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1992

MEASURES OF THE GENERAL ADMINISTRATION OF CUSTOMS FOR THE ADMINISTRATION OF MATERIALS AND PARTS THAT ENTERPRISES WITH FOREIGN INVESTMENT NEED IMPORT IN ORDER TO PERFORM PRODUCT EXPORT CONTRACTS

The General Administration of Customs

Measures of the General Administration of Customs for the Administration of Materials and Parts that Enterprises with Foreign Investment
Need Import in Order to Perform Product Export Contracts

the General Administration of Customs

November 24,1986

Article 1

These Measures are formulated in accordance with the Interim Customs Law of the People’s Republic of China and relevant provisions
of the State Council for the encouragement of foreign investment in order to encourage the re-export of products that are processed
(manufactured) by enterprises with foreign investment for which materials and parts need to be imported to perform their product
export contracts and to expand exports to generate foreign exchange earnings.

Article 2

Enterprises with foreign investment shall, in accordance with the provisions of these Measures, enjoy preferential treatment and perform
the obligations in customs clearance and the paying of taxes. The goods imported and exported by them shall be declared to the Customs
strictly according to the facts. Machinery and equipment, vehicles used in production and raw materials, fuel, knock-down parts,
spare parts, components, sets of parts, auxiliary materials and packaging materials (hereinafter referred to as “Materials and Parts”)
that need to be imported by these enterprises for the execution of their product export contracts shall be categorized as bonded
warehouse goods and shall be subject to supervision and control by the Customs.

Article 3

The imported machinery, equipment, vehicles used in production, and Materials and Parts referred to in Article 2 of these Measures
shall be exempted from the requirement of obtaining import licenses. The Customs shall inspect and release such imports on the strength
of the concerned enterprise’s contract(s) or the import-export contract(s).

For products that are processed from Materials and Parts imported by enterprises with foreign investment and then re-exported, the
Customs shall, at the time of re-export, handle the inspection and release of such products in accordance with the Provisions of
the Measures of the Ministry of Foreign Economic Relations and Trade Concerning the Application of Import and Export Licenses by
Enterprises with Foreign Investment.

But if imported Materials and Parts are used in products to be sold domestically, the enterprise with foreign investment in question
shall have to go through the import Measures retroactively in accordance with the relevant provisions of the State. Where such products
belong to the category of commodities subject to the control of import licensing control, import licenses for the said imported goods
shall be submitted to and inspected by the Customs.

Article 4

As regards the imported Materials and Parts referred to in Article 2 of these Measures, exemption from import duties and the consolidated
industrial and commercial tax applies only to that part of the imported Materials and Parts that is actually consumed in the processing
of products for export.

The tax-free Materials and Parts referred to above shall include reasonable quantities of imported catalysts, catalytic agents, abrasives
and fuel that are directly used in the processing of products for export and that are consumed in the production process.

Imported Materials and Parts shall be restricted to use by the enterprise that processes products for export and such products may
not be sold on the domestic market. But for those products that are, for one reason or another, approved for domestic disposal (sale),
the imported Materials and Parts that are used for their manufacture shall be taxed retroactively in accordance with the relevant
regulations. Taxes may be reduced or exempted for substandard and defective products and scrap materials that are left over in the
course of production on the basis of their use value as the case may be.

Article 5

Materials and Parts that enterprises with foreign investment need to import in order to manufacture products that are included in
the List of Products to Substitute Imports approved by the department in charge as stipulated by the State shall, in light of these
Measures, be treated as bonded warehouse goods over which the Customs shall exercise supervision and control, thus obviating the
need to go through the measures for the payment of taxes at the time of import. When the product referred to above are supplied to
domestic users, import duties and the consolidated industrial and commercial tax on the imported Materials and Parts used shall be
paid to the Customs, and the import measures required shall be completed retroactively in accordance with the relevant regulations.

If domestic users import similar types of products from abroad, they may enjoy preferential tax reduction or exemption. When enterprises
with foreign investment supply the products referred to above to these users, preferential tax reduction or exemption may also be
granted, provided that they shall, in accordance with the relevant provisions of the State submit for inspection the certificate
of tax reduction or exemption that has been approved by the department in charge.

Article 6

Materials and Parts that are purchased by enterprises with foreign investment from the bonded warehouses of the relevant departments
or are imported by other enterprises in the capacity of agents of the said enterprises with foreign investment shall be likewise
treated as those imported by the enterprises with foreign investment themselves, hence similarly subject to the relevant provisions
of these Measures.

Article 7

Enterprises with foreign investment that are engaged in processing operations for which materials must be imported must complete the
registration measures with the Customs in the locality (or the appropriate administrative division of Customs) for the record, for
which their relevant contracts must be submitted, and, upon examination by the Customs, a Manual of the Customs of the People’s Republic
of China for the Registration of Processing and Re-export of Materials and Parts that Need be Imported by Enterprises with Foreign
Investment in Order to Perform Product Export Contracts (hereinafter referred to as the “Registration Manual”) shall be issued to
the said enterprises with foreign investment. Those enterprises that are qualified, upon verification by Customs in the locality,
may be dealt with in accordance with the administrative provisions of the Customs for bonded factories that import materials for
processing operations.

When the above-mentioned Materials and Parts are imported and, after processing, the finished products are exported, an enterprise
with foreign investment shall make declarations to the Customs at the place of entry and exit by submitting the Registration Manual,
three copies of the customs declaration form for imported and exported goods, the invoice for the goods, packing lists and other
relevant lists and certificates. The Customs shall make annotations and comments, and then affix a seal on the Registration Handbook,
which shall then be returned to the enterprises with foreign investment, which shall use this to complete the verification and cancellation
measures at the Customs in the locality (or the appropriate administrative division of the Customs).

Article 8

In respect of imported Materials and Parts imported under the items of each import contract, within two months after completing the
execution (performance) of the relevant contracts, enterprises with foreign investment shall submit the Registration Manual, the
customs declaration form for imported and exported goods and other relevant documents to Customs to complete the verification and
cancellation measures.

A record of the import, storage and care, allocation for use and passing on to factories for processing of Materials and Parts, and
the storage, export and domestic sales of the finished products after processing, must be kept by enterprises with foreign investment
in specialized account books and quarterly statements must be submitted to the Customs for examination. As for products that require
a long production period, upon the verification and approval of the Customs, such statements may be submitted every six months.

Article 9

If products processed from imported and tax-exempted Materials and Parts are, upon approval, sold domestically, the enterprises with
foreign investment concerned shall, within one month of the date of approval, pay retroactively to the competent the Customs the
customs duties and consolidated industrial and commercial tax on the imported Materials and Parts that were originally exempted from
tax.

Article 10

Except where the Customs has given approval because of special reasons, enterprises with foreign investment shall, within one year
of the date of import of the tax-exempted imported Materials and Parts, process them into finished products and perform the relevant
contracts.

Article 11

When imported Materials and Parts after being processed into finished products are not exported directly but instead are transferred
to another production enterprise, which also does processing on imported materials for re-export, for reprocessing and assembly,
the enterprise that imported the Materials and Parts shall, together with this other production enterprise, complete the measures
with the Customs as regards transfer and verification and cancellation, for which the purchase and sales contract or production and
processing contract signed by the two parties and other relevant documents must be submitted. Such production enterprise that carries
on the business of reprocessing of imported materials for re-export shall, in accordance with the stipulations of these Measures,
apply for a new Registration Manual, and shall comply with the relevant stipulations of these Measures, subject to the supervision
and control of Customs.

Article 12

In case of any alteration, transfer, suspension or cancellation of contracts that occurs after the importation of Materials and Parts,
the enterprises with foreign investment concerned shall complete as soon as possible the required measures with the Customs for the
said alteration, transfer, or cancellation.

Article 13

In order to facilitate the business activities of carrying out processing and export by enterprises with foreign investment and by
production enterprises that do reprocessing of imported materials for re-export, the Customs may, based on the actual situation,
dispatch Customs officers to be stationed at the factories to carry out actual supervision and control, and may examine the relevant
account books. The enterprises referred to above shall provide offices and the necessary facilities.

Article 14

Enterprises with foreign investment may not, without authorization, transfer or sell domestically imported Materials and Parts and
their processed products that are bonded warehouse goods. If an enterprise concerned is found to have made a transfer, or to have
acted illegally in violation of the stipulations of these Measures, the matter shall be dealt with by the Customs in accordance with
customs law and the relevant decrees and regulations of the State.

Article 15

These Measures shall enter into force as of December 1, 1986.



 
The General Administration of Customs
1986-11-24

 






REGULATIONS CONCERNING DIPLOMATIC PRIVILEGES AND IMMUNITIES

Category  TERRITORY AND DIPLOMATIC RELATIONS Organ of Promulgation  The Standing Committee of the National People’s Congress Status of Effect  In Force
Date of Promulgation  1986-09-05 Effective Date  1986-09-05  


Regulations of the People’s Republic of China Concerning Diplomatic Privileges and Immunities



(Adopted at the 17th Meeting of the Standing Committee of the Sixth

National People’s Congress, promulgated by Order No. 44 of the President of
the People’s Republic of China and effective as of September 5, 1986)

    Article 1  The present Regulations are formulated for the purpose of
defining the diplomatic privileges and immunities of the diplomatic missions
in China and their members and facilitating the efficient performance of the
functions of the diplomatic missions in China as representing States.

    Article 2  The members of the diplomatic staff of a mission shall in
principle be of the nationality of the sending State. They may be appointed
from among persons of Chinese or thirdstate nationality only with the consent
of the competent Chinese authorities, which may be withdrawn at any time by
the said authorities.

    Article 3  The mission and its head shall have the right to use the flag
and emblem of the sending State on the premises of the mission and on the
means of transport of the head of the mission.

    Article 4  The premises of the mission shall be inviolable. Chinese
government functionaries may enter them only with the consent of the head of
the mission or another member of the mission authorized by him. The Chinese
authorities concerned shall take appropriate measures to protect the premises
of the mission against any intrusion or damage.

    The premises of the mission, their furnishings and other property thereon
and the means of transport of the mission shall be immune from search,
requisition, attachment or execution.

    Article 5  The premises of the mission shall be exempt from dues and
taxes, other than such as represent payment for specific services rendered.

    The fees and charges levied by the mission in the course of its official
duties shall be exempt from all dues and taxes.

    Article 6  The archives and documents of the mission shall be inviolable.

    Article 7  The members of the mission shall enjoy freedom of movement and
travel within Chinese territory except for areas the entry into which is
prohibited or restricted by the regulations of the Chinese Government.

    Article 8  The mission may for official purposes communicate freely with
the Government and the other missions and consulates of the sending State. In
so doing, it may employ all appropriate means, including diplomatic couriers,
diplomatic bag, and messages in code or cipher.

    Article 9  The mission may install and use a wireless transmitter-receiver
for the purpose of communication only with the consent of the Chinese
Government. The import of the above-mentioned equipment shall be subject to
the relevant procedure as specified by the Chinese Government.

    Article 10  The official correspondence of the mission shall be inviolable.

    The diplomatic bag shall not be opened or detained.

    The diplomatic bag may contain only diplomatic papers or articles intended
for official use and must be sealed and bear visible external marks of its
contents.

    Article 11  The diplomatic courier shall be provided with a courier
certificate issued by the competent authorities of the sending State. He shall
enjoy personal inviolability and shall not be liable to arrest or detention.

    Diplomatic couriers ad hoc shall be provided with certificates of courier
ad hoc issued by the competent authorities of the sending State, and shall
enjoy the same immunities as the diplomatic courier while charged with the
carrying of the diplomatic bag.

    A diplomatic bag may be entrusted to the captain of a commercial aircraft.
He shall be provided with an official document issued by the consigner state
indicating the number of packages constituting the bag, but he shall not be
regarded as a diplomatic courier. The mission shall send its members to
receive the diplomatic bag from the captain of the aircraft or deliver it to
him.

    Article 12  The person of a diplomatic agent shall be inviolable. He shall
not be liable to arrest or detention. The Chinese authorities concerned shall
take appropriate measures to prevent any attack on his personal freedom and
dignity.

    Article 13  The residence of a diplomatic agent shall enjoy inviolability
and protection.

    His papers, correspondence and, except as provided in Article 14, his
property, shall be inviolable.

    Article 14  A diplomatic agent shall enjoy immunity from criminal
jurisdiction.

    He shall also enjoy immunity from civil and administrative jurisdiction,
except in the case of:

    (1) an action relating to succession in which he is involved as a private
person;

    (2) an action relating to any professional or commercial activity
conducted by him in China outside his official functions in violation of
paragraph 3 of Article 25.

    No measures of execution shall be taken in respect of a diplomatic agent
except in cases coming under the preceding paragraphs of this Article, where
the measures of execution do not constitute any violations of his person and
residence.

    A diplomatic agent is not obliged to give evidence as a witness.

    Article 15  The immunity from jurisdiction of diplomatic agents and of
persons enjoying immunity under Article 20 may be waived through explicit
expression by the Government of the sending State.

    The initiation of proceedings by a diplomatic agent or by a person
enjoying immunity from jurisdiction under Article 20 shall preclude him from
invoking immunity from jurisdiction in respect of any counter-claim directly
connected with the claim.

    Waiver of immunity from civil or administrative jurisdiction shall not
imply waiver of immunity in respect of the execution of the judgment, for
which a separate and explicit waiver shall be necessary.

    Article 16  A diplomatic agent shall be exempt from all dues and taxes,
except:

    (1) dues and taxes of a kind which are normally incorporated in the price
of goods or services;

    (2) estate, succession or inheritance duties, except for the movable
property in China of a deceased diplomatic agent;

    (3) dues and taxes on private income having its source in China;

    (4) charges levied for specific services rendered.

    Article 17  Diplomatic agents shall be exempt from all personal and public
services as well as military obligations.

    Article 18  Imported articles for the official use of the mission and
those for the personal use of a diplomatic agent shall, in accordance with the
relevant regulations of the Chinese Government, be exempt from customs duties
and all other related dues and taxes.

    The personal baggage of a diplomatic agent shall be exempt from
inspection, unless the competent Chinese authorities have serious grounds for
presuming that it contains articles not covered by the exemptions specified in
the previous paragraph, or articles the import or export of which is
prohibited by Chinese laws and government regulations or controlled by the
quarantine law and regulations. Such inspection shall be conducted in the
presence of the diplomatic agent or of his authorized representative.

    Article 19  The diplomatic missions and their members may bring and import
firearms and bullets into China for their personal use, subject to the
approval of the Chinese government and to its relevant regulations.

    Article 20  The spouse and under-age children of a diplomatic agent
forming part of his household shall, if they are not nationals of China, enjoy
the privileges and immunities specified in Article 12 to 18.

    The members of the administrative and technical staff of the mission,
together with their spouses and under-age chlldren forming part of their
respective households, shall, if they are not nationals of and permanently
resident in China, enjoy the privileges and immunities specified in Articles
12 to 17. However, the immunity from civil and administrative jurisdiction
shall be confined to acts performed in the course of official duties. The
members of the administrative and technical staff shall enjoy the privilege of
exemption from dues and taxes specified in paragraph one of Article 18 in
respect of articles intended for their establishment which are imported within
six months of the time of installation.

    The members of the service staff of the mission who are not nationals of
and permanently resident in China shall enjoy immunity in respect of acts
performed in the course of official duties and exemption from income tax on
the emoluments they receive by reason of their employment. They shall enjoy
the privilege of exemption from dues and taxes as specified in paragraph one
of Article 18 of the present Regulations in respect of articles intended for
their establishment which are imported within six months of the time of
installation.

    The private attendants of members of the mission shall, if they are not
nationals of and permanently resident in China, be exempt from income tax on
the emoluments they receive by reason of their employment.

    Article 21  Dipolmatic agents who are nationals of China or foreigners
having obtained permanent residence in China shall enjoy immunity from
jurisdiction and inviolability only in respect of acts performed in the course
of official duties.

    Article 22  The following persons shall enjoy immunity and inviolability
necessary for their transit through or sojourn in China:

    (1) a diplomatic agent stationed in a third State who passes through China
together with his spouse and underage children forming part of his household;

    (2) a visiting foreign official who has obtained a diplomatic visa from
China or who holds a diplomatic passport of a State with which China has an
agreement on the mutual exemption of visas;

    (3) other visiting foreigners to whom the Chinese Goverment has granted
the privileges and immunities specified in the present Article.

    The provisions of Articles 10 and 11 shall apply, mutatis mutandis, to a
diplomatic courier of a third state passing through China and his accompanying
diplomatic bag.

    Article 23  Visiting heads of State or government, foreign ministers and
other officials of comparable status from foreign States shall enjoy the
privileges and immunities specified in the present Regulations.

    Article 24  Representatives of foreign States coming to China to attend
international conferences sponsored by the United Nations or its specialized
agencies, visiting officials and experts of the United Nations and its
specialized agencies, and offices of the United Nations and its specialized
agencies in China and their personnel shall enjoy such trentment as specified
in the relevant international conventions to which China has acceded and
agreements which China has concluded with the international organizations
concerned.

    Article 25  Persons enjoying diplomatic privileges and immunities under
the present Regulations shall:

    (1) respect Chinese laws and regulations;

    (2) not interfere in the internal affairs of China;

    (3) not practise for personal profit any professional or commercial
activity on Chinese territory;

    (4) not use the premises of the mission and the residence of the members
of the staff of the mission for purposes incompatible with the functions of
the mission.

    Article 26  In case the diplomatic privileges and immunities accorded by a
foreign State to the Chinese mission and its members in that State and to
visiting Chinese personnel concerned are fewer than those China would give
under the present Regulations to the mission of that State and its members in
China and its visiting personnel concerned, the Chinese Government may accord
them such diplomatic privileges and immunities as appropriate on a reciprocal
basis.

    Article 27  Where there are other provisions in international treaties to
which China is a contracting or acceding party, the provisions of those
treaties shall prevail, with the exception of those provisions on which China
has expressed reservations.

    Where there are other provisions in agreements on diplomatic privileges
and immunities between China and other countries, the provisions of those
agreements shall prevail.

    Article 28  For the purpose of the present Regulations, the following
expressions shall have the meanings hereunder assigned to them:

    (1) the “head of the mission” is the ambassador, minister, charge
d’affaires or other person of equivalent rank charged by the sending State
with the duty of acting in that capacity;

    (2) the “members of the mission” are the head of the mission and the
members of the staff of the mission;

    (3) the “members of the staff of the mission” are the members of the
diplomatic staff, of the administrative and technical staff and of the service
staff of the mission;

    (4) the “members of the diplomatic staff of the mission” are the members
of the staff of the mission having diplomatic rank;

    (5) a “diplomatic agent” is the head of the mission or a member of the
diplomatic staff of the mission;

    (6) the “members of the administrative and technical staff of the mission”
are the members of the staff of the mission engaged in the administrative and
technical work of the mission;

    (7) the “members of the service staff of the mission” are the members of
the staff of the mission in the domestic service of the mission;

    (8) a “private attendant” is a person in the private employment of a
member of the mission;

    (9) the “premises of the mission” are the buildings and the land ancillary
thereto used for the purposes of the mission and the residence of the head of
the mission.

    Article 29  The present Regulations shall enter into force on the date of
their promulgation.





INTERIM PROVISIONS OF THE MINISTRY OF FINANCE ON CERTAIN TAX ISSUES IN PROMOTING HORIZONTAL ECONOMIC LINKS

AMENDMENT TO ARTICLE 100 OF THE “REGULATIONS FOR THE IMPLEMENTATION OF THE LAW OF THE PEOPLE’S REPUBLIC OF CHINA ON CHINESE-FOREIGN EQUITY JOINT VENTURES”

The State Council

Amendment to Article 100 of the “Regulations for the Implementation of the Law of the People’s Republic of China on Chinese-foreign
Equity Joint Ventures”

the State Council

January 15, 1986

Article 100 of the “Regulations for Implementation of the Law of the People’s Republic of China on Chinese-foreign Equity Joint Ventures”
promulgated by the State Council on September 20, 1983 stipulates: “The duration of a joint venture shall be decided upon through
consultation of all parties to the joint venture according to actual conditions of the particular lines of business and projects.
The duration of a joint venture engaged in an ordinary project requiring large amount of investment, long construction periods and
low interest rate on funds can be extended to more than 30 years.”The above mentioned Article is now amended as follows:

“The duration of a joint venture shall be decided upon through consultation of all parties to the joint venture according to actual
conditions of the particular lines and projects. The duration of a joint venture engaged in ordinary projects is ten to thirty years
while the duration of a joint venture engaged in projects requiring large amount of investment, long construction periods and low
interest rates on funds, producing highly sophisticated products with advanced or key technology supplied by foreign partner, or
producing competitory products on world market, can be extended to 50 years. The said duration can be extended to more than 50 years
with the special approval by the State Council.”



 
The State Council
1986-01-15

 






CIRCULAR OF THE MINISTRY OF FOREIGN TRADE AND ECONOMIC COOPERATION ON AFFIRMING THE EXPORT ENTERPRISES OF PRODUCTS AND THE ENTERPRISES WITH ADVANCED TECHNOLOGY AMONG ENTERPRISES WITH FOREIGN INVESTMENT

19961203

The Ministry of Foreign Trade and Economic Cooperation

Circular of the Ministry of Foreign Trade and Economic Cooperation on Affirming the Export Enterprises of Products and the Enterprises
with Advanced Technology among Enterprises with Foreign Investment

WaiJingMaoZiZi [1986] No.210

November 13, 1986

The people’s governments of various provinces, autonomous regions, municipalities directly under the Central Government, municipalities
separately listed on the State plan, special economic zones and open coastal cities and each department, commission and bureau of
the State’s Council and the International Trust and Investment Company of China:

After the Provisions of the State Council on Encouraging Foreign Investment are promulgated, each region and department has already
carried out it actively and earnestly. With a view to examining and affirming the export enterprises of products and the enterprise
with advanced technology, the Ministry of Foreign Trade and Economic Cooperation is drafting Measures on Affirming the Export Enterprises
of Products and the Enterprises with Advanced Technology among the Enterprises with Foreign Investment according to opinions of the
leading team of the State Council in charge of foreign investment. Before the unified Measures are promulgated, please implement
according to this circular.

1.

Together with the relevant departments in the same level, the departments (commissions, bureaus) of foreign trade and economic cooperation
of various provinces, autonomous regions, municipalities directly under the Central Government, municipalities separately listed
on the State plan, and special economic zones have the right to affirm the export enterprises of products and the enterprise with
advanced technology in the enterprises with foreign investment approved to establish before the promulgation of the Provisions of
the State Council on Encouraging Foreign Investment and bring forth the certification. The two kinds enterprises of the open coastal
cities can be affirmed by the departments of trade and economic cooperation of the provinces, autonomous regions together with the
departments in the same level, which bring forth the certification. The two kinds enterprises of the ministries, commissions and
bureaus of the State Council should be affirmed by the Ministry of Foreign Trade and Economic Cooperation together with the relevant
departments, which bring forth the certification.

After the Provisions are promulgated, the export enterprises of products and the enterprise with advanced technology established newly
are affirmed by the Ministry of Trade and Economic Cooperation or the departments (commissions, bureaus) of various provinces, autonomous
regions, municipalities directly under the central government, municipalities separately listed on the State plan, and special economic
zones together with the relevant departments according to the power of examining and approving contracts, which bring forth the certification.

2.

From the day promulgating the Provisions to the day issuing this circular, the affirmation of the export enterprises of products and
the enterprise with advanced technology made by various provinces, autonomous regions, municipalities directly under the Central
Government, municipalities directly under the State plan, special economic zones and cities authorized by provinces and autonomous
regions is still effective. The two kinds enterprises affirmed by provinces, autonomous regions and municipalities directly under
the Central Government should be filed to the departments of trade and economic cooperation of the provinces, autonomous regions
for records, which bring forth the certification. The affirmation made after the issue of this Circular should be dealt according
to Article 1 of this Circular.

3.

The procedures of affirming the export enterprises of products and the enterprise with advanced technology are: The enterprises make
applications to the departments of trade and economic cooperation of the provinces, autonomous regions, municipalities directly under
the Central Government, municipalities separately listed on the State plan, and special economic zones through the local departments
of trade and economic cooperation, and then the departments of trade and economic cooperation of provinces, autonomous regions, municipalities
directly under the Central Government, municipalities separately listed on the State plan, and special economic zones will examine
and affirm the enterprises together with the relevant departments according to the application of the enterprises. The name list
of the examined and affirmed enterprises and relevant documents should be filed to the Ministry of Foreign Trade and Economic Cooperation
for records. At the same time, they are reported to their local departments of industry and commerce, taxation, foreign exchange,
bank, customs, finance, labor, urban construction and other relevant departments in the same level as the evidence of enjoying various
preferential treatments. The report can work as the basis of transacting procedures to enjoy the favorable treatment. The two kinds
enterprises held by the ministries, commissions and bureaus of the State Council should make applications to the Ministry of Foreign
Trade and Economic Cooperation through the departments in charge and be examined and approved by the Ministry of Foreign Trade and
Economic Cooperation together with the relevant departments, which bring forth the certification.

4.

Every local government should deal the affirmation of the two kinds of enterprises with discretion. Don’t hurry to make affirmation
when you are not certain with the enterprises with advanced technology and the method of making affirmation from the easy batches
to the difficult ones can be adopted.



 
The Ministry of Foreign Trade and Economic Cooperation
1986-11-13

 






PROVISIONS OF THE PEOPLE’S REPUBLIC OF CHINA ON THE FINANCIAL CONTROL OF CHINESE-FOREIGN EQUITY JOINT VENTURES

19931213

The Ministry of Finance

Provisions of the People’s Republic of China on the Financial Control of Chinese-foreign Equity Joint Ventures

the Ministry of Finance

August 5, 1986

Article 1

These Provisions are formulated in accordance with the Law of the People’s of China on Chinese-foreign Equity Joint Ventures and other
relevant laws and statutory regulations, in order to improve the financial control and supervision of Chinese-foreign Equity Joint
Ventures and to protect the legitimate rights and interests of investors.

Article 2

All financial and accounting activities of a Chinese-foreign Equity Joint Ventures (hereinafter referred to as a joint enterprise)
which is established in China with the approval of the ministry of Foreign Economic Relations and Trade of the People’s Republic
of China or one of its authorised organs shall comply with the provisions of the relevant Chinese laws and statutory regulations,
and shall be subject to examination and supervision from the relevant finance and taxation departments. A joint enterprise shall
provide the examining party with related information and the examining party shall be liable for maintaining the confidentiality
of such information.

Article 3

A joint enterprise shall establish a complete financial and accounting body which shall be based within China. Financial and accounting
matters shall be handled by the enterprise itself.

Article 4

A joint enterprise shall, in accordance with the rules and financial and accounting procedures for Chinese-foreign Equity Joint Ventures
issued by the Ministry of Finance of the People’s Republic of China and in conjunction with its own specific conditions, formulate
is own financial and accounting procedures and shall file these procedures with the department in charge of the enterprise, and equivalent
level finance organ and the local taxation organ. If any one of these units considers that the financial and accounting procedures
of the said joint enterprise contravene a Chinese law or statutory regulation it shall require the enterprise to make the appropriate
amendments.

Article 5

A joint enterprise shall tighten control of its invested capital, invested property and invested goods and materials, in order to
ensure that enterprise property remains safe and intact. A joint enterprise shall improve cost control and endeavour to reduce costs
so as to enhance its competitiveness. A joint enterprise shall strengthen control of its creditors and debtors, special funds and
foreign exchange funds and increase the efficient use of these funds.

Article 6

A joint enterprise shall, in accordance with provisions, submit monthly, quarterly and annual accounting statements to the various
parties to the joint enterprise, the department in charge of the joint enterprise, an equivalent level finance organ and the local
taxation organ. A copy of the annual accounting statement shall be submitted to the original examining and approving organ. A copy
of the annual accounting statement for key joint enterprises designated by the Ministry of Finance shall, at the same time, be submitted
to the Ministry of Finance.

Article 7

The various parties to a joint enterprise shall pay their respective investment contributions in full in accordance with the time
limits prescribed in the contract. Interest on late payments or compensation for losses shall be paid in accordance with the provisions
of the contract for that part of the investment payment overdue. After the various parties to a joint enterprise have paid their
investment contributions, a certified public accountant approved by the Chinese Government shall be engaged to verify the amount
and to issue a verification report. The joint enterprise, in accordance with this report, shall enterprise. Investment verification
work shall be completed within 60 days of payment of investment.

Article 8

A joint enterprise shall strengthen finance control during its establishment period. Wages of personnel involved in preparatory activities,
travelling expenses, staff training costs and other expenses incurred during the establishment period, which is the period from the
signing of the contract to the start-up of production and business operations, may be classified as establishment costs and shall
be amortised by instalments after the start-up of production and business operations. Annual amortisation shall not exceed 20%. The
purchase or construction of fixed assets by a joint equity enterprise, its expenditure on intangible assets, or its interest expenses
during construction which shall be apportioned to project costs shall not be counted as establishment costs.

Article 9

Classification criteria for fixed assets and the period of depreciation for a joint enterprise shall be determined and implemented
in accordance with the provisions of the Rules for the Implementation of the Income Tax Law on Chinese-foreign Equity Joint Ventures.

Article 10

During the period of the joint enterprise the parties to the joint enterprise shall not withdraw their registered capital in any form
or by any means.

Article 11

A joint enterprise shall pay site use fees for the right to use a site. The scale of rates for site use fees and the method of payment
shall be implemented in accordance with the local provisions of the people’s government of the province, autonomous region and municipality
directly under the Central Government. Site use fees may be counted as costs. If the site use right is subscribed by the Chinese
party as investment, a joint enterprise shall not, in addition, pay site use fees.

Article 12

A joint enterprise, in accordance with the scale of fees checked and ratified by the finance department and the labour department
of the local province, autonomous region or municipality directly under the Central Government, shall pay, on behalf of its Chinese
employees, labour insurance funds, medical and welfare fees and various State subsidies, such as employee housing rent and commodity
price subsidies. Such expenses shall be counted as costs. Labour insurance funds for the Chinese employees of the enterprise shall
be paid by the joint enterprise to the department in charge of labour insurance. Medical and welfare fees shall be kept by the enterprise
itself for use in payment of medical and welfare expenses for Chinese employees. The various subsidies, such as housing rent and
commodity price subsides, shall be paid by the enterprise to the local finance organ.

Article 13

A joint enterprise shall set aside 2% of the total monthly employee actual wage bill as trade union funds, to be paid out of enterprise
cost outlays. Trade union funds shall be managed and used by the trade union of the enterprise in accordance with the relevant provisions
of the All-China Federation of Trade Unions.

Article 14

A joint enterprise shall pay the various taxes in accordance with the provisions of the relevant tax laws of the People’s Republic
of China. After-tax profits shall be allocated first to the reserve fund, the employee bonus and welfare fund and the enterprise
development fund. The proportion of the amount allocated to these funds shall be determined in accordance with contract provisions
or by the Board of Directors. In addition to being used as a temporary advance payment to cover the losses of a joint enterprise,
the reserve fund may also be used to increase the enterprise’s capital and to expand its production, provided this is approved by
the joint enterprise’s examining and approving organ. The enterprise development fund may be used to purchase fixed assets, increase
the amount of working capital available and expand the enterprise’s production operations. The employee bonus and welfare fund shall
be used in part for extraordinary employee bonuses, such as an exemplary worker bonus, an invention bonus and an end-of-year bonus,
and in part shall be given to the trade union of the enterprise for use in collective welfare activities, such as construction or
renovation of employee housing.

Article 15

After the “three funds” have been set aside in accordance with Article 14 of the Provisions, a joint enterprise shall distribute
the remaining distributable profit in accordance with the proportion of investment contributed by the various parties to the enterprise.
Profit that has not been distributed from previous years may be added to the current year’s profit for distribution. A foreign party
to a joint enterprise may legally remit abroad its dividends paid in accordance with its investment proportion, or the dividends
may be reinvested in China. Dividends paid to the Chinese party to a joint enterprise in accordance with its investment proportion
shall be handled pursuant to the measures of the Ministry of Finance of the People’s Republic of China on the allocation and control
of profit received by a Chinese Party to a Chinese-foreign equity joint enterprise.

Article 16

When the liquidation of a joint enterprise is declared at the expiry or premature termination of its contract, appropriate financial
and liquidation work shall be conducted in accordance with the Law of the People’s Republic of china on Chinese-foreign Equity Joint
Ventures and the provisions of its Implementing Rules concerning liquidation of Chinese-foreign Equity Joint Ventures.

After a joint enterprise is dissolved, the various account books and documents shall be retained by the Chinese party to the enterprise.

Article 17

The right to interpret these Provisions resides with the Ministry of Finance of the People’s Republic of China.

Article 18

These Provisions shall enter into force as of the date of promulgation.



 
The Ministry of Finance
1986-08-05

 






INTERIM PROVISIONS OF THE MINISTRY OF COMMUNICATIONS FOR LIGHTERAGE OPERATIONS ON WATER IN PORTS

INTERIM PROVISIONS ON ENVIRONMENT CONTROL FOR ECONOMIC ZONES OPEN TO FOREIGNERS

19860304the State Council

The State Environmental Protection Administration

Interim Provisions on Environment Control for Economic Zones Open to Foreigners

the State Environmental Protection Administration

March 15,1986

Article 1

These Provisions are formulated to strengthen environment control for the Economic Zones Open to Foreigners, to prevent and control
environmental pollution and ecological damage, to ensure the health of human beings, to protect and create a sound investment environment
and to promote economic and social development.

Article 2

The term “Economic Zones Open to Foreigners” used in these Provisions refers to State-approved Special Economic Zones, Port Cities
and Open Port Economic Zones.

All units and individuals engaged in production and business activities in the Economic Zones Open to Foreigners must abide by these
Provisions.

Article 3

The people’s governments at the various levels in the Economic Zones Open to Foreigners must adhere to the policy of “giving priority
to prevention and integrating prevention with control”, as well as enforcing the comprehensive restoration and control of the environment.
Environment protection should be brought into the economic and social development plans of local areas and aims, tasks and measures
for environment protection clearly defined and their implementation organized.

Article 4

Where the construction of new areas is being carried out in Economic Zones Open to Foreigners an evaluation of environmental effects,
overall planning and an appropriate layout must be made. The various relevant departments must carry out construction strictly in
accordance with the requirements of the plan and the layout.

Where inappropriate layouts presently exist in the Economic Zones Open to Foreigners, they should be progressively resolved through
integration with the reconstruction of the locality and the adjustment of industry. The construction of projects that will pollute
the environment in residential areas, water resource protection areas, convalescence areas, nature conservation and scenic and tourist
areas, as well as places of historic interest and scenic beauty and other areas which require special protection is not permitted;
where such projects have been built already, a limited period will be allowed to bring the project under control or to carry out
adjustments or relocation.

Article 5

The people’s government of the province, autonomous region or municipality directly under the Central Government governing the Economic
Zones Open to Foreigners may formulate local supplementary standards in cases where there are no provisions for the quality of the
environment under State standards; where the implementation of State standards for the discharge of pollutants does not meet local
environment quality requirements, local standards for the discharge of pollutants, more restrictive than the State standards, may
be formulated and filed with the State departments for environment protection.

Local enterprises and institutions must implement local standards for the discharge of pollutants formulated in accordance with the
provisions in the previous paragraph.

Article 6

Technology and equipment imported into the Economic Zones Open to Foreigners from abroad must comply with pollution-free or low-level
pollution requirements and in cases where pollution will be a resultant factor and where China is unable to provide the supplementary
systems necessary to solve such problems, appropriate environment protection facilities shall be imported at the same time. All new
construction, reconstruction and extension projects must provide supplementary facilities that prevent and control environmental
pollution at the same time that the main part of the project is put into operation.

Article 7

When signing an economic contract, all units and individuals in the Economic Zones Open to Foreigners shall define the obligations
and responsibilities for environment protection of the various parties and carry out measures to prevent and control environmental
pollution. The contract is not permitted to include any content in violation of State and local environment protection laws and legislation.

Article 8

Units undertaking development construction in the Economic Zones Open to Foreigners must, in accordance with State provisions, submit
a report (table) on environmental effects and details on environment protection concerning the initial plan of the construction project;
after construction is completed, a report concerning the completed environment protection facilities must be lodged for inspection
and approval.

Environment protection departments shall provide an official response within 45 days of receiving the report (table) on environmental
effects and within 30 days of receiving details on environment protection measures for the initial plan and the report on completed
environment protection facilities submitted for inspection and approval; in the absence of an official response prior to the expiry
of the time limit, the submitted plan will automatically become effective.

Article 9

Where enterprises and institutions in the Economic Zones Open to Foreigners wish to discharge pollutants, they must apply to the environment
protection department of the local people’s government for permission and accurately complete a form declaring the facilities used
for the discharge of pollutants, the facilities for treatment and the categories, methods, quantities and concentration of pollutants
discharged under normal working conditions, and only after examination and approval and the obtaining of a registration certificate
authorizing the discharge of pollutants may production or business operations commence. Changes concerning the discharge of pollutants
shall be reported promptly to the environment protection departments of the local People’s Government.

In cases where the limits of national or local standards for the discharge of pollutants are exceeded, a fee for exceeding the standard
rate for discharge of pollutants shall be paid in accordance with State provisions; a pollutant discharge fee will be paid, in accordance
with State provisions, where pollutants are discharged into waterways.

Article 10

The environment protection departments of the people’s governments at the various levels in the Economic Zones Open to Foreigners
will be responsible for the organization, co-ordination, supervision and inspection of environment protection work in the local area.
Units under supervision and inspection must accurately provide information about the relevant state of affairs and other data.

The environment protection departments have obligations and responsibilities for maintaining the confidentiality of the information
and data provided by the unit under supervision and inspection.

Article 11

Where a unit has violated these Provisions and caused pollution damage, the environment protection departments of the people’s governments
at the various levels in the Economic Zones Open to Foreigners, or other departments in charge specified by the State, may instruct
the unit to bring the pollution under control within a given period, to pay expenses for the elimination of the pollution and to
compensate for losses; and a warning or a fine may be imposed.

Should the party concerned refuse to comply, legal proceedings may be filed with the People’s Court within 15 days of the date of
delivery of the statement on the decision; where, upon the expiry of the claim period, legal proceedings have not been filed, nor
the decision carried out, the environment protection departments or other departments in charge are to submit the case to the People’s
Court for enforcement.

Article 12

The people’s government of the province, autonomous region or municipality directly under the Central Government in the local area
of the Economic Zones Open to Foreigners may formulate implementing measures in accordance with these Provisions.

Article 13

These Provisions will enter into force as of the date of promulgation.



 
The State Environmental Protection Administration
1986-03-15

 






PROVISIONAL REGULATIONS ON VEHICLE VESSEL USAGE TAX

Provisional Regulations of the PRC on Vehicle Vessel Usage Tax

    

   Article 1. All obligatory taxpayers (hereinafter referred to as taxpayers) of Vehicle and Vessel Usage Tax, who are the representatives
of units or individuals who possess and also use a vehicle or vessel within the territory of the People’s Republic
of China, shall pay Vehicle and Vessel Usage Tax in accordance with the provisions of these Regulations.

   Article 2. Levies for the use of a vessel will be calculated in accordance with the “Vessel Tax Schedule” attached to these
Regulations. Levies for the use of a vehicle will be determined by the provincial, autonomous region or
directly administered municipal people’s government within the scope stipulated in the “Vehicle Tax Schedule” attached to these
Regulations.

   Article 3. The following vehicles or vessels are exempt from Vehicle and Vessel Usage Tax:

(1) vehicles or vessels for the private use of State organs, people’s organisations and the armed forces;

(2) vehicles or vessels for the private use of institutions whose operating expenses are allocated by State finance departments;

(3) fishing vessels with a deadweight capacity of less than one tonne;

(4) landing stages and pontoons specifically for the loading and unloading of passengers and goods and the storage of goods;

(5) various types of fire fighting vehicles and vessels, street sprinkler vehicles, prison vans, police vehicles,
vehicles used in epidemic prevention, ambulance vehicles and vessels, garbage disposal vehicles and vessels,
vehicles and vessels used in port work and vessels used in construction;

(6) vessels which pay vessel tonnage tax in accordance with the relevant regulations;

(7) other vehicles or vessels approved by the Ministry of Finance as tax exempt.

   Article 4. With the exception of those included in Article 3 of these Regulations, taxpayers who have bona fide difficulties in
meeting tax payments may enjoy a reduction or exemption from Vehicle and Vessel Usage Tax for a set period to be
determined by the provincial, autonomous region or directly administered municipal people’s government.

   Article 5. The levying of or exemption from Vehicle and Vessel Usage Tax will be determined by the provincial, autonomous region
or directly administered municipal people’s government where individuals who possess bicycles or other
non-motorised vehicles or vessels for private, non-business use are concerned.

   Article 6. Vehicle and Vessel Usage Tax will be collected annually with payment by instalments. Payment deadlines will be determined
by the provincial, autonomous region or directly administered municipal people’s government.

   Article 7. Control of the collection of the Tax will be carried out in accordance with the provisions of the “Provisional
Regulations of the People’s Republic of China on the Control of Tax Payment Collection”.

   Article 8. Vehicle and Vessel Usage Tax will be collected by the taxpayer’s local tax organ.

   Article 9. The Ministry of Finance is responsible for the interpretation of these Regulations. Detailed implementing rules
will be formulated by the provincial, autonomous region or directly administered municipal people’s government and a copy
will be filed with the Ministry of Finance.

   Article 10. These Regulations will be effective from 1 October 1986.

    





REGULATIONS FOR THE AUTONOMOUS RIGHT OF THE ENTERPRISES WITH FOREIGN INVESTMENT TO EMPLOY PERSONNEL, THE WAGES AND SALARIES, AND THE EXPENSES FOR INSURANCE AND WELFARE BENEFITS FOR STAFF MEMBERS AND WORKERS

CONSTITUTION ACT, 1982 – page 21

CONSTITUTION ACT, 1982 – page 20

CONSTITUTION ACT, 1982 – page 19

CONSTITUTION ACT, 1982 – page 18

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