Home China Laws 1996 Page 6

1996

CUSTOMS REGULATIONS FOR THE SUPERVISION OF INBOUND AND OUTBOUND TRAINS AND THE GOODS AND COMMODITIES THEREON

Customs Regulations of the PRC for the Supervision of Inbound and Outbound Trains and the Goods and Commodities Thereon

(Effective Date:1990.03.01–Ineffective Date:)

Article 1 In order to promote foreign economic and trade scientific, technological and cultural exchanges, and strengthen customs supervision
and management, these Regulations are made in keeping with the Customs Law of the People’s Republic of China, and the relevant regulations
governing railways, and in the light of the actual situation of railway transportation.

Article 2 The “inbound and outbound trains” in these Regulations refer to the locomotives, passenger trains, goods trains, mail trains, baggage
trains, electricity generating trains, guard’s trains, and track trains that pass through the Customs on the border.

The “goods and commodities” in these Regulations refer to the goods, baggage, packages, mail and other items carried on trains passing
through the Customs on the border.

The word “inter-customs transportation” in these Regulations refers to the fact that when goods and commodities have been transported
into the country they will be sent, under the supervision of the Customs, into another customs station for entry formalities, or
to the goods and commodities allowed through the Customs under the supervision of the Customs for which export formalities have been
complied with at the place of shipment, or to the goods and commodities that are transported from one customs station on another
in the country and that should be supervised by the Customs.

Article 3 Outbound or inbound trains must stay at departure or entry stations for customs supervision and examination.

Form the time an inbound train arrives at an entry station to the time when the Customs has finished its examination, or from the
time the Customs begins examining an outbound train to the time Customs allows it to pass through, it cannot move, be disintegrated
(except for wheel replacement for passenger cars), or leave the entry or departure station without permission.

Article 4 During the Custom’s examination of an inbound or outbound train, no personnel are allowed to board and alight it except for those
personnel from relevant port examination and quarantine departments or railway service personnel who carry out their duties.

Article 5 The goods, commodities and passengers carried on an inbound or outbound train should be supervised by the Customs. When goods and
commodities have been loaded or unloaded, the railway station should hand documents and business records to the Customs, which attest
to the actual situation.

If the Customs finds inbound or outbound goods or commodities to have been smuggled or if it suspects them to have been smuggled,
it can inform the railway station by letter to unload them at a place designated by the Customs or transfer the relevant cars to
a designated place for further handling.

Article 6 The goods and commodities under the supervision of the Customs should be supervised by the Customs whether they are stored in the
Customs supervision area or outside it.

The personnel sent by the Customs to a railway station, a warehouse of a freight supervision area, or a cargo transshipment area should
abide by relevant railway regulations and must produce their credentials when needed. All railway departments should play a supportive
role.

Article 7 When an inbound or outbound train leaves a departure or entry station, the railway station should notify in advance the Customs of
the departure time, number, and the place where the train stays at and leaves from.

For each inbound and outbound goods train, a railway station should hand to the Customs a list of the orderly grouping of trains and
a goods hand-over note.

Article 8 When the Customs finishes examining a train, it should immediately notify a departure or entry station. If it cannot finish the examination
during the stay of an inbound passenger train, it can continue the examination by sending its personnel onto the train, and the head
of the entry station must provide them round-trip tickets enabling them to come to a station nearest to the front station and provide
them working conditions.

Article 9 For the goods and commodities carried on an inbound or outbound train, the departure or entry railway station must hand the following
documents to the Customs:

(1) a goods delivery note, or a baggage or package hand-over note and supplementary documents.

(2) a goods hand-over note, or a baggage or package hand-over note.

(3) other relevant documents as required by the Customs.

Article 10 When proceeding with formalities for the import and export of goods, the recipient of imported goods (including packages) or the
sender of exported goods, or the agents should declare their goods by filling out goods declaration forms and handing in the following
as required:

(1) a goods delivery note (including package declaration) and supplementary documents;

(2) the license for imported or exported goods; and

(3) other documents as required by the Customs.

The owner of inbound reclaimed baggage and outbound checked baggage must complete relevant customs formalities.

Article 11 When the Customs is examining goods, the departure and entry railway station should send its personnel to break the seals in the
cars, open car doors, or remove the tarpaulin in accordance with customs requirements. The recipient or sender of the goods, or their
agents should remove, load, or unload goods, and open or re-pack them. When the Customs deems necessary, it can, at its discretion,
open them for examination or re-examination, or take samples. The Customs should produce evidence for the name and amount of each
item taken as a sample.

Article 12 For the goods and commodities that are returned by the Customs because they do not meet China’s entry control regulation, the railway
station should complete the formalities for their return upon production of a written notice of rejection issued by the Customs.
For those goods that are rejected as they contravene the international railway transportation regulation, the Customs must allow
the return upon production of the railway department’s record of rejection.

Article 13 Only after the Customs has stamped a seal on the goods delivery note, or baggage or package declaration, can the railway station
deliver or transport the relevant goods and commodities out of the country.

Article 14 Prior to the transportation of “inter-customs transportation” goods, the Customs should stamp a seal on the goods delivery note with
words Goods Under Customs Supervision after checking that the relevant documents, goods and commodities are correct. It then returns
the delivery note to the railway station together with the customs seal for their transportation. The customs seal must be handed
to the responsible person of a train by the railway station. It then will be sent together with a delivery note to the designated
place or to the customs of the departure station.

Article 15 For the goods under customs supervision, if there is any change in the station of arrival in the country or a station of departure
in the country, the railway station that arranges for the change should notify the customs of such a change. The designated station
or departure station that has been changed must be a customs station. The relevant railway station should hand the customs seal to
the responsible person of a train together with the delivery note to the designated place or the customs of the departure station
that has been changed. In case there is no customs house at the designated place, the applicant for the change will have to obtain
the consent of the customs near the designated delivery station before the entry station will proceed with the change.

Article 16 The goods carried by passengers that have gone through customs and approved by the customs at the station of arrival in the country
will be sealed by the Customs, and then the Customs seal will be handed to the responsible person of the train, which will then be
brought to the Customs at the place of arrival.

Article 17 The materials, spare parts, tools, wheel, and bogies for the repair of an inbound or outbound train will be exempted from customs
duties and product taxes (or value-added taxes) when they are confirmed to be used for the repair of an inbound or outbound car under
the supervision of the Customs.

For the materials used for sealing cars and tools for railway transportation (including tarpaulin), the railway station should declare
in good faith to the Customs, and the Customs will inspect them and let them pass tax-free.

Article 18 The goods for public use and the daily necessities for personal use within a reasonable amount carried by the personnel at the departure
and entry station and by stewards on trains (including food such as grain and vegetables), and the drink and food used by passengers
on an inbound and outboard train, will be inspected by the Customs and then allowed through tax-fee.

For the return of tarpaulin and empty containers, the recipient and sender or their agents should fill out the “tax-exemption certificate
for the returned of goods” for the tarpaulin and containers of recipients or senders. It then must be handed to Customs of the entry
or departure station in the country for signature and stamping before being returned to the railway station for the tax-free return
of these items.

DECISION OF THE NATIONAL PEOPLE’S CONGRESS APPROVING THE PROPOSAL BY THE DRAFTING COMMITTEE FOR THE HONG KONG SPECIAL ADMINISTRATIVE REGION ON THE ESTABLISHMENT OF THE COMMITTEE FOR THE BASIC LAW OF THE HONG KONG SPECIAL ADMINISTRATIVE REGION UNDER THE STANDING COMMITTEE OF THE NATIONAL PEOPLE’S CONGRESS BASIC LAW

Category	SPECIAL ADMINISTRATIVE REGION	Organ of Promulgation	The National People’s Congress	Status of Effect	In Force
Date of Promulgation	1990-04-04	Effective Date	1990-04-04

Decision of the National People’s Congress Approving the Proposal by the Drafting Committee for the Basic Law of the Hong Kong Special Administrative Region on the Establishment of the Committee for the Basic Law of the Hong Kong Special Administrative Region under the Standing Committee of the National People’s Congress

The Decision
Appendix

(Adopted at the Third Session of the Seventh National People’s Congress on

April 4, 1990)
The Decision

The Third Session of the Seventh National People’s Congress decides:

1. to approve the proposal by the Drafting Committee for the Basic Law of
the Hong Kong Special Administrative Region on the Establishment of the
Committee for the Basic Law of the Hong Kong Special Administrative Region
under the Standing Committee of the National People’s Congress; and

2. to establish the Committee for the Basic Law of the Hong Kong Special
Administrative Region under the Standing Committee of the National People’s
Congress when the Basic Law of the Hong Kong Special Administrative Region of
the People’s Republic of China is put into effect.
Appendix

Proposal by the Drafting Committee for the Basic Law of the Hong Kong
Special Administrative Region on the Establishment of the Committee for the
Basic Law of the Hong Kong Special Administrative Region Under the Standing
Committee of the National People’s Congress

1. Name: The Committee for the Basic Law of the Hong Kong Special
administrative Region Under the Standing Committee of the National People’s
Congress.

2.Affiliation: To be a working committee under the Standing Committee of
the National People’s Congress.

3.Function: To study questions arising from the implementation of Articles
17, 18, 158 and 159 of the Basic Law of the Hong Kong Special Administrative
Region and submit its views thereon to the Standing Committee of the National
People’s Congress.

4.composition: Twelve members, six from the mainland and six from Hong
Kong, including persons from the legal profession, appointed by the Standing
Committee of the National People’s Congress for a term of office of five
years. Hong Kong members shall be Chinese citizens who are permanent residents
of the Hong Kong Special Administrative Region with no right of abode in any
foreign country and shall be nominated jointly by the Chief Executive,
President of the Legislative Council and Chief Justice of the Court of Final
Appeal of the Region for appointment by the Standing Committee of the National
People’s Congress.

CIRCULAR OF THE MINISTRY OF FOREIGN ECONOMIC RELATIONS AND TRADE AND THE STATE ADMINISTRATION FOR INDUSTRY AND COMMERCE ON ISSUING THE PROVISIONS FOR CONTRACTED OPERATION OF CHINESE-FOREIGN EQUITY JOINT VENTURES

The Ministry of Foreign Economic Relations and Trade, the State Administration for Industry and Commerce

Circular of the Ministry of Foreign Economic Relations and Trade and the State Administration for Industry and Commerce on Issuing
the Provisions for Contracted Operation of Chinese-foreign Equity Joint Ventures

WaiJingMaoFaFa [1990] No.22

September 13, 1990

(Circular omitted) Attachment:Provisions for Contracted Operation of Chinese-foreign Equity Joint Ventures

The following regulations on contracted operation of Chinese-foreign equity joint ventures (hereinafter referred to as joint ventures)
are aimed at guaranteeing the normal development of these enterprises.

Article 1

Definition of contracted operation

The contracted operation mentioned in these regulations is meant for joint ventures which, by signing contracts, offer the whole or
part of their operational rights to contractors for a certain period of time while those joint ventures are managed by the contractors.
Such forms of contracted operation are but supplementary measures to help those poorly managed and loss-making joint ventures. During
the contracting term, the contractor takes on the risks of operation while gaining part of the joint venture’s profits.

Article 2

Requirements for contracted operation of joint ventures

A joint venture shall fulfill the following requirements to practice contracted operation:

That it is a project in an industry encouraged or permitted by State policy. However, key state projects, those in energy or communications
in particular, shall not practice contracted operation.

That the Chinese and foreign partners of the joint venture have fully provided the investment required by contract and the payment
has been verified-but the joint venture is hardly likely to survive because of poor management.

Article 3

Contractors’ qualifications

A contractor must have the following qualifications:

That it is a Chinese or foreign corporation or enterprise with the qualification of a legal person, and has engaged in business operation
for at least 3 years;

That is belongs to the same industry as the joint venture and can work out a concrete plan to effectively help the business make up
deficits and return to normal development; and

That it is able to provide adequate risk deposit and a letter-of-guarantee for the risk-guaranty money.

Article 4

Basic requirements for contracted operation

The contractor can be chosen through public bidding (i.e., the joint venture conducts public bidding in accordance with the conditions
worked out by the board of directors); alternatively, the joint venture can sign directly an agreement on contracted operation with
the contractor (either partner of the venture or a third party) in accordance with the decision made by the board of directors.

The legal-person status, name and business scope of the joint venture shall not be changed because of contracted operation.

As the operator and manager of the joint venture’s property, the contractor shall strictly carry out the contract and be under the
supervision of the venture’s board of directors. The contractor has no right to dispose of the joint venture’s property, such as
transfer, selling off, removing, mortgaging, leasing or giving out as a present. The contractor shall regularly submit factual financial
reports to the joint venture’s board of directors.

The contracting term is usually set at 1 to 3 years. The maximum shall be no more than 5 years. The contractor shall see to it that
the joint venture becomes profitable or at least its performance is improved remarkably when the contracting term expires.

Contracting shall only cover the joint venture’s after-tax profits. Both parties to such contracts shall decide on the annual profit
during the contracting term base in accordance with relevant targets defined in the feasibility study report worked out when the
joint venture was launched.

During the contracting term the contractor shall, in the first quarter of each year, submit to the joint venture risk guaranty money,
letter of guarantee or risk deposit. No securities shall be made for the deposit, which shall not come from the investment by the
joint venture’s partners. The risk guaranty money and the letter of guarantee shall be irrevocable and unilaterally drawable to the
joint venture. Whatever the form the sum shall be not less than 50 percent of the contracted annual profit.

During the contracting term the contractor shall get approval from the board of directors before applying for any loan in the name
of the joint venture. The debt of the joint venture during the contracting term shall not exceed the total amount of the contracted
profit for the year.

During the contracting term, the joint venture shall continue to implement State laws, regulations and accounting rules.

In accordance with law, the contractor shall pay income tax on its earnings from contracting.

The financial, accounting and tax affairs related to the contracted operation shall be handled in accordance with relevant regulations
adopted by the financial and taxation departments.

If the contractor fails, for two years in succession, to fulfill contracted-profit obligations, besides the joint venture shall, at
the end of a fiscal year, take over the contractor’s risk deposit or draw the risk guaranty money according to the bank’s letter
of guarantee, or the contractor shall pay for the loss according to contract, the examination and approval authority may annual the
approval. Consequently, the contract shall cease to be in force, the contractual relationship shall automatically be renounced, while
the administration for industry and commerce shall recall the certificate of registration for the contracted operation and register
the changed operational status of the joint venture.

The joint venture shall be dissolved according to the law and the joint venture contract if, after the contracted operation has ceased,
the venture still fails to change its loss-making situation.

10.

Before the contracted operation, and when the contracted operation is terminated during the contracting term or when the contracting
term expires, the joint venture shall make an inventory of property and capital and transfer management from one to another. The
inventory is valid only when it has been certified by accountants registered in China.

Article 5

Contract on contracted operation

To contract the operation of a joint venture, the contractor shall sign a contract with the joint venture. Contracts on contracting
profit between partners of the venture are not permitted to sign.

The contract shall be concluded in accordance with relevant Chinese laws, in keeping with the purposes and principles of the original
contract of the joint venture and without changing the items of the original contract that have nothing to do with the contracted
operation.

The contract shall include the contracting term, the rights and restrictions on the rights, and duties and responsibilities of the
contractor, the form and content of the contracted operation, the distribution pattern of income, risk guaranty money, letter of
guarantee and risk deposit, liability for breach of contract, ways to settle disputes over contract, responsibilities on losses and/or
debt owed by the joint venture prior to the contracted operation, the principles of making an inventory of property and capital and
the transferring procedures as well as the method of evaluating, production targets and profit, target for technological upgrading,
the debt safety line, the arrangements for the workers of the joint venture, labour management, wages, welfare and insurance, and
the party which shall handle and be responsible for the disputes with other corporations, enterprises and individuals in the course
of implementing the contract on contracted operation.

If the contractor severely violates the contract during the contracting term, the joint venture’s board of directors has the right
to terminate the contract and demand corresponding compensation for loss from the contractor.

The revision, postponement, termination or expiration of the contract shall be approved by the original authorities that approved
the joint venture.

Article 6

Application, examination and approval and registration of contracted operation

The joint venture shall apply for contracted operation and submit the following documents to the examination and approval authority:

(1)

an application on contracted operation of the joint venture;

(2)

the decision of the joint venture’s board of directors on contracted operation;

(3)

a report containing concrete measures to turn the joint venture from loss-making to profitable, measures worked out by the contractor
and approved by the joint venture’s board of directors:

(4)

the contractor’s legal business license, articles of association of the corporation, and a balance sheet covering the past 3 years
operations;

(5)

the contract on contracted operation;

(6)

the original contract of the joint venture and report on feasibility studies;

(7)

opinions of the government department in charge and financial and taxation departments on contracted operation of the joint venture;
and

(8)

other documents required by the examination and approval authority.

The examination and approval authority, within 30 days of receiving all the above-mentioned documents, shall decide to approve or
not approve the contracted operation in accordance with these regulations. The authority shall, within a specified time, demand revision
of illegal or obviously unfair contents in the contract. Otherwise the application shall not be approved.

Within 30 days from the date when the examination and approval authority issued documents of approval for the contracted operation,
the contractual parties shall, with the certificate on the delivery of risk deposit or letter of guarantee and risk guaranty money,
go through the formalities of registration with the administration for industry and commerce. The approval of the examination and
approval authority shall automatically cease to be effective if registration is not done in 30 days. The administration for industry
and commerce shall handle registration within 30 days of receiving the application.

The term of contracted operation begins from the date on which the administration for industry and commerce issues registration documents.

The registration of the opening and alteration of contracted operation and cancellation of registration shall be handled in accordance
with the regulations of the administration for industry and commerce.

Article 7

Supplementary rules

Joint ventures which are already under contracted operation must, within 90 days from the date these regulations are published, retroactively
go through procedures of the examination and approval and registration for contractual operation. Contracts already concluded may
be revised by referring to these regulations. The joint ventures and contractors who fail to retroact formalities within the time,
may be ordered jointly by the examination and approval authority and the administration for industry and commerce to terminate their
contract, and even their business license of the joint venture may be taken over and the contractor’s profit may be frozen.

The examination and approval authority and administration for industry and commerce may penalize joint ventures and contractors who
conceal their contracted operations without applying for approval and going through the registration formalities.

The Circular on the Examination, Approval and Registration of Enterprises from Foreign Countries or Regions Entrusted to Manage Chinese-foreign
Joint Ventures, published on July 11, 1988 by the State Administration for Industry and Commerce and the Ministry of Foreign Economic
Relations and Trade is still valid for those joint ventures which entrust foreign enterprises with management and administration.

Contracted operators of Chinese-foreign contractual joint ventures may refer to these regulations.

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

The Ministry of Foreign Economic Relations and Trade, the State Administration for Industry and Commerce
1990-09-13

PROVISIONS ON THE ADMINISTRATION OF MARITIME INTERNATIONAL CONTAINER TRANSPORT

Category	COMMUNICATIONS AND TRANSPORT	Organ of Promulgation	The State Council	Status of Effect	With An Amendment Existing
Date of Promulgation	1990-12-05	Effective Date	1990-12-05

Provisions of the People’s Republic of China on the Administration of Maritime International Container Transport

Chapter I  General Provisions
Chapter II  Procedures for the Examination and Approval of Applications
Chapter III  Management of Freight Transportation
Chapter IV  Hand-Over Procedures and Responsibilities
Chapter V  Provisions on Penalties
Chapter VI  Supplementary Provisions

(Promulgated by Decree No. 68 of the State Council of the People’s

Republic of China on December 5, 1990, and effective as of the date of
promulgation)(Editor’s Note: For the revised text, see the Decision of the
State Council Regarding Amending the Provisions of the People’s Republic of
China on the Administration of Maritime International Container Transport
promulgated on April 18, 1998)
Chapter I  General Provisions

Article 1 These Provisions are formulated in order to strengthen the
administration of maritime international container transport, to clearly
define the responsibilities of the various parties concerned, and to meet
the State’s needs in handling foreign trade.

Article 2 These Provisions shall apply to those enterprises that are
established within the territory of the People’s Republic of China for the
handling of maritime international container transport, and also to units
and individuals that are involved in the operations of maritime international
container transport.

Article 3 The Ministry of Communications of the People’s Republic of
China shall be responsible for the administration of the operations of
maritime international container transport throughout the country.

Article 4 In conducting maritime international container transport, the
principles of safety, accuracy, speed, economy, and civilized services must
be followed and door-to-door transportation shall be actively developed.
Chapter II Procedures for the Examination and Approval of Applications
for the Establishment of Enterprises That Handle Maritime International
Container Transport

Article 5 “Enterprises for the operations of maritime international
container transport” refers to those shipping enterprises that are engaged in
maritime international container transport, and also to those enterprises
that are engaged in port handling, with their inland transshipment stations
and freight stations that undertake maritime international container
transport.

Article 6 The applications for the establishment of enterprises that
are engaged in the operations of maritime international container transport
shall be submitted to the competent departments for communications of the
provinces, autonomous regions, or municipalities directly under the Central
Government for examination and verification, and then to the Ministry of
Communications for examination and approval.

Article 7 The applications for the establishment of enterprises that
are engaged in port handling of international containers shall be submitted
to the competent departments for communications of the provinces, autonomous
regions, or municipalities directly under the Central Government for
examination and approval, and then to the Ministry of Communications for the
record.

After the promulgation of these Provisions, the applications for the
establishment of new inland transshipment stations and freight stations that
undertake the transport of maritime international containers shall be
submitted first to the competent department that has established the said
enterprise for examination, verification, and consent; and then to the
competent departments for communications of the provinces, autonomous
regions, or municipalities directly under the Central Government for
examination and approval; and finally to the Ministry of Communications for
the record.

The procedures for the examination and approval of the applications for
the establishment of new transshipment stations and freight stations that
undertake the transport of maritime international containers shall be
formulated separately by the Ministry of Communications in conjunction with
the Ministry of Foreign Economic Relations and Trade.

Article 8 The applications for the establishment of Chinese-foreign
equity joint ventures and Chinese-foreign contractual joint ventures that
handle maritime international container transport shall be submitted to the
Ministry of Communications for examination, verification, and consent; and
shall then, in accordance with the provisions of the pertinent laws and
regulations, be submitted to the Ministry of Foreign Economic Relations and
Trade for examination and approval.

Article 9 The establishment of enterprises that are engaged in the
operations of maritime international container transport must satisfy the
following conditions;

(1) to have transport vessels, transport motor vehicles, transport
equipment and other relevant facilities that correspond to theft scope of
business and to the needs of their customers;

(2) to have the necessary organizational structure, site for setting up
their business office, and specialized administrative personnel;

(3) to have the registered capital and their own working capital that
meets the requirements of their business operations;

(4) to meet other conditions as stipulated by State laws, decrees and
regulations governing the establishment of enterprises.

Article 10 The competent department for communications shall examine,
verify and approve the scope of business operations of the enterprises that
have applied for the permission to handle maritime international container
transport in light of their sources of funds, the conditions of equipment and
facilities, the standard of administration, and the sources of cargoes.

Article 11 The competent department of communications shall issue the
approving documents to those enterprises, which have obtained the approval to
handle maritime international container transport. The units that have
received the approving documents shall apply and go through the registration
procedures by presenting the aforesaid approving documents to the
administrative department for industry and commerce, which shall issue the
business licences after checking and approving the enterprises’ application;
and only then shall the enterprises be permitted to start business operations.

Cases concerning the establishment of inland transshipment stations and
freight stations that undertake the transport of maritime international
containers shall also be submitted to the Customs for the completion of the
registration procedures.
Chapter III Management of Freight Transportation

Article 12 The containers used in maritime international container
transport shall conform to the provisions and technical standards of the
international organization for the standardization of containers, and also
to the provisions of the pertinent international containers convention.

The owners and operators of containers shall do a good job in the
management and maintenance of containers and carry out regular inspections, in
order to guarantee the provision of containers that are suitable for the
transportation of cargoes.

In case that the provisions in the second paragraph of this Article have
been violated, and, as a result, goods are damaged or short in number or
quantity, the person(s) who is (are) held responsible for this shall bear the
liability, for compensation in accordance with the pertinent provisions.

Article 13 Shippers and enterprises that are engaged in port handling,
shall guarantee that the vessels, motor vehicles, handling machinery and
tools are kept in a good technical condition, thereby ensuring the
transportation and safety of containers.

In case that shippers and enterprises that are engaged in port handling
have violated the provisions in the first paragraph of this Article, and, as
a result, goods are damaged or short in number or quantity, they shall bear
the liability for compensation in accordance with the pertinent provisions.

Article 14 Shippers and enterprises that are engaged in port handling
shall use the container shipping documents.

Article 15 Shippers may directly organize the contracting of the
transportation of container goods, and consignors may directly hold business
talks with shippers or commission shipping agents for the consignment of
import and export container goods.

Article 16 Consignors shall submit an accurate report on the names of
goods, and their property, quantity, weight, and specifications. The goods
shipped by consignment in containers must conform to the requirements of
container transport, and marks on the goods should be obvious and clear.

Article 17 Consignors or shippers shall, before vanning, carry out a
careful inspection of containers, and containers that might cause an adverse
effect on to the transportion and vanning of goods may not be used.

Article 18 Containers which are used for shipping such perishables as
grains, edible oils, and frozen food, shall be inspected by the department for
commodity inspection and found to be up to the standard before they are used
for shipping.

Article 19 As soon as container goods have reached their destination,
the shipper shall promptly send a cargo delivery notice to the consignee; and
the consignee shall, upon receiving the notice, take delivery of goods on the
strength of the bill of lading.

In case that the consignee fails to clear the goods when the prescribed
time limit is overdue, or that the consignee fails to return the containers
according to the prescribed time limit, the said consignee shall be required
to pay in accordance with the pertinent stipulations or with the agreement
set forth in the contract, the demurrage charge for the extended use of
containers.

Article 20 The freight charges for maritime international container
transport and other expenses shall be calculated and collected in accordance
with the State provisions concerning shipping charges and charge rates. In the
absence of State provisions, the freight charges shall be calculated and
collected in accordance with the prices agreed upon by both parties. No units
shall be permitted to collect charges at random.

Article 21 Shippers and enterprises that are engaged in port handling,
shall submit periodical statistical statements on transportion to the
competent department for communications.

Article 22 Various parties that are involved in maritime international
container transport shall, in good time, provide each other with information
concerning container transport.
Chapter IV Hand-Over Procedures and Responsibilities

Article 23 Shippers and consignors or consignees shall, in accordance
with the hand-over method stipulated, in the bill of lading, handle the
hand-over operations of containers and container goods at marshalling yards,
freight stations, or other places agreed upon by the two parties concerned.

Article 24 Shippers and enterprises that are engaged in port handling,
which take part in maritime international container transport, shall handle
the hand-over operations in accordance with the following provisions:

(1) maritime shippers shall handle the hand-over operations alongside
vessel through the tally companies and enterprises that are engaged in port
handling;

(2) with respect to containers transported by waterways through nodal
points, the enterprises that engaged in port handling and waterway carriers
shall handle the hand-over operations alongside vessel;

(3) with respect to containers transported by highways through nodal
points, the enterprises that engaged in port handling and highway carriers
shall handle the hand-over operations at the gate of the container terminal;

(4) with respect to containers transported by railway through nodal
points, the enterprise that engaged in port handling or highway carriers and
railway carriers shall handle the hand-over operations at the site of handing.

Article 25 While handling the hand-over operations of containers, the
two handling parties shall check the container numbers, the bodies of
containers and the containers’ marking seals. The loaded containers shall be
handed over by their marking seals and by the condition of container body; and
the empty containers shall be handed over by condition of container body.

After checking the container numbers, the bodies of containers and the
marking the two handling parties shall make a record and confirm it by
appending their signatures to the record.

Article 26 With respect to the liabilities of shippers and enterprises
that are engaged in port handling for the damage and loss of containers and
container goods, before the hand-over operations, the liabilities shall be
taken up by the handing-over party; after the hand-over operations, the
liabilities shall be taken up by the receiving party. However, if, within 180
days immediately after the hand-over operations, the receiving party is able
to produce evidence to testify to the fact that the damage of the containers,
or the damage and loss of container goods, were caused by the handing-over
party, then the handing-over party shall take up the liabilities for
compensation, unless otherwise provided by law.

Article 27 Unless otherwise provided by law, shippers and consignors
shall, in accordance with the following provisions, take up the liabilities
for the damage or loss of container goods:

(1) With respect to those goods, the vanning of which is done by the
shippers, if the goods in the containers are damaged or are short in number
or quantity during the period of time from the day the shippers receive the
goods to the day when the goods reach their destination but before they are
handed over to the consignees, the shippers shall take up the liabilities for
the damage or shortage.

(2) With respect to those goods, the vanning of which is done by the
consignors, if the container bodies and the marking seals have remained intact
but the goods (in the containers) have been damaged or are short in number or
quantity during the period of time from the completion or the vanning and the
completion of the procedures for consignment to the day before the containers
are handed over to the consignees, the consignors shall take up the liabilities
for the damage or shortage; if the container bodies are damaged or the marking
seals broken, and the goods in the containers are also damaged or are short
in number or quantity, the shippers shall take up the liabilities for the
damage or shortage.

The time limits for shippers and consigness or consignees to raise
claims of compensation shall be limited to no more than 180 days, beginning
from the day when container goods are handed over, unless otherwise provided
by law.

Article 28 In case that the consignors’ inaccurate or false declaration
on container goods has resulted in injuries and death of personnel, or in the
loss of means of transport of the goods proper and the containers, or of other
goods, the consignors shall bear the liabilities for the consequences
arising therefrom.

Article 29 In case that the fault of the person in charge of the vanning
has resulted in injuries and death of personnel, or in the loss of means of
transport, of other goods, or containers, the aforesaid person shall bear the
liabilities for the consequences arising therefrom.

Article 30 In case that the damage or shortage in number or quantity
of container goods involves a claim for compensation from a foreign unit,
which necessitates an appraisal and the issue of the relevant certificate by
the administrative department for commodity inspection, the case shall be
handled in accordance with the provisions in the Law of the People’s Republic
of China on the Inspection of Import and Export Commodities. In case that the
shortage in number or quantity of containers or container goods involves a
claim for compensation from a foreign unit, which necessitates the issue of
the relevant certificate by the tally department, the case shall be handled in
accordance with the pertinent provisions.
Chapter V Provisions on Penalties

Article 31 With respect to those who are engaged in container transport
business without a business licence for handling transport business, the
competent department for communications shall order them to cease business
operations, and penalties shall be imposed on them by the administrative
department for industry and commerce.

Article 32 With respect to those who have received shipping charges in
violation of these Provisions and the relevant laws and regulations of the
State on commodity prices, they shall be penalized by the department for the
control of commodity prides.

Article 33 With respect to those who have violated the administration
of transport documents, they shall be given an administrative warning or a
pecuniary penalty by the competent department for communications in light of
the seriousness of the cases.

Article 34 With respect to those who have disturbed the normal order of
transportation or have expanded their scope of business without authorization,
they shall be ordered by the competent department for communications to carry
out rectification of their business, and shall be penalized by the
administrative department for industry and commerce.

Article 35 In the event that the person concerned does not accept the
decision on penalties, he/she may, within 15 days as of the first day after
the receipt of the notice of the decision on penalties, appeal to the
competent department immediately above the punishing department for
reconsideration of the aforesaid decision on penalties. The competent
department that has received the appeal for reconsideration shall, within
30 days (after receiving the appeal), make the decision on reconsideration.
If the person concerned still does not accept the decision of the
reconsideration, he/she may within 15 days immediately after receiving the
decision on reconsideration, bring a suit before a people’s court. If the
person concerned neither appeal for reconsideration, nor bring a suit before
the people’s court, nor execute the decision on penalties or the decision of
the reconsideration within the prescribed period of time, the department that
has made the decision on penalties may apply to the people’s court for
enforcement.
Chapter VI Supplementary Provisions

Article 36 The right to interpret these Provisions resides in the
Ministry of Communications.

The Ministry of Communications may formulate the rules for implementation
in accordance with these Provisions.

Article 37 These Provisions shall go into effect as of the date of
promulgation.

NATIONAL FLAG LAW

Category	NATIONAL FLAG, NATIONAL EMBLEM, CAPITAL, NATIONAL ANTHEM AND NATIONAL DAY	Organ of Promulgation	The Standing Commettee of the National People’s Congress	Status of Effect	In Force
Date of Promulgation	1990-06-28	Effective Date	1990-10-01

Law of the People’s Republic of China on the National Flag

Appendix: Directions for the Making of the National Flag

(Adopted at the 14th Meeting of the Standing Committee of the Seventh

National People’s Congress on June 28, 1990, promulgated by Order No.28 of the
President of the People’s Republic of China on June 28, 1990, and effective
as of October 1, 1990)

Article 1 This Law is enacted in accordance with the Constitution with a
view to defending the dignity of the National Flag, enhancing citizens’
consciousness of the State and promoting the spirit of patriotism.

Article 2 The National Flag of the People’s Republic of China shall be a
red flag with five stars.

The National Flag of the People’s Republic of China shall be made
according to the Directions for the Making of the National Flag promulgated by
the Presidium of the First Plenary Session of the Chinese People’s Political
Consultative Conference.

Article 3 The National Flag of the People’s Republic of China is the
symbol and hallmark of the People’s Republic of China.

All citizens and organizations shall respect and care for the National
Flag.

Article 4 The local people’s governments at various levels shall exercise
supervision over and administration of the display and use of the National
Flag within their respective administrative areas.

The Ministry of Foreign Affairs, the competent department in charge of
communications under the State Council and the General Political Department of
the Chinese People’s Liberation Army shall exercise supervision over and
administration of the display and use of the National Flag within their
respective jurisdiction.

The National Flag shall be made by enterprises designated by the people’s
governments of provinces, autonomous regions and municipalities directly under
the Central Government.

Article 5 The National Flag shall be displayed daily in the following
places or premises of institutions:

(1) Tiananmen Square and Xinhuamen in Beijing;

(2) The Standing Committee of the National People’s Congress, the State
Council, the Central Military Commission, the Supreme People’s Court and the
Supreme People’s Procuratorate;

The National Committee of the Chinese People’s Political Consultative
Conference;

(3) The Ministry of Foreign Affairs;

(4) Airports, harbours and railway stations of entry or exit and other
frontier ports, frontier stations and coastal defence stations.

Article 6 Departments under the State Council, the standing committees of
the local people’s congresses, the people’s governments, the people’s courts,
the people’s procuratorates and the local committees of the Chinese People’s
Political Consultative Conference at various levels shall display the National
Flag during working days.

Full-time schools shall display the National Flag daily, except during
winter vacations, summer vacations and Sundays.

Article 7 State organs at all levels and mass organizations shall display
the National Flag on National Day, International Labour Day, New Year’s Day
and the Spring Festival; the National Flag may be displayed, when conditions
permit, in premises of enterprises, institutions, villagers’ committees and
residents’ committees, in urban residential compounds (buildings) and in
public places such as squares and parks.

In minority nationality areas where the Spring Festival is not a
traditional festival, whether the National Flag is displayed during the Spring
Festival shall be prescribed by the authorities practising self-government in
the national autonomous areas.

In a national autonomous area, the National Flag may be displayed on the
anniversary of the founding of the national autonomous area and during major
traditional festivals of the minority nationalities.

Article 8 The National Flag may be displayed when important celebration
and commemorative activities, large-scale cultural and sports activities and
major exhibitions are held.

Article 9 Measures for the display and use of the National Flag in
diplomatic activities and by the Chinese embassies and consulates stationed in
foreign countries and other diplomatic representative agencies shall be
prescribed by the Ministry of Foreign Affairs.

Article 10 The National Flag shall be displayed by military organs at
barracks and on military vessels in accordance with the relevant provisions of
the Central Military Commission.

Article 11 Measures for the display of the National Flag by civilian
vessels or foreign vessels entering Chinese territorial waters shall be
prescribed by the competent department in charge of communications under the
State Council.

Measures for the display of the National Flag by public security vessels
on frontier defence, security or fire control duties shall be prescribed by
the departments in charge of public security under the State Council.

Article 12 The National Flag, when displayed under Articles 5, 6 and 7 of
this Law, shall be hoisted in the morning and lowered in the eve- ning.

Where the National Flag shall be displayed under this Law, when the
weather is inclement, it is permissible that the Flag not be displayed.

Article 13 When the National Flag is displayed, a Flag-hoisting ceremony
may be held.

When a Flag-hoisting ceremony is held, persons present shall face the Flag
and stand at attention to salute the Flag, and the National Anthem may be
played or sung while the National Flag is being hoisted.

A full-time middle school or primary school shall hold a Flag-hoisting
ceremony once a week, except during vacations.

Article 14 The National Flag shall be lowered to the half staff as at
token of mourning when the following persons pass away:

(1) President of the People’s Republic of China, Chairman of the Standing
Committee of the National People’s Congress, Premier of the State Council and
Chairman of the Central Military Commission;

(2) Chairman of the National Committee of the Chinese People’s Political
Consultative Conference;

(3) Persons who have made outstanding contributions to the People’s
Republic of China;

(4) Persons who have made outstanding contributions to world peace or the
cause of human progress.

When unfortunate events causing especially serious casualties occur or
when serious natural calamities have caused heavy casualties, the National
Flag may be flown at half staff as a token of mourning.

The half-staffing of the National Flag in accordance with the provisions
of (3) and (4) in the first paragraph and of the second paragraph of this
Article shall be decided by the State Council.

Dates and places for the half-staffing of the National Flag under this
Article shall be decided by the funeral organ established by the State, or
shall be decided by the State Council.

Article 15 When the National Flag is displayed, it shall be placed in a
prominent position.

The National Flag, when raised or carried in a procession with another
flag or flags, shall be in front of the other flag or flags.

The National Flag, when displayed with another flag or flags, shall be
either at the center, above the other flag or flags, or in a position of
prominence.

When the National Flags of two or more nations are displayed in foreign
affairs activities, relevant provisions of the Ministry of Foreign Affairs or
the international practice shall be followed.

Article 16 The National Flag, when hoisted or lowered from a vertical
staff, shall be hoisted or lowered slowly. When hoisted, the National Flag
must reach the peak of the staff; when lowered, it may not touch the ground.

The National Flag, when flown at half staff, shall be first hoisted to the
peak of the staff and then lowered to a point where the distance between the
top of the Flag and the peak of the staff is one third of the length of the
staff; the Flag, when lowered, shall be again hoisted to the peak before it is
lowered.

Article 17 No damaged, defiled, faded or substandard National Flag shall
be displayed.

Article 18 The National Flag and the design thereof shall not be used as
a trade mark or for advertising purposes, and shall not be used in private
funeral activities.

Article 19 Whoever desecrates the National Flag of the People’s Republic
of China by publicly and wilfully burning, mutilating, scrawling on, defiling
or trampling upon it shall be investigated for criminal responsibilities
according to law; where the offence is relatively minor, he shall be detained
for not more than 15 days by the public security organ in reference to the
provisions of the Regulations on Administrative Penalties for Public Security.

Article 20 This Law shall enter into force as of October 1, 1990.

Appendix: Directions for the Making of the National Flag
(Promulgated by the Presidium of the First Plenary Session of the Chinese
People’s Political Consultative Conference on September 28, 1949)

The shape and colour of either side of the National Flag shall be
identical, whereas the five stars on both sides of the Flag shall be opposite
to each other. For convenience’s sake, these directions shall take the
circumstances where the staff is on the left as the basis for illustration.
Where the staff is on the right, the word “left” used in these directions
shall all be changed to “right”, while the word “right” referring to direction
shall all be changed to “left”.

(1) The face of the Flag shall be red and rectangular; the proportion of
its length and height shall be 3 to 2. The upper left of the face of the Flag
shall be studded with five yellow five-pointed stars. One of the stars shall
be bigger than the others, with its circumcircle’s diameter being three-tenth
of the height of the Flag, and shall be placed in the left; the four other
stars shall be smaller, with their circumcircle’s diameter being one-tenth of
the height of the Flag, encircling the big star on its right in the shape of
an arch. The cover of the staff shall be white.

(2) The five stars shall be positioned and drawn as follows:

a. To determine the position of the five stars, the face of the Flag shall
be first folded both ways to form four equal rectangles; then the rectangle on
the upper left shall be vertically divided into ten equal sections and
horizontally divided into fifteen equal sections.

b. The central point of the big five-pointed star shall be at a point in
the rectangle where the fifth line from above (or the fifth line from below),
and the fifth line from the left (or the tenth line from the right) meet. The
method of drawing shall be: taking this point as the centre and the length of
three such equals as the radius to make a circle. On the circumference of this
circle, five points with equal distances from each other shall be determined,
one of the points must be in the right above position of the circle. Then
connect each of the five points with every other point to form a straight line
respectively. The outline formed by these five straight lines shall be the
required big five-pointed star. An angle of the five-pointed star shall point
in the right above direction.

c. The centres of the four small five-pointed stars shall be as follows:
the first shall be at a point, in the rectangle, where the second line from
above (or the eighth line from below), and the tenth line from the left (or
the fifth line from the right) meet; the second shall be at a point where the
fourth line from above (or the sixth line from below), and the twelfth line
from the left (or the third line from the right) meet; the third shall be at a
point where the seventh line from above (or the third line from below), and
the twelfth line from the left (or the third line from the right) meet; the
fourth shall be at a point where the ninth line from above (or the first line
from below), and the tenth line from the left (or the fifth line from the
right) meet. The method for drawing shall be: taking each of the above four
points as the centre and the length of one such equal as the radius to make
four circles. On each circle, five points with equal distances from each other
shall be determined. One of such points must be on the line linking the
centre of the circle with the centre of the big five-pointed star. Then the
same methods used in forming the big five-pointed star shall be used to form
the small five-pointed stars. The four small five-pointed stars shall
respectively have an angle pointing right at the centre of the big
five-pointed star.

(3) The measurement in common use for the National Flag, from which people
from various circles may choose at their discretion shall be as follows:

a. 288 cm. in length, 192 cm. in height;

b. 240 cm. in length, 160 cm. in height;

c. l92 cm. in length, 128 cm. in height;

d. 144 cm. in length, 96 cm. in height;

e. 96 cm. in length, 64 cm. in height.

DECISION OF THE NATIONAL PEOPLE’S CONGRESS REGARDING THE REVISION OF THE CHINESE-FOREIGN EQUITY JOINT VENTURES

Category	FOREIGN ECONOMIC RELATIONS AND TECHNOLOGICAL COOPERATION	Organ of Promulgation	The National People’s Congress	Status of Effect	In Force
Date of Promulgation	1990-04-04	Effective Date	1990-04-04

Decision of the National People’s Congress Regarding the Revision of the Law of the People’s Republic of China on Chinese-foreign Equity Joint Ventures

(Adopted at the Third Session of the Seventh National People’s Congress on

April 4, 1990, promulgated by Order No. 27 of the President of the People’s
Republic of China and effective as of the date of promulgation)

The Third Session of the Seventh National People’s Congress, having
considered the proposal of the State Council regarding the Amendment to the Law
of the People’s Republic of China on Chinese-Foreign Equity Joint Ventures
(Draft), decides to make the following revisions to the Law of the People’s
Republic of China on Chinese-Foreign Equity Joint Ventures:

1. A new paragraph shall be added to Article 2 as paragraph 3: “The state
shall not nationalize or requisition any equity joint venture. Under special
circumstances, when public interest requires, equity joint ventures may be
requisitioned by following legal procedures and appropriate compensation shall
be made.”

2. Article 3 shall be amended as: “The equity joint venture agreement,
contract and articles of association signed by the parties to the venture shall
be submitted to the state’s competent department in charge of foreign economic
relations and trade (hereinafter referred to as the examination and approval
authorities) for examination and approval. The examination and approval
authorities shall decide to approve or disapprove the venture within three
months. When approved, the equity joint venture shall register with the state’s
competent department in charge of industry and commerce administration,
acquire a business license and start operations”.

3. Paragraph 1 of Article 6 shall be amended as: “An equity joint venture
shall have a board of directors; the number of the directors thereof from each
party and the composition of the board shall be stipulated in the contract and
articles of association after consultation among the parties to the venture;
such directors shall be appointed and replaced by the relevant parties. The
chairman and the vice-chairman (vice-chairmen) shall be determined through
consultation by the parties to the venture or elected by the board of
directors. If the Chinese side or the foreign side assumes the office of the
chairman, the other side shall assume the office(s) of the vice-chairman
(vice-chairmen). The board of directors shall decide on important issues
concerning the joint venture on the principle of equlity and mutual benefit.”

4.Paragraph 2 of Article 7 shall be amended as: “An equity joint venture
may, in accordance with provisions of the relevant laws and administrative
rules and regulations of the state on taxation, enjoy preferential treatment
for reduction of or exemption from taxes.”

5. Paragraph 1 of Article 8 shall be amended as: “An equity joint venture
shall, on the strength of its business license, open a foreign exchange account
with a bank or any other financial institution which is permitted by the state
agency for foreign exchange control to handle foreign exchange transactions.”

Paragraph 1 of Article 10 shall be amended as: “The net profit which a
foreign joint venturer receives as its share after performing its obligations
under the laws, and the agreements or the contract, the funds it receives upon
the expiration of the venture’s term of operation or its early termination, and
its other funds may be remitted abroad in accordance with foreign exchange
control regulations and in the currency or currencies specified in the contract
concerning the equity joint venture.”

Article 11 shall be amended as: “The wages, salaries or other legitimate
income earned by a foreign worker or staff member of an equity joint venture,
after payment of the individual income tax under the tax laws of the People’s
Republic of China, may be remitted abroad in accordance with foreign exchange
control regulations.”

6. Article 12 shall be amended as: “Based on different lines of trade and
different circumstances, arrangements for the duration of equity joint ventures
may be made differently through agreement by the parties to the venture.
Equity joint ventures engaged in certain lines of trade shall specify their
duration in the contracts, while equity joint ventures engaged in certain other
lines of trade may choose to or not to specify their duration in the contract.
Where an equity joint venture has had its duration specified and the parties
to the venture agree to extend the duration, the venture shall file an
application for the purpose with the examination and approval authorities six
months before its expiration. The examination and approval authorities shall,
within one month after receipt of the application, decide on its approval or
disapproval.”

7. Article 13 shall be amended as: “In case of heavy losses, failure of a
party to perform its obligations under the contract and the articles of
association, or force majeure etc., the parties to the joint venture may
terminate the contract through their consultation and agreement, subject to
approval by the examination and approval authorities and to registration with
the state’s competent department in charge of industry and commerce
administration. In case of losses caused by a breach of contract, the financial
responsibility shall be borne by the party that has breached the contract.”

This Decision shall enter into force as of the date of promulgation.

The Law of the People’s Republic of China on Chinese-Foreign Equity Joint
Ventures shall be republished after being correspondingly amended according to
this Decision.?

PROVISIONS CONCERNING REDUCTION OF AND EXEMPTION FROM ENTERPRISE INCOME TAX AND CONSOLIDATED INDUSTRIAL AND COMMERCIAL TAX FOR THE ENCOURAGEMENT OF FOREIGN BUSINESSMEN TO INVEST IN THE SHANGHAI PUDONG NEW ZONE

Category	TAXATION	Organ of Promulgation	The State Council	Status of Effect	In Force
Date of Promulgation	1990-09-11	Effective Date	1990-10-01

Provisions Concerning Reduction of and Exemption From Enterprise Income Tax and Consolidated Industrial and Commercial Tax for the Encouragement of Foreign Businessmen to Invest in the Shanghai Pudong New Zone

(Approved by the State Council on September 7, 1990 and promulgated by

the Ministry of Finance on September 11, 1990)

Article 1 These Provisions are formulated in order to assist Shanghai
Pudong New Zone (hereinafter referred to as “Pudong New Zone”) in expanding
foreign economic cooperation and technological exchange, absorbing foreign
capital, introducing advanced technology, and speeding up development and
construction.

Article 2 Production-oriented enterprises organized as Chinese-foreign
equity joint ventures, Chinese-foreign contractual joint ventures and
foreign-capital enterprises established in Pudong New Zone shall be subject
to enterprise income tax at the reduced tax rate of 15% on income derived from
production and business operations and on other income. Upon the filing of an
application with and approval of the tax authorities, an exemption from income
tax in the first and second years, commencing the first profit-making year,
and a 50% reduction of income tax from the third through the fifth years shall
be granted to those enterprises scheduled to operate for a period of 10 years
or more.

Article 3 After the period of enterprise income tax reduction and
exemption has expired in accordance with the provisions of the State,
export-oriented enterprises may, for any year in which the output value of the
export products of the enterprise amounts to 70% or more of the output value
of the products of the enterprise for that year, pay enterprise income tax at
a reduced tax rate of 10%. After the period of enterprise income tax reduction
and exemption has expired in accordance with the provisions of the State, the
payment of enterprise income tax at a rate reduced by one half may be extended
for a period of 3 years for advanced technology enterprises.

Article 4 Enterprises with foreign investment that are engaged in the
operation of such energy resources and communications construction projects
as airport, harbour, railway, highway, and power station, shall be subject to
enterprise income tax at a reduced tax rate of 15%. Upon the filing of an
application with and approval of the tax authorities, an exemption from income
tax from the first through fifth years, commencing the first profit-making
year, and a 50% reduction of income tax from the sixth through the tenth years
shall be granted to those enterprises scheduled to operate for a period of 15
years or more.

Article 5 Enterprises with foreign investment, that are engaged in
infrastructure construction connected with certain projects on tracts of land,
upon approval by the tax authorities of an application filed by the enterprise,
shall be given preferential treatment in taxation, in accordance with Article
2 of these Provisions concerning production-oriented enterprises.

Article 6 With respect to foreign financial institutions such as foreign
capital banks, branch offices of foreign banks, banks with Chinese-foreign
joint capital, and finance companies that are scheduled to operate for a
period of 10 years or more, if the paid-in capital of foreign investors or the
capital granted by the head office to the branch office for business
operations exceeds 10 million U.S. dollars, upon approval by the tax
authorities of an application, the enterprise income tax shall be levied on
income derived from business operations at a reduced tax rate of 15%, and
shall subject to an exemption in the first year, commencing the first
profit-making year, and a 50% reduction in the second and third years.

Article 7 Foreign financial institutions such as foreign capital banks,
branch offices of foreign banks, banks with Chinese-foreign joint capital,
and finance companies shall be subject to consolidated industrial and
commercial tax at a tax rate of 3% on their income derived from loan
transactions, and a tax rate of 5% on their income derived from other
financial transactions.

Article 8 A foreign investor that reinvests its share of profit
obtained from an enterprise in the same enterprise or in other enterprises
with foreign investment, or uses the aforesaid share of profit for setting up
a new enterprise with foreign investment, where the period of operation is
not less than 5 years, shall be refunded 40% of the amount of income tax
paid on the reinvested portion; if the reinvested amount is used to set up
export-oriented enterprises or advanced technology enterprises, where the
period of operation is not less than 5 years, the entire amount of income
tax paid on the reinvested portion shall be refunded.

Article 9 Where a foreign investor to a Chinese-foreign equity joint
venture remits its share of profit out of China, the amount remitted shall
be exempt from income tax.

Article 10 Foreign investors having no establishments in China but
receiving dividends, interest, rentals, royalties, and other income from
sources in the Pudong New Zone shall be subject to income tax at a reduced
tax rate of 10%, with the exception of those that are exempt from income tax
in accordance with the law. Where investors which provide funds or equipment
on preferential terms, or transfer advanced technology, and need to be granted
more preferential treatment in the form of income tax reduction or exemption,
the case shall be decided by the Shanghai Municipal People’s Government.

Article 11 Export products manufactured by enterprises with foreign
investment, with the exception of crude oil, refined oil and the products
otherwise specified by the State, shall be exempt from consolidated
industrial and commercial tax.

Article 12 Building materials, production and management equipment and
spare parts, means of transport, office supplies required for own use, as
well as raw materials and auxiliary materials required for production,
imported by enterprises with foreign investment, shall be exempt from
consolidated industrial and commercial tax.

Where enterprises with foreign investment use the tax-free imported raw
materials, spare parts, components and packaging materials for processing
products, which are then sold on the domestic market, consolidated industrial
and commercial tax shall be made up on the imported materials and components
used for processing of such products.

Article 13 Reasonable quantities of settling-in articles and means of
transport personally brought in by foreign personnel who are working or
reside in enterprises located in Pudong New Zone, shall be exempt from
consolidated industrial and commercial tax.

Article 14 The Shanghai Municipal People’s Government shall decide
whether or not the preferential treatment shall be granted to enterprises
with foreign investment in respect of local income tax imposed on them, or
in respect of real estate tax imposed on the new houses which have been
built or bought by them for their own use.

Article 15 For enterprises established or projects launched with
investment by companies, enterprises and other economic organizations as
well as individuals from Hong Kong, Macao and Taiwan, matters shall be
handled by taking reference to these Provisions.

Article 16 The State Taxation Bureau shall be responsible for
interpreting these Provisions.

Article 17 These Provisions shall go into effect as of October 1, 1990.

DECISION OF THE STANDING COMMITTEE OF THE NATIONAL PEOPLE’S CONGRESS ON THE PUNISHMENT OF CRIMINALS WHO SMUGGLE, PRODUCE, SELL OR DISSEMINATE PORNOGRAPHIC ARTICLES

Category	CRIMINAL LAW	Organ of Promulgation	The Standing Committee of the National People’s Congress	Status of Effect	In Force
Date of Promulgation	1990-12-28	Effective Date	1990-12-28

Decision of the Standing Committee of the National People’s Congress on the Punishment of Criminals Who Smuggle, Produce, Sell or Disseminate Pornographic Articles

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

National People’s Congress on December 28, 1990, promulgated by Order No.39
of the President of the People’s Republic of China on December 28, 1990, and
effective as of December 28, 1990)(Editor’s Note: In accordance with the
provisions of Article 452 of the Criminal Law of the People’s Republic of China revised at the Fifth Session of the Eighth National
People’s Congress on
March 14, 1997, and effective on October 1, 1997, the provisions regarding
administrative penalties and administrative measures in this Decision shall
continue to be in force and the provisions regarding criminal liability have
been incorporated into the revised Criminal Law)

With a view to punishing criminals who smuggle, produce, sell or
disseminate pornographic books and periodicals, movies, video- and
audio-tapes, pictures or other pornographic articles, and for the purpose of
maintaining social security and public order, strengthening the building of a
socialist society with advanced culture and ideology and stemming the
corrosive influence of the decadent bourgeois ideology, the following decision
is made:

1. Whoever smuggles pornographic articles for the purpose of making
profits or disseminating them shall be punished in accordance with the
Supplementary Provisions Concerning the Punishment of the Crimes of Smuggling.
Whoever carries or mails any pornographic article of small quantity into or
out of the territory of China, not for the purpose of making profits or
disseminating them, shall be punished in accordance with the relevant
provisions of the Customs Law.

2. Whoever produces, duplicates, publishes, sells or disseminates
pornographic articles for the purpose of making profits shall be sentenced to
fixed-term imprisonment of not more than three years or criminal detention
and shall concurrently be sentenced to a fine; if the circumstances are
serious, the offender shall be sentenced to fixed-term imprisonment of not
less than three years but not more than ten years and shall concurrently be
sentenced to a fine; and if the circumstances are especially serious, the
offender shall be sentenced to fixed-term imprisonment of not less than ten
years or life imprisonment and shall concurrently be sentenced to a fine or
confiscation of property. If the circumstances are relatively minor, the
offender shall be subjected to punishment by the public security organ in
accordance with the relevant provisions of the Regulations on Administrative
Penalties for Public Security.

Whoever provides book numbers for others to publish pornographic books and
periodicals shall be sentenced to fixed-term imprisonment of not more than
three years or criminal detention and shall concurrently or simply be
sentenced to a fine. Whoever provides others with book numbers when he clearly
knows that these will be used in the publication of pornographic books and
periodicals shall be punished in accordance with the provisions of the
preceding paragraph.

3. Whoever disseminates in society pornographic books and periodicals,
movies, video- and audio-tapes, pictures or any other pornographic articles,
where the circumstances are serious, shall be sentenced to fixed-term
imprisonment of not more than two years or criminal detention; where the
circumstances are relatively minor, the offender shall be subjected to
punishment by the public security organ in accordance with the relevant
provisions of the Regulations on Administrative Penalties for Public Security.

Whoever organizes shows of pornographic movies or video-tapes or similar
audio- and video-products shall be sentenced to fixed-term imprisonment of
not more than three years or criminal detention and shall concurrently be
sentenced to a fine; where the circumstances are serious, the offender shall
be sentenced to fixed-term imprisonment of not less than three years but not
more than ten years and shall concurrently be sentenced to a fine. Where the
circumstances are relatively minor, the offender shall be subjected to
punishment by the public security organ in accordance with the relevant
provisions of the Regulations on Administrative Penalties for Public Security.

Whoever produces or duplicates pornographic movies and video-tapes or
similar audio- and video-products and organizes shows of such products shall
be given a heavier punishment in accordance with the provisions of the
preceding paragraph.

Whoever disseminates pornographic articles to minors under the age of
eighteen shall be given a heavier punishment.

Parents and schools shall rigorously discipline and educate minors under
the age of sixteen who make private copies of, or pass around, pornographic
pictures, books and periodicals, or other pornographic articles.

4. Whoever uses pornographic articles to engage in criminal hooligan
activities shall be punished in accordance with the provisions of Article 160
of the Criminal Law; ringleaders of criminal hooligan groups or those who
engage in criminal hooligan activities leading to especially serious
consequences, may, in accordance with the provisions of Article 1 of the
Decision Regarding the Severe Punishment of Criminals Who Seriously Endanger
Public Security, be given punishment above the maximum punishment stipulated
in the Criminal Law, up to and including the death sentences.

Whoever uses pornographic articles to impart ways for committing crimes
shall be punished in accordance with the provisions of Article 2 of the
Decision Regarding the Severe Punishment of Criminals Who Seriously Endanger
Public Security; where the circumstances are especially serious, the offender
shall be sentenced to life imprisonment or death.

5. If a unit commits any illicit or criminal act mentioned in Article 1, 2
or 3 of this Decision, the person(s) directly in charge and other person(s)
directly involved in it shall be punished respectively in accordance with the
provisions of the aforesaid Articles, the unit shall be subjected to a fine or
penalty, and the competent administrative department may order the unit to
suspend business for rectification or rescind its licence.

6. Whoever is under any of the following circumstances shall be given a
heavier punishment in accordance with the relevant provisions of this
Decision:

(1) ringleaders of a criminal group;

(2) State functionaries who take advantage of their of their office to
smuggle, produce, duplicate, publish, sell or disseminate pornographic
articles;

(3) persons in charge of facilities for video recording, photographing,
duplicating, etc. who, by taking advantage of these facilities, commit illicit
or criminal acts mentioned in Article 2, 3, or 4 of this Decision; or

(4) adults who instigate any minor under the age of eighteen to smuggle,
produce, duplicate, sell or disseminate pornographic articles.

7. Pornographic articles, illegal gains from smuggling, producing,
duplicating, publishing, selling or disseminating pornographic articles and
the offender’s own guilty tools shall be confiscated. The confiscated
pornographic articles shall be destroyed in accordance with relevant
regulations of the State. All gains from fines and penalties or confiscation
shall be turned over to the State Treasury.

8. For the purpose of this Decision, pornographic articles refer to
obscene books, periodicals, movies, video- and audio-tapes, pictures, etc.
that explicitly portray sexual behavior or undisguisedly publicize
pornography.

Scientific works on human physiology or medical knowledge are not
pornographic articles.

Literary and art works of artistic value which contain obscene contents
shall not be regarded as pornographic articles.

The categories and catalogues of pornographic articles shall be prescribed
by the relevant competent departments under the State Council.

9. This Decision shall enter into force as of the date of promulgation.

REGULATIONS CONCERNING FOREIGN JOURNALISTS AND PERMANENT OFFICES OF FOREIGN NEWS AGENCIES

Regulations Concerning Foreign Journalists and Permanent Offices of Foreign News Agencies

(Effective Date 1990.01.19–Ineffective Date )

Article 1. These Regulations are formulated for the purpose of promoting international exchanges and the dissemination of information, regulating
the activities of foreign journalists and permanent offices of foreign news agencies within the territory of China and facilitating
their journalistic work.

Article 2. The present Regulations shall apply to resident foreign correspondents, foreign reporters for short-term news coverage (hereinafter
both referred to as foreign journalists) and permanent offices of foreign news agencies.

Resident foreign correspondents refer to the professional journalists dispatched by foreign news agencies, in accordance with these
Regulations, to be stationed in China for a period of more than 6 months for news coverage and reporting.

Foreign reporters for short-term news coverage refer to the professional journalists who come to China and stay for a period not exceeding
6 months for news coverage and reporting in accordance with these Regulations.

Permanent offices of foreign news agencies refer to branch offices composed of one or more staff members and established within the
territory of China by foreign news agencies for news coverage and reporting in accordance with these Regulations.

Article 3. The Government of the People’s Republic of China shall protect according to law the legitimate rights and interests of foreign journalists
and of the permanent offices of foreign news agencies and provide them with facilities for their normal journalistic activities.

Foreign journalists and permanent offices of foreign news agencies must abide by the laws and regulations of the People’s Republic
of china.

Article 4. The Ministry of Foreign Affairs of the People’s Republic of China (hereinafter referred to as the Foreign Ministry) is the competent
authority in charge of the affairs concerning foreign journalists and the permanent offices of foreign news agencies in China.

Article 5. A foreign news agency wishing to send a resident correspondent to China shall file an application with the Information Department
of the Foreign Ministry (hereinafter referred to as the Information Department). The application must be signed by the head of its
headquarters and contain the following particulars, with necessary papers attached thereto:

(1) Basic facts about the news agency;

(2) The name, sex, age, nationality, position, curriculum vitae and the place of intended residence of the correspondent to be sent;
and

(3) The professional correspondent certificate of the correspondent.

If one resident correspondent is to be sent by two or more foreign news agencies, these agencies shall submit separate applications
according to the procedures as stipulated in the preceding paragraph and indicate in their respective applications the posts held
concurrently by the said correspondent.

Article 6. Upon approval the application, the resident foreign correspondent to be sent shall, within 7 days of his/her arrival in China, register
with the Information Department on presentation of an appointment letter signed by the head of the headquarters of the relevant news
agency and his/her passport, and obtain the Foreign Journalist Identity Card.

A resident foreign correspondent to reside in a place other than Beijing shall, within 7 days of his/her arrival in China, go through
the procedures as stipulated in the preceding paragraph at the relevant foreign affairs office of the local people’s government entrusted
by the Information Department (hereinafter referred to as the authorities entrusted by the Information Department).

Article 7. A foreign news agency shall apply to the Information Department if it wishes to set up a permanent office in China. The application
shall be signed by its legal representative and shall contain the following particulars, with necessary papers attached thereto:

(1) Basic facts about the news agency;

(2) The name of the office to be set up in China, the place of intended residence, business scope, number of staff as well as the
name, sex, age, nationality, position and curriculum vitae of the head of the office and those of other members; and

(3) A copy of the registration certificate of the news agency issued by its home country.

Article 8. Upon approval of the application, the head of the permanent office to be set up shall, within 7 days of his/her arrival in China,
register with the Information Department on presentation of an appointment letter signed by the legal representative of the foreign
news agency concerned and his/her passport and the passports of other members, and obtain the Certificate for Permanent Office of
Foreign News Agency in China.

The head of a permanent office of a foreign news agency in a place other than Beijing shall, within 7 days of his/her arrival in China,
go through the procedures as stipulated in the preceding paragraph at the authorities entrusted by the Information Department.

Article 9. If a foreign news agency wishes to send an acting correspondent in the absence of its resident correspondent in china for a period
of no less than one month and no more than 6 months, the head of the agency’s headquarters shall submit in advance to the Information
Department or the authorities entrusted by it a written application which shall contain the name, sex, age, nationality, position,
curriculum vitae of the acting correspondent, with his/her professional correspondent certificate attached thereto. The acting correspondent
may not engage in journalistic activities unless he/she obtains approval and due certification.

Article 10. A resident foreign correspondent shall apply to the Information Department or the authorities entrusted by it for examination and
renewal of his/her Foreign Journalist Identity Card once every full year. Whoever fails to go through such procedure within 30 days
after the period due without justification will automatically forfeit his/her status of resident foreign correspondent.

Whenever a permanent office of a foreign news agency needs a change of its head, a change in the size of its staff and other important
changes, it shall submit an application to the Information Department, obtain the latter’s approval and go through the necessary
registration procedures for the change.

Article 11. For foreign journalists wishing to come to China to cover a visit by the head of state or government or the foreign minister of a
country, the application for approval shall be made collectively through the Ministry of Foreign Affairs of that country in advance
to the Chinese Foreign Ministry.

Article 12. A foreign reporter or journalist group wishing to come to China for news coverage on a short-term basis shall file an application
with a Chinese embassy or consulate abroad or a department concerned in China. Upon approval, the said reporter or group shall go
through the procedures for visas at a chinese embassy or consulate abroad or a visa-issuing organ authorized by the Foreign Ministry.

A foreign reporter or journalist group that is to visit China at the invitation of a chinese organization for short-term news coverage
shall apply for visas at a Chinese embassy or consulate abroad or a visa-issuing organ authorized by the Foreign Ministry on presentation
of the invitation letter or cable.

Article 13. The Chinese host organization shall be responsible for arranging the short-term news coverage activities of a foreign journalist
within the territory of China and render him/her assistance in this regard.

A foreign reporter for short-term news coverage shall obtain the consent of the host organization for an extended news coverage in
China with justified reasons and shall go through formalities for extension of the visa in accordance with the relevant regulations.

Article 14. A foreign journalist or permanent office of a foreign news agency shall conduct journalistic activities within the scope of business
as registered or within that of the mutually agreed plan for news coverage.

Foreign journalists and permanent offices of foreign news agencies must observe journalistic ethics and may not distort facts, fabricate
rumours or carry out news coverage by foul means.

Foreign journalists and permanent offices of foreign news agencies may not engage in any activities incompatible with their status
or the nature of their profession, or detrimental to China’s national security, unity or social and public interest.

Article 15. A foreign journalist shall apply for approval through the Information Department for interviewing a top leader of China, and shall
apply to the relevant foreign affairs departments for approval for gathering news form China’s government departments or other institutions.

Foreign journalists shall obtain in advance permission from the relevant foreign affairs office of the people’s government of a province,
autonomous region or municipality directly under the Central Government for news coverage in an open area in China. They shall submit
a written application to the Information Department for approval, if they intend to covernews in a nonopen area in China. Upon approval,
they shall go through formalities for travel certificates at the relevant public security organ.

Article 16. Resident foreign correspondents and permanent offices of foreign news agencies shall rent houses and set up office in accordance
with the relevant Chinese regulations.

Resident foreign correspondents and permanent offices of foreign news agencies may employ Chinese citizens as staff members or service
personnel through local foreign affairs service departments, whereas the employment of citizens of theirs respective home countries
or of a third country as staff members or service personnel requires the consent of the Information Department.

Article 17. Foreign journalists and permanent offices of foreign news agencies may not install transceivers or statellite communications facilities
within the territory of China. They shall apply to the competent telecommunications department of the Chinese Government for approval
if they are to use walkie-talkies or similar telecommunication facilities within the territory of China.

Foreign reporters for short-term news coverage in China shall apply to the Foreign Ministry for approval if they are to carry with
them or install satellite communications facilities for special reasons.

Article 18. Resident foreign correspondent shall notify in writing the Information Department of their departure 30 days before they leave their
posts and return their Foreign Journalist Identity Cards to the Information Department or the authorities entrusted by it for cancellation
before their departure from China. A permanent office of a foreign news agency in China shall notify the Information Department
of its closure 30 days beforehand and, after closure, it shall return its Certificate for Permanent Office of Foreign News Agency
to the Information Department or the authorities entrusted by it for cancellation.

Article 19. In case of violation of the present Regulations by foreign journalists or permanent offices of foreign news agencies in China, the
Information Department may, on the merits of each case, give them a warning, suspend or stop their journalistic activities in China,
or revoke their Foreign Journalist Identity Cards or Certificates for Permanent Office of Foreign News Agency.

Cases involving violations of the Law of the People’s Republic of China on Control of the Entry and Exit of Aliens or other laws and
regulations shall be dealt with by the competent Chinese authorities according to law.

Article 20. Foreigners and foreign agencies other than the foreign journalists and permanent offices of foreign news agencies as specified in
the present Regulations may not engage in journalistic activities in China. Due penalty shall be meted out by the relevant Chinese
public security organ to any violator depending on the seriousness of the case.

Article 21. The Ministry of Foreign Affairs shall be responsible for the interpretation of these Regulations.

MOFTEC P.R.C.

EDITOR:Victor

REGULATIONS OF PRC ON THE INVESTIGATION AND HANDLING OF MARITIME TRAFFIC ACCIDENTS

Regulations of PRC on the Investigation and Handling of Maritime Traffic Accidents

(Effective Date:1990.03.03–Ineffective Date:)

CONTENTS

CHAPTER I GENERAL PROVISIONS

CHAPTER II REPORT

CHAPTER III INVESTIGATION

CHAPTER IV HANDLING OF ACCIDENTS

CHAPTER V MEDIATION

CHAPTER VI PENALTIES

CHAPTER VII SPECIAL PROVISIONS

CHAPTER VIII SUPPLEMENTARY PROVISIONS

CHAPTER I GENERAL PROVISIONS

Article 1. These Regulations are formulated according to the relevant provisions of the Maritime Traffic Safety Law of the People’s Republic
of China in order to strengthen the control of maritime traffic safety and promptly investigate and handle maritime traffic accidents.

Article 2. The harbour superintendency establishments of the People’s Republic of China shall be responsible for implementing these Regulations.

Article 3. These Regulations shall apply to the maritime traffic accidents happening to the vessels and installations in the coastal waters
of the People’s Republic of China.

If there exist special provisions in state laws and administrative regulations for the investigation and handling of the maritime
traffic accidents happening in the fishing port waters or of the maritime traffic accidents happening between fishing vessels or
between military vessels in the coastal waters, these special provisions shall prevail.

Article 4. The maritime traffic accidents referred to in these Regulations mean the following accidents happening to vessels and installations:

(1) Collision, strike or damage by waves;

(2) Hitting hidden rocks or running aground;

(3) Fire or explosion;

(4) Sinking;

(5) Damage or loss of machinery parts or important tools during a voyage which affects the vessel’s seaworthiness;

(6) Other maritime traffic accidents which cause losses in property and human lives.

CHAPTER II REPORT

Article 5. The persons in charge of the vessels and installations which are involved in maritime traffic accidents must report immediately to
the harbour superintendency administration at the nearest harbour by a high-frequency telephone, radiotelegram or other effective
means. The content of the reports shall include: name of the vessel or installation, call sign, nationality, port of departure and
port of arrival, owners or managers of the vessel or installation,when and where the accident happened and the attending circumstances
on the sea, the extent of damage of the vessel or installation, request for salvage, etc.

Article 6. The persons in charge of the vessels and installations which are involved in maritime traffic accidents must, in addition to making
brief reports immediately in accordance with the provisions in Article 5, submit the Report Concerning Maritime Traffic Accidents
and other necessary documents and material according to the following stipulations to the harbour superintendency administration;

(1) If maritime traffic accidents happen to vessels or installations within the waters of the harbour areas, it is necessary to submit
a report and other material to the local harbour superintendency administration within 24 hours after the accidents.

(2) If maritime traffic accidents happen to vessels or installations in the coastal waters beyond the waters of harbour areas, it
is necessary to submit a report and other material within 48 hours after the vessels arrive at the first harbour in the People’s
Republic of China of the harbour superintendency administration; in the case of installations, it is necessary to report by telegram,
the content of which shall cover all the items required in the Report Concerning Maritime Traffic Accidents to the harbour superintendent
at the nearest harbour within 48 hours after the accidents.

(3) If a maritime traffic accident happens in the course of pilotage, the pilot shall submit the Report Concerning Maritime Traffic
Accidents to the local harbour superintendency administration within 24 hours after his return to the harbour.

If, because of special circumstances, the Report Concerning Maritime Traffic Accidents cannot be submitted within the time limit set
in paragraphs (1) and (2) of this Article, the time limit may be appropriately extended after permission is obtained from the harbour
superintendency administration.

Article 7. The following information shall be truthfully provided in the Report Concerning Maritime Traffic Accidents:

(1) Basic conditions of the vessel or installation and the data concerning its main functions;

(2) Name and address of the owner or manager of the vessel or installation;

(3) When and where the accident happened;

(4) The climatic conditions and the conditions on the sea when the accident happened;

(5) A detailed description of the course of the accident (for a collision, a sketch map illustration the face-to-face movements shall
be attached);

(6) Degree of the damage (A sketch showing the damaged parts of the vessel or installation shall be attached. If it is difficult to
make a thorough investigation within the set time limit, a report shall be submitted at a later date after the examination.)

(7) Estimated location of sinking in case where the vessel or installation sank;

(8) Other information related to the accident.

Article 8. A report concerning maritime traffic accidents must be truthful and there must not be any concealment or falcification.

Article 9. If a vessel or an installation is damaged due to a maritime traffic accident, the captain in of the vessel or the person in charge
of the installation shall apply to China’s local inspection department or the inspection department at the vessel’s first port of
arrival in China for inspection or appraisement and send a copy of the inspection report to the harbour superintendency administration
for the record.

The harbour superintendency administration may entrust the inspection and appraisement mentioned in the preceding paragraph to relevant
unite or department and the expenses shall be borne by the owner or manager of the vessel or installation.

If the accident happening to a vessel or installation involved fire or explosion, the captain or the person in charge of installation
must apply to a fire fighting brigade in the public security organ for an appraisement and send a copy of the appraisement report
to the harbour superintendency administration for the record.

CHAPTER III INVESTIGATION

Article 10. Harbour superintendency administration shall be responsible for the investigation of the maritime traffic accidents which happen
in the waters of their respective harhour areas.

The maritime traffic accidents which happen outside the waters of harbour areas shall be investigated by the harbour superintendency
administration of the nearest harbour or that of the vessel’s first port of arrival in the People’s Republic of China. The Harbour
Superintendency Administration Bureau of the People’s Republic of China may designate a harbour superintendency administration to
carry out the investigation, if the Bureau deems it necessary.

When the harbour superintendency administration concerned deems it necessary, he may request relevant departments and social organizations
to take part in the investigation of the accidents.

Article 11. Upon receiving accident reports, the harbour superintendency administration shall promptly carry out investigation. Investigation
shall be carried out in an objective and all-round manner and must not be restricted by the information provided by the parties involved
in the accidents. If the investigation warrants it, the harbour superintendency administration has the right to:

(1) Question the persons concerned;

(2) Demand written material and testimonial from the persons under investigation;

(3) Demand the parties involved to provide logbooks, engine room logs, wheel-bell records, radio operation logs, course records, charts,
data of the vessel, functions of the navigation equipment and instruments and other necessary original papers and materials;

(4) Examine certificates of the vessels, installations and the relevant equipment and certificates of the personnel and verify seaworthiness
of the vessels and technical conditions of the installations before the accident;

(5) Examine the damage to the vessels, installations and goods and assertain casualties of personnel;

(6) Survey the scene of the accident and collect relevant material evidences.

During the investigation, the harbour superintendency administration may use recording, photographing and video equipment and may
resort to other means of investigation permitted by law.

Article 12. The persons being investigated must subject themselves to the investigation, honestly state the relevant circumstances of the accident
and provide authentic papers and materials.

In conducting investigations, the personnel of harbour superintendency administration shall produce their certificates to the persons
being investigated.

Article 13. If the investigation of a maritime traffic accident so requires, the harbour superintendency administration may order the vessel(s)
involved to sail to the spot for investigation. Except when its (their) own safety is in danger, the vessel(s) involved must not
leave the said spot without the permission of the harbour superintendency administration.

Article 14. The organs respectively in charge of public security, state security, supervision, procuratorial work, and judicial work, as well
as maritime arbitration committees and other organs and personnel designated under the law may consult, make extracts of or duplicate
the findings concerning maritime traffic accidents prepared by the harbour superintendency administrations for the purpose of handling
cases. judicial organs may borrow these findings if they are really needed in the trials.

CHAPTER IV HANDLING OF ACCIDENTS

Article 15. The harbour superintendency administrations shall, according to the investigations of maritime traffic accidents, work out the Report
on Findings Concerning Maritime Traffic Accidents, in which causes of the accident shall be ascertained and the responsibility of
the persons concerned be determined. A serious accident shall be reported to the local procuratorial organ.

Article 16. The Report on Findings Concerning the Maritime Traffic Accident shall include the following items:

(1) Basic conditions of the vessels or installations and the main data;

(2) Names and addresses or the owners or managers of the vessels or installations;

(3) When and where the accident happened, the course of the accident, weather and sea conditions at the time, seriousness of the damage;

(4) Causes of the accident and evidences thereof;

(5) Liabilities of the parties involved and evidences thereof;

(6) Other relevant information.

Article 17. The harbour superintendency administrations may, according to the nature and seriousness of their liabilities, mete out the following
penalties according to law to the persons who are held responsible for the maritime traffic accidents:

(1) Warnings, fines, suspension or revocation of their job certificates may be resorted to when the crew, pilots or personnel working
on the installations are of Chinese nationality;

(2) Warnings and fines may be imposed on the crew or the personnel working on the installations who are of foreign nationalities or
their faults may be reported to the competent organs of their respective countries.

Article 18. If it is necessary to pursue the administrative responsibility of the persons involved, owners or managers of the vessels or installations
who are held responsible for the maritime traffic accidents, the harbour superintendency administrations shall submit the cases to
their competent organs or the organs in charge of administrative supervision, With respect to persons whose action constitutes a
crime, the judicial authorities shall, in accordance with the law, investigate their criminal responsibility.

Article 19. The harbour superintendency administration may, in the light of the causes of the maritime traffic accidents, order the owners and
managers of the vessels involved or installtions involved to strengthen safety control over their vessels or installations within
a time limit. In case of refusal to strengthen safety administration or failure to meet the safety requirements within the said time
limit, the harbour superintendent has the right to order the vessels or installations to suspend navigation, change courses or suspend
operation and may adopt other necessary compulsory measures.

CHAPTER V MEDIATION

Article 20. If a maritime traffic accident happening to vessels or installations gives rise to a civil dispute over tort liability, the parties
may apply to the harbour superintendency administration for mediation.

Mediations must be carried out on the principles of voluntariness and impartiality and no coercion shall be allowed.

Article 21. If s suit has been brought before a maritime court or an application sent to a maritime arbitration organ, the parties to the civil
disputes mentioned in the preceding article shall not apply to the harbour superintendency administration for mediation.

Article 22. Written applications for mediations shall be submitted, by the parties within 30 days after the accident happened, to the harbour
superintendency administration responsible for the investigation of the accident. If guarantees are demanded by the harbour superintendency
administration the parties shall provide papers of economic compensation guarantee.

Article 23. If an agreement is reached after mediation, the harbour superintendency administration shall prepare a mediation document. The mediation
document shall include the following items: names and addresses of the parties, names and positions of the legal representatives,
main points of the disputes, liabilities of the parties, content of the agreement, payment of the mediation fees and the time limit
for the execution of the mediation agreement. The parties concerned shall jointly sign the mediation document and the superintendency
administration shall confirm it by affixing its seal thereon. One copy of the mediation document shall be held by each party concerned
and one copy kept by the harbour superintendency administration.

Article 24. All the parties concerned shall execute the agreement of mediation of their own accord. If the parties renegue or fail to execute
the agreements within the time limit after the agreement is reached, the mediation shall be regarded as failing.

Article 25. If a party to a civil dispute who has applied to the harbour superintendency administration for mediation wants to withdraw from
it, the party shall send a written application to the harbour superintendency administration for mediation cancellation and notify
the other party to the dispute at the same time.

Article 26. If the harbour superintendency administration fails to make the parties reach an agreement of mediation within 3 months as of the
date of receipt of the application for mediation, the mediation may be announced as failing.

Article 27. If the parties do not want mediation or the mediation has failed, they may bring a suit in a maritime court or apply to a maritime
arbitration organ for arbitration.

Article 28. Anyone who has applied to the harbour superintendency administration for mediation shall pay mediation fees. Standards for mediation
charges shall be worked out by the Ministry of Communications in conjunction with the State Administration for Commodity Prices and
the Ministry of Finance.

If an agreement is reached through mediation, the mediation charge shall be shared according to the seriousness of the parties’ faults
or the agreed proportions. If mediation has failed, the expenses shall be shared out equally among the parties.

CHAPTER VI PENALTIES

Article 29. The harbour superintendency administration may, depending on the circumstances, warn or impose a fine of not more than 200 yuan on
the persons concerned (natural person), or impose a warning or a fine of not more than 5,000 yuan on the owners or managers of the
vessels, if they violate these Regulations in one of the following manners:

(1) Failing to report the accident to the harbour superintendency administration or submit the Report Concerning Maritime Traffic
Accident or duplicate copies of the documents of court verdict, arbitration award or mediation document as stipulated in Article
32 of these Regulations within the time limit;

(2) Failing to sail to the spot designated by the harbour superintendency administration or leaving the designated spot without the
permission of the harbour superintendency administration when nothing is endangering the vessel (s);

(3) Affecting the progress of the investigations or causing losses to the departments concerned because the content of the accident
report or the Report Concerning Maritime Traffic Accident does not meet the stipulated requirement or it is not truthful;

(4) Affecting the investigation of the accident by violating the provisions of Article 9;

(5) Refusing to be investigated or unjustifiably obstructing and interfering with the investigation by the harbour superintendency
administration;

(6) Intertionally concealing facts or providing false testimonial during investigation.

With respect to persons whose acts have constituted a crime as specified in paragraphs (5) and (6) of this Article, the judicial organs
shall investigate their criminal responsibility according to law.

Article 30. Administrative sanctions shall be given by administrative supervision organs or relevant units to those persons working in harbour
superintendency administrations who violate the provisions of these Regulation, neglect their duties, abuse their powers, engage
in malpractices for selfish ends and ask for and accept bribes. If their acts constitue crimes, their criminal responsibilities shall
be investigated by judicial organs according to law.

Article 31. If the parties concerned do not agree with the penalties imposed on them by the harbour superintendency administration according
to the provisions of these Regulations, they may bring a suit in a people’s court according to law.

CHAPTER VII SPECIAL PROVISIONS

Article 32. If maritime traffic accidents happen to vessels of Chinese nationality outside the coastal waters of the People’s Republic of China,
their owners or managers shall report to the harbour superintendency administration where the vessels have registered and shall submit
the Report Concerning Maritime Traffic Accident within 60 days after the accidents happened. If lawsuits, arbitrations of mediations
concerning the accidents take place abroad, the owners or managers shall submit copies or photocopies of the court verdicts, awards
or mediation documents to the harbour superintendent of the harbour where the vessels have registered for the record within 60 days
after the termination of the lawsuits, arbitration or mediation.

Article 33. If crew members of Chinese nationality holding job qualification certificates of the People’s Republic of China are held responsible
for maritime traffic accidents while they are working on board foreign vessels, their respective units in China shall submit the
Report Concerning Maritime Traffic Accidents to the harbour superintendency administration issuing the job qualification certificates
within 60 days after the accidents happened.

The maritime traffic accidents mentioned in the first paragraph of this Article and in Article 32 shall be investigated and dealt
with in accordance with the relevant provisions of these Regulations.

CHAPTER VIII SUPPLEMENTARY PROVISIONS

Article 34. With respect to those operations which have violated the regulations concerning maritime traffic safety and have constituted latent
threats of potential major accidents although direct traffic accidents have not been caused, the harbour superintendency administration
may carry out investigation and mete out penalties according to the provisions of these Regulations.

Article 35. The maritime traffic accidents which have caused marine environmental pollution shall be dealt with in accordance with the relevant
laws and regulations of China concerning marine environmental protection.

Article 36. These Regulations shall be interpreted by the Ministry of Communications.

Article 37. These Regulations shall go into effect as of the date of promulgation.

1...4 56Page 6 of 6

1996

REGULATIONS ON ADMINISTRATIVE RECONSIDERATION

INTERIM PROCEDURES FOR THE ADMINISTRATION OF FOREIGN INVESTMENT IN THE DEVELOPMENT AND MANAGEMENT OF WHOLE AREAS OF LAND

CUSTOMS REGULATIONS FOR THE SUPERVISION OF INBOUND AND OUTBOUND TRAINS AND THE GOODS AND COMMODITIES THEREON

CIRCULAR OF THE MINISTRY OF FOREIGN ECONOMIC RELATIONS AND TRADE AND THE STATE ADMINISTRATION FOR INDUSTRY AND COMMERCE ON ISSUING THE PROVISIONS FOR CONTRACTED OPERATION OF CHINESE-FOREIGN EQUITY JOINT VENTURES

PROVISIONS ON THE ADMINISTRATION OF MARITIME INTERNATIONAL CONTAINER TRANSPORT

NATIONAL FLAG LAW

DECISION OF THE NATIONAL PEOPLE’S CONGRESS REGARDING THE REVISION OF THE CHINESE-FOREIGN EQUITY JOINT VENTURES

PROVISIONS CONCERNING REDUCTION OF AND EXEMPTION FROM ENTERPRISE INCOME TAX AND CONSOLIDATED INDUSTRIAL AND COMMERCIAL TAX FOR THE ENCOURAGEMENT OF FOREIGN BUSINESSMEN TO INVEST IN THE SHANGHAI PUDONG NEW ZONE

DECISION OF THE STANDING COMMITTEE OF THE NATIONAL PEOPLE’S CONGRESS ON THE PUNISHMENT OF CRIMINALS WHO SMUGGLE, PRODUCE, SELL OR DISSEMINATE PORNOGRAPHIC ARTICLES

REGULATIONS CONCERNING FOREIGN JOURNALISTS AND PERMANENT OFFICES OF FOREIGN NEWS AGENCIES

REGULATIONS OF PRC ON THE INVESTIGATION AND HANDLING OF MARITIME TRAFFIC ACCIDENTS

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