CIRCULAR OF THE GENERAL AFFAIRS DEPARTMENT OF THE STATE ADMINISTRATION OF FOREIGN EXCHANGE ON RELEVANT ISSUES CONCERNING FOREIGN EXCHANGE SALES AND PAYMENTS IN TRANSFERRING GOODS OUT OF THE EXPORT PROCESSING ZONES FOR DEEP PROCESSING

State Administration of Foreign Exchange

Circular of the General Affairs Department of the State Administration of Foreign Exchange on Relevant Issues concerning Foreign Exchange
Sales and Payments in Transferring Goods out of the Export Processing Zones for Deep Processing

Hui Zong Fa [2005] No.66

June 2, 2005

Branches and Exchange Administration Offices of the State Administration of Foreign Exchange in all provinces, autonomous regions,
municipalities under direct control of the Central Government, Branches in the Cities of Shenzhen, Dalian, Qingdao, Xiamen and Ningbo:

In order to promote the carrying-out of the work of foreign exchange sales and payments in transferring goods out of the export processing
zones for deep processing, to regulate banks’ formalities of foreign exchange sales and payments, and to guarantee the enterprise’s
normal business use of foreign exchange, this Circular is hereby given as follows:

I.

Transferring goods out of the export processing zones for deep processing between the transfer-out enterprise in the export processing
zone (hereinafter referred to as the “transfer-out enterprise”) and the transfer-in enterprise without the territory of export processing
zones, bonded zones, and any other zones under the special supervision of the customs authorities (hereinafter referred to as the
“transfer-in enterprise”) shall be valued and settled in foreign currencies.

II.

The designated foreign exchange bank shall handle the formalities of foreign exchange sales and payments of from the transfer-in enterprise
to the transfer-out enterprise upon the documents as follows:

1.

The original copy of the declaration bill for import with the stamp of “Check-off” by the customs authorities and with no faults against
the examination by China Electronic Port System , and with the country (region) of departure as “the People’s Republic of China (142)”,
and the trade mode as “Deep Processing of Imported Materials (0654)”; and

2.

The original copy of the Record List of Exit Goods in the Export Processing Zone, with the country (region) of arrival of the transfer-out
as “the People’s Republic of China (142)”, and the trade mode as “Coming/Leaving of Finished Products from Export Processing Zone
(5100)”; and

3.

The Interplant Contract; and

4.

The Verification Form of Foreign Exchange Payment for Import (in lieu of the Declaration Form).

III.

The designated foreign exchange bank shall handle the formalities of overseas foreign exchange sales and payments for the transfer-in
enterprise upon the documents as follows:

1.

The original copy of the declaration bill for import with the stamp of “Check-off” by the customs authorities and with no faults against
the examination by China Electronic Port System , and with the country (region) of departure as “the People’s Republic of China (142)”,
and the trade mode as “Deep Processing of Imported Materials (0654)”; and

2.

The original copy of the Record List of Exit Goods in the Export Processing Zone, with the country (region) of arrival of the transfer-out
as “the People’s Republic of China (142)”, and the trade mode as “Coming/Leaving of Finished Products from Export Processing Zone
(5100)”; and

3.

The original copy of the Record List of Entry Goods in the Export Processing Zone with the country (region) of arrival for the transfer-out
enterprise as “the People’s Republic of China (142)”, and the trade mode as “Goods Processed in the Export Processing Zone (5015)”;
and

4.

The Interplant Contract; and

5.

The Verification Form of Foreign Exchange Payment for Import (in lieu of the Declaration Form).

IV.

Matters not stated in this Circular shall be subject to the relevant foreign exchange provisions for the transferring of interplant
deep processing without the territory of export processing zone.

In case that any question arises during the process of implementation, please feed it back timely to the General Affairs Department
of the State Administration of Foreign Exchange.

Contact Person: Hu Chunyu

Contact Telephone: 010-68402430

Fax: 010-68402430