PROVISIONS OF THE PEOPLE’S REPUBLIC OF CHINA ON ADMINISTRATION OF INTERNATIONAL FREIGHT FORWARDERS

The Ministry of Foreign Trade and Economic Cooperation

Provisions of the People’s Republic of China on Administration of International Freight Forwarders

Decree No.5 of the Ministry of Foreign Trade and Economic Cooperation

June 29, 1995

Chapter I General Provisions

Article 1

These provisions are formulated to govern behaviors of international freight forwarders to safeguard the lawful rights and benefits
of consignors and consignees of exports and imports, and international freight forwarders and to promote the development of foreign
trade.

Article 2

The international freight forwarders referred to in the provisions mean those trades entrusted by consignors and consignees of exports
and imports conduct international freight forward and related businesses for their clients and collect enumerations for their services
in their own names or in the name of their consignors.

Article 3

International freight forwarders must obtain the status of a legal body as an enterprise of the People’s Republic of China according
to law.

Article 4

The Competent Departments of foreign trade and economic cooperation under the State Council are responsible for supervision and management
of international freight forwarders throughout the country.

The competent departments of trade and economic relations with other countries of people’s governments of various provinces, autonomous
regions and municipalities directly under the Central Government as well as special economic zones (hereinafter referred to as local
competent departments of trade and economic relations with other countries) are responsible for supervision and management of international
freight forwarders in their administrative areas in accordance with the provisions and with in the scope of power authorized by the
competent departments of foreign trade and economic cooperation under the State Council.

Article 5

The supervision and management of international freight forwarders should abide by the following principles:

1.

To meet the demands of development of foreign trade and promote the rational distribution of international freight forwarding agencies.

2.

To protect fair competition and promote the improvement of services of international freight forwarders.

Article 6

Enterprises engaged in international freight forwarding should observe the laws and administrative rules and regulations of the People’s
Republic of China and be subject to the supervision and management carried out by related competent institutions of their trade in
keeping with relevant laws and administrative rules and regulations.

Chapter II Conditions for the Establishment

Article 7

According to the characteristics of the trade the establishment of an international freight forwarder must acquire the following conditions:

1.

It has competent professional to engage in international freight forwarding.

2.

It has a fixed site for business and necessary facilities.

3.

It has stable sources of and markets for exports and imports.

Article 8

The minimum amount of registered capital of an international freight forwarder must meet the following demands:

1.

The minimum amount of registered capital of an international freight forwarder by sea should be 5 million yuan.

2.

The minimum amount of registered capital of an international freight forwarder by air should 3 million yuan.

3.

The minimum amount of registered capital of an international freight forwarder by land or and international express deliverer should
be 2 million yuan.

For an enterprise engaged in two or more than two items of businesses mentioned above its minimum amount of registered capital should
be that of the item with the highest amount of registered capital.

In sitting up a branch an international freight forwarder should add a registered capital of 500,000 yuan.

Chapter III Procedures of Examination and Approval

Article 9

To apply for the establishment of an international freight forwarding agency the applicant should submit an application to the competent
department of trade and economic relations with other countries of the locality when the agency is to be set up and, with opinions
put forward by the department, should forward the applications to the competent department of foreign trade and economic cooperation
under the State Council for approval and ratification.

Enterprises directly subordinate to the departments of the State Council in Beijing which apply to establish international freight
forwarding agencies in Beijing may file applications to the competent department of foreign trade and economic cooperation under
the State Council, and the latter is responsible for examination and approval.

Article 10

To apply for the establishment of an international freight forwarding agency. The following documents should be submitted.

1.

application.

2.

draft Constitution of the enterprise.

3.

the names, posts and identification paper of leading members and chief staff members.

4.

certificates of credit standing and conditions of operational facilities.

5.

other documents as stipulated by the competent departments of foreign trade and economic s/cooperation under the State Council.

Article 11

The local competent department of trade and economic relations with other countries should put forward its opinions within 45 days
farm the day it receives the application and other documents and then forwards them to the competent department of foreign trade
and economic cooperation under the State Council.

The competent department of foreign trade and economic cooperation under the State Council should decide on approval or disapproval
within 45 days from the day it receives the application for the establishment of an international freight forwarding agency and other
documents, and should issue a certificate of ratification to the approved international freight forwarding agency.

Article 12

With the certificate of ratification issued by the competent department of trade and economic corporation with other countries the
he international freight forwarding agency should go through the procedures of enterprise and taxation registration according to
relevant stipulations of laws, administrative rules and regulations.

Article 13

The competent department of trade and economic cooperation under the State Council should cancel the certificate of ratification if
the applicant does not open business without proper reasons within 180 days from the day it receives the certificate of ratification.

Article 14

The certificate of ratification is valid for 3 years.

When the certificate of ratification expires and the agency wants to continue its business the international freight forwarding agency
should apply to the competent department of foreign trade and economic cooperation under the State Council for another certificate
of ratification 30 days before the expire.

If the international freight forwarding agency does not apply for another certificate of ratification according to stipulations in
the previous clause, it will automatically lose its qualification to engage in international freight forwarder.

Article 15

When the international freight forwarding agency terminates its business it should report to the local competent department of trade
and economic relations with other countries or to the competent department of foreign trade and economic cooperation under the State
Council according to the procedures of application for its establishment as stipulated in Article 9 and hand in its ratification
certificate for cancellation.

Article 16

To apply for setting up a branch the international freight forwarding agency should go through the necessary procedures stipulated
in the provisions.

Chapter IV Business Scope

Article 17

An international freight forwarding agency may accept a commission to operate part or all of the following business:

1.

to book ship’s holds and warehouses.

2.

supervision of freight loading and unloading and assembling and dismantling of containers.

3.

multi-forms of international through transportation.

4.

international express delivery excluding private letters.

5.

to make customs declaration, undergo customs quarantine and inspection and to insure,

6.

to prepare related bills and certificates, pay transport charges, settle accounts and pay miscellaneous fees.

7.

other businesses of international forwarder.

An international freight forwarding agency should conduct its business within the ratified scope. To engage in above-mentioned businesses
an international freight forwarding agency should register with relevant competent departments as required by related laws and administrative
rules and regulations.

International freight forwarding agencies can be mutually entrusted to conduct business stipulated in this articles.

Article 18

International freight forwarding agencies should pursue and operational policy of safety, high speed, accuracy, economy and convenience
in serving consignors and consignees of exports and imports.

Article 19

An international freight forwarding agency must set the standards of charges to be collected according to relevant state stipulations
and publicize them at the business site.

Article 20

An international freight forwarding agency must use invoices checked and approved by taxation departments in its business,

Article 21

An international freight forwarding agency should hand in a report on its business performance of the previous year to the competent
department of trade and economic relations with other countries of its locality before the end of March every year.

Article 22

An international freight forwarding agency is not allowed to do the following things:

1.

to conduct its business through using unfair competition method.

2.

to lend, lease or transfer to others its certificate of ratification and other papers concerning international freight forwarder.

Chapter V Penalty Provisions

Article 23

When and international freight forwarding agency violates the stipulations of Articles 19 and 21 of the provisions, the competent
department of foreign trade and economic operation under the State Council should serve if a warning and order it to amend with a
time limit. If not, the department should cancel its certificate of ratification.

Article 24

When an international freight forwarding agency violates the 2nd stipulation of Article 17 and stipulations of Articles 20 and 22,
the competent department of foreign trade and economic cooperation under the State Council should serve it a warning and order it
to suspend business for rectification up to canceling its certificate of ratification. Related competent departments of industrial
and commercial administration, customs and taxation should give punishments according to relevant laws and administrative rules and
regulations.

Article 25

To engage in international freight forwarder as prescribed in Article 17 without authorization in violation of the stipulations of
the provisions the competent departments of foreign trade and economic cooperation under the State Council should be these illegal
business activities and the administration institutions of industry and commerce should give punishments according to laws, and administrative
rules and regulations.

Article 26

If violations of the provisions constitute a crime the violator should be given criminal sanctions according to law.

Chapter VI Supplementary Provisions

Article 27

International freight forwarders may set up an association of international freight forwarders which can give guidance and provide
services to its members according to its charter.

Article 28

The provisions shall enter into force as of the date of promulgation.