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The Ministry of Foreign Trade and Economic Cooperation
Circular of the Ministry of Foreign Trade and Economic Cooperation Concerning Printing and Distributing the Rules for the Implementation
of Invitation for Bids for Agricultural Product Export Quotas
WaiJingMaoMaoFa [2001] No.670
December 3, 2001
The commissions (departments or bureaus) of various provinces, autonomous regions, municipalities directly under the Central Government
and municipalities separately listed on the State plan, the special commissioner’s offices, the licence affairs bureaus of quota,
the import and export chambers of commerce, the association of enterprise with foreign investment and the directly subordinate general
corporations of ministries and commissions:
In order to further improve the invitation for bids for agricultural product export quotas, the Ministry of Foreign Trade and Economic
Cooperation has revised and improved the former Rules for the Implementation of Invitation for Bids for Agricultural Product Export
Quotas on the basis of soliciting the suggestion extensively and summarizing the practical experience of invitation for bids. The
revised Rules for the Implementation of Invitation for Bids for Agricultural Product Export Quotas is now printed and issued to you
for implementation. Attachment:Rules for the Implementation of Invitation for Bids for Agricultural Product Export Quotas
Chapter I General Provisions
Article 1
These Rules are enacted in accordance with the Measures on the Invitation for Bids for Export Commodity Quotas (hereinafter referred
to as the Measures on Invitation for Bids). For the application scope of these Rules, please see Appendix I.
Chapter II Organizational Structure
Article 2
The Committee of Invitation for bids for export commodity quotas (hereinafter referred to as the Committee of Invitation for Bids)
under the Ministry of Foreign Trade and Economic Cooperation (hereinafter referred to as the MOFTEC) shall be composed of one chairperson,
one or two vice-chairpersons and several committeemen.
The chairperson shall be a competent ministerial leader of the MOFTEC; each vice-chairperson shall be the responsible person of the
Department of Foreign Trade under the MOFTEC; and the committeemen shall be the relevant persons of the Department of Foreign Trade
and the relevant departments or bureaus under the MOFTEC.
Article 3
The Committee of Invitation for Bids shall perform the following duties:
(1)
to determine the quantity of quotas for bidding, the methods for invitation for bidding and the proportion of each method to the total
quantity of the invitation for bidding before each bid on the basis of the specific situations of different commodities;
(2)
to examine and approve specific plans on invitation for bids for export commodity quotas, and to verify the name list of the bidding
enterprises in accordance with the criteria for bidding qualification;
(3)
to promulgate various notices, announcements and decisions, etc. on invitation for quota bidding;
(4)
to preside over the opening and evaluation of bid, and to examine and approve the bid-winning results on invitation for quota bidding;
(5)
to accept the quotas delivered by enterprises and submitted by the Office of Invitation for bids for export commodity quotas (hereinafter
referred to as the Office of Invitation for Bids), and to record the transfer of such quotas;
(6)
to examine the collection of the deposit for winning of bid and the bid-winning money as well as the use of the quotas;
(7)
other matters to be determined by the Committee of Invitation for Bids.
The Department of Foreign Trade under the MOFTEC shall be responsible for the daily work of the Committee of Invitation for Bids.
Article 4
The Committee of Invitation for Bids shall, on the basis of the varieties of the commodities subject to invitation for bidding, establish
a corresponding Office of Invitation for Bids in a relevant import/export chamber of commerce. The Office of Invitation for Bids
shall be composed of one director general, one deputy director general and several members. The director general shall be the responsible
person a relevant import/export chamber of commerce, while the deputy director general and the members shall be the representatives
of the relevant import/export chamber of commerce, China Association of Enterprises with Foreign Investment and the relevant industrial
coordination department as well as experts in the relevant fields.
The Office of Invitation for Bids shall follow the working rules of one vote for each person and the minority’s deferring to the majority.
Article 5
The Office of Invitation for Bids shall perform the following duties:
(1)
to draft specific plans on invitation of export commodity quota bidding with reference to industrial opinions, and to determine, through
collective discussion and resolution of the members in the Office of Invitation for Bids, the preliminary proposal on the major issues
of the plan such as the criteria for the bidding qualification, etc. before submitting it to the Committee of Invitation for Bids
for examination;
(2)
to verify the qualification according to the criteria for the bidding qualification, and to determine the name list of the bidding
enterprises, as well as to submit the name list to the Committee of Invitation for Bids for examination and approval;
(3)
to draft all notices, announcements and decisions, etc. relating to the invitation for quota bidding and submit them to the Committee
of Invitation for Bids for examination and approval;
(4)
to participate in the specific work in the opening and evaluation of bid, and to submit the results to the Committee of Invitation
for Bids for examination and approval;
(5)
to print in a uniform format and issue according to provisions in the Document on the Payment of the Bid-winning Money in Public Invitation
for Bids for Export Commodity Quotas (see Appendix II), the Document on the Payment of the Bid-winning Money in Agreement Invitation
for the Export Commodity Quota Bidding (see Appendix III), the Attestation on the Application for the Export License for the Commodities
subject to Invitation for Quota Bidding (see Appendix IV), the Attestation on the Transfer of the Quotas for the Commodities subject
to Invitation for Bidding (see Appendix V), etc.;
(6)
to, within one week before the expiry date for the payment of the deposit for winning of bid, remind the enterprises which have not
paid the deposit for winning of bid to make the payment in time, as well as to check the information on the payment by the enterprises
of the deposit for winning of bid or the bid-winning money, etc. and to make reports to the Committee of Invitation for Bids;
(7)
to accept the quotas delivered by enterprises, and to submit them to the Committee of Invitation for Bids; to accept and approve the
applications on transfer of enterprise quotas, and to submit them to the Committee of Invitation for Bids for record;
(8)
to inspect and monitor the use of quotas and of licenses by the enterprises, as well as to follow up the check on the export of the
commodities subject to invitation for bidding and changes in the market and to make reports to the Committee of Invitation for Bids
by quarter;
(9)
to handle other affairs on invitation for bidding delivered by the Committee of Invitation for Bids such as the change of the qualification
of enterprises, etc,.
The relevant import/export chamber of commerce shall be responsible for the daily affairs of the Office of Invitation for Bids.
Chapter III Qualification, Price, Quantity and Methods for Bidding
Article 6
Bidding Qualification
(1)
Public Invitation for Bidding
Any enterprise with a qualification for export operation, which has been registered in the administration department for industry
and commerce, and has joined a relevant import/export chamber of commerce (enterprises with foreign investment shall join China Association
of Enterprises with Foreign Investment.), may participate in the public invitation for bidding; meanwhile, the Committee of Invitation
for Bids shall, on the basis of the specific situations of some commodities, further determine the conditions for the qualification
in participating in the public invitation for bidding in such respects as the registered capital of each enterprise, the import/export
amount, the export performance or supply performance on this commodity, defense against anti-dumping claims, etc..
(2)
Agreement Invitation for Bidding
The Committee of Invitation for Bids shall, on the basis of the specific situations of the commodities subject to invitation for bidding,
stipulate the bidding qualification for agreement invitation for bidding by adopting any of the following criteria. The specific
criteria include:
a.
Enterprises with the qualification for public bidding.
b.
A certain number of the top enterprises with the qualification for public bidding, with the sum of quantity (or amount) of the annual
average export and supply of the commodities subject to invitation for bidding in the previous 2 (or 3) years having reached a certain
proportion of the total quantity (or total amount) of the annual average export and supply by the bidding enterprises. The proportion
of the enterprises participating in the agreement invitation for bidding shall be determined on the basis of the specific situations
of different commodities. Other export enterprises (including enterprises with foreign investment) with the registered capital or
production and operation of each having reached a certain scale, with good asset situations and operational performances, high value-added
content of the manufactured commodities, and with well-known brands. The backbone export enterprises in the main origin of the commodities
subject to invitation for bidding and the enterprises which actively participate in defense against anti-dumping claims regarding
this commodity and fully pay the defense expenses in time.
Article 7
bidding enterprise shall decide on the bidding price by itself. In order to avoid unreasonably low bidding price, the Committee of
Invitation for Bids may, on the basis of specific situation, determine and promulgate the lowest bidding price in advance. The bidding
documents with the price in which lower than the lowest bidding price shall be regarded as a waste bid.
In order to avoid unreasonably high bidding price, the Committee of Invitation for Bids shall have the right to regard the bidding
documents with the price in which obviously deviating from normal price as a waste bid.
The lowest bidding price in an agreement invitation for bidding may be determined with reference to the weighted average price of
the bid-winning enterprises in the same public invitation for bidding in the present year, or be determined on the basis of the specific
situation and with reference to the average profits in the export of specific commodities, the price for winning of bid of quotas
in the previous years and other factors.
Article 8
In order to prevent the bid-winning quotas from being too centralized or decentralized, the Committee of Invitation for Bids shall,
on the basis of specific situation, set forth the largest and the smallest bidding quantities, and shall promulgate the said quantities
before the invitation for bidding. The Committee of Invitation for Bids may, as needed, set forth the largest bidding quantities
at different levels for specific commodities on the basis of the export performance and operational capability, etc. of various enterprises.
If the quantity in the bidding documents is larger than the largest bidding quantity or smaller than the smallest bidding quantity,
the said bidding documents shall be regarded as a waste bid.
(1)
A bidding enterprise may, in a public invitation for bidding, decide on the bidding quantity by itself between the largest and the
smallest bidding quantities, among which, the bidding quantity of an enterprise with foreign investment shall not be larger than
the balance of subtraction of the bid-winning quantity in the agreement invitation for bidding from the export scale verified by
the MOFTEC.
(2)
The Office of Invitation for Bids shall, in an agreement invitation for bidding, determine the largest bidding quantity with reference
to the bidding enterprises’ average export performance supply and operational capability, etc. in the previous 2 or 3 years, and
shall notify the relevant enterprises upon consent by the Committee of Invitation for Bids.
Article 9
The export performance of a bidding enterprise shall be determined with the statistical figure of the General Administration of Customs
to be a base, and if necessary, with reference to other attestation documents ratified by the Committee of Invitation for Bids.
Article 10
The enterprises must offer a bid by submitting electronic bidding documents before the stipulated time, and the bidding time shall
be determined on the basis of the electronic data.
Each export enterprise may offer a bid only once before the stipulated deadline. The enterprise must, after sending out the electronic
bidding documents, receive through computer the information on the feedback of the bidding documents sent by China International
Electronic Commerce Center under the MOFTEC (hereinafter referred to as the EDI Center of the Ministry), and shall not end the bidding
until the bidding documents are confirmed to have reached the EDI Center of the Ministry safely. Where an enterprise is unable to
send out the electronic bidding documents before the stipulated deadline, it shall be regarded to have automatically waived the bidding
qualification.
Chapter IV Rules for Evaluation of Bid
Article 11
The qualified bidding documents shall be confirmed in accordance with Articles 7, 8 and 10 of these Rules.
Article 12
The following electronic bidding documents under any of the circumstances shall be treated as a waste bid:
(1)
the enterprise automatically applies to the Office of Invitation for Bids for a waste bid before the opening of the bid;
(2)
the bidding documents are served after the stipulated deadline for bidding;
(3)
one enterprise has succeeded in serving two or more sets of electronic bidding documents before the stipulated time, no matter whether
the contents are the same or not;
(4)
other circumstances under which the bidding documents are confirmed by the Committee of Invitation for Bids to be a waste bid.
Article 13
Determination of bid-winning enterprises
Public invitation for bidding: the bidding prices of all qualified bidding enterprises shall be arranged from the highest to the lowest,
and the bidding quantities of the bidding enterprises shall be accumulated in sequence; when the accumulated bidding quantities equal
to the total quantity of invitation for bidding, the enterprises calculated into the accumulated total bidding quantity (that is,
the total quantity of invitation for bidding) shall be bid-winning enterprises.
Where the sum of bidding quantities of the enterprises in the lowest bid-winning price exceed the quantity of the remained quotas,
the enterprises in the said price shall all be bid-winning enterprises.
Agreement invitation for bidding: the enterprises whose bidding price is not lower than the lowest bidding price provided for by the
Committee of Invitation for Bids shall all be bid-winning enterprises.
Article 14
Determination of the price for winning of bid and the bid-winning quantity
(1)
The bid-winning enterprise’s price for winning of bid shall be its bidding price.
(2)
Determination of the bid-winning quantity:
i.
In a public invitation for bidding, the bid-winning quantity of a bid-winning enterprise shall be its bidding quantity. If the sum
of the bidding quantities of the enterprises in the lowest bidding price exceeds the quantity of the remained quotas, the enterprises
in the said price shall distribute the remained quotas according to the proportion of their bidding quantities. If the bid-winning
quantity of an enterprise is smaller than the smallest bidding quantity, the enterprise shall be regarded to have not won the bid.
ii.
The bid-winning quantity in agreement invitation for bidding:
(i) The bid-winning quantity of an enterprise shall be calculated on the basis of the following formula:
the bid-winning quantity of an enterprise = the total quantity in the invitation for bidding the bidding amount of the enterprise
(the bidding quota price bidding quantity) the sum of the bidding amount of all bid-winning enterprises (the bidding quota price
bidding quantity)
or (ii) The largest bid-winning quantity of an enterprise shall be its bidding quantity.
ii.
The total bid-winning quantity of an enterprise with foreign investment in a whole year shall be limited by its export scale verified
by the MOFTEC.
Chapter V Operational Procedures
Article 15
Examination of bidding qualification
The Office of Invitation for Bids shall reexamine the qualifications of the bidding enterprises within the stipulated time limit,
and shall submit the reexamination result and the relevant documents to the Committee of Invitation for Bids for determination.
(1)
Preliminary examination
The commission (department, bureau) of foreign trade and economic cooperation of each province, autonomous region, municipality directly
under the Central Government and municipality separately listed on the State plan (hereinafter referred to as each department in
charge of foreign trade and economic cooperation at the provincial level) shall, as required by the Committee of Invitation for Bids,
conduct the preliminary examination on the qualifications of the local bidding enterprises within the stipulated time limit, and
shall submit the relevant documents to the Office of Invitation for Bids (For enterprises subject to the management of the Central
Government, the said documents shall be submitted to the import/export chamber of commerce.) for preliminary examination.
(2)
Reexamination
The Office of Invitation for Bids shall reexamine the qualifications of the bidding enterprises within the stipulated time limit,
and shall submit the reexamination result and the relevant documents to the Committee of Invitation for Bids for determination.
Article 16
The Office of Invitation for Bids shall, within the stipulated time limit, submit the plans on invitation for bidding to the Committee
of Invitation for Bids for determination; it shall also, after the determination, promulgate the announcement on invitation for bidding
on a designated news media and its web site, and shall promulgate the name list of the enterprises participating in the agreement
invitation for bidding.
Article 17
The Office of Invitation for Bids shall, within 1 working day after evaluation of the bid, promulgate the preliminary bid-winning
result by electronic means. In case a bidding enterprise has any doubt, it may, within 2 working days as of the promulgation of the
preliminary bid-winning result, propose the doubt to the Office of Invitation for Bids. The Office of Invitation for Bids shall,
within 3 working days as of the promulgation, submit the preliminary bid-winning result to the Committee of Invitation for Bids for
determination.
Article 18
The Committee of Invitation for Bids shall, after the determination of the bid-winning result, notify the Office of Invitation for
Bids in time, and promulgate the name list of the bid-winning enterprises.
Article 19
The Office of Invitation for Bids shall, upon the notification by the Committee of Invitation for Bids, timely issue the Document
on the Payment of the Bid-winning Money in Public Invitation for bids for export commodity quotas and the Document on the Payment
of the Bid-winning Money in Agreement Invitation for bids for export commodity quotas to the bid-winning enterprises.
Article 20
Payment of the bid-winning money
The bid-winning enterprises shall pay the deposit for winning bids and the bid-winning money for the quotas in accordance with the
following provisions, and shall not be paid by other enterprises on their behalf:
(1)
A bid-winning enterprise shall, within the stipulated time limit, remit the deposit for winning of bid to the account of a designated
bank by means of check, bill of exchange or remittance, etc., and shall issue the Document on the Payment of the Bid-winning Money
in Public Invitation for bids for export commodity quotas and the Document on the Payment of the Bid-winning Money in Agreement Invitation
for bids for export commodity quotas, which are filled out by itself. The deposit for winning bids shall be 10% to 60% of the bid-winning
money (the amount = the bid-winning quantity of the enterprise the price for winning of the bid). The specific proportion shall
be determined by the Committee of Invitation for Bids on the basis of the specific situations of commodities. The deposit for winning
of bid shall not be refunded no matter how the winning of bid is used.
(2)
It shall, before applying for and obtaining the export license at each time, pay the balance of bid-winning money for corresponding
quotas to the account of the designated bank according to the quantity of the quotas in the obtained license, and shall issue the
Document on the Payment of the Bid-winning Money in Public Invitation for bids for export commodity quotas and the Document on the
Payment of the Bid-winning Money in Agreement Invitation for bids for export commodity quotas, which are filled out by itself.
Article 21
The Office of Invitation for Bids shall, upon receipt of the bid-winning money paid by the enterprises, issue the Attestation on the
Application for the Export License for the Commodities subject to Invitation for Quota Bidding.
Chapter VI Delivery and Transfer of Quotas
Article 22
Where an enterprise is unable to use up the bid-winning quotas, it may deliver or transfer them in compliance with the principle of
voluntariness after having explained the reason to the Office of Invitation for Bids.
Article 23
The time for an enterprise to deliver its quotas to the Office of Invitation for Bids shall not be later than October 31 of each year.
With respect to seasonal commodities subject to invitation for bidding, the time for delivering the quotas may be otherwise provided.
The Office of Invitation for Bids may, upon receipt of the quotas before October 31, which are delivered by an enterprise, refund
the corresponding bid-winning money which have been paid, but shall not refund the deposit for winning of bid. The Office of Invitation
for Bids shall not accept any delivery of quotas after October 31.
With respect to the quotas which have neither been used nor been delivered at the stipulated time, neither the corresponding bid-winning
money nor the deposit for winning of bid shall be refunded.
Article 24
A bid-winning enterprise shall not propose the transfer of the quotas under planned transfer before paying the total amount of the
corresponding bid-winning money to the account of a designated bank.
Article 25
Both the transferor and the transferee must submit the application for the transfer of quotas, which is consented by both parties,
to the Office of Invitation for Bids for approval. The transferee must have the bidding qualification.
Article 26
With respect to the quotas delivered by an enterprise, the Office of Invitation for Bids shall, within 3 working days as of acceptance
of the delivered quotas, report the information to the Committee of Invitation for Bids; with respect to an enterprise’s application
for transfer of quotas, the Office of Invitation for Bids shall, within 3 working days as of the acceptance, completed the examination
in accordance with the relevant provisions, and shall submit the Attestation on the Transfer of the Quotas for the Commodities subject
to Invitation for Bidding to the Committee of Invitation for Bids for record, and meanwhile notify the EDI Center of the Ministry.
Article 27
The Office of Invitation for Bids shall timely deduct the quantity of quotas delivered or transferred by an enterprise from the quantity
of its bid-winning quotas, and shall, when issuing the Attestation on the Transfer of the Quotas for the Commodities subject to Invitation
for Bidding, issue the Attestation on the Application for the Export License for the Commodities subject to Invitation for Quota
Bidding to the transferee, and respectively notify the relevant license issuing organs.
Article 28
With respect to the recalled or delivered quotas or other remained quotas, the Committee of Invitation for Bids may decide to hold
a second invitation for quota bidding on the basis of the largeness of the quantity, or may dispose of them in other ways approved
by the MOFTEC.
Chapter VII Export License
Article 29
The bid-winning quotas shall be valid for the present year. The MOFTEC shall check and issue the name list of the bid-winning enterprises
and their bid-winning quantity, and shall, upon approval by the MOFTEC, transmit the said name list and quantity to all organs issuing
the relevant licenses and the departments in charge of foreign trade and economic cooperation at all localities.
Article 30
The check and issuance of the export licenses for commodities subject to invitation for bidding shall not only be based on the relevant
provisions on the administration of export licenses, but also be based on the following:
(1)
the name list of the bid-winning enterprises, which is transmitted by the MOFTEC, and their bid-winning quantity, or the Attestation
on the Transfer of the Quotas for the Commodities subject to Invitation for Bidding;
(2)
the Attestation on the Application for the Export License for the Commodities subject to Invitation for Bid for Quotas.
Chapter VIII Penalty Provisions
Article 31
Any individual, organization or enterprise who violates the Measures on Invitation for Bidding or these Rules by disrupting invitation
for bidding shall be imposed upon administrative penalties by the MOFTEC in consideration of the seriousness of the case; whoever
violates the Criminal Law shall be transferred to the judicial department for investigation of his criminal liabilities.
Article 32
Any enterprise or individual shall have the right and obligation to make exposures and complaints against the fraudulent acts in violation
of the Measures on Invitation for Bidding or these Rules in the process of invitation for quota bidding. In case of any of the above
mentioned acts, the MOFTEC shall have the right to veto the result of the invitation for bidding once it is found out to be true.
Article 33
Where any member in the Committee of Invitation for Bids or the Office of Invitation for Bids violates the Measures on Invitation
for Bidding or these Rules for personal benefits or the benefits of the small organization, he shall be imposed upon disciplinary
punishments or severer punishments by the MOFTEC in consideration of the seriousness of the case, or he shall even be transferred
to the judicial department for investigation of his criminal liabilities.
Article 34
Where any enterprise disrupts the invitation for quota bidding by conspiring with others or falsely declaring the conditions for bidding
qualification or by any other means, the Committee of Invitation for Bids shall recall its bid-winning quotas, and shall revoke its
bidding qualification for the quotas of the commodity for 1 to 3 years.
Article 35
Where any enterprise which has won a bid does not pay the deposit for winning of bid in accordance with the relevant provisions, the
Committee of Invitation for Bids shall recall its bid-winning quotas, and shall revoke its bidding qualification for the quotas of
the commodity for 1 to 2 years.
Article 36
The quotas which are neither delivered or transferred by an enterprise in accordance with the relevant provisions, nor obtained by
the enterprise before the expiry date of the validity period, and the quotas which have been obtained by an enterprise but the commodities
under which have not been exported actually, shall be regarded as wasted quotas. Where an enterprise has wasted 30 % or more of bid-winning
quotas of the whole year, its bidding qualification for the commodity shall revoked for the next 1 to 3 years.
Article 37
With respect to the enterprises in violation of rules enumerated in this Chapter, if the acts committed by any of them constitute
intentional disruption of invitation for bidding and the case is serious, the Committee of Invitation for Bids shall have the right
to revoke its permanent bidding qualification for a single or even all the commodities subject to invitation for bidding, and shall
transfer the case to the relevant department for punishment in accordance with the relevant regulations.
Article 38
Where a bid-winning enterprise fails to pay the bid-winning money (including the deposit for winning of bid) in accordance with the
relevant provisions due to force majeure, it shall, within a reasonable time period, provide in time the attestation issued by a
relevant institution. Upon resolution by the Office of Invitation for Bids and approval by the Committee of Invitation for Bids,
part or the whole of its liabilities may be exempted.
Article 39
Where, with respect to a certain commodity, the rate of obtaining the export license for the bid-winning quotas is commonly low due
to reasons of international market, etc., upon resolution by the Office of Invitation for Bids and approval by the Committee of Invitation
for Bids, part or the whole of the liabilities of the relevant bid-winning enterprises may be exempted.
Article 40
In case of major adjustment on the policies on invitation for bidding, thus the administration on invitation for bidding of a certain
commodity or the prohibition on the export of a certain commodity subject to invitation for bidding is cancelled, the Office of Invitation
for Bids shall refund the bid-winning money (including the deposit for winning of bid) of this commodity in accordance with the provisions
in the relevant notices issued by the MOFTEC.
Chapter IX Supplementary Provisions
Article 41
The Committee of Invitation for Bids shall open a special account in a designated bank for collecting the deposit for winning of bid
and the bid-winning money. It may entrust a relevant import/export chamber of commerce to handle the specific affairs.
Article 42
The Office of Invitation for Bids must, within 5 working days after the expiry date for the collection of the deposit for winning
of bid, which is provided for in Article 20 of these Rules, report the collection to the Committee of Invitation for Bids.
Article 43
The Committee of Invitation for Bids shall designate the International Business Daily, the International Trade News or other relevant
media to promul
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Copyright Law of People’s Republic of China
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(Adopted at the 15th Meeting of the Standing Committee of the Seventh National People’s Congress on September 7,
1990 and promulgated by Order No.31 of the President of the People’s Republic of China on September 7, 1990; amended according to
the Decision on Amending the Copyright Law of the People’s Republic of China at the 24th Meeting of the Standing Committee of the
Ninth National People’s Congress on October 27, 2001)
Contents
Chapter I General Provisions
Chapter II Copyright
Section 1 Copyright Owners and Their Rights
Section 2 Ownership of Copyright
Section 3 Term of Protection for the Rights
Section 4 Limitations on Rights
Chapter III Copyright Licensing and Transfer Contracts
Chapter IV Publication, Performance, Sound Recording, Video Recording and Broadcasting
Section 1 Publication of Books, Newspapers and Periodicals
Section 2 Performance
Section 3 Sound Recording and Video Recording
Section 4 Broadcasting by a Radio Station or Television Station
Chapter V Legal Liabilities and Enforcement Measures
Chapter VI Supplementary Provisions
Chapter I
General Provisions
Article 1 This law is enacted, in accordance with the Constitution, for the purpose of protecting the copyright of authors
in their literary, artistic and scientific works and the rights and interests related to copyright, encouraging the creation and
dissemination of works conducive to the building of a socialist society that is advanced ethically and materially, and promoting
the progress and flourishing of socialist culture and sciences.
Article 2 Chinese citizens, legal entities or other organizations shall, in accordance with this Law, enjoy the copyright in
their works, whether published or not.
The copyright enjoyed by foreigners or stateless persons in any of their works under an agreement concluded between China and the
country to which they belong or in which they have their habitual residences, or under an international treaty to which both countries
are parties, shall be protected by this Law.
Foreigners and stateless persons whose works are first published in the territory of China shall enjoy the copyright in accordance
with this Law.
Any work of an author of a country that has not concluded any agreement with China or that is not a party to any international treaty
to which China is a party and any work of a stateless person, which is first published in a member country of an international treaty
to which China is a party, or simultaneously published in a member country of the treaty and in a non-member country, shall be protected
by this Law.
Article 3 For purposes of this law, the term “works” includes, among other things, works of literature, art, natural sciences,
social sciences, engineering and technology, which are created in any of the following forms:
(1) written works;
(2) oral works;
(3) musical, dramatic, quyi, choreographic and acrobatic works;
(4) works of the fine arts and architecture;
(5) photographic works;
(6) cinematographic works and works created by a process analogous to cinematography;
(7) graphic works such as drawings of engineering designs and product designs, maps and sketches, and model works;
(8) computer software; and
(9) other works as provided for in laws and administrative regulations.
Article 4 Works the publication and dissemination of which are prohibited by law shall not be protected by this Law.
In exercising their copyright, no copyright owners may violate the Constitution or laws, nor may they impair public interests.
Article 5 This Law shall not be applicable to:
(1) laws and regulations, resolutions, decisions and orders of State organs, other documents of a legislative, administrative or
judicial nature and their official translations;
(2) news on current affairs; and
(3) calendars, numerical tables and forms of general use, and formulas.
Article 6 Measures for the protection of copyright in works of folk literature and art shall be formulated separately by the
State Council.
Article 7 The administrative department for copyright under the State Council shall be responsible for the administration of
copyright nationwide. The administrative departments for copyright under the people’s governments of provinces, autonomous regions
and municipalities directly under the Central Government shall be responsible for the administration of copyright in their respective
administrative regions.
Article 8 Copyright owners or owners of the rights related to the copyright may authorize collective copyright administration
organizations to exercise their copyright or rights related to the copyright. Upon authorization, a collective copyright administration
organization may exercise the copyright or the rights related to the copyright in its own name for the copyright owner or the owner
of the rights related to the copyright and participate as a party in legal or arbitration proceedings concerning the copyright or
the rights related to the copyright.
Collective copyright administration organizations are non-profit organizations, and regulations concerning the way of their establishment,
their rights and obligations, their collection and distribution of copyright licensing fees, and their supervision and administration
shall be formulated separately by the State Council.
Chapter II
Copyright
Section 1
Copyright Owners and Their Rights
Article 9 Copyright owners include:
(1) authors; and
(2) other citizens, legal entities and other organizations enjoying the copyright in accordance with this Law.
Article 10 Copyright includes the following personal rights and property rights:
(1) the right of publication, that is, the right to decide whether to make a work available to the public;
(2) the right of authorship, that is, the right to claim authorship in respect of, and to have the author’s name mentioned in connection
with, a work;
(3) the right of revision, that is, the right to revise or authorize others to revise a work;
(4) the right of integrity, that is, the right to protect a work against distortion and mutilation;
(5) the right of reproduction, that is, the right to produce one or more copies of a work by printing, photocopying, lithographing,
making a sound recording or video recording, duplicating a recording, or duplicating a photographic work, or by other means;
(6) the right of distribution, that is, the right to provide the original copy or reproductions of a work to the public by selling
or donating;
(7) the right of rental, that is, the right to authorize others to use temporarily a cinematographic work or a work created by a
process analogous to cinematography, or computer software, except where the software itself is not the essential object of the rental;
(8) the right of exhibition, that is, the right to publicly display the original copy or reproductions of a work of the fine arts
or of a photographic work;
(9) the right of performance, that is, the right to publicly perform a work, and to publicly communicate the performance of a work
by any means or process;
(10) the right of presentation, that is, the right to publicly present a work of the fine arts, a photographic work, a cinematographic
work, a work created by a process analogous to cinematography, or other works, by projector, slide projector or any other technology
or instrument;
(11) the right of broadcasting, that is, the right to broadcast a work or disseminate it to the public by any wireless means, to
communicate the broadcast of a work to the public by wire or by rebroadcasting, and to publicly communicate the broadcast of a work
by loudspeaker or any other analogous instrument transmitting signs, sounds or images;
(12) the right of communication through information network, that is, the right to make a work available to the public by wire or
by wireless means, so that people may have access to the work from a place and at a time individually chosen by them;
(13) the right of cinematography, that is, the right to fix an adaptation of a work in a medium by cinematography or a process analogous
to cinematography;
(14) the right of adaptation, that is, the right to change a work into a new one with originality;
(15) the right of translation, that is, the right to change the language in which the work is written into another language;
(16) the right of compilation, that is, the right to compile by selection or arrangement preexisting works or passages therefrom
into a new work; and
(17) other rights to be enjoyed by copyright owners.
Copyright owners may authorize others’ exercising of the rights provided for in Subparagraph (5) through Subparagraph (17) of the
preceding paragraph and receive remuneration in accordance with the terms of contracts or the relevant provisions in this Law.
Copyright owners may transfer, wholly or in part, the rights provided for in Subparagraph (5) through Subparagraph (17) of the first
paragraph in this Article and receive fees in accordance with the terms of contracts or the relevant provisions in this Law.
Section 2
Ownership of Copyright
Article 11 Except where otherwise provided for in this Law, the copyright in a work shall belong to its author.
The author of a work is the citizen who creates the work.
Where a work is created under the auspices and according to the intention of a legal entity or other organization, which bears responsibility
for the work, the said legal entity or organization shall be deemed to be the author of the work.
The citizen, legal entity or other organization whose name is mentioned in connection with a work shall, in the absence of proof
to the contrary, be deemed to be the author of the work.
Article 12 Where a work is created by adaptation, translation, annotation or arrangement of a preexisting work, the copyright
in the work thus created shall be enjoyed by the adapter, translator, annotator or arranger, provided that the exercise of such copyright
does not prejudice the copyright in the preexisting work..
Article 13 Where a work is created jointly by two or more authors, the copyright in the work shall be enjoyed jointly by the
co-authors. No co-authorship may be claimed by anyone who has not participated in the creation of the work.
Where a work of joint authorship can be separated into parts and exploited separately, each co-author may be enpost_titled to independent
copyright in the part that he creates, provided that the exercise of such copyright does not prejudice the copyright in the joint
work as a whole.
Article 14 A collection of preexisting works or passages therefrom, or of data or other material which does not constitute
a work, if manifesting the originality of a work by reason of the selection or arrangement of its contents, is a compilation. The
copyright in such compilation shall be enjoyed by the compiler, provided that the exercise of such copyright does not prejudice the
copyright in the preexisting works.
Article 15 The copyright in a cinematographic work or in a work created by a process analogous to cinematography shall be enjoyed
by the producer of the work, while its scriptwriter, director, cameraman, lyricist, composer and other authors shall enjoy the right
of authorship therein and shall be enpost_titled to receive remuneration in accordance with the terms of the contracts concluded between
them and the producer.
The authors of the script, the musical works and the other works which are included in a cinematographic work or in a work created
by a process analogous to cinematography and which can be exploited separately shall be enpost_titled to exercise their copyright independently.
Article 16 A work created by a citizen in the fulfillment of tasks assigned to him by a legal entity or other organization
is a work created in the course of employment. Subject to the provisions of the second paragraph of this Article, the copyright in
such work shall be enjoyed by the author; however, the legal entity or other organization shall have priority to exploit the work
within the scope of its professional activities. Within two years after the completion of the work, the author may not, without the
consent of the legal entity or other organization, authorize the exploitation of the work by a third party in the same manner as
the legal entity or other organization exploits the work.
In any of the following cases, the author of a work created in the course of employment shall enjoy the right of authorship, while
the legal entity or other organization shall enjoy the other rights included in the copyright and may reward the author:
(1) drawings of engineering designs and product designs, maps, computer software and other works which are created in the course
of employment mainly with the material and technical resources of the legal entity or other organization and for which the legal
entity or other organization bears responsibility;
(2) works created in the course of employment the copyright in which is, in accordance with laws, administrative regulations or contracts,
enjoyed by the legal entity or other organization.
Article 17 The ownership of the copyright in a commissioned work shall be agreed upon in a contract between the commissioning
and the commissioned parties. In the absence of such a contract or of an explicit agreement in such a contract, the copyright in
the work shall belong to the commissioned party.
Article 18 The transfer of ownership of the original copy of a work of the fine arts or other works shall not be deemed to
include the transfer of the copyright in such work or works; however, the right to exhibit the original copy of the work of the fine
arts shall be enjoyed by the owner of the original copy.
Article 19 Where the copyright in a work belongs to a citizen, the rights as provided for in Subparagraph (5) through Subparagraph
(17) of the first paragraph in Article 10 of this Law in respect of the work shall, after his death and during the term of protection
provided for in this Law, be transferred in accordance with the provisions of the Law of Succession.
Where the copyright in a work belongs to a legal entity or other organization, the rights provided for in Subparagraph (5) through
Subparagraph (17) of the first paragraph in Article 10 of this Law shall, after the change or the termination of the status of the
legal entity or other organization and during the term of protection provided for in this Law, be enjoyed by the succeeding legal
entity or other organization which takes over the former’s rights and obligations, or, in the absence of such succeeding entity or
organization, by the State.
Section 3
Term of Protection for the Rights
Article 20 No time limit shall be set on the term of protection for an author’s rights of authorship and revision and his right
to protect the integrity of his work.
Article 21 In respect of a work of a citizen, the term of protection for the right of publication and the rights as provided
for in Subparagraph (5) through Subparagraph (17) of the first paragraph in Article 10 of this Law shall be the lifetime of the author
and fifty years after his death, expiring on December 31 of the fiftieth year after his death. In the case of a work of joint authorship,
the term shall expire on December 31 of the fiftieth year after the death of the last surviving author.
In respect of a work of a legal entity or other organization or a work which is created in the course of employment and the copyright
(except the right of authorship) in which is enjoyed by a legal entity or other organization, the term of protection for the right
of publication and the rights as provided for in Subparagraph (5) through Subparagraph (17) of the first paragraph in Article 10
of this Law shall be fifty years, expiring on December 31 of the fiftieth year after the first publication of such work; however,
such work shall no longer be protected under this Law if it is not published within fifty years after the completion of its creation.
In respect of a cinematographic work, a work created by a process analogous to cinematography or a photographic work, the term of
protection for the right of publication and the rights as provided for in Subparagraph (5) through Subparagraph (17) of the first
paragraph in Article 10 of this Law shall be fifty years, expiring on December 31 of the fiftieth year after the first publication
of such work; however, such work shall no longer be protected under this Law if it is not published within fifty years after the
completion of its creation.
Section 4
Limitations on Rights
Article 22 In the following cases, a work may be used without permission from, and without payment of remuneration to, the
copyright owner, provided that the name of the author and the post_title of the work are mentioned and the other rights enjoyed by the
copyright owner in accordance with this Law are not prejudiced:
(1) use of another person’s published work for purposes of the user’s own personal study, research or appreciation;
(2) appropriate quotation from another person’s published work in one’s own work for the purpose of introducing or commenting a certain
work, or explaining a certain point;
(3) unavoidable inclusion or quotation of a published work in the media, such as in a newspaper, periodical and radio and television
program, for the purpose of reporting current events;
(4) publishing or rebroadcasting by the media, such as a newspaper, periodical, radio station and television station, of an article
published by another newspaper or periodical, or broadcast by another radio station or television station, etc. on current political,
economic or religious topics, except where the author declares that such publishing or rebroadcasting is not permitted;
(5) publishing or broadcasting by the media, such as a newspaper, periodical, radio station and television station of a speech delivered
at a public gathering, except where the author declares that such publishing or broadcasting is not permitted;
(6) translation, or reproduction in a small quantity of copies of a published work by teachers or scientific researchers for use
in classroom teaching or scientific research, provided that the translation or the reproductions are not published for distribution;
(7) use of a published work by a State organ to a justifiable extent for the purpose of fulfilling its official duties;
(8) reproduction of a work in its collections by a library, archive, memorial hall, museum, art gallery, etc. for the purpose of
display, or preservation of a copy, of the work;
(9) gratuitous live performance of a published work, for which no fees are charged to the public, nor payments are made to the performers;
(10) copying, drawing, photographing or video-recording of a work of art put up or displayed in an outdoor public place;
(11) translation of a published work of a Chinese citizen, legal entity or other organization from Han language into minority nationality
languages for publication and distribution in the country; and
(12) transliteration of a published work into braille for publication.
The provisions of the preceding paragraph shall be applicable also to the rights of publishers, performers, producers of sound recordings
and video recordings, radio stations and television stations.
Article 23 Except where the author declares in advance that use of his work is not permitted, passages from a work, a short
written work, musical work, a single work of the fine arts or photographic work which has been published may, without permission
from the copyright owner, be compiled in textbooks for the purpose of compiling and publishing textbooks for the nine-year compulsory
education and for national education planning, provided that remuneration is paid, the name of the author and the post_title of the work
are mentioned, and the other rights enjoyed by the copyright owner in accordance with this Law are not prejudiced.
The provisions of the preceding paragraph shall be applicable also to the rights of publishers, performers, producers of sound recordings
and video recordings, radio stations and television stations.
Chapter III
Copyright Licensing and Transfer Contracts
Article 24 Anyone who exploits another person’s work shall conclude a copyright licensing contract with the copyright owner,
except where no permission need be obtained under this Law.
A licensing contract shall include the following main points:
(1) the category of the right to exploit the work covered by the license;
(2) the exclusive or non-exclusive nature of the right to exploit the work covered by the license;
(3) the territory and the term covered by the license;
(4) the rates of remuneration and the means of payment;
(5) the liabilities in the case of breach of the contract; and
(6) other matters which the parties consider it necessary to agree upon.
Article 25 Anyone who transfers any of the rights provided for in Subparagraph (5) through Subparagraph (17) of the first paragraph
in Article 10 of this Law shall conclude a written contract.
A copyright transfer contract shall include the following main points:
(1) the post_title of the work;
(2) the category of the right to be transferred and the territory covered by the transfer;
(3) the rates of the transfer fee;
(4) the date and the means of payment of the transfer fee;
(5) the liabilities in the case of breach of the contract; and
(6) other matters that the parties consider it necessary to agree upon.
Article 26 The other party may not, without permission from the copyright owner, exercise any right that is not explicitly
licensed or transferred by the copyright owner in the contract.
Article 27 The rates of remuneration for the exploitation of a work may be agreed upon by the parties and may also be paid
in accordance with the rates fixed by the administrative department for copyright under the State Council in conjunction with the
other departments concerned. In the absence of an explicit agreement in the contract, the remuneration shall be paid in accordance
with the rates fixed by the said department under the State Council in conjunction with the other departments concerned.
Article 28 No publishers, performers, producers of sound recordings and video recordings, radio stations, television stations,
etc. that exploit another person’s work in accordance with the relevant provisions of this Law may infringe upon the authors’ rights
of authorship, revision or protection of the integrity of the works, or their right to remuneration.
Chapter IV
Publication, Performance, Sound Recording,
Video Recording and Broadcasting
Section 1
Publication of Books, Newspapers and Periodicals
Article 29 A book publisher who intends to publish a book shall conclude a publishing contract with, and pay remuneration to,
the copyright owner.
Article 30 The exclusive right enjoyed by the book publisher in accordance with the agreement in the contract to publish a
work that the copyright owner delivered to him for publishing shall be protected by law, and the work may not be published by others.
Article 31 The copyright owner shall deliver the work within the term specified in the contract. The book publisher shall publish
the work in compliance with the quality requirements and within the term as specified in the contract.
The book publisher who fails to publish the work within the term specified in the contract shall bear civil liabilities provided
for in Article 53 of this Law.
When the book publisher reprints or republishes the work, it shall notify the copyright owner of the matter and pay remuneration
to him. If the publisher refuses to reprint or republish the work when the stock of the book is exhausted, the copyright owner shall
have the right to terminate the contract.
Article 32 Where a copyright owner has submitted the manuscript of his work to a newspaper or periodical publisher for publication
and has not received, within 15 days from the newspaper or within 30 days from the periodical publisher, counted from the date of
submission of the manuscript, any notification of the said newspaper’s or publisher’s decision to publish the work, the copyright
owner may submit the manuscript of the same work to another newspaper or periodical publisher for publishing, unless the parties
have agreed otherwise.
Except where the copyright owner declares that no reprinting or excerpting of his work is permitted, a newspaper or periodical publisher
may, after the work is published by another newspaper or periodical publisher, reprint the work or print an abstract of it or print
it as reference material, provided that remuneration is paid to the copyright owner in accordance with relevant regulations.
Article 33 A book publisher may, with the permission of the author, revise or abridge the work.
A newspaper or periodical publisher may make editorial modifications and abridgments in the language of a work. Any revision in the
contents of the work shall be subject to permission by the author.
Article 34 When publishing a work created by adaptation, translation, annotation, arrangement or compilation of a preexisting
work, the publisher shall obtain permission from, and pay remuneration to, both the owner of the copyright in the work created by
adaptation, translation, annotation, arrangement or compilation and the owner of the copyright in the preexisting work.
Article 35 A publisher shall have the right to permit another person to exploit, or prohibit such person from exploiting, the
typographical design of the book or the periodical which he publishes.
The term of protection for the right specified in the preceding paragraph shall be ten years, expiring on December 31 of the tenth
year after the first publication of the book or the periodical in which the typographical design is used.
Section 2
Performance
Article 36 A performer (an individual performer or a performing group) who exploits, for a performance, a work created by another
person shall obtain permission from, and pay remuneration to, the copyright owner. Where a performance is organized by a person,
the organizer shall obtain permission from, and pay remuneration to, the copyright owner.
Anyone who exploits, for a performance, a work created by adaptation, translation, annotation or arrangement of a preexisting work
shall obtain permission from, and pay remuneration to, both the owner of the copyright in the work created by adaptation, translation,
annotation or arrangement and the owner of the copyright in the preexisting work.
Article 37 A performer shall, in respect of his performance, enjoy the following rights:
(1) to claim performership;
(2) to protect the image inherent in his performance from distortion;
(3) to authorize others’ live broadcasting or communicating to the public of his performance, and receive remuneration therefrom;
(4) to authorize others’ making of sound recordings and video recordings of his performance, and receive remuneration therefrom;
(5) to authorize others’ reproduction and distribution of the sound recordings and video recordings of his performance, and receive
remuneration therefrom; and
(6) to authorize others’ making of his performance available to the public through information network, and receive remuneration
therefrom.
A person who is authorized exploitation of a work in the manner provided for in Subparagraph (3) through Subparagraph (6) of the
preceding paragraph shall, in addition, obtain permission from, and pay remuneration to, the copyright owner.
Article 38 No time limit shall be set on the term of protection for the rights provided for in Subparagraphs (1) and (2) of
the first paragraph in Article 37 of this Law.
The term of protection for the rights provided for in Subparagraph (3) through Subparagraph (6) of the first paragraph in Article
37 of this Law shall be fifty years, expiring on December 31 of the fiftieth year after the performance takes place.
Section 3
Sound Recording and Video Recording
Article 39 A producer of sound recordings or video recordings who exploits, for making a sound recording or video recording,
a work created by another person shall obtain permission from, and pay remuneration to, the copyright owner.
A producer of sound recordings or video recordings who exploits a work created by adaptation, translation, annotation or arrangement
of a preexisting work shall obtain permission from, and pay remuneration to, both the owner of the copyright in the work created
by adaptation, translation, annotation or arrangement and the owner of the copyright in the preexisting work.
A producer of sound recordings who exploits, for making a sound recording, a musical work of which a lawful sound recording has been
made, may do without permission from the copyright owner, but shall, in accordance with regulations, pay remuneration to the copyright
owner; no
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The People’s Bank of China, the State Administration of Foreign Exchange
Circular of the People’s Bank of China and State Administration of Foreign Exchange on Adjusting Policies Concerning Foreign Exchange
Purchase for Some Capital Account Transactions
YinFa [2001] No.304
September 19, 2001
Each branch, operation administrative department of the People’s Bank of China (hereinafter referred to as “the PBC”), key subbranch
of the PBC in each provincial capital, and in Shenzhen, Dalian, Qingdao, Xiamen, and Ningbo; Branch of the State Administration of
Foreign Exchange (hereinafter “SAFE”) in each province, autonomous region, municipality directly under the Central Government, foreign
exchange administrative department, Shenzhen, Dalian, Qingdao, Xiamen, Ningbo branch of SAFE; each designated Chinese-capital foreign
exchange bank:
The PBC and SAFE took some temporary measures to limit buying foreign for some capital account transactions in 1998 according to the
special situation at that time. These measures have played positive role in stabilizing balance of payment and preventing foreign
exchange evasion and arbitrage. Now, China’s macroeconomic development and balance of payment are sound. In order to facilitate the
enterprise’s business, promote the bank to improve their asset, and implement the strategy of “Going Out”, following adjustments
have been made:
1.
Eliminate the limitation on buying foreign exchange for repaying overdue domestic foreign exchange loans. When examining and approving
the application of foreign exchange purchase, each branch of SAFE shall adhere to principle of enterprise’s application. In order
to prevent large scale mass purchase, approval shall be made by stages and in groups.
2.
Relax the limitation on buying foreign exchange for repaying domestic foreign exchange loans, external debt on-relendings, and external
debts before the due date. In case of advance repayment clauses included in concerned loan contract, with the approval of SAFE, advance
repayment can be made with the borrower’s own foreign exchange. With the approval of SAFE, following advance repayments can be made:
1) those approved by the State Council; 2) those needed for debt rearrangement, closure, suspend, merger, or shifting of the enterprise
due to policy adjustments; 3) those pronounced by the court.
3.
Relax the limitation on buying foreign exchange for overseas investment. Foreign exchange needed for strategic overseas investment
(approved by the State Council), processing project with exported materials, and foreign aid project may be purchased. Other kind
of overseas investments shall mainly be financed by the investor’s own foreign exchange.
In case of foreign exchange purchase for L/C advanced payment, separate notice shall be issued.
This circular shall enter into force as of the date of promulgation. In case of any contradiction with previous regulations, this
circular shall prevail. On receiving this circular, each branch of SAFE shall transmit it to branch/sub-branch and related units
under its jurisdiction in no time. The headquarter of each Chinese-funded foreign exchange designated bank shall transmit it to its
branches. Any problem during implementation shall be reported to the Capital Account Department of SAFE in a timely fashion.
This is hereby the notification.
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The People’s Bank of China, the State Administration of Foreign Exchange
2001-09-19
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e01524
the State Council
Regulations for the Implementation of the Law on Sino-foreign Equity Joint Ventures (2001)
(Promulgated 20 September 1983 by the State Council Revised 15 January 1986 by the State Council Revised 21 December 1987 by the State
Council Revised 22 July 2001 by the State Council in accordance with the Decision of the State Council to Revise the Law of the People’s
Republic of China on Sino-toreign Equity Joint Ventures)
TABLE OF CONTENTSChapter I General Principles
Chapter II Establishment and Registration
Chapter III Form of Organization and Registered Capital
Chapter IV Methods of Contributing Investment
Chapter V Board of Directors and Management Office
Chapter VI Introduction of Technology
Chapter VII Right to the Use of Site and Its Fee
Chapter VIII Purchasing and Selling
Chapter IX Taxes
Chapter X Foreign Exchange Control
Chapter XI Financial Affairs and Accounting
Chapter XII Staff and Workers
Chapter XIII Trade Unions
Chapter XIV Duration, Dissolution and Liquidation
Chapter XV Settlement of Disputes
Chapter XVI Supplementary Provisions
Chapter I General Principles
Article 1
These Regulations are formulated in order to facilitate the implementation of the Law of the People’s Republic of China on Sino-foreign
Equity Joint Ventures (hereinafter referred to as the Law on Sino-foreign Joint Ventures)
Article 2
Sino-foreign equity joint ventures (hereinafter referred to as joint ventures) established within China’s territory in accordance
with the Law on Sino-foreign Joint Ventures are Chinese legal persons and are subject to the jurisdiction and protection of the Chinese
law.
Article 3
Joint ventures established within China’s territory must be able to promote the development of China’s economy and the improvement
of the science and technology for the benefit of socialist modernization.
Businesses and industries in which the establishment of joint ventures is encouraged, prohibited or restricted by the State shall
be decided in accordance with provisions of the State in the Regulations on Foreign Investment Guidelines and the Guideline Catalogue
of Foreign Investment Industries.
Article 4
Applications to establish joint ventures shall not be granted approval if the project involves any of the following conditions:
(1)
detriment to China’s sovereignty
(2)
violation of the Chinese law
(3)
nonconformity with the requirements of the development of China’s national economy
(4)
environmental pollution
(5)
obvious inequity in the agreements, contracts and articles of association signed impairing the rights and interests of one party
Article 5
A joint venture has the right to do business independently within the scope of the provisions of Chinese laws, administrative regulations,
and the agreement, contract and articles of association of the joint venture. The relevant departments and authorities concerned
shall provide support and assistance.
Chapter II Establishment & Registration
Article 6
The establishment of a joint venture in China shall be subject to examination and approval by the Ministry of Foreign Trade and Economic
Cooperation of the People’s Republic of China (hereinafter referred to as MOFTEC). After approval, a certificate of approval shall
be issued by MOFTEC.
The State Council shall delegate to the people’s governments in provinces, autonomous regions and centrally administered municipalities
and relevant departments under the State Council the power to examine and approve the establishment of joint ventures that meet the
following conditions:
(1)
the total amount of investment is within the limit of the investment examination and approval power as stipulated by the State Council,
and the source of capital of the Chinese parties has been ascertained
(2)
no additional allocations of raw materials by the State are required and the national balance of fuel, power, transportation and foreign
trade export quotas, etc. is not affected.
Joint ventures established in accordance with provisions of the proceeding paragraph shall be reported to MOFTEC for the record.
MOFTEC and the State Council authorized people’s governments in provinces, autonomous regions and centrally administered municipalities
and relevant departments under the State Council shall hereinafter be referred to as the examination and approval authority.
Article 7
When applying for establishing a joint venture, the foreign and Chinese parties shall jointly submit the following documents to the
examination and approval authority:
(1)
an application for the establishment of a joint venture
(2)
the feasibility study report jointly prepared by the parties to the joint venture
(3)
joint venture agreement, contract and articles of association signed by representatives authorized by the parties to the venture
(4)
list of candidates for chairperson, vice-chairperson and directors nominated by the parties to the venture (5) other documents required
by the examination and approval authority.
The documents listed in the proceeding paragraph shall be written in Chinese. Documents (2), (3) and (4) may be written simultaneously
in a foreign language agreed upon by the parties to the joint venture. Both versions shall have equal validity.
Where any contents are found to be inappropriate in the submitted documents, the examination and approval authority shall demand an
amendment to it within a limited time.
Article 8
Upon receipt of all the documents stipulated in Article 7 of these Regulations, the examination and approval authority shall, within
three (3) months, decide whether to approve or disapprove them.
Article 9
The applicant shall, within one (1) month after receipt of the certificate of approval, carry out registration procedures with the
administrative authority of industry and commerce (hereinafter referred to as the registration administration organ) The date on
which the business license of a joint venture is issued shall be regarded as the date of formal establishment of the joint venture
Article 10
The “joint venture agreement” mentioned in these Regulations refers to a document agreed upon by the parties to the joint venture
on .some main points and principles governing the establishment of a joint venture; “joint venture contract” refers to a document
agreed upon and concluded by the parties to the joint venture on their rights and obligations; “articles of association” refers to
a document agreed upon by the parties to the joint venture defining the purposes, organizational principles and method of management
of a joint venture in compliance with the principles of the joint venture contract. If the joint venture agreement conflicts with
the contract, the contract shall prevail.
If the parties to the joint venture agree to sign only a contract and articles of association, the agreement may be omitted.
Article 11
The joint venture contract shall include the following main items:
(1)
the names, the countries of registration, the legal addresses of parties to the joint venture, and the names, professions and nationalities
of the legal representatives thereof
(2)
name of the joint venture, its legal address, purpose and the scope and scale of business
(3)
total amount of investment and registered capital of the joint venture, investment contributed by the parties to the joint venture,
each party’s investment proportion, forms of investment, the time limit for contributing investment, stipulations concerning incomplete
contributions, and assignment of investment
(4)
the ratio of profit distribution and losses to be borne by each party
(5)
the composition of the board of directors, the distribution of the number of directors. and the responsibilities, powers and means
of employment of the general manager, deputy general manager and other senior management personnel
(6)
the main production equipment and technology to be adopted and their source of supply
(7)
the ways and means of purchasing raw materials and selling finished products
(8)
principles governing the handling of finance, accounting and auditing
(9)
stipulations concerning labor management, wages, welfare and labor insurance
(10)
the duration of the joint venture. its dissolution and the procedure for liquidation
(11)
the liabilities for breach of contract
(12)
ways and procedures for settling disputes between the parties to the joint venture
(13)
the language used for the contract and the conditions for putting the contract into effect.
The annex to the contract of a joint venture shall have equal validity with the contract itself.
Article 12
The formation of a joint venture contract, its validity, interpretation, execution and the settlement of disputes under it shall be
governed by the Chinese law.
Article 13
Articles of association shall include the following main items:
(1)
the name of the joint venture and its legal address
(2)
the purpose, business scope and duration of the joint venture
(3)
the names, the countries of registration and the legal addresses of parties to the joint venture, and the names, professions and nationalities
of the legal representatives thereof
(4)
total amount of investment and registered capital of the joint venture, investment contributed by the parties to the joint venture,
each party’s investment proportion, stipulations concerning the assignment of investment, the ratio of profit distribution and losses
to be borne by parties to the joint venture
(5)
the composition of the board of directors, its re3ponsibilities, powers and rules of procedure, the term of office of the directors,
and the responsibilities of its chairperson and vice chairperson
(6)
the setting up of management organizations, rules for handling routine affairs, the responsibilities of the general manager, deputy
general manager and other senior management personnel, and the method of their appointment and dismissal
(7)
principles governing finance, accounting and auditing
(8)
dissolution and liquidation
(9)
procedures for amendment of the articles of association
Article 14
The agreement, contract and articles of association shall come into force after being approved by the examination and approval authority.
The same applies in the event of amendments.
Article 15
The examination and approval authority and the registration and administration office are responsible for supervising and inspecting
the execution of the joint venture contracts and articles of association.
Chapter III Forms of Organization & Registered Capital
Article 16
A joint venture is a limited liability company.
Each party to the joint venture assumes the liability of the joint venture within the limits of the capital subscribed by the party.
Article 17
The total amount of investment (including loans) of a joint venture refers to the sum of capital construction funds and the circulating
funds needed for the joint venture’s production scale as stipulated in the contract and the articles of association of the joint
venture.
Article 18
The registered capital of a joint venture is the total capital registered at the registration and administration office for the establishment
of the joint venture. It shall be the capital subscribed by all parties to the joint venture.
The registered capital shall generally be expressed in Renminbi, or may be in a foreign currency agreed upon by the parties to the
joint venture
Article 19
A joint venture shall not reduce its registered capital during the term of the joint venture. Where there is a real need for reduction
of the registered capital due to changes in the total amount of investment, the scale of production and operation or other circumstances,
the reduction shall be approved by the examination and approval authority.
Article 20
If one party to the joint venture intends to assign all or part of his investment subscribed to a third party, consent shall be obtained
from the other parties to the joint venture, and approval from the examination and approval authority is required.
When one party assigns all or part of his investment to a third party, the other parties shall have a priority purchase right.
When one party has his investment subscribed to a third party, the conditions given shall not be more favorable than those given the
other parties to the joint venture.
No assignment shall have effect should there be any violation of the above stipulations.
Article 21
Any increase or reduction of the registered capital of a joint venture shall be approved by a meeting of the board of directors and
submitted to the examination and approval authority for approval. Registration procedures for changes shall be undertaken with the
original registration and administration office.
Chapter IV Methods of Contributing Investment
Article 22
Each party to a joint venture may contribute cash or buildings, factory premises, machinery, equipment or other materials, industrial
property, proprietary technologies, or site use rights as investment, the value of which shall be ascertained. If the investment
is in the form of buildings, factory premises, machinery, equipment or other materials, industrial property or proprietary technologies,
the value shall be assessed through consultation by the parties to the joint venture on the basis of fairness and reasonableness,
or shall be assessed by a third party agreed upon by parties to the joint venture.
Article 23
The foreign exchange contributed by the foreign party shall be converted into Renminbi according to the standard exchange rate announced
by the People’s Bank of China on the day of its submission or be cross exchanged into a predetermined foreign currency.
Where the cash Renminbi contributed by the Chinese party is converted into foreign currency, it shall be converted according to the
standard exchange rate announced by the People’s Bank of China on the day of the submission of the funds.
Article 24
The machinery, equipment and other materials contributed by the foreign party shall be those necessary for the production of the joint
venture.
The price of the machinery, equipment and other materials referred in the proceeding paragraph shall not be higher than the current
international market price for similar equipment or materials.
Article 25
The industrial property or proprietary technologies contributed by the foreign party as investment shall meet one of the following
conditions:
(1)
capable of improving markedly the performance and quality of existing products and raising productivity
(2)
capable of notable savings in raw materials, fuel or power
Article 26
Foreign parties who contribute industrial property or proprietary technologies as investment shall present relevant documentation
on the industrial property or proprietary technologies, including photocopies of the patent certificates or trademark registration
certificates, statements of validity, their technical characteristics. practical value, the basis for calculating the price and the
price agreement signed with the Chinese partners All these shall serve as an annex to the contract.
Article 27
The machinery, equipment or other materials, industrial property or proprietary technologies contributed by foreign parties as investment
shall be subject to the examination and approval authority for approval.
Article 28
The parties to the joint venture shall pay in full the investment subscribed according to the time limit stipulated in the contract.
Delay in payment or partial delay in payment shall be subject to a payment of interest in arrears or a compensation for the loss
as defined in the contract.
Article 29
After the investment is paid up by the parties to the joint venture, a Chinese registered accountant shall verify it and provide a
certificate of verification, based on which the joint venture shall issue an investment certificate. An investment certificate shall
include the following items: name of the joint venture; date, month and year of the establishment of the joint venture; names of
the parties and the investment contributed; date, month and year of the contribution of the investment; and date, month and year
of issuance of the investment certificate.
Chapter V Board of Directors & Management Office
Article 30
The highest authority of the joint venture shall be its board of directors. It shall decide all major issues concerning the joint
venture.
Article 31
The board of directors shall consist of no less than three (3) members. The distribution of the number of directors shall be ascertained
through consultation by the parties to the joint venture with reference to the proportion of investment contributed.
The term of office for the directors is four (4) years. Their term of office may be renewed with the consent of the parties to the
joint venture.
Article 32
The board of directors shall convene at least once every year. The meeting shall be called and presided over by the chairperson of
the board.
Where the chairperson is unable to call the meeting, he/she shall authorize the vice-chairperson or other director to call and preside
over the meeting. The chairperson may convene an interim meeting based on a proposal made by more than one-third of the directors.
A board meeting requires a quorum of over two-thirds of the directors. Where the director is unable to attend, he/she shall present
a proxy authorizing someone else to represent him/her and vote for him/her.
A board meeting shall generally be held at the location of the joint venture’s legal address.
Article 33
Decisions on the following matters shall be made only after being unanimously agreed upon by the directors present at the board meeting:
(1)
amendment of the articles of association of the joint venture
(2)
termination and dissolution of the joint venture
(3)
increase or reduction of the registered capital of the joint venture
(4)
merger or division of the joint venture
Decisions on other matters shall be made according to the rules of procedure stipulated in the articles of association.
Article 34
The chairperson of the board is the legal representative of the joint venture. Where the chairperson is unable to exercise his/her
responsibilities. he/she shall authorize the vice-chairperson of the board or other director to represent the joint venture
Article 35
A joint venture shall establish a business management office that shall be responsible for daily business management. The business
management office shall have a general manager and several deputy general managers who shall assist the general manager in his/her
work.
Article 36
The general manager shall carry out the decisions of the board meeting, organize and be responsible for the daily management of the
joint venture. The general manager shall, within his/her authority empowered by the board, represent the joint venture externally,
and shall have the right to appoint and dismiss his/her subordinates, and exercise other responsibilities and power as authorized
by the board within the joint venture.
Article 37
The general manager and deputy general managers shall be appointed by the board of directors of the joint venture. These positions
may be held either by Chinese citizens or foreign citizens.
At the invitation of the board of directors, the chairperson, vice-chairperson or other directors of the board may concurrently be
the general manager, deputy general managers or other senior management personnel of the joint venture.
In handling major issues, the general manager shall consult with the deputy general managers.
The general manager or deputy general managers shall not hold posts concurrently as general manager or deputy general managers of
other economic organizations. They shall not have any connections with other economic organizations in commercial competition with
their own joint venture.
Article 38
Where the general manager, deputy general managers or other senior management personnel practice favoritism or seriously abuse their
power, the board of directors shall have the power to dismiss them at any time.
Article 39
Where a joint venture needs to establish branch offices (including sales offices) outside China or in HongKong or Macao, it must report
to the Ministry of Foreign Trade and Economic Cooperation for approval.
Chapter VI Introduction of Technology
Article 40
The introduction of technology mentioned in this Chapter refers to the necessary technology obtained by the joint venture by means
of technology transfer from a third party or parties to the joint venture.
Article 41
The technology acquired by the joint venture shall be appropriate and advanced and enable the venture’s products to display conspicuous
social and economic results domestically or to be competitive on the international market.
Article 42
The right of the joint venture to do business independently shall be maintained when making technology transfer agreements, and relevant
documentation shall be provided by the technology exporting party in accordance with the provisions of Article 26 of these Regulations.
Article 43
The technology transfer agreements signed by a joint venture shall be submitted for approval to the examination and approval authority
Technology transfer agreements shall comply with the following stipulations:
(1)
the fees for use of technology shall be fair and reasonable
(2)
unless otherwise agreed upon by both parties, the technology exporting party shall not put any restrictions on the quantity, price
or region of sale of the products that are to be exported by the technology importing party
(3)
the term for a technology transfer agreement is generally no longer than ten years
(4)
after the expiry of a technology transfer agreement, the technology importing party shall have the right to use the technology continuously
(5)
conditions for mutual exchange of information on the improvement of technology by both parties of the technology transfer agreement
shall be reciprocal
(6)
the technology importing party shall have the right to buy the equipment, parts and raw materials needed from sources they deem suitable
(7)
no unreasonably restrictive clauses prohibited by the Chinese law and regulations shall be included
Chapter VII Right to the Use of Site and Its Fee
Article 44
Joint ventures shall implement the principle of efficiency in the use of land. Any joint venture requiring the use of a site shall
file an application with local departments of the municipal (county) government in charge of land and obtain the right to use a site
only after securing approval and signing a contract. The size, location, purpose and contract period and fee for the right to use
a site (hereinafter referred to as site use fee), rights and obligations of the parties to a joint venture and fines for breach of
contract should be stipulated in explicit terms in the contract.
Article 45
If the Chinese party already has the right to the use of site for the joint venture, the Chinese party may use it as part of its investment.
The monetary equivalent of this investment should be the same as the site use fee otherwise paid for acquiring such site.
Article 46
The standard for a site use fee shall be stipulated by the people’s government of a province, autonomous region or centrally administered
municipality where the joint venture is located according to such factors as the purpose of use, geographic and environmental conditions,
expenses for requisition, demolishing and resettlement and the joint venture’s requirements with regard to infrastructure, and shall
be filed at the Ministry of Foreign Trade and Economic Cooperation and the state department responsible for land administration.
Article 47
Joint ventures engaged in agriculture and animal husbandry may, with the consent of the people’s government of the local province,
autonomous region or centrally administered municipality, pay a percentage of the joint venture’s business income as site use fees
to the local department responsible for land administration.
Projects of a developmental nature in economically undeveloped areas may receive special preferential treatment in respect of site
use fees with the consent of the local people’s government.
Article 48
The rates for site use fees shall not be subject to adjustment in the first five (5) years beginning from the day the land is used.
After that the interval of adjustment shall not be less than three (3) years according to the development and changes in geographic
and environmental conditions.
Site use fees as part of the investment by the Chinese party shall not be subject to adjustment during the contract period.
Article 49
The fee for the right to the use of site obtained by a joint venture according to Article 44 of these Regulations shall be paid annually
from the day to begin use of the land stipulated in the contract. For the first calendar year, the venture shall pay a half-year
fee if it has used the land for over six months; if less than six months, the site use fee shall be exempt. During the contract period,
if the rates of site use fees are adjusted, the joint venture shall pay it according to the new rates from the year of adjustment.
Article 50
Joint ventures, in addition to obtaining site use right according to the provisions of this Chapter. may also acquire site use right
in accordance with relevant provisions of the State.
Chapter VIII Purchasing & Selling
Article 51
In its purchase of required machinery, equipment, raw materials, fuel, parts, means of transport and items for office use, etc. (hereinafter
referred to as materials), a joint venture has the right to decide whether to buy them in China or from abroad.
Article 52
The amount of materials needed for office and daily life for joint ventures purchased in China is not subject to restriction.
Article 53
The Chinese Government encourages joint ventures to sell their products on the international market.
Article 54
A joint venture has the right to export its products by itself or entrust sales agencies of the foreign party or Chinese foreign trade
corporations with sales on a commission or distribution basis.
Article 55
Within the scope of operations stipulated in the contract, a joint venture may import machinery, equipment, parts, raw materials and
fuel needed for its production. A joint venture shall make a plan every year for items for which import licenses are required by
state regulations, and apply for them every six months. For machinery, equipment and other objects that a foreign party has contributed
as part of its investment, the, foreign party can apply directly for import licenses with documents approved by the examination and
approval authority. For materials to be imported exceeding the stipulated scope of the contracts, separate application for import
licenses according to state regulations is required.
A joint venture has the right to export its products by itself; for those products for which export licenses are required by state
regulations, the joint venture shall apply for them every six months on the basis of its annual export plan.
Article 56
With respect to prices for materials in China and fees charged for services such as water, electricity, gas, heat, transportation
of goods, labor, engineering design, consultation, advertisements, joint ventures shall be treated equally with other domestic enterprises.
Article 57
A joint venture and other Chinese economic organizations shall, in their economic exchanges, undertake economic responsibilities and
settle disputes over contracts in accordance with the relevant laws and the contract concluded between both parties.
Article 58
A joint venture shall provide statistic data and submit statistic forms in accordance with the Law of the People’s Republic of China
on Statistics and other state provisions on the statistics collection in relation to the utilization of foreign investment.
Chapter IX TAXES
Article 59
Joint ventures shall pay taxes according to the stipulations of relevant laws of the People’s Republic of China.
Article 60
Staff members and workers employed by joint ventures shall pay individual income tax according to the Individual Income Tax Law of
the People’s Republic of China
Article 61
Taxes on the following imports by a joint venture shall be reduced or exempted in accordance with the relevant provisions of the Chinese
tax law’.
(1)
machinery, equipment, parts and other materials (“other materials” here and hereinafter mean required materials for the joint venture’s
construction on the factory site and for the installation and reinforcement of machines,) which are part of the foreign party’s share
of investment according to the provisions of contract
(2)
machinery, equipment, parts and other materials imported with funds which are part of the joint venture’s total investment
(3)
machinery, equipment, parts and other materials imported by the joint venture with additional capital under the approval of the examination
and approval authority, and for which China cannot guarantee production and supply
(4)
raw materials, auxiliary materials, components, parts and packaging materials imported by the joint venture for production of export
goods
Taxes shall be paid or added according to regulations when the above-mentioned duty-free materials are approved for sale inside China
or used for the production of items to be sold on the Chinese domestic market.
Article 62
Except for those export items restricted by the State, taxes on export products of a joint venture shall be reduced, exempted or refunded
in accordance with the relevant provisions of the Chinese tax law
Chapter X Foreign Exchange Control
Article 63
All matters concerning foreign exchange for joint ventures shall be handled according to the Rules of the People’s Republic of China
on Foreign Exchange Control and relevant provisions of administrative measures.
Article 64
With a business license, a joint venture may open foreign exchange accounts and Renminbi accounts with hanks inside China. The bank
handling the accounts of the joint venture shall exercise supervision of receipts and expenditures.
Article 65
A joint venture shall obtain
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The State Economic and Trade Commission
Reply of the State Economic and Trade Commission Concerning the Relevant Issues on the Purchase of Diesel Oil in China and Sale of
Processed Products in Domestic Market by Companies Engaged in Processing Trade
GuoJingMaoTingWaiJingHan [2001] No.339
May 21,2001
The General Office of the General Administration of Customs:
The document (TingShuBanHan [2001] No.59) submitted by you has been received. We have made a study and now reply you as follows:
According to the Circular Concerning the Relevant Questions on the Domestic Supply of Oil Products after Suspension of Diesel Oil
and Gasoline Import (GuoJingMaoMaoYi [1998] No.653), enterprises with foreign investment and the enterprises engaged in processing
trade should go through oil import procedures at the customs offices at the location of the designated oil refineries against their
oil purchasing certificates. Meanwhile, the Document provides that import-duty-exempted diesel oil bought by companies engaging in
processing trade is subject to supervision and control in accordance with regulations on processing trade. In case of failure in
exporting processed products, import duty shall be repaid accordingly for the diesel oil consumed. The Document also provides that
oil used for products in processing trade which are sold to domestic market are subject to repayment of import duty in line with
relevant regulations rather than deferred application of import license.
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The State Economic and Trade Commission
2001-05-21
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The General Office of the Ministry of Finance
Circular of the General Office of the Ministry of Finance Concerning Further Enhancing the Management of Collection of the Site Use
Fees of Enterprises with Foreign Investment
CaiBanQi [2001] No.211
April 9, 2001
With a view to further enhancing the management of collection of the site use fees of enterprises with foreign investment, relevant
issues are hereby notified as follows:
1.
The site use fees of enterprises with foreign investment are specially used for the compensation, pull-down, allocation, construction
of public establishments outside the factories and corresponding land development of the land use of enterprises with foreign investment.
Financial departments at all levels shall strengthen the management of collection of the site use fees of enterprises with foreign
investment, and ensure that the financial revenue be brought into the treasuries in time and in full amount.
2.
The site use fees of foreign enterprise are incomes of the compensated use of state-owned land and are an important composition of
the state budget, and the local governments have no right to reduce and remit them. The local governments that have already reduced
and remitted the site use fees shall be corrected.
3.
The financial departments shall urge the payment of site use fees that haven’t been handed in. The financial departments shall punish
the enterprises with foreign investment that are behind in payment of the site use fees according to relevant laws and regulations,
and shall apply to the people’s courts for enforcement with regard to enterprises that still don’t pay the fees after punishment.
4.
The financial departments of all localities shall make general check-ups of the site use fees of enterprises with foreign investment
that haven’t been handed in, and shall check and bring all the site use fees that were behind in payment of previous years into the
treasuries before the end of September of 2001, and shall hand in part of the fees that should be handed in to the State treasury
in time, and shall submit the surveys of the collection of site use fees of enterprises with foreign investment to the Department
of Enterprises of this Ministry before the end of September of 2001. This Ministry will make a special inspection over the payment
of site use fees that were not handed in.
5.
The financial departments of all localities shall bring the site use fees of enterprises with foreign investment into the treasuries
strictly according to the levels of budget management, and shall avoid mixing up the treasuries of different levels. The site use
fees handed in by enterprises affiliated to central departments, and by Sino-foreign equity joint ventures, Sino-foreign cooperative
ventures, which are jointly operated by enterprises directly under the central management and foreign investors, are incomes of the
central budget, and shall be handed in to the State Treasury. The site use fees handed in by enterprises affiliated to the central
departments and by Sino-foreign equity joint ventures, Sino-foreign cooperative ventures, which are jointly operated by enterprises
directly under the central management and local enterprises, shall be firstly handed in on-site to the State Treasury. The localities
shall share part of the fees, and may get it back from the central finance according to the proportion of investment through year-end
settlements.
6.
The financial departments at all levels shall adopt delegated collection of the site use fees of enterprises with foreign investment
at the central level. With regard to the costs of the delegated collection, the collecting departments shall draw 5% of the incomes
that are brought into the treasuries as the handling charges of delegated collection to supply the operating spending.
Attachment:
1.Survey of the collection of site use fees of enterprises with foreign investment at the central level (omitted)
2. Survey of the collection of site use fees of central, local Sino-foreign equity joint ventures, Sino-foreign cooperative ventures
(omitted)
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The General Office of the Ministry of Finance
2001-04-09
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The State Administration of Foreign Exchange
Circular of the State Administration of Foreign Exchange on the Execution of the Circular Concerning the Relevant Issues of Software
Exports
HuiFa [2001] No.28
February 22, 2001
The sub-administrations of the State Administration of Foreign Exchange; the departments of foreign exchange administration of Beijing
and Chongqin; and the sub-administrations of Dalian, Qingdao, Ningbo, Xiamen and Shenzhen:
In order to promote the software export enterprises to export their products and earn foreign exchange income, the relevant issues
of the execution of item 7) of Article 1 of the Circular Concerning the Relevant Issues of Software Exports (WaiJingMaoJiFa [2000]
No.680 ) (hereinafter referred to as the Circular) promulgated jointly by the Ministry of Foreign Trade and Economic Cooperation,
the Ministry of Information Industry, the State Administration of Taxation, the General Administration of Customs, the State Administration
of Foreign Exchange and the State Administration of Statistics are hereby defined as follows:
1.
The domestic-funded software enterprises of self-management export (hereinafter referred to as “enterprises”) that meet the conditions
for account opening as provided by the Circular shall, when applying to the foreign exchange administrations for opening accounts
of foreign exchange settlement, provide the “Certificate of Cognizance of Software Enterprise” issued by the competent department
under the Ministry of Information Industry, apart from providing the relevant materials as provided for in the Procedures for the
Keeping of Limited Amount of Foreign Exchange Income by Domestic-funded Enterprises.
2.
When making the examination and verification of account opening of an enterprise, the foreign exchange administration shall examine
and verify whether the enterprise is in the “List of Honorable Enterprises”, and shall determine the maximum limit of the account
on the basis of 15% of the sum of cancellation after verification of export earnings in foreign exchange of last year issued by the
foreign exchange administration of the place where the enterprise is located. The sum cancelled after verification of export earnings
in foreign exchange that is used to determine the limit shall be kept together with the materials for account opening, for the purpose
of check and verification.
3.
The sub-administrations shall strictly take the sum cancelled after verification of export earnings in foreign exchange of last year
that actually occurred to the enterprise as the base, and determine the limit of the account of foreign exchange settlement according
to the prescribed proportion. The limit may not be broken without the approval of the general administration.
The sub-administrations shall transmit this Circular to their branches as soon as possible after receiving it.
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