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CIRCULAR OF THE MOFTEC AND THE GENERAL ADMINISTRATION OF CUSTOMS ON RELEVANT ISSUES IN IMPORTED EQUIPMENT FOR PROCESSING TRADE

The Ministry of Foreign Trade and Economic Cooperation, the General Administration of Customs

Circular of the MOFTEC and the General Administration of Customs on Relevant Issues in Imported Equipment for Processing Trade

WaiJingMaoZhengFa [1998] No.383

March 16, 1998

The commissions (departments and bureaus) of foreign trade and economic cooperation of various provinces, autunomous regions, municipalities
under the Central Government and municipalities separately listed on the State plan, Shenzhen Municipal Bureau for Economic Development,
Guangdong Sub-Administration of the General Administration of Customs, customs directly under the General Administration of Customs,
various foreign trade centres and companies directly under the ministries and commissions:

In accordance with the regulations laid down in the Circular of the State Council on Adjusting Taxation Policy on Imported Equipment
(GuoFa [1997] No.37), for “those imported equipment without setting price provided by foreign businessmen for processing trade”,
“except for commodities enlisted in the List of Commodities Imported for Projects with Foreign Investment that Are Not to Be Exempted
from Taxes, no customs duties and import value-added tax shall be levied”. “The processing trade units importing non-price setting
equipment provided by foreign businessmen shall go through the procedures at the customs for import tax exemption according to the
approved contract for processing trade. The customs will check and ratify it, according to those procedures, against the list of
commodities not to be exempted from taxes”. To carry out the above mentioned taxation adjusting policy on imported equipment for
processing trade, the relevant issues are hereby notified as follows:

1.

Non-price setting imported equipment provided by foreign businessmen for processing trade, refers to equipment needed in processing
production, which is provided free of charge by foreign businessmen engaged in processing trade (including processing with provided
materials, processing with imported materials and pro cessing trade by foreign invested enterprises, same below) with the operating
units of processing trade; the operating units need neither payment in foreign exchange for imports, nor payment in the form of processing
fees of price difference.

2.

Imports exempted from taxes and use of non-price setting equipment provided by foreign businessmen must conform to one of the following
conditions:

1)

Having independent factories or workshops exclusively for processing trade (I, e, not producing products processed for home sale)
and that the non-price setting equipment shall be used only within the factories or workshops;

2)

For those processing trade enterprises which have no such factories or workshops and engage in processing trade based on their existing
production capacity and use of non-price setting equipment for processing production, in the terms of their processing trade contract
(agreement), over 70% of their yearly produced processing products must be exported.

3.

For import of non-price setting equipment by the operating units, they should list, in their processing trade contracts (agreements),
provisions of importing non-price setting equipment (I.e, listing that the equipment shall be provided free of charge by foreign
businessmen, without payment by the processing trade operating units for its import in foreign exchange, without payment of processing
fees or price difference), and that an attached Application Form for Filing of Non- Price Setting Equipment for Processing Trade
shall be provided.

4.

The departments of foreign trade and economic cooperation should work according to their administrative power at different levels
for examination and approval and relevant regulations. In examining and approving processing trade contracts (agreements), they shall
check the applications for import of non-price setting equipment against the List of Commodities Imported for Projects with Foreign
Investment that Are Not to Be Exempted from Taxes, and complete procedures for approving such import. In their checking and approving
of imported equipment without setting price, the following contents shall be examined:

1)

Whether or not the applicant conforms to the conditions for tax-free import and the use of non-price setting equipment;

2)

Whether or not the provisions of import of non-price setting equipment stipulated in the processing trade contracts (agreements) conform
to the regulations.

5.

The Customs where the processing trade contracts (agreements) are put on file shall be responsible for the checking, approving and
handling of the procedures for tax-free import of equipment without setting price.

1)

The operating units shall go to the customs for handling tax-free import procedures in accordance with the Approved processing trade
contracts (agreements) and the Application Form for Filing of Non-Price Setting Equipment for Processing Trade;

2)

The customs, after checking and approving the application according to the processing trade contracts (agreements) and the Application
Form for Filing of Non-Price Setting Equipment for Processing Trade approved by the departments of foreign trade and economic cooperation,
and other relevant documents and checking it against the List of Commodities Imported for Projects with Foreign Investment that Are
Not to Be Exempted from Taxes, puts it on file and issues out registration handbooks (with fake-proof label);

3)

The operating units go through declaration procedures at the customs at the ports according to their Registration Handbooks, and the
customs at ports checks and accepts such procedures according to the Registration Handbooks.

6.

For temporary imports (shorter than half a year) of non-price setting equipment needed in processing trade production (confined to
modeling tools and single set of equipment), the customs shall handle them as temporary import goods, and taxes shall be levied for
over-term imports.

7.

The above mentioned tax-free imported non-price setting equipment shall be regarded as goods under the customs’ supervision and control
from the date of import to the date of export back on the condition that the supervision and control are terminated according to
the regulations by the Customs. Within the term of supervision and control which runs for five years, the goods shall not be sold,
exchanged, transferred, mortgaged or used for other purposes in the mainland.

When the tax-free non-price setting equipment is under the period of supervision and control, the operating units of processing trade
shall have to report in writing in January each year about its use respectively to the departments of foreign trade and economic
cooperation and to the customs. The customs shall check it regularly.

In case the operating units of processing trade terminate or cancel their processing trade contracts for one reason or another, they
may transport back their non-price setting equipment or pay customs duties and import value-added tax according to its value after
deducting depreciation funds for the years it has been used, after its application is approved by the original departments of foreign
trade and economic cooperation and checked by the customs.

8.

In case of transporting back tax-free non-price setting equipment for processing trade, or paying overdue customs duties and import
valueadded tax for the equipment, or the term of supervision and control being overdue, the operating units shall have to go through
in time the procedures for terminating the supervision and control, for which they shall have to submit a written application to
the customs for terminating the supervision and control and the Registration Handbooks for the equipment and other relevant documents.
The supervision and control shall be terminated after being checked and ratified by the customs, and a certificate for the termination
of supervision and control shall be issued out.

9.

In case the imported non-price setting equipment belongs to the category of commodities listed in the Import Commodities for Projects
with Foreign Investment not to Be Exempted from Taxes, the customs shall, according to the rules and regulations of the State, levy
customs duties and import value-added tax on it.

10.

Those operating units violating provisions of Article 2 , 3 and 7 of this circular, or getting tax-free by cheating, evading and dodging
taxes in the name of non-price setting equipment for processing trade, the departments of foreign trade and economic cooperation
shall stop approving their new processing trade contracts (agreements), and the customs shall levy on them full overdue customs duties
and import value- added tax. And they shall be treated seriously in accordance with the Customs Law of the People’s Republic of China,
Detailed Rules for the Implementation of Administrative Penalties of the Customs Law of the People’s Republic of China and other
relevant laws and regulations. Those operating units violating the laws, shall be transferred to the judicial departments to find
out, according to the laws, their criminal responsibilities.

11.

In case the non-price setting equipment involves import quotas products, special or registered products, procedures for quotas, licenses,
registrations or import certificates shall be exempted. Within the supervision and control term (five years), should the supervision
and control be terminated ahead of time and the equipment not to be transported outside the land, supplimentary documents shall be
required according to the laws.

12.

The departments of foreign trade and economic cooperation at different levels and the customs should strengthen cooperation in their
work, reduce the intermediate links and simplify procedures, be strict on examination and approval, and strengthen supervision. They
should adopt workable measures to implement this important adjusting policy of the State Council with effective results.

13.

For those non-price setting equipment which had been imported with customs duties and had been given customs permit with letters of
gurantee prior to January 1, 1998, procedures shall be notified separately.

For questions that might arise in execution, please contact the Ministry of Foreign Trade and Economic Cooperation and the General
Administration of Customs.



 
The Ministry of Foreign Trade and Economic Cooperation, the General Administration of Customs
1998-03-16

 






CATALOGUE FOR THE GUIDANCE OF FOREIGN INVESTMENT INDUSTRIES

Category  FOREIGN ECONOMIC RELATIONS AND TECHNOLOGICAL COOPERATION Organ of Promulgation  The State Council Status of Effect  In Force
Date of Promulgation  1997-12-31 Effective Date  1997-12-31  


Catalogue for the Guidance of Foreign Investment Industries

Catalogue for the Encouragement of Foreign Investment Industries
Catalogue of Restricted Foreign Investment Industries
Catalogue of Prohibited Foreign Investment Industries

(Approved by the State Council on December 29, 1997, and revised and

promulgated by the State Planning Commission, the State Economy and Trade
Commission and the Ministry of Foreign Trade and Economic Cooperation on
December 31, 1997)
Catalogue for the Encouragement of Foreign Investment Industries

    I. Agriculture, Forestry, Husbandry, Fishery and Related Industries

    1. Cultivation and development of wasteland, waste mountain, flood land
(except those with military facilities), as well as improvement of median- and
low-yield field

    2. Development of fine high-yielding and new varieties and technology for
crops such as sugar crops, fruit trees, vegetables, flowers and plants, forage
grass

    3. Serial production of soilless cultivation of vegetables, flowers
and plants

    4. Planting of forest trees and introduction of fine seeds of forest
trees

    5. Breeding of good strains of domestic animals and aquatic fingerlings
(not including the good strains of the rare ones of our country)

    6. Cultivation of famous aquatic products

    7. New varieties of effective and safe agricultural chemicals and
pesticides (80 percent and over death rate, safe to people, animals and crops)

    8. High-density fertilizers (potash fertilizer, phosphate fertilizer)

    9. New technology for the production of agricultural films, and
development of new products (fibre film, photolysis film, multifunctional
film and raw materials)

    10. Antibacterial raw medicines for animals (including antibiotics and
chemical compound medicines)

    11. New products and preparations of antiscolic, insecticide and
anticoddiosis medicine for animals

    12. Development of feed additives and feed protein resources

    13. New technology and equipment for the storage, preservation,
desiccation, and processing of foodgrains, vegetables, fruits, meat products,
and aquatic products

    14. Forestry chemicals and new technology and products for the
comprehensive utilization of “sub-quality, small and firewood” lumber and
bamboo in the forest area

    15. Construction and management of comprehensive utilization of
irrigation works (with the Chinese party taking the holding or leading
position)

    16. New water-saving irrigation technology and equipment manufacture

    17. New farm implements technology and equipment manufacture

    18. Ecological and environmental treatment and control and construction
projects

    II. Light Industry

    1. Design, processing, and manufacture of moulds for non-metal products

    2. Paper pulp (with an annual production of 170,000 tons and over wood
pulp, and having corresponding raw materials bases)

    3. Post ornament and processing of leather as well as its new technology
and equipment manufacture

    4. Production of mercuryless alkaline manganese storage battery and
lithium-ion battery

    5. Production of high-tech involved special industrial sewing machine

    6. Production of ployamide film

    7. Production of new high-efficiency enzyme preparations

    8. Production of synthetic spices and single icon spices

    9. Research and popularization of the applied technology of freon
substitution

    10. Processing of diactate cellulose for cigarettes and collection of
filaments

    III. Textile Industry

    1. Wood pulp for textile chemical fibres (with an annual production of
100,000 tons and over and having corresponding raw materials bases)

    2. Special textiles for industry

    3. Printing and dyeing of high emulation chemical fibres and high-grade
textile cloth and their post arrangement and processing

    4. Production of auxiliaries, oils, dyes and chemicals for textile

    IV. Communication and Transportation as well as Post & Telecommunications
Industries

    1. Equipment and technology for railway transportation: the design and
manufacture of locomotives and main parts, the design and manufacture of
wiring and equipment, related technology and equipment manufacture for
high-speed railway, manufacture of the equipment for communications signal
and transportation safety monitoring, manufacture of electric railway
equipment and instrument

    2. Construction and management of feeder railway, local railway, bridge,
tunnel, and ferry facilities (wholly foreign-owned enterprises are not allowed)

    3. Design and manufacture of new highway and port mechanical equipment

    4. Construction and management of city subway and light track (with
the Chinese party taking the holding or leading position)

    5. Construction and management of highway, independent bridge and tunnel

    6. Construction and management of port facilities for public wharfs (with
the Chinese party taking the holding or leading position)

    7. Construction and management of civil airport (with the Chinese party
taking the holding or leading position)

    8. Equipment manufacture for honey-comb mobile communications DCS/CDMA
system

    9. Manufacture of transmission equipment for 2.5GB/S and over optical
synchronized and microwave synchronized digital series

    10. Manufacture of measuring instrument and meter for 2.5GB/S optical
communications, radio communications and data communications

    11. Manufacture of ATM switchboard equipment

    V. Coal Industry

    1. Design and manufacture of coal mining, transportation and washing
equipment

    2. Coal mining and washing (for special and rare kinds of coal, the
Chinese party will take the holding or leading position)

    3. Production of water coal pulp and liquefied coal

    4. Comprehensive development and utilization of coal

    5. Comprehensive development and utilization of low calorific value fuel
and accompanying resources

    6. Coal pipeline transmission

    7. Coal rake gas exploration and exploitation

    VI. Power Industry

    1. Construction and management of thermal power station with generating
unit capacity of 300,000 kilowatts and over

    2. Construction and management of hydropower station with power generation
as its main function

    3. Construction and management of nuclear power station (with the Chinese
party taking the holding or leading position)

    4. Construction and management of clean coal burning technology power
station

    5. Construction and management of new energy power station (including
solar energy, wind energy, magnetic energy, earth heat energy, tide energy
and bio-matter energy, etc.)

    VII. Ferrous Metallurgical Industry

    1. 50 tons and over superhigh power electric furnace process (with
out-of-furnace refining and continuous casting) and 50 tons and over
converting process

    2. Stainless steel smelting

    3. Production of cold-rolled silicon steel plates

    4. Production of cold and hot-rolled stainless steel plates

    5. Petroleum steel pipe

    6. Scrap steel processing and disposal

    7. Iron and manganese mine concentration

    8. Production of direct reduction iron and melting reduction iron

    9. Mining of high-alumina bauxite, hard clay ore and production of chamotte

    10. Deep processing of acicular coke, hard coke and coke oil

    11. Dry coke quenching production

    VIII. Non-Ferrous Metal Industry

    1. Production of monocrystalline silicon (with diameter 8 inches and
over), multicrystalline silicon

    2. Production of hard alloy, tin compound, antimony compound

    3. Production of non-ferrous compounds, new type alloys

    4. Copper, lead, zinc mine opening (wholly foreign-owned enterprises
are not allowed)

    5. Aluminum mine opening (wholly foreign-owned enterprises are not
allowed) and alumina production with a capacity of 300,000 tons and over per
year

    6. Rare earth application

    IX. Petroleum, Petrochemical and Chemical Industries

    1. Production of ion film for caustic soda

    2. Ethylene with an annual production of 600,000 tons and over (with the
Chinese party taking the holding or leading position)

    3. Polyvinyl chloride resin (with the Chinese party taking the holding or
leading position)

    4. Comprehensive utilization of C5C9 products that are by-products of
ethylene

    5. Engineering plastics and plastic alloys

    6. Supporting raw materials for synthesized materials: biphenol-A,
styrene-butadiene latex, pyridine, 4.4′ diphenylmethane diisocyanate and
methylbenzene diisocyanate

    7. Basic organic chemical raw materials: comprehensive utilization of
the derived products of benzene, methylbenzene, dimethylbenzene (O-, M-, P-)

    8. Synthetic rubber: production of liquid styrene-butadiene rubber, butyl
rubber, isoamyl rubber, ethyl rubber, butadiene neoprene rubber, butadiene
rubber, acrylic rubber, chlorinated rubber

    9. Fine chemistry: new products and technology of dye (pigment),
intermediate, catalytic agent, auxiliary and petroleum additives, processing
technology for the commercialization of dye (pigment), high-tech chemicals for
electronics and paper-making, production of food additives, feed additives,
leather chemical products, oilwell auxiliaries, surface active agent, water
treatment agent, adhesive, inorganic fibre, inorganic powder agent feeder

    10. Production of chloridized titanium dioxide

    11. Production of coal chemical products

    12. Comprehensive utilization of waste gases, waste liquids, waste slag

    13. Production of purification agent, catalytic agent and other
auxiliaries for automobile exhaust

    14. Development and application of new tertiary oil recovery technology
for raising oil recovery ratio (with the Chinese party taking the holding or
leading position)

    15. Construction and management of oil and gas transmission pipelines, as
well as oil depot and oil wharf (with the Chinese party taking the holding or
leading position)

    X. Mechanical Industry

    1. Manufacture of high-performance welding robot and high-efficiency
welding and assembling production line equipment

    2. Production of high temperature resistant insulation material (with F, H
insulation class) and insulation products

    3. Manufacture of equipment of the trolley car for mining, loading and
transporting in the well, 100 tons or over mechanical power-driven dump
truck for mining, mobile crusher, 3,000 cubic metre/hour or over bucket
excavator, 5 cubic metres or over mining loader, total cross-section lane
entry-drilling machine

    4. Manufacture of web- and sheet-fed multi-colour off-set printing machine

    5. Manufacture of washing equipment for mechanical and electric wells and
production of chemicals

    6. Manufacture of turbine compressor and combined powder machine for the
complete set of equipment for an annual production of 300,000 tons and over
synthetic amine, 480,000 tons and over urea, 300,000 tons and over ethylene
(with the Chinese party taking the holding or leading position)

    7. Manufacture of complete sets of equipment such as new knitting machine,
new paper (including pulp) making machine

    8. Development and manufacture of delicate on-line measuring instrument

    9. New technology of safe production and environmental protection
monitoring instrument as well as equipment manufacture

    10. New meter spare parts and material (mainly new switches and function
material for meters such as intelligent sensors, electrical adapters,
flexible circuit plate, fibre switch, and proximity switch)

    11. Research, design and development centre for important basic machinery,
basic components and major technical equipment

    12. Proportional servohydraulic technology, low-power pneumatic control
valve, and filling static sealing production

    13. Production of precision die, precision cavity mould, and mould
standard parts

    14. Manufacture of 250,000 ton/day and over city sewage disposal
equipment, industrial sewage film treatment equipment, up-flow anaerobic
fluidized bed equipment and other biological sewage disposal equipment,
slab making equipment of powder coal dust (50,000-100,000 ton/year), recycling
equipment for waste plastics, equipment for desulphurization and denigration
of industrial boiler, large high-temperature resistant and acid resistant bag
dust remover

    15. Manufacture of delicate bearings and special bearings for various
kinds of main engines

    16. Manufacture of car-related key spare parts: complete brakes, complete
drive rod, transmission, fuel pump of diesel engine, piston (including piston
ring), valve, hydraulic tappet, carton shaft, booster, filter (3 filter),
even speed carton joint, shock absorber, seat adjustment, car lock, backview
mirror, glass lifter, compound meter, lights, bulb, high-strength special
fastener

    17. Manufacture of car and motorcycle moulds (including strike mould,
plastics filling mould, mould-pressing mould, etc.) and clippers (welding
clipper, testing clipper, etc.)

    18. Manufacture of casting body for car and motorcycle

    19. Technology research centre and design and development centre for cars
and motorcycles

    20. Production of special-purpose cars such as desert car for petroleum
industry

    21. Manufacture of key spare parts for motorcycles: carburettor, magneto,
starting motor, lights, and disk brake

    22. New technology and equipment manufacture for water quality on-line
monitoring instrument

    23. Manufacture of special machinery and equipment for flood control and
emergency rescue

    24. Manufacture of wetland earthmover and dredging machinery

    25. Manufacture of complete sets of 10 ton/h and over feed processing
equipment, and production of their key spare parts

    26. Design and manufacture of new petroleum exploration and exploitation
instrument and equipment

    XI. Electronics Industry

    1. Production of 0.35 micron wire width and below large integrated circuit

    2. Production of new electronic spare parts (including slice spare parts)
and electric and electronic spare parts

    3. Production of optic-electro parts, sensitive spare parts and sensor

    4. Manufacture of large- and medium-size electronic computer

    5. Production of compatible digital TV, HDTV, digital tape video recorder

    6. Development of special-purpose materials for semi-conductor and
photo-electronics

    7. Manufacture of new displayer (plate displayer and screen)

    8. Manufacture of CAD, CAT, CAM, CAE and other computer application systems

    9. Manufacture of equipment, instrument and industrial mould for
electronics

    10. Manufacture of hydrological data collection instrument and equipment

    11. Manufacture of satellite communications system equipment

    12. Manufacture of DCS equipment

    13. Manufacture of air traffic control equipment (wholly foreign-owned
enterprises are not allowed)

    14. Development and manufacture of high-capacity CD and magnetic disk
memory and their parts

    15. Development and manufacture of new printing devices (lazerprinter,
etc.)

    16. Equipment manufacture for data communications multimedia system

    17. Production of monomode optical fibre

    18. Equipment manufacture for access-to-the-network communications system

    19. New technology and manufacture of equipment supporting communications
networks

    20. Manufacture of wide-band ISDN equipment

    XII. Building Materials and Equipment and Other Non-metal Mineral Product
Industry

    1. High-quality floating glass production line with a daily melting
capacity of 500 tons and over

    2. High-grade sanitation porcelain production line with an annual
production of 500,000 pieces and over and production of its matching metal and
plastic parts

    3. New building materials (walling materials, decoration and renovation
materials, water-proof materials, insulation materials)

    4. New dry-process cement production line with a daily production of 4,000
tons and over cement chamotte (restricted to production in the central and
western regions of China)

    5. Bulk cement storage and transportation facilities

    6. Glass fibre (direct melting process production line) with an annual
production of 10,000 tons and over and glass fibre reinforced plastic products

    7. Inorganic non-metal material and products (quartz glass, artificial
crystal)

    8. High-grade refractory material for glass, porcelain or glass fibre
furnaces and kilns

    9. Technology for deep processing of plate glass as well as equipment
manufacture

    10. Manufacture of tunnel drilling machine and city subway excavating
equipment

    11. Manufacture of special equipment for city sanitation

    12. Manufacture of tree and plant removing and planting machinery and
equipment

    13. Manufacture of road grader, tar finisher

    XIII. Medicine Industry

    1. Chemical medicines protected by the patent law or administratively
protected by our country, medical intermediate which we have to import

    2. Production of antipyretic and analgesic medicines by adopting new
technology and equipment

    3. Vitamins: nicotinic acid

    4. New anticarcinogen and new cardio-vascular and cerebrovascular medicines

    5. Medicines and pharmaceutics: new preparations and products by adopting
new technologies such as buffer, control, target and skin-penetrating

    6. Amino acid: serine, tryptophan, histidine, etc.

    7. New packing material and container for medicine and advanced
pharmaceutical equipment

    8. New, effective and economical contraceptive medicines and devices

    9. New technology, equipment and instrument for product quality control of
prepared traditional Chinese medicine and changing preparation packing

    10. New technology for analysis and new technique and equipment for
extraction of the effective part of traditional Chinese medicine

    11. New medicines which are produced using biological engineering
technology

    12. Development and application of new adjuvant

    13. Production of diagnosis agents for hepatitis, AIDS and radiation
immunization

    XIV. Medical Apparatus Manufacturing Industry

    1. 80 kilowatts and over medical X-ray apparatus with intermediate
frequency technology, computer control technology and digital image processing
technology and with small radiation dosage

    2. Electronic endoscope

    3. Medical tubes

    XV. Aviation and Aerospace Industry

    1. Design and manufacture of civil planes (with the Chinese party taking
the holding or leading position)

    2. Manufacture of spare parts of civil planes

    3. Design and manufacture of aeroplane engines (with the Chinese party
taking the holding or leading position)

    4. Manufacture of airborne equipment

    5. Manufacture of light gas turbine engines

    6. Design and manufacture of civil satellites (with the Chinese party
taking the holding or leading position)

    7. Manufacture of civil satellite pay load (with the Chinese party taking
the holding or leading position)

    8. Manufacture of spare parts of civil satellites

    9. Technological development for civil satellite application

    10. Design and manufacture of civil carrier rocket (with the Chinese party
taking the holding or leading position)

    XVI. New Industries

    1. Micro-electronic technology

    2. New materials

    3. Biological engineering technology (not including gene engineering
technology)

    4. Network technology of information, communications systems

    5. Isotope, irradiation and laser technology

    6. Ocean and ocean energy development technology

    7. Technology for seawater desalination and utilization

    8. Energy-saving technology development

    9. Technology for recycle and comprehensive utilization of resources

    10. Projects for the control of environment pollution as well as
monitoring and treatment technology

    XVII. Service Industry

    1. Information consultancy of international economy, science and
technology, environmental protection

    2. Maintenance and post-sale service of delicate instruments and
equipment

    3. Construction of new high-tech and new product development centre and
enterprise incubation

    XVIII. Permitted Projects in Which All Products Are to Be Directly Exported

Catalogue of Restricted Foreign Investment Industries

                              (A)

    I. Light Industry

    1. Production of washing machines, refrigerators, freezers

    2. Synthetic embro, alcohol ether, alcohol sulphate

    3. Production of air-conditioner and refrigerator compressors with shaft
power lower than 2,000 watts

    II. Textile Industry

    1. Chemical fibre reeled silk woven by means of conventional chipper

    2. Production of viscose staple fibre with a single-line capacity of
20,000 ton/year below

    III. Petroleum, Petrochemical and Chemical Industries

    1. Production of barium salt

    2. Construction of refinery of less than 5,000,000 tons

    3. Retreading of cross-ply tyre and old tyre (not including meridian tyre)
and production of low-performance industrial rubber attachments

    4. Production of titanium dioxide through sulphuric acid method

    IV. Mechanical Industry

    1. Equipment manufacture for ordinary dacron filament and staple fibre

    2. Manufacture of diesel power generating units

    3. Production of various kinds of ordinary abrasives (including corundum,
carborundum), grinding wheel with diameter less than 400mm and artificial
diamond saw blade

    4. Production of electric drill, power-driven grinder

    5. Ordinary carbon steel welding rods

    6. Ordinary standard fasteners, small- and medium-size ordinary bearings

    7. Ordinary lead acid accumulators

    8. Containers

    9. Elevators

    10. Aluminium alloy wheel hub

    V. Electronics Industry

    1. Satellite television receivers and key parts

    2. Digital programmed local and user switches

    VI. Medicine Industry

    1. Production of chloramphenicol, lincomycin, gentamycin,
dibydrostreptomycin, amikacin, tetracycline hydrochloride, terramycin,
acetylspiramycin, medemycin, leucomycin, erythromycin, ciprofloxacin,
norfloxacin and ofloxacin

    2. Production of analgin, aspirin, paracetamol, vitamin B1, vitamin B2
and vitamin B6

    VII. Medical Apparatus Manufacturing Industry

    1. Production of low- and medium-class B-mode supersonic displayers

    VIII. Transportation Service Industry

    1. Taxi (the purchase of cars is restricted within China)

    2. Gas station (restricted to construction and management of enterprises
attached to expressway)

                              (B)

    I. Agriculture, Forestry, Husbandry, Fishery and Related Industries

    1. Development and production of seeds of foodgrains, cotton and oil crops
(with the Chinese party taking the holding or leading position)

    2. Processing and export of precious varieties of logs (wholly
foreign-owned enterprises are not allowed)

    3. Inshore and inland water area fishing (wholly foreign-owned enterprises
are not allowed)

    4. Planting and breeding of traditional Chinese medicinal materials
(wholly foreign-owned enterprises are not allowed)

    II. Light Industry

    1. Production of table salt, industrial salt

    2. Production of non-alcoholic beverage of foreign brand (including solid
beverage)

    3. Production of millet wine and well-known spirits

    4. Tobacco processing industry producing cigarettes and filter tips

    5. Processing and production of blue wet hide of pig, ox, and sheep

    6. Production of natural spices

    7. Processing of fat

    8. Paper and paperboard

    III. Textile Industry

    1. Wool spinning, cotton spinning

    2. Raw silk, grey silk fabric

    3. High-emulation chemical fibres and special chemical fibres such as
arylon, carbon fibre (wholly foreign-owned enterprises are not allowed)

    4. Fibre-grade and non-fibre-use polyester, acrylic fibre, spandex (wholly
foreign-owned enterprises are not allowed)

    IV. Communication and Transportation as well as Post & Telecommunications
Industries

    1. Construction and management of main lines of railways (with the Chinese
party taking the holding or leading position)

    2. Water transportation (with the Chinese party taking the holding or
leading position)

    3. Entry and exit automobile transportation (wholly foreign-owned
enterprises are not allowed)

    4. Air transportation (with the Chinese party taking the holding or
leading position)

    5. General aviation (with the Chinese party taking the holding or l

MEASURES FOR THE ADMINISTRATION OF PARTNERSHIP ENTERPRISE REGISTRATION

Category  ADMINISTRATION FOR INDUSTRY AND COMMERCE Organ of Promulgation  The State Council Status of Effect  In Force
Date of Promulgation  1997-11-19 Effective Date  1997-11-19  


Measures of the People’s Republic of China for the Administration of Partnership Enterprise Registration

Chapter I  General Provisions
Chapter II  Registration for the Establishment
Chapter III  Change(s) in Registration
Chapter IV  Nullification of Registration
Chapter V  Registration of Branch Office(s)
Chapter VI  Annual Inspection and License Management
Chapter VII  Legal Liability
Chapter VIII  Supplementary Provision

(Promulgated by Decree No. 236 of the State Council of the People’s

Republic of China on November 19, 1997)
Chapter I  General Provisions

    Article 1  These Measures are formulated in accordance with the
Partnership Enterprise Law of the People’s Republic of China(hereinafter
referred to as the Partnership Enterprise Law) for the purpose of confirming
the management qualifications of partnership enterprises and standardizing
the act of partnership enterprise registration.

    Article 2  Formalities for enterprise registration shall be completed
in pursuance of the provisions of the Partnership Enterprise Law and these
Measures for the establishment, change and nullification of a partnership
enterprise.

    Article 3  A partnership enterprise may engage in business operations
only upon the approval and registration by the enterprise registration
organ in accordance with law and obtainment of a business license.

    A partnership enterprise shall engage in business operations in
accordance with law within the registration matters approved by the
enterprise registration organ.

    Article 4  An organ of industry and commerce administration shall be
the partnership enterprise registration organ(hereinafter referred to as
the enterprise registration organ).

    The department of industry and commerce administration under the State
Council shall take charge of the work of partnership enterprise registration
nationwide.

    Municipal and county organs of industry and commerce administration
shall be responsible for the partnership enterprise registration in areas
under their respective jurisdiction.
Chapter II  Registration for the Establishment

    Article 5  The qualifications prescribed in Article 8 of the Partnership
Enterprise Law shall be met for the establishment of a partnership enterprise.

    Article 6  For the establishment of a partnership enterprise, the
representative designated by all the partners or their jointly entrusted
agent shall apply to the enterprise registration organ for registration
for the establishment thereof.

    Article 7  The registration matters of a partnership enterprise shall
include the name, business site, business scope, the mode of operations of the partnership enterprise and the names of partners and
their residences,
amount of contribution and mode of contribution.

    For any partnership enterprise that determines the partner conducting
the affairs of the partnership enterprise or the establishment of branch
offices, the registration matters shall also include information on the
partner conducting the affairs of the partnership enterprise or the branch
offices.

    Article 8  The following documents shall be presented to the enterprise
registration organ for the application for the establishment of a partnership
enterprise:

    (1)An application letter for the registration for the establishment
signed by all partners;

    (2)Identification papers of all partners;

    (3)A letter of authority for the representative designated by all
partners or the jointly entrusted agent;

    (4)The partnership agreement;

    (5)Certificates of contribution ownership rights;

    (6)Certificate of the business site; and

    (7)other documents the presentation of which are prescribed by the
department of industry and commerce administration under the State Council.

    For partnership enterprises the establishment of which are subject to
examination and approval provided for by laws and administrative regulations,
relevant approval documents shall also be presented. For any partnership
enterprise that agrees in the partnership agreement or is decided by all
partners to entrust one or several partners to conduct the affairs of the
partnership enterprise, a letter of authority of all partners shall also
be presented.

    Article 9  An enterprise registration organ shall, within 30 days from
the date of receipt of all documents presented by an applicant pursuant to
the provisions of Article 8 of these Measures, make a decision of approval
and registration or that of no registration.

    Article 10  The date of issuance of a business license for a partnership
enterprise shall be the date of establishment of the partnership enterprise.
Chapter III  Change(s) in Registration

    Article 11  An application for change(s) in registration shall be
submitted to the original enterprise registration organ within 15 days from
the date of making the decision for change(s) or occurence of the change(s)
for the occurence of change(s) in the registration matters of a partnership
enterprise.

    Article 12  The following documents shall be presented to the original
enterprise registration organ for the application for change(s) in
registration by a partnership enterprise:

    (1)An application letter for change(s) in registration;

    (2)The decision on change(s) signed all partners or the testimonial
documents of the occurence of change(s); and

    (3)other documents the presentation of which are prescribed by the
department of industry and commerce administration under the State Council.

    For change(s) in matters subject to examination and approval provided for
by laws and administrative regulations, relevant approval documents shall
also be presented.

    Article 13  An enterprise registration organ shall, within 30 days from
the date of receipt of all documents in conformity with the provisions of Article 12 of these Measures, make a decision of approval
for change(s) in
registration or that of no registration for the change(s).

    The enterprise registration organ shall reissue a business license
in the event of the change(s) in registration matters of a partnership
enterprise involving change(s) in the business license.
Chapter IV  Nullification of Registration

    Article 14  A partnership enterprise that is disbanded in pursuance of the provisions of Article 57 of the Partnership Enterprise
Law shall, within
15 days from the date of completion of settlement, go through the formalities
of nullification of registration at the original enterprise registration
organ.

    Article 15  The following documents shall be presented when a partnership
enterprise goes through the formalities of nullification of registration:

    (1)An application letter for the nullification of registration signed
by all partners;

    (2)The settlement statement signed by all partners; and

    (3)other documents the presentation of which are prescribed by the
department of industry and commerce administration under the State Council.

    A partnership enterprise shall hand in the business license when
going through the formalities of nullification of registration.

    Article 16  A partnership enterprise is terminated upon nullification of registration by an enterprise registration organ.
Chapter V  Registration of Branch Office(s)

    Article 17  A partnership enterprise shall apply to the enterprise
registration organ of the locality wherein the branch office(s) is(are)
located for the registration for the establishment of a branch office(s).

    Article 18  The registration matters of a branch office shall include
the name, business site, business scope, mode of operattions of the branch
office and the name and residence of the responsible person of the branch
office.

    The business scope and mode of operations of a branch office shall not
exceed those of the partnership enterprise.

    Article 19  The following documents shall be presented to the enterprise
registration organ for the establishment of a branch office by a partnership
enterprise:

    (1)An application letter for the registration for the establishment of a branch office;

    (2)The decision for the establishment of a branch office signed by all
partners;

    (3)A copy of the business license of the partnership enterprise with
the seal of the enterprise registration organ affixed;

    (4)A letter of authority for the responsible person entrusted by all
partners to conduct the affairs of the branch office and his/her
identification papers;

    (5)Certificate of the business site; and

    (6)other documents the presentation of which are prescribed by the
department of industry and commerce administration under the State Council.

    For a partnership enterprise whose establishment of a branch office is
subject to examination and approval as provided for under laws and
administrative regulations, relevant approval documents shall also be
presented.

    Article 20  Application by a partnership enterprise for change(s) in
registration or nuliification of registration of its branch office shall
be handled with reference to the provisions governing change(s) in
registration and nullification of registration of partnership enterprises of
these Measures.
Chapter VI  Annual Inspection and License Management

    Article 21  Partnership enterprises shall, pursuant to the requirements
of enterprise registration organs, present annual inspection reports and
other documents within the specified time and be subject to annual inspection.

    Article 22  Enterprise registration organs shall examine the annual
inspection documents presented by partnership enterprises to confirm their
qualifications for continued operations.

    Article 23  The business license of a partnership enterprise has an
original copy and a copy. The original copy and the copy are equally
authentic legally.

    A partnership enterprise may, according to business requirements, apply
to the enterprise registration organ for the issuance of a number of copies
of the business license.

    A partnership enterprise shall place the original copy of the business
license in an eye-catching position at the business site.

    Article 24  No unit or individual shall forge, alter, sell, lease, lend
or transfer the business license in other forms.

    In the event of loss or damage of the business license, a partnership
enterprise shall publish a statement to declare it null and void in the
newspaper designated by the enterprise registration organ and apply to the
enterprise registration organ for obtainment of a new license or change the
license.

    Article 25  Formats of the original copy and the copy of business licence
of partnership enterprise shall be formulated by the department of industry
and commerce administration under the State Council.
Chapter VII  Legal Liability

    Article 26  Whoever engages in business operations in the name of a
partnership enterprise without the approval and registration of the enterprise
registration organ in accordance with law and obtainment of a business
license shall be ordered by the enterprise registration organ to stop the
business operations and may be imposed a fine of less than RMB 5000 Yuan.

    Article 27  Whoever presents fake documents or adopt other fraudulent
means in going through partnership enterprise registration for the
obtainment of partnership enterprise registration shall be ordered by
the enterprise registration organ to make a rectification and may be
imposed a fine of less than RMB 5000 Yuan; where the circumstances are
serious, the enterprise registration shall be nullified and the business
license revoked.

    Article 28  Whoever fails to go through change(s) in registration in
accordance with the provisions of these Measures in the event of change(s)
in registration matters of a partnership enterprise shall be ordered by
the enterprise registration organ to make a rectification within the
specified time; whoever fails to go through change(s) in registration on
expiry of the specified time shall be imposed a fine of less than RMB 2000
Yuan.

    Article 29  The settler of a partnership enterprise who fails to submit
the settlement statement to the enterprise registration organ or conceal
important facts or there are major omissions in the settlement statement
submitted shall be ordered by the enterprise registration organ to make a
rectification.

    Article 30  A partnership enterprise that fails to go through the
nullification of registration upon disbandment and completion of settlement
shall be revoked of its business license by the enterprise registration organ.

    Article 31  A partnership enterprise that fails to accept annual
inspection pursuant to the provisions of these Measures shall be ordered
by the enterprise registration organ to accept annual inspection within
the specified time and may be imposed a fine of less than RMB 3000 Yuan;
a partnership enterprise that fails to accept annual inspection on expiry
of the specified time shall be nullified of its registration and revoked
of the business license.

    Article 32  A partnership enterprise that conceals the truth and
indulges in fraudulent practices in annual inspection shall be ordered
by the enterprise registration organ to make a rectification and may be
imposed a fine of less than RMB 3000 Yuan.

    Article 33  A partnership enterprise that fails to place the original
copy of its business licence in an eye-catching position at the business
site shall be ordered by the enterprise registration organ to make a
rectification within the specified time.

    Article 34  A partnership enterprise that leases, lends or transfers
the business license in other forms shall be ordered by the enterprise
registration organ to make a rectification and may be imposed a fine of less than RMB 5000 Yuan; where the circumstances are serious,
registration
of the enterprise shall be nullified and the business license shall be
revoked.

    Any lessee, borrower or tranferee in other forms of the business license
that engages in business operations shall be ordered by the enterprise
registration organ to stop the business operations and may be imposed a
fine of less than RMB 5000 Yuan.

    Article 35  Any functionary of enterprise registration organs who
abuses power, indulges in self-seeking misconducts, accepts bribes or
infringes on the legitimate rights and interests of partnership enterprises
which constitute a crime shall be investigated of criminal liability;
where no crime has been constituted, administrative sanctions shall be
administered according to law.
Chapter VIII  Supplementary Provision

    Article 36  These Measures shall enter into force as of the date of promulgation.





OFFICIAL REPLY OF THE STATE COUNCIL CONCERNING THE AMENDING OF THE PROVISIONS CONCERNING THE ADMINISTRATION OF VESSELS OF FOREIGN NATIONALITY NAVIGATING IN THE WATERS OF THE YANGTZE RIVER(APPENDIX: THE THIRD REVISED TEXT)

Category  COMMUNICATIONS AND TRANSPORT Organ of Promulgation  The State Council Status of Effect  In Force
Date of Promulgation  1997-05-26 Effective Date  1997-08-01  


Official Reply of the State Council Concerning the Amending of the Provisions of the People’s Republic of China Concerning the Administration
of Vessels of Foreign Nationality Navigating in the Waters of the Yangtze River(Appendix: the Third Revised Text)

Official Reply
APPENDIX: PROVISIONS OF THE PEOPLE’S REPUBLIC OF CHINA CONCERNING THE

(May 26, 1997)

Official Reply

    The Ministry of Communications:

    The State Council has approved the amending of Article 3 of the Provisions
of the People’s Republic of China for the Administration of Vessels of Foreign
Nationality Navigating in the Waters of the Yangtze River as follows: “The
Yangtze River waters as mentioned in these Provisions refer to the main course
waters west of the line between Liuheiwu in the lower reaches of the mouth of
the Liuhe River (31 degrees 30 minutes north latitude, 121 degrees 18 minutes
east longitude) and Shixingan in the lower reaches of the mouth of the Shiqiao
River on the Chongming Island (31 degrees 37 minutes north latitude, 121
degrees 22 minutes east longitude), and east of the line between Yaozui on the
north bank in the middle reaches of the Yangtze River (29 degrees 29 minutes
north latitude, 113 degrees 6 minutes east longitude) and Qizhou on the south
bank, and east of the line between the Qilishan Mountains on the south bank of
the Xiangjiang River in the outlet of the Dongting Lake (29 degrees 24 minutes
north latitude, 113 degrees 7 minutes east longitude) and Luxizhou on the
north bank (29 degrees 25 minutes north latitude, 113 degrees 6 minutes east
longitude).

    The ports as mentioned in these Provisions refer to the ports along
the Yangtze River waters which are open to vessels of foreign nationality
according to the provisions of the preceding paragraph.”

    The Provisions of the People’s Republic of China for the Administration of
Vessels of Foreign Nationality Navigating in the Waters of the Yangtze River
shall be correspondingly revised according to this Official Reply and
promulgated by your Ministry for implementation.

APPENDIX: PROVISIONS OF THE PEOPLE’S REPUBLIC OF CHINA CONCERNING THE
ADMINISTRATION OF VESSELS OF FOREIGN NATIONALITY NAVIGATING IN THE WATERS OF
THE YANGTZE RIVER (The Third Revised Text)

    (Approved by the State Council on April 9, 1983, promulgated by the
Ministry of Communications on April 20, 1983, amended three times with the
approval of the State Council on February 6, 1986, June 6, 1992 and May 26,
1997, and promulgated by Decree No. 7 of the Ministry of Communications
on August 1, 1997)

    Article 1  The Yangtze River is an inland waterway of the People’s
Republic of China. These Provisions have, in accordance with the Rules of the
People’s Republic of China Concerning the Administration of Vessels of Foreign
Nationality, been formulated with a view to safeguarding the sovereignty of
the People’s Republic of China, ensuring the safety of vessels and maintaining
the order of traffic in the Yangtze River waters and its ports.

    Article 2  All motorized and non-motorized vessels and other water-borne
vehicles of transport of foreign nationality (hereinafter referred to as
“vessels”) sailing in, or berthing at, waters or ports of the Yangtze River
of the People’s Republic of China shall comply with these Provisions and all
relevant laws, administrative regulations and rules of the People’s Republic
of China.

    Article 3  The Yangtze River waters as mentioned in these Provisions refer
to the main course waters west of the line between Liuheiwu in the lower
reaches of the mouth of the Liuhe River (31 degrees 30 minutes north latitude,
121 degrees 18 minutes east longitude) and Shixingan in the lower reaches of
the mouth of the Shiqiao River on the Chongming Island (31 degrees 37 minutes
north latitude, 121 degrees 22 minutes east longitude), and east of the line
between Yaozui on the north bank in the middle reaches of the Yangtze River
(29 degrees 29 minutes north latitude, 113 degrees 6 minutes east longitude)
and Qizhou on the south bank, and east of the line between the Qilishan
Mountains on the south bank of the Xiangjiang River in the outlet of the
Dongting Lake (29 degrees 24 minutes north latitude, 113 degrees 7 minutes
east longitude) and Luxizhou on the north bank (29 degrees 25 minutes north
latitude, 113 degrees 6 minutes east longitude).

    The ports as mentioned in these Provisions refer to the ports along
the Yangtze River waters which are open to vessels of foreign nationality
according to the provisions of the preceding paragraph.

    Article 4  These Provisions shall be enforced by the Harbour
Superintendency Administration of the People’s Republic of China, and all
vessels shall subject themselves to its supervision and control.

    Article 5  No vessels may enter the Yangtze River waters or its ports
without the approval of the Harbour Superintendency Administration of the
People’s Republic of China. Those permitted to enter the Yangtze River
waters shall be subject to inspection of the Health Quarantine Office, the
Harbour Superintendency Administration, the Border Inspection Office, the
Customs and the Animal and Plant Quarantine Office, and complete all relevant
formalities. The abovementioned authorities are enpost_titled to exercise on
board supervision, if and when they deem it necessary.

    Article 6  Vessels entering the Yangtze River waters shall not engage
in shipping business between the various ports along the Yangtze River
and between these ports and the port of Shanghai, nor shall they engage
in other unauthorized operations.

    Article 7  A vessel entering the Yangtze River ports shall comply with
the following stipulations:

    (1) One week prior to its scheduled passage through the port of
Shanghai, appoint the port agent company for foreign vessels to complete entry
formalities and seek approval from the Harbour Superintendency Administration
at the next port of call on the Yangtze River.

    (2) 24 hours prior to passing through the port of Shanghai (or upon
departure from the last port of call if the voyage takes less than 24 hours),
report such information as the estimated time for passing through the port of
Shanghai and arrival at the port on the Yangtze River, the size of the vessel,
its fore and aft drafts, and maximum height above the actual waterline, to
the Harbour Superintendency Administration through the port agent for
foreign vessels.

    (3) Shall duly advise any alteration in the time reported as required
under this Article.

    Article 8  Vessels sailing in the Yangtze River waters or shifting berths
at its ports shall apply to the Harbour Superintendency Administration at the
port of arrival along the Yangtze River for pilotage, and for passing through
the port of Shanghai, shall apply to the Shanghai Harbour Superintendency
Administration for pilotage.

    Article 9  Upon arrival at the port, vessels shall immediately submit
the entry report and other relevant forms and statements, ship’s papers and
relevant documents for examination and subject themselves to inspection.
Before leaving the port, vessels shall report the time of departure and the
port of destination to the Harbour Superintendency Administration and complete
the departure formalities through the port agency for foreign vessels and may
leave the port only after port clearance has been obtained.

    Article 10  Vessels sailing in the Yangtze River waters or berthing
at its ports shall during the day fly the national flag of the People’s
Republic of China at the top of the front mast and the national flag of the
country of registry at the stern; an “H” flag shall in addition be flown when
there is a pilot on board. On entering or leaving ports or shifting berths,
vessels shall also display signal-letters and other prescribed signals.

    Article 11  Vessels making use of their VHF radio-telephone in the
Yangtze River waters or its ports shall comply with the Interim Measures
Governing the Use of VHF Radio-Telephone by Foreign Vessels promulgated by
the Ministry of Communications of the People’s Republic of China.

    Article 12  In the Yangtze River waters, a vessel’s radio-telegraph and
radio-telephone transmitters can only be used for communications with the
riverside and coastal radio-stations of the People’s Republic of China, and
they can only be used in ports in case of emergency, and reports shall be made
to the Harbour Superintendency Administration immediately thereafter.

    In the Yangtze River waters and its ports, a vessel’s signal rockets,
flame signals or signal guns can only be used in case of emergency, and
reports shall be made to the Harbour Superintendency Administration
immediately thereafter.

    Article 13  Vessels sailing in the Yangtze River waters or berthing
at its ports are prohibited from conducting the following activities:

    (1) taking photographs or drawing sketches of military installations
and military vessels, or videotaping or surveying the same;

    (2) shooting, swimming, fishing and setting off firecrackers or
fireworks; or

    (3) other activities endangering the national security, rights and
interests, safety and order of the People’s Republic of China.

    Article 14  Vessels sailing in the Yangtze River waters shall anchor
as near to the outer limit of the fairway as possible, and shall not
occupy the main channel of navigation under extraordinary circumstances
such as inclement weather and flood peaks, when temporary anchoring is
required, and shall promptly report the time and position of anchoring and the
time of departure to the nearest Harbour Superintendency Administration, and
no crew member shall go ashore without the permission of the local public
security organs.

    Article 15  Vessels sailing in the Yangtze River waters shall not
proceed at a speed that may endanger the safety of other vessels and
installations on the river banks.

    Article 16  Matters concerning navigation, berthing and prevention of
collisions of vessels sailing in the Yangtze River waters or berthing at
its ports shall be carried out in accordance with the Rules Governing
Prevention of Collision in Inland Waterways promulgated by the Ministry of
Communications of the People’s Republic of China.

    Article 17  While using signals, vessels shall comply with the Rules
Governing Prevention of Collisions in Inland Waterways and other relevant
signal regulations promulgated by the Ministry of Communications of the
People’s Republic of China; signals not specified therein shall be displayed
in accordance with the relevant international regulations.

    Article 18  No vessels sailing in the Yangtze River waters or berthing
at its ports shall discharge or dispose of oils, oily mixtures or other
pollutants or refuse into the water.

    Article 19  Matters provided for in these Provisions shall be handled
in accordance therewith, while those not set forth herein shall be
dealt with in accordance with the Rules of the People’s Republic of China
Concerning the Administration of Vessels of Foreign Nationality and other
relevant stipulations.

    Article 20  These Provisions shall come into effect as of the date of
promulgation.





PRICE LAW

Category  PRICE Organ of Promulgation  The Standing Committee of the National People’s Congress Status of Effect  In Force
Date of Promulgation  1997-12-29 Effective Date  1998-05-01  


Price Law of the People’s Republic of China

Contents
Chapter I  General Provisions
Chapter II  Price Acts of the Operators
Chapter III  The Government’s Pricing Act
Chapter IV  Regulation and Control of Overall Price Level
Chapter V  Price Supervision and Inspection
Chapter VI  Legal Liability
Chapter VII  Supplementary Provisions

(Adopted at the 29th Meeting of the Standing Committee of the Eighth National People’s Congress on December 29, 1997 and promulgated
by Order No. 92 of the President of the People’s Republic of China)

Contents
Chapter I  General Provisions
Chapter II  Price Act of the Operator
Chapter III Pricing Act of the Government
Chapter IV  Regulation and Control of Overall Price Level
Chapter V  Supervision and Inspection over Price
Chapter VI  Legal Liability
Chapter VII  Supplementary Provisions
Chapter I  General Provisions

    Article 1  This Law is enacted with a view to standardizing the price
acts, giving play to the role of price in the rational allocation of
resources, stabilizing the overall price level of the market, protecting
the lawful rights and interests of the consumers and operators and promoting
the sound development of the socialist market economy.

    Article 2  This Law shall be applicable to price acts taking place
within the territory of the People’s Republic of China.

    The prices referred to in this Law include the prices of commodities and
the prices of services.

    The prices of commodities mean the prices of all kinds of visible products
and invisible assets.

    The prices of services mean collection of fees for all kinds of paid-for
services.

    Article 3  The State practises and gradually perfects the price mechanism
shaped mainly by the market under macro economic regulation and control.
Determination of prices shall be in line with the law of value, prices
of most commodities and services shall be the market-regulated prices and
prices of an extremely small number of commodities and services shall be
the government-guided prices or the government-set prices.

    Market-regulated prices mean those prices determined autonomously by the
operators and formed through market competition.

    The operators referred to in this Law mean the legal persons, other
organizations or individuals engaging in the production and management of commodities or provision of paid services.

    Government-guided prices mean those prices determined to guide the
operators by the competent departments of price of the government or other
departments concerned, the baseline prices and their range of fluctuations
in accordance with the pricing authority and scope in pursuance of the
provisions of this Law.

    Government-set prices mean those prices determined by the competent
departments of price of the government or other departments concerned
in accordance with the pricing authority and scope in pursuance of the
provisions of this Law.

    Article 4  The State supports and promotes fair, open and lawful
market competition, maintains normal price order and carries out
administration, supervision and necessary regulation and control over
price activities.

    Article 5  The competent department of price under the State Council
shall be uniformly responsible for the work related to prices nationwide.
Other departments concerned under the State Council shall be responsible
for the work related to prices concerned within their respective functions,
responsibilities and scope.      

    The competent departments of price under local people’s governments
at or above the county level shall be responsible for the work related to
prices within their respective administrative areas. Other departments
concerned under local people’s governments at or above the county level
shall be responsible for the work related to prices concerned within their
respective functions and responsibilities.
Chapter II  Price Acts of the Operators

    Article 6  Market regulated prices shall be practised and determined
autonomously by the operators in pursuance of this Law for commodity prices
and services prices except those to which government-guided prices and
government-set prices shall apply pursuant to the provisions of Article 18
of this Law.

    Article 7  The operators shall, in determining prices, abide by
the principle of fairness, being in conformity with law, honesty and
credibility.

    Article 8  Production and management costs and market supply and demand
situation shall be the fundamental basis for the determination of prices
by the operators.

    Article 9  The operators shall exert efforts to improve the administration
of production and management, reduce the cost of production and management,
provide commodities and services for the consumers at reasonable prices and
gain lawful profits in market competition.

    Article 10  The operators shall, in accordance with their management
conditions, establish and perfect internal price control system, accurately
record and verify the production and management costs of commodities and
services and must not indulge in fraudulent practices.

    Article 11  The operators have the following rights in the conduct of price activities:

    (1)autonomous determination of prices under market regulation;

    (2)determination of prices within the range prescribed by government-
guided prices;

    (3)determination of prices for trial sale of new products within the
scope of products of government-guided prices and government-set prices
with the exception of specific products; and

    (4)report or filing a charge against acts infringing on his/her right
of autonomous determination of prices in accordance with law.    

    Article 12  The operators shall, in conducting price activities, abide
by laws and regulations, and observe the intervention measures and
emergency measures of government-guided prices, government-set prices and
legal prices determined in accordance with law.

    Article 13  The operators shall, in selling, procuring commodities and
providing services, display the clearly marked price in accordance with the
provisions of the competent departments of price of the government, annotate
relevant information such as the name, place of manufacture, specifications,
grade, unit of price calculation and price of a commodity or the services
item and rates.

    The operators shall not sell commidities with additional price besides
the marked price and shall not collect any fee not indicated.

    Article 14  The operators shall not commit the following unfair price
acts:

    (1)manipulation of market price in collusion to the detriment of the lawful rights and interests of other
operators or consumers;

    (2)dumping at the lower-than-the-cost price and disrupting the normal
production and management order to the detriment of national interests or
the lawful rights and interests of other operators for the purpose of squeezing out other competitors or of sole occupancy of the
market
in addition to the disposal of such commodities as fresh and living
commodities, seasonal commodities and overstocked commodites at reduced
prices in accordance with law;

    (3)concoction and spreading of price-hike information, jacking up
prices and pushing up over rise in commodities prices;

    (4)luring consumers or other operators to conclude transactions with it
by employing falsified or misleading price means;

    (5)practising price discrimination towards other operators with
identical trading conditions in providing identical commodities or services;

    (6)procuring, selling commodities or providing services at prices
raised or reduced in disguised form by adopting such means as raisisng or
lowering the grade;

    (7)seeking exorbitant profits in violation of the provisions of laws
and regulations; and

    (8)other unfair price acts prohibited by laws and administrative
regulations.

    Article 15  All types of intermediate agencies shall abide by the
provisions of this Law in the collection of fees in providing paid-for
services. Where laws have other provisions, the relevant provisions shall
be observed.

    Article 16  The operators shall abide by the relevant provisions of this Chapter and maintain the order of the domestic market in
selling
import commodities and procuring export commodities.

    Article 17  Industries organizations shall abide by price laws,
regulations and strengthen price self-discipline and accept the
guidance in the work by the competent departments of price of the
government.
Chapter III  The Government’s Pricing Act

    Article 18  The government may enforce government-guided prices or
government-set prices when necessary for the prices of the following
commodities and services:

    (1)the prices of an extremely small number of commodites vital
for the development of the national economy and people’s life;

    (2)the prices of a small number of commodities the resources of which
are rare or short;

    (3)the prices of commodities under natural monopoly management;

    (4)the prices of essential public utilities; and

    (5)the prices of essential non-profit services.

    Article 19  The pricing catalogs of the Central Government and local
governments shall be the basis for the pricing authority and specific
applicable scope of government-guided prices and government-set prices.

    The Central Pricing Catalog shall be compiled and revised by the
competent department of price under the State Council and published upon
approval of the State Council after submission.

    Local Pricing Catalogs shall be compiled by the competent departments
of price of people’s governments of the provinces, autonomous regions and
municipalities directly under the Central Government in pursuance of the
pricing authority and specific applicable scope provided for in the Central
Pricing Catalog and published upon examination and finalization of the
competent department of price under the State Council after the verification
and approval of the people’s governments at the corresponding level.

    Local people’s governments at all levels below people’s governments of the provinces, autonomous regions
and municipalities under the Central
Government shall not compile pricing catalogs.

    Article 20  The competent department of price and other departments
concerned under the State Council shall determine the government-guided
prices and government-set prices in pursuance of the pricing authority
and the specific applicable scope provided for in the Central Pricing Catalog;
among which the government-guided prices and government-set prices of the
prices of essential commodities and services shall be submitted to the
State Council for approval in accordance with provisions.

    The competent departments of price and other departments concerned of people’s governments of the provinces,
autonomous regions and municipalities
directly under the Central Government shall determine the government-guided
prices and government-set prices for implementation in their respective areas
in pursuance of the pricing authority and specific applicable scope provided
for in Local Pricing Catalogs.

    Municipal and county people’s governments may, in accordance with the
authorization of people’s governments of the provinces, autonomous regions
and municipalities directly under the Central Government and in pursuance of the pricing authority and specific applicable scope
provided for in Local
Pricing Catalogs, determine the government-guided prices and government-set
prices for implementation in their respective areas.

    Article 21  Determination of the government-guided prices and government-
set prices shall be based on the average costs of society and market supply
and demand situation of relevant commodities or services, requirements of national economic and social development and tolerance
of society and
difference in prices in procurement and marketing, wholesale and retail,
regions and seasons shall be followed.

    Article 22  Competent departments of price and other departments concerned
of the government shall, in determining the government-guided prices and
government-set prices, conduct price and cost survey and solicit the views
of the consumers, operators and the quarters concerned.

    When the competent departments of price of the government conduct price
and cost survey of the government-guided prices and government-set prices,
the units concerned shall truthfully report the information and provide
necessary account books, documents as well as other materials.

    Article 23  The system of testimony shall be established under the
chairmanship of the competent departments of price of the government to
solicit the views of the consumers, operators and the quarters concerned
to authenticate its necessity and feasibility in determining the government-
guided prices and government-set prices of the prices of public utilities,
prices of nonprofit services and prices of commodities under natural monopoly
management which involve the vital interests of the masses.  

    Article 24  The government-guided prices and government-set prices shall,
upon determination, be released by the department determining the prices to
the consumers and operators.

    Article 25  The specific applicable scope and price level of the
government-guided prices and government-set prices shall be adjusted at
an appropriate time in the light of the economic performance and in
pursuance of the pricing authority and procedures provided for.

    The consumers and operators may come up with proposals for adjustment
of the government-guided prices and government-set prices.
Chapter IV  Regulation and Control of Overall Price Level

    Article 26  Stabilization of the overall market price level constitutes
an important macro-economic policy goal of the State. The State determines
the regulatory goals of the overall market price level on the basis of the
requirements of the development of the national economy and tolerance of society, integrate them into the national economic and social
development
plan and bring about their realization through comprehensive employment of monetary, fiscal, investment, import-export and other
policies and measures.

    Article 27  The government may establish essential commodities reserve
system and establish the price regulatory fund to regulate prices and
stabilize the market.

    Article 28  To keep up with the requirements of price regulation and
administration, the competent departments of price of the government should
establish the price monitoring system to monitor the change in prices of essential commodities and services.

    Article 29  The government may bring into effect the protective prices
in procurement when the market purchasing prices of such essential farm
produce as foodgrains and other produce are too low, and adopt corresponding
economic measures to guarantee its realization.

    Article 30  When there is a marked rise in the prices of essential
commodities and services or there exists the possibility of a marked rise,
the State Council and people’s governments of the provinces, autonomous
regions and municipalities directly under the Central Government may take
such intervention measures as restricting the price differential ratio or
profit ratio, prescribe the restricted price, practise the price rise
submission system and the price adjustment record system with respect to
part of the prices.

    People’s governments of the provinces, autonomous regions and
municipalities directly under the Central Government shall, in adopting
the intervention measures prescribed in the preceding paragraph, submit
the same to the State Council for the record.

    Article 31  When drastic fluctuations and other abnormal conditions
occur in the overall market price level, the State Council may take
emergency measures of temporarily concentrated pricing authority, partial
or comprehensive price freeze nationwide or in parts of the regions.

    Article 32  Upon elimination of the circumstances for the implementation
of the intervention meausres and emergency measures in pursuance of the
provisions of Articles 30 and 31 of this Law, the intervention measures
and emergency measures shall be lifted in time.
Chapter V  Price Supervision and Inspection

    Article 33  The competent departments of price of people’s governments
at or above the county level shall conduct supervision and inspection over
price activities in accordance with law and impose administrative sanctions
against law-breaking acts in price in pursuance of the provisions of this Law.

    Article 34  The competent departments of price of the government may,
in conducting price supervision and inspection, exercise the following
powers:

    (1)inquire the interested party or the person involved and demand that
he/she provides testimonial materials and other information relating to
law-breaking acts in price;

    (2)inquire into and duplicate the account books, invoices, vouchers,
documents and other materials relating to law-breaking acts in price, and
check the bank information relating to law-breaking acts in price;

    (3)investigate the properties relating to law-breaking acts in price,
and may order the interested party to suspend the relevant business when
necessary; and

    (4)may register for safekeeping in advance under circumstances
that the evidences may be destroyed and lost or may be difficult to obtain
later, the interested party and the person involved must not transfer,
conceal or destroy the same.  

    Article 35  When subject to the supervision and inspection of the
competent departments of price of the government, the operators should
truthfully provide the account books, invoices, vouchers, documents and
other materials necessary for supervision and inspection.

    Article 36  Functionaries in charge of price of government departments
must not use the materials or information obtained in accordance with law
for any purposes other than price control in accordance with law and must
not divulge the business secrets of the interested party.

    Article 37  Consumer organizations, price supervision organizations of workers and staff members, neighborhood committees, villagers’
committees
and other organizations as well as the consumers have the right to conduct
social supervision over price activities. The competent departments of price
of the government should give full play to the supervisory role of the masses
in price.

    Media units have the right to exercise supervision over price through
public opinion.

    Article 38  The competent departments of price of the government should
establish the reporting system of law-breaking acts in price.

    All units and individuals have the right to report on law-breaking acts
in price. The competent departments of price of the government should give
encouragement to the informants and be responsible to keep the secret for
the informants.        
Chapter VI  Legal Liability

    Article 39  Any operator who fails to implement the government-guided
prices, government-set prices and legal price intervention measures and
emergency measures shall be ordered to make a rectification, confisticated
of the illegal gains and may be concurrently imposed a fine of less than
five times of the illegal gains; where there is no illegal gains, a fine
may be imposed; where the circumstances are serious, an order shall be
issued for the suspension of business operations for consolidation.

    Article 40  Any operator who commits any of the acts listed in Article
14 of this Law shall be ordered to make a rectification, confisticated of the illegal gains and may be concurrently imposed a fine
of less than five
times of the illegal gains; where there is no illegal gains, a warning
shall be administered and a fine may be imposed; where the circumstances
are serious, an order shall be issued for the suspension of business
operations for consolidation, or the business license revoked by the
agency of industry and commerce administration. In the case of separate
provisions of relevant laws on penalties and penalty authorities for acts
listed in Article 14 of this Law, the provisions of relevant laws may be
observed.

    Acts listed in Item (1) and Item (2) of Article 14 of this Law national
in nature shall be confirmed by the competent department of price under the
State Council; those of the provinces and below the provinces regional in
nature shall be confirmed by the competent departments of price of people’s
governments of the provinces, autonomous regions and municipalities directly
under the Central Government.

    Article 41  Any operator who causes consumers or other operators to pay
more prices for illegal price acts should refund the portion overpaid;
where damage has been caused, liability for compensation shall be borne
according to law.

    Article 42  Any operator who violates the provision of clearly marking
prices shall be ordered to make a rectification, confisticated of the illegal
gains and may be concurrently imposed a fine of less than RMB 5,000 Yuan.

    Article 43  Any operator who has been ordered to suspend relevant
business operations but does not suspend the operations, or transfers,
conceals and destroys properties registered for safekeeping in accordance
with law shall be imposed a fine of more than 100% less than three times
of the relevant business revenue or of the value of the properties
transferred, concealed or destroyed.

    Article 44  Whoever refuses to provide information required for
supervision and inspection in accordance with the provisions or provides
false information shall be ordered to make a rectification and administered
a warning; whoever fails to make a rectification on expiry of the specified
time period may be imposed a fine.

    Article 45  Local people’s governments at all levels or the departments
concerned of people’s governments at all levels that violate the provisions
of this Law, overstep the pricing authority and scope in determining and
adjusting prices without authorization or fail to implement the legal price
intervention measures and emergency measures shall be ordered to make a
rectification and may be criticized in a circular; the person-in-charge
held directly responsible and other persons directly responsible shall be
given administrative sanctions according to law.

    Article 46  Any functionary in charge of price who divulges state secrets,
business secrets and abuses power, indulges in self-seeking misconducts,
neglects duties, extorts and accepts bribes consituting a crime shall be
investigated of the criminal liability in accordance with law; where a crime
has not been constituted, sanctions shall be imposed according to law.
Chapter VII  Supplementary Provisions

    Article 47  Fee collection by state administrative agencies should be
effected in accordance with law, items for fee collection put under stringent
control and scope of fee collection and rates restricted. Specific control
measures for fee collection shall be worked out separately by the State
Council.

    Provisions of relevant laws and administrative regulations apply to
interest rates, exchange rates, premium rates, and securities and futures
prices, and this Law shall not be applicable thereto.

    Article 48  This Law shall enter into force as of May 1, 1998.





CIRCULAR OF THE STATE ECONOMIC AND TRADE COMMISSION, THE MINISTRY OF FOREIGN TRADE AND ECONOMIC COOPERATION, THE GENERAL ADMINISTRATION OF CUSTOMS, PEOPLE’S BANK OF CHINA, THE STATE ADMINISTRATION OF FOREIGN EXCHANGE, BANK OF CHINA ON PRINTING AND DISTRIBUTING THE IMPLEMENTATION MEASURES CONCERNING PROCESSING TRADE ENTERPRISES PROVIDING TAX GUARANTEE IN VARIOUS FORMS

The State Economic and Trade Commission, the Ministry of Foreign Trade and Economic Cooperation, the General Administration of Customs,
People’s Bank of China, the State Administration of Foreign Exchange, Bank of China

Circular of the State Economic and Trade Commission, the Ministry of Foreign Trade and Economic Cooperation, the General Administration
of Customs, People’s Bank of China, the State Administration of Foreign Exchange, Bank of China on Printing and Distributing the
Implementation Measures Concerning Processing Trade Enterprises Providing Tax Guarantee in Various Forms

GuoJingMaoMaoYi [1999] No.1271

December 29, 1999

Trade and economic commissions (economic commissions, planning and economic Commissions), commissions (departments and bureaus) of
foreign trade and economic cooperation of the various provinces, autonomous regions, municipalities directly under Central Government,
municipalities separately listed on the State plan and Xinjiang Production and Construction corps, Guangdong Sub-Administration of
the General Administration of the Customs, various customs directly under the General Administration of Customs, branches of the
People’s Bank of China, sub-bureaus of the State Administration of Foreign Exchange, branches of the Bank of China, and relevant
institutions of the State Council:

In order to implement the Circular of the General Office of the State Council on Transmitting the Circular of the State Economic and
Trade Commission and other Departments on Further Improving the Machine Account System of Bank Guaranty funds for Processing Trade
(GuoBanFa [1999] No. 35) and the Circular of the General Office of the State Council on Transmitting the Opinions of the MOFTEC Concerning
Taking Further Measures to Stimulate and Expand Export (GuoBanFa [1999] No. 71), the State Economic and Trade Commission, the MOFTEC,
the General Administration of the Customs, the People’s Bank of China, the State Administration of Foreign Exchange and the Bank
of China drafted Implementation Measures Concerning Processing Trade Enterprises Paying Tax Guarantee in Various Forms. In accordance
with the Customs Law of the People’s Republic of China, the Guarantee Law of the People’s Republic of China and other relevant laws
and regulations. The Implementation Measures states, financial institutions confirmed by the General Administration of Customs to
be qualified to provide guarantee to other institutions, or other legal entities that are capable of liquidating in other institutions’
place (hereinafter simplified as guarantee institutions), can provide guarantee to the Customs for processing trade enterprises.
Now, the Bank of China is confirmed by the General Administration of Customs and the People’s Bank of China as the financial institution
that provides guarantee to processing trade. This Measure is applicable to other guarantee institutions upon confirmation of their
qualification.

The Implementation Measures Concerning Processing Trade Enterprises Paying Tax Guarantee Fund in Various Forms hereby printed and
distributed to you.These Measures shall come into force on January 1, 2000.

Attachment:Implementation Measures Concerning Processing Trade Enterprises Paying Tax Guarantee Fund in Various Forms

Article 1

In order to perfect the machine account system of bank guarantee funds of processing trade, enterprises that deal with operations
of processing trade (hereinafter simplified as “enterprises”) are allowed to pay Customs tariff and other tax guarantee funds (herein
after simplified as “tax guaranty funds”) to the Customs in various forms, these measure are drafted in accordance with the Customs
Law of the People’s Republic of China and the Guarantee Law of the People’s Republic of China.

Article 2

In case that enterprises in processing trade can not pay tax guarantee funds to the Customs due to some reasons, these enterprises
can go through Customs filing procedures by presenting the Letter of Tax Payment Guarantee issued by the Bank of China in favor of
the Customs. Letter of Tax Payment Guarantee and Letter of Claim are attached hereafter.

Article 3

Following agencies of the Bank of China can issue letters of guarantee to the Customs upon self-evaluation according to credit standing
of enterprises:

1.

Business department in the head office of the Bank of China;

2.

Branches of various provinces, autonomous regions and municipalities directly under the Central Government;

3.

Shenzhen Branch of the Bank of China;

4.

Branches in Zhuhai, Shantou, Suzhou, Wusi, Ningbo, Xiamen and Shenyang.

Article 4

Funds guaranteed by the Bank of China include taxes and interests. Taxes refer to tariffs due by enterprises to the Customs and other
taxes confirmed by the Customs. Interests and interest rates are subject to relevant Customs regulations.

Article 5

The guarantee is valid till 60 days after the verification period of machine account is due.

Article 6

Within the guarantee validity, in case the value of processing contract increases or extension of contract occurs, enterprises should
first apply to the Bank of China for handling according to procedures concerning increasing value of the letter of guarantee and
contract extension and then go through procedures of machine account alteration with the Customs and the Bank of China. In order
to simplify formal procedures, the value of the letter of guarantee issued by the Bank of China may exceed the value of guarantee
funds upon application of the enterprise.

Article 7

For enterprises to which laws, regulations and this Measure are applicable, according to Contact Sheet of Establishment of Machine
Account of Bank Guarantee Funds and Contact Sheet of Alteration of Machine Account of Bank Guarantee Funds issued by the Customs,
the Bank of China will conduct evaluation on the credits of enterprises, and various forms of guarantee provided by enterprises,
such as guarantee, mortgage, hypothecation, retention and down payment (including funds in foreign exchange owned by enterprises
and guarantee funds provided by other nonfinancial guarantors). If evaluation demonstrates that enterprises meet requirements of
risk control, the Bank of China will issue the Letter of Tax Payment Guarantee in favor of the Customs and transfer the document
to relevant machine account units. The Bank of China may refuse to handle cases of enterprises that are not in accordance with the
State laws, regulations and this Measure.

Article 8

Upon receipt of the Letter of Guarantee for Machine Account Payment of Bank Guaranty Funds issued by branches of the Bank of China
upon empowerment of BOCL/G Department, BOC business units handling machine accounts will issue Registration Advice Note of Machine
Account of Bank Guarantee Funds or Alteration Advice Note of Machine Account of Bank Guarantee Funds. Enterprises can conduct filing
procedures of processing trade contracts by presenting the above two Advice notes and the Letter of Payment Guarantee.

Article 9

Within the guarantee validity, guarantee obligations of the BOC will be automatically terminated on condition that enterprises have
duly implemented contracts or submit taxes due. Within the guarantee validity, in case that enterprises have not fully or partially
perform export obligations, the Customs should issue Letter of Claim and payment Letter exclusively used by Customs to the Bank of
China in accordance with the amount of overdue tax and interest rates of postponed tax (if imported materials and components are
not allowed for domestic sales, a special Advice Note for Tax Payment, Collection, Deduction and Transfer should be issued.). The
Bank of China will perform compensation obligations stated in the letter of guarantee with the above documents. After performed compensation
obligations duly, the Bank of China can conduct the right of recourse upon entites guaranteed.

Article 10

The Machine Account Communication System currently existing between the Customs and the Bank of China remains unchanged. Issues concerning
machine account of bank guaranty funds will be handled by the Customs and the Bank of China in accordance with Circular on Printing
and Distributing Detailed Regulations of Implementation of Contact and Cooperation Measures Concerning the Actual Transfer of Machine
Account Guaranty Funds (ZhongYinFa [1999] No. 89) and various regulations concerned.

Article 11

Enterprises that have not obtained the Letter of Tax Payment Guarantee issued by the Bank of China should pay the tax guarantee funds
in forms of cash, girocheque, draft, remittance and so on, so forth.

Article 12

These measures shall enter into force from January 1, 2000. Detailed Regulations of Implementation will be drafted and issued by the
General Administration of Customs and the Bank of China.

Attachment:

1. Letter of tax payment guarantee (omitted)

2. Letter of claim(omitted)



 
The State Economic and Trade Commission, the Ministry of Foreign Trade and Economic Cooperation, the General Administration
of Customs, People’s Bank of China, the State Administration of Foreign Exchange, Bank of China
1999-12-29

 






REGULATIONS FOR THE IMPLEMENTATION OF THE TOBACCO MONOPOLY

Category  TOBACCO MONOPOLY Organ of Promulgation  The State Council Status of Effect  In Force
Date of Promulgation  1997-07-03 Effective Date  1997-07-03  


Regulations for the Implementation of the Law of the People’s Republic of China on Tobacco Monopoly

Chapter I  General Provisions
Chapter II  The Tobacco Monopoly Licence
Chapter III  Plantation, Purchase and Allocation of Leaf Tobacco
Chapter IV  Production of Tobacco Products
Chapter V  Sale of Tobacco Products
Chapter VI  Transportation of Tobacco Monopoly Products
Chapter VII  Production and Sale of Cigarette Paper, Filter Rods,
Chapter VIII  Import-export Trade and Foreign Economic and Technological
Chapter IX  Supervision and Inspection
Chapter X  Legal Responsibilities
Chapter XI  Supplementary Provisions

(Promulgated by Decree No. 223 of the State Council of the People’s

Republic of China on July 3, 1997)
Chapter I  General Provisions

    Article 1  These Regulations are formulated in accordance with of the People’s Republic of China on Tobacco Monopoly>(hereinafter referred
to as ).

    Article 2  Tobacco monopoly means that the State practises the system of
monopoly operations and unified control over the production, sales and import-
export businesses of tobacco monopoly products.

    Article 3  The cut tobacco in tobacco monopoly products refers to
commodities in cuts, dust and granule processed with leaf tobacco, redried
leaf tobacco and leaf tobacco slices as raw materials.

    Article 4  For performance of functions, responsibilities and leadership
system of the department of tobacco monopoly administration under the State
Council and the departments of tobacco monopoly administration of the
provinces, autonomous regions and municipalities directly under the Central
Government, the provisions of Article 4 of shall
be observed. Municipalities and counties with established departments of
tobacco monopoly administration, the municipal and county departments of
tobacco monopoly administration shall take charge of the work of tobacco
monopoly within their respective administrative areas and be subject to the
dual leadership of the department of tobacco monopoly administration at the
next higher level and the People’s Government at the same level, with the
department of tobacco monopoly administration at the next higher level as
the main leading body.

    Article 5  The State exercises control over the tar content in cigarettes
and cigars and main additives for cigarettes and cigars. Tobacco products
production enterprises must not use hazardous additives and pigments in
violation of the relevant provisions of the State.
Chapter II  The Tobacco Monopoly Licence

    Article 6  Anyone engaging in the production, wholesale and retail
businesses, operating tobacco monopoly products import-export businesses
and operating foreign tobacco products purchasing-marketing businesses must,
in pursuance of the provisions of and these
Regulations, apply for and obtain a tobacco monopoly licence.

    Tobacco monopoly licences are divided into:

    (1)tobacco monopoly production enterprise licence;

    (2)tobacco monopoly wholesale enterprise licence;

    (3)tobacco monopoly retail licence; and

    (4)special tobacco monopoly operating enterprise licence.

    Article 7  For the obtainment of a tobacco monopoly production enterprise
licence, the following conditions should be met:

    (1)having appropriate funds for the production of tobacco monopoly
products;

    (2)having the required conditions of technology and equipment for the
production of tobacco monopoly products;

    (3)compliance with the requirements of the industrial policy of the State
on the tobacco industry; and

    (4)other conditions prescribed by the department of tobacco monopoly
administration under the State Council.

    Article 8  For the obtainment of a tobacco monopoly wholesale enterprise
licence, the following conditions should be met:

    (1)having adequate funds for operating tobacco monopoly products
wholesale business;

    (2)having a fixed site for the operations and necessary specialized
staff;

    (3)compliance with requirements for rational distribution of tobacco
monopoly wholesale enterprises; and

    (4)other conditions prescribed by the department of tobacco monopoly
administration under the State Council.

    Article 9  For the obtainment of a tobacco monopoly retail licence,
the following conditions should be met:

    (1)having adequate funds for operating tobacco monopoly products retail
business;

    (2)having a fixed site for the operations;

    (3)compliance with requirements for rational distribution of tobacco
monopoly products retail points; and

    (4)other conditions prescribed by the department of tobacco monopoly
administration under the State Council.

    Article 10  For the obtainment of a special tobacco monopoly operating
enterprise licence, the following conditions should be met:

    (1)having adequate funds for operating special tobacco monopoly products
business;

    (2)having a fixed site for the operations and necessary specialized
staff;

    (3)compliance with requirements for rational distribution of operating
foreign tobacco monopoly products business; and

    (4)other conditions prescribed by the department of tobacco monopoly
administration under the State Council.

    Article 11  The departments of tobacco monopoly administration issue
tobacco monopoly licences and transportation permits for tobacco monopoly
products and exercise control pursuant to the provisions of Monopoly Law> and these Regulations.

    Article 12  Applicants for the obtainment of tobacco monopoly production
enterprise licences should submit their applications to the departments of tobacco monopoly administration of the provinces, autonomous
regions and
municipalities directly under the Central Government(hereinafter referred
to as at the provincial level), departments of tobacco monopoly administration
at the provincial level shall examine the same and make remarks thereon and
submit the same to the department of tobacco monopoly administration under the
State Council for examination and approval and issuance of licences.

    Article 13  Applicants for the obtainment of tobacco monopoly wholesale
enterprise licences for transregional operations in provinces, autonomous
regions and municipalities directly under the Central Government should
submit their applications to the departments of tobacco monopoly
administration at the provincial level which shall examine the same and offer
their remarks thereon and submit the same to the department of tobacco
monopoly administration under the State Council for examination and approval
and issuance of licences.

    Applicants for the obtainment of tobacco monopoly wholesale enterprise
licences for operations within the jurisdiction of a province, an autonomous
region or a municipality directly under the Central Government should submit
their applications to the departments of tobacco monopoly administration of the localities wherein the enterprises are located which
shall examine the
same and offer their remarks thereon and submit the same to the departments
of tobacco monopoly administration at the provincial level for examination
and approval and issuance of licences.

    Article 14  Applications for the obtainment of tobacco monopoly retail
licences shall be handled pursuant to the provisions of Law>.

    Article 15  Applicants for the obtainment of special tobacco monopoly
operating enterprise licences for operating tobacco monopoly products
import-export business and operating foreign tobacco products purchasing-
marketing business should submit their applications to the departments of
tobacco monopoly administration at the provincial level which shall examine
the same and sign their remarks thereon and submit the same to the department
of tobacco monopoly administration under the State Council for examination
and approval and issuance of licences.

    Applicants for the obtainment of special tobacco monopoly operating
enterprise licences for operating duty-free foreign tobacco products
purchasing-marketing business in customs supervision zones should submit
their applications to the departments of tobacco monopoly administration
of the localities wherein the enterprises are located which shall examine
the same and sign remarks thereon for submission to the departments of
tobacco monopoly administration at the provincial level for examination
and approval and issuance of licences.

    Article 16  Issuing organs of tobacco monopoly licences can carry out
regular or irregular inspections of the enterprises and individuals having
obtained tobacco monopoly licences. Those found to be not in compliance with
the conditions prescribed by and these Regulations
in inspections, issuing organs of tobacco monopoly licences can direct them
to suspend tobacco monopoly operations for consolidation and go so far as to
revoke their qualifications in engaging in tobacco monopoly business.

    Specific control measures for tobacco monopoly licences shall be worked
out by the department of tobacco monopoly administration under the State
Council in accordance with the provisions of these Regulations.
Chapter III  Plantation, Purchase and Allocation of Leaf Tobacco

    Article 17  The department of tobacco monopoly administration under the
State Council works out the leaf tobacco planting plan in conjunction with
the People’s Governments of the provinces, autonomous regions and
municipalities directly under the Central Government concerned according to
the State plan, in accordance with the requirements of rational distribution
and the principle of using good seeds, regional grouping and standardization.

    Article 18  Leaf tobacco shall be unifiedly purchased by the tobacco
companies or their entrusted agencies according to law. The tobacco companies
or their entrusted agencies may, in accordance with requirements, set up
leaf tobacco purchasing stations(points) in areas where the State has
assigned leaf tobacco purchasing plans for the purchase of leaf tobacco.
Establishment of leaf tobacco purchasing stations(points) shall be subject
to the approval of the departments of tobacco monopoly administration at the
provincial level. No unit or individual shall purchase leaf tobacco without
approval.

    Article 19  Local departments of tobacco monopoly administration organize
the departments concerned at the same level and representatives of leaf
tobacco producers in the formation of leaf tobacco grading groups to
coordinate grading in leaf tobacco purchase.

    Article 20  Plans for State reserve and export of leaf tobacco and
leaf tobacco allocation plans shall be assigned by the planning department
under the State Council.
Chapter IV  Production of Tobacco Products

    Article 21  Establishment of tobacco products production enterprises
should be submitted by the departments of tobaco monopoly administration at
the provincial level to the department of tobacco monopoly administration
under the State Council for approval, with the acquisition of tobacco monopoly
production enterprise licences and registration upon verification and
approval at the departments of industry and commerce administration.

    Article 22  Tobacco products production enterprises must strictly
implement the production plans assigned by the State.

    Article 23  Use of stale leaf tobacco for the production of cigarettes,
cigars and cut tobacco is prohibited.

    Article 24  Cigarettes, cigars and packed cut tobacco should use
registered trademarks; applications for the registration of trademarks
should proceed with the approval documents for production issued by the
department of tobacco monopoly administration under the State Council in
accordance with law.
Chapter V  Sale of Tobacco Products

    Article 25  Enterprises with acquisition of tobacco monopoly wholesale
enterprise licences should engage in tobacco products wholesale business
within the business scope and regional boundary prescribed in the licences.

    Enterprises or individuals with acquisition of tobacco monopoly retail
licences should purchase the merchandise at local tobacco monopoly wholesale
enterprises and be subject to the supervision and control of the issuing
organs of tobacco monopoly licences.

    Article 26  Any unit or individual selling more than 50 cartons of cigarettes or cigars at a time without a tobacco monopoly wholesale
enterprise
licence shall be construed as engagement in tobacco products wholesale
business without a tobacco monopoly wholesale enterprise licence.

    Article 27  No unit or individual shall sell illegally produced tobacco
products.

    Article 28  Tobacco monopoly production enterprises and tobacco monopoly
wholesale enterprises must not supply tobacco products to any unit or
individual without tobacco monopoly retail licences.

    Article 29  Cigarettes and cigars sold within the territory of China
should indicate grades of tar content and “Smoking is hazardous to your
health” in the Chinese language on the packs and cartons.

    Article 30  Whenever necessary, the department of tobacco monopoly
administration under the State Council may, in the light of the market
supply and demand, assign appropriation tasks for cigarettes and cigars
among the provinces, autonomous regions and municipalities directly under
the Central Government.

    Article 31  Sale of stale and foul tobacco products is strictly
prohibited. Stale and foul tobacco products shall be destroyed under the
supervision of the departments of tobacco monopoly administration or the
departments of administration concerned.

    Article 32  Tobacco products with counterfeit trademarks intercepted by
departments concerned according to law should be handed over to departments
of tobacco monopoly administration for open destruction pursuant to
relevant provisions of the State and sale thereof in any form is prohibited.

    Article 33  Identification, inspection and testing of tobacco products
with counterfeit trademarks shall be carried out by the tobacco quality
inspection and testing stations designated by the department of product
quality supervision and control under the State Council and the departments
of product quality supervision and control of the People’s Governments of the provinces, autonomous regions and municipalities directly
under the
Central Government.
Chapter VI  Transportation of Tobacco Monopoly Products

    Article 34  Tobacco monopoly product transportation permits shall be
issued upon examination and approval by the departments of tobacco monopoly
administration above the provincial level or by their authorized agencies.
Control measures for tobacco monopoly product transportation permits shall
be worked out by the department of tobacco monopoly administration under the
State Council.

    Article 35  Cross-boundary transportation of import tobacco monopoly
products, Chinese-made special-purpose tobacco machinery, cigarette tow,
filter rods and import cut cigarette paper across the provinces, autonomous
regions and municipalities directly under the Central Government should go
through consignment for shipment or shipment on one’s own against the tobacco
monopoly product tranportation permits issued by the department of tobacco
monopoly administration under the State Council or its authorized agencies.

    Cross-boundary transportation of other Chinese-made tobacco monopoly
products other than Chinese-made special-purpose tobacco machinery, cigarette
tow, filter rods and import cut cigarette paper across the provinces,
autonomous regions and municipalities directly under the Central Government
should go through consignment for shipment or shipment on one’s own against
the tobacco monopoly product transportation permits issued by the department
of tobacco monopoly administration under the State Council or departments of
tobacco monopoly administration at the provincial level.

    Cross-city, cross-county transportation of tobacco monopoly products
within the provinces, autonomous regions and municipalities directly under
the Central Government should go through consignment for shipment or
shipment on one’s own against the tobacco monopoly product transportation
permits issued by departments of tobacco monopoly administration at the
provincial level or their authorized agencies.

    Transportation of smuggled tobacco monopoly products confisticated
according to law should go through consignment for shipment or shipment on
one’s own against the tobacco monopoly product transportation permits
issued by the department of tobacco monopoly administration under the
State Council.

    Article 36  Any of the following circumstances shall be transportation
of tobacco monopoly products without tobacco monopoly product transportation
permits:

    (1)transportation of tobacco monopoly products exceeding the quantity
and range prescribed in the tobacco monopoly product transportation permits;

    (2)use of expired, altered or duplicated tobacco monopoly product
transportation permits;

    (3)without tobacco monopoly product transportation permits and failure
to provide effective certificates of local purchase of tobacco monopoly
products; and

    (4)other acts of shipment of tobacco monopoly products without tobacco
monopoly product transportation permits.

    Article 37  For transfer-customs shipment of tobacco products under
customs supervision, formalities for shipment shall be completed in accordance
with the provisions of the State relating to transfer-customs shipment.
Chapter VII  Production and Sale of Cigarette Paper, Filter Rods,
Cigarette Tow and Special-purpose Tobacco Machinery

    Article 38  Tobacco monopoly wholesale enterprises and tobacco products
production enterprises can purchase cigarette paper, filter rods, cigarette
tow and special-purpose tobacco machinery only from enterprises with
acquisition of tobacco monopoly production enterprise licences and special
tobacco monopoly operating enterprise licences.

    Production enterprises of cigarette paper, filter rods, cigarette tow
and special-purpose tobacco machinery must not sell their products to units
or individuals without tobacco monopoly production enterprise licences.

    Article 39  Purchase, sale and transfer of special-purpose tobacco
machinery must be subject to the approval of the department of tobacco
monopoly administration under the State Council.

    Catalog of the names of special-purpose tobacco machinery shall be
prescribed by the department of tobacco monopoly administration under
the State Council.

    Article 40  No unit or individual shall sell illegally produced special-
purpose tobacco machinery, cigarette paper, filter rods and cigarette tow.

    Phased-out, condemned and illegally assembled special-purpose tobacco
machinery, broken and substandard cigarette paper, filter rods and
cigarette tow as well as their bits and pieces shall be handled under the
supervision of local departments of tobacco monopoly administration and must
not be sold in any form.
Chapter VIII  Import-export Trade and Foreign Economic and Technological
Cooperation

    Article 41  For the establishment of a tobacco monopoly production
enterprise with investment from foreign businesses, recording of the project
pursuant to relevant provisions of the State can only be approved upon
examination and consent of the department of tobacco monopoly administration
under the State Counci.  

    Article 42  Operations of import tobacco monopoly products can only be
undertaken by enterprises with acquisition of special tobacco monopoly
operating enterprise licneces. Their plans of import tobacco monopoly
products should be submitted to the department of tobacco monopoly
administration under the State Council for examination and approval.

    Article 43  Duty-free import tobacco products should be stored in
customs-designated bonded warehouses, and joint control by the local
departments of tobacco monopoly administration designated by the department
of tobacco monopoly administration under the State Council and the customs
shall be stepped up. The customs shall verify and write off the quantity of duty-free import foreign tobacco products in batches
against the duty-free
import plans approved by the department of tobacco monopoly administration
under the State Council.

    Article 44  Duty-free cigarettes and cigars marketed in customs
supervision zones are only for retail and special labels should be printed on
the packs and cartons as prescribed by the department of tobacco monopoly
administration under the State Council.

    Article 45  “Exclusively for export” in the Chinese language should be
marked on packs and cartons of cigarettes and cigars exclusively for
export.
Chapter IX  Supervision and Inspection

    Article 46  Departments of tobacco monopoly administration shall conduct
supervision and inspection on the implementation of Law> and these Regulations according to law, investigate and deal with cases
of violation of and these Regulations, and
investigate and deal with acts of smuggling, trafficking of smuggled tobacco
products, counterfeiting, forgery and making inferior quality products.

    Article 47  Opening and running of tobacco monopoly products trading
markets should be subjected to the examination and approval of the department
of tobacco monopoly administration under the State Council. Tobacco monopoly
products trading markets established without examination and approval should
be banned by the People’s Governments above the county level of the localities
wherein the markets are located.

    Article 48  Whenever necessary, the department of tobacco monopoly
administration under the State Council may, in the light of the actual
conditions in tobacco monopoly work, set up representative agencies in major
areas; whenever necessary, the departments of tobacco monopoly administration
at the provincial level may despatch resident staff in tobacco monopoly
products production and operating enterprises. Representative agencies and
resident staff supervise and inspect the production and operating activities
relating to tobacco monopoly products within the authorized scope of the
despatching departments.

    Article 49  In investigating and handling cases of violation of Tobacco Monopoly Law> and these Regulations, departments of tobacco monopoly
administration may exercise the following functions and powers:

    (1)inquire the parties interested, suspects and witnesses in the law-
breaking cases;

    (2)inspect the operating sites of the parties interested in the law-
breaking cases and deal with the illegally produced or marketed tobacco
monopoly products according to law; and

    (3)search, read and duplicate contracts, invoices, accounting books,
vouchers, records, documents, business correspondence and other information
related to the law-breaking activities.

    Article 50  Departments of tobacco monopoly administration or departments
of tobacco monopoly administration in conjunction with the departments
concerned may inspect and deal with activities of illegal transportation
of tobacco monopoly products in accordance with law.

    Article 51  For auctions pursuant to the relevant provisions of the State
of tobacco monopoly products confisticated by people’s courts and
administrative organs and tobacco monopoly products offsetting penalties,
fines and tax money, bidders should hold tobacco monopoly wholesale enterprise
licences; bidders taking part in auctions of foreign tobacco products should
hold special tobacco monopoly operating enterprise licences.

    Auction enterprises established in accordance with law for auctioning
of tobacco monopoly products should examine and verify the qualifications of the bidders. Auctioning of tobacco monopoly products
by auction enterprises
should be subjected to the supervision of the departments of tobacco monopoly
administration.

    Article 52  Monopoly administrator-inspectors of departments of tobacco
monopoly administration should wear badges issued by the department of tobacco monopoly administration under the State Council and
show certificates
of inspection issued by departments of tobacco monopoly administration at the
provincial level while performing official duties.

    Article 53  Units and individuals having performed meritorious services
in reporting law-breaking cases in tobacco monopoly shall be rewarded.
Chapter X  Legal Responsibilities

    Article 54  The following provisions shall be observed in the implementa-
tion of penalties pursuant to the provisions of Article 30 of Monopoly Law>:

    (1)for purchase of leaf tobacco without authorization, a fine of more
than 20% and less than 50% of the value of the illegally purchased leaf
tobacco may be imposed, and the illegally purchased leaf tobacco shall be
purchased at the price set by the State;

    (2)for purchase of more than 1000 kilograms of leaf tobacco without
authorization, the illegally purchased leaf tobacco and illegal income
shall be confisticated according to law.

    Article 55  The following provisions shall be observed in the implementa-
tion of penalties pursuant to the provisions of Article 31 of Monopoly Law>:

    (1)for consignment for shipment or shipment on one’s own of tobacco
monopoly products without a transportation permit or the quantity of which
exceeds that prescribed in the transportation permit, a fine of more than
20% and less than 50% of the value of the illegally transported tobacco
monopoly products shall be imposed, and the illegally transported tobacco
monopoly products may be purchased at the price set by the State.

    (2)for any of the following circumstances, the illegally transported
tobacco monopoly products and illegal income shall be confisticated:

    1.the value of illegally transported tobacco monopoly products exceeds
RMB 50000 Yuan or the quantity of transported cigarettes exceeds 100 pieces
(every 10000 cigarettes constitute one piece);

    2.having been subjected to penalties more than twice by departments of tobacco monopoly administration;

    3.resisting inspection according to law by supervisor-inspectors of departments of tobacco monopoly administration;

    4.illegal transportation of smuggled tobacco monopoly products;

    5.transportation of tobacco monopoly products produced by enterprises
without tobacco monopoly production enterprise licences;

    6.illegal transportation of tobacco monopoly products in dis

REGULATIONS ON THE CONTROL OF AGRICULTURAL CHEMICALS

Category  AGRICULTURE, FORESTRY AND METEOROLOGY Organ of Promulgation  The State Council Status of Effect  In Force
Date of Promulgation  1997-05-08 Effective Date  1997-05-08  


Regulations on the Control of Agricultural Chemicals

Chapter I  General Provisions
Chapter II  Registration of Agricultural Chemicals
Chapter III  Production of Agricultural Chemicals
Chapter IV  Marketing of Agricultural Chemicals
Chapter V  Application of Agricultural Chemicals
Chapter VI  Other Provisions
Chapter VII  Penalties
Chapter VIII  Supplementary Provisions

(Promulgated by Decree No. 216 of the State Council of the People’s

Republic of China on May 8, 1997)
Chapter I  General Provisions

    Article 1  These Regulations are formulated for the purpose of
strengthening the supervision and control of the production, management
and application of agricultural chemicals, ensuring the quality of
agricultural chemicals, protecting the agricultural and forestry
production, ecological environment, and maintaining the safety of human
beings and animals.

    Article 2  Agricultural chemicals referred to in these Regulations mean
mixtures or preparations of one or more substances by chemical synthesis
or originating from organisms or other natural substances with the intent to
prevent, eliminate or put under control plant diseases, insect pests, weeds
or other living beings harmful to agriculture and forestry and to purposely
regulate the growth of plants and insects.

    Agricultural chemicals prescribed in the preceding paragraph include the
following categories used for different purposes or sites:

    (1) to prevent, eliminate or put under control plant diseases, insect
pests (including insects, ticks and mites), weeds, rats, molluscs and other
living beings harmful to agriculture and forestry;

    (2) to prevent, eliminate or put under control diseases, insect pests,
rats and other harmful living beings in warehouses;

    (3) to regulate the growth of plants and insects;

    (4) to be used as antiseptics or preservatives of agricultural products or
forest products;

    (5) to prevent, eliminate or put under control mosquitoes, flies,
cockroaches, rats and other harmful living beings; and

    (6) to prevent, eliminate or put under control living beings harmful to
dykes and dams, railways, airports, buildings and other sites.

    Article 3  The production, management and application
of agricultural chemicals within the territory of the People’s Republic of
China shall observe these Regulations.

    Article 4  The State encourages and supports research, production and
application of agricultural chemicals that are safe, highly efficacious and
economical.

    Article 5  The agricultural department under the State Council shall be
responsible for the registration, supervision and control of agricultural
chemicals throughout the country. The agricultural departments of people’s
governments of provinces, autonomous regions or municipalities directly under
the Central Government shall assist the agricultural department under the
State Council in the registration of agricultural chemicals, and shall be
responsible for the supervision and control of agricultural chemicals within
their respective administrative regions. The agricultural departments of
people’s governments at the county level and in municipalities with
subordinate districts or autonomous prefectures shall be responsible for
the supervision and control of agricultural chemicals within their respective
administrative regions.

    The chemical industry department under the State Council shall be
responsible for the overall planning, coordination, guidance, supervision
and administration of the production of agricultural chemicals. The chemical
industry departments of people’s governments of provinces, autonomous regions
or municipalities directly under the Central Government shall be responsible
for the supervision and administration of the production of agricultural
chemicals within their respective administrative regions.

    Other relevant departments of people’s governments at or above the county
level shall be responsible for the supervision and administration of the
production of agricultural chemicals according to their terms of reference.
Chapter II  Registration of Agricultural Chemicals

    Article 6  The State practises a registration system for agricultural
chemicals.

    The production (including the production of raw agricultural chemicals as
well as the processing and packing of preparations, the same hereinafter) and
importation of agricultural chemicals must enter into registration.

    Article 7  Agricultural chemicals produced or imported in the country for
the first time shall be registered by the following three phases:

    (1) the Field Trial Phase: Agricultural chemicals the registration of
which to be applied for shall be put in field trials subject to approval
after their researchers so apply for. Those at the field trial phase shall
not be sold.

    (2) the Interim Registration Phase: Producers of agricultural chemicals
which require demonstrations of field trials for trial sale and which require
to be used under special circumstances after field trials shall apply for
interim registration. After the agricultural department under the State
Council issues a certificate for interim registration, those agricultural
chemicals can be demonstrated for trial sale within a designated scope.

    (3) the Formal Registration Phase: Producers of agricultural chemicals
which can be circulated as standard commodities upon demonstrations of field
trials for trial sale shall apply for formal registration. After the
agricultural department under the State Council issues a registration
certificate of agricultural chemicals, those agricultural chemicals can be
produced and sold.

    The registration certificate of agricultural chemicals and the
certificate for interim registration of agricultural chemicals shall
respectively specify the period of validity for registration. If it is
necessary to continue to produce or sell to China agricultural chemical
products after the expiration of such period of validity, an application
for the extension of registration shall be filed before the expiration date
of the registration.

    An application for change in registration shall be filed if an
agricultural chemical having been granted formal registration or interim
registration changes in its pharmaceutical form, ingredients, usage or
directions for use within the period of validity for its registration.

    Article 8  When applying for registration of agricultural chemicals
pursuant to the provisions of Article 7 of these Regulations, researchers,
producers or foreign enterprises selling agricultural chemicals to China shall
provide samples of agricultural chemicals to the agricultural department under
the State Council, or to the agricultural department under the State Council
via the agricultural departments of provinces, autonomous regions and
municipalities directly under the Central Government, and shall,
at the same time, provide information on product chemistry and toxicology,
effectiveness, residues, environmental impact and label as required by the
agricultural department under the State Council for registration of
agricultural chemicals.

    The appraisal institution of agricultural chemicals attached to the
agricultural department under the State Council shall be responsible for
specific affairs relating to the registration of agricultural chemicals
throughout the country. The appraisal institutions of agricultural chemicals
attached to the agricultural departments of provinces, autonomous regions and
municipalities directly under the Central Government shall assist in handling
specific affairs relating to the registration of agricultural chemicals
within their respective administrative regions.

    Article 9  Managerial specialists and technical specialists of
agricultural chemicals recommended by departments under the State Council
in charge of agriculture, forestry, chemical industry, public health,
environmental protection and foodgrains as well as the Chinese Federation of
Supply and Marketing Cooperatives shall form an evaluation and examination
committee for registration of agricultural chemicals.

    After the departments under the State Council in charge of agriculture,
chemical industry, public health and environmental protection and the Chinese
Federation of Supply and Marketing Cooperatives separately examine
information on applications for formal registration of agricultural chemicals
and write down their comments, the evaluation and examination committee for
registration of agricultural chemicals shall conduct an evaluation on the
agricultural chemicals in terms of product chemistry, toxicology,
effectiveness, residues and environmental impact. Based on the
evaluation of the evaluation and examination committee for registration of
agricultural chemicals, the agricultural department under the State Council
shall issue registration certificates for agricultural chemicals to those
applicants who conform to requirements.

    Article 10  If a producer produces identical agricultural chemicals
already under registration by other manufacturers, the producer shall apply
for registration for the agricultural chemicals and provide samples and
information prescribed in Article 8 of these Regulations. The agricultural
department under the State Council shall issue to the producer a registration
certificate for agricultural chemicals.
Chapter III  Production of Agricultural Chemicals

    Article 11  Production of agricultural chemicals shall conform to the
state industrial policies on the agricultural chemical industry.

    Article 12  Whoever intends to establish an agricultural chemicals
producing enterprise (including any jointly operated enterprise, any branch
or any workshop established for producing agricultural chemicals in a
non-agricultural chemicals producing enterprise) shall fulfil the following
conditions, subject himself/herself to the examination and consent of the
chemical industry department of the province, autonomous region or
municipality directly under the Central Government in the place where the
enterprise is to be located, then report to the chemical industry department
under the State Council for approval. If laws or administrative regulations
have other provisions regarding conditions for the establishment of
enterprises, and the examination and approval authority, these provisions
shall prevail.

    (1) having technicians and skilled workers required by the kind of
agricultural chemicals to be produced;

    (2) having workshops, production facilities and hygienic conditions
required by the kind of agricultural chemicals to be produced;

    (3) having facilities up to the national standards for labour safety and
health and corresponding rules for labour safety and health management;

    (4) having product quality standards and product quality guarantee system;

    (5) producing agricultural chemicals having been granted registration
according to law; and

    (6) having facilities and measures for pollution prevention and treatment
as required by the state for environmental protection and discharge of
pollutants not exceeding the national and local standards.

    After the establishment of an agricultural chemicals producing enterprise
has been approved, it shall apply to the organ of industry and commerce
administration for a business licence.

    Article 13  The State practises a licence system for production of
agricultural chemicals.

    Production of those agricultural chemicals for which the national or
trade standards exist shall acquire a production licence issued by the
chemical industry department under the State Council.

    Production of those agricultural chemicals for which a standard within
the enterprise exists but the national or trade standards have not yet been
set shall be examined by the chemical industry department of the province,
autonomous region and municipality directly under the Central Government and,
on gaining consent, reported to the chemical industry department under the
State Council for approval and issuance of an approval document for production
of agricultural chemicals.

    Article 14  Agricultural chemicals producing enterprises shall conduct
production according to quality standards and technical rules for
agricultural chemical products, and shall keep their production records
complete and accurate.

    Article 15  Products of agricultural chemicals shall be attached with
a label or a description. Labels shall be tightly stuck on or be printed on
packages of agricultural chemicals. Labels or descriptions shall have
indications concerning the name of agricultural chemicals, name of the
producing enterprise, product batch number and number of the registration
certificate or interim registration certificate, number of the production
licence or number of the approval document for production of the agricultural
chemicals, as well as ingredients, contents, weight, product characteristics,
toxicity, usage, techniques and directions for use, date of production, period
of effectiveness and precautions for applying the agricultural chemicals.
Those agricultural chemicals separately packed for distribution shall also be
given the names of the packing units.

    Article 16  Before leaving the factory, agricultural chemicals shall
undergo quality inspections and be attached with a certificate of quality
inspection. No substandard agricultural chemicals shall be dispatched from
the factory.
Chapter IV  Marketing of Agricultural Chemicals

    Article 17  Any of the following units may market agricultural chemicals:

    (1) units of the supply and marketing cooperatives marketing means of
agricultural production;

    (2) plant protection stations;

    (3) soil fertilizer stations;

    (4) agricultural or forestry technology dissemination institutions;

    (5) institutions for prevention of forest diseases and insect pests;

    (6) agricultural chemicals producing enterprises; and

    (7) other marketing units stipulated by the State Council.

    Whoever intends to market agricultural chemicals categorized as
dangerous chemicals shall obtain a marketing licence according to the
relevant state provisions.

    Article 18  An agricultural chemicals marketing unit shall meet the
following requirements and other requirements prescribed in the relevant laws
and administrative regulations and shall take out a business licence
according to law from the organ of industry and commerce administration
before engaging in marketing of agricultural chemicals:

    (1) having technicians qualified for marketing agricultural chemicals;

    (2) having a place of business, equipment, warehousing facilities, safety
and protection measures and facilities and measures for pollution prevention
and treatment required by marketing of agricultural chemicals;

    (3) having rules and regulations established for marketing of
agricultural chemicals; and

    (4) having a commensurate system and means for quality control over
agricultural chemicals to be marketed.

    Article 19  When purchasing agricultural chemicals, an agricultural
chemicals marketing unit shall check the agricultural chemical products with
the product labels or descriptions and certificates of product quality to find
them to tally and conduct quality inspections.

    Purchase or sale of those agricultural chemicals without
a registration certificate or interim registration certificate, without
a production licence or approval document for production, without product
quality standards and a certificate of product quality, or without passing
quality inspection shall be prohibited.

    Article 20  Agricultural chemicals marketing units shall build up reserve
of agricultural chemicals according to the relevant state provisions.

    Rules for the storage and safekeeping of agricultural chemicals shall be
established and executed to ensure the quality and safety of agricultural
chemical products.

    Article 21  Agricultural chemicals marketing units shall guarantee quality
of agricultural chemicals they sell and shall check product labels or
descriptions and certificates of product quality with the agricultural
chemical products to find them to tally.

    Agricultural chemicals marketing units shall explain correctly to
the users of agricultural chemicals, whether units or individuals, the usage,
directions for use, dosages, emergency measures for poisoning and precautions
of agricultural chemicals.

    Article 22  Agricultural chemical products with an expired period of
guaranteed quality may continue to be sold within a fixed period if they are
still up to the standards subject to the inspection of the appraisal
institution of agricultural chemicals attached to the agricultural department
of the people’s government at or above the provincial level. However, the
words “expired agricultural chemicals” must be indicated and directions for
use and dosages must be given.
Chapter V  Application of Agricultural Chemicals

    Article 23  Agricultural departments of people’s governments at or above
the county level shall, under the plant protection policy of “prevention
first and integrated prevention and control”, organize the
popularization of agricultural chemicals that are safe and highly efficacious,
conduct training to improve peasants’ level in the application of agricultural
chemicals, and give forecasts of plant diseases and insect pests.

    Article 24  Agricultural departments of local people’s governments at or
above the county level shall give directions for safe and rational use of
agricultural chemicals and, in the light of occurrences of local agricultural
disasters due to plant diseases, insect pests, weeds or rats, work out
programmes for alternate use of agricultural chemicals, by alternately using
agricultural chemicals according to the programmes, alleviate the
drug-resistance of plant diseases, insect pests, weeds and rats and improve
the results of prevention and control.

    Article 25  Use of agricultural chemicals shall comply with
anti-poisoning rules. The preparation and application of agricultural
chemicals, disposal of wastes and safety and protection shall be properly
handled to prevent environmental pollution and poisoning accidents by
agricultural chemicals.

    Article 26  Use of agricultural chemicals shall comply with the relevant
state provisions regarding safe and rational use of agricultural chemicals.
Dosages, frequency, ways and safety intervals for use of agricultural
chemicals shall conform to the regulations to prevent pollution to
agricultural and sideline products.

    Hypertoxic or high toxic agricultural chemicals shall not be used for the
prevention and control of insects harmful to hygienic conditions, and shall
not be applied to vegetables, melons, fruits, tea and traditional Chinese
medicinal herbs.

    Article 27  In use of agricultural chemicals, attention shall be paid
to environmental protection, protection of beneficial organisms and precious
and rare species.

    It is strictly prohibited to poison fishes, shrimps, birds, beasts, etc.
with agricultural chemicals.

    Article 28  Administrative departments in charge of forestry, foodgrains
and public health shall step up guidance for safe, rational use of
agricultural chemicals in forestry, grain reserve and public health.
Chapter VI  Other Provisions

    Article 29  No unit or individual shall produce agricultural chemicals
without a production licence for agricultural chemicals or an approval
document for the production of agricultural chemicals.

    No unit or individual shall produce, market, import or use agricultural
chemicals without a registration certificate or an interim registration
certificate for agricultural chemicals.

    Import of agricultural chemicals shall comply with the relevant state
provisions. An importer or his/her agent shall produce to the Customs his/her
registration certificate or interim registration certificate acquired for
agricultural chemicals in China.

    Article 30  Production, marketing or use of fake agricultural
chemicals shall be prohibited.

    Any of the following agricultural chemicals are fake agricultural
chemicals:

    (1) those not being agricultural chemicals but passed off as genuine
ones, or those being a kind of agricultural chemicals but passed off as
another kind; or

    (2) those with the kinds and names of effective ingredients not in
conformity with the kinds and names of effective ingredients indicated in
the product labels or descriptions.

    Article 31  Production, marketing or use of inferior agricultural
chemicals shall be prohibited.

    Any of the following agricultural chemicals are inferior agricultural
chemicals:

    (1) those not conforming to the quality standards of agricultural
chemical products;

    (2) those having lost effectiveness; or

    (3) those mixed with ingredients that can cause harmful chemical
effects or mixed with other harmful ingredients.

    Article 32  Marketing of agricultural chemicals without labels or with
incomplete or unclear labels on product packages shall be prohibited.

    Article 33  Printing, broadcasting, setting up or putting up of
advertisements for agricultural chemicals without undergoing registration
shall be prohibited.

    Advertisements for agricultural chemicals shall have contents consistent
with those in registration of agricultural chemicals and shall be subject to
examination according to the provisions of the advertisement law and the
relevant state provisions governing advertisements for agricultural chemicals.

    Article 34  If those agricultural chemicals having undergone registration
are found within the period of validity for registration severely harmful to
agriculture, forestry, safety of humans and animals and ecological
environment, the agricultural department under the State Council shall, based
on the deliberation of the evaluation and examination committee for
registration of agricultural chemicals, announce restrictions upon the use or
nullify the registration thereof.

    Article 35  No unit or individual shall produce, market or use
agricultural chemicals the production of which has been prohibited expressly
by the state or the registration of which has been nullified by the state.

    Article 36  Competent departments of people’s governments at or above the
county level shall check and monitor the amount of residues of agricultural
chemicals accumulating in agricultural and sideline products.

    Article 37  It is prohibited to sell agricultural and sideline products
containing residues of agricultural chemicals in excess of the standards.

    Article 38  Disposal of fake, inferior, expired or prohibited
agricultural chemicals, or discarded packages of agricultural chemicals, or
other wastes containing agricultural chemicals must strictly conform to the
relevant provisions of laws and regulations on environmental protection in
order to prevent environmental pollution.
Chapter VII  Penalties

    Article 39  Whoever commits any of the following acts shall be penalized
by the agricultural departments according to the following provisions:

    (1) Anyone who, without a registration certificate or an interim
registration certificate for agricultural chemicals, produces or markets
agricultural chemicals, or produces or markets agricultural chemicals
the registration of which has been nullified, shall be ordered to stop
the production or marketing, and, in addition to confiscation of the illegal
gains, concurrently fined more than 100% and less than ten times of the
amount of the illegal gains. If there is no illegal gain, the offender shall
be concurrently fined not more than RMB 100,000 Yuan.

    (2) Anyone who continues to produce agricultural chemicals without
renewing the expired registration certificate or the expired interim
registration certificate for agricultural chemicals, shall be ordered to go
through the renewing formalities within a time limit retrospectively, with
the illegal gains confiscated, and may be concurrently fined not more than
five times of the amount of the illegal gains. If there is no illegal gain,
the offender shall be concurrently fined not more than RMB 50,000 Yuan. If
the offender fails to go through the renewing formalities within the time
limit retrospectively, the department that issued the certificate shall order
him/her to stop production and marketing and revoke the registration
certificate or the interim registration certificate for agricultural
chemicals.

    (3) Anyone who produces or markets agricultural chemical products not
having labels attached to the packages, or those having incomplete or unclear
labels on product packages, or those having contents in the labels altered,
shall be given a warning, with the illegal gains confiscated, and may be
concurrently fined not more than three times the amount of the illegal gains.
If there is no illegal gain, the offender shall be concurrently fined not
more than RMB 30,000 Yuan.

    (4) Anyone who, in using agricultural chemicals, fails to conform to the
relevant state provisions regarding safe use of agricultural chemicals, shall
be given a warning and may be concurrently fined not more than RMB 30,000
Yuan.

    Whoever commits the act described in Item (4) of the preceding paragraph
shall, if a crime has been constituted, be investigated for criminal
responsibility according to law.

    Article 40  Whoever commits any of the following acts shall be penalized
by the chemical industry department of the people’s government at or above
the provincial level according to the following provisions:

    (1) Anyone who establishes an agricultural chemicals producing enterprise
without approval, or produces agricultural chemicals without a production
licence or an approval document for production of agricultural chemicals,
shall be ordered to stop production and, with the illegal gains
confiscated, concurrently fined more than 100% and less than ten times of
the amount of the illegal gains. If there is no illegal gain, the offender
shall be fined not more than RMB 100,000 Yuan.

    (2) Anyone who, in producing agricultural chemicals, fails to conform to
the provisions in the production licence or the approval document for
production of agricultural chemicals, shall be ordered to stop production
and, with the illegal gains confiscated, concurrently fined more than
100% and less than five times of the amount of the illegal gains. If there
is no illegal gain, the offender shall be concurrently fined not more than RMB
50,000 Yuan. If the circumstances are serious, the organ that issued the
licence or the approval document shall revoke the production licence or the
approval document for production of agricultural chemicals.

    Article 41  If anyone fa

CIRCULAR OF THE STATE COUNCIL CONCERNING FURTHER STRENGTHENING THE ADMINISTRATION OF SHARE ISSUANCE AND LISTING OVERSEAS

Category  SECURITIES Organ of Promulgation  The State Council Status of Effect  In Force
Date of Promulgation  1997-06-20 Effective Date  1997-06-20  


Circular of the State Council Concerning Further Strengthening the Administration of Share Issuance and Listing Overseas



(June 20, 1997)

    The State Council and the competent department for securities under the
State Council have expressly instituted policies concerning share issuance and
listing overseas by a series of regulations and official documents since 1992.
However, for a period of time of late, there are some institutions and
enterprises which have, in violation of provisions, transferred domestic
assets in various forms overseas for listing shares without approval,
resulting in harmful effects. Issuing and listing shares overseas is a
policy-intensive work which must be carried out step by step in an organized
way and in accordance with the relevant state provisions. In view of the
current problems in share listing overseas and for the purpose of further
strengthening the administration to ensure order in share issuance
and listing overseas, the relevant questions are hereby notified as follows:

    1. Any overseas listed company registered in a foreign country and held
by a Chinese shareholder(s) (including in the case where a Chinese shareholder
is the largest one, the same below) (hereinafter referred to as “an overseas
Chinese-holding listed company”) shall subject itself to the supervision and
regulation of the local securities supervisory and regulatory organ when
engaging in activities such as capital-dividing for listing shares and
increase in issuance of shares. However, the share-holding unit(s) inside the
country of the Chinese shareholder(s) should report the case to the China
Security Supervisory and Regulatory Commission for the record afterwards and
shall strengthen the supervision and administration over the share ownership.

    2. Local laws are applicable where a Chinese invested non-listed
company or a Chinese-holding listed company which has entered into
registration overseas applies overseas for issuing and listing
shares with its overseas assets or its domestic assets which are formed from
its overseas assets invested in China and have been in its actual possession
for over three years. However, the share-holding unit(s) inside the country
should obtain consent in advance from the provincial people’s government or
the competent department under the State Council based on its subordination
thereto. For domestic assets in its possession for not more than three years,
the company shall not apply for share issuance and listing overseas. In the
case of special requirements, a report thereon shall be submitted to the China
Securities Supervisory and Regulatory Commission for verification and then
subject to the examination and approval of the State Council Securities
Commission. After the listing has been completed, the share-holding unit(s)
inside the country should report the relevant details to the China Securities
Supervisory and Regulatory Commission for the record.

    3. Where assets of an internal enterprise are to be transferred to an
overseas Chinese invested non-listed company or an overseas Chinese-holding
listed company by purchase, exchange of shares, allocation or by any other
means for listing shares overseas, or where domestic assets are to be first
transferred to an overseas Chinese invested non-listed company and then
injected into an overseas Chinese-holding listed company for listing shares
overseas, the internal enterprise or the share-holding unit(s) inside the
country of the Chinese shareholder(s) should obtain in advance consent from
the provincial people’s government or the competent department under the State
Council based on its subordination thereto, then report to the China
Securities Supervisory and Regulatory Commission for verification, and
thereafter subject it to the examination and approval of the State Council
Securities Commission in accordance with the state industrial policies, the
relevant provisions of the State Council and the total volume for the year.

    4. In reiteration of the spirit contained in the provisions of the
Circular of the State Council Concerning Suspending the Purchase of Overseas
Enterprises and Further Strengthening the Administration of Overseas
Investment (Guo Fa [1993] No.69), internal institutions and enterprises are
prohibited from listing their shares through shell firms by purchasing
share-holding rights of overseas listed companies.

    5. Violations of the aforesaid provisions shall be treated and punished as
issuing of shares without authorization. Persons in charge of the competent
departments held responsible for such violations shall be given administrative
sanctions by the department concerned. Persons in charge of a violating unit
and other persons directly responsible shall be removed from their posts or
even expelled therefrom by the department at the next higher level than the
unit. Those who commit crimes shall be transferred to the judicial organs and
investigated for criminal responsibility according to law. Violating units,
intermediary agencies involved and violators shall be penalized by the China
Securities Supervisory and Regulatory Commission in accordance with the
provisions of the Provisional Regulations on the Administration of Share
Issuance and Trading and other relevant provisions.

    All localities and departments shall, in strict accordance with the
provisions of this Circular, take practical and effective measures to exercise
supervision on its subordinate enterprises for the earnest implementation of
the relevant state laws and policies. Internal enterprises should take direct
listing of shares as the main form in which they seek funds on the overseas
securities market. The State Council Securities Commission shall continue to
direct this work well and select state-owned enterprises which conform to the
state industrial policies and overseas listing requirements to list shares
directly overseas.

    This Circular shall come into effect as of the date of promulgation.





REGULATIONS ON THE PROTECTION OF NEW VARIETIES OF PLANTS

Category  AGRICULTURE, FORESTRY AND METEOROLOGY Organ of Promulgation  The State Council Status of Effect  In Force
Date of Promulgation  1997-03-20 Effective Date  1997-10-01  


Regulations of the People’s Republic of China on the Protection of New Varieties of Plants

CHAPTER I  GENERAL PROVISIONS
CHAPTER II  CONTENT AND OWNERSHIP OF VARIETY RIGHTS
CHAPTER III  CONDITIONS FOR THE GRANT OF VARIETY RIGHTS
CHAPTER IV  APPLICATION FOR VARIETY RIGHTS AND RECEITPT THEREOF
CHAPTER V  EXAMINATION AND APPROVAL OF VARIETY RIGHTS
CHAPTER VI  TERM, TERMINATION AND NULLITY OF VARIETY RIGHTS
CHAPTER VII  SUPPLEMENTARY PROVISIOINS

(Promulgated by Decree No.213 of the State Council of the People’s

Republic of China on March 20,1997)
CHAPTER I  GENERAL PROVISIONS

    Article 1  These Regulations are enacted to protect the rights in new
varieties of plants, to encourage the breeding and use of new varieties of
plants, and to promote the development of agriculture and forestry.

    Article 2  The new variety of plant referred to in these Regulations,
means a cultivated variety, or a developed one based on a discovered wild
plant, which possesses novelty, distinctness, uniformity and stability, and
which is designated by an adequate denomination.

    Article 3  The administrative departments of agriculture and forestry
under the State Council(hereinafter referred generally to as the “examining
and approving authorities”) are jointly responsible, according to the
division of their responsibilities, for the receipt and examination of
application for rights in new varieties of plants(hereinafter referred to
as “variety rights”), and for the grant of variety rights for those that
conform to the provisions of these Regulations.

    Article 4  Any entity which or any person who has accomplished the
breeding of a new variety that has a bearing on the national interests or the
public interests, and is of great value for use, he or it shall be rewarded
by the People’s Governments above county level or the relevant departments
under them.

    Article 5  The production, sale and dissemination of a new variety for
which a variety right has been granted (hereinafter referred to ad the
“protected variety”) is subject to review and approval in accordance with the
provisions of relevant laws and regulations on seeds.
CHAPTER II  CONTENT AND OWNERSHIP OF VARIETY RIGHTS

    Article 6  The entity which or the person who has accomplished the
breeding enjoys an exclusive right on his or its protected variety. Except
otherwise provided in these Regulations, no other entities or persons shall,
without the authorization of the owner of the variety right (hereinafter
referred to as the “variety right owner”), produce or sell for commercial
purposes the propagating material of the said protected variety, or use
repeatedly for commercial purposes the propagating material of the said
protected variety in the production of the propagating material of another
variety.

    Article 7  For service breeding accomplished by any person in execution
of the tasks of the entity to which he belongs, or mainly by using the
facilities of that entity, the right to apply for a variety right shall
belong to the entity in question; for non-service breeding, the right to
apply for such a variety right shall belong to the person accomplishing the
breeding. Upon approval of the application, the variety right shall belong
to the applicant.

    For commissioned breeding or jointly conducted breeding, the ownership of
the variety right shall be agreed upon by the parties concerned in
a contract; lacking of such a contract, the variety right shall belong to
the entity which or person who commissioned to conduct or jointly conducted
the breeding.

    Article 8  One new variety shall be granted only one set of variety
right. Where two or more applicants apply separately for the variety right
for the same new variety , the variety right shall be granted to the person
whose application file first; in the case of simultaneous applications, the
variety right shall be granted to the person who has first accomplished the
breeding.

    Article 9  The right to apply for a variety right and the variety right
in respect of a new variety  may be assigned according to the law.

    Any assignment, by a Chinese entity or person, of the right to apply for
a variety right or the variety right of the new variety bred in China, to a
foreigner, must by approved by the examining and approving authorities.

    Any assignment within China, by a state-owned entity, of the right to
apply for variety right or of the variety right, must be submitted in the
light of the relevant national provisions for approval by the competent
administrative departments concerned.

    Article 10  Without prejudice to other rights of the variety right owner
under these Regulations, the exploitation of the protected variety may not
require authorization from, or payment of royalties to, the variety right
owner for the following purposes:

    (a) exploitation of the protected variety for breeding and other
scientific research activities;

    (b) the use by farmers for propagating purposes, on their own holdings,
of the propagating material of the protected variety which they have obtained
by planting on their own holdings.

    Article 11  The examining and approving authorities may, in the national
interests or the public interests, make decision to grant compulsory licenses
to exploit new varieties of plants, which shall be registered and announced.

    The entity which or the person who is granted a compulsory license for
exploitation shall pay to the variety right owner a reasonable exploitation
fee, the amount of which shall be fixed by both parties in consultation.
Where the parties fail to reach an agreement, the examining and approving
authorities shall adjudicate.

    Where the variety right owner is not satisfied with the decision to grant
a compulsory license for exploitation or is not satisfied with the
adjudication regarding the fee payable for exploitation, he or it may, within
3 months from the date of receiving the notification, institute legal
proceedings in the People’s Court.

    Article 12  Regardless of whether or not the term of protection of the
protected variety has expired, the denomination of the protected variety as
used in its registration must be used for sales thereof.
CHAPTER III  CONDITIONS FOR THE GRANT OF VARIETY RIGHTS

    Article 13  The new variety for which a variety right has been applied
for shall be under the plant genera and species included in the national list
of protected plant genera and species. This list of protected plant genera
and species shall be determined and announced by the examining and approving
authorities.

    Article 14  Any variety for which a variety right may be granted shall
possess novelty. Novelty means that, at the date of filing of the application
for a variety right, the propagating material of the new variety has not been
sold, or with the authorization of the breeder, within the territory of
China, earlier than 1 year before that date; in a territory other than China,
earlier than 4 years , or in the case of vines, forest trees, fruit trees and
ornamental plants, earlier than 6 years.

    Article 15  Any variety for which a variety right may be granted shall
possess distinctness. Distinctness means that, the variety for which a
variety right is applied for must be clearly distinguishable from any other
variety whose existence is a matter of common knowledge at the time of the
application.

    Article 16  Any variety for which a variety right may be granted shall
possess uniformity. Uniformity means that the variety for which a variety
right is applied for is sufficiently uniform in its relevant features or
characteristics after propagation, subject to variation that may be expected
from the particular features of its propagation.

    Article 17  Any variety for which variety right may be granted shall
possess stability. Stability means that the variety for which a variety right
is applied for keeps its relevant features or characteristics unchanged after
repeated propagation or at the end of a particular cycle of propagation.

    Article 18  Any variety for which variety right may be granted shall have
an adequate denomination, which shall be distinguishable from that for any
other known variety of the same or similar plant genera or species. The
denomination, after its registration, shall be the generic designation of
the new variety in question.

    The following shall be avoided in the selection of a denomination for
a new variety:

    (a) those consisting of only numbers;

    (b) those violating social morals;

    (c) those that are liable to mislead or to cause confusion concerning
the features or characteristics of the new variety, or identity of the
breeder.
CHAPTER IV  APPLICATION FOR VARIETY RIGHTS AND RECEITPT THEREOF

    Article 19  Where any Chinese entity or person applies for a variety
right, he or it may file an application with the examination and approving
authorities directly or through an agency commissioned for the purpose.

    Where the new variety for which a Chinese entity and person applies for
a variety right involves security or other vital interests of the state and
therefore requires to be kept confidential, it shall be dealt with in
accordance with the relevant prescriptions of the state.

    Article 20  Where any foreigner ,foreign enterprise or any other foreign
institution files an application for a variety right in China, the
application shall be under these Regulations in accordance with any agreement
concluded between the country to which the applicant belongs and the People’s
Republic of China, or in accordance with any international convention to
which both countries are party, or on the basis of the principle of
reciprocity.

    Article 21  For the purpose of applying for a variety right, an
application, specification and photographs of the variety conforming to the
prescribed forms shall be submitted to the examining and approving
authorities.

    The application documents shall be written in Chinese.

    Article 22  The date on which the examining and approving authorities
receive the application documents shall be the date of filing. If the
application is sent by mail, the date of mailing indicated by the postmark
shall be the date of filing.

    Article 23  Where, within 12 months from the date on which any applicant
has first filed in a foreign country an application for a variety right, the
said applicant files an application for a variety right in China for the same
new variety, he or it may, in accordance with any agreement concluded between
the said foreign country and the People’s of Republic of China, or in
accordance with any international treaty to which both countries are party,
or on basis of the principle of mutual recognition of the right of priority,
enjoy a right of priority.

    Any applicant who claims the right of priority shall make a written
statement when the application is filed, and submit, within 3 months, a copy
of the variety right application that was first filed, as confirmed by the
original receiving authority; if the applicant fails to make the written
statement or fails to submit a copy of the application according to the
provisions of these Regulations, the claim to the right of priority shall be
deemed not to have been made.

    Article 24  Where the variety right application conforms to Article 21
of these Regulations, the examining and approving authorities shall accept
it, establish the date of filing, assign a filing number and serve a notice
on the applicant within 1 month from the receipt of the application to pay
an application fee.

    Where the variety right application dose not, or after amendment still
does not, conform to Article 21 of the Regulations, the examining and
approving authorities shall not accept it and shall notify the applicant
accordingly.

    Article 25  An applicant may amend or withdraw his or its variety right
application at any time before the variety right is granted.

    Article 26  Any variety right application, filed by a Chinese entity or
person with a foreign county for a new variety bed in China, shall be
registered before the examining and approving authorities.
CHAPTER V  EXAMINATION AND APPROVAL OF VARIETY RIGHTS

    Article 27  Upon payment of the application fee, the examining and
approving authorities shall carry out a preliminary examination on the
variety right application of the following items:

    (a) whether it is under the plant genera or species included in the list
of protected plant genera or species;

    (b) whether it conforms to the provisions of Article 20 of these
Regulations;

    (c) whether it conforms to the provisions on novelty;

    (d) whether the denomination of the new variety is adequate.

    Article 28  The examining and approving authorities shall complete the
preliminary examination within 6 months from the date that the variety right
application is accepted. Where the variety right application is found
acceptable on preliminary examination, the examination and approving
authorities shall have it announced and serve a notice on the applicant to
pay the examination fee within 3 months.

    where the variety tight application is found unacceptable on preliminary
examination, the examining and approving authorities shall invite the
applicant to state his observations or make amendments; where an applicant
fails to respond within the time limit or the application is still
unacceptable after amendment, the application shall be refused.

    Article 29  After the applicant has paid the prescribed examination fee,
the examining and approving authorities shall carry out a substantive
examination on the distinctness, uniformity and stability of the variety
right application.

    Where the applicant has not paid the prescribed examination fee, the
variety rights application shall be deemed to have been withdrawn.

    Article 30  The examining and approving authorities shall conduct the
substantive examination the basis of application documents and other relevant
written information. Where they deem it necessity, the examining and
approving authorities may entrust a designated testing institution with
undertaking tests or may inspect the results of breeding or other trials
that have already been carried out.

    For the purposes of examination, the applicant shall, at the request of
the examining and approving authorities, furnish necessary information and
the propagating material of the variety in question.

    Article 31  Where the variety right application is found to be in
conformity with the provisions of these Regulations, the examining and
approving authorities shall make a decision to grant the variety right, issue
the variety right post_title, and have it registered and announced.

    Where, after substantive examination, the variety right application is
found not to be in conformity with the provisions of these Regulations, the
examining and approving authorities shall refuse the application and notify
the applicant accordingly.

    Article 32  The examining and approving authorities shall setup Variety
Right Re-examination Boards.

    Where any applicant is not satisfied with the decision of the examining
and approving authorities refusing the variety right application, that
applicant may, within 3 months from the date of receiving the notification,
request the Variety Right Re-examination Board to carry out a re-examination.
The Variety Right Re-examination Board shall, within 6 months from the date
of receiving the request for re-examination, make a decision and notify the
applicant accordingly.

    Where any applicant is not satisfied with the decision of the Variety
Right Re-examination Board, that applicant may, within 15 days from the date
of receiving the notification, institute legal proceedings in the People’s
Court.

    Article 33  After the variety right has been granted, any entity which or
person who, during the period beginning from the date on which an acceptable
application is announced on preliminary examination and ending on the date of
grant of variety rights, had produced or sold the propagating material of the
variety in question for commercial purposes without his authorization of the
variety right owner, the variety right owner is enpost_titled to claim
compensation.
CHAPTER VI  TERM, TERMINATION AND NULLITY OF VARIETY RIGHTS

    Article 34  The term of protection of a variety right, counted from the
date of grant thereof, shall be 20 years for vines, forest trees, fruit trees
and ornamental plants and 15 years for other plants.

    Article 35  The variety right owner shall pay an annual fee from the year
in which the variety right is granted, and shall furnish propagating material
of the protected variety for the purposes of testing as required by the
examining and approving authorities.

    Article 36  The variety right shall be terminated prior to its expiration
in any of the following cases:

    (a) where the variety right owner makes a written statement renouncing
his or its variety right;

    (b) where the variety right owner has not paid the annual fee as
prescribed;

    (c) where the variety right owner has not furnished, in the manner
required by the examining and approving authorities, such propagating
material of the protected variety necessary for testing;

    (d) where, on testing, the protected variety no longer conforms to the
features and characteristics that existed at the time of the grant of the
variety right.

    The termination of the variety right shall be registered and announced
by the examining and approving authorities.

    Article 37  From the date on which the examining and approving
authorities announce the grant of any variety right, the Variety Right
Re-examination Board may, ex officio or on the basis of a written request
made by any entity or person, declare the variety right null and void, when
the variety is not in conformity with the provisions of Articles 14, 15, 16
and 17 of these Regulations; or change the denomination of any variety that
is not in conformity with the provisions of Article 18 of these Regulations.
The decision of nullity of the variety right and the decision to change the
denomination shall be registered and announced by the examining and approving
authorities, and shall be notified to the parties concerned.

    Where any party is not satisfied with the decision of the Variety Right
Re-examination Board, he or it may, within 3 months from the date of
receiving such notification , institute legal proceedings in the People’s
Court.

    Article 38  Any variety right that has been declared null and void shall
be deemed non-existent from the outset.

    The decision of nullity of a variety right shall have no retroactive
effect on any judgment or order on variety right infringement pronounced and
enforced by the People’s Court, or on any decision on variety right
infringement made and enforced by the administrative departments of
agriculture and forestry of the People’ Governments above provincial level,
or on any executed license contract for exploitation of a new variety or any
executed contract of assignment of a variety right. However, any damage
caused to any other person in bad faith on the part of the variety right
owner shall be equitably compensated.

    If, pursuant to the provisions of the preceding paragraph, no repayment
of the fees for the exploitation of the new variety or of the price for the
assignment of the variety right, is made by the variety right owner or the
assignor of the variety right to the licensee or the assignee, which is
obviously contrary to the principle of equity, the variety right owner or
the assignor of the variety right shall repay the whole or part of the
exploitation fee or of the assignment fee to the licensee or the assignee.

    Article 39  Where the propagating material of the protected variety is
produced or sold for commercial purposes without the authorization of the
variety right owner, the variety right owner or the party having an interest
therein may, request the administrative departments of agriculture and
forestry of the People’s Governments above provincial level to handle it in
accordance with their respective competence, or directly institute legal
proceedings in the People’s Court.

    The administrative departments of agriculture and forestry of the
people’s Governments above provincial level may, according to their
respective competence and based on the principle of free will of the parties,
mediate the compensation of damages caused by the infringement. Where accord
has been reached through mediation, it should be executed by the parties
concerned; where no accord has been reached through mediation, the variety
right owner or the party having an interest therein may institute legal
proceedings in the People’s Court according to civil action procedures.

    In handling cases of variety right infringements in accordance with their
respective competence, the administrative departments of agriculture and
forestry of the People’s Governments above provincial level may, for the
purposes of safeguarding the public interests, order the infringer to stop
the infringing act, confiscate the unlawful earnings and impose a fine not
exceeding five times of the unlawful earnings.

    Article 40  Where any variety counterfeits as a protected variety, the
administrative departments of agriculture and forestry of the People’s
Governments above county level shall order the party concerned to stop the
counterfeiting act, confiscate the unlawful earnings and the propagating
material of the variety, and impose a fine at least one time but not
exceeding five times of the unlawful earnings; where the circumstances of
the case are so serious as to constitute a crime, the party concerned shall
be subjected to criminal liability in accordance with the law.

    Article 41  The administrative departments of agriculture and forestry
of the People’s Governments above provincial level in handling cases
concerning variety right infringements in accordance with their respective
competence, and the administrative departments of agriculture and forestry
of the People’s Governments above county level in handling cases concerning
counterfeiting protected variety in accordance with their respective
competence, may, as necessary, seal up or detain the propagating material
of the variety relevant to the cases, have access to, make copies of and
seal up contracts, account books and other relevant documents related to
the cases.

    Article 42  Where the protected variety is sold without using its
registered denomination, the administrative departments of agriculture and
forestry of the People’s Governments above county level shall, in accordance
with their respective competence, order a correction within a specified
period, and may impose a fine not exceeding 1,000 Yuan.

    Article 43  Where disputes arises as to the right to apply for a variety
right and the ownership of the variety right, the parties concerned may
institute legal proceedings in the People’s Court.

    Article 44  Where any staff member of the administrative departments of
agriculture and forestry of the People’s Governments above county level and
of other relevant departments abuses his power, neglects his duty, engages in
any malpractice for private gain, or extorts or receives bribes, he shall be
subjected to criminal liability in accordance with the law if he is guilty of
a crime; or he shall be punished with disciplinary sanctions in accordance
with the law if he is not guilty of a crime.
CHAPTER VII  SUPPLEMENTARY PROVISIOINS

    Article 45  The examining and approving authorities may provide for
flexible provision on the conditions of novelty for the plant genera or
species first included in the list of protected plant genera and species
before the entry into force of these Regulations or for ones newly included
in the list after the entry into force of these Regulations.

    Article 46  These Regulations shall enter into force as from October 1,
1997.





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NOTES (1) The enacting clause was repealed by the Statute Law Revision Act, 1893, 56-57 Vict., c. 14 (U.K.). It read as...

CONSTITUTION ACT, 1982 – page 21

CONSTITUTION ACT, 1982 – page 20

CONSTITUTION ACT, 1982 – page 19

CONSTITUTION ACT, 1982 – page 18

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