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DECISION OF THE STATE COUNCIL ON REVISING THE REGULATION OF THE PEOPLE’S REPUBLIC OF CHINA CONCERNING THE EXPORT CONTROL OF DUAL-PURPOSE NUCLEAR PRODUCTS AND RELEVANT TECHNOLOGIES

Order No. 484 of the State Council

No. 484
The Decision of the State Council on Revising the Regulation of the People’s Republic of China Concerning the Export Control
of Dual-purpose Nuclear Products and Relevant Technologies is hereby promulgated, and shall go into effect as of the date of promulgation.
Premier of the State Council Wen Jiabao

January 26, 2007

Decision of the State Council on Revising the Regulation of the People’s Republic of China Concerning the Export Control of Dual-purpose
Nuclear Products and Relevant Technologies

As regards the Regulation of the People’s Republic of China Concerning the Export Control of Dual-purpose Nuclear Products and Relevant
Technologies, the State Council has determined to make the following amendments:

1.

Article 1 shall be revised as: “The present Regulation is formulated in order to reinforce the export control of dual-purpose nuclear
products and relevant technologies, prevent nuclear weapons from diffusing, keep away the acts of nuclear terrorism, promote the
international cooperation in peacefully utilizing nuclear energy, and safeguard national security and social public benefits.”

2.

Article 2 shall be revised as: “The export of dual-purpose nuclear products and relevant technologies” as mentioned in the present
Regulation means the transfer of the equipment, materials, software and relevant technologies incorporated in the List for the Export
Control of Dual-purpose Nuclear Products and Relevant Technologies (hereinafter referred to as the Control List) in methods of the
trading export, endowments to and exhibitions in foreign countries or regions, as well as scientific and technological cooperation
with and assistance and services, etc. to foreign countries or regions.”

3.

Article 3 shall be revised as: “The state shall strictly control the export of dual-purpose nuclear products and relevant technologies,
rigorously perform its international obligation of not diffusing nuclear weapons, and prevent dual-purpose nuclear products or relevant
technologies from using for the purpose of nuclear explosion or the activities of nuclear terrorism.

The state may take any necessary measure for the export of dual-purpose nuclear products and relevant technologies in order to maintain
national security as well as international peace and safety”

4.

Article 6 shall be revised as: “The export of dual-purpose nuclear products and relevant technologies shall be approved on the basis
of the recipient party’s promises as follows:

(1)

The recipient party should promise that the dual-purpose nuclear products and relevant technologies that are supplied by China or
any duplicate thereof will not be utilized for nuclear explosion purposes or any other purpose exceeding the declared final ones.

(2)

The recipient party should promise that the dual-purpose nuclear products and relevant technologies that are supplied by China or
any duplicate thereof will not be utilized for the nuclear fuel cycling that has not accepted the security supervision of International
Atomic Energy Agency. As for a country that has entered into a voluntary security agreement with International Atomic Energy Agency,
this provision may not apply.

(3)

The recipient party should promise that the dual-purpose nuclear products and relevant technologies that are supplied by China or
any duplicate thereof will not be transferred to a third party other than the declared final users without the Chinese government’s
consent.”

5.

Item (3) of Article 8 shall be revised as: “Technical explanations or testing reports on dual-purpose nuclear products and relevant
technologies”; and Item (4) shall be revised as: “Certifications about final users and final uses”.

6.

Article 9 shall be revised as: “As regards the dual-purpose nuclear products and relevant technologies that are exported for overseas
exhibitions, are exclusively used by the Chinese party abroad or are exported for overhauling, and they will be transported back
within the prescribed period, or that are transported back after the overhauling in China to foreign countries or regions, or are
under any other circumstance as provisioned by the Ministry of Commerce, the exporter can, when applying to the Ministry of Commerce
for examination and approval, be exempted from submitting the documents as prescribed by Article 8 of the present Regulation.”

7.

Article 11 shall be revised as: “The Ministry of Commerce shall examine the application upon receipt of an export application form
and the documents prescribed by Article 8 of the present Regulation and make a decision on approval or disapproval within 45 working
days in collaboration with China Atomic Energy Authority or with China Atomic Energy Authority and other departments concerned, as
well as with the Ministry of Foreign Affairs in case diplomatic policies are involved.”

8.

Paragraph 1 of Article 12 shall be revised as: “As regards the export of dual-purpose nuclear products and relevant technologies
that will result in great influences to national security, social pubic interests or diplomatic policies, the Ministry of Commerce
in collaboration with other related departments shall report this to the State Council for approval.”

9.

A new article shall be added as Article 16 : “The customs house may propose a challenge on whether the export of the equipment, materials,
software and relevant technologies exported by an exporter needs to apply for an export permit for dual-purpose nuclear products
and relevant technologies, and may request this exporter to apply for a certification document on whether the exported goods fall
within the scope of export control over dual-purpose nuclear products and relevant technologies to the Ministry of Commerce; in case
the exported goods really fall within the scope of export control over dual-purpose nuclear products and relevant technologies, the
exporter shall, according to the present Regulation, apply for an export permit for dual-purpose nuclear products and relevant technologies.
The concrete measures shall be prepared by the General Administration of Customs in collaboration with the Ministry of Commerce.”

10.

Article 16 shall be altered as Article 17 , and be revised as: “The Ministry of Commerce shall terminate or revoke an granted export
permit, and notify to related departments in written form, where the recipient party violates a corresponding promise made in accordance
with Article 6 of the present Regulation or if the risk of nuclear proliferation or any act of nuclear terrorism occurs.”

11.

A new article shall be added as Article 18 : “An exporter shall set up and perfect an inner control system for the export of dual-purpose
nuclear products and relevant technologies, and appropriately maintain related contracts, invoices, documents, business letters and
telegrams and other materials for five years or more. The Ministry of Commerce may consult and copy related materials.”

12.

A new article shall be added as Article 19 : “Where an exporter knows, ought to know or is informed by the Ministry of Commerce that
the equipment, materials, software or relevant technologies as exported involve the risk of nuclear diffusing or may be used for
nuclear terrorism, they shall dealt with them according to the present Regulation, even though such equipment, materials, software
or relevant technologies are not incorporated into the Control List.”

13.

Article 17 shall be altered as Article 20 and be revised as: “The Ministry of Commerce may, upon approval of the State Council and
in collaboration with relevant departments, temporarily decide to carry out the control to the export of specific dual-purpose nuclear
products and relevant technologies that are not incorporated into the Control List in accordance with the present Regulation.

The “export of specific dual-purpose nuclear products and relevant technologies” as provisioned in the preceding paragraph shall be
subject to approval in accordance with the present Regulation.”

14.

A new article shall be added as Article 21 : “The Ministry of Commerce shall organize the experts in related fields to establish a
consulting committee for the control of dual-purpose nuclear products and relevant technologies, which shall take charge of the consultation,
evaluation and demonstration, etc. of dual-purpose nuclear products and relevant technologies.”

15.

A new article shall be added as Article 22 : “The Ministry of Commerce or the Ministry of Commerce and related departments may investigate
and deter the acts that are suspected of violating the present Regulation. Where necessary, the Ministry of Commerce may circulate
a notice on the equipment, materials, software and relevant technologies to be exported to the customs house. As regards those goods
under customs supervision, the customs house may check or detain them. As regards those goods beyond the customs supervision, the
Ministry of Commerce may seal up or detain them. Related departments and individuals shall cooperate and assist.”

16.

Article 18 shall be altered as Article 23 , and be revised as: “Anyone who exports dual-purpose nuclear products in violation of
the present Regulation shall be punished in accordance with the Customs Law.

Anyone who exports the relevant technologies of dual-purpose nuclear products in violation of the present Regulation shall be warned
by the Ministry of Commerce, and a fine of more than one time but less than five times the illegal business volume shall be imposed;
where the illegal business volume is less than 50,000 Yuan, a fine of more than 50,000 Yuan but less than 250,000 Yuan shall be imposed;
in case illegal gains exist, the illegal gains shall be confiscated; and in case a crime is constituted, criminal liabilities shall
be investigated.”

17.

Article 19 shall be altered as Article 24 , and be revised as: “In case anyone forges, alters, buys or sells export permits, it/he
shall be punished in accordance with the related laws and administrative regulations; and if a crime is constituted, criminal liabilities
shall be investigated.

Where anyone obtains export permits by frauds or any other unjustifiable means, these export permits shall be confiscated by the Ministry
of Commerce and a fine of more than one time but less than five times the illegal business volume shall be imposed upon the violator;
in case the illegal business volume is less than 50,000 Yuan, a fine of more than 50,000 Yuan but less than 250,000 Yuan shall be
imposed; if there exists illegal gains, the illegal gains shall be confiscated; and in case a crime is constituted, criminal liabilities
shall be investigated.”

18.

Article 21 shall be altered into Article 26 , and be revised as: “The Ministry of Commerce may, in light of the actuality, adjust
the Control List, and publicize it in collaboration with China Atomic Energy Authority and related departments.”

19.

A new article shall be added as Article 28 : “The present Regulation shall be applicable to the export of dual-purpose nuclear products
and relevant technologies from bonded areas, export processing zones, other special areas under the customs house’s surveillance,
export surveillance warehouses, bonded logistics centers or other bonded surveillance areas.

The transit, transshipment or pass of dual-purpose nuclear products and relevant technologies shall be governed by the present Regulation
by analogy.”

The order of articles and some wording have been adjusted and amended accordingly in addition.

The present Decision shall go into effect as of the promulgation date.

The Regulation of the People’s Republic of China Concerning the Export Control of Dual-purpose Nuclear Products and Relevant Technologies
shall be revised in accordance with the present Decision, and be re-promulgated.



 
The State Council
2007-01-26

 






ANNOUNCEMENT NO. 8, 2007 OF MINISTRY OF COMMERCE ON ARBITRATION OF ANTI-DUMPING INVESTIGATION OF POTATO STARCH ORIGINATING FROM EU

Announcement No. 8, 2007 of Ministry of Commerce on Arbitration of Anti-dumping Investigation of Potato Starch Originating from EU

[2007] No. 8

In accordance with Anti-dumping Regulations of the People’s Republic of China, Ministry of Commerce of the People’s Republic of China
released announcement on Feb 6, 2006, deciding to carry out anti-dumping investigation on potato starch (hereinafter referred to
as “investigated commodity”) originating from EU.

In line with investigation, Ministry of Commerce finally verdicts dumping of the investigated commodities, injures the domestic potato
starch industry, and the existence of causality between dumping of the investigated commodities and the injury of domestic industry.

In accordance with Anti-dumping Regulations of the People’s Republic of China, Tariff Committee of the State Council decides to impose
anti-dumping duties on potato starch originating from EU as from Feb 6, 2007, the tariff codes of which are 11081300 in Import and
Export Tariff of the People’s Republic of China.

Rate of Anti-dumping Duties on Different Companies:

AVEBE U.A. 18%

Avebe Kartoffelstarkefabrik Prignitz/Wendland GmbH) 17%

All Others 35%

The duration of the anti-dumping duties on Potato Starch originating from EU is 5 years as from Feb 6, 2007.

Appendix: Ministry of Commerce’s Final Arbitration on Anti-dumping Investigation on Potato Starch Originating from EU

The Ministry of Commerce

February 5, 2006



 
Ministry of Commerce
2007-02-05

 






CIRCULAR OF THE MINISTRY OF COMMERCE ON ENTRUSTING QINGDAO ECONOMIC-TECHNOLOGICAL AREA TO EXAMINE, APPROVE AND ADMINISTER THE RELEVANT WORK ON FOREIGN-INVESTED ENTERPRISES IN SOME SERVICE TRADE SECTORS

Circular of the Ministry of Commerce on Entrusting Qingdao Economic-Technological Area to Examine, Approve and Administer the Relevant
Work on Foreign-invested Enterprises in Some Service Trade Sectors

Shang Zi Han [2007] No. 10

Qingdao Municipal People’s Government and Qingdao Economic-Technological Area,

Pursuant to Some Opinions on Further Promoting the Development Level of National Economic and Technical Development Zones (Guo Ban
Fa [2005] No. 15) as forwarded by the General Office of the State Council to the Ministry of Commerce, the Ministry of Land and Resources
and the Ministry of Construction as well as the provisions of the Ministry of Commerce on the authorized examination, approval and
administration of foreign-funded enterprises, the Ministry of Commerce has finished the archival filing, examination and approval
of the management systems of all the national economic and technological development zones and the connected network for examination
and approval of foreign capital. The related matters are hereby notified as follows:

1.

Upon research, we hereby authorize the Management Committee of Qingdao Economic-Technological Area to be responsible for examining,
approving and administrating the foreign-funded enterprises in related service trade sectors set up inside its zone for the purpose
of encouraging and supporting the national economic and technological development zones to vigorously develop the high value-added
service industries.

2.

The Management Committee of Qingdao Economic-Technological Area shall, in strict accordance with the laws and regulations on foreign
investments as well as the related provisions on foreign-funded enterprises of non-vessel shipping, construction, printing, construction
engineering design, road transport, commerce and international freight forwarding (see appendix), carefully examine and approve the
related foreign-funded enterprises set up within its zone, and report the related problems found in the work to the Ministry of Commerce
in a timely manner. The Ministry of Commerce shall implement the inspection of the aforesaid examination, approval and administration,
and cancel the authorization to a national economic and technological development zone which commits illegal examination and approval
during the course of authorization.

3.

The Management Committee of Qingdao Economic-Technological Area shall conduct a good job in examination and approval, archival filing
and statistical work in strict accordance with the requirements of the Ministry of Commerce for networking and online joint annual
inspection and by taking advantage of the networking certification system for foreign-funded enterprises. The related statistical
data shall be in line with the requirements so that the Ministry of Commerce can keep informed of the situation and strengthen supervision.

4.

Qingdao Economic-Technological Area, the management system of which needs to be improved, has not set up an independent finance department
yet. Qingdao Economic-Technological Area shall keep a close eye on and further resolve the problems in the management system, keep
a concise and efficient management system, and improve the level for examining, approving and administrating the foreign-funded enterprises.
Where any management system problem that may affect the work on examining, approving and administrating the foreign-funded enterprises
is found, this Ministry will withdraw the authorized power of examination, approval and administration immediately.

5.

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

Ministry of Commerce

February 12, 2007
Appendix:
Related documents on entrusting the competent provincial departments of commerce to examine, approve and Administer foreign-funded
service trade Enterprises

1.

Circular of the Ministry of Commerce on Entrusting the Competent Provincial Departments of Commerce to Examine and Manage Foreign-funded
Non-vessel Shipping Enterprises (Shang Zi Han [2005] No. 89)

2.

Circular of the Ministry of Commerce on Entrusting the Provincial Administrative Departments of Commerce to Examine, Approve and Administer
the foreign-funded Construction Enterprises (Shang Zi Han [2005] No. 90)

3.

Circular of the Ministry of Commerce on Entrusting the Administrative Departments of Commerce at the Provincial Level to Examine and
Administer the Foreign-funded Printing Enterprises (Shang Zi Han [2005] No. 91)

4.

Circular of the Ministry of Commerce on Entrusting the Administrative Departments of Commerce at the Provincial Level to Examine and
Administer the Foreign-funded Designing Enterprises for Engineering Projects (Shang Zi Han [2005] No. 92)

5.

Circular of the Ministry of Commerce on Entrusting the Competent Provincial Departments of Commerce to Examine and Manage Some Foreign-funded
Road Transport Enterprises (Shang Zi Han [2005] No. 93)

6.

Circular of the Ministry of Commerce on Entrusting Local Departments to Check Foreign-funded Commercial Enterprises (Shang Zi Han
[2005] No. 94)

7.

Circular of the Ministry of Commerce about the related Issues on Entrusting National Economic and Technical Development Zones to Examine
and Approve foreign-funded Commercial Enterprises and International Freight Forwarding Enterprises (Shang Zi Han [2005] No. 102)

8.

Measures for the Administration of Foreign-funded International Freight Forwarding Enterprises (Decree No. 19, 2005 of the Ministry
of Commerce)



 
Ministry of Commerce
2007-02-12

 






CIRCULAR OF THE STATE ADMINISTRATION OF FOREIGN EXCHANGE CONCERNING THE RELATED MATTERS ON ADMINISTERING SHORT-TERM FOREIGN DEBTS OF FINANCIAL INSTITUTIONS IN 2007

Circular of the State Administration of Foreign Exchange Concerning the Related Matters on Administering Short-term Foreign Debts
of Financial Institutions in 2007

Hui Fa [2007] No. 14

The branches and foreign exchange administration offices of the State Administration of Foreign Exchange in each province, autonomous
region, and municipality directly under the Central Government, and the municipal branches of the State Administration of Foreign
Exchange in Shenzhen, Dalian, Qingdao, Xiamen and Ningbo, and all the headquarters of the designated Chinese-funded foreign exchange
banks:

For the purpose of rigorously controlling the short-term foreign debt scale, promoting the international balance of payments and maintaining
the safety of the national economic and financial, the related matters on administering short-term foreign debts of financial institutions
in 2007 are hereby notified as follows:

1.

The administration of short-term foreign debt balance quotas (hereinafter referred to as short-term foreign debt quotas) shall apply
to the following foreign debts of financial institutions:

(1)

Usance letters of credit that has been accepted but not yet paid with a term of over 90 days (excluding 90 days);

(2)

Deposits of overseas institutions as well as deposits of overseas individuals whose balance in the foreign exchange account at a same
bank with a legal person status is more than an equivalent value of USD 500,000;

(3)

Overseas loans, overseas inter-bank borrowings, current businesses with overseas inter-bank and subordinated institutions thereof
(as the debtor) as well as overseas agency payments by various settlement methods with a term of less than one year (including one
year) ; and

(4)

Short-term foreign debts in other forms.

2.

The short-term foreign debt quotas of financial institutions in 2007 will be reduced by the decrease State Administration of Foreign
Exchange (SAFE). The short-term foreign debt quotas for Chinese-funded banks in 2007 shall be decreased to 30% of their respective
quotas as determined upon confirmation in 2006, and short-term foreign debt quotas for non-bank financial institutions and foreign-funded
banks in 2007 shall be decreased to 60% of their respective quotas as determined upon confirmation in 2006.

3.

A financial institution shall decrease its short-term foreign debt balance according to the following requirements:

(1)

By June 30, 2007, a Chinese-funded bank shall reduce its short-term foreign debt balance to 45% or less of the quota as determined
in 2006, and with regard to a non-bank financial institution or foreign-funded bank, its short-term foreign debt balance shall be
reduced to 85% or less of the quota as determined in 2006.

(2)

By September 30, 2007, a Chinese-funded bank shall reduce its short-term foreign debt balance to 40% or less of the quota as determined
in 2006, and with respect to a non-bank financial institution or foreign-funded bank, its short-term foreign debt balance shall be
reduced to 75% or less of the quota as determined in 2006.

(3)

By December 31, 2007, a Chinese-funded bank shall reduce its short-term foreign debt balance to 35% or less of the quota as determined
in 2006, and with regard to a non-bank financial institution or foreign-funded bank, its short-term foreign debt balance shall be
reduced to 65% or less of the quota as determined in 2006.

(4)

By March 31, 2008, a Chinese-funded bank shall reduce its short-term foreign debt balance to 30% or less of the quota as determined
in 2006, and with respect to a non-bank financial institution or foreign-funded bank, its short-term foreign debt balance shall be
reduced to 60% or less of the quota as determined in 2006.

4.

The short-term foreign debt quota for a Chinese-funded or foreign-funded bank newly established, or a Chinese-funded bank newly launching
foreign exchange business shall be determined upon verification as no more than two times its foreign exchange operating fund or
its capital.

5.

After a branch of a foreign-funded bank is converted into a bank with a legal person statue in China, the short-term foreign debt
quota of the original short-term foreign debt quota management bank or the original domestic branch shall be inherited by this bank
with a legal person status, and its headquarters shall submit such quota to the SAFE or the SAFE branch or management department
at the registration place (hereinafter referred to as the “SAFE branch”) for archival filing.

In case a foreign-funded bank has simultaneously established both a bank with a legal person status and a branch conducting wholesale
business of foreign exchange within the territory of China, the subsidiary bank shall take charge of managing short-term foreign
debts, and the short-term foreign debt quota shall be jointly used by the bank with a legal person status and the branch conducting
wholesale business of foreign exchange.

Where it is necessary for a foreign-funded bank to adjust short-term foreign debt quotas for different regions because of the merger
or split-up, etc., the institution needing to increase the quota shall apply to the local SAFE branch, who shall examine and approve
the application together with other related SAFE branches, and then report it to the SAFE for archival filing.

6.

Before a branch of a foreign-founded bank in China is converted into a bank with a legal person status, the funds from its overseas
parent bank for its the capital increase may be deposited into a special account which is opened in a domestic bank upon this branch’s
application to the local SAFE branch on behalf of the foreign bank. Such funds are not subject to the management of short-term foreign
debt quotas of such domestic bank, but they may only be used as overseas short-term capital by such domestic bank and not for any
other purpose.

7.

The SAFE will determine upon verification the short-term foreign debt quotas of the following financial institutions:

(1)

Policy banks and nationwide commercial banks with a legal person status (including foreign-funded banks with a legal person status
converted from foreign bank branches, see the affixed forms 1 and 2); and

(2)

Foreign bank branches implementing the centralized management on short-term foreign debt quotas (see affixed Form 1).

8.

Within the regional quotas (see affixed form 3) determined upon verification by the SAFE, each SAFE branch shall determine the short-term
foreign debt quotas of the following financial institutions within its jurisdiction:

(1)

Regional Chinese-funded banks (those that have not been listed into affixed Form 2);

(2)

Foreign-funded bank branches not implementing the centralized management of short-term foreign debts and regional foreign-funded banks
with a legal person status (hereinafter referred to as regional foreign-funded banks, that are, those that have not been listed into
affixed form 1); and

(3)

Non-bank financial institutions that have not been listed into any affixed form.

9.

A department and some staff members shall be designed by a financial institution to be responsible for managing and registering its
short-term foreign debts, as well as reporting them to the SAFE for archival filing.

10.

A financial institution shall conduct careful statistics on and comprehensive report of the short-term foreign debt data (see annex)
according to the relevant provisions on the statistical monitoring of foreign debts.

Chinese-funded financial institutions shall, uniformly by their headquarters through the SAFE foreign debt statistical monitoring
system (the bank version), report the foreign debt data on usance letters of credit, deposits of non-resident, overseas inter-bank
borrowing and overseas agency payments. The foreign-funded bank with a legal person status upon restructuring and its branches conducting
wholesale business of foreign exchange shall, uniformly by the subsidiary bank through the SAFE foreign debt statistical monitoring
system (the bank version), report the foreign debt data. A foreign bank branch that has not been restructured shall keep its original
foreign debt data submission method.

A financial institution shall report the data on usance letters of credit subject to the following three types based on currencies;
(1) usance letters of credit within a term of 90 days or less in the same currency; (2) usance letters of credit within a term of
over 90 days up to one year in the same currency; and (3) usance letters of credit with a term of over one year.

The data on overseas deposits not governed by foreign debt quotas shall be reported in the system at the same time.

11.

The SAFE and branches thereof shall deliver the short-term foreign debt quotas to the financial institutions under their respective
jurisdictions prior to March 31, 2007, and rigorously administer and supervise the borrowing of short-term foreign debts and the
implementation of quotas.

12.

The demands for short-term foreign exchange financing of a domestic financial institution may be satisfied through currency market
lending and swap, etc.

13.

The present Circular shall go into effect as of April 1, 2007. All SAFE branches shall promptly forward the present Circular to the
sub-branches and foreign-funded banks under their jurisdiction after they receive it. All designated Chinese-funded foreign exchange
banks shall promptly forward the present Circular to their branches. Any problem encountered during the implementation shall be fed
back to the SAFE in a timely manner.

Annex: Instructions on the Adjustment of the Submission Methods of Foreign Debt Data (Omitted)

Form 1: Form of the Verification of Short-term Foreign Debt Quotas for the Short-term Foreign Debt Management Banks of Foreign-funded
Financial Institutions in 2007 (Omitted)

Form 2: Form of the Verification of Short-term Foreign Debt Quotas for Chinese-funded Financial Institutions in 2007 (Omitted)

Form 3: Form of the Verification of Short-term Foreign Debt Quotas of Various Regions in 2007 (Omitted)

The State Administration of Foreign Exchange

March 2, 2007



 
The State Administration of Foreign Exchange
2007-03-02

 






PROVISIONS ON THE ADMINISTRATION OF SALES INFORMATION MANAGEMENT PLATFORMS OF SECURITIES INVESTMENT FUNDS

Circular of China Securities Regulatory Commission on Promulgating the Provisions on the Administration of Sales Information Management
Platforms of Securities Investment Funds

Zheng Jian Ji Jin Zi [2007] No. 76

Securities Depository and Clearing Company Limited, all the fund management companies, fund underwriting institutions and fund custodian
banks:

For the purpose of specifying various technical standards for securities investment fund sales information management, and strictly
surveilling market entrance and routine acts of fund sales institutions, the Provisions on the Administration of Sales Information
Management Platforms of Securities Investment Funds has been formulated in accordance with the Law on Securities Investment Funds
and the Measures for the Administration of the Sales of Securities Investment Funds (Decree No. 20 of China Securities Regulatory
Commission). It is hereby promulgated. Please implement them accordingly.

China Securities Regulatory Commission

March 15, 2007

Provisions on the Administration of Sales Information Management Platforms of Securities Investment Funds
Chapter I General Rules

Article 1

For the purpose of regulating the securities investment fund sales information management, advancing the quality of information services
provided to fund investors, and promoting the further development of securities investment fund sales business, the present Provisions
are formulated in accordance with the Law on Securities Investment Funds and the Measures for the Administration of the Sales of
Securities Investment Funds (hereinafter referred to as the Sales Administrative Measures).

Article 2

Sales information management platform of securities investment funds (hereinafter referred to as information management platform)
as referred to in the present Provisions means the information systems that are used for the sales of funds by fund sales institutions,
including foreground business systems, background management systems and support systems for applied systems.

Fund sales institutions as referred to in the present Provisions means the fund managers who carry out the subscription, purchase
and redemption of fund units lawfully and other institutions that have obtained the qualification for fund underwriting business
as well.

Article 3

The establishment and maintenance of information management platforms shall be line with the principles of safety, practicality and
systematization, and satisfy the requirements as follows:

(1)

they have all the fund sales functions as referred to in the present Provisions, and are capable of performing the duties of related
principals as prescribed in related laws or regulations;

(2)

they have a mechanism for monitoring and checking fund sales information flows and capital flows, and ensure the safety of capital
flows of fund investors;

(3)

they have a mechanism for monitoring fund sales rates, and prevent unfair competition in the fund sales business;

(4)

they support the utilize of the applicability principle for fund sales in the fund sales business;

(5)

they have a mechanism of management, supervisory and complaint concerning fund salespersons; and

(6)

they are able to provide the information about monitoring the fund transactions, capital safety and other sales acts for China Securities
Regulatory Commission (CSRC) as required.

Article 4

When implementing the activities regarding fund sales, a fund sales institution shall build, reconstruct and manage a related information
system under the present Provisions.

Chapter II Foreground Business Systems

Article 5

Foreground business systems means the application systems that are used by fund investors directly or are directly related to the
trading activities of fund investors, and are classified into self-service systems and assisted systems.

Assisted foreground system means a software application system that is offered by a fund sales institution and is required for qualified
professional service staff to assist fund investors to complete business operations.

Self-service foreground system means an application system that is offered by a fund sales institution, and used for completing business
operations by fund investors independently, and comprises of the on-site self-service systems in the outlets of the fund sales institution
as well as the off-site self-service systems by internet, telephone or mobile communications, etc.

The foreground business system performs its functions by the network connection with the background management system.

Article 6

A foreground business system shall be able to provide the investment information for fund investors and fund salespersons, and the
following contents shall be included in the investment information:

(1)

Basic knowledge with respect to funds;

(2)

Related laws and regulations with respect to funds;

(3)

Fund products information, including basic information, rates, conversion of funds, mode for paying commissions, information on fund
risk evaluation and other public market information on funds, etc.;

(4)

Information concerning fund managers and fund custodians;

(5)

Related investment market information on funds; and

(6)

Information with respect to fund sales branches and outlets.

The investment information as provided for fund investors shall come from lawful information sources, and the provider shall disclose
the information sources and the time of publicity to fund investors.

Article 7

A foreground business system shall cover the function of managing the information concerning the accounts for fund transaction and
fund investors, including the opening of accounts, investigation and assessment of risk tolerance of fund investors, information
inquiry about fund investors as well as the alteration of the information, annulment of accounts, password management, applications
for freezing or defreezing accounts, etc. with regard to the fund investors:

(1)

When an account is opened for an individual, the information concerning the type and number of the certificate, fund transaction account,
the name, date of birth, type and number of the statutory or authorized agent’s certificate, name of the statutory or authorized
agent, the bank account, contact information and method for delivery of statements, etc. shall be recorded down by the system;

(2)

When an account is opened an entity, information concerning the type and number of the certificate, type, fund transaction account,
the name, registration place, name of the legal representative, type and number of the statutory or authorized agent’s certificate,
name of the statutory or authorized agent, the bank account, contact information and method for delivery of statements, etc. shall
be recorded down by the system;

(3)

A reliable mechanism shall be contained by the system for the transaction codes of fund investors and it shall prohibit the system
from generating same passwords or weak passwords, and the revision or taking back of passwords by fund investors shall be recorded
down as log files; and

(4)

The system shall contain the functions of investigating, assessing and recording down the risk tolerance of fund investors.

Article 8

As for a foreground business system, the functions of subscribing, purchasing and redeeming funds and changing the mode for distributing
dividends as well as other trading functions as recognized by CSRC shall be contained:

(1)

whether the risk degree of the funds subscribed or purchased by fund investors matches with the risk tolerance of these fund investors
shall be examined by the system; and the function of requiring fund investors to make confirmation and recording down the information
concerning the confirmation of fund investors shall be included in the system if the non-matching occurs;

(2)

The transfer of the capital from redemption into any bank account which is not owned by the fund investor shall be prohibited in the
system; and if a fund investor makes alterations to his bank account after filing an application for redemption but before the return
of the capital from redemption into his account, it shall be deemed as an abnormal transaction, and shall be recorded down in the
system;

(3)

The function of revising the sales rates may not be included in the system; and

(4)

The correct indications shall be made for the transaction applications as submitted at the time other than the opening hours for fund
transactions.

Article 9

A foreground business system shall have the function of providing services to fund investors:

(1)

The service for inquiring about the information with respect to the fund products and fund units as held by fund investors, details
about fund transactions as performed by fund investors, capital transfer for fund transactions as implemented by fund investors,
fund products suitable for the risk tolerance of fund investors, net value of funds and fund proceeds, etc. shall be offered by the
system;

(2)

The statements shall be provided to fund investors regularly and irregularly by a mode as chosen by fund investors, which shall comprise
of the fund units as held by each fund holder, details regarding the transactions occurred in the fund transaction account of each
fund investor, conditions on collection of commissions, and the means for distributing dividends, etc.; and

(3)

The information about the complaints put forward by fund investors shall be recorded down by the system, which shall contain the name
of the fund investor, time of complaint, matter as complained about, handling process and results, etc.

Chapter III Self-service Foreground Systems

Article 10

A self-service foreground system shall satisfy the provisions as prescribed in this Chapter at the same time upon the requirements
as prescribed in Chapter II.

Article 11

Various methods shall be provided for fund investors to verify their real identities and qualifications in the self-service foreground
system by a fund sales institution, which shall comprise of the provision of related certification documents with respect to lawful
sales of funds and the contact information of the supervisory organ for fund investors to conduct convenient verifications.

The related personnel that provide supporting services in the self-service foreground system shall be required for the same qualification
as for the employees that provide face-to-face services at the similar positions; and a self-service foreground system shall provide
a function of checking the qualifications of related personnel for fund investors.

Article 12

The following information shall be disclosed to fund investors by way of online reading, downloading and links of documents or voice
indicating, etc. in a self-service foreground system:

(1)

Information on the fund sales institution, including the registration address, main office site, branches and outlets of fund sales,
and contact information, etc.;

(2)

Models of the client’s account opening agreement or any other related document;

(3)

Two or more means for handling complaints; and

(4)

Revealing related risks in the self-service and the prevention measures of fund investors, including information safety, abnormal
operations and system malfunction, etc., and reminding fund investors of their obligations of verifying the information as provided
by the fund sales institution through the third party and the obligation of keeping their identity data as passwords, certificates
and etc. properly.

Article 13

When opening a fund transaction account through the self-service foreground system, the fund investor shall be required to offer
related materials that may prove his identity, verify his identity by adopting an equivalent real-name system; and when opening an
account independently or revising the information about the account by a fund investor, the fund sales institution shall verify the
identity of the name of the fund investor with the bank account thereof.

A self-service foreground system shall have the function of verifying the identity of the fund investor for conducting self-service
operations and take lawful and valid anti-denial measures; where a fund investor carries out operations by the internet, the IP address
and digital certificate, etc. of the operator shall be recorded down by the system, and if through the phone, the phone number shall
be recorded down.

In case of any surplus, transaction or rights in float in a fund transaction account, a fund investor may not conduct such important
operations as cancel this fund transaction account through a self-service foreground system, designate the alteration of bank account,
and shall go through the aforesaid operations at the counter upon his valid certificate.

Article 14

The following quotas shall be set in the self-service foreground system by any fund sales institution:

(1)

the maximum amount that a fund investor may subscribe or purchase funds in a single deal or in a day accumulatively; and

(2)

the maximum amount that a fund investor may redeem funds in a single deal or in a day accumulatively.

Article 15

Standby service measures or schemes shall be provided to fund investors by all fund sales institutions when the self-service foreground
system breaks down.

Article 16

Each function as designed in the self-service foreground system shall have the friendly interface, be convenient to use, and have
the function of preventing or correcting wrong operations of fund investors.

Chapter IV Background Management Systems

Article 17

A background management system shall implement the data support and centralized management for the foreground business system, the
functions of which shall be used only inside the fund sales institution.

Article 18

In a background management system, the related information with respect to the fund sales institution, branches and outlets of fund
sales, and fund salespersons shall be recorded down, and the functions of managing, examining and monitoring the branches and outlets
of fund sales as well as the fund salespersons shall be remained:

(1)

The basic information concerning the fund sales institution shall comprise of the name, registration place, contact person, person
in charge and contact information, etc.;

(2)

The basic information concerning the branches and outlets of fund sales shall comprise of names, addresses, contact persons, persons
in charge and contact information, etc.; and

(3)

The basic information on the fund salespersons shall comprise of their names, contact information, sales branches and outlets where
they are serving, and the qualification certificates, etc.; and the system shall be able to record down the training records and
irregularity information, etc. concerning fund salespersons.

Article 19

The information regarding the risk evaluation of funds, fund managers, fund products and investments, etc. shall be recorded down
and managed by a background management system:

(1)

The information on a fund manager shall include the name, registration address, main office site, person in charge, contact person
and contact information, etc. thereof;

(2)

The information concerning a fund product shall include the code, name, type, trading quota, and rate, etc. of the fund; and

(3)

The system shall be able to monitor the regularity of fund sales rates.

Article 20

In a background management system, the transaction applications that are received at the time other than the opening hours for fund
transactions shall be disposed of correctly so as to prevent the off-hour trading by fund investors.

Article 21

A background management system shall be able to liquidate transactions and dispose the capital so as to complete the data exchange
with the fund registration system and the bank system:

(1)

Inputting the data on opening fund accounts and fund transactions as confirmed by the fund registration institution into the system
for disposal shall be remained within the functions thereof, including the confirmation of the annulment of accounts, freeze of accounts,
freeze of shares, defreeze of accounts, defreeze of shares, non-trade transfer of funds, division of shares and other special business
disposal functions as launched by the fund registration institution;

(2)

Recording down the bank accounts of fund investors and the capital transfer information shall be remained within the functions thereof;
and

(3)

Controlling the fund sales scale with a fund registration system shall be remained within the functions thereof.

Article 22

A background management system shall be able to check the information flows and capital flows as involved:

(1)

Checking whether the fund units held by fund investors as recorded down by the fund sales institution conform to the data as provided
by the fund registration institution;

(2)

Checking whether the amount booked in and out of special fund sales accounts are identical with the amount of subscription and purchase
and the amount of redemption as recorded down by the fund registration institution;

(3)

Checking the details of trading dates, funds, fund investors, and branches, etc.; and

(4)

Recording down the problems that are found during the course of checking, and giving warnings against major problems and logging actual
methods of resolution.

Chapter V Submission of the Information to the Supervisory System

Article 23

The following information shall be provided to the CSRC fund supervisory business information system by a fund sales institution,
and the genuineness, accuracy and integrity thereof shall be guaranteed:

(1)

Daily fund transactions of the fund sales institution;

(2)

Monthly summaries of the information concerning whether the risk degree of the funds as subscribed and purchased by fund investors
match with the risk tolerance thereof;

(3)

Monthly summaries of the information on abnormal fund transactions;

(4)

Quarterly internal audit reports of the fund sales institution;

(5)

Annual financial and business information of the fund sales institution;

(6)

Instructions about the fund risk assessment methods of the fund sales institution;

(7)

Instructions about the methods of the fund sales institution for investigating and assessing the risk tolerance of fund investors;
and

(8)

Other information as required by the CSRC.

The bank that opens exclusive fund sales accounts shall be entrusted by a fund sales institution to provide the daily capital flow
data concerning the said exclusive fund sales accounts to the CSRC fund supervisory business information system.

Article 24

The confirmation information concerning daily fund transactions shall be provided to the CSRC fund supervisory business information
system by all fund registration institutions, and the authenticity, accuracy and integrity thereof shall be guaranteed.

The bank that opens settlement accounts shall be entrusted by a fund sales institution to provide the daily capital flow data concerning
settlement accounts to the CSRC fund supervisory business information system.

Chapter VI Administration of Information Management Platforms

Article 25

The support system of the application system to the information management platform shall comprise of databases, servers, network
communications, and security guards, etc., and back-up measures or schemes shall be provided for the component parts of a key support
system.

Article 26

An information management platform shall have the technical features of uniformly business disposal and uniformly data storage so
as to keep the information on fund investors, trading records, information concerning fund salespersons and service information to
fund investors, or any other electronic data in a centralized manner.

Article 27

Such reports as putting the system into use, performing major upgrading to the system and annual technical risk assessment shall
be submitted to the CSRC for archival filing.

Interconnection tests shall be implemented together with fund managers and the fund registration institution when upgrading a system.

Article 28

A fund sales institution shall formulate the business continuity scheme and the disaster resumption scheme, and corresponding drills
shall be performed regularly.

Article 29

A fund sales institution shall set up a perfect monitoring system so as to record down system upgrading, network visiting, database
access, revision of user passwords or any other important operation, and keep log files properly.

Article 30

The system data shall be backed up everyday and shall be kept on different places properly, and the backup of the information on
fund investors and the trading records in the system operating data shall be kept on the media that can not be changed for 15 years.

Article 31

The reliable encryption shall be performed for the transmission of sensitive data such as the identities of fund investors and the
detailed transactions on the public network, and no plain text means shall be used for the storage and transmission of the trading
passwords of fund investors; and the business, operation and maintenance personnel of a fund sales institution may not directly alter
the trading data or passwords of fund investors; and in case of any alteration as required for any special reason, rigid procedures
shall be implemented and marks shall be left accordingly.

Article 32

A fund sales institution shall appropriately manage the project documents and technical files in the management system; and with
regard to a core business system that is developed as required, the fund sales institution shall require the developer to provide
source code or give the source code to a third party for custody.

Article 33

A fund sales institution shall take guild standards and data interfaces that have already been promulgated in the system development
and operation.

Article 34

On the basis of the guaranteed safety, a fund sales institution may outsource such professional services as systems integration,
application development, operations maintenance, equipment custody, network communications, technical advice, and etc. to service
providers having a corresponding qualification in light of the principle of fair competition in the market. A fund sales institution
shall conclude a detailed business contract with the party that undertakes the technical outsourcing so as to clarify the duties
respectively.

The basic information concerning selection or alteration of the party that undertakes the technical outsourcing shall be submitted
to the CSRC for archival filing.

Article 35

When outsourcing technical services, the fund sales institution shall assume the final management duty for the safe operation of
the information management platform.

Chapter VII Supplementary Rules

Article 36

The CSRC and the agencies thereof shall be enpost_titled to monitor the fund transactions, capital safety and other sales activities by
its fund supervisory business information system.

Article 37

The CSRC and the agencies thereof shall be enpost_titled to conduct on-site inspections of the information platforms of fund sales institutions,
and may adopt monitoring measures accordingly under specific situation and the related laws and regulations if any major problem
is found.

Article 38

As for an institution that plans to apply for the qualification for fund underwriting business, it shall build a related information
system as required in the Sales Administrative Measures and the present Provisions, and supplement and improve the related contents
in the application materials for the fund underwriting qualification at the same time.

Article 39

As for fund managers and those institutions that have obtained the qualification for fund underwriting business, they shall complete
the reconstruction of related information system within one year as of the implementation of the present Provisions in accordance
with the present Provisions, and prepare for the on-site inspections of CSRC and the agencies thereof on the information management
platform simultaneously.

Article 40

The format requirements for the data exchanges as submitted by fund sales institutions and fund registration institutions to the
CSRC fund supervisory business information system shall be informed by the CSRC separately.

Article 41

The present Provisions shall enter into force as of the promulgation date.



 
China Securities Regulatory Commission
2007-03-15

 






CIRCULAR OF THE STATE ADMINISTRATION OF TAXATION ON INTENSIFYING INVESTIGATION INTO AND ANALYSIS OF TRANSFER PRICING

Circular of the State Administration of Taxation on Intensifying Investigation into and Analysis of Transfer Pricing

Guo Shui Han [2007] No. 363

The state taxation bureaus and local taxation bureaus of all provinces, autonomous regions, municipalities directly under the Central
Government, and cities specifically designated in the state plan,

With a view to regulating the investigation into and analysis of the cases concerning transfer pricing of all regions and enhancing
the quality of such investigations, the related issues are hereby clarified as follows in accordance with Article 51 of the Detailed
Rules for the Implementation of the Law of the People’s Republic of China on the Administration of Tax Collection and the related
provisions in the Rules of the State Administration of Taxation for the Taxation Management Rules for the Businesses between Associated
Enterprises (Guo Shui Fa [2004] No. 143 ):

1.

Every region shall intensify the functional risk analysis of the enterprises under investigation, and the enterprises that accept
the transfer pricing investigation shall fill in the Analysis Form on Enterprise Functional Risks. The competent taxation authority
shall fill in the Confirmation Form on the Analysis of Enterprise Functional Risks in light of the Analysis Form on Enterprise Functional
Risks as filled in by the enterprise and by referring to other related conditions it has known through investigation, and shall submit
these two forms to the State Administration of Taxation together.

2.

Every region shall intensify the related financial analysis of associated transactions conducted by the enterprises under investigation,
and fill in the Financial Analysis Form on the Associated Transactions between Enterprises on the basis of anti-tax avoidance investigation,
and report it and the archival filing report and the case settlement report to the State Administration of Taxation.

Attachments:

1.

Analysis Form on Enterprise Functional Risks (omitted)

2.

Confirmation Form on the Analysis of Enterprise Functional Risks (omitted)

3.

Financial Analysis Form on the Associated Transactions between Enterprises (omitted)

State Administration of Taxation

March 27, 2007



 
State Administration of Taxation
2007-03-27

 






CIRCULAR OF THE MINISTRY OF COMMERCE CONCERNING MATTERS ABOUT REINFORCING THE ADMINISTRATION OF PROCESSING TRADE

Circular of the Ministry of Commerce Concerning Matters about Reinforcing the Administration of Processing Trade

Shang Chan Fa [2007] No.133

In order to further perfect the administration of processing trade, encourage processing trade enterprises to optimize structure,
improve economic performance, independently innovate and actively perform social responsibilities, restrict and decrease activities
of processing trade enterprises conducting the processing trade with high consumption of energy, serious pollution of environment
and low added value, effectively accelerate the transformation and upgrading of processing trade and promote the sound development
of processing trade, the competent departments of commerce at various levels shall ceaselessly reinforce system construction in the
administration of processing trade business, check the business qualification and processing production capacity of processing trade
enterprises as well as do well in access administration. The related matters are hereby notified as follows:

1.

Reinforcing the system construction of the processing trade administrative departments at each level

(1)

Rigorously administering the power of examination and approval. The competent commerce departments at each level shall, strictly according
to the provisions on examining and approving organ and graded examination and approval in the Interim Measures for Administrating
Examination and Approval of Processing Trade, exercise the power of examination and approval over processing trade business. When
delegating the power of examination and approval to lower levels, the provincial competent commerce departments shall observe the
related provisions and file the related situation with the Ministry of Commerce for record. The examining and approving organs at
each level shall issue the Certificate on Operation Situation and Production Capacity of Processing Trade Enterprises and the Approval
Certificate for Processing Trade Business to enterprises by using the e-networked approval/administration system for processing trade.
The related data on such certificates shall be put into the database of the Ministry of Commerce for unified administration. Any
examining and approving organ may not issue any certificate by any other means.

(2)

Attention shall be paid to daily statistical analysis. The competent commerce departments at each level shall pay attention to gathering
the statistical data regarding the production, operation, taxation, environmental protection, energy consumption, number of workers,
wage level, payment of staff’s social insurances, etc., of the local processing trade enterprises, summarize the situation and experience
in using advanced technical equipment, obtaining patents and building self-owned brands by them, and file the related information
with the higher competent commerce departments for statistical summary.

2.

Perfecting the access management for processing trade enterprises

(1)

Inspection on the operation situation and production capacity of processing trade enterprises shall be reinforced. For determining
an enterprise’s qualification for engaging in processing trade business as well as examining and approving processing trade business
by the examining and approving organ, the Certificate on Operation Situation and Production Capacity of Processing Trade Enterprises
(hereinafter referred to as the Production Capacity Certificate) shall be deemed as an important basis. When applying for engaging
in processing trade business, an enterprise shall truthfully report each item listed in the Production Capacity Certificate, and
the competent commerce departments at each level shall make on-the-spot investigation and make examination and approval in accordance
with the actual situation. The enterprise shall provide the evidentiary documents or materials in relation to the reported contents
when necessary. The competent commerce department may not approve any enterprise failing to pass the check on operation situation
and production capacity to engage in processing trade business.

(2)

Incorporating the indices about environmental protection, energy consumption, employment and equipment level, etc., into the scope
of check on operation situation and production capacity.

(a)

Processing trade enterprises shall be urged to strictly carry out environmental protection standards and encouraged to save energy
and reduce energy consumption. A processing trade enterprise’s major discharge indices such as sulfur dioxide (SO2) index, chemical
oxygen demand (COD) index, etc., shall reach the requirements of the environmental protection departments, and its comprehensive
energy consumption for gross unit output value may not be higher than the local average level. If any enterprise fails to reach the
standards for environmental protection and energy consumption or commits any environment responsible accident, it shall be prohibited
from engaging in processing trade business.

(b)

Processing trade enterprises shall be urged to improve the employment system. A processing trade enterprise shall go through employment
registration formalities as required at the local labor security department, care for workers’ welfare and respect the related local
provisions on minimum wage level and social insurances payment. Where any enterprise fails to go through employment registration
formalities as required, fails to reach the minimum wage level at its locality or violates the related provisions at its locality
on social insurance payment, engagement in trade business may not be approved; as for any such enterprise approved prior to the issuance
of the present Circular, the competent commerce department shall urge it to correct within a fixed time limit, where it fails to
do so, the competent commerce department shall cancel its qualification for engaging in processing trade business.

(c)

The elimination of outdated production capacity shall be accelerated. The competent commerce departments at each level shall effectively
implement the Decision of the State Council Concerning the Promulgation of the “Interim Provisions on Promoting Industrial Structure
Adjustment” for Implementation (Guo Fa [2005] No.40), and in light of the Catalogue for the Guidance of Industrial Structure Adjustment,
forbid the enterprises using outdated production technical equipment as listed in the eliminated category from operating processing
trade business, and may not approve any enterprise to undertake processing trade business for the purpose of producing any outdated
product as listed in the eliminated category. They shall urge the processing trade enterprises, which use technologies and equipment
as listed in the restricted category or produce products listed in the restricted category, to accelerate transformation and upgrading,
and may not approve any new enterprise to undertake processing trade business by using technologies and equipment as listed in the
restricted category any more.

3.

Delegating the power of examination and approval on the domestic sale of processing trade to the lower levels

For the purpose of adapting to the development situation of processing trade and strengthening the administration of processing trade,
from July 1st, 2007, when any processing trade enterprise applies for selling bonded import materials in domestic market, the application
shall be accepted, examined and approved by the original competent commerce department issuing the Approval Certificate for Processing
Trade Business according to the Interim Measures for Examining and Approving the Domestic Sales of Bonded Import Materials of Processing
Trade. In case any commodity to be sold in domestic market involves quota, license or any other special administrative measure, it
shall still be submitted to the provincial competent commerce department or the Ministry of Commerce for approval as required.

The competent commerce departments at each level shall, by considering the requirements mentioned above and the actual situation of
the locality, perfect each control measure, do well in self-inspection and rectification, find out the real situation of all the
processing trade enterprises within your respective jurisdiction and timely report the problems and situation found out. The provincial
competent commerce departments shall supervise the examination and approval organs at lower levels, handle and report behaviors of
examining and approving by exceeding power or issuing certificate not through the e-networked approval/administration system for
processing trade once found out, work hard in statistical analysis and summarize the experiences of outstanding entities, timely
report them to the higher authorities as well.

The Ministry of Commerce

April 12, 2007



 
The Ministry of Commerce
2007-04-12

 






CIRCULAR OF THE MINISTRY OF COMMERCE AND THE STATE ADMINISTRATION OF FOREIGN EXCHANGE CONCERNING FURTHER STRENGTHENING AND STANDARDIZING THE EXAMINATION AND APPROVAL OF FOREIGN DIRECT INVESTMENT IN REAL ESTATE INDUSTRY

Circular of the Ministry of Commerce and the State Administration of Foreign Exchange concerning Further Strengthening and Standardizing
the Examination and Approval of Foreign Direct Investment in Real Estate Industry

Shang Zi Han [2007] No.50

The authorities responsible for commerce and foreign exchange in all provinces, autonomous region, municipalities, and cities specifically
designated in the state plan, and Xinjiang Production and Construction Corps:

Six departments of the State Council (namely, Ministry of Construction, Ministry of Commerce, National Development and Reform Commission,
People’s Bank of China, State Administration for Industry of Commerce and State Administration of Foreign Exchange) jointly issued
Opinions on Regulating the Access to and Administration of Foreign Investment in the Real Estate Market (Jian Zhu Fang [2006] No.
171, hereinafter referred to as the Opinions) for the purpose of standardizing foreign fund access to and administration of real
estate market. The local authorities strictly implemented the prescriptions and requirements in the Opinions and made some substantial
achievement. However, some problems still remain in some regions. In accordance with the laws and regulations of foreign investment
and the relevant prescriptions in the Opinions, the relevant particulars concerning further strengthening and standardizing the examination,
approval, record for file and supervision of foreign investment in real estate are hereby notified as follows:

1.

The local commerce authorities shall strictly implement the Opinions and the Circular of the General Office of the Ministry of Commerce
concerning Implementing Circular concerning Standardizing Foreign Fund Access to and Administration of Real Estate Market (Shang
Zi Zi [2006] No. 192), strengthen the examination, approval and supervision of foreign-funded real estate enterprises, and strictly
control foreign investment in top grade real estate.

2.

Foreign-funded investment in the development and operation of real estate market shall observe the principle of project company.

(1)

In the case of applying for opening a real estate company, the right of land use and ownership of real estate building, or the booking
sale/purchase of land use or real estate right signed with land administration authority, land developer/ the owner of real estate
building. The examination and approval authority may not approve it if the aforesaid requirements are not met.

(2)

Should such enterprises as have established new-added real estate or business of foreign-funded enterprises, and as are engaged in
the development and operation of new real estate project, the enterprises hereof shall, in light of the relevant laws and rules,
apply to the examination and approval authority for the relevant procedures concerning increasing business scope or extending business
scale.

3.

The merge and acquisition or investment in domestic real estate enterprises by means of return investment (including the same actual
manipulator) shall be strictly controlled. Foreign investor may not alter the means of actual manipulator of domestic real estate
enterprises, evade the examination and approval upon foreign-funded real estate. Should the foreign exchange authority discovers
the foreign-funded real estate enterprises established by such means as deliberate evasion and false statement, the authority hereof
shall investigate it for remitting capital and the additive yield of its own accord to evade foreign exchange responsibility.

4.

Foreign investor engaged in domestic real estate development or operation shall abide by the principle of business existence, lawfully
apply for establishing foreign-funded enterprises in real estate and engage in the relevant business in accordance with the approved
business scope. The Chinese and foreign parties to the foreign-funded real estate enterprise shall not conclude the clauses guaranteeing
fixed return or the fixed return in disguised form of any party by any means.

5.

The local authority responsible for examining and approving the establishment of foreign investment shall record for file in the Ministry
of Commerce.

6.

The authority responsible for foreign exchange administration and designated foreign exchange bank shall not handle procedure of settlement,
sale, and remittance of capital exchange for such foreign-invested real estate enterprises as have not completed the procedure of
record for file in the Ministry of Commerce or have not passed the joint annual inspection upon foreign-funded enterprises.

7.

With regard to the foreign-funded real estate enterprises examined and approved by local authority hereof against the law, the Ministry
of Commerce shall investigate and rectify it, the authority of foreign exchange administration shall not handle such procedures as
foreign exchange registration hereto.

Ministry of Commerce

State Administration of Foreign Exchange

May 23, 2007



 
Ministry of Commerce, State Administration of Foreign Exchange
2007-05-23

 






1...141516Page 16 of 16

CONSTITUTION ACT, 1982 – page 22

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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