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CIRCULAR OF CHINA SECURITIES REGULATORY COMMISSION AND THE STATE ADMINISTRATION OF FOREIGN EXCHANGE ON ISSUES CONCERNING INDIVIDUAL DOMESTIC RESIDENTS’ INVESTMENT IN FOREIGN CURRENCY STOCKS LISTED IN THE DOMESTIC STOCK MARKETS

The China Securities Regulatory Commission

Circular of China Securities Regulatory Commission and the State Administration of Foreign Exchange on Issues Concerning Individual
Domestic Residents’ Investment in Foreign Currency Stocks Listed in the Domestic Stock Markets

ZhengJianFa [2001] No.22

February 21,2001

All the Securities Regulatory Offices, Sub-Offices, Representative Offices; all the branches, Beijing and Chongqing Departments of
State Administration of Foreign Exchange (“SAFE”); Shanghai and Shenzhen Stock Exchanges; all the commercial banks, securities companies
and investment trust companies:

To promote the sound development of foreign currency stocks listed in the domestic stock markets (hereinafter referred to as “B shares”),
maintain the normal operation of both the B shares and foreign exchange markets, safeguard the legal rights of the investors and
regulate the conduct of the participants in the stock market, this notice has been thus made by the China Securities Regulatory Commission
(hereinafter referred to as “CSRC”) to the following issues:

1.

Pursuant to Article 4 of the Provisions of the State Council on Foreign Currency Stocks Listed in the Domestic Stock Market Issued
by Joint Stock Limited Companies (Decree No.189 of the State Council, 1995] and the decision made by CSRC on February 19, 2001 concerning
the approval of domestic residents’ investment in the B Share market, individual domestic residents may, adhering to this notice,
invest in the B shares.

2.

Before June 1, 2001, domestic residents who intend to invest in the B shares, can only use the foreign exchange account and foreign
currency account which had been deposited in domestic commercial banks before the date of February 19, 2001 (February 19 included
and the same hereinafter). Nevertheless, those foreign currencies either in cash or transacted from other sources rather than from
the foreign currency deposit accounts as aforementioned will not be allowed to invest in the B shares. The foreign currency that
had been deposited before February 19, 2001 in domestic commercial banks and the deposit referred upon the expiration date is allowed
to invest in the B shares. After June 1, 2001, domestic residents are allowed to invest in the B shares with foreign currencies which
should be deposited after February 19,2001 or remitted from abroad to the Chinese domestic commercial banks. Foreign currencies in
cash, however, still will not be allowed to invest in B-share market as aforementioned.

3.

Security companies and trust investment companies which bear the authorization of CRSC to engage in B shares transactions and the
authorization of SAFE to handle foreign currencies may carry the certificates produced by the CSRC for operating the B shares and
the licenses authorized by the State Bureau of Foreign Exchange for managing foreign currencies to open B share guarantee accounts
at all the domestic commercial banks and their branches which bear the authorization to manage foreign currencies in the same city.
The branches of the aforementioned securities companies and investment trust companies may open the guarantee accounts by producing
copies of the aforementioned certificates and licenses issued to the companies, on which the official seals of the branches shall
be set. Securities companies or investment trust companies or their branches (hereinafter referred to as “securities operating institutions”)
can open only one B share guarantee account within one domestic commercial bank within the same area, and under no circumstances,
should securities operating institutions open more than one B share guarantee account in one domestic commercial bank within the
same area. Securities operating institutions should, within three working days after the opening of the account, submit the name
of the bank of the deposit to SAFE or its local branches (“Foreign Exchange Bureau”) to be put on file and disclose the information
about their guarantee accounts to the public via mess media.

4.

Domestic residents who intend to open B share accounts should go through the following proceedings:

Individuals may, bearing their legal ID documents, have their foreign currencies transferred from their original deposit accounts
into the B share guarantee accounts opened by the securities operating institutions. Personal IDs are required for such transactions.
Presently such transactions are restricted to the same kind of bank and the same city. Domestic commercial banks should produce entry
vouchers to individuals for their money transference, and should deliver the statement of account to the securities operating institutions.

Individuals then may bring their legal IDs and entry vouchers of the transferred foreign currencies to the securities opening institutions
to open B share capital accounts. The minimum B share account opening balance is 1,000.00 US dollars or the equivalent.

Upon opening the B share capital accounts, individuals may open their B share securities accounts with the said securities operating
companies.

5.

Domestic commercial banks should, when handling with transference of foreign currency for domestic residents, strictly abide by the
rules prescribed in this notice to check the deposit dates and transferred currency. Before June 1, 2001, when domestic residents
transfer foreign currency from their certified deposit, the foreign currency should be deposited before February 19, 2001. When domestic
residents transfer foreign currency from the current deposit, the amount should not be over the balance of the accounts before February
19, 2001. When domestic residents make the transactions, the foreign currency should be converted into the same kind of currency
as the B share guarantee account held by the securities operating institutions.

6.

The profit of the B share capital accounts for domestic residents should include the profit of the foreign currency being transferred
from foreign exchange account or foreign currency accounts, and the profit from B share trading. The cost should include the foreign
currency spent for buying B-share stocks or transferring back to domestic commercial banks. Nevertheless, foreign currency in B-share
capital account is not allowed to be transferred to foreign countries. All the foreign currencies transferred from B share capital
accounts to their deposit accounts within domestic commercial banks shall be deemed foreign currency within the country and be subjected
to the “The Interim Rules on Foreign Currency Regulations of Individual Domestic Residents” and other applicable rules. Domestic
residents shall not withdraw foreign currency cash from their B share capital accounts at anytime.

7.

The profit of B share accounts for non-residents shall include foreign currency being transferred from abroad, foreign currency legally
deposited with domestic commercial banks and profit from the B-share trading. The cost should include the cost of the foreign currency
being transferred abroad, or the foreign currency being deposited in their legal accounts within domestic commercial banks and/or
the foreign currency spent for B share trading. Non-residents shall not withdraw foreign currency cash from their B share accounts.

8.

Transference of B share between domestic residents and non-residents is forbidden. Domestic residents shall not entrust their B share
holdings to the entities outside of main land China.

9.

All domestic commercial banks, having opened B share guarantee accounts for the securities operating institutions, are permitted to
manage foreign currency payment and settlement which are associated to B-share trading between the securities operating companies
and securities registration and settlement companies, and between the securities operating companies and their branches.

10.

All securities operating institutions, domestic commercial banks, domestic residents, non-residents shall strictly abide by the rules
prescribed in this notice and other relevant rules and regulations issued by the CSRC and the SAFE concerning B share trading, in
order to avoid transferring foreign exchange abroad and illegal trading of foreign currencies. Those who breach the rules and regulations
shall be subject to CSRC and SAFE’s punishments stipulated by the relevant rules and regulations.

11.

This notice shall enter into force as of February 21, 2001. Securities operating institutions may open B share guarantee accounts
in domestic commercial banks from the effective date of this notice. Nevertheless, domestic residents shall not transfer foreign
currency for the purpose of opening B share capital accounts until February 26, 2001. “The Circular on Issues related to Strict Control
of Opening B Share Accounts” (ZhengJianFaZi [1996] No. 75) and “The Circular of Clearing up B Share Accounts” (ZhengJianJiaoZi [1996]
No. 1) of CSRC shall be nullified at the same time as this notice enters into force.



 
The China Securities Regulatory Commission
2001-02-21

 






INTERIM GENERAL RULES CONCERNING INSPECTION OF ENTRY AND EXIT TRAINS, TRAIN CREW, PASSENGERS AND LUGGAGE

Category  PUBLIC SECURITY Organ of Promulgation  The Government Administration Council Status of Effect  In Force
Date of Promulgation  1951-05-24 Effective Date  1951-05-24  


Interim General Rules Concerning Inspection of Entry and Exit Trains, Train Crew, Passengers and Luggage



(Promulgated by the Government Administration Council on May 24, 1951)

    1. These General Rules are formulated to unity the inspection work
relating to the entry and exit trains, train crew, passengers, luggage, and
articles passengers carry along in order to ensure the safety of driving, to
maintain the public order in the border areas, to prevent epidemic diseases
from spreading, and to suppress smuggling.

    2. The following government organs shall, in accordance with their
respective competent scope of operations, carry out inspections, at stations
in the country’s border areas, of the entry and exit trains, train crew,
passengers, luggage, and articles passengers carry along.

    (1) Public security organs: It shall be responsible for inspecting
passengers’passports and other certificates, for safeguarding the operations
on trains, and for maintaining the public order in the country’s border areas;
shall work in cooperation with the Customs Office in inspecting trains, train
crew, passengers, luggage, and articles passengers carry along; and, when
necessity arises, shall inspect certain suspicious passengers separately.

    (2) Quarantine organs: It shall be responsible for inspection and
prevention of diseases and epidemic diseases on trains and among train crew
and passengers.

    (3) Customs offices: It shall be responsible for inspecting trains, train
crew, passengers, luggage, and articles passengers carry along, for smuggled
goods; and when necessary, it shall inspect passengers suspicious of smuggling
individually.

    Other government organs, unless specially authorized by the Government
Administration Council, are not permitted to conduct inspections.

    3. To carry out the inspection of the entry and exit trains, train crew,
passengers, luggage, and articles passengers carry along, the railway
authorities shall notify all inspection units concerned to effect a
coordinated inspection at a specified time in accordance with the stipulations
in the preceding article; if no special situation occurs, the inspection shall
be made, in principle, just once.

    4. In principle, inspections are not carried out on board the trains; when
necessity arises, however, a coordinated inspection shall be carried out on
board the trains by the public security organ, the Customs office and the
quarantine organ; the working procedures for such a coordinated inspection
shall be worked out by the organs concerned through consultation.

    5. The inspection of foreign diplomatic personnel shall be carried out in
accordance with the pertinent provisions promulgated by the Ministry of
Foreign Affairs under the Central People’s Government.

    6. In principle, inspections are not carried out on board the domestic
trains, except by the public security organ; however, inspections shall be
carried out by the organs concerned through the railway authorities under
either of the following two circumstances:

    (1) when trains running from or to epidemic-stricken areas, or when
epidemic cases or deaths from epidemic diseases occur on the train, and the
quarantine organ considers it necessary to make an inspection;

    (2) when the train is running close to border area where smuggling is
rampant, or when suspicious cases of smuggling arise and the Customs office
considers it necessary to make an inspection.

    7. At all stations on the country’s borders, the public security organ
shall be responsible for calling and presiding over regular meetings on the
coordination in inspection work; and all organs concerned shall discuss
problems that crop up during the inspections, and exchange views on how to
coordinate their actions, to work in close cooperation under division of
competence, and to simplify operative procedures.

    8. Government inspection personnel shall wear uniforms and the badges and
armbands issued by their respective organs.

    9. The term inspection, as mentioned in these General Rules, refers to the
inspection provisions lists in the various items in Article 2 of these General
Rules. Other Provisions of inspection, such as the control of cargo shipment
and the inspection and examination of goods for taxation as executed by the
Customs office, shall be executed by various organs concerned in accordance
with the existing relevant provisions.

    10. All the inspection organs concerned under the Central Government
shall, in accordance with their respective competent scope of operations, send
immediately to the Ministry of Railways the regulations and decrees concerning
the prohibitions, restrictions and bans to be imposed on the railway
transportation of passengers and cargos; and the same procedure shall be
followed when amendments are made.

    11. These General Rules shall go into effect after their promulgation by
the Government Administration Council. If any former inspection procedures
adopted in various regions conflict with these General Rules, the former shall
be abolished.





PROCEDURES OF THE CUSTOMS OF THE PEOPLE’S REPUBLIC OF CHINA FOR THE SUPERVISION OF SMALL VESSELS FROM AND TO HONG KONG AND MACAO

RULES GOVERNING SUPERVISION & CONTROL OVER EXPORTATION OF EXHIBITION GOODS BY THE CUSTOMS OF THE PEOPLE’S REPUBLIC OF CHINA

ENVIRONMENTAL PROTECTION LAW OF THE PEOPLE’S REPUBLIC OF CHINA

PROVISIONAL REGULATIONS OF THE BANK OF CHINA OF FOREIGN EXCHANGE CERTIFICATE

RESOLUTION OF THE STANDING COMMITTEE OF THE NATIONAL PEOPLE’S CONGRESS ON APPROVING THE INTERIM PROVISIONS OF THE STATE COUNCIL FOR VETERAN CADRES TO LEAVE THEIR POSTS IN ORDER TO REST

Resolution of the Standing Committee of the National People’s Congress on Approving the Interim Provisions of the State Council for
Veteran Cadres to Leave Their Posts in Order to Rest*
(Adopted on September 29, 1980)

____________________ 

*Lixiu ganbu, or “cadres who leave their posts in order to rest,” refers to a specific group of cadres who retire with preferential
treatment. — Trans. 

 

The 16th Meeting of the Standing Committee of the Fifth National People’s Congress decides to approve the Interim Provisions of the
State Council for Veteran Cadres to Leave Their Posts in Order to Rest, which shall be promulgated for implementation by the State
Council. 

Appendix: 

Interim Provisions of the State Council for Veteran Cadres to  

Leave Their Posts in Order to Rest 

(Approved at the 16th Meeting of the Standing Committee of the National People’s Congress on September 29, 1980 and promulgated by
the State Council for implementation on October 7, 1980) 

Through many years of arduous struggle and hard work in revolution and socialist construction, our veteran cadres have made significant
contributions to the country and the people.  They are valuable assets to the Party and the State.  However, as they are
advancing in age, more and more of them are becoming unable to carry on their  regular work. Following the Party’s and the State’s
tradition of showing concern for and taking good care of veteran cadres, the aged and infirm veteran cadres who can no longer do
regular work are being allowed to leave their posts in order to rest (hereinafter referred to as “veteran cadres”), while being held
in high esteem politically and having their well-being well looked after. This is an important measure for the reform and improvement
of our country’s cadre system and an embodiment of the superiority of the socialist system.  It not only benefits the health
of the veteran cadres while enabling them to continue to play a useful role but also facilitates the promotion and growth of younger
cadres.  Hence, the following provisions are formulated. 

Article 1  Aged and infirm cadres in the following categories who can no longer do regular work shall leave their posts in order
to rest: those who joined the revolution during the First or the Second Revolutionary Civil War period; those who joined the revolution
during the War of Resistance Against Japanese Aggression  and now hold a post of deputy county head or other post corresponding
to deputy county head or whose rank is Grade 18 or higher; and those who joined the revolution before the founding of the People’s
Republic of China and now hold a post of deputy prefectural commissioners or other post corresponding to deputy prefectural commissioners
or whose rank is  Grade 14 or higher. 

Cadres who have already retired but meet the qualifications mentioned above shall likewise be treated as veteran cadres. 

Article 2  Approval for cadres to leave their posts in order to rest shall be obtained by their work units from the relevant
departments with the power of appointment and removal of such cadres.  

Article 3  After leaving his post, a veteran cadre shall in general be helped to settle in the locality where he has been working
or in his native place or in the place where his spouse lives. The State shall encourage veteran cadres to settle in the countryside
or in small or medium-sized cities or towns. 

As regards those who wish to leave the province in which they have been working to go to another province, arrangement shall be made
by the provinces concerned through consultation. The number of cadres to be allowed to settle in Beijing, Tianjin or Shanghai shall
be strictly controlled. In the case of cadres who left the interior to work on the Qinghai-Tibet Plateau and who wish to go back
to the interior after retirement, the provinces, autonomous regions and municipalities concerned shall help them settle accordingly. 

Article 4  The affairs of veteran cadres who plan to settle in the locality where they have been working shall be managed by
their original units. Those who plan to settle in other places (including army cadres who have been transferred to civilian work)
shall have their affairs managed by the cadre or personnel departments in the new places.  Small rest homes may be built when
necessary. 

Article 5  After leaving their posts, veteran cadres shall continue to receive their former standard wages (including reserved
wages), and their material benefits shall remain unchanged. As for other welfare benefits, they shall enjoy the same treatment as
active cadres in their locality who hold the same ranks.  Such treatment shall be fully guaranteed.  Veteran cadres shall
also be given priority in medical care, housing, transport and the supply of daily necessities. 

Veteran cadres who became disabled in line of duty and who need assistance in their daily lives may in general receive for nursing
a sum equivalent to the standard wage of a Grade 2 worker at an ordinary engineering enterprise in the locality.  Those who
for long cannot take care of themselves at all for reasons such as paralysis, may be granted an appropriate amount of money for nursing. 
Subsidies may be extended to those who need medical equipment but cannot afford to buy it. 

If cadres who relocate to other provinces after leaving their posts genuinely need to build new houses, their original work units
shall allocate funds to the new areas where they settle, and these areas shall be responsible for building houses for them. 

Cadres’ rest homes or departments directly in charge of a large number of veteran cadres shall be provided with an adequate number
of cars for the convenience of the veteran cadres. 

Article 6  Veteran cadres shall be placed on a list separate from the regular staff of their original units. Their various necessary
expenses shall be borne by their original units. In the case of cadres who have relocated to other provinces, their original units
shall appropriate funds to the cadre or personnel departments of the new places to pay for their expenses. Medical expenses of relocated
veteran cadres shall still be disbursed by their original units; if such expenses have already been paid by the new places, the cadre
or personnel departments there shall include those expenses in their budgets. 

Cadres who relocate shall receive a lump sum of RMB 150 yuan from their original units as a subsidy, and those who settle in production
brigades in the countryside shall receive 300 yuan. When veteran cadres and their immediate family members whom they provide for
relocate, their train or ship tickets, hotel expenses, luggage transportation fees and food subsidies on the journey shall be disbursed
in accordance with the provisions for travelling subsidies to cadres in office. 

After leaving their posts, veteran cadres shall continue to enjoy home leave according to State provisions. In addition, they may
pay one visit to their parents, children or native places, with their round-trip train or ship tickets paid by the State. 

Article 7  When a veteran cadre dies, the burial subsidy, pension for his family and living allowances for his surviving dependants
in financial difficulty shall be granted the same as for active cadres of the same rank.  

Article 8  Leaders and relevant departments at all levels shall concern themselves with the political and cultural life of veteran
cadres and take concrete measures to enable them to read documents and listen to reports like active cadres of the same ranks so
that they may be timely informed about current principles and policies of the Party and the State. Leaders and departments should
hold regular meetings with veteran cadres or visit them, taking heed of their opinions and demands. 

Article 9  Attention shall be giving to developing the veteran cadres useful abilities. Necessary conditions shall be provided
to those who are able to write or dictate revolutionary memoirs. They shall be encouraged to carry forward the revolutionary tradition,
concern themselves with State affairs and the people’s life, report on problems, make suggestions and do such work as is within their
power. 

Article 10  All localities and departments shall give more effective guidance in the work concerning veteran cadres. Departments
at and above the county level shall assign one leading comrade to be in charge of this work. Cadre or personnel departments and units
where there are such veteran cadres shall, when conditions permit, appoint full-time or part-time cadres to make a success of this
work in close cooperation with other relevant departments. It is essential to conduct political and ideological education among those
who are involved in this work, so that they will try their best to help quickly solve the practical problems confronted by veteran
cadres, imparting to them the warm feelings of the Party and the State. Healthy tendencies to hold veteran cadres in high esteem
and take good care of them should be cultivated among the cadres and the masses. 

Article 11  These Provisions shall go into effect as of the month they are issued.  They shall be applicable to cadres
working in Party and government departments, people’s organizations, State enterprises and institutions as well as to State cadres
who have been assigned to work in enterprises and institutions under collective ownership.  Where past provisions are at variance
with these Provisions, these Provisions shall prevail. 

Article 12  Rules for the implementation of these Provisions shall be formulated and issued by the State Personnel Bureau upon
approval by the State Council.

Notice: All Rights Reserved to the Legislative Affairs Commission of the Standing Committee of the National People’s Congress.






INTERIM PROCEDURES OF THE CUSTOMS OF THE PEOPLE’S REPUBLIC OF CHINA FOR THE SUPERVISION AND CONTROL OVER BONDED GOODS AND BONDED WAREHOUSES

PROVISIONAL RULES OF THE CUSTOMS GOVERNING THE SUPERVISION AND CONTROL OF IMPORT AND EXPORT GOODS AND MATERIALS NEEDED FOR THE COOPERATIVE EXPLORATION AND EXPLOITATION

Provisional Rules of the Customs of the People’s Republic of China Governing the Supervision and Control of Import and Export Goods
and Materials Needed For the Cooperative Exploration and Exploitation

     (Effective Date:1981.10.01–Ineffective Date:)

   Article 1. These Rules have been made in accordance with the Provisional Customs Law of the People’s Republic of China and the spirit of Document
No. 211 (1980) promulgated by the State Council, for the purpose of facilitating the importation and exportation of the goods and
materials needed for the cooperative exploration and exploitation of the offshore petroleum of our country.

   Article 2. The Customs shall, in accordance with the documents and contracts (including sub-contracts–the same hereinafter) approved by the
State Council or its authorised organs, exercise supervision and control over all the goods and materials imported and exported by
the oil companies for the exploration and exploitation of the offshore petroleum of our country.

After the determination of an engineering project, the oil company concerned should immediately submit the above-mentioned documents
and contracts to the local Customs and the Customs of entry and exit. It should also, before entry, submit for Customs inspection,
the manifest of the goods and materials and equipment (including the supplementary manifest) corresponding with the import plan verified
and approved by the competent organ. These goods and materials, if verified by the Customs to be for productive purpose within the
scope of the engineering project, may be imported upon the approved manifest, without applying for a separate import licence (but
the import of machinery equipment should still be reported, beforehand, to the specific authorizing department for approval). Import
licences issued by foreign trade control organs should be submitted for verification with regard to goods and materials outside the
scope of the engineering project, goods and materials not for direct productive purpose and imported by the oil company in accordance
with a temporary plan, and goods and materials covered by import licence according to relevant State provisions.

   Article 3. At the time of importation and exportation of the goods and materials, the oil company or its agent should fill out the Declaration
Form of Imports (Exports) in duplicate, and submit it together with the invoices, packing list and other relevant papers and documents
to the Customs for the completion of Customs formalities of entry and exit.

In the case of the goods and materials imported or exported at the places other than the place where the company is located, the declarant
should fill out the Declaration Form of Imports (Exports) in triplicate, and declare to the Customs of entry in the case of importation,
and to the local Customs in the case of exit, for the completion of the transhipment formalities. The declarant should entrust the
forwarding agent with delivering the Customs Cover, along with the cargo in question, to the Customs of destination or exit. The
forwarding agent must keep intact the Customs seals affixed by the Customs on the cargo or on the means of conveyance.

   Article 4. At the time of Customs examination of the import and export cargoes, the cargo-owner or his agent must be present and unpacking the
goods himself. In case the cargo needs to be examined at places other than the places under Customs supervision and control, permission
should be sought from the Customs beforehand, and special fees paid in accordance with the Customs regulations.

   Article 5. Cargoes imported (including those imported by means of lease) within the duty-exemption limits approved by State organs shall be
released duty-free by the Customs; the portion of import cargo in excess of the above-mentioned limits shall be released, only after
the Customs duties and industrial and commercial (consolidated) tax have been levied by the Customs in accordance with the regulations.

Goods and materials imported temporarily may be accorded duty-free treatment, provided that the oil company concerned completes the
declaration formalities with the local Customs and guarantees to re-ship them abroad within six months. In this case, the oil company
should pay a cash deposit not less than the total amount of the payable duties and undertake to re-ship the goods and materials abroad
within the stipulated time-limit. The deposit shall be refunded on re-shipment abroad of the goods and materials. If, owing to special
circumstances, the goods and materials imported temporarily cannot be re-shipped abroad within the prescribed time-limit, the oil
company should apply to the Customs for extension. If the re-shipment is still not undertaken within the extended time-limit, the
oil company should, in accordance with the present Rules, go through Customs formalities for entry, and pay Customs duties and the
industrial and commercial (consolidated) tax.

   Article 6. Import goods and materials may be delivered only after completion of the Customs formalities, or with the special permission of the
Customs; the export goods and materials may be loaded and shipped abroad only after completion of the Customs formalities and under
the Customs supervision and control.

   Article 7. The commission warehouses set up by foreign businessmen at the oil bases shall be dealt with by the Customs in accordance with the
Provisional Rules Governing the Supervision and Control over Bonded Cargo and Bonded Warehouses. But if the goods and materials for
sale on commission and the spare parts and components for use in maintenance are to be turned into importation, the levying of, or
the exemption from, the duty on them shall be dealt with in accordance with Article 5 of the present Provisional Rules.

   Article 8. Import goods and materials which are not declared to the Customs or on which the Customs duty is not paid within three months from
the date of the declared entry of the means of conveyance, shall be dealt with by the Customs in accordance with the relevant provisions.

   Article 9. For foreign engineers and technicians who come to China on exploration and exploitation business, the competent departments should
submit regularly to the Customs the lists of their names in quadruplicate, which will be sent respectively to the Customs at the
port of entry, the local Customs, and the Guangzhou and Kowloon Customs. They shall be treated by the Customs according to the regulations
concerning the control of import and export baggage and articles carried, and articles imported and exported by post, by foreign
engineers and technicians who are invited to come to work in China.

Baggage and articles carried by our engineers and technicians on entering and leaving the Chinese territories on business, shall be
dealt with in accordance with the State Council-approved Regulations Concerning the Entry and Exit of the Baggage and Articles Carried
by Our Workers Who Go to Work Abroad; and the provisions in the Supplementary Circular to Document No. 517 (79) promulgated jointly
by the Ministry of Foreign Trade, the Ministry of Foreign Affairs, the Ministry of Economic Relations with Foreign Countries and
the Ministry of Finance.

   Article 10. The following cases shall be dealt with by the Customs each on its merits, in accordance with the relevant provisions of the Provisional
Customs Law of the People’s Republic of China:

(1) False declaration;

(2) The units concerned taking delivery of or loading the import and export goods and materials not yet released by the Customs;

(3) Smuggling through the means of import and export goods and materials;

(4) Sale, without permission, of the goods and materials which have been released duty-free by the Customs;

(5) The goods and materials imported temporarily on Customs verification and approval, being not re-shipped abroad within the prescribed
time-limit, and not redeclared for the completion of the Customs formalities in accordance with the relevant regulations;

(6) Unauthorizedly breaking Customs Cover, or Customs seals, or losing Customs Cover;

(7) Other cases in violation of the Customs regulations.

   Article 11. Whenever deemed necessary for the work, the Customs may set up working offices or station officers at the offshore exploration and
exploitation bases. The oil companies and sub-companies should provide free office and living accommodation, and extend living facilities.

   Article 12. The present Provisional Rules shall come into force on October 1, 1981.

    





REGULATIONS ON THE EXPLOITATION OF OFFSHORE PETROLEUM RESOURCES IN COOPERATION WITH FOREIGN ENTERPRISES

Regulations of the People’s Republic of China on the Exploitation of Offshore Petroleum Resources in Cooperation with Foreign Enterprises

     (Effective Date:1982.01.30–Ineffective Date:)

CONTENTS

CHAPTER I GENERAL PRINCIPLES

CHAPTER II RIGHTS AND OBLIGATIONS OF THE PARTIES TO PETROLEUM CONTRACTS

CHAPTER III PETROLEUM OPERATIONS

CHAPTER IV SUPPLEMENTARY PRINCIPLES

CHAPTER I GENERAL PROVISIONS

   Article 1. In the interests of developing the national economy and expanding international economic and technological cooperation, these Regulations
are formulated, on the premise of safeguarding national sovereignty and economic interests, to permit foreign enterprises to participate
in the cooperative exploitation of offshore petroleum resources of the People’s Republic of China.

   Article 2. All petroleum resources in the internal waters, territorial sea and continental shelf of the People’s Republic of China and in all
sea areas within the limits of national jurisdiction over the maritime resources of the People’s Republic of China are owned by the
People’s Republic of China.

In the sea areas referred to in the preceding paragraph, all buildings and structures set up and vessels operating to exploit petroleum,
as well as the corresponding onshore oil (gas) terminals and bases, shall be under the jurisdiction of the People’s Republic of China.

   Article 3. The Government of the People’s Republic of China shall protect, in accordance with the law, the investments of foreign enterprises
participating in the cooperative exploitation of offshore petroleum resources, the profits due to them and their other legitimate
rights and interests, and shall protect, in accordance with the law, the cooperative exploitation activities of foreign enterprises.

All activities for the cooperative exploitation of offshore petroleum resources within the scope of these Regulations shall be subject
to the laws and decrees of the People’s Republic of China and relevant provisions of the State; all persons and enterprises taking
part in petroleum operations shall be subject to the laws of China and shall accept inspection and supervision by the competent authorities
concerned of the Chinese Government.

   Article 4. The Ministry of Petroleum Industry of the People’s Republic of China shall be the competent authority in charge of the exploitation
of offshore petroleum resources in cooperation with foreign enterprises, and shall determine the forms of cooperation and demarcate
areas of cooperation in accordance with the zones and the surface areas of cooperation designated by the State; it shall work out
a plan for the exploitation of offshore petroleum resources in cooperation with the foreign enterprises in accordance with long-term
state economic plans, formulate operation and management policies for the cooperative exploitation of offshore petroleum resources
and examine and approve the overall development program for offshore oil (gas) fields.

   Article 5. The China National Offshore Oil Corporation (CNOOC) shall have exclusive and overall responsibility for the work of exploiting offshore
petroleum resources in the People’s Republic of China in cooperation with foreign enterprises.

CNOOC shall be a state corporation with the qualifications of a juridical person and shall have the exclusive right to explore for,
develop, produce and market the petroleum within the zones of cooperation with foreign enterprises.

CNOOC may, as the work requires, establish regional corporations, specialized corporations and overseas representative offices to
carry out the tasks delegated by the head office.

   Article 6. CNOOC shall, by means of calling for bids and signing petroleum contracts, cooperate with foreign enterprises to exploit petroleum
resources in accordance with the zones, surface areas and areas of cooperation with foreign enterprises for the exploitation of petroleum
resources.

The petroleum contracts referred to in the preceding paragraph shall come into force after approval by the Foreign Investment Commission
of the People’s Republic of China.

All documents signed by CNOOC for other forms of cooperative exploitation of petroleum resources utilizing technology and funds provided
by foreign enterprises shall also be subject to approval by the Foreign Investment Commission of the People’s Republic of China.

CHAPTER II RIGHTS AND OBLIGATION OF THE PARTIES TO PETROLEUM CONTRACTS

   Article 7. CNOOC shall cooperate with foreign enterprises to exploit offshore petroleum resources by means of entering into petroleum contracts,
and, unless otherwise specified by the Ministry of Petroleum Industry or in a petroleum contract, the foreign enterprise that is
one party to the petroleum contract (hereafter “foreign contractor”) shall provide the investment to carry out exploration, be responsible
for exploration operations and bear all exploration risks; after a commercial oil (gas) field is discovered, both the foreign contractor
and CNOOC shall provide the investment for its cooperative development, and the foreign contractor shall be responsible for the development
operations and production operations until CNOOC takes over the production operations when conditions permit as provided in the petroleum
contract. The foreign contractor, in accordance with the provisions of the petroleum contract, may recover its investment and expenses
and receive remuneration out of the petroleum produced.

   Article 8. The foreign contractor may export the petroleum due to it and the petroleum it purchases, and may also remit abroad, in accordance
with the law, the investment it recovers, its profits and its other legitimate income.

   Article 9. All Chinese enterprises and foreign enterprises participating in the cooperative exploitation of offshore petroleum resources shall
pay taxes in accordance with the law and shall pay mining royalties.

All employees of the enterprises referred to in the preceding paragraph shall pay individual income tax in accordance with the law.

   Article 10. The equipment and material imported for carrying out the petroleum contract shall be subject to tax at a reduced rate, or exempted
from tax, or given other preferential tax treatment in accordance with State provisions.

   Article 11. The foreign contractor shall open a bank account in accordance with the provisions of the Provisional Regulations on Foreign Exchange
Control of the People’s Republic of China.

   Article 12. In carrying out the petroleum contract, the foreign contractor shall use appropriate and advanced technology and management experience
and shall be obliged to transfer the technology and pass on the experience to the personnel of the Chinese side involved in carrying
out the petroleum contract (hereafter “Chinese personnel”); in petroleum operations, the foreign contractor must give preference
in employment to Chinese personnel, progressively increase the percentage of Chinese personnel and train Chinese personnel in a planned
way.

   Article 13. In carrying out the petroleum contract, the foreign contractor must promptly and accurately report to CNOOC on the situation of petroleum
operations; and it must acquire complete and accurate date, records, samples, vouchers and other original data with respect to various
aspects of the petroleum operations, and regularly submit to CNOOC necessary data and samples as well as various technological, economic,
financial and accounting, and administrative reports.

   Article 14. In carrying out the petroleum contract, the foreign contractor shall establish a branch or subsidiary or representative office within
the territory of the People’s Republic of China and fulfil registration formalities in accordance with the law.

The domiciles of the offices referred to in the preceding paragraph shall be determined through consultation with CNOOC.

   Article 15. The provisions of Articles 3, 8, 9, 10 and 14 of these Regulations shall apply, by analogy, to foreign subcontractors that render
services in connection with the petroleum operations.

CHAPTER III PETROLEUM OPERATIONS

   Article 16. In order to achieve the highest possible oil recovery factor, the operator must, in accordance with these Regulations and the relevant
provisions promulgated by the Ministry of Petroleum Industry on the exploitation of petroleum resources and by taking account of
international practice, formulate an overall development program for the oil (gas) field and implement production operations.

   Article 17. In carrying out the petroleum contract, the foreign contractor shall use the existing bases within the territory of the People’s
Republic of China, and, if new bases are needed, they must be established within the territory of the People’s Republic of China.

The specific locations of the new bases referred to in the preceding paragraph, and other arrangements that may be necessary in special
circumstances, must all be subject to the written approval of CNOOC.

   Article 18. CNOOC shall have the right to send personnel to join the foreign operator in making master designs and engineering designs for carrying
out the petroleum contract. Design corporations within the territory of the People’s Republic of China shall have priority in entering
into subcontracts for the master designs and engineering designs mentioned above, provided that their terms are competitive.

   Article 19. With respect to all facilities required to be built in carrying out the petroleum contract, including artificial islands, platforms,
buildings and structures, when signing subcontracts, the operator must give preference to manufacturing plants and engineering corporations
within the territory of the People’s Republic of China, provided that they are competitive in terms of quality, price, term of delivery
and services.

   Article 20. With respect to the equipment and materials required to carry out the petroleum contract, the operator and subcontractors must give
preference to procuring and utilizing equipment and materials manufactured and supplied by the People’s Republic of China, provided
that these are competitive.

   Article 21. With respect to services that are required to carry out the petroleum contract, such as those for geophysical prospecting, well-drilling,
diving, aircraft, ships and bases, the operator and subcontractors must enter into subcontracts and service contracts with relevant
departments within the territory of the People’s Republic of China, provided that they are competitive in terms of price, efficiency
and services.

   Article 22. The ownership of all assets purchased or built by the foreign contractor to carry out the petroleum contract in accordance with the
plan and budget, excluding equipment leased from a third party, shall belong to CNOOC after the foreign contractor’s investment has
been compensated as provided for, and, within the term of the contract, the foreign contractor may continue to use those assets in
accordance with the provisions of the contract.

   Article 23. CNOOC shall have the ownership of all of the data, records, samples, vouchers and other original data with respect to the petroleum
operations stipulated in Article 13 of these Regulations.

The utilization and transfer, donation, exchange, sale and publication of the previously mentioned data, records, samples, vouchers
and other original data and their export and transmission from the People’s Republic of China all must be conducted in accordance
with the “Provisions for the Control of Data” formulated by the Ministry of Petroleum Industry.

   Article 24. In the course of implementing petroleum operations, the operator and subcontractors shall comply with the relevant laws and provisions
on environmental protection and safety of the People’s Republic of China, and shall, by taking account of international practice
when conducting operations, protect fishery resources and other natural resources and prevent the environment, including the air,
sea, rivers, lakes and land, from being polluted or damaged.

   Article 25. The petroleum produced within the petroleum contract area shall be landed in the People’s Republic of China or may be exported from
oil (gas) metering points on offshore terminals. In case such petroleum has to be landed at a point outside the People’s Republic
of China, the approval of the Ministry of Petroleum Industry must be obtained.

   Article 26. In case of war, threat of war or other state of emergency, the Chinese Government shall have the right of compulsory purchase or
requisition with respect to a portion or all of the petroleum earned or purchased by the foreign contractor.

CHAPTER IV SUPPLEMENTARY PRINCIPLES

   Article 27. Any dispute arising between foreign and Chinese enterprises during the cooperative exploitation of offshore petroleum resources shall
be settled through friendly consultations. If it cannot be resolved through consultation, mediation and arbitration may be conducted
by an arbitration body of the People’s Republic of China, or the parties to the contract may agree upon arbitration by another arbitration
body.

   Article 28. In case an operator or subcontractor violates the provisions of these Regulations in implementing petroleum operations, the Ministry
of Petroleum Industry shall have the right to issue a warning and set a deadline for correction. If no correction can be made prior
to the specified deadline, the Ministry of Petroleum Industry shall have the right to adopt necessary measures, even to the extent
of suspending implementation of petroleum operation. All economic losses caused as a result of this shall be borne by the responsible
party.

A party responsible for serious violation of these Regulations may be fined by and/or even be subject to suit before the judicial
authorities filed by the Ministry of Petroleum Industry.

   Article 29. The terms used in these Regulations shall have the following definitions:

(1) “Petroleum” means crude oil or natural gas deposited underground, currently being extracted or already extracted.

(2) “Exploitation” means, in general, the exploration for and development, production and marketing of petroleum, as well as other
related activities.

(3) “Petroleum contract” means a contract signed, in accordance with the law, between CNOOC and foreign enterprises for the cooperative
exploitation of offshore petroleum resources of the People’s Republic of China, including the exploration for and development and
production of petroleum.

(4) “Contract area” means a surface area designated within a sea area demarcated by geographical coordinates in the petroleum contract
for the cooperative exploitation of petroleum resources.

(5) “Petroleum operations” means all exploration, development and production operations and other related activities conducted in
carrying out the petroleum contract.

(6) “Exploration operations” means all work done to locate the petroleum-bearing traps by means of geological, geophysical and geochemical
methods and including drilling exploratory wells, etc., and all work done to determine the commerciality of discovered petroleum
traps, including appraisal drilling, feasibility studies and preparation of the overall development program for an oil (gas) field.

(7) “Development operations” means projects, such as those for design, construction, installation and drilling, and corresponding
research work, conducted from the date of the approval of the overall development program for an oil (gas) filed by the Ministry
of Petroleum Industry, in order to bring about petroleum production, including production activities carried out before the commencement
of commercial production.

(8) “Production operations” means all operations for producing petroleum conducted after the date of commencement of the commercial
production of an oil (gas) field and related activities, such as extraction, injection, production stimulation, processing, storage
and transportation and lifting of petroleum and other operations.

(9) “Foreign contractor” means a foreign enterprise that signs a petroleum contract with CNOOC. The foreign enterprises may be a corporation
or a consortium of corporations.

(10) “Operator” means an entity that is responsible for implementing the operations pursuant to the provisions of the petroleum contract.

(11) “Subcontractor” means an entity that renders services to the operator.

   Article 30. Rules for the implementation of these Regulations shall be formulated by the Ministry of Petroleum Industry.

   Article 31. These Regulations shall come into force on the day of promulgation.

    





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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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