevant certification documents are insufficient or false, the State Intellectual
Property Office may prior to the refusal to the petition of compulsory licensing send notification to the petitioner for providing
the latter with an opportunity for statement of its opinions.

Article 12

In case the petitioner or the patent right holders request for hearing, the State Intellectual Property Office may organize a hearing.

The State Intellectual Property Office shall seven days before the hearing send notification to the petitioner, patent right holders
and other persons of interest.

Except for involvement of state secrets, commercial secrets or personal privacy, the hearing should be held in open session.

When the State Intellectual Property Office is holding a hearing, the petitioner, patent right holders and other persons of interest
may defend and make cross-examination.

The hearing should be recorded in writing, which should be singed or stamped upon confirmation without error by the participants.

The hearing procedure is not applicable to the petitions for grant of compulsory licensing according to the provisions of Article
49 of the Patent Law.

Article 13

In any of the following cases, the State Intellectual Property Office shall made a decision on refusal to the petition for compulsory
licensing, with notification sent to the petitioner:

(I)

the petitioner is not an eligible subject as specified by Article 4 of the Measures;

(II)

The reasons for petitioning the grant of the compulsory licensing are not in compliance wit the provisions of Articles 48, 49 and
50 of the Patent Law;

(III)

The reasons are not in compliance with the provision of Article 72 of the Implementation Rules of the Patent Law when the petition
for compulsory licensing involves the invention and creation of semiconductor technologies.

If objecting to the decision of refusal to the petition of compulsory licensing, the petitioner may institute a lawsuit with the peoples
court within three months upon receipt of the notice.

Article 14

The petitioner may withdraw its petitions for compulsory licensing from time to time, and in case the petitioner withdraw its petitions
prior to the decision by the State Intellectual Property Office, the review procedures for the petition of compulsory licensing terminates.

In case of reaching a licensing contract on patent implementation by and between the petitioner and the patent right holder prior
to the decision by the State Intellectual Property Office, timely notice should be given to the State Intellectual Property Office
and the petition for compulsory licensing should be withdrawn directly.

Article 15

In case of no reason for refusal to the petition of the compulsory licensing through review, the State Intellectual Property Office
shall make a decision on granting compulsory licensing, with the following items stated:

(I)

Name and address of the individual or unit obtaining the compulsory licensing for patent implementation;

(II)

The name, patent number, date of application and date of authorized announcement of the invention patent or patent of utility models
relating to the petitioned compulsory licensing;

(III)

Scope, scale and term of the compulsory licensing granted;

(IV)

Reasons, facts and legal basis for the decisions;

(V)

The stamp of the State Intellectual Property Office and the signature of the responsible persons;

(VI)

Date of decisions; and

(VII)

Other relevant matters.

The decisions on granting the compulsory licensing should be timely notified to the petitioner and the patent right holders.

Article 16

In case the patent right holders object to the decision of granting compulsory licensing, lawsuit may be brought at the peoples
court in within three months upon the receipt of the notice.

Article 17

The decision that has come into force on granting compulsory licensing should be registered on the patent register and published on
the patent gazette of the State Intellectual Property Office, the government websites and China Intellectual Property News.

Chapter III Review and Finding of the Petitions for Adjudication of the Use Fees of the Compulsory Licensing

Article 18

The petitions for the State Intellectual Property Office to determine the use fees of the compulsory licensing shall be available
for the following conditions:

(I)

Publication of the decisions on granting the compulsory licensing;

(II)

The petitioner is the patent right holder or a unit or individual that obtains the compulsory licensing

(III)

Failure to reach an agreement through mutual consultation.

Article 19

In case of petitioning for determining the use fees of the compulsory licensing, an application should be submitted for adjudication
of the use fees of the compulsory licensing, indicating the following items:

(I)

Name and address of the petitioner;

(II)

Nationality of the petitioner or the country where the headquarters of the petitioner is located;

(III)

Document number that making the decisions on granting the compulsory licensing;

(IV)

Name and address of the petitioned;

(V)

Reasons for petition of the adjudication of the use fees of the compulsory licensing;

(VI)

(VII)

The signature or stamp of the petitioner; and if there is an authorized agency, the stamp of the agency is required also;

(VIII)

List of the attached documents;

(IX)

Other items required to state.

The petition and attached documents should be executed in two copies.

Article 20

In any of the following cases relating to the petitions for the adjudication of the use fees of the compulsory licensing, the State
Intellectual Property Office may not accept the petitions, with notification sent to the petitioner:

(I)

The decisions involved on granting the compulsory licensing are not clear or not published;

(II)

The petitioning documents without Chinese version;

(III)

Obviously no reason available for petition for adjudication of the use fees of the compulsory licensing.

Article 21

In case the petitioning documents do not meet the provisions of Articles 49 of the Measures, the petitioner shall within 15 days upon
receipt of the notice make up for the documents. In case of failure to making up for the documents required, the petition will be
deemed as no submission.

The petitioner shall within a month upon the petition for compulsory licensing pay the petitioning fees of adjudication of the fsue
fees of the compulsory licensing; and in case of nonpayment or insufficient payment of such petitioning fees, the petition will be
deemed as no submission.

Article 22

In terms of the petitions for adjudication of the use fees of the compulsory licensing in compliance with the provisions of the Patent
Law, the Implementation Rules of the Patent Law and the Measures, the State Intellectual Property Office shall send the copy of the
petition to the counterpart. The counterpart shall state their opinions within the time schedule specified. In case of no reply beyond
the time schedule, the State Intellectual Property Office may make a decision as usual.

During the adjudication of the use fees of the compulsory licensing, the parties concerned may submit written opinions. The State
Intellectual Property Office may listen to the oral opinions of both parties as required by the actual circumstances of the case.

Article 23

The petitioner may withdraw its petitions for adjudication from time to time, and in case the petitioner withdraw its petitions for
adjudication prior to the decision by the State Intellectual Property Office, the adjudication procedures terminates.

Article 24

The State Intellectual Property Office shall within three months upon receipt of the petition make a decision on adjudication of the
use fees of the compulsory licensing.

Article 25

The decision on the adjudication of the use fees of the compulsory licensing shall indicate the following items:

(I)

Name and address of the individual or unit obtaining the compulsory licensing for patent implementation;

(II)

The name, patent number, date of application and date of authorized announcement of the invention patent or patent of utility models
relating to the petitioned compulsory licensing;

(III)

Reasons for the adjudication;

(IV)

The stamp of the State Intellectual Property Office and the signature of the responsible persons;

(V)

Date of decisions; and

(VI)

Other relevant matters.

The decisions on adjudication of the use fees of the compulsory licensing should be timely notified to both parties.

Article 26

In case the patent right holder and the unit or individual obtaining the compulsory implementation licensing objects to the decision
of the adjudication of the use fees of the compulsory licensing, lawsuit may be brought at the peoples court in within three months
upon the receipt of the notice.

Chapter IV Review and Decision on Terminating the Petition for Compulsory Licensing

Article 27

The compulsory licensing automatically terminates upon the expiry of the valid term of the compulsory licensing specified by the decision
on granting the compulsory licensing.

When the compulsory licensing terminates automatically, announcement should be registered on the patent register and published on
the patent gazette of the State Intellectual Property Office, the government websites and China Intellectual Property News.

Article 28

In case the reasons for compulsory licensing are eliminated without reoccurrence prior to the expiry of the valid term of the compulsory
licensing specified in the decision on granting the compulsory licensing, the patent right holders may request for the State Intellectual
Property Office to make a decision on terminating the compulsory licensing.

In case of petitioning for terminating the compulsory licensing, an application should be submitted for terminating the compulsory
licensing, indicating the following items:

(I)

Name and address of the patent right holders;

(II)

Nationality of the patent right holders or the country where its headquarters is located;

(III)

Document number that makes the decisions on the compulsory licensing requested to terminate;

(IV)

Reasons for petition of terminating the compulsory licensing;

(V)

When authorizing a patent agency, the patent right holder shall indicate the relevant items; and in case there is no authorized patent
agency, name, address, postcode and contact telephone of the contact person should be indicated;

(VI)

The signature or stamp of the patent right holder; and if there is an authorized agency, the stamp of the agency is required also;

(VII)

List of the attached documents;

(VIII)

Other items required to state.

The patent right holder shall submit the petition application and attached documents in two copies.

Article 29

In any of the following cases relating to the petitions for terminating the compulsory licensing, the State Intellectual Property
Office may not accept the petitions, with notification sent to the petitioner:

(I)

The petitioner is not the right holders of the invention patent or the patent of utility model requested under the compulsory licensing;

(II)

The document number is not clear for the decision on granting the compulsory licensing requested to terminate are not clear or not
published;

(III)

The petitioning documents without Chinese version;

(IV)

Obviously no reason available for terminating the compulsory licensing.

Article 30

In case the petitioning documents do not meet the provisions of Articles 28 of the Measures, the petitioner shall within 15 days upon
receipt of the notice make up for the documents. In case of failure to making up for the documents required, the petition will be
deemed as no submission.

Article 31

In terms of the petitions for terminating the compulsory licensing in compliance with the provisions of the Measures, the State Intellectual
Property Office shall send the copy of the petition to the unit or individual that obtains the compulsory implementation licensing.
The unit or individual that obtains the compulsory implementation licensing shall state their opinions within the time schedule specified.
In case of no reply beyond the time schedule, the State Intellectual Property Office may make a decision as usual.

Article 32

The State Intellectual Property Office shall review the reasons stated by the patent right holder and the relevant certification documents.
In case of field verification required, the State Intellectual Property Office shall assign no less than two persons to carry out
the field verification.

In case the reasons stated by the patent right holder and the relevant certification documents are insufficient or false, the State
Intellectual Property Office may prior to making decision send notification to the patent right holder for providing the latter with
an opportunity for statement of its opinions.

Article 33

When holding that the reasons for petition of terminating the compulsory licensing do not hold water through review, the State Intellectual
Property Office shall make a decision on rejecting the petition of terminating the compulsory licensing.

If objecting to the decision on rejecting to the petition of terminating the compulsory licensing, the patent right holder may institute
a lawsuit with the peoples court within three months upon receipt of the notice.

Article 34

The patent right holder may withdraw its petitions for terminating the compulsory licensing from time to time, and in case the patent
right holder withdraws its petitions prior to the decision by the State Intellectual Property Office, the relevant procedures terminates.

Article 35

In case of no reason for refusal to the petition of terminating the compulsory licensing through review, the State Intellectual Property
Office shall make a decision on terminating the compulsory licensing, with the following items stated:

(I)

Name and address of the patent right holder;

(II)

Name and address of the individual or unit obtaining the compulsory licensing for patent implementation;

(III)

The name, patent number, date of application and date of authorized announcement of the invention patent or patent of utility models
relating to the petitioned compulsory licensing;

(IV)

Document number of deciding the grant of the compulsory licensing;

(V)

Facts and legal basis for the decisions;

(VI)

The stamp of the State Intellectual Property Office and the signature of the responsible persons;

(VII)

Date of decisions; and

(VIII)

Other relevant matters.

The decision on the petition of terminating the compulsory licensing should be timely notified to the patent right holders and the
unit or individual obtaining the compulsory implementation licensing.

Article 36

In case the unit or individual obtaining the compulsory implementation licensing objects to the decision on terminating the compulsory
licensing, lawsuit may be brought forth at the peoples court in within three months upon receipt of the notice.

Article 37

The decision that has come into force on terminating the compulsory licensing should be registered on the patent register and published
on the patent gazette of the State Intellectual Property Office, the government websites and China Intellectual Property News.

Chapter V Supplementary Provisions

Article 38

The interpretation of the Measures is vested with the State Intellectual Property Office.

Article 39

The Measures shall come into force as of July15, 2003.

The State Intellectual Property Office
2003-06-13

BASIC REQUIREMENTS FOR OFFICIAL INSPECTION AND QUARANTINE CERTIFICATES OF EXPORTING COUNTRIES OR REGIONS OF ENTRY AQUATIC PRODUCTS

The State General Administration of Quality Supervision, Inspection and Quarantine

Order of the State General Administration of Quality Supervision, Inspection and Quarantine

No. 313

The Regulations on Inspection and Quarantine of Entry and Exit Aquatic Products, which were adopted at the executive meeting of the
State General Administration of Quality Supervision, Inspection and Quarantine on October 18, 2002, are hereby promulgated and shall
enter into force on December 10, 2002.

Director of the State General Administration of Quality Supervision, Inspection and Quarantine Li Changjiang

November 6, 2002

Regulations on Inspection and Quarantine of Entry and Exit Aquatic Products

Chapter 1 General Rules

Article 1

In order to strengthen the inspection and quarantine of entry and exit aquatic products and the supervision and administration thereof,
to guarantee the quality safety and sanitation of entry and exit aquatic products and to protect the safety of fishery production
and human health, these Regulations are formulated in accordance with the Law of the People’s Republic of China on Import and Export
Commodity Inspection and the implementation regulations thereof, the Law of the People’s Republic of China on Import and Export Animal
and Plant Quarantine and the implementation regulations thereof, the Law of the People’s Republic of China on Frontier Sanitation
Quarantine and the implementation regulations thereof, the Law of the People’s Republic of China on Food Sanitation, etc. and other
relevant laws and regulations.

Article 2

These Regulations shall apply to the inspection and quarantine of entry and exit aquatic products and the supervision and administration
thereof.

Article 3

Aquatic products as used in these Regulations shall refer to the aquatic animals and the products thereof (not including live aquatic
animals and the propagation materials thereof, hereinafter the same) for human consumption, including the aquatic animals like cephalochordata,
vertebrate, crustacean, chordate, molluse and aquatic plants like alga, etc. and the products thereof.

Article 4

The State General Administration of Quality Supervision, Inspection and Quarantine (hereinafter referred to as SAQSIQ) shall administer
the entry and exit inspection and quarantine and the supervision and administration thereof of the whole country in a unified way.
The entry and exit inspection and quarantine bodies set up by the SAQSIQ at the localities (hereinafter referred to as the inspection
and quarantine bodies) shall be in charge of the inspection and quarantine of entry and exit aquatic products and the supervision
and administration thereof within the areas under their respective jurisdictions.

Chapter 2 Entry Inspection and Quarantine.

Article 5

Inspection and quarantine bodies shall carry out inspection and quarantine over entry aquatic products pursuant to the state laws
and administrative regulations, the provisions of the SAQSIQ, and the inspection and quarantine requirements provided for in the
bilateral inspection and quarantine agreements, protocols and memos signed by China with the exporting countries or regions, and
shall take sanitary treatment against harmful substances when necessary.

Article 6

Quarantine of entry aquatic products shall be subject to the examination and approval of the SAQSIQ. The consignor of the entry aquatic
products or its agent shall, before singing the trade contract, go through the examination and approval formalities and obtain the
License for Quarantine of Entry Animals and Plants. Aquatic products for which the License for Quarantine of Entry Animals and Plants
hasn’t been obtained may not be imported.

Article 7

With respect to the aquatic products listed in the Catalog of Import Food Subject to Enterprise Registration, the departments of certification
and recognition of the state shall register the foreign manufacturing and processing enterprises. With respect to the aquatic products
listed in the Catalog of Import Food Subject to Enterprise Registration, if the foreign manufacturing and processing enterprises
thereof haven’t been registered, such products may not be imported.

Article 8

The SAQSIQ may, according to the needs, send personnel to the exporting countries or regions to make advance inspection of entry aquatic
products.

Article 9

Entry aquatic products must enter China through the ports accredited by the SAQSIQ. An entry port for aquatic products shall meet
the following conditions:

(1)

Having the storerooms accommodated to the quantity and scale of the entry aquatic products; a storeroom shall meet the Inspection
and Quarantine Requirements for Entry Aquatic Product Storerooms (see attachment 1), and shall be put on record with the inspection
and quarantine bureau directly under the SAQSIQ of the place where it is located;

(2)

The inspection and quarantine body of the port has the necessary professionals and facilities for carrying out inspection and quarantine
of entry aquatic products.

Article 10

Before or when the aquatic products enter China, the consignor or its agent shall apply for inspection with the inspection and quarantine
body of the entry port by taking the license for quarantine of entry animals and plants, the original of the inspection and quarantine
certificate issued by the authority of the exporting country or region, the certificate of origin, trade contract, letter of credit,
bill of lading, invoice and other relevant documents. With respect to the aquatic products listed in the Catalog of Import Food Subject
to Enterprise Registration, the registration numbers shall also be provided in the application for inspection.

The official inspection and quarantine certificate of the exporting country or region attached with the aquatic products shall meet
the Basic Requirements for Official Inspection and Quarantine Certificates of Exporting Countries or Regions of Entry Aquatic Products
(see attachment 2).

Article 11

The inspection and quarantine body shall make preliminary examination of the relevant documents submitted by the consignor or its
agent. If the requirements are met, the application for inspection shall be formally accepted, and the quantity examined and approved
in the License for Quarantine of Entry Animals and Plants shall be verified and written off. In any of the following cases, the application
shall be returned or destroyed:

(1)

Failing to obtain the License for Quarantine of Entry Animals and Plants through examination and approval formalities pursuant to
law, or the License for Quarantine of Entry Animals and Plants is invalid;

(2)

Failing to have the inspection and quarantine certificate issued by the authority of the exporting country or region, or the certificate
fails to meet the requirements;

(3)

With respect to the aquatic products listed in the Catalog of Import Food Subject to Enterprise Registration, the manufacturing enterprise
thereof hasn’t been registered.

Article 12

Vehicles from epidemic areas that carry entry aquatic products shall go through disinfection treatment under the supervision of the
inspection and quarantine body of the entry port; no unit or individual may, without the permission of the inspection and quarantine
body, unload the entry aquatic products from the vehicles.

Article 13

The inspection and quarantine body shall make on-spot inspection and quarantine over the entry aquatic products pursuant to the following
requirements, and collect or select samples for laboratory testing use pursuant to the provisions:

(1)

Checking the documents and examining the goods;

(2)

Examining whether the package meets the Basic Requirements for Package of Entry Aquatic Products (see attachment 3);

(3)

Carrying out quarantine over the salinized or dried entry aquatic products that are likely to grow plant pests.

Article 14

If any is found to have occurred to any of the entry aquatic products after on-spot inspection and quarantine, they shall be returned
or destroyed:

(1)

The goods fail to match the certificates or the goods fail to meet the inspection and quarantine requirements;

(2)

The goods are rotten and deteriorated or are polluted by poisonous and harmful substances;

(3)

The package fails to meet the Basic Requirements for Package of Entry Aquatic Products.

Article 15

The entry aquatic products that pass the on-spot inspection and quarantine shall be transported to the aquatic product storerooms,
which have been put on record with the inspection and quarantine body directly under the SAQSIQ, for storage and later laboratory
testing, and may not be transferred or processed without permission.

Article 16

With respect to the entry aquatic products that are listed in the annual plan of leftover monitoring and control promulgated by the
state, the inspection and quarantine body must, apart from finishing the necessary laboratory testing pursuant to the provisions,
make laboratory testing pursuant to the requirements of the annual plan.

Article 17

The inspection and quarantine body shall make sensory, physical and chemical, and microorganism laboratory testing over the samples
pursuant to the provisions, and shall determine the specific testing items according to the degree of risk of the entry aquatic products.

Article 18

The inspection and quarantine body of the entry port shall, according to the result of laboratory, handle the goods in the following
ways pursuant to the provisions on visa administration:

(1)

Issuing the Certification of Inspection and Quarantine of Entry Goods to those passing the inspection and quarantine;

(2)

Issuing the Notice on Inspection and Quarantine Treatment of Entry Goods to those failing the inspection and quarantine, and supervising
the non-hazardous treatment over the goods, or returning or destroying the goods. (If the consignor needs to claim compensation against
others, it may apply for issuance of the relevant certificates with the inspection and quarantine body of the entry port.

Chapter 3 Exit Inspection and Quarantine.

Article 19

Inspection and quarantine bodies shall carry out inspection and quarantine over exit aquatic products pursuant to the laws and administrative
regulations of China, the provisions of the SAQSIQ, and the inspection and quarantine requirements provided for by the bilateral
inspection and quarantine agreements, protocols, memos signed by China with the exporting countries or regions, and by the authorities
of the exporting countries and regions.

Article 20

The SAQSIQ shall monitor and control the leftovers with respect to exit aquatic products. For all the exit aquatic listed in the annual
plan of leftover monitoring and control promulgated by the state, the inspection and quarantine body must, apart from finishing the
necessary laboratory testing pursuant to the provisions, make the laboratory testing pursuant the requirements of the annual plan.

Article 21

The departments of authentication and recognition shall apply the system of sanitation registration with respect to the enterprises
that produce, process and store exit aquatic products. The production enterprises of aquatic products without sanitation registration
may not produce, process or store exit aquatic products.

Article 22

If the authorities of the exporting countries or regions require registration for the production enterprises of aquatic products of
China, the departments of authentication and recognition shall recommend the applications for foreign registration to the foreign
countries in a unified way, and shall promulgate the list of the enterprises that have obtained foreign registration.

Article 23

Before the aquatic products exit China, the consignor or its agent shall apply for inspection with the inspection and quarantine body
of the producing area pursuant to the provisions on application for inspection for entry and exit inspection and quarantine.

Article 24

If the goods pass the inspection and quarantine, the inspection and quarantine body shall issue relevant certificates and documents
pursuant to the provisions on visa administration; if the importing countries or regions have definite requirements for the inspection
and quarantine certificates, the relevant certificates shall be produced pursuant to such requirements. If the goods fail the inspection
and quarantine, the inspection and quarantine body shall issue the notice on failure, and handle the goods in the following ways
respectively:

(1)

For failure of safety and sanitation items, the goods shall not be allowed to exit China;

(2)

For failure of other items, technical treatment is allowed; and a new application for inspection may be filed after the technical
treatment.

Article 25

The inspection and quarantine body shall, pursuant to the relevant provisions of the SAQSIQ, affix inspection and quarantine marks
or seals on the exit aquatic products inspected and quarantined.

Article 26

With respect to the exit aquatic products inspected and quarantined at the producing area, if the inspection and quarantine body of
the exit port finds through the port examination that the goods fail to match the documents or the contents of the documents fail
to meet the requirements, the goods shall not be released.

Article 27

The inspection and quarantine body shall, pursuant to the Regulations on the Sanitation Registration of Production Enterprises of
Export Food, the Sanitation Criteria for Registration of Processing Enterprises of Export Aquatic Products and the relevant foreign
provisions, establish the daily supervision and administration system with respect to the enterprises that produce, process or store
export aquatic products, to supervise and administer the breeding, production, processing and storage, etc. of export aquatic products.
The production, processing, and storage enterprises that violate the requirements of supervision and administration shall be dealt
with by the inspection and quarantine body pursuant to the relevant provisions.

Article 28

The inspection and quarantine body may supervise the package of exit aquatic products pursuant to the relevant laws and regulations
and the provisions of the SAQSIQ.

Article 29

The valid terms of inspection and quarantine of exit aquatic products are:

(1)

Cooled (kept fresh) aquatic products: 2 days;

(2)

Dry-frozen and single-frozen aquatic products: 4 months;

(3)

Other aquatic products: 6 months. If the exit aquatic products exceed the valid term of inspection and quarantine, a new application
for inspection must be filed.

Chapter 4 Early Warning of Risks.

Article 30

The SAQSIQ shall apply the system of early warning of risks with respect to the entry and exit aquatic products pursuant to the relevant
provisions.

Article 31

The entry and exit aquatic products for which the early risk warning measures or fast reaction measures have been taken shall, apart
from following the relevant provisions of these Regulations, meet the relevant provisions of early warning of risks.

Chapter 5 Supplementary Rules.

Article 32

Those violating these Regulations shall be punished pursuant to the relevant laws and regulations.

Article 33

The power to interpret these Regulations shall remain with the SAQSIQ.

Article 34

These Regulations shall come into force on December 10, 2002. The Regulations on Inspection of Export Aquatic Products (No.82 [1996]
of the SAQSIQ) promulgated by the original state administration of import and export commodity inspection on April 12, 1996 shall
be abrogated at the same time.

Attachment 1:Inspection and Quarantine Requirements for Entry Aquatic Product Storerooms

Basic conditions for storehouses

(1)

Having favorable transport facilities, locating within the jurisdiction of the entry port, having operational space convenient for
conveying, and having storage volume of no less than 3,000 tons;

(2)

There is no source of pollution around the storehouse, the requirements for environment protection are met, and road surface is flat,
without logged water and exposed ground;

(3)

Having anti-pest, anti-rat and anti-mildew facilities. There is no dirt or peculiar smell in the storehouse, the environment is clean
and tidy, and the inside is arranged rationally;

(4)

The storehouse to be used to keep frozen aquatic products must be special cold storehouses for aquatic products, and may not be used
for other products. Temperature in the storehouse shall be below -18the difference in temperature between day and night shall
not exceed 1There shall be automatic temperate recording equipment, and non-mercury thermometers shall be set up in the storehouse.

(5)

Establishing a sanitation quality system including the following contents:

Guidelines and targets of sanitation quality;

Organizational structures and the duties of the organizations;

Requirements for the production and management personnel;

Sanitary requirements for environment;

Sanitary requirements for storehouses (cold storehouses) and facilities;

Sanitary requirements for storage and transport;

Control of poisonous and hazardous substances;

Quality record;

Quality system internal examination.

II.

Administration of Storehouse Entry

(1)

The storehouse shall check the first section of the Customs Clearance Form of Entry Goods produced by the inspection and quarantine
body with respect to the entry aquatic products that enter the storehouse, and shall keep the copy of the section.

(2)

The aquatic products found to be in any of the following cases shall not be allowed to enter the storehouse, and the relevant inspection
and quarantine body shall be notified without delay.

The goods fail to match the certificates, the goods are loosely packed, assembled or in neutral package;

The goods are rotten and deteriorated or have peculiar smell.

(3)

Different products (including products of different categories, different producing areas, different time of storehouse entry, and
different consignors) may not be piled up in a mix in the unified area of the storehouse, and may not be put in the same storehouse
where the home-made goods are kept. The storehouse shall be kept tidy inside, and no obstacles shall be set up.

(4)

The storehouse shall establish the check system of storehouse entry registration, special personnel shall be designated to take charge
of the storehouse entry registration of aquatic products (including the information about the registration of goods and about consignors),
the sanitation and epidemic prevention, and to assist the inspection and quarantine body in the check.

(5)

The storehouse must fill in the Manual of Quality Supervision and Administration of Storehouse of Entry Aquatic Products (hereinafter
referred to as the Manual), for check by the inspection and quarantine body.

III.

Administration of Storehouse Exit

(1)

The storehouse shall check the original of the first page of the Inspection and Quarantine Certificate of Entry Goods produced by
the inspection and quarantine body, and keep the copy of the page.

(2)

Special personnel shall take charge of the registration of storehouse exit when the products exit the storehouse.

(3)

After the products exit the storehouse, the leftovers shall be cleared away and go through necessary disinfection treatment in a timely
manner.

IV.

Supervision and Administration

(1)

The storehouse shall provide necessary equipment and conditions for the work of the inspection and quarantine personnel. When the
inspection and quarantine body carries out quarantine supervision of the storehouse pursuant to law, the storehouse must provide
close assistance, and may not conceal the information or refuse the check.

(2)

The supervision and administration of storehouses shall be organized by the inspection and quarantine bureaus directly under the SAQSIQ,
the contents include: sending personnel to the storehouses in fixed or unfixed terms to check the storage status of the entry aquatic
products, the relevant registration of storehouse entry and exit, function of the quality system, and compliance with the laws and
regulations on inspection and quarantine, including whether there are illegal entry aquatic products kept in the storehouse, or whether
the storehouse hasn’t faithfully reported to the inspection and quarantine body when finding illegal entry aquatic products, as well
as whether the inspection and quarantine marks and seals of the kept goods have been torn open or damaged during the storage period,
etc..

(3)

If the inspection and quarantine body finds through the check any violations of the relevant provisions by the storehouse, it may
order the storehouse to get right within a prescribed time limit; if the circumstances are serious, it may give a warning, suspend
the storehouse from storing entry aquatic products or cancel the qualification of the storehouse.

(4)

The storehouse shall regularly submit the statistics statements of the entry aquatic products that entered and exited the storehouse
last month to the inspection and quarantine body, which shall make the verification.

(5)

If it is needed to change the structure of a storehouse due to repairs or other reasons, consent of the inspection and quarantine
body shall be obtained, and epidemic prevention shall be carried out under the guidance of the inspection and quarantine body.

(6)

The waste generated in the course of loading and unloading of aquatic products from the storehouses must go through non-hazardous
treatment at the designated place pursuant to the requirements of the inspection and quarantine body.

Attachment 2:

Basic Requirements for Official Inspection and Quarantine Certificates of Exporting Countries or Regions of Entry Aquatic Products

The following information shall be stated in the certificate: product name (including the formal name), producing area, fishing area,
processing method, names of the production and processing enterprises and the registration numbers thereof, and certificate-issuing
department; transport means (ship means, flight number, container number, etc.), seal number, consignor, consignee, quantity/weight,
and date of production.

II.

The inspection and quarantine certificate may not be altered, must bear the official stamp and signature of the official inspection
and quarantine personnel, and P. R. China must be indicated as the destination.

III.

There must be an original of the inspection and quarantine certificate for each batch of aquatic products. And the languages used
in the certificate must be both in Chinese and English.

IV.

The certificate shall include the following matters:

֤This is to certify that:

ܵҵThe above fishery products come from the establishment approved by competent authority.

òװغ䣬ּܵල֮The products were produced, packed, stored, and transported under
sanitary condition, which were under the supervision of competent authority.

òּܵδкThe products were inspected and quarantined by competent authority
and no pathogenic bacteria, harmful substances and foreign substances regulated by the P. R. China was found.

òҪThe products meet veterinary sanitary requirements and fit for human consumption.

Date of Issue ǩ

Stampp>Official Veterinary Signatureٷҽǩ

Attachment 3:Basic Requirements for the Package of Entry Aquatic Products

Apart from having intact and durable external package and totally new, non-poisonous and non-hazardous internal and external package,
entry aquatic products shall also have on their internal and external package fixed, clear and distinguishable Chinese and English
marks, which shall indicate the following matters:

Commodity name and formal name, specs, date of production, batch number and preservation conditions of the aquatic products;

II.

Production method, including sea fishing, freshwater fishing and breeding;

III.

Producing area, including fishing sea areas of the sea fisher, and country or region where the freshwater fisher comes from, and the
country or region where the last breeding phase of the bred products is located;

IV.

Names and registration numbers of the production and processing plants;

and P. R. China must be indicated as the destination.

The State General Administration of Quality Supervision, Inspection and Quarantine
2002-11-06

CIRCULAR OF THE MINISTRY OF COMMERCE AND GENERAL ADMINISTRATION OF TAXATION ON STRENGTHENING COORDINATION OF TAXATION AND FOREIGN TRADE AND OVERCOMING THE IMPACTS OF “SARS” EPIDEMICS ON FOREIGN TRADE

The Ministry of Commerce, the General Administration of Taxation

Circular of the Ministry of Commerce and General Administration of Taxation on Strengthening Coordination of Taxation and Foreign
Trade and Overcoming the Impacts of “SARS” Epidemics on Foreign Trade

ShangGuiFa [2003] No.154

June 20, 2003

Foreign economic and trade commissions (departments and bureaus) of provinces, autonomous regions and municipalities directly under
the Central Government and municipalities separately listed on the State plan, as well as the state tax administration:

The occurrence and spreading of the SARS has added many difficulties to the various export enterprises in undertakings of commercial
activities and expansion of exports, which has become the main factor of uncertainty with impacts on the exports of our country.
Therefore, various competent departments of commerce and the state tax administration shall firmly grasp the guiding spirits of the
CPC central Committee and the State Council in balanced focus on the prevention and treatment of the SARS and the economic construction,
unify the thoughts, enhance the understanding, further strengthen the coordination of taxation and foreign trade, and make the utmost
efforts to overcome the adverse effects of the epidemics of the SARS on the export of our country, hence, safeguarding the stable
growth of foreign trade export of the year. Here is to notify you of the following matters:

Further strengthening communications of circumstance and doing well in departmental coordination

(I)

Improving and perfecting the communication mechanism for coordination of foreign trade and taxation and ensuring the accuracy and
smooth flow of information. Further intensifying the contact between the leaders of both parties concerned and their corresponding
workers, taking initiatives in communicating the progress on foreign trade exports and tax reimbursement of exports by various means
and ways of telephone, fax and email, and earnestly investigating and solving the outstanding problems during work. Timely reporting
material emergent incidents and making efforts in treatment.

(II)

Various levels of the competent department of commerce shall closely trace and analyze the impacts of the SARS epidemics on the enterprises
and product exports of our country. Questionnaire investigation should be conducted by various means based on paper, call and computer
networks, thus analyzing the impacts of the SARS epidemics on the various categories of local enterprises and product exports, especially
on the key enterprises of tax reimbursement of exports, timely reporting the relevant information to various levels of tax administrations
to facilitate joint investigation on the countermeasures and policies, thus making great efforts to reduce the impacts of the SARS
epidemics on foreign trade exports as much as possible.

(III)

Various levels of tax administrations shall keep on efforts in promoting the measures for “exemption, credit and reimbursement” of
taxes with the export commodities of production enterprises, timely communicate with the competent departments of commerce of the
same level on the relevant issues, thus jointly overcoming and solving the existing problems.

(IV)

Various levels of the competent department of commerce shall practically promote the production enterprises to speed up the collection
of the documents for tax reimbursement and timely handling with the “exemption, credit and reimbursement” of taxes. Various levels
of state tax administrations shall practically speed up handling with the review and examination on “exemption, credit and reimbursement”
of taxes, thus helping the production enterprises reduce the holding and use of capital.

(V)

Various levels of the competent departments of commerce and state tax administrations shall be increasingly alert and pay close attention
on the new trends of tax frauds, strictly prevent the wrongdoers from any tax frauds by taking chance of the SARS epidemics, and
submit timely reports on any tax fraud cases or clues of material tax frauds.

II.

Making good and sufficient use of the quotas for tax reimbursement of exports and practically accelerating the progress of the tax
reimbursement of exports

(I)

Various levels of the competent departments of commerce shall timely report to the state tax administrations on the corresponding
local exports and demands for tax reimbursement, and various levels of tax administrations shall in such special situation earnestly
do well in the work relating to tax reimbursement of exports, and speed up the progress of tax reimbursement provided all the documents
relating to tax reimbursement and the relevant electronic information are checked free of errors.

(II)

Various state tax administrations of provincial levels shall distribute the plan of tax reimbursement of exports distributed by the
General State Administration of Taxation to prefecture and municipal level and timely reimburse the export enterprises, without any
withholding or delay.

(III)

Various levels of state tax administrations shall make scientific and rational use of the plan of tax reimbursement of exports, and
priority should be taken in handling with the tax reimbursement of exports of key export enterprises, thus enhancing the competitiveness
of their export products in international market, and alleviating and releasing the adverse effects of the SARS on the foreign trade
of China.

III.

Adopting multiple ways to expand export and create benevolent environment

(I)

Various levels of the competent departments of commerce and state tax administrations shall earnestly carry out the spirits of the
Circular of the Peoples Bank of China, the MOFTEC and the General State Administration of Taxation on Handling with the Entrusted
Loan Business of the Accounts for Tax Reimbursement of Exports (Yin Fa [2001] No. 276), timely help solving the problems and difficulties
encountered by the export enterprises in the entrusted loan business of the accounts for tax reimbursement of exports, and take initiative
to coordinate with the local government in doing well in the discounting work relating to the entrusted loans of the accounts for
tax reimbursement of exports.

(II)

Various levels of the competent departments of commerce shall timely report to the commercial banks on the impacts of the SARS on
the foreign trade exports, take initiative too seek for their supports, and promote the export enterprises to obtain the entrusted
loans of the accounts for tax reimbursement of exports in a timely way.

(III)

Various levels of tax administrations shall strengthen communication and coordination with commercial banks, take initiative in coordinating
commercial banks in deployment of the entrusted loans of the accounts for tax reimbursement of exports, thus facilitating commercial
banks in querying about the credit rating of the enterprises involved in tax reimbursement of exports.

(IV)

Establishing convenient and smooth channels and ways for provision of enthusiastic and high efficiency consultation and services.
Patience should be taken in listening the problems reflected and suggestions put forth by the export enterprises, thus earnestly
and carefully answering the promoting the state policies and measures on trade management and tax reimbursement of exports; taking
efforts in protecting he initiatives of the enterprises in expanding exports and helping various categories of export enterprise
overcome the difficulties and problems encountered in production and operations.

(V)

Various levels of the competent department of commerce and state tax administrations shall be united in mutual supports and close
coordination, promote the good traditions of the cooperation of foreign trade and taxation, make efforts to overcome the adverse
impacts of the SARS, and promote the sustaining growth of foreign trade export of our country.

The Ministry of Commerce, the General Administration of Taxation
2003-06-20

INTERIM PROVISIONS ON INTRODUCING FOREIGN INVESTMENT TO REORGANIZE STATE-OWNED ENTERPRISES

The State Economy and Trade Commission, the State Administration for Industry and Commerce, the State Administration of Foreign Exchange,
the Ministry of Finance

Decree of the State Economy and Trade Commission (SETC) of the People’s Republic of China, the Ministry of Finance (MOF) of the People’s
Republic of China, the State Administration for Industry and Commerce (SAIC) of the People’s Republic of China and the State Administration
of Foreign Exchange (SAFE)

No.42

The Interim Provisions on Introducing Foreign Investment to Reorganize State-owned Enterprises is promulgated hereafter and shall
enter into force as of January 1, 2003.

Director of the SETC Li Rongrong

Minister of MOF Xiang Huaicheng

Director-general of the SAIC Wang Zhongfu

Director-general of the SAFE Guo Shuqing

November 8, 2002

Interim Provisions on Introducing Foreign Investment to Reorganize State-owned Enterprises

Article 1

In order to guide and normalize the activities of introducing foreign investment to reorganize state-owned enterprises, promote strategic
restructuring of the state-owned economy, accelerate the pace of building up a modern enterprise system in state-owned enterprises,
and protect the social stability, the Provisions is formulated in accordance with the provisions of the Company Law of the People’s
Republic of China, the Contract Law of the People’s Republic of China and state laws and regulations concerning foreign investment
and administration of state assets.

Article 2

The Provisions applies to the activities of introducing foreign investment to reorganize state-owned enterprises and corporate enterprises
with state-owned equities (financial enterprises and listed corporations are excluded) or turn them into corporate enterprises with
foreign investment (hereinafter referred to as “introducing foreign investment to reorganize state-owned enterprises”).

Article 3

Introducing foreign investment to reorganize state-owned enterprises in the Provisions includes the following circumstances:

A holder of state-owned post_title in a state-owned enterprise transfers all or part of its post_title to foreign companies, enterprises or
other economic organizations or individuals (hereinafter referred to as “foreign investors”), and the enterprise is reorganized into
an enterprise with foreign investment;

A holder of state-owned post_title in a corporate enterprise transfers all or part of its post_title to foreign investors, and the enterprise
is reorganized into an enterprise with foreign investment;

A domestic creditor of a state-owned enterprise transfers its credits to foreign investors, and the enterprise is reorganized into
an enterprise with foreign investment;

A state-owned enterprise or a corporate enterprise with state-owned equities sells all or major assets of the enterprise to foreign
investors, and the foreign investors use the assets they bought to establish an enterprise with foreign investment independently
or jointly with the enterprise that sold the assets;

A state-owned enterprise or a corporate enterprise with state-owned equities absorbs foreign investors’ investment through capital
increase and share expansion, and reorganizes the enterprise into an enterprise with foreign investment.

Article 4

State-owned enterprises and corporate enterprises mentioned in Subparagraphs 1,2,3 and 5, Article 3 of the Provisions are called
reorganized enterprises. The state-owned post_titles of state-owned enterprises and state-owned equities of corporate enterprises are
jointly called state property. Holders of state-owned post_titles and state-owned equities are jointly called holders of state property.
Holders of state property refer to departments authorized by the state or institutions whose investment is authorized by the state,
enterprises holding state-owned capital, and other economic organizations. Holders of state property, creditors of state-owned enterprises
who transfer their credits, and enterprises that sell assets are jointly called reorganizing parties.

Article 5

A reorganizing party shall select foreign investors with the following conditions:

Have the operating credit status and technological level needed by the reorganized enterprise.

Have good business reputation and management capacity.

Have good financial status and economic strength. The reorganizing party shall require the foreign investors to bring forward a rearrangement
program for improving the structure of governance of the enterprise and promoting the sustainable development of the enterprise.
The rearrangement program shall include new product development, technological transformation and related investment plan(s), measures
to strengthen the management of the enterprise, and etc.

Article 6

Introducing foreign investment to reorganize state-owned enterprises shall follow the principles listed below:

Abide by state laws and regulations, and ensure national economic safety.

Accord with requirements for the state’s industrial policies. Foreign investors are not allowed to take part in the reorganization
of an enterprise (including its directly and indirectly shareholding enterprises) whose business scope falls into the industries
to which foreign investment is forbidden according to the Industrial Guide for Foreign Investment. For an enterprise that must be
held or relatively held by Chinese shareholders, Chinese shareholders shall remain in a controlling or relatively controlling position
after the reorganization.

Benefit the economic structure adjustment, and promote the optimum allocation of state-owned capital.

Emphasize on introducing advanced technologies and management experience, establishing normalized corporate management structure,
and promoting the technological advancement and industrial upgrading of the enterprise.

Adhere to the principles of openness, justness, impartiality and trustworthiness, prevent erosion of state assets, not evade or suspend
the credits of banks and other creditors, not harm the lawful rights and interests of the employees, and protect the lawful rights
and interests of foreign investors;

Promote fair competition, and not lead to market monopoly.

Article 7

To transfer the property of a state-owned enterprise or equities of a limited liability company invested and established by a solely
state-owned company and two or more state-owned enterprises or two or more state-owned investment entities, the reorganizing party
shall solicit in advance opinions of the congress of employees of the reorganized enterprise. Transferring the equities of a corporate
enterprise shall have the agreement of the congress of shareholders of the reorganized enterprise. Transferring the credits of a
state-owned enterprise shall have the agreement of the state property holders of the reorganized enterprise. An enterprise that sells
all or major assets shall have, in advance, the agreement of its state property holders or its congress of shareholders, and inform
its creditors.

Article 8

Introducing foreign investment to reorganize state-owned enterprises shall satisfy the following requirements:

Prior to the reorganization, the holders of state property shall organize the reorganized enterprise to check assets, demarcate property
rights, clear credits and debts, invite a qualified intermediary organization to conduct financial audit, and evaluate assets according
to the Administrative Procedure for the Evaluation of State Property (Decree of the State Council No.91) and the Regulation on Issues
Concerning the Evaluation of State Property (Decree of the Ministry of Finance No.14) and other relevant regulations. The evaluation
results, after being verified or filed for record as required, become the evidence for determining the prices of the state property
and assets.

In case the controlling right of the enterprise is transferred to or all or major operating assets of the enterprise are sold to foreign
investors after the reorganization, the reorganizing party and the reorganized enterprise shall work out a program for the proper
placement of employees. The program shall be passed on the congress of employees. The reorganized enterprise shall use the existing
assets to pay the wages in arrears to its employees, the pooled funds that have not been reimbursed, the social insurance premiums
due, and other outlays. The reorganized enterprise and the employees shall choose each other. Labor contracts shall be signed again
or altered for retained employees according to law. Economic compensations shall be given to the employees whose labor contracts
have been revoked according- to law, and social insurance premiums shall be fully paid once for all to the employees who have been
handed over to social security organizations according to law, and the funds needed for the economic compensations and the social
insurance premiums shall be deducted from the net assets of the reorganized enterprise before the reorganization, or be disbursed
in priority from the proceeds that the holders of state property obtained from transferring the state property.

In case the reorganization is made in the form of selling assets, the credits and debts of the enterprise shall be inherited by the
original enterprise. If the reorganization is made in other forms, the credits and debts of the enterprise shall be succeeded by
the enterprise after the reorganization. Transfer of mortgaged or hypothecated state property or assets shall accord with relevant
provisions of the Guarantee Law of the People’s Republic of China. The debt successor shall sign with the creditors agreements on
the settlement of relevant credits and debts.

The reorganizing party shall publicize information on the reorganization, widely recruit foreign investors, investigate into the credit
status, reputation, financial status, management capacity, payment guarantee, manager skills and other aspects of the foreign investors,
and give priority to the choice of medium- and long-term investors that are able to bring in advanced technologies and management
experience, and that are from highly connected industries. The reorganizing party and the foreign investors shall, in response to
rational requests of each other, conscientiously and minutely provide relevant information and materials, and not conduct any misleading
or fraudulent activities, and undertake the obligation of keeping secrets.

In case the reorganization of the enterprise is made in the form of transferring state property or selling assets, the reorganizing
party shall give priority to open and competitive bidding in determining the foreign investors and the transfer price. Transfer through
open and competitive bidding shall go through relevant procedures according to law, and publicize relevant information on the intended
transfer of state property or intended sale of assets. Transfer through agreement shall also be handled publicly. Regardless of the
form of the transfer, the reorganizing party and the foreign investors shall sign a transfer agreement according to relevant provisions
of the state and the Provisions. The content of such transfer agreement shall include the general situation of the state property,
placement of employees, treatment of credits and debts, proportion of the transfer, transfer price, way and terms of payment, matters
concerning the property delivery, rearrangement of the enterprise, and other clauses.

Article 9

Introducing foreign investment to reorganize a state-owned enterprise shall follow the procedures below:

The reorganizing party (if two or more reorganizing parties are involved, one of them shall be determined) shall file an application
for the reorganization with the department in charge of economy and trade of its level. Application materials for the reorganization
shall be attached with a feasibility report, situations of the reorganizing party and the reorganized enterprise, conditions of the
foreign investors (including the financial reports that have been audited by certified public accountants for the past three years
and the market share of the products or services of other enterprises with actual controlling rights in the same industry within
the territory of China), the reorganization program (including programs for placement of employees, treatment of credits and debts,
and enterprise rearrangement), the business scope and equity structure of the enterprise (including its directly or indirectly shareholding
enterprises) after the reorganization, and other documents. The department in charge of economy and trade with which the application
has been filed shall check and ratify the application according to the limits of authority prescribed in the Regulation on Guiding
Foreign Investment and other related laws and regulations. In case a central enterprise and its wholly-owned or controlled enterprises
are to be reorganized, or the reorganized enterprise directly or indirectly holds equities in listed corporations, or the gross assets
of the enterprise after the reorganization are not below US$30 million, the check and ratification shall be made by the department
of the State Council in charge of economy and trade. In case the reorganization may lead to market monopoly and hinder fair competition,
a public hearing shall be organized before the check and ratification. The department in charge of economy and trade shall give an
answer whether the application is accepted within 45 days after receiving the application materials for the reorganization. If a
public hearing is necessary, the answer shall be given within three months. If the state has other regulations on the utilization
of foreign investment in industries to which a reorganized enterprise and its directly or indirectly shareholding enterprises belong,
or on the change in the nature of state-owned shares held by holders of state equities of listed corporations caused by equity change,
the said regulations shall be complied with.

The transfer agreement signed between the reorganizing party and the foreign investors shall be reported for approval according to
the relevant provisions of the Circular on Distributing the “Provisional Procedures for the Administration of Enterprises’ State
Capital and Financial Management” issued by the MOF (CaiQi [2001] No.325). The transfer agreement shall go into effect after the
approval. The transfer agreement shall be attached with the registration certificate of state property, information on the ratification
or record of the audit and asset evaluation reports of the reorganized enterprise, plan for the placement of its employees, agreement
on credits and debts, program for enterprise rearrangement, related resolutions of the reorganizing party and the reorganized enterprise,
opinions or resolutions of the congress of employees of the reorganized enterprise, and other documents.

The reorganizing party or the reorganized enterprise shall, according to law, handle the check and ratification procedures for enterprises
with foreign investment by presenting the approval documents of the reorganization application and the transfer agreement. If the
enterprise after the reorganization is a limited liability company, the procedures shall be handled according to relevant provisions
of the Company Law of the People’s Republic of China.

The enterprise after the reorganization or the investors shall, according to the provisions of registration administration regulations,
present the approval documents prescribed in Subparagraphs 1 and 3 of this Article to the original registration organ that has the
authority for registration of enterprises with foreign investment or the registration organ in its locality that has the authority
for registration of enterprises with foreign investment. If the enterprise after the reorganization is a limited liability company,
the procedures shall be handled according to relevant provisions of the Company Law of the People’s Republic of China.

The reorganizing party shall, according to relevant provisions, handle the state property delivery procedures and the ownership alteration
registration procedures by presenting the approval documents for the reorganization and the transfer agreement, the certificate of
foreign exchange registration of foreign investment and relevant documents, and entrust certified public accountants to issue a capital
verification report according to law. If the land used by the enterprise after the reorganization was state-allotted, the procedures
for check and ratification and transfer of land-use right shall be handled according to law.

Foreign exchange proceeds of the reorganizing party obtained from the transfer of state property and credits or from the sale of assets
shall be sold with the approval of the SAFE office by presenting the approval documents for the reorganization and the transfer agreements.
If a reorganized enterprise is reorganized in the form of capital increase and share expansion to attract foreign investors’ investment,
with the approval of the SAFE office, it may open a foreign exchange capital account to retain the foreign exchange capital put in
by the foreign investors.

The applications for reorganization, the transfer agreements and related approval documents of state key enterprises under quota limit
checked and ratified by the local departments in charge of economy and trade and those in charge of finance, debt-for-equity swap
enterprises approved by the state, and enterprises in the industries belonging to the limited category in the Industrial Guide for
Foreign Investment shall be reported to the department of the State Council in charge of economy and trade and the department of
the State Council in charge of finance respectively for record.

Article 10

Foreign investors shall pay the transfer fees or capital contribution with freely convertible currencies or other lawful properties
and equities remitted in from overseas. With the approval of the SAFE offices, they may also use the net Renminbi profits from investments
in China or other lawful properties and equities to pay the transfer fees or capital contribution. The above-mentioned lawful property
and equities include:

Properties of the foreign investors obtained from the liquidation, equity transfer, recovering investment in advance, and capital
reduction of other enterprises with foreign investment in China.

State property or assets acquired by the foreign investors from state-owned enterprises or corporate enterprises with state equity;

Credits acquired by the foreign investors from creditors of state-owned enterprises;

Other ways of capital contribution stipulated by laws and regulations. When verifying the capital provided by the foreign investors,
the certified public accountants shall carry out the capital verification procedures and issue capital verification reports according
to the provisions of the Circular of the Ministry of Finance (MOF) and the State Administration of Foreign Exchange (SAFE) on Further
Strengthening the Verification of Payment of Legal Capital by Investors of Enterprises with Foreign Investment and Perfecting Foreign
Exchange Registration of Foreign Direct Investment (FDI) (CaiKuai [2002] No.1017).

Article 11

In case the reorganization is done in the form of transfer, the foreign investors shall, as a general rule, pay the full price within
three months after the day when the license of enterprise with foreign investment is granted. If it is really difficult, in accordance
with law, more than 60 percent of the total price shall be paid within six months after the day when the business license is granted,
and guarantee shall be provided according to law for the rest that shall be paid up within one year.

Article 12

In case the controlling right of the enterprise is transferred to or all or major operating assets of the enterprise are sold to the
foreign investors after the transfer of state property, before full payment by the foreign investors, the reorganizing party has
the right to know and supervise the production, operating and financial conditions of the enterprise after the reorganization, and
the foreign investors and the enterprise after the reorganization shall give necessary conveniences. Before the foreign investors
establish an enterprise with foreign investment with the acquired assets, they are not permitted to conduct operating activities
by using the above-mentioned assets.

Article 13

Proceeds from transfer of state property and assets shall be collected by the reorganizing party, and be managed and used according
to relevant provisions of the department of the State Council in charge of finance.

Article 14

The foreign investors may, according to laws, remit overseas net profits obtained from the enterprise after the reorganization, proceeds
from equity transfer, funds shared after the expiration or termination of the enterprise, and other lawful incomes. With the approval
of the SFAE offices, the said incomes may also be reinvested within China.

Article 15

In the process of introducing foreign investment to reorganize state-owned enterprises, the taxation policies shall follow the provisions
of the state laws and administrative regulations related to taxation, and the charging policies shall follow the provisions of the
Circular on Exemption and Reduction of Related Charges in the Course of Reform, Reorganization and Transformation of Enterprises
issued jointly by the State Development Planning Commission, the State Economic and Trade Commission, the Ministry of Supervision,
the Ministry of Finance, the State Audit Administration, and the State Council Office for Checking Unhealthy Tendencies (JiJiaFei
[1998] No.1077).

Article 16

Any person in the reorganizing party or the reorganized enterprise who goes beyond his/her limit of authority, neglects his/her duty
or colludes with the foreign investors, embezzles money or takes bribery, and violates the lawful rights and interests of the state,
creditors and employees, shall be given administrative penalty and punishment by relevant departments according to law. In case crime
is constituted, criminal responsibilities shall be pursued according to law.

Article 17

If any government official in charge of the check and ratification violates the Provisions by giving approval without authorization
or abusing his/her authority for personal gains, and thereby harms lawful rights and interests of the state, creditors and employees,
the related departments shall, according to the authorization limit in cadre administration, investigate and fix the administrative
responsibilities of the persons directly responsible and the persons in charge. In case crime is constituted, criminal responsibilities
shall be pursued according to law.

Article 18

The Provisions also applies to reorganizations of state-owned enterprises with the participation of investors from the Hong Kong Special
Administrative Region, the Macao Special Administrative Region and the Taiwan region and the enterprises with foreign investment
that have been established.

Article 19

The SETC, the MOF, the SAIC and the SAFE are responsible for the interpretation of the Provisions.

Article 20

The Provisions shall enter into force as of January 1, 2003.

The State Economy and Trade Commission, the State Administration for Industry and Commerce, the State Administration
of Foreign Exchange, the Ministry of Finance
2002-11-08

CIRCULAR OF THE STATE ADMINISTRATION OF FOREIGN EXCHANGE AND CHINA INSURANCE REGULATORY COMMISSION ON THE RELEVANT ISSUES CONCERNING THE ADMINISTRATION OF SALE AND PAYMENT OF FOREIGN EXCHANGE IN OVERSEAS REINSURANCE CEDING

The State Administration of Foreign Exchange, China Insurance Regulatory Commission

Circular of the State Administration of Foreign Exchange and China Insurance Regulatory Commission on the Relevant Issues Concerning
the Administration of Sale and Payment of Foreign Exchange in Overseas Reinsurance Ceding

HuiFa [2003] No.75

June 20, 2003

The branches and departments of foreign exchange administration of the State Administration of Foreign Exchange (SAFE) in the provinces,
autonomous regions, and municipalities directly under the Central Government, the branches in Shenzhen, Dalian, Qingdao, Xiamen,
and Ningbo; the designated foreign exchange banks; and the insurance companies:

In order to implement the Interim Provisions on the Foreign Exchange Administration of Insurance Services, to regulate the reinsurance
made in foreign exchange, and to effectively disperse insurance risks, the following circular is hereby made concerning the relevant
matters of the administration of sale and payment of foreign exchange in overseas reinsurance ceding:

The domestic Chinese-invested insurance companies, Sino-foreign equity joint insurance companies, and branches of foreign insurance
companies in China (hereinafter referred as domestic insurance companies) that engage in overseas reinsurance ceding upon ratification
by the SAFE may, pursuant to the relevant provisions of China Insurance Regulatory Commission (CIRC), undertake overseas reinsurance
ceding of domestic insurances, and go through the formalities for purchase and payment of foreign exchange under overseas reinsurance
ceding pursuant to the provisions hereof. Branches of domestic insurance companies may not go through the formalities for purchase
and payment of foreign exchange under overseas reinsurance ceding.

Where a domestic insurance company reinsured overseas any domestic insurance made in foreign exchange, that company shall, by taking
with it the valid proofs, such as reinsurance bill or reinsurance payment list, etc., make the reinsurance payments from its foreign
exchange operation account with a domestic commercial bank, and may not purchase any foreign exchange to make the payment.

Where a domestic insurance company reinsured overseas any insurance made in RMB, it may, by taking with it the valid proofs, such
as the reinsurance bill or reinsurance payment list, etc., make the reinsurance payment from its foreign exchange operation account
with a domestic commercial bank; either may it, pursuant to Articles 4 through 7 hereof, apply to SAFE, and purchase foreign exchange
to make the reinsurance payment with a designated foreign exchange bank on the strength of the ratification document of the SAFE.

Where a domestic insurance company makes overseas excess of loss ratio reinsurance of any of its insurance made in RMB, it may apply
for purchasing foreign exchange to make the reinsurance payment according to the actual business needs.

Where a domestic insurance company make overseas reinsurance through contract or temporarily of the enterprise property insurance,
freight insurance, ship insurance, aviation insurance, space insurance, oil insurance, energy insurance, construction and installment
project insurance, liability insurance, nuclear station insurance, or any other type of insurance ratified by the CIRC that are made
in RMB, that insurance company may apply to the SAFE for purchasing foreign exchange to make the reinsurance payment if either of
the following conditions is satisfied:

(1)

The maximum insurance liability for a single insurance contract exceeds RMB50m;

(2)

The accumulative RMB premium income for a single insurance type exceeds the sum of the capital and the accumulation fund of that company.

Where a domestic insurance company meets the conditions for purchasing foreign exchange under overseas reinsurance specified in Articles
4 and 5, that company shall file the application with SAFE on a quarterly basis by taking with it the relevant documents, such as
the application for purchase of foreign exchange, the relevant insurance contracts or insurance data statistics, the audited balance
sheet and profit statement of the company of the previous year, the copy of the License for Foreign Exchange Services, etc. A once-and-only
application shall be filed with the SAFE with respect to any reinsurance contract for which the payment is made by installments.
In the application for purchase of foreign exchange, the insurance company shall respectively specify the amount of foreign exchange
purchased for excess of loss ratio reinsurances and contracts, and for temporary reinsurances.

Where the application for purchase of foreign exchange under overseas reinsurance has been ratified by the SAFE, the domestic insurance
company shall, when paying for the overseas reinsurance to overseas, make the payment with the designated foreign exchange bank through
purchase of foreign exchange on the strength of the valid proofs, such as the ratification document of SAFE, and the reinsurance
bill or reinsurance payment list, etc.

A domestic insurance company shall fill out the “Quarterly Statements of Foreign Exchange Services of Insurance Company” in an accurate
and timely manner (see HuiFa [2003] No.27), and shall indicate in the “Remarks” the overseas reinsurance operations of the previous
quarter; in the case of payment by purchase of foreign exchange, the amount of foreign exchange purchased, the time of purchase and
the bank for purchase, etc., shall be specified.

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

Upon receipt of this Circular, the branches shall transmit it as soon as possible to the insurance companies and designated foreign
exchange banks within their respective jurisdictions; and the Chinese-funded designated foreign exchange banks shall transmit it
as soon as possible to their respective branches and sub-branches. Please promptly report any problem encountered in the execution
to the SAFE and the CIRC.

The State Administration of Foreign Exchange, China Insurance Regulatory Commission
2003-06-20

ANNOUNCEMENT OF THE GENERAL ADMINISTRATION OF CUSTOMS ON THE RELEVANT ISSUES CONCERNING THE ADJUSTMENT OF THE “CUSTOMS IMPORT AND EXPORT TARIFF OF THE PEOPLE’S REPUBLIC OF CHINA”

The General Administration of Customs

Announcement of the General Administration of Customs on the Relevant Issues concerning the Adjustment of the “Customs Import and
Export Tariff of the People’s Republic of China”

[2002] No. 39

December 25, 2002

Upon the approval of the State Council, the items and tariff rates in the Customs Import and Export Tariff of the People’s Republic
of China shall be adjusted as of January 1, 2003. For the relevant details, please refer to the 2003 version of Customs Import and
Export Tariff of the People’s Republic of China (published by Law Press. China). We hereby announce the relevant issues as follows:

Part of the items in the import tariff have been adjusted, and the total number of the items of the import tariff after the adjustment
is 7445, which is 129 more than that in 2002.

II.

The MFN tariff rates of 3019 items in the import tariff has been reduced, and after the adjustment, the arithmetic average tariff
level has been reduced from 12% to 11%; while the common rates of import tariff are kept unchanged.

III.

Specific duty or compound duty shall continue to be applied to 51 items of commodities such as frozen chicken, beer and video cameras,
etc., with their tariff rates being reduced in different degrees compared with those in 2002.

IV.

The tariff quota administration shall continue to be applied to 10 agricultural products such as wheat, bean oil, etc. and 3 fertilizers
such as urea, etc., with their tariff rates beyond the quota being reduced in different degrees compared with those in 2002, and
their tariff rates within the quota being kept unchanged.

With respect to the 15 commodities to which the Information Technology Agreement (ITA) tariff rates are partly applied, whether the
ITA tariff rates shall be applied to them shall be examined, checked and determined by the competent customs at the locality of the
enterprise. The consignee or consigner of the imported or exported goods or his agent shall, 15 working days before the goods are
actually imported, submit to the local customs an “Application Form on the Uses of the Commodities to which ITA Tariff Rates are
partly applied” (hereinafter referred to as “Application Form”, see Attachment 1). The customs shall, if determining that they shall
be subject to ITA tariff rates upon examination and check, issue a “Proof on Ascertainment of the Uses of the Commodities to which
ITA Tariff Rates are partly applied” (hereinafter referred to as “Proof on Uses”, see Attachment 2), and the customs at the place
of import shall levy customs duty according to the ITA tariff rates.

VI.

To the 757 items of imported commodities originating in Korea, Sri Lanka, Bengal and Laos, the tariff rates in Bangkok Agreement shall
be applied; while to the 20 items of imported commodities originating in Bengal, special preferential tariff rates shall be applied.

VII.

One item is added to the export tariff, and the tariff rates in the export tariff have not been adjusted.

VIII.

The tariff rates temporarily determined under the annual MFN shall be applied to 216 imported commodities, and the annually determined
temporary tariff rates shall be applied to 23 exported commodities, with the date of expiry to be December 31, 2003 (the date for
application).

IX.

The rate of single ad valorem duty, instead of the sliding scale duty, shall be applied to newsprint paper.

This is hereby the announcement.

Attachments:

1. Application Form on the Uses of the Commodities to which ITA Tariff Rates are Partly Applied (Omitted)

2. Proof on Ascertainment of the Uses of the Commodities to which ITA Tariff Rates are Partly Applied (Omitted)

The General Administration of Customs
2002-12-25

MEASURES FOR QUALIFICATION REGISTRATION OF GEOLOGICAL RECONNAISSANCE

The Ministry of State Land Resources

Notice of the Ministry of State Land Resources on Printing and Issuing Measures for Qualification Registration of Geological Reconnaissance

Guo Tu Zi Fa [2003] No.218

The ministries of state land resources of every province, autonomous region and municipality directly under the Central Government
(the ministry of state land environment resources, bureau of state land resources and housing, bureau of housing and land resources,
bureau of state land resources and planning):

In order to standardize the conditions for the access to geological reconnaissance market, to maintain the market order of geological
reconnaissance, to strengthen the supervision of the ability of the geological reconnaissance and to promote the development of geological
reconnaissance work, in accordance with regulations of the Mineral Resources Law of the People’s Republic of China and the Measures
for Registration Administration of the Reconnaissance Blocks of Mineral Resources, the ministry decided to set up registration system
and formulated Measures for Qualification Registration of Geological Reconnaissance, the measures are hereby printed and issued,
please carry out.

The Ministry of State Land Resources

June 24, 2003

Measures for Qualification Registration of Geological Reconnaissance

Article 1

In order to standardize the conditions for the access to geological reconnaissance market, to maintain the market order of geological
reconnaissance and to promote the development of geological reconnaissance work, the Measures are hereby formulated in accordance
with the Mineral Resources Law of the PRC and the Measures for Registration Administration of the Reconnaissance Blocks of Mineral
Resources.

Article 2

Registration shall go through in compliance with the Measure for obtaining the qualification certificates of geological reconnaissance
in case geological reconnaissance is undertaken in the territory and other sea jurisdiction of the PRC.

Article 3

The qualifications for geological reconnaissance are classified by nature of the professions of geological reconnaissance and the
registration should be kept according to the requirements of geological reconnaissance capability and level.

The professional classifications of the qualifications for geological reconnaissance and the conditions for registration are separately
promulgated.

Article 4

The Ministry of State Land Resources and the administrative departments of sate land resources of the people’s government of provinces,
autonomous regions and municipalities directly under the Central Government are the registration authorities of the qualifications
for geological reconnaissance.

The scope of functions of the Ministry of State Land Resources is as follows:

(I)

Registration of the qualifications for oceanic geological survey, oil and gas mineral reconnaissance, aviation physical geographical
reconnaissance, and aviation remote sensing geological reconnaissance;

(II)

Summarization, publication and provision of query services of information on registration of the qualifications for geological reconnaissance
of the whole country;

(III)

Supervision management on the registration of qualifications for geological reconnaissance by the administrative departments of sate
land resources of the people’s government of provinces, autonomous regions and municipalities directly under the Central Government
as well as the qualifications for geological reconnaissance of the whole country.

The scope of functions of the administrative departments of sate land resources of the people’s government of provinces, autonomous
regions and municipalities directly under the Central Government provinces, autonomous regions and municipalities directly under
the Central Government is as follows:

(I)

Registration of the qualifications for geological reconnaissance other than that specified in Item (I) of the above-mentioned clause
of this article;

(II)

Summarization, publication and provision of query services of information on registration of the qualifications for geological reconnaissance
in the corresponding administrative divisions;

(III)

Supervision management on the registration of qualifications for geological reconnaissance in the corresponding administrative divisions.

Article 5

The applicants for geological reconnaissance qualifications shall be enterprises or institutional unites directly engaged in the undertakings
of geological reconnaissance, which besides the requirements for a legal person shall meet the following conditions for the geological
reconnaissance qualifications.

Article 6

In applying for the geological reconnaissance qualifications, the applicant shall provide the registration authority with the following
materials:

(I)

Application for qualification registration of geological reconnaissance;

(II)

Documents or copy of the certification of the legal person;

(III)

Documents or copy of the positions of the legal representative and the responsible technological persons;

(IV)

Documents or copy of the certification of assets;

(V)

Name list of technicians and copies of the technical post_title and qualifications of senior and medium-level technicians;

(VI)

List of the main reconnaissance instruments and equipment;

(VII)

Other necessary materials required for submission by the registration authority.

In case of application for the qualification of oil and gas mineral reconnaissance, the documents or copy of the approval of the State
Council should be submitted for establishment of oil companies or consent of oil and gas mineral reconnaissance.

Article 7

Within 30 days upon receipt of the application for qualification registration of geological reconnaissance, the registration authority
shall check and verify the truthfulness of the application materials, and draw conclusions on whether or not the registration is
qualified in compliance with the requirements for the conditions of the geological reconnaissance qualifications, together with notices
given to the applicant.

If modification or supplementary materials are required from the applicant, the registration authority shall notify the applicant
of modification or supplementation within the term specified.

In case the registration conditions meet the requirements, the applicant shall within 30 days upon receipt of the notice handle with
the registration formalities and obtain the qualification certificates of geological reconnaissance and become the registered entity
eligible for geological reconnaissance, which can undertake the geological reconnaissance work by force of law within the registration
scope.

In case of failure to meet the registration requirements, the registration authority shall provide the applicant with the reasons
thereof.

Article 8

The qualifications of geological reconnaissance adopt the uniform inspection system at the intervals of inspection once two years
to be executed in December. And the uniform inspection work will be in the charge of the registration authority.

At the time of uniform inspection the registration holder shall carry the qualification certificate of geological reconnaissance (original
and duplicate) and fill in and submit the Uniform Inspection From of Geological Reconnaissance at the original registration authority
and accept the uniform inspection.

In qualified for the uniform inspection, the registration authority shall cover the special stamp on the qualification certificate
of geological reconnaissance (duplicate), and if not qualified, the registration authority shall proceed in compliance with the provisions
of Article 9 of the Measures.

In case of failure to accept the uniform inspection beyond the time schedule, the qualification certificate of geological reconnaissance
will automatically become invalid.

Article 9

in case of any of the following circumstances during the uniform inspection, the uniform inspection authority shall proceed as degrading
of the qualifications, and notify the inspected to handle with the formalities for alteration of the registration.

(I)

When the reconnaissance capabilities are lower than the requirements of the corresponding classifications;

(II)

Having not undertaken such classification of geological reconnaissance activities consecutively for two years;

(III)

Material negligence or violations of law in some type of reconnaissance works.

In case of any of the circumstances specified in Article 16 of the Measures, the registration authority will revoke the registration
qualifications and proceed according to Article 6 of the Measures.

Article 10

Eligible for the following conditions, the registration holder may apply for adding the business scope at the original registration
authority and verified in compliance with the requirements of the registration conditions, the original registration authority shall
notify the registration holder to handle with the formalities for alteration of the registration.

(I)

Expiry of two years of various reconnaissance works with qualified uniform inspections;

(II)

The working capacity for newly added reconnaissance work having reached the corresponding conditions and requirements of the added
business items; and

(III)

Free of material negligence or violations of law in various reconnaissance works.

Article 11

In any of the following cases, application should be made to the registration authority within 30 days for handling with the formalities
for alteration of the registration.

(I)

Consolidation, separation and renaming of the legal person;

(II)

Alteration of the domicile of legal person and the legal representative;

(III)

Addition or reduction of business classifications;

(IV)

Alteration required for by the laws, administrative regulations, rule and stipulations.

Article 12

In case of loss of the qualification certificates of geological reconnaissance (original and duplicate), announcement must be made
on the media designated by the Ministry of State Land Resources before application is made at the original registration authority
for handling with the formalities for repeated issuance of the certificates.

Article 13

The applicant shall provide the registration authority with true registration materials without any falsehood, and may not refuse
the inspection.

The registration authority should keep confidential the applicant’s materials relating to commercial secrets.

Article 14

The administrative departments of sate land resources of the people’s government of provinces, autonomous regions and municipalities
directly under the Central Government shall in the first month each year submit the Ministry of State Land Resources with the annual
reports of the previous year on the administration of the qualification registration of geological reconnaissance, which annual report
shall include: work survey, main achievements, existing issues, working plan, opinions and suggestions of the coming year.

Article 15

The registration authority shall regularly make random sampling inspection and evaluation on the professional capabilities and performance
of the registration holder and set up the practice archives thereof, and their practice behaviors, reputation maintenance, results
of sampling evaluation, social claims and defaults should be recorded in their practicing archives.

Article 16

In any of the following cases on the part of the registration holder, the registration authority shall not grant it with the qualification
registration of geological reconnaissance for three years.

(I)

Conceal of facts and falsehood in the relevant materials;

(II)

Failure to handling with the formalities for alteration of the registration in compliance with the relevant provisions of the Measures;

(III)

Participating in the reconnaissance without the license for mineral resource reconnaissance or undertaking of reconnaissance by tort;

(IV)

Subcontracting the implementation to the unit or individual without the qualification certificates of geological reconnaissance;

(V)

Undertaking of geological reconnaissance beyond the approved scope of reconnaissance;

(VI)

Mortgage, leasing or transferring of the qualification certificates of geological reconnaissance;

(VII)

Other material negligence or violations of law; or

(VIII)

Noncompliance with the professional ethic standards or breach of the principle of good faith.

Article 17

In case of abuse of positions for private purposes on the part of the workers of the registration authority that constitutes a crime,
criminal responsibilities shall be prosecuted, and in case no crime has been constituted, administrative punishment may be accorded
buy force of law.

Article 18

The qualification certificates of geological reconnaissance are divided into originals and duplicates, which are equally authentic.

The qualification certificates of geological reconnaissance are not restricted by administrative divisions, which are valid throughout
the country.

Article 19

The qualification certificates of geological reconnaissance are uniformly printed by the Ministry of State Land Resources, which is
in charge of uniformly formulating the application forms of the qualification registration of geological reconnaissance, the forms
for uniform inspection of the qualifications of geological reconnaissance, the special stamp for the qualification registration of
geological reconnaissance, and the special stamp for the uniform inspection of the qualifications of geological reconnaissance.

Article 20

In case of registration by the administrative departments of sate land resources of the people’s government of provinces, autonomous
regions and municipalities directly under the Central Government in violation of the provisions of the Measures, the Ministry of
State Land Resources is enpost_titled to make corrections thereof.

Article 21

Foreign investors and investors from Hong Kong, Macao and Taiwan that apply for registration of the qualifications of geological reconnaissance
shall proceed in compliance with the provisions of the Measures and special provisions, if any, specified by laws and administrative
regulations shall apply.

Article 22

Those entities that have obtained the qualification certificates of geological reconnaissance prior to the implementation of the Measures
shall apply with the registration authority for registration in compliance with Article 4 of the Measures, and by the end of the
registration work, the previous qualification certificates of geological reconnaissance will become invalid automatically.

Article 23

The Measures shall come into force as of the date of promulgation.

The Ministry of State Land Resources
2003-06-24

DECISION OF THE STANDING COMMITTEE OF THE NATIONAL PEOPLE’S CONGRESS ON REVISING THE PREVENTION AND CONTROL OF ATMOSPHERIC POLLUTION

Decision of the Standing Committee of the National People’s Congress on Revising the Law of the PRC on the Prevention and Control
of Atmospheric Pollution

At its 15th Meeting, the Standing Committee of the Eighth National People’s Congress decides to revise the Law of the People’s Republic
of China on the Prevention and Control of Atmospheric Pollution as follows:

1. One paragraph is added to Article 8 as Paragraph 1: “The State adopts economic and technological policies and measures to facilitate
the prevention and control of atmospheric pollution and comprehensive utilization.”

2. One article is added as Article 9: “The people’s governments at various levels shall redouble their efforts in afforestation and
urban greening to improve the atmospheric environment.”

3. One article is added as Article 15: “Enterprises shall give priority to the adoption of clean production techniques that are instrumental
to high-efficient use of energy and reduced discharge of pollutants so as to decrease the generation of atmospheric pollutants.

“The State practises an elimination system for the backward production techniques and backward equipment which seriously pollutes
the atmospheric environment.

“The competent department for comprehensive economic and trade affairs under the State Council shall, in conjunction with other relevant
departments under the State Council, publish a catalog of the techniques which seriously pollute the atmospheric environment and
the use of which shall be prohibited within a time limit, and a catalog of the equipment which seriously pollutes the atmospheric
environment and the production, sale, importation and use of which shall be prohibited within a time limit.

“Producers, sellers, importers or users shall, within the time limit prescribed by the competent department for comprehensive economic
and trade affairs under the State Council in conjunction with the relevant departments under the State Council, stop the production,
sale, importation or use of the equipment listed in the catalog specified in the preceding paragraph. People who use the production
techniques listed in the catalog specified in the preceding paragraph shall, within the time limit prescribed by the competent department
for comprehensive economic affairs under the State Council in conjunction with the relevant departments under the State Council,
stop using such techniques.

“The equipment eliminated in accordance with the provisions of the preceding two paragraphs may not be transferred to another for
use.”

4. One article is added as Article 24: “The State promotes the dressing of coal by washing to reduce the sulfur and ash in coal, and
restricts the mining of high-sulfur or high-ash coal. If the coal mined from a newly-built coal mine is of high-sulfur or high-ash,
supporting facilities for the dressing of coal by washing shall be installed to make the sulfur and ash in coal fall within the prescribed
limits.

“If the coal mined from an established coal mine is of high-sulfur or high-ash, supporting facilities for the dressing of coal by
washing shall be installed within a time limit in accordance with the plan approved by the State Council.

“It is prohibited to mine the coal with toxic or harmful substances, such as radioactive and arsenic, that exceed the prescribed limits.”

5. One article is added as Article 25: “People’s governments of large or medium-sized cities shall make plans for people in the urban
areas to use sulfur-fixed briquette of coal as fuel or other clean fuel for cooking ranges, so as to gradually eliminate the direct
use of raw coal as fuel.”

6. One article is added as Article 26: “To establish a heat-engine plant within the urban areas of a city, both heating and electricity
shall be generated where it is necessary and conditions permit, and construction and acceptance for use of the network of pipelines
for heat supply shall be arranged in step with that of the main project of the plant.”

7. One article is added as Article 27: “The environmental protection department under the State Council together with relevant department
under the State Council may, in light of the meteorological, topographical, soil and other natural conditions, delimit the areas
where acid rain has occurred or will probably occur and areas that are seriously polluted by sulfur dioxide as acid rain control
areas and sulfur dioxide pollution control areas, subject to approval by the State Council.

“With respect to the heat-engine plants and other large or medium-sized enterprises in the acid rain control areas or sulfur dioxide
pollution control areas that discharge sulfur dioxide, if they are newly-built construction projects which cannot use low-sulfur
coal, supporting facilities for desulphurization and dust removal must be installed or other measures for control of the discharge
of sulfur dioxide or for dust removal adopted; if they are established enterprises which do not use low-sulfur coal, measures for
control of discharge of sulfur dioxide or for dust removal shall be adopted. The State encourages enterprises to adopt advanced technology
for desulphurization and dust removal.

“Enterprises shall gradually adopt measures to control the nitrogen oxide generated by the burning of coal.”

8. One article is added as Article 36: “Operators of the catering trade in urban areas must observe the regulations of the State Council
on the administration of environmental protection in relation to the catering trade, and adopt measures to prevent and control the
pollution caused by lampblack to the residential environment in the neighbourhood.”

9. One article is added as Article 38: “The State encourages and supports the production and use of high-grade, unleaded gasoline
and restricts the production and use of leaded gasoline.

“Relevant competent departments under the State Council shall make plans for gradually reducing the production of leaded gasoline
so as finally to stop the production and use of leaded gasoline.”

10. One article is added as Article 40: “Whoever, in violation of the provisions of Article 15 of this Law produces, sells, imports
or uses the equipment that is prohibited to produce, sell, import or use or employs the techniques that are prohibited to employ
shall be ordered to make rectification by the competent department for comprehensive economic and trade affairs of the people’s government
at or above the county level; if the circumstances are serious, the said competent department shall put forward suggestions thereon
and submit them to the people’s government at the corresponding level, which shall, according to the limits of authority prescribed
by the State Council, order the offender to suspend operation or close down.”

11. The post_title of Chapter III is revised as follows: “Prevention and Control of Atmospheric Pollution by the Burning of Coal”.

This Decision shall go into effect as of the date of promulgation.

The Law of the People’s Republic of China on the Prevention and Control of Atmospheric Pollution shall be revised correspondingly
in accordance with this Decision and shall be republished.

SUPPLEMENTARY CIRCULAR OF THE STATE ADMINISTRATION OF TAXATION ON THE TAXATION SCOPE AFTER REFORM OF THE SHARING SYSTEM OF INCOME TAX REVENUES

The State Administration of Taxation

Supplementary Circular of the State Administration of Taxation on the Taxation Scope after Reform of the Sharing System of Income
Tax Revenues

GuoShuiFa [2003] No.76

June 25, 2003

The bureaus of state taxations and the bureaus of local taxations of the provinces, autonomous regions, municipalities directly under
the Central Government, and municipality separately listed on the State plan, and the entities in those bureaus:

In accordance with the spirit of the Circular of the State Council on Distributing the Scheme on the Reform of Income Tax Revenue
Sharing (GuoFa [2001] No.37), the State Administration of Taxation (SAT) handed down the Circular of the State Administration of
Taxation on the Taxation Scope after Reform of the Sharing System of Income Tax Revenues (GuoShuiFa [2002] No.8 ), which provide
for the specific taxation scope of the bureaus of state taxation and the bureaus of local taxation after the reform of the sharing
system of income tax revenues. Since execution of the new taxation scope from over one year ago, the bureaus of state taxation and
the bureaus of local taxation at various levels have taken consideration for the interests of the whole, strengthened the coordination
and cooperation in the division of taxation scope, and thus guaranteed the smooth progress of the reform of the sharing system of
income tax revenue. However, with the deepening of the enterprise reform, the forms of enterprise restructuring become more and more
varied, and some new situations have brought new problems to the taxation work of income taxes, in order to implement the principle
of taxation according to law, and to make up the omissions in taxation, the taxation scope for enterprise income tax after the enterprises’
restructuring and operation form changes shall be further clarified. For this purpose, the supplementary circular is hereby made
concerning the taxation scope of enterprise income tax on the basis of the spirit provided for by document GuoShuiFa [2002] No.8:

Where the original enterprise is in any of the following situations, even if it has made the establishment (business start) registration,
its enterprise income tax shall be subject to taxation by the original taxation organ:

The original enterprise is transferred or sold (auctioned) as a whole, but continues to exist and be qualified as an independent taxpayer.
However, if the original enterprise, after being transferred or sold (auctioned) as a whole, becomes a wholly-funded subsidiary of
the acquiring enterprise, and is brought into the scope of consolidate tax payment of the acquiring enterprise, then the income tax
of the enterprise transferred or sold (auctioned) as a whole shall be taxed by the taxation organ in charge of the taxation of income
tax of the acquiring enterprise.

An enterprise acquires any other enterprise by merger (the acquired enterprise is written off) and continues to exist.

A partnership enterprise is restructured into a limited liability company or a joint stock limited company, and no new investment
is absorbed in the restructuring.

Alteration registration shall be made pursuant to the provisions of the State Administration for Industry and Commerce, such as for
expansion of the enterprise, alteration of the leading (subordinate) relationship, enterprise name, enterprise type, economic nature,
business scope, business duration, operation method, legal representative, shareholders, name (post_title) of the shareholder of the promoter
of the company, registered capital, addition or cancellation of any branch, as well as the alteration of domicile, or business site,
etc.

Where an original domestic-funded enterprise is restructured into a foreign-funded enterprise, and the income tax of foreign-funded
enterprise and foreign enterprise shall be collected pursuant to the provisions, no matter the enterprise makes whichever industrial
and commercial registration, the taxation scope shall be determined pursuant to the Circular of the General Office of the State Council
on Transmitting the Opinions of the State Administration of Taxation on Adjusting the Taxation Scope of the Bureaus of state Taxation
and the Bureaus of Local Taxation (GuoBanFa [1996] No.4) on the limit of authority of the administration of income tax of foreign-funded
enterprises and foreign enterprises.

The taxation scope for public institutions and social organizations shall comply with the spirit of document GuoShuiFa [2002] No.8
and the aforesaid provisions.

The bureaus of state taxation and bureaus of local taxation at various levels shall further strengthen cooperation in the division
of taxation scope of income taxes, shall strengthen contact, coordination and communication in the aspects of execution of the policies
on enterprise income tax and determination and collection of enterprise income tax, etc., shall strictly comply with the policies
on reduction and exemption of enterprise income tax, and thus to ensure the uniformity and seriousness of the tax law.

The Provisions shall be implemented as of July 1, 2003. In order to keep the stability of taxation order, where the taxation scope
in respect of any domestic-funded enterprise that is subject to the actual taxation by a bureau of state taxation or local taxation
is inconformity with the Circular, such scope will not be adjusted any more.

The State Administration of Taxation
2003-06-25

DETAILED RULES FOR THE IMPLEMENTATION OF THE TOBACCO PATENT SALES LAW

Detailed Rules For The Implementation of the Tobacco Patent Sales Law of the People’s Republic of China

CHAPTER ONE GENERAL PROVISIONS CHAPTER TWO TOBACCO PATENT SALES LICENSES CHAPTER THREE PLANTATION, PURCHASE AND APPROPRIATION OF TOBACCO
LEAVES CHAPTER FOUR PRODUCTION OF TOBACCO PRODUCTS CHAPTER FIVE SALES OF TOBACCO PRODUCTS CHAPTER SIX TRANSPORTATION OF PATENT SALES
TOBACCO PRODUCTS CHAPTER SEVEN PRODUCTION AND SALE OF CIGARETTE PAPER, FILTER TIPS, CIGARETTE CELLULOSE, AND SPECIAL CIGARETTE MAKING
MACHINERIES CHAPTER EIGHT IMPORT AND EXPORT TRADE AND FOREIGN ECONOMIC AND TECHNICAL COOPERATION CHAPTER NINE SUPERVISION AND EXAMINATION
CHAPTER TEN LEGAL LIABILITY CHAPTER ELEVEN SUPPLEMENTARY PROVISIONS

Article 1 The detailed rules have been formulated pursuant to the “Tobacco Patent Sales Law of the People’s Republic of China” (hereinafter
referred to as “Tobacco Patent Sales Law”).

Article 2 Tobacco patent sales refer to monopoly of the State of the administration of production, marketing and import and export of patent
tobacco products.

Article 3 Patent cut tobacco refers to tobacco filaments, dust and granules processed with tobacco leaves, re-cured tobacco leaves and tobacco
sheets as raw materials.

Article 4 Institution of functions and administrative system of departments in charge of tobacco patent sales of the State Council and various
provinces, autonomous regions and municipalities shall be done in accordance with the provisions of Article 4 of the Tobacco Patent
Sales Law. For cities and counties which do not have administrative departments in charge of tobacco patent sales, the departments
of the cities and counties in charge of tobacco patent sales shall take charge of such rules under dual leadership of the tobacco
patent sales administrative departments in charge at the next higher level and the people’s governments at the same level, with the
tobacco patent sales administrative departments in charge at the next higher level to assume the main leadership.

Article 5 The State shall control over the tar contents of cigarettes and cigars and major additives to cigarettes and cigars. Tobacco products
manufacturers should not use harmful additives and colorants in violation of the ralated provisions by the State.

CHAPTER TWO TOBACCO PATENT SALES LICENSES

Article 6 Application for tobacco patent sales licenses shall be required according to the provisions of the Tobacco Patent Sales Law and the
provisions of this set of rules for producing and handling wholesale and retail sale of tobacco products subject to patent sales
and for handling imports and exports of such products and for handling purchase and marketing of foreign tobacco products.

Tobacco Patent sales licenses are divided into:

(1) Tobacco Patent Production Enterprise License;

(2) Tobacco Patent Wholesale Enterprise License;

(3) Tobacco Patent Retail Sale Enterprise License;

(4) Special Tobacco Monopoly Business License;

Article 7 The following requirements shall be met in obtaining Tobacco Patent Production Enterprise Licenses:

(1) To have adequate amount of funds for producing the patent tobacco products;

(2) To have the technology and equipment for producing the patene tobacco products;

(3) To adapt to the requirements of the State industrial policies for the tobacco industry; and

(4) To adapt to other requirements as provided for by the State Council department in charge of tobacco potent sales.

Article 8 The following requirements shall be met in obtaining Tobacco Patant Wholesale Enterprise Licenses:

(1) To have adequate funds for wholesale of patent tobacco products;

(2) To have adaquate operational site and personnel;

(3) To conform to the requirements of the distribution of patent tobacco wholesale enterprises; and

(4) To conform to other requirements as provided for by the State Council department in charge of tobacco patent sales.

Article 9 The following requirements shall be met in obtaining Tobacco Patent Retailsales Enterprise Licenses:

(1) To have adequate funds for retailsale of patent tobacco products;

(2) To have the fixed site for business operations;

(3) To conform to the requirements of the distribution of patent tobacco retailsales enterprises; and

(4) To conform to other requirements as provided for by the State Council department in charge of tobacco patent sales.

Article 10 The following requirements should be met for obtaining Tobacco Patent Sales Enterprise Licenses:

(1) To have corresponding funds for handling tobacco and related products patent sales;

(2) To have a fixed site and adequate professional personnel for business operation;

(3) To conform with the rational distribution of tobacco patent retail sales enterprises; and

(4) To conform with other requirements as provided for by the State Council department in charge of tobacco patent sales.

Article 11 Administrative department in charge of tobacco patent sales under the State Council shall be responsible for issuance of licenses
and administration of patent sales of tobacco products and transport of such products according to the Tobacco Patent Sales Law and
the provisions of this set of regulations.

Article 12 In applying for a license for the production of tobacco products for patent sales, an application should first of all be filed with
the administrative departments in charge of tobacco patent sales of the province, autonomous region or municipality (hereinafter
referred to as provincial level), for an examination comments and submitted to the administrative department in charge of tobacco
patent sales under the State Council for approval and issuance of the license.

Article 13 In applying for licenses for wholesale of tobacco patent products for trans-provincial, autonomous regional or municipal operations,
an application should be first of all filed with the provincial level administrative departments in charge of tobacco patent sales
for examination and comments and then submitted to the administrative department under the State Council in charge of tobacco patent
sales for approval and issuance of the license.

In applying for a license for wholesale of tobacco patent sales products within a province, autonomous region or municipality, an
application should first of all be filed with the administrative departments in charge of tobacco patent sales in its domicile for
examination comments and then submitted to the provincial level administrative departments in charge of tobacco patent sales for
approval and issuance of the license.

Article 14 In applying for a license for patent retail sales of tobacco products, the provisions of the Tobacco Patent Sales Law shall apply.

Article 15 In applying for a business license for special tobacco patent sales for import and export of tobacco patent sales products or sales
of foreign patent sales tobacco products, an application should first of all be filed with the provincial level administrative departments
in charge of tobacco patent sales for examination and comments and then submitted to the administrative department under the State
Council in charge of tobacco patent sales for approval and issuance of the license.

In applying for a special business license for sales of duty-free foreign tobacco patent sales products within the Customs control
areas, an application should first of all be filed with the administrative department in charge of tobacco patent sales in its domicile
for examination and comments and then submitted to the provincial level administrative department in charge of tobacco patent sales
for approval and issuance of the license.

Article 16 Organs responsible for issuance of tobacco patent sales licenses should, regularly or irregularly check enterprises or individuals
that have obtained such licenses. If any case is found to have failed to meet the requirements of the Tobacco Patent Sales Law and
this set of regulations, the organs that issued the license shall order a temporary stop of the patent sales for carrying out a rectification
until all the requirements are met.

The specific procedures for control of tobacco patent sales licenses shall be worked out by the administrative department in charge
of tobacco patent sales under the State Council according to the provisions of this set of regulations.

CHAPTER THREE PLANTATION, PURCHASE AND APPROPRIATION OF TOBACCO LEAVES

Article 17 Administrative department in charge of tobacco patent sales under the State Council shall, together with people’s governments of
related provinces, autonomous regions and municipalities, map out plans for tobacco plantation according to the requirements of rational
distribution and the State plans under the principle of improved strains, regionalization and standardization.

Article 18 Tobacco leaves should be purchased in a unified way by tobacco companies or their entrusted units. Tobacco companies or their entrusted
units may, according to needs, open tobacco purchasing stations (points) to purchase tobacco in areas that have received plans for
purchasing tobacco issued by the State. The opening of such purchasing stations (points) should get the approval of provincial level
administrative departments in charge of tobacco patent sales. Without approval, no unit or individual is allowed to purchase tobacco
leaves.

Article 19 Groups for grading of tobacco leaves should be erected by local administrative departments in charge of tobacco patent sales, together
with related departments at the same level and tobacco producers to coordinate appraisals of grades of tobacco leaves for purchase.

Article 20 Plans for State reserves, exports and appropriation of tobacco leaves shall be issued by the planning department of the State Council.

CHAPTER FOUR PRODUCTION OF TOBACCO PRODUCTS

Article 21 Startups of tobacco product producers shall be applied by the provincial level tobacco patent sales administrative departments to
the State Council administrative department in charge of tobacco patent sales for approval and issuance of licenses and to the administrations
for industry and commerce for registration as tobacco patent sales production enterprises.

Article 22 Producers of tobacco products should strictly operate according to the production plan issued by the State.

Article 23 It is forbidden to use rotten tobacco leaves to make cigarettes, cigars or cut tobacco.

Article 24 Registrations of trademarks should be undertaken for cigarettes, cigars and packed cut tobacco. In application for the registration,
document of approval for production issued by the State Council administrative Department in charge of tobacco patent sales should
be presented according to law.

CHAPTER FIVE SALES OF TOBACCO PRODUCTS

Article 25 Enterprises that have obtained licenses for patent wholesale of tobacco products should operate within the scope and areas specified
in the licenses.

Enterprises or individuals that have obtained licenses for patent retail sales of tobacco products should buy the products for sales
from the local tobacco patent wholesale enterprises and accept the supervision and control by the organs issuing the tobacco patent
sales licenses.

Article 26 A unit or individual without a tobacco wholesale patent license to one time sales of over 50 cartons of cigarettes or cigars shall
be regarded as a wholesale business without license.

Article 27 No unit or individual is allowed to sell illegally produced tobacco products.

Article 28 Producers of tobacco products for patent sales or patent tobacco wholesalers must not provide tobacco products to units or individuals
that are unavailable with tobacco patent retail sales licenses.

Article 29 Cigarettes and cigars to be sold within the territory of PRC should have Chinese words to indicate tar contents of the products and
the words “Cigarette smoking is harmful to health” on the surface of the packs.

Article 30 State Council administrative department in charge of tobacco patent sales shall, if necessary, distribute cigarettes and cigars among
different provinces, autonomous regions and municipalities according to market demand.

Article 31 It is forbidden to sell rotten or deteriorated tobacco products. Rotten or deteriorated tobacco products should be destroyed under
the guidance of administrative departments in charge of tobacco patent sales or related administrative departments.

Article 32 Tobacco products with forged or phony trademarks discovered by related departments according to law shall be destroyed openly by
administrative departments in charge of tobacco patent sales according to the related regulations but not to be resold by any means.

Article 33 The appraisals and testing of tobacco products with forged or phony trademarks shall be carried out by tobacco quality testing stations
designated by quality control and supervision department of the State Council or the people’s governments of provinces, autonomous
regions and municipalities.

CHAPTER SIX TRANSPORTATION OF PATENT SALES TOBACCO PRODUCTS

Article 34 Licenses for transporting patent sales tobacco products shall be approved and issued by administrative departments in charge of tobacco
patent sales at and above provincial level or their authorized organs. Procedures for administration of licenses for transport of
patent sales tobacco products shall be worked out by the State Council administrative department in charge of tobacco patent sales.

Article 35 Trans-provincial, autonomous regional and municipal transportation of imported patent sales tobacco products, home-made special tobacco
machineries and cigarette cellulose, filter tips and imported cigarette paper cuts should be made by one’s own effort or on consignment
basis on the strength of licenses for transport of patent sales tobacco products signed and issued by the administrative department
of the State Council in charge of tobacco patent sales.

Trans-provincial, autonomous regional and municipal transportation of domestic patent sales tobacco products other than domestically
manufactured tobacco special machinery and cigarette cellulose, filter tips and imported cigarette paper cuts should be made by one’s
own effort or on consignment basis on the strength of licenses for transport of patent sales tobacco products signed and issued by
the administrative department of the State Council in charge of tobacco patent sales or by provincial level tobacco patent sales
administrative department.

Trans-city or county transportation of patent sales tobacco products within a province, autonomous region or municipality should be
made by one’s own effort or on consignment basis on the strength of licenses for transport of patent sales tobacco products signed
and issued by the provincial level administrative departments in charge of tobacco patent sales or by units entrusted by them.

The transportation of confiscated smuggled patent sales tobacco products should be made by one’s own effort or on consignment basis
on the strength of licenses for transport of patent sales tobacco products signed and issued by the administrative department of
the State Council in charge of tobacco patent sales.

Article 36 It shall be considered as transportation of patent sales tobacco products without transport licenses in one of the following cases:

1. The amount and scope of patent sales tobacco products transported have gone beyond the limits as prescribed in the transport licenses;

2. Use of overdue, altered or copied patent sales tobacco products transport licenses;

3. Bearing no license for transport of patent sales tobacco and failure to present valid certificate certifying the purchase of patent
sales tobacco products in the locality; and

4. Other acts involving the transport of patent sales tobacco products without a transport license.

Article 37 The transship of patent sales tobacco products which is put under the control by the Customs shall go through the transshipping formalities
according to the regulations of the Customs on transshipment.

CHAPTER SEVEN PRODUCTION AND SALE OF CIGARETTE PAPER, FILTER TIPS, CIGARETTE CELLULOSE, AND SPECIAL CIGARETTE MAKING MACHINERIES

Article 38 Tobacco patent wholesale enterprises and tobacco products production enterprises should purchase cigarette paper, filter tips, cigarette
cellulose and special cigarette making machineries exclusively from enterprises with patent tobacco production licenses, special
patent tobacco businesses licenses. Enterprises producing cigarette paper, filter tips, cigarette cellulose and special cigarette
making machineries should not sell their products to units or individuals without a patent tobacco production license.

Article 39 The procurement, sale and transfer of special cigarette making machineries should have prior approval of the administrative department
in charge of patent tobacco sales under the State Council.

The catalog of special cigarette making machineries shall be compiled by the administrative department in charge of patent tobacco
sales under the State Council.

Article 40 No unit or individual is allowed to sell special cigarette making machineries, cigarette paper, filter tips and cigarette tip cellulose.

Obsolete and illegally assembled special cigarette making machineries, sub-standard cigarette paper, filter tips and cigarette cellulose
and their odds and ends should be put under the disposal of local administrative departments in charge of patent tobacco sales and
are not allowed to be sold by any means.

CHAPTER EIGHT IMPORT AND EXPORT TRADE AND FOREIGN ECONOMIC AND TECHNICAL

Article 41 The establishment of patent tobacco production enterprises with foreign investment should get the prior consent from the administrative
department in charge of tobacco patent sales under the State Council as according to related regulations of the State.

Article 42 Import of patent sales tobacco products can only be handled by enterprises with special patent tobacco business licenses. The plan
for such import should be examined and approved by the administrative department in charge of tobacco patent sales under the State
Council.

Article 43 Tobacco products imported duty-free should be kept at bonded warehouses designated by the Customs and locked and controlled by local
administrative departments in charge of tobacco patent sales and the Customs houses designated by the administrative department in
charge of tobacco patent sales under the State Council. The Customs should certify each package of foreign tobacco products imported
duty-free according to the import plan which has been approved by the administrative department in charge of tobacco patent sales
under the State Council.

Article 44 Duty-free cigarettes and cigars should only be put on retail sales inside the areas under the control of the Customs with special
signs prescribed by the administrative department in charge of tobacco patent sales under the State Council on the packs and cartons.

Article 45 Cigarettes and cigars especially for export should bear the Chinese words of “For Export Only” on the packs and cartons.

CHAPTER NINE SUPERVISION AND EXAMINATION

Article 46 Administrative departments in charge of tobacco patent sales should supervise over and check on the implementation of the Tobacco
Patent Sales Law and the provisions of this set of regulations, explore and punish cases that have been found violated the Tobacco
Patent Sales Law and the provisions of this set of regulations and, together with related departments of the State, check and punish
smuggling of tobacco patent sales products, sales of smuggled goods and fake or shoddy tobacco patent sales products.

Article 47 The opening of tobacco patent sales markets should be examined and approved by the administrative department in charge of tobacco
patent sales under the State Council. Tobacco patent sales markets that have not been approved should be banned by the people’s governments
above the county level.

Article 48 The administrative department in charge of tobacco patent sales under the State Council shall, if necessary, set up offices in major
areas according to the actual circumstances; provincial administrative departments in charge of tobacco patent sales shall, if necessary,
station personnel in tobacco patent production and business enterprises. The offices or personnel stationed shall carry out supervision
and checks on production and business activities within the scope authorized by the departments that have set up the offices or stationed
personnel.

Article 49 In examining and punishing cases that have violated the Tobacco Patent Sales Law and the provisions of this set of regulations, administrative
departments in charge of tobacco patent sales may exercise the following powers and functions:

1. to inquire into parties, suspects and witnesses concerned;

2. to check the business sites of parties concerned and dispose of the patent sales tobacco products produced or managed illegally;
and

3. to refer to and copy contracts, invoices, accounts, bills, records, documents, business letters and other materials related to
the law- violating acts.

Article 50 Administrative departments in charge of tobacco patent sales may on its own or together with related departments carry out check
and handle illegal transportation of patent sales tobacco products.

Article 51 Patent sales tobacco products confiscated according to law by the people’s court or the patent administrative departments concerned
in charge of tobacco patent sales and patent sales tobacco products used as penalty funds, pecuniary money or tax payment should
be auctioned according to relevant regulations of the State and bidders should enter in the auction upon the strength of tobacco
patent wholesale licenses. Bidders for foreign tobacco products should have acquired a tobacco patent sales business license.

Auctioning enterprises established according to law shall verify the qualifications of bidders and accept supervision by administrative
departments concerned in charge of tobacco patent sales in their work of auctioning tobacco patent sales products.

Article 52 In performing their duties, tobacco patent sales inspection personnel of administrative departments concerned in charge of tobacco
patent sales shall wear badges issued by the tobacco patent sales administrative department under the State Council and present inspection
certificates issued by provincial level tobacco patent sales administrative departments.

Article 53 Units or individuals who have done a good work in reporting cases violating tobacco patent sales law shall be rewarded.

Article 54 Punishments as defined in Article 30 of this set of regulations should be meted out as:

1. For purchasing tobacco leaves without authorization, a fine amounting to over 20% and less than 50% of the value of tobacco purchased
illegally shall be imposed and the tobacco leaves illegally purchased shall be purchased at State listed prices;

2. For cases of purchasing more than 1,000 kilograms of tobacco leaves without authorization, the tobacco leaves illegally purchased
together with all the illegal proceeds, shall be confiscated.

Article 55 Punishments as defined in Article 31 of this set of regulations shall be meted out as:

1. For consigning or self-transportation of tobacco patent sales products without transport passes or the amount of tobacco patent
sales products carried has exceeded the amount prescribed in the transport passes, a fine amounting to over 20% and less than 50%
of the value of the products illegally transported and the tobacco patent sales products may be pruchased at State listed prices.

2. Tobacco patent sales products transported illegally and all the proceeds shall be confiscated in one of the following cases:

(1) The value of tobacco patent sales products illegally transported has exceeded RMB 50,000 or the amount of cigarettes has exceeded
100 parcels (one parcel includes 10,000 cigarettes);

(2) Those who have been punished at least twice by administrative departments in charge of tobacco patent sales;

(3) Resisting the inspection by the inspection personnel of administrative departments in charge of tobacco patent sales;

(4) Illegally transporting smuggled tobacco patent sales products;

(5) Transporting tobacco patent sales products manufactured by enterprises without tobacco patent sales production licenses;

(6) Illegal camouflaged transportation of tobacco patent sales products;

(7) Evading inspection by using special purpose transportation means to carry tobacco patent sales products; and

(8) Other illegal transportation acts and the cases are very serious.

3. For units or individuals who intentionally transport tobacco patent sales products without transport passes, their illegal proceeds
shall be confiscated and a fine amounting to over 10% and less than 20% of the value of the tobacco patent sales products transported
shall be imposed.

4. For cases of sending by post or carrying tobacco leaves and tobacco products from one place to another with the sending or carrying
amounts exceeding more than one time the limits set by the related department of the State Council, punishments shall be meted out
according to the provisions of Article 32 of this set of regulations.

Article 56 Punishments as defined in Article 32 of this set of regulations shall be meted out as:

1. For enterprises producing tobacco products without patent tobacco production licenses, administrative departments in charge of
tobacco patent sales shall order them to shut down and confiscate all the illegal proceeds and impose a fine amounting to one time
and less than two times the value of the tobacco products produced and the tobacco products confiscated shall be destroyed openly.

2. For enterprises producing cigarette paper, filter tips, tobacco cellulose or special equipment for making tobacco without licenses,
administrative departments in charge of tobacco patent sales shall order them to shut down and confiscate all the illegal proceeds
and impose a fine amounting to one time and less than two times the value of the products produced and the products confiscated shall
be destroyed openly.

Article 57 For cases of illegally handling wholesales of tobacco products without licenses as defined in Article 33 of this set of regulations,
administrative departments in charge of tobacco patent sales shall order them to shut down or stop the wholesale business, confiscate
all the illegal proceeds and impose a fine amounting to over 50% and less than one time the value of the tobacco products sold.

Article 58 Punishments as defined in Article 32 of this set of regulations shall be meted out as:

1. For handling import and export business of tobacco patent sales products without licenses, administrative departments in charge
of tobacco patent sales shall order them to stop such business, confiscate all the illegal proceeds and impose a fine amounting to
over 50% and less than one time the value of the business handled.

2. For businesses handling the selling and buying of foreign tobacco products without special tobacco patent sales business licenses,
administrative departments in charge of tobacco patent sales shall order them to stop such business, confiscate all the illegal proceeds
and impose a fine amounting to 20%-50% of the value of the products handled illegally.

Article 59 For licensed tobacco patent wholesale enterprises that have violated the provisions of the first paragraph of Article 25 of this
set of regulations by handling wholesales beyond the business and geographical scopes, administrative departments in charge of tobacco
patent sales shall order them to suspend their businesses, and confiscate all the illegal proceeds and impose a fine amounting to
10%- 20% of the value of the products handled.

Article 60 For tobacco patent retail sale enterprises or individuals that have violated the provisions of the second paragraph of Article 25
of this set of regulations by failing to procure products from local tobacco patent wholesalers, administrative departments in charge
of tobacco patent sales shall confiscate all the illegal proceeds and impose a fine amounting to 5%-10% of the value of the products
procured.

Article 61 For cases that handle retail sale of tobacco products without tobacco patent retail sales licenses, administration for industry and
commerce or administrative departments in charge of tobacco patent sales, according to the opinion of administration for industry
and commerce, shall order them to stop their retail sales businesses, confiscate all the illegal proceeds and impose a fine amounting
to 20%- 50% of the value of the products handled.

Article 62 For cases of marketing illegally manufactured tobacco patent sales products in violation of Article 27, the first paragraph of Article
40 of this set of regulations, administrative departments in charge of tobacco patent sales shall order them to stop the marketing
operations, confiscate all the illegal proceeds and impose a fine amounting to 20%-50% of the value of the products marketed and
the tobacco patent sales products confiscated shall be destroyed openly.

Article 63 For cases of handling trans-provincial, autonomous regional and municipal tobacco products wholesale business without obtaining tobacco
patent wholesale licenses in violation of this set of regulations, administrative department in charge of tobacco patent sales shall
impose a fine amounting to over 10% and less than 20% of the value of the total amount handled.

Article 64 For cases that provide tobacco patent sales products to units or individuals without tobacco patent sales licenses in violation of
the provisions of Article 28 and the second paragraph of Article 38 of this set of regulations, administrative departments in charge
of tobacco patent sales shall confiscate all the illegal proceeds and impose a fine amounting to 20%-50% of the value of the products
sold.

Article 65 For tobacco wholesale enterprises

12 3 Page 1 of 3

Supreme Court Decisions

LETTER OF THE MINISTRY OF COMMERCE CONCERNING ASSISTING THE ESTABLISHMENT OF AN AID WORK MECHANISM FOR LABOR SERVICE ASSIGNED...

INTERIM PROVISION ON THE ESTABLISHMENT OF FOREIGN HOLDING AND WHOLLY FOREIGN-OWNED TRAVEL AGENCIES

MEASURES FOR COMPULSORY LICENSING OF PATENT IMPLEMENTATION

BASIC REQUIREMENTS FOR OFFICIAL INSPECTION AND QUARANTINE CERTIFICATES OF EXPORTING COUNTRIES OR REGIONS OF ENTRY AQUATIC PRODUCTS

CIRCULAR OF THE MINISTRY OF COMMERCE AND GENERAL ADMINISTRATION OF TAXATION ON STRENGTHENING COORDINATION OF TAXATION AND FOREIGN TRADE AND OVERCOMING THE IMPACTS OF “SARS” EPIDEMICS ON FOREIGN TRADE

INTERIM PROVISIONS ON INTRODUCING FOREIGN INVESTMENT TO REORGANIZE STATE-OWNED ENTERPRISES

CIRCULAR OF THE STATE ADMINISTRATION OF FOREIGN EXCHANGE AND CHINA INSURANCE REGULATORY COMMISSION ON THE RELEVANT ISSUES CONCERNING THE ADMINISTRATION OF SALE AND PAYMENT OF FOREIGN EXCHANGE IN OVERSEAS REINSURANCE CEDING

ANNOUNCEMENT OF THE GENERAL ADMINISTRATION OF CUSTOMS ON THE RELEVANT ISSUES CONCERNING THE ADJUSTMENT OF THE “CUSTOMS IMPORT AND EXPORT TARIFF OF THE PEOPLE’S REPUBLIC OF CHINA”

MEASURES FOR QUALIFICATION REGISTRATION OF GEOLOGICAL RECONNAISSANCE

DECISION OF THE STANDING COMMITTEE OF THE NATIONAL PEOPLE’S CONGRESS ON REVISING THE PREVENTION AND CONTROL OF ATMOSPHERIC POLLUTION

SUPPLEMENTARY CIRCULAR OF THE STATE ADMINISTRATION OF TAXATION ON THE TAXATION SCOPE AFTER REFORM OF THE SHARING SYSTEM OF INCOME TAX REVENUES

DETAILED RULES FOR THE IMPLEMENTATION OF THE TOBACCO PATENT SALES LAW

CONSTITUTION ACT, 1982 – page 22

CONSTITUTION ACT, 1982 – page 21

CONSTITUTION ACT, 1982 – page 20

CONSTITUTION ACT, 1982 – page 19

CONSTITUTION ACT, 1982 – page 18

CONSTITUTION ACT, 1982 – page 17

CONSTITUTION ACT, 1982 – page 16

CONSTITUTION ACT, 1982 – page 12

CONSTITUTION ACT, 1982 – page 11

CONSTITUTION ACT, 1982 – page 10

CONSTITUTION ACT, 1982 – page 9

CONSTITUTION ACT, 1982 – page 8

CONSTITUTION ACT, 1982 – page 7