Ministry of Commerce

Circular of the Ministry of Commerce on Relevant Issues concerning the Implementation of the Measures for Administration of the Operational
Qualification for Overseas Labor Service Cooperation

Competent departments of commerce in all provinces, autonomous regions, municipalities directly under the Central Government, and
cities specially designated in the state plan, and China International Contractors Association:

On July 26, 2004, the Ministry of Commerce and the Sate Administration for Industry and Commerce released the joint Decree No.3, promulgating
the Measures for Administration of the Operational Qualification for Overseas Labor Service Cooperation (hereinafter referred to
as these Measures), which entered into force as of the date of August 26, 2004. And in order to better implement and carry out the
Measures, to strengthen the administration of overseas labor service cooperation, and to promote an orderly development of overseas
labor service cooperation, this circular on relevant issues is hereby given as follows:

I.

The Examination and Approval of the Operational Qualification for Overseas Labor Service Cooperation

1.

In accordance with the provisions in Article V and Article VI of these Measures, the commerce authorities in charge in all provinces,
autonomous regions, municipalities under direct control of the Central Government, and cities specially designated in the state plan
(hereinafter referred to as the local commerce authorities in charge) shall conduct a strict examination of the first instance on
the applicant enterprises’ operational qualifications for overseas labor service cooperation, and an on-the-spot examination, if
necessary, shall also be conducted on such as items as their reported business places, employees, management operating systems (including
the emergent measures for overseas labor disputes and accidents) etc.; and if fraudulences detected, a pass shall not be granted
to the examination of the first instance to be submitted and their applications for operational qualification shall not be handled
within one year. With regard to such enterprise that has already obtained the operational qualification for overseas labor service
cooperation (hereinafter referred to as the “operational company”), an attestation specifying the number of its laborers sent to
overseas shall be issued to the applicant enterprise while carefully checking according to the statistical data of its operation
and the operational company may be required to present its relevant contract or agreement, and if fraudulences detected in the attestation
documents of the operational company, a pass shall not be granted to this company concerned upon the annual examination of its Certificate
of Operational Qualification for Overseas Labor Service Cooperation (hereinafter referred to as the Certificate of Operational Qualification).

2.

In accordance with the provisions in Article XVI of these Measures, such enterprise as has obtained an all-round or industry-confined
operational qualification for overseas labor service cooperation, if meeting the conditions stipulated in Section I-VII of Article
V of the Measures, may, as of the date of August 26, 2004, procedurally apply for the issuance of a new Certificate of Operational
Qualification; and if the standard requirements stipulated in the Measures still fail to be met till August 26, 2004, the operational
qualification of this company concerned shall automatically be deprived of.

3.

In accordance with the provisions in Article XIII of these Measures, such enterprise as has obtained the operational qualification
to engage in foreign contracted project, shall naturally possess the qualification to send labor personnel to its contracted overseas
project, it, however, shall not engage in the simplex labor-subcontracting activities, and the aforesaid labor personnel shall be
integrated into the unified management of the foreign contracted project; in case that overseas labor service cooperation business
beyond the labor service under the project is to be conducted, another Certificate of Operational Qualification shall be obtained
in accordance with the provisions in Article V of the Measures.

4.

Where the enterprise applies for operational qualification for overseas labor service cooperation or the operational company applies
for the issuance of a new Certificate of Operational Qualification and it has other similar qualifications for overseas labor service,
the local commerce authorities in charge may refuse to handle.

5.

Where the enterprise applies for operational qualification for labor service cooperation concerning Hong Kong SAR, Macau SAR and Taiwan
Province, the application shall be handled in accordance with the national policy of labor service cooperation concerning the Hong
Kong Special Administrative Region, the Macau Special Administrative Region and Taiwan Province. Where the enterprise engaging in
the petty trade in the border areas applies for operational qualification for labor service cooperation, the application shall, in
accordance with the current national policy, be subject to the examination and approval of the local commerce authorities in charge
and be filed with the Ministry of Commerce for record.

6.

In accordance with the provisions in Article XV of the Measures, the Ministry of Commerce will, together with other relevant authorities,
formulate measures for administration of operational qualification for overseas labor service for special industries; and the operational
qualification for overseas labor service that the enterprise has obtained shall remain valid before the release of new measures.

II.

Strengthening the Administration of Overseas Labor Service Cooperation

1.

In accordance with the provisions in Article XVIII of these Measures, the local commerce authorities shall, in accordance with the
principles of territory and of the contract-signer assuming the liability, strengthen the administration of the local overseas labor
service cooperation, guide and supervise the operational company.

2.

In accordance with the provisions in Article IV of these Measures, the operational qualification for overseas labor service cooperation
shall be subject to the examination and approval of the Ministry of Commerce, and the local commerce authorities in charge shall
not exceed their powers to examine and approve or grant to the local enterprise the operational qualification for overseas labor
service cooperation and such related qualifications for consultation on overseas labor service, providing the operational company
with labor personnel to be sent overseas etc..

3.

The operational company shall systematically recruit, select, train and send labor personnel, and assume the post-sending management
responsibility, and shall not act as an agent of overseas labor service for other enterprises, units or individuals, and shall not
accept the “affiliated” operation or contracted operation by other enterprises, units or individuals.

4.

The operational company, when entrusting other enterprise or unit to recruit labor personnel, may, in accordance with the provisions
in the Contract Law, conclude with the entrusted enterprises or units an Entrust Agreement on Recruiting Labor Personnel to Be Sent
Overseas and issue it a Certificate of Entrust, with which the local commerce authorities in charge shall then be filed for record.
The entrusted enterprise or unit shall not directly sign contracts with foreign parties, and shall not charge the labor personnel
any fees, and the cost arising from the entrusted recruiting labor personnel shall be paid by the operational company. The operational
company shall not directly authorize or entrust individuals to recruit labor personnel for it. Other enterprise or unit shall not
be entrusted to recruit the labor personnel that the enterprise engaging in the petty trade in border areas needs to conduct overseas
economic cooperation and that the enterprise engaging in overseas contracted project needs to send to its contracted project.

5.

Where the operational enterprise directly recruits labor personnel transregionally (province, autonomous region, municipalities under
direct control of the Central Government, and cities specially designated in the state plan), the commerce authorities in charge
of where the labor personnel comes shall be filed for record with the program exanimation opinions issued by the commerce authorities
in charge of where the operational company comes (such enterprise as is able to apply for visa itself may issue the program examination
opinions itself); and with regard to such program as shall be subject to the examination of the Ministry of Commerce, the commerce
authorities in charge of where the labor personnel comes shall be filed for record with the duplicated copy of the approval document
issued by the Ministry of Commerce. Where other enterprise or unit is entrusted to transregionally recruit labor personnel, the Entrust
Agreement on Recruiting Labor Personnel to Be Sent Overseas and the Certificate of Entrust shall also be simultaneously submitted.

6.

The local commerce authorities in charge shall timely inform relevant authorities and demand them to, according to law, investigate
and prosecute such enterprise, unit or individual as recruits or sends labor personnel without the authorization of the operational
company and the Entrust Agreement on Recruiting Labor Personnel to Be Sent Overseas concluded with the company concerned.

7.

Before the labor personnel leaves the territory of the People’s Republic of China, the operational company shall, in accordance with
its Contract for Overseas Labor Service Cooperation conclude with foreign employers, directly conclude with the labor personnel hereof
a Contract for Overseas Labor Service and acquire a legal work permit for the labor personnel, and shall not send overseas labor
personnel in the form of tourist or business visa etc.. And after the labor personnel leaves the territory of the People’s Republic
of China, the operational company shall help the labor personnel conclude with the foreign employers a Contract of Employment, and
assume the overseas management responsibility, timely and properly deal with the labor disputes or accidents.

8.

The local commerce authorities in charge shall actively strengthen their coordination and cooperation with relevant authorities and
construct and improve the long-term cooperative administration mechanism for overseas labor service cooperation so as to maintain
the business order together.

The local commerce authorities in charge and China International Contractors Association are required to distribute this Circular
to the local operational enterprises and the association members of enterprises directly administered by the Central Government as
soon as possible, and to urge them to carry it out earnestly.

This Circular is hereby given.

Ministry of Commerce

September 2, 2004