Constitution

MEASURES FOR ADMINISTRATION OF CHINESE-FOREIGN COOPERATIVE DISTRIBUTION ENTERPRISES

e02176

Ministry of Culture, Ministry of Commerce

Order of Ministry of Culture, Ministry of Commerce of the People’s Republic of China

No. 28

Measures for Administration of Chinese-foreign Cooperative Audio-video Product Distribution Enterprises are hereby promulgated and
shall come into force as of January 1, 2004. Measures for Administration of Chinese-foreign Cooperative Distribution Enterprises
promulgated on December 10, 2001 shall be repealed concurrently.

Sun JiaZheng, Minister of Ministry of Culture

Lu FuYuan, Minister of Ministry of Commerce

December 8th, 2003

Measures for Administration of Chinese-foreign Cooperative Distribution Enterprises

Article 1

The present Measures are hereby formulated in accordance with the law of the People’s Republic of China on Chinese-foreign Cooperative
Enterprises, the Regulations on the Administration of Audio-video Products and other laws and regulations for the purpose of enlarging
foreign culture exchange and economic cooperation as well as strengthening the administration on Chinese-foreign Cooperative Audio-video
products distribution enterprises.

Article 2

The present Measures shall be applicable to the Chinese-foreign cooperative audio-video product distribution enterprises established
in the territory of china.

The term of Chinese-foreign cooperative audio-video product enterprise refers to, in light of the principles of equality and mutual
benefits, upon the approval of relevant departments of the Chinese government, foreign enterprises and other economic organizations
or individuals (hereinafter referred to as the foreign cooperator) cooperatively established inside the territory of the People’s
Republic of China with Chinese enterprises and other economic organizations (hereinafter referred to as the Chinese cooperators)to
engage in the business of wholesale, retail and lease of the audio-video products.

The term “the audio-video products” refers to audio tapes, video tapes, gramophone records, laser audio discs, and laser video discs,
etc. on which contents are recorded.

Article 3

The Chinese-foreign cooperative audio-video product distribution enterprise must abide by the related laws and regulations, and disperse
thoughts, ethics, science and technology, cultural knowledge that are beneficial to the development of economy and the social progress.

Article 4

The legitimate business activities of the Chinese-foreign cooperative Audio-video Product Distribution Enterprises and the legitimate
rights and interests of the cooperators shall be subject to the protection of Chinese law.

Article 5

Ministry of Culture and Ministry of Commerce, as well as their authorized competent departments of culture and commerce at the provincial
level shall be responsible for the examination and approval of and supervision over the Chinese-foreign cooperative audio-video product
distribution enterprises.

The responsible departments of culture and the responsible departments of commerce of the local people’s governments at the county
level or above shall, in accordance with separate functions and duties, be responsible for the everyday supervision and administration
for the Chinese-foreign cooperative audio-video product distribution enterprises within their own administrative regions.

Article 6

The establishment and development of the Chinese-foreign cooperative Audio-video Product Distribution Enterprises shall follow the
development planning of the market of the audio-video market.

Article 7

The Chinese cooperator and foreign cooperator applying for establishing a Chinese-foreign cooperative audio-video product distribution
enterprises shall have the corresponding capacity for establishing the audio-video product distribution enterprises; and shall be
capable for bearing the civil responsibility independently and have no illegal records during the three consecutive years before
the application.

Article 8

The Chinese-foreign cooperative audio-video product distribution enterprises shall meet the following conditions:

(1)

Having independent status as a legal person;

(2)

Meeting the requirements of the state on the establishment of the audio-video product distribution enterprises;

(3)

Having funds adequate to its operation scale;

(4)

The equity owned by the Chinese cooperator is no less than 51 percent; and

(5)

The term of cooperation shall not exceed 15 years.

Article 9

Where Chinese-foreign cooperative audio-video product distribution enterprises apply for engaging in the chain operation of the audio-video
products or for operating the audio-video products by using the information in network, it shall go through the procedures for examination
and approval in accordance with the provisions of the state on the chain operation of the audio-video products and on operating the
audio-video products by using the information in network.

Article 10

Where a Chinese cooperator takes the stated owned assets as cooperated term, it shall get the approval of the superior state-owned
assets supervision and administration departments, in accordance with the related provisions of the evaluation and administration
for the stated-owned assets, and the evaluation institution specified by the state-owned assets supervision and administration departments
shall valuate for the stated-owned assets as the cooperated term. The valuation result shall be defined by the corresponding state-owned
assets supervision and administration departments in accordance with the provisions of the administration of state-owned assets.

Article 11

The establishment of the Chinese-foreign cooperative audio-video product distribution enterprises of audio-video products engaging
in the wholesale business of the audio-video products shall be handled in accordance with the following procedures:

(1)

The Chinese cooperator shall apply to the competent departments of culture at the province, autonomous regions and municipalities
directly under the Central Government where the distribution Chinese-foreign cooperative Audio-video Product Distribution Enterprises
of audio-video products to be established, and the mentioned above departments shall submit to Ministry of Commerce for making program,
examination and approval. Ministry of Culture shall make the decision of approval or not within 30 working days; the reason thereof
shall be stated in writing if the application is not approved.

(2)

The Chinese cooperator shall, within 6 months as of the date when the project initiation is approved by Ministry of Culture, apply
to the competent departments of commerce of the province, autonomous regions and municipalities directly under the Central Government
where the audio-video product distribution enterprises to be established is located for the establishment of such an enterprise.
The mentioned above departments shall submit to Ministry of Commerce for examination and approval after its check and approval. Ministry
of Commerce shall make a decision of approval or not within 30 working days. Upon the approval, an Approval Certificate for Enterprise
with Foreign Investment shall be issued to the applicant. If not, the reasons thereof shall be stated in writing.

(3)

The Chinese cooperator shall, within 30 days as of the date of receiving the Approval Certificate for Enterprise with Foreign Investment
issued by the Ministry of Commerce, apply to the Ministry of Culture on behalf of the Chinese-foreign cooperative audio-video product
distribution enterprises to be established for the Operation Permit for Audio-video Products upon strength of the approval documents
on project initiation issued by the Ministry of Culture and the Approval Certificate for Enterprises with Foreign Investment issued
by the Ministry of Commerce.

(4)

The Chinese cooperator shall, within 30 days as of the date of receiving the Operation Permit for Audio-video Products issued by Ministry
of Culture, and upon strength of the Operation Permit for Audio-video Products and the Approval Certificate for Enterprise with Foreign
Investment, go through the registration procedures and obtain the Business License of an Enterprise Legal Person in compliance with
the provisions of the administration for industry and commerce.

Article 12

the Chinese cooperator shall submit the following documents to Ministry of Culture while proposing the application for project initiation:

(1)

The application for project initiation which shall specify the name, address, scope of business, the source of the invested funds
and its amount of the Chinese-foreign cooperative audio-video product distribution enterprises to be established;

(2)

The project proposals and feasibility study report programmed and admitted commonly by both/all cooperator;

(3)

The business license or certification of registration, certification of qualification by every cooperated cooperator and the valid
certification of the legal representatives;

(4)

The appraisal and confirming documents issued by the state-owned assets administration departments of the state-owned assets to be
invested by the Chinese cooperator (if the Chinese cooperator take the state-owned assets as a means of cooperation); and

(5)

Other documents as required by Ministry of Culture.

Article 13

the Chinese cooperator shall submit the following documents to Ministry of Commerce while proposing the application for establishing
the Chinese-foreign cooperative audio-video product distribution enterprises:

(1)

An application for establishment;

(2)

A project proposals or feasibility study report programmed and admitted commonly by every cooperated cooperator, and approved by Ministry
of Culture;

(3)

The approval documents for project initiation of the cooperation project issued by Ministry of Culture

(4)

The contract and articles of association of the Chinese-foreign cooperative audio-video product distribution enterprises to be established
signed by the representatives authorized by both/all cooperators;

(5)

The confirming documents issued by the state-owned assets administration departments of the state-owned assets on appraising report
of the state-owned assets to be used as investment by the Chinese cooperator (if the Chinese cooperator take the state-owned assets
as a means of cooperation);

(6)

The cooperators￿￿ business license or certification of registration, credit certificates and the valid certificates of the legal representatives;

(7)

The notice of pre-approval for the name of the cooperative enterprise to be established;

(8)

The name list of the chairman, vice chairmen and members of the board of directors or of the joint management committee of the cooperative
enterprises, which is determined by both/all cooperators through negotiation; and

(9)

Other documents as required by Ministry of Commerce.

Article 14

In case of any major change of Chinese-foreign cooperative audio-video product distribution enterprises, such as change of the investors,
adjustment of the interest proportion of the investors, change of the investment amount or means of cooperation, change of scope
of business, change of operational period, or change of establishment of the branches, the enterprise shall go through the procedures
for approval in accordance with Article 11 of the present Measures.

Other changes of the Chinese-foreign cooperative audio-video product distribution enterprises shall, in accordance with related provisions
of the foreign investment enterprises, be submitted to the Ministry of Commerce for approval or record. In the case of the change
of legal address, legal representative, the main responsible person and termination of the business activity due to expiry of operational
period, the Chinese-foreign cooperative audio-video product distribution enterprises shall also report to Ministry of Culture for
record within 30 days.

Article 15

The establishment of a Chinese-foreign cooperative audio-video product distribution enterprises that engages in the retail and leasing
business, shall be handled in accordance with the following procedures:

(1)

The Chinese cooperator shall apply to the competent departments of culture at the level of province where the Chinese-foreign cooperative
audio-video product distribution enterprises to be established is located, and then the competent departments of culture shall make
the decision on whether to approve the project initiation within 30 working days; if the application is rejected, the reasons for
it shall be stated in writing.

(2)

The Chinese cooperator shall, within 6 months as of the date when the project initiation is approved by the competent departments
of culture at provincial level, apply to the competent departments of commerce at provincial level where the Chinese-foreign cooperative
audio-video product distribution enterprises to be established is located for the establishment of such an enterprise, and then the
competent departments of commerce at provincial level shall, within 30 working days, make a decision on whether to approve or not;
the reason for it shall be stated in writing explanation if the application is rejected.

(3)

The Chinese cooperator shall, within 30 days as of the date of receiving the Approval Certificate for Enterprises with Foreign Investment
issued by the competent departments of Commerce at the provincial level, apply to the competent department of culture at the provincial
level on behalf of the Chinese-foreign cooperative audio-video product distribution enterprise to be established for the Operation
Permit for Audio-video Products upon strength of the approval documents on project initiation issued by the competent department
of culture at the provincial level and the Approval Certificate for Enterprises with Foreign Investment issued by the competent department
of commerce at the provincial level.

(4)

The Chinese cooperator shall, within 30 days as of the date of receiving the Operation Permit for Audio-video Products issued by the
competent departments of culture at provincial level, and upon strength of the Operation Permit for Audio-video Products and the
Approval Certificate for Enterprises with Foreign Investment, go through the registration procedures and obtain the Business License
of an Enterprise Legal Person in compliance with the provisions on the industry and commerce administration,

Article 16

The Chinese cooperator shall submit the following documents to the competent departments of culture at the provincial level while
proposing the application for project initiation:

(1)

The application for project initiation, which shall specify the name, address, scope of business, the source of the investment funds
and its amount of the Chinese-foreign cooperative audio-video product distribution enterprises to be established;

(2)

The project proposals or feasibility study report worked out or recognized by both/all cooperators;

(3)

The business license or certificates of registration, credit certificates of every cooperator and the valid certificates of the legal
representatives;

(4)

The confirmation documents issued by the administrative departments of the state-owned assets on the appraising report of state-owned
assets to be used as investment by the Chinese cooperator (if the Chinese cooperator take the state-owned assets as a means of cooperation);
and

(5)

Other documents as required by the competent departments of culture at the provincial level.

Article 17

The Chinese cooperator shall submit the following documents to the competent departments of commerce at provincial level while proposing
the application for establishing the Chinese-foreign cooperative audio-video product distribution enterprises:

(1)

An application for establishment:

(2)

A project proposals and feasibility study report worked out and recognized by both/all cooperators, and approved by the competent
departments of commerce at the provincial level;

(3)

The approval documents on project initiation under cooperation issued by the competent departments of commerce at the provincial level;

(4)

The contract and articles of association of the Chinese-foreign cooperative audio-video product distribution enterprises to be established,
which are executed by the representatives authorized by both/all cooperators.

(5)

The confirmation documents issued by the state-owned assets administration departments on the appraising report and the state-owned
assets to be used as a means of investment by the Chinese cooperator (if the Chinese cooperator take the state-owned assets as a
means of investment);

(6)

The business license or registration certificates, credit certificates of the cooperators and the valid certificates of the legal
representative;

(7)

The notice of pre-approval for the name of the cooperative enterprises to be established;

(8)

The name list of the chairmen, vice-chairmen and members of the board of directors or of the joint management committee of the cooperative
enterprise, which is determined by both/all cooperators through negotiation; and

(9)

Other documents as required by the competent departments of commerce at the level of province.

Article 18

In case of any major change in a Chinese-foreign cooperative audio-video product retail or leasing enterprises, including change of
any investor, adjustment of the interest proportion of the investors, change of the investment amount or means of cooperation, change
of the business scope, change of the operational period or the establishment of the branches, the enterprise shall go through the
procedures for approval in accordance with article 15 of the Measures hereby.

In the case of other changes of the Chinese-foreign cooperative audio-video product distribution enterprises, the enterprise shall,
in accordance with related provisions of the enterprises with foreign investment, report to the competent departments of commerce
at the provincial level for approval or record.

In the case of the change of legal address, legal representative, the main responsible person and termination of the business activity
due to expiry of operational period, the Chinese-foreign cooperative audio-video product distribution enterprises shall report to
the competent departments of culture at the provincial level for putting on records within 30 days.

Article 19

The Chinese-foreign cooperative audio-video product distribution enterprises shall engage in the business activities of audio-video
products within the approved scope of business.

Article 20

No Chinese-foreign cooperative audio-video product distribution enterprises may operate any audio-video products, which contains any
contents prohibited by the state from being dispersed; or which is published by non audio-video publishing entities or reproduced
by non audio-video product reproducing entities; or which is imported without the approval of Ministry of Culture; or which infringes
on the copyright of others.

Article 21

No Chinese-foreign cooperative audio-video product distribution enterprises may engage in the business of importing the audio-video
products

Article 22

Whoever, without the approval of the Ministry of Culture and the Ministry of Commerce and without authorization, establishes Chinese-foreign
cooperative audio-video product distribution enterprises, or engages in the business of distributing audio-video products with foreign
investment without approval, shall be punished by related departments of the state according to law. And the relevant person liable
shall be prosecuted for liabilities.

Article 23

Where the investors of Hong Kong Special Administrative Region, Macao Special Administrative Region and Taiwan of China establish
the distribution Chinese-foreign cooperative audio-video product distribution enterprises of the audio-video products within other
provinces, autonomous regions and municipalities directly under the Central Government, it shall implement by reference to the present
measures hereby.

Article 24

The power to interpret the present measures remains with the Ministry of Commerce and Ministry of Culture.

Article 25

The present measures and the annexes shall be effective as of the date of January 1, 2004; The administrative measures of Chinese-foreign
cooperative audio-video product distribution enterprises promulgated on December 10, 2001 by Ministry of Culture and Ministry of
Foreign Trade and Economic Cooperation shall be repealed simultaneously.

Annex:

In order to promote closer economic and trade relations between Hong Kong, Macao and the mainland, and encourage the service providers
in Hong Kong and Macao to establish the audio-video product distribution enterprises in the mainland, in accordance with the arrange
on establishing closer economic and trade relations between Hong Kong and the mainland, as well as the arrange on establishing closer
economic and trade relations between Macao and the mainland upon the approval of the State Council, the following special provisions
shall be made hereby on the related issues that the service providers in Hong Kong and Macao to establish the audio-video product
distribution enterprises prescribed by measures for administration of distribution Chinese-foreign cooperative audio-video product
distribution enterprises.

1.

From the date of January 1, 2004, the providers with service in Hong Kong and Macao are permitted to establish the Chinese-foreign
cooperative audio-video product distribution enterprises in the form of equity joint ventures in the mainland.

2.

The providers with service in Hong Kong and Macao may possess the majority of the shareholders, but not more than 70 percent.

3.

The providers with service in Hong Kong and Macao may possess the proportion of rights and interests not more than 70 percent in the
contractual joint ventures.

4.

Other provisions on the providers with service in Hong Kong and Macao to establish the Chinese-foreign cooperative audio-video product
distribution enterprises in the mainland shall be governed by administrative measures of Chinese-foreign cooperative audio-video
product distribution enterprises. While other provisions on the providers with service in Hong Kong and Macao to establish the Chinese-foreign
cooperative audio-video product distribution enterprises in the mainland shall be implemented by reference to administrative measures
of Chinese-foreign cooperative audio-video product distribution enterprises.

5.

The service providers in Hong Kong and Macao defined in the provisions shall comply with the requests of related provisions and the
definition specified by the arrange on establishing closer economic and trade relations between Hong Kong and the mainland, as well
as the arrange on establishing closer economic and trade relations between Macao and the mainland separately.

6.

The present provisions shall be interpreted by Ministry of Commerce and Ministry of Culture in accordance with respective functions.



 
Ministry of Culture, Ministry of Commerce
2003-12-08

 







CIRCULAR OF THE STATE ADMINISTRATION OF TAXATION ON AUDIT OF E-INFORMATION OF SPECIAL TAX RECEIPT OF EXPORTS

State Administration of Taxation

Circular of the State Administration of Taxation on Audit of E-information of Special Tax Receipt of Exports

No.1392 [2003] of State Administration of Taxation

December 30, 2003

The departments and offices of all the provinces, autonomous regions, municipalities directly under the Central Government, and cities
under separate State Planning:

In order to ensure the implement of the spirit of the provision promulgated on reform of the export refunds by the State Council and
to increase the efficiency of the audit of export refunds, the State Administration of Taxation decided to, on the base of the improvement
and stable functioning of the second phase of the Gold-tax project, cancel the audit of the E- information of the special tax warrant
of exports and the list of tax payment certificate (hereinafter referred to as special tax receipt )when the competent tax authorities
run the audit procedure of the export refunds of the exports declared at the custom after the date of January 1, 2004(subject to
the date signed in the Bill of Entry) except the items listed in the Article 2 of this circular. We hereby give our notice as follows
regarding the concerning matters:

1.

To the exports declared at the custom after January 1, 2004, the competent tax authorities shall, in the course of running the audit
procedure of export refunds, verify the exports bill of entry, the foreign exchange acceptance verification in export trade, VAT
invoice and other paper documents and the related E-information for export refunds and shall verify the paper documents of the special
tax receipt despite the E-information of it.

2.

To the following listed 3 sorts of exports, the competent export refunds authorities shall verify the special tax receipt declared
by the export units and the E-information from the State Administration of Taxation simultaneously. The procedures of export refunds
shall be run follow the current provisions after the verification.

(1)

The VAT invoice was made before August 1, 2003,

(2)

The VAT invoice or the normal invoice of purchasing is out of the scope of supervision system of the VAT control and audit

(3)

consumption tax deduct

3.

From January 1, 2004, the competent tax authorities charging the offering companies shall not type in the E-information of the special
tax receipt to the goods that the offering units make VAT invoice using VAT anti-forging and control system for the export units.
The competent tax authorities charging the offering companies shall type in and upload the E-information of the special tax receipt
of the VAT invoice, the normal invoice out of the scope of the supervision system of the VAT control and audit and the goods the
shall pay the consumption tax. The State Administration of Taxation will set out the E-information of the mentioned special tax receipt
monthly.

4.

The time of revoking the paper documents of special tax receipt shall be notified separately later.



 
State Administration of Taxation
2003-12-30

 







INTERIM REGULATIONS ON THE MANAGEMENT OF INTERNATIONAL NETWORKING OF COMPUTER INFORMATION

Interim Regulations of the PRC on the Management of International Networking of Computer Information

     Article 1 These Regulations are promulgated hereby with the aim of strengthening management of international networking of computer
information and promoting the healthy development of international exchange of computer information.

   Article 2 International networking of computer information within the People’s Republic of China shall be carried out in accordance with stipulations
in these Regulations.

   Article 3 Denotations of the following terms as used in these Regulations:

(1) International networking of computer information (hereinafter referred to as international networking) refers to the linking of
networks of computer information within the People’s Republic of China to foreign networks of computer information for the purpose
of international exchange of information.

(2) Inter-connected networks refers to networks of computer information directly linked to international networking. Inter-connected
units refer to units in charge of operation of inter-connected networks.

(3) Insertion networks refer to networks of computer information that are inserted into inter-connected networks for the purpose of
international networking. Insertion units refer to units in charge of operation of insertion networks.

   Article 4 The State shall implement the principle of unified planning, unified standards, and level-by-level management of international networking
to promote its development.

   Article 5 The Information Working Group of the State Council (hereinafter referred to as the Leading Group) shall take charge of coordinating
and solving problems concerning international networking.

The office of the Leading Group shall work out, in line with stipulations in these Regulations, specific management rules to clarify
the rights, obligations and responsibilities of units providing international output and input channels, inter-connected units, insertion
units, and customers. It shall also take charge of examination and supervision of international networking.

   Article 6 To carry out international networking of computer information, the output and input channels provided by the Ministry of Posts and
Telecommunications in its public telecommunication network shall be used.

No units or individuals shall establish or use other channels for international networking on their own accord.

   Article 7 Inter-connected networks that have already been established shall be readjusted and put into management by the Ministry of Posts
and Telecommunications, the Ministry of Electronics Industry, the State Education Committee, and the China Academy of Sciences.

Establishment of new inter-connected networks shall be reported to the State Council for approval.

   Article 8 Insertion networks shall carry out international networking via inter-connected networks.

Insertion units that plan to engage in the business of international networking shall apply for license for doing the business of
international networking from departments or units in charge of inter- connected units empowered to handle applications for engagement
in the business of international networking. Those that have not obtained these licenses shall not engage in activities related to
international networking.

Insertion units that plan to engage in activities of a non-business kind shall report for examination and approval to departments
or units in charge of inter-connected units empowered to handle applications for these activities. Those that have not obtained approval
shall not carry out international networking via inter-connected networks.

Those applying for licenses for doing businesses related to international networking or reporting for examination and approval shall
provide information on the character of their computer information, scope of information, and location of their host computers.

The form of the license for doing businesses relationed to international networking shall be produced by the Leading Group in a unified
way.

   Article 9 Insertion units doing businesses related to international networking or engaged in non-business activities related to international
networking shall all meet the following requirements:

(1) They shall be legal person enterprises or institutions set up in accordance with law.

(2) They shall have corresponding computer networks, equipment, and relevant technical and management personnel.

(3) They shall have perfect safety and security systems and measures for technical protection.

(4) They shall meet other requirements stipulated in laws or raised by the State Council.

Insertion units doing businesses related to international networking that no longer meet requirements in clauses (1) and (2) due to
changes in their situation shall have their licenses revoked by the departments that have originally issued these licenses, and insertion
units engaged in non-business activities related to international networking that no longer meet the requirement in clause (1) due
to changes in their situation shall have their qualifications for international networking nullified by the departments that have
originally granted the approval.

   Article 10 International networking of the networks of computer information used by individuals, legal persons, and other organizations (hereinafter
referred to as customers) shall be carried out via insertion networks.

If the computers or networks of computer information as referred in the preceding clause are to be inserted into networks, consent
shall be won from insertion units, and registration procedures shall be gone through.

   Article 11 Units providing international input and output channels, inter-connected units, and insertion units shall set up corresponding network
management centres, enhance management of themselves and their customers according to law and relevant stipulations of the State,
do a good job in the safety management of network information, and provide excellent and safe services to customers.

   Article 12 Inter-connected units and insertion units shall take charge of technical training and management education related to international
networking for themselves and for their customers.

   Article 13 Units and individuals doing businesses related to international networking shall abide by relevant laws and administrative decrees
of the State, strictly implement the system of safety and security, refrain from illegal and criminal activities that endanger national
security and leak State secrets through international networking, and stay away from producing, consulting, duplicating, or spreading
information that interrupts social order or pornographic information.

   Article 14 Those that violate stipulations in articles 6, 8 and 10 shall be ordered by public security departments to stop networking, with
a warning issued to them. They may also be imposed a fine below 15,000 yuan. If they have earned any illegal incomes, these incomes
shall be confiscated.

   Article 15 Those that violate these Regulations and violate stipulations in other laws or administrative decrees shall be punished according
to the relevant laws and administrative decrees. If the cases are so serious as to be criminal, criminal responsibilities shall be
affixed.

   Article 16 Networking of computer information with Taiwan, Hong Kong and Macao shall be carried out with reference to these Regulations.

   Article 17 These Regulations shall take effect on the date of promulgation.

    






CIRCULAR OF THE STATE ADMINISTRATION OF FOREIGN EXCHANGE ON DISTRIBUTING THE SYSTEM OF THE INDIRECT DECLARATION AND VERIFICATION OF INTERNATIONAL REVENUE AND EXPENDITURE STATISTICS (FOR TRIAL IMPLEMENTATION)

The State Administration of Foreign Exchange

Circular of the State Administration of Foreign Exchange on Distributing the System of the Indirect Declaration and Verification of
International Revenue and Expenditure Statistics (for Trial Implementation)

HuiFa [2003] No.1

January 3, 2003

The branches and foreign exchange administration departments of the State Administration of Foreign Exchange (“SAFE”) in all provinces,
autonomous regions, and municipalities directly under the Central Government, the branches in Shenzhen, Dalian, Qingdao, Xiamen,
and Ningbo:

With a view to promoting the orderliness and effectiveness of the indirect declaration and verification of international revenue and
expenditure statistics, promoting the regularization and standardization of the verification work, the SAFE has formulated System
for the Indirect declaration and Verification of International Revenue and Expenditure Statistics (for Trial Implementation), and
hereby distributes them to you for implementation.

It is desired that you, after receiving the present Circular, will forward it to the sub-branches and the banks (including foreign-funded
banks) within your respective jurisdictions in good time. In case any problem arises in the implementation of the present Circular,
please contact the Department of International Revenue and Expenditure of the SAFE.

Tel: (010) 68402374; 68402146.

Attachment:System for the Indirect Declaration and Verification of International Revenue and Expenditure Statistics (for Trial Implementation)

Chapter I General Provisions

Article 1

The present System have been formulated on the basis of the Measures for the Declaration of International Revenue and Expenditure
Statistics and the Rules for the Implementation thereof as well as the relevant provisions of the Operational Rules for the Statistical
Declaration of International Revenue and Expenditure through Financial Institutions and by taking the practice of work into consideration
for the purpose of ensuring the quality of the data of international revenues and expenditures indirectly reported.

Article 2

Statistical personnel of international revenue and expenditure shall take a true-to-the-fact, serious and responsible attitude in
the work of verification of indirect declaration of international revenue and expenditure (hereinafter referred to as “verification”)
so as to ensure the timeliness, accuracy and comprehensiveness of the data reported. If they find any errors or omissions in their
verification work, they shall demand the entity under verification to put right.

Article 3

Verifications are classified into the non-on-the-spot verification of indirect statistical declaration of international revenue and
expenditure and on-the-spot verification of indirect statistical declaration of international revenue and expenditure.

Non-on-the-spot verification of indirect statistical declaration of international revenue and expenditure (hereinafter referred to
as “non-on-the-spot verification”) refers to that the administrative departments of statistical declaration of international revenue
and expenditure do not have to go to the banks to consult the original documents of transaction, instead, they make verifications
according to the connections and logical relationship between the relevant information reported by the banks.

On-the-spot verification of indirect statistical declaration of international revenue and expenditure (hereinafter referred to as
“on-the-spot verification”) refers to that the administrative departments of statistical declaration of international revenue and
expenditure go to the site of the banks or reporters of statistics to consult the original documents of transaction and other relevant
documents and verify the reported information.

Article 4

The principles for the verification of indirect statistical declaration of international revenue and expenditure are:

1.

The foreign exchange administrations on various levels shall verify the indirect statistical declaration of international revenue
and expenditure submitted by the banks or other reporters within their jurisdictions;

2.

The foreign exchange administrations on various levels are responsible for making irregular sample tests over the business of indirect
statistical declaration of international revenue and expenditure of the foreign exchange administrations on lower levels;

3.

The verification work shall be combined with the specific positions of the staff members.

Article 5

Foreign exchange administrations shall establish archivist files of verification, properly keep the relevant verification materials
incurred from non-on-the-spot and on-the-spot verifications.

Chapter II Non-on-the-spot Verification

Article 6

Non-on-the-spot verifications mainly include the verification of the electronic data in the foreign exchange administration version
of the monitoring system of international revenue and expenditure statistics (hereafter “foreign exchange administration version”)
and the check between the electronic data and the hardcopy declaration documents (hereafter “the sheet preserved by the foreign exchange
administration”).

Article 7

The verification of the electronic data in the monitoring system of international revenue and expenditure statistics mainly include
the verification of the precision of the electronic data in the foreign-related revenue and expenditure declaration documents, the
check between foreign-related revenue declaration documents and foreign-related revenue statistic reports, the check between the
daily settlement books of foreign-related payments and the declaration documents of foreign payments, the verification of the timeliness
of the input and transmission of electronic data of the banks, the check of consistency between the basic data and summarized data
on the same level, the verification of the implementation of the rule of “declare first, then make payment”, and the verification
of the forms of basic information of the entities, etc.

Article 8

Foreign exchange administrations shall make a sum-by-sum check of the electronic data declared by the banks within their respective
jurisdictions every ten days, and make irregular sample tests of the electronic data declared by the foreign exchanges on the next
lower level. Foreign exchange administrations shall note down or print all the problems disclosed in the verifications, and inform
the verified entity of the result of verification. The verified entities shall feed back their opinions within the prescribed time
limit.

Article 9

Foreign exchange administrations shall determine the scope of verification of the electronic data of foreign-related revenue declarations.

1.

Select the types of declaration documents from the basic system of the monitoring system of international revenue and expenditure
statistics that need to be verified, and then enter into the interface of declaration documents;

2.

Key in such factors as the area code, bank code, and the time period of inward and outward remittances into the interface of the declaration
documents, and then choose the “search” key;

3.

After entering into the search interface, select the factors of verification for search, and after the results of search are displayed,
select the “print” key, and then you’ll enter into the printing interface. Select the “output” key, and select the document type
of EXCEL, key in the file name, and then select the “save” key. Thus, the data is changed into the EXCEL format.

Article 10

Foreign exchange administrations shall verify the precision of the electronic data in the foreign-related revenue and expenditure
declarations according to the following requirements:

1.

Verifying whether the elements of declaration are complete and standard, including the declaration numbers, currency and amount of
revenue and expenditure, name of the payers and payees within the territory, (domestic) codes of the payers and payees, the country
(region) and the code thereof, domestic accounts for payment and receipt, amount of spot foreign exchange or settled (or purchased)
foreign exchange, other amounts, ways of settlement, transaction codes, transaction remarks, etc. in particular, verifying the declaration
information whose country displayed is “China”.

2.

Verifying whether logical relationship exists between the (overseas) payers and payees and the country (region) and the codes thereof,
between the accounts of receipt and payment and the ways of spot foreign exchange or settlement (purchase) of foreign exchange, between
currencies and the corresponding countries, between the code of transaction and the transaction remarks, etc.

3.

Verifying the precision of the selection of the types of declaration documents according to the contents of declaration.

4.

Checking whether the statistical reports of foreign payment within the quotas (except those under the item of writing-off for import)
have been completed in accordance with the relevant operational rules.

The wrong or doubtful data found in the process of verifications shall be registered (see annexed form).

Article 11

Foreign exchange administrations shall check the foreign-related revenue declaration documents against the foreign-related revenue
statistical reports.

The check shall be done in the “search” functions of the basic system within the monitoring system of international revenue and expenditure
statistics. The search shall include three inconsistencies: the foreign-related revenue declaration documents inconsistent with revenue
statistical reports, the statistical reports that want foreign-related revenue declaration documents, and the declaration documents
that want foreign-related revenue statistical reports. The inconsistent declaration information shall be printed for keeping purposes,
and shall be informed to the banks so as to find out the why they have happened.

Article 12

Foreign exchange administrations shall make checks between daily settlement books of foreign payments and the declaration documents
of foreign payments.

1.

The foreign payment declaration documents include forms of writing off foreign exchange paid for imports (to be used as declaration
documents), declaration documents of foreign payment for non-trade (including capital) (to entities), declaration documents of foreign
payments (to individuals), foreign payments within quota (to entities) and foreign payments within quota (to individuals). The data
are taken from the summarization system of the monitoring system of international revenue and expenditure statistics (foreign exchange
administration version). The data in the daily settlement books of foreign payments are taken from the basic system of the monitoring
system of international revenue and expenditure statistics (foreign exchange administration version).

2.

The check shall mainly cover:

a. whether the subject of declaration has filled in the declaration documents of foreign payments truthfully, timely, and completely;

b. whether the banks that handled the foreign payment businesses have made the daily settlement books of foreign payments according
to the operational rules.

3.

The logical relationship between the declaration documents of foreign payments and the data in the daily settlement books of foreign
payments shall meet the following requirements:

[amount in the forms of writing off foreign exchange paid for imports (to be used as declaration documents) + the amount in the declaration
documents of foreign payments for non-trade (including capital) + the amount in the declaration documents of foreign payments (to
individuals)] / [amount in the daily settlement books of foreign payments ?C amount of foreign payments within quota (to entities)
?C amount of foreign payments within quota (to individuals) ￿￿100%

Article 13

Foreign exchange administrations shall verify whether the electronic data of the banks have been input and transmitted in a timely
way.

1.

The types of declaration documents to be verified include statistical reports of foreign-related revenues, forms of writing off foreign
exchange paid for imports (to be used as declaration documents), declaration documents of foreign payment for non-trade (including
capital) (to entities), declaration documents of foreign payments (to individuals), and statistical reports of foreign payments within
quota.

2.

The verifications shall be made by using the searching functions in the above-mentioned declaration documents in the basic system
of the monitoring system of international revenue and expenditure statistics. When a date is determined for verifications, the number
of declarations and the amounts of the verification day as mentioned above shall be searched within the subsequent workdays. If neither
the number of declarations nor the amounts searched during the subsequent days are consistent, it would mean that the electronic
data of the banks have not been input and transmitted in a timely way.

Article 14

Foreign exchange administrations shall verify the consistency between the basic data in the monitoring system of international revenue
and expenditure statistics and the summarized data.

1.

It shall be verified whether the number of declarations and amounts of the various declaration documents in the basic system are consistent
with those in the summarized system so that the differences and errors that may exist between the basic data of the various declaration
documents and the summarized data can be found out.

2.

The verification shall be made by means of the Verification Forms of Indirect Declarations of International Revenue and Expenditure
Statistics.

3.

The total of the number of declarations and the total amounts in the basic system of the forms of writing off foreign exchange paid
for imports (to be used as declaration documents) shall be identical to the total number of declarations and the total amounts in
the summarized data and the payments made to the special economic zones (bonded areas, export processing zones, etc.)

Article 15

Foreign exchange administrations shall verify the implementation of the rule of “declare first, then make payments”.

The verifications shall be done through the search functions within the statistical reports of foreign-related revenues in the basic
system of the monitoring system of international revenue and expenditure statistics. On the search interface of the statistical reports
of foreign-related revenues, key in the code of the payee (in the case of entities) or the name of the payee (in the case of individuals)
as specified in the public announcements of “declare first, then make payment”, and at the same time, limit the time for inward payment
to three months, starting on the day when the public announcement becomes effective. What should be noted is that this search is
targeted at all the banks within jurisdiction, and thus the code of financial institution shall be “%”.

Article 16

Foreign exchange administrations shall verify the precision and integrity of all the elements of the electronic information in the
forms of basic information of the entities within the basic system of the monitoring system of international revenue and expenditure
statistics.

1.

The precision of the organizational and institutional codes (codes of the entities) according to the standard codes provided by the
National Organizational and Institutional Code Management Center or the local technical supervision administration. At the same time,
it shall be verified whether there are different names for a same code or different codes for a same name;

2.

The integrity and precision of the contact telephone numbers and the names of the entities shall be verified;

3.

Whether the enterprise attributes and industry attributes have been precisely filled in shall be verified through the function “inconsistency
between the enterprise attributes and industry attributes” in the basic system of the monitoring system of international revenue
and expenditure statistics;

4.

The preciseness of the currency codes and accounts shall be verified through the accounts provided by the enterprises when they make
declarations for receiving and making payments.

Article 17

Foreign exchange administrations shall check whether the electronic data in the monitoring system of international revenue and expenditure
statistics and data in the hardcopy declaration documents (the sheet to be kept by the foreign exchange administrations), including
whether the data are in consistency with each other, whether there exists any omission of items or falsely filled items, and whether
there are no electronic data for the hardcopy declaration documents. Foreign exchange administrations shall, within 15 workdays after
each month ends, have taken random samples from the hardcopy declaration documents of the previous month, and the number of the declaration
documents taken shall not be no less than 5% of the total declaration documents (they shall be randomly taken from all the banks).

The problems found in the verifications shall be recorded down one by one, and the banks concerned shall be informed of the reasons
so as to correct the problems. The verified hardcopy declaration documents shall be marked in a conspicuous way for archivist purposes.

Chapter III On-the-spot Verification

Article 18

Foreign exchange administrations shall arrange for on-the-spot verifications according to the requirements and described below. The
verifications shall be made in accordance with the relevant procedures as provided in the “Procedures of the State Administration
of Foreign Exchange for the Verification and Punishments of International Revenue and Expenditure Statistical Declaration.

1.

The foreign exchange administrations on all levels shall make on-the-spot verifications to at least one bank within their respective
jurisdictions, and accomplish on-the-spot verifications to all the banks within their respective jurisdictions. The verification
of a bank may be done by verifying either one or more branches. It is encouraged that a general verification be done to all the branches
of all banks.

2.

The foreign exchange administrations on all levels may conduct on-the-spot verifications irregularly to the relevant banks and subjects
of declarations (entities) according to the demand of the non-on-the-spot verifications.

3.

The foreign exchange administrations on all levels shall, according to their overall situation and plans of declarations, organize
irregularly on-the-spot verifications to the administrations on lower levels and cross-verifications among the administrations on
lower levels.

Article 19

The object of on-the-spot verifications shall include banks and subjects of declaration (entities), and the content of the verifications
shall cover the data in foreign-related revenue and expenditure declaration documents, the daily account books of foreign payments,
the forms of the basic information of the entities, hardcopy declaration documents (the sheet to be kept by the banks), the making
and execution of system for the internal control of the indirect statistical declaration of international revenue and expenditure
of the banks.

Article 20

The verification of the data in the foreign-related revenue reported by banks may be done by sum-to-sum ticking of the data of declaration
in the monitoring system of international revenue and expenditure statistics and the running accounts of the relevant accounting
items provided by the banks.

1.

Verifying the comprehensiveness and timeliness of the data in foreign-related revenue and expenditure declaration.

(1)

Verifying the types and constituent elements of declaration documents. The types of declaration documents include: foreign-related
revenue statistical reports, forms of writing off foreign exchange for payment of imports (to be used as declaration forms), declaration
documents for non-trade (including capital) foreign payments (to entities), declaration documents of foreign payment (to individuals),
and statistical reports for foreign payment within quota. The constituent elements of declaration to be verified include: the numbers
of the declaration documents, the amount and currency of the payments made and received, the names of the inland payers and payees,
terms of settlement, name of country, etc.

(2)

Ticking the checklist for verification on the item-by-item basis:

a. Whether the numbers of the declarations of foreign-related revenue and expenditure have been formulated in good time according
to the operational rules;

b. Whether there are declaration data for which there are no data in accounting books;

c. Whether there are data in accounting books for which there are no declaration data;

d. Whether statistical reports for foreign payment within quota have been filled in for foreign payments within quota (except payment
of foreign exchange for imports).

(3)

The unticked data shall be verified by consulting the accounting vouchers. If they have been wrongly reported, omitted, repeated,
etc., a list of such data shall be recorded down, and at the same time, photocopies of the corresponding accounting vouchers shall
be kept, and the relevant personnel of the banks under verification shall be required to fix their signatures, and the relevant departments
shall be required to affix their seals for confirmation.

2.

Verifying the preciseness of the data in foreign-related payment declaration documents

(1)

The types of the declaration documents to be verified include foreign-related revenue declaration documents (to entities), foreign-related
revenue declaration documents (to individuals), declaration documents for non-trade (including capital) foreign payments (to entities),
forms of writing off foreign exchange paid for imports (to be used as declaration forms), declaration documents of foreign payments,
etc.

(2)

The contents of verification include the transaction codes and transaction remarks for the declaration data, the country name of the
oversea payers and payees, terms of settlement;

3.

Ways of verification

(1) The verification of the foreign-related revenue declaration documents under the item of money remittance shall be done by consulting
the running accounts or other materials under the item of inward money remittance;

(2) The verification of the foreign-related revenue declaration documents under the item of letters of credit and collection via banks
shall be done by consulting the relevant letters of credit and agreements of collection via banks;

(3) The verification of foreign payments shall be done by consulting the relevant application documents of foreign payment businesses.

Article 21

Foreign exchange administrations shall make verifications to the daily account books of foreign payments made by banks. Daily account
books of foreign payments shall be made on the daily basis for all the foreign payments according to the practical situations. The
basis of verification shall be the subsidiary ledgers of payment of the banks.

Article 22

Foreign exchange administrations shall make verifications to the forms of basic information of the entities established by banks.
Whether the forms of basic information the entities have been filled in completely and precisely shall verified by checking the information
included in the forms of basic information of the entities obtained from the monitoring system of international revenue and expenditure
statistical declaration against the materials of the entities for opening accounts in the designated banks. The contents to be verified
include the organizational and institutional codes (entity codes), names of the entities, enterprise attributes, industry attributes,
and the opening of accounts, etc.

Article 23

Foreign exchange administrations shall make verifications to the hardcopy declaration documents kept by the banks. The verifications
shall be made by way of taking random samples from the declaration documents in the current month and past months.

1.

The verification of the declaration documents taken randomly from past months shall cover:

(1)

Whether the declaration documents have been bound into books on the basis of month and types and have been properly kept;

(2)

Whether the declaration documents have been kept for 24 months;

(3)

Whether the declaration documents have been filled in precisely, completely and properly;

(4)

Whether any declaration documents have been wrongly used.

2.

The verification of the declaration documents of taken randomly from the current month shall be done by checking the hardcopy declaration
documents of the current month (kept by banks) against the corresponding data reported in the monitoring system of international
revenue and expenditure statistical declaration (bank version) to see if any of the declaration documents have not been input in
good time.

Article 24

Foreign exchange administrations shall make verifications to the system of the banks for the internal regulation of the indirect statistical
declaration of international revenue and expenditure.

1.

Where any direct report of international revenue and expenditure has been made on behalf of any other party, it shall be determined
according to whether agreement has been concluded for making reports on behalf of another party, and whether the agreements have
been properly kept.

2.

whether rules have been formulated for the internal operations of indirect report of international revenue and expenditure, whether
the internal operation rules have met the requirements of the Operational Rules for the Statistical Report of International Revenue
and Expenditure through Financial Institutions, and how they have been carried out;

3.

Other systems of work, administration, and job-related responsibilities that are connected with the work of international revenue
and expenditure.

Article 25

Foreign exchange administrations shall make verifications to the subjects of declaration (entities). They shall make on-the-spot verifications
to the subjects of declaration (entities) by combining the non-on-the-spot verification and on-the-spot verification of banks. The
focus shall be laid on the preciseness of the data declared.

1.

Ways of verification. The verifications shall be based on the declaration data of foreign-related revenue and expenditure of the relevant
entities in the monitoring system of international revenue and expenditure statistics and shall be done by consulting the relevant
accounting post_titles and corresponding contracts of the entities under verification. Special attention shall be paid to the consistency
between the amount of revenue and expenditure as specified in the accounting post_titles of the entities and the check sheets issued by
the banks.

2.

The verifications shall cover the amount and currency of the transactions, the nature of transactions, the name and country of overseas
payers and payees;

3.

The questionable data found in the process of verification shall be verified by consulting corresponding hardcopy declaration documents
so as to decide who is be held liable, and detailed records shall be made for the verifications.

Chapter IV Supplementary Provisions

Article 26

The foreign exchange administrations on all levels shall, within 15 workdays after each quarter ends, report the verifications to
the next higher foreign exchange administration in written form, and the verification reports shall cover the contents of verification,
the problems found in the verifications, the corresponding results of handling, and shall reflect the problems that exist in the
routine operations, the large sums reflected in the reported data, and the abnormal changes of revenue and expenditure, etc.

Article 27

In case any violations of the Measures for the Declaration of International Revenue and Expenditure Statistics and other relevant
provisions are found through the verifications, they shall be punishable according to the Measures for the Punishment of Financial
Violations of Law, the Rules of Implementation for the Measures for Declaration of International Revenue and Expenditure Statistics,
and other relevant provisions.

Article 28

The present System shall enter into force as of March 1, 2003, and the power to interpret the present System shall remain with the
SAFE.



 
The State Administration of Foreign Exchange
2003-01-03

 







CIRCULAR ON THE RELEVANT WORK OF ANNUAL JOINT EXAMINATION OF ENTERPRISES WITH FOREIGN INVESTMENT OF 2003

The Ministry of Foreign Trade and Economic Cooperation, the State Economic and Trade Commission, the Ministry of Finance, the General
Customs Administration, the State Administration of Taxation, the State Administration for Industry and Commerce, the State Administration
of Foreign Exchange

Circular on the Relevant Work of Annual Joint Examination of Enterprises with Foreign Investment of 2003

WaiJinMaoZiFa [2002] No.591

February 24, 2003

The commissions (departments, bureaus) of foreign trade and economic cooperation, economic and trade commissions (economic commissions),
departments (bureaus) of finance, state tax bureaus, local tax bureaus, administrations for industry and commerce, administrations
of foreign exchange of provinces, autonomous regions, municipalities directly under the Central Government and municipalities separately
listed on the State plan, Guangdong Sub-administration of Customs and the customs directly under the General Administration of Customs:

Through the efforts of recent years, the annual joint examination of enterprises with foreign investment has played an important role
in improving the soft environment for investment, alleviating the enterprises’ burden and strengthening the communication and coordination
between the government departments. For successful progress of the annual joint examination of enterprises with foreign investment
of the whole country in 2003, and to keep on implementing the spirits of the Circular on the Implementation Scheme on Annual Joint
Examination of Enterprises with Foreign Investment (WaiJinMaoZiFa [1998] No.938, hereinafter referred to as the Circular), the relevant
issues are hereby notified as follows:

I.

The period from March 1 through May 31, 2003 is the work time of the annual joint examination of enterprises with foreign investment.
The localities shall organize the annual joint examination of enterprises with foreign investment strictly in accordance with the
requirements of the Circular, and the departments shall actively participate in the examination.

II.

The localities shall enhance the publicity of annual joint examination of enterprises with foreign investment, and strive to have
more enterprises participate in the examination. For those failing to declare for annual examination, failing to make faithful reports
in the annual examination or committing law-breaking or rule-breaking acts in production or business operations, the departments
of annual joint examination shall dealt with the punish the offenders pursuant to the laws and regulations.

III.

The localities shall promptly correct the acts not in line with the guidance of the Circular, prohibit those participating the examination
in other’s name, strengthen the direction for basic-level annual joint examination, inspect the progress of the examination work
and the implementation of the Circular, get to know and coordinate the settlement of the problems arising in the examination in a
timely manner, and guarantee the successful progress of the annual joint examination of their respective localities.

IV.

The departments of annual joint examination shall strengthen the communication and coordination between themselves. The departments
shall take the examination as an opportunity to change their administration methods, and shall stress the role of integrated coordination
and administration between the departments. The departments shall strengthen the coordination of the annual joint examination under
the leadership of the people’s governments at corresponding levels. The localities with necessary conditions shall have the departments
carry out the annual joint examination together, and the local finance shall give support. The departments shall exchange opinions
through joint work and conference, earnestly carry out the provisions of the Circular and improve the level of annual joint examination.

V.

The localities shall strengthen the administration of intermediary agencies, regulate the acts of the intermediary agencies e.g. accounting
firms etc, formulate specific regulations on the services that need to be provided by intermediary agencies, and impose heavier punishment
on those intermediary agencies with rule-breaking operations. The problems of accounting firms and other intermediary agencies found
out during the annual examination shall be passed on to the departments in charge in a timely manner.

The ￿￿Form of Foreign Exchange Payment￿￿ in the Circular on Adjustment of the ￿￿Form of Foreign Exchange Content￿￿ in the Annual Examination
of Foreign Exchange of Enterprises with Foreign Investment (HuiFa [2002] No.124) jointly distributed by the State Administration
of Foreign Exchange and the Ministry of Finance shall still be filled in by registered public accountants.

VI.

The relevant departments of annual joint examination shall cooperate closely, sort out, nullify and revoke the enterprises that have
no capital, site and structure. The number of the enterprises that have been deprived of the approval certificate in the current
year and the accumulative number of such enterprises shall be counted, and the information about sorting out, nullification and revocation
shall be indicated in the summary of the annual joint examination.

VII.

According to the Circular, the departments of annual joint examination may not add new charges, except that the administrations for
industry and commerce may take the charges according to the original standards. The departments shall firmly sort out and stop those
that, in violation of the provisions, take charges from enterprises or do so in disguised forms by the chance of annual joint examination,
or conduct annual examinations over enterprises with foreign investment without approval of the State Council, thus increasing the
enterprises’ burden by taking arbitrary charges or imposing random examinations.

VIII.

In order to improve the efficiency of annual joint examination and alleviate the enterprises’ burden, pilot projects of on-line annual
joint examination of enterprises with foreign investment will be carried out in Anhui, Beijing, Shanghai and Shenzhen etc, and will
be spread to other regions of China with the necessary conditions.

IX.

The departments shall strengthen the training of the functionaries of annual joint examination, enhance their sense of service and
operation quality, to provide open, transparent and normative services to the enterprises. And annual joint examination consultation
and complaint agencies shall be set up to accept the inquiries and complaints filed by enterprises with foreign investment.

X.

In order to guarantee the quality of the data gathered through the annual joint examination, the data of the localities shall go through
the preliminary joint review on a regional basis before being submitted, and the departments in charge of foreign trade and economic
cooperation of the localities shall make good preparations for the joint review.

XI.

The localities shall strengthen the statistics and analysis of the annual examination data, use the information and materials obtained
through the examination to analyze in depth the production and business operations and the general problems of enterprises with foreign
investment, and to carry out wide-range survey, study and communication.

This is hereby the notification.



 
The Ministry of Foreign Trade and Economic Cooperation, the State Economic and Trade Commission, the Ministry of Finance,
the General Customs Administration, the State Administration of Taxation, the State Administration for Industry and Commerce, the
State Administration of Foreign Exchange
2003-02-24

 







CIRCULAR OF THE STATE ADMINISTRATION OF FOREIGN EXCHANGE ON SUBMITTING THE STATEMENTS UNDER THE MEASURES FOR ADMINISTRATION OF THE REPORTS ON TRANSACTIONS OF LARGE-SUM AND DOUBTFUL FOREIGN EXCHANGE CAPITAL OF FINANCIAL INSTITUTIONS

The State Administration of Foreign Exchange

Circular of the State Administration of Foreign Exchange on Submitting the Statements Under the Measures for Administration of the
Reports on Transactions of Large-Sum and Doubtful Foreign Exchange Capital of Financial Institutions

HuiFa [2003] No. 42

March 18, 2003

The branches of the State Administration of Foreign Exchange (“SAFE”) and departments of foreign exchange in all provinces, autonomous
regions, and municipalities directly under the Central Government, the branches in the cities of Shenzhen, Dalian, Qingdao, Xiamen,
and Ningbo of the SAFE, the Industrial and Commercial Bank of China, the Agricultural Bank of China, the Bank of China, the Construction
Bank of China, the Bank of Communications of China, the State Development Bank, the Import and Export Bank of China, the Agricultural
Development Bank of China, the CITIC Industrial Bank, the Everbright Bank of China, Hua Xia Bank, Guangdong Development Bank, Shenzhen
Development Bank, the Merchants Bank, the Industrial Bank, Shanghai Pudong Development Bank, China Minsheng Bank:

With a view to ensuring the smooth implementation of Decree [2003] No. 3 of the People’s Bank of China, Measures for Administration
of the Reports on Transactions of Large-Sum and Doubtful Foreign Exchange Capital of Financial Institutions (hereinafter referred
to as the Administration Measures), the SAFE has according to the Principles for Submission of the Statements under the Administration
Measures (see Attachment 1) formulated four Statements required to be filled in by financial institutions for performing anti-money-laundry
functions (see Attachment 2) and provided for the indicators for the Statements, the codes of the reporting and identification standards
and the transmission of electronic Statements (see Attachment 3 through 5). Here is to notify you of the relevant requirements:

I.

The financial institutions shall according to the provisions of the Administration Measures submit the transactions of large-sum and
doubtful foreign exchange capital by paper-based statements and electronic statements as of April 1.

II.

The SAFE shall according to the requirements of Attachment 1 through 4 to this Circular formulate the statements under the Administration
Measures into electronic template documents, and send them to its branches through the internal electronic information transmission
system. Upon receipt of the electronic template documents, the branches shall timely transfer this Circular (including its Attachment
) and the electronic template documents to Chinese and foreign-invested banks (including the head offices of Chinese-invested banks)
and urban commercial banks, urban credit cooperatives, rural credit cooperatives and rural commercial banks in their jurisdictions.

III.

The financial institutions shall in strict accordance with the provisions of the Administration Measures and this Circular fill in
the statements carefully, guarantee the quality of the data in the statements and timely and accurately submit the paper-based statements
and the electronic statements. In case of any business problems occurred in work, please do not hesitate to contact with the Administrative
and Examination Department of the SAFE; and in case of any technological problems, please do not hesitate to contact with the Information
Center of the SAFE. The contact telephones are:

Administrative and Examination Department Anti-Money-Laundry Control Office: Lu Zheng by 68402106

Information Center Network Engineering Office: Wei Kun by 68402022

Information Center Application Development Office: Zhu Yong by 68402026

Attachment:

1. Principles for Submission of the Statements under the Measures for Administration of the Reports on Transactions of Large-Sum and
Doubtful Foreign Exchange Capital of Financial Institutions

2. Statements under the Measures for Administration of the Reports on Transactions of Large-Sum and Doubtful Foreign Exchange Capital
of Financial Institutions (omitted)

3. Descriptions on the Indicators for the Statement under the Measures for Administration of the Reports on Transactions of Large-Sum
and Doubtful Foreign Exchange Capital of Financial Institutions.

4. Codes of the Reporting and Identification Standards under the Measures for Administration of the Reports on Transactions of Large-Sum
and Doubtful Foreign Exchange Capital of Financial Institutions

5. Descriptions on the transmission of electronic Statements

Attachment 1:Principles for Submission of the Statements under the Measures for Administration of the Reports on Transactions of Large-Sum and
Doubtful Foreign Exchange Capital of Financial Institutions

I.

Submitting subjects:

The financial institutions and its branches and sub-branches, and the branches of the State Administration of Foreign Exchange (“SAFE”)
in all provinces, autonomous regions, and municipalities directly under the Central Government and its sub-branches in prefectures,
cities and counties where there are top-level corporate financial institutions are the submitting subjects.

The first-level branches and sub-branches in the capital cities of the provinces, autonomous regions, and municipalities directly
under the Central Government set up by the financial institutions are the principal submitting institutions, and in case no first-level
branches and sub-branches are set up in the capital cities of the provinces, autonomous regions, and municipalities directly under
the Central Government by the financial institutions, the headquarters of the financial institutions shall designate the principal
submitting institution.

The top-level corporate financial institutions set up in the prefectures, cities and counties shall perform their reporting functions
and obligations to the local branches, which shall be summarized by local branches before consolidated reporting to the branches
of the provinces, autonomous regions, and municipalities directly under the Central Government

II.

Submission procedures and time schedule:

The Administration Measures has provided for the principles territorial jurisdiction and double-way submission.

The branches and sub-branches of the financial institutions shall summarize the transactions of the large-sum and doubtful foreign
exchange capitals of the last month within the first five working days of each month, which should be submitted to the principal
submitting institutions by levels, and to the local branches and sub-branches of the SAFE at the same time.

Each principal submitting institutions shall summarize the transactions of the large-sum and doubtful foreign exchange capitals of
the last month in each province, autonomous region and municipalities directly under the Central Government within the first fifteen
working days of each month, which should be submitted to the branch of the corresponding province, autonomous region and municipalities
directly under the Central Government, and to the headquarters of each corresponding financial institutions.

The headquarters of each financial institution shall within the first five working days of each month submit the transactions of the
large-sum and doubtful foreign exchange capital incurred to itself of the last month to the local branches or sub-branches and shall
summarize all the transactions of the large-sum and doubtful foreign exchange capitals incurred in its whole jurisdiction of the
last month before submitting to the SAFE within the first working 20 days of each month.

The financial institutions shall verify and analyze the transactions of the large-sum and doubtful foreign exchange capital and in
case of finding any suspected crimes, reports thereof should be made to the local public security organ within three days and to
the local branches or sub-branches of the SAFE.

The branches of the SAFE in the provinces, autonomous regions, and municipalities directly under the Central Government shall within
the first 20 days of each month submit the summaries of the transactions of the large-sum and doubtful foreign exchange capital reported
by the financial institutions to the SAFE; and any transactions of foreign exchange capital involved in suspected crimes should be
transferred to the local public securities and submitted to the SAFE at the same time.

III.

Means of submission:

In case of the acts relating to the transactions of the large-sum and doubtful foreign exchange capital provided for in Article 8
through 10 in the Administration Measures, the financial institutions shall fill in and submit Statement 1, Statement 2 and Statement
3 each month respectively in the forms of paper-based documents and electronic files.

In case of any suspected money laundry found in verifying the transactions of foreign exchange capital as provided for by Articles
12 through 3 in the Administration Measures, the financial institutions shall timely fill in and submit the paper-based Statement
4 together with the relevant Attachment attached. Attachment 3:Descriptions on the Indicators for the Statement under the Measures for Administration of the Reports on Transactions of Large-Sum
and Doubtful Foreign Exchange Capital of Financial Institutions

I.

“Summarizing and submitting unit”, “submitting unit” and “code of submitting unit”

“Summarizing and submitting unit” and “submitting unit” should be filled in with the full name (as per the specimen seal impression)
of the financial institutions and their branches and sub-branches undertaking the foreign exchange business (hereinafter referred
to as the financial institutions), and the summarizing and submitting units refer to the financial institutions that summarize the
data information of their branches and sub-branches and directly make reports to the SAFE. The code of the submitting unit shall
be filled in as per the identity code (12 digits) of the financial institutions in the submission of the international payments.
The financial institutions without identity codes shall submit the data to the superior branches for filling and submission. The
basic units of the financial institutions that summarize, fill in and submit the transactions of large-sum and doubtful foreign exchange
capital are the sub-branches in prefectures, cities and counties.

II.

Enterprise

Enterprises refer to enterprise and institutional units (including foreign-invested enterprises), state organs, social communities,
military units, and other domestic institutions in the territory of the PRC, foreign units assigned to China, as well as institutions
outside China with occurrence of conversion of foreign exchanges or payments of foreign exchanges with the offshore accounts in the
territory of the PRC or with occurrence of conversion of foreign exchanges or payments of foreign exchanges with the onshore accounts
in the territory of the PRC.

III.

Name of enterprise

To be filled in as per the full name registered by the enterprises with the administration of commerce and industry and other administrative
authorities in country where it is located, or as per the name indicated on the valid certificates that includes its accurate, complete
ad standard name or on the approval document and certification of the competent authorities. Institutions outside China shall fill
in the standard full name in Chinese and English at the same time in the format of “name in Chinese (and name in English)”.

IV.

Enterprise code

To be fill in as per the 9-digit organizational and institutional code (GB code) promulgated by the National Administrative Center
of Organizational and Institutional Codes of China State General Administration of Quality Supervision, Inspection and Quarantine
(AQSIQ), whereby the English letter should be in capital, and with the short line of “�” deleted, for instance, the original code
of “25186820�X” would be written as “25186820X”.

V.

Date of occurrence of transactions

In the format of “yyyy/mm/dd”, among which “yyyy’ refer to year, “mm” refers to month, and “dd” refers to day, and in case the month
or the day is less than two digits, 0 would be added before the actual number of the month or the day. For instance, January 1, 2003
would filled in as “2003/01/01”.

VI.

Code of reporting or identification standards

There are 60 items corresponding to the reporting standards of the transactions of the large-sum foreign exchange capital and the
reporting and identification standards of the transactions of the doubtful foreign exchange capital under the Administration Measures,
which are provided for fixed 4-digit codes accordingly (see Attachment 4), and the financial institutions shall fill in the fixed
codes according to the content of the actual transactions.

VII.

Code of transactions

To be filled in as per the transaction codes of the monitoring system of international payments statistics.

VIII.

Payments of capital

Incomes of foreign exchange capital would be filled in as “1”, and payment thereof should be filled in as “0”.

IX.

Bank account

The A/C number opened at banks by the enterprises according to law, including the number of offshore accounts.

X.

Transaction currencies and transaction volume

The transaction currencies should be filled in as the code of such currencies based on national standards (Abbreviation in English
as 3-digit capital letters) , and the transaction volume should be filled in the corresponding forms in the original currency and
conversion of USD. The conversion ratio shall adopt that of the month of filling and submission of the statement.

XI.

Transaction direction

Cross-border flow of the foreign exchange capital should be filled in with the national or regional code where the counterpart is
located (Abbreviation in English as 3-digit capital letters) based on national standards; and domestic transaction of capital requires
for filling in the code of the special economic zones, and the codes of special economic zones are as follows: general trade zone
(Z00), bonded zone (Z01), processing zone (Z020), and diamond exchanges (Z03).

XII.

Name and individual name

For residents, full name should be filled in as per the ID cards; and for non-residents, full name of the individual should be filled
in as per the passports.

XIII.

Nationality

According to the national standards, filled in with the national (regional) codes (Abbreviation in English as 3-digit capital letters).

XIV.

ID number

To be filled in with the ID card number of residents, number of the certificate of military officers, number of children on the household
register and the number of the passports of non-residents.

XV.

Number of bankcards or the number of saving account of foreign currency

When holding bank cards, to be filled in with the bank cards; when having the saving account of foreign currency, to be filled in
with the number of the saving account of foreign currency; when having both the bank cards, both numbers should be filled in with
the number of bank cards before and separated with “￿￿m the number of the saving accounts of foreign currency.

XVI.

Responsible person, undertakers and contact telephone

The responsible person should be filled in with the personnel in charge of the anti-money laundry department of the filling and submitting
units; the undertaker should be filled in with the person filling in and submitting the forms; and the contact telephone number refers
to that of the undertaker.

XVII.

Seal

For the “filling and submitting unit (seal)” in Statements 1 through 4, it refers to the seal of the anti-money laundry department
of the filling and submitting units). The “transferring unit (seal)” and the “receiving unit (seal)” in Statement 4 refer to the
seal of the anti-money laundry departments of the transferring unit and the receiving unit.

XVIII.

Legal representative and address

The legal representative refers to the full name of the legal representative registered with the administrative department of commerce
and industry and the address refers to that registered with the administrative department of commerce and industry.

XIX.

Contact person and contact telephone.

For the “contact person” in Statement 4, the full name of the relevant persons of the unit involved in the suspected circumstance
or the full name of the individual involved in the suspected circumstances may be filled in, and for the contact telephone, the telephone
of that person or that individual shall be filled in.

XX.

Transferring person. Receiving person and contact telephone

For the transferring person, the full name of the person of the administrative department of foreign exchange or the financial institution
who transfers the relevant materials to the public security department shall be filled in, for the receiving person, the full name
of the person of the public security department who receives the relevant materials to the administrative department of foreign exchange
or the financial institution shall be filled in, and for the contact person, the telephone of that transferring person or receiving
person shall be filled in.

XXI.

Total

Each statement shall summarize the sums of the “codes of the reporting standard or the identifying standards” and at the same time,
the amount of the “transaction volume (conversion into USD)” shall be summarized.

XXII.

Remarks

Other circumstance to be supplemented and described.

Attachment 4:Codes of the Reporting and Identification Standards under the Measures for Administration of the Reports on Transactions of Large-Sum
and Doubtful Foreign Exchange Capital of Financial Institutions

Item 1 of Article 8 ￿￿0801￿￿, Item 2 of Article 8 (0802);

Item 1 of Article 9 ￿￿0901￿￿, Item 2 of Article 9 ￿￿0902￿￿;

Item 3 of Article 9 ￿￿0903￿￿, Item 4 of Article 9 ￿￿0904￿￿;

Item 5 of Article 9 ￿￿0905￿￿, Item 6 of Article 9 ￿￿0906￿￿;

Item 7 of Article 9 ￿￿0907￿￿, Item 8 of Article 9 ￿￿0908￿￿;

Item 9 of Article 9 ￿￿0909￿￿, Item 10 of Article 9 ￿￿0910￿￿;

Item 11 of Article 9 ￿￿0911￿￿, Item 1 of Article 10 ￿￿1001￿￿;

Item 2 of Article 10 ￿￿1002￿￿, Item 3 of Article 10 ￿￿1003￿￿;

Item 4 of Article 10 ￿￿1004￿￿, Item 5 of Article 10 ￿￿1005￿￿;

Item 6 of Article 10 ￿￿1006￿￿, Item 7 of Article 10 ￿￿1007￿￿;

Item 8 of Article 10 ￿￿1008￿￿, Item 9 of Article 10 ￿￿1009￿￿;

Item 10 of Article 10 ￿￿1010￿￿, Item 11 of Article 10 ￿￿1011￿￿;

Item 12 of Article 10 ￿￿1012￿￿, Item 13 of Article 10 ￿￿1013￿￿;

Item 14 of Article 10 ￿￿1014￿￿, Item 15 of Article 10 ￿￿1015￿￿;

Item 16 of Article 10 ￿￿1016￿￿, Item 17 of Article 10 ￿￿1017￿￿;

Item 18 of Article 10 ￿￿1018￿￿, Item 19 of Article 10 ￿￿1019￿￿;

Item 20 of Article 10 ￿￿1020￿￿, Item 21 of Article 10 ￿￿1021￿￿;

Item 2 of Article 12 ￿￿1202￿￿, Item 3 of Article 12 ￿￿1203￿￿;

Item 1 of Article 13 ￿￿1301￿￿, Item 2 of Article 13 ￿￿1302￿￿;

Item 3 of Article 13 ￿￿1303￿￿, Item 4 of Article 13 ￿￿1304￿￿;

Item 5 of Article 13 ￿￿1305￿￿, Item 6 of Article 13 ￿￿1306￿￿;

Item 7 of Article 13 ￿￿1307￿￿, Item 8 of Article 13 ￿￿1308￿￿;

Item 9 of Article 13 ￿￿1309￿￿, Item 10 of Article 13 ￿￿1310￿￿;

Item 11 of Article 13 ￿￿1311￿￿, Item 12 of Article 13 ￿￿1312￿￿;

Item 13 of Article 13 ￿￿1313￿￿, Item 14 of Article 13 ￿￿1314￿￿;

Item 15 of Article 13 ￿￿1315￿￿, Item 16 of Article 13 ￿￿1316￿￿;

Item 17 of Article 13 ￿￿1317￿￿, Item 18 of Article 13 ￿￿1318￿￿;

Item 19 of Article 13 ￿￿1319￿￿, Item 20 of Article 13 ￿￿1320￿￿;

Item 21 of Article 13 ￿￿1321￿￿, Item 22 of Article 13 ￿￿1322￿￿;

Item 23 of Article 13 ￿￿1323￿￿, Item 24 of Article 13 ￿￿1324￿￿.

Attachment 5:Descriptions on the Transmission of Electronic Statements

According to the requirements for submission of the electronic statements provided for by the Administration Measures, the submission
channels and file names and formats of the electronic statements have been standardized as follows:

I.

Channels of transmission

1.

From commercial banks to the SAFE

After the electronic statements of the branches and sub-branches of the commercial banks have been submitted to the principal submitting
institutions by level, the principal submitting institutions shall consolidate and submit then to the local branches of the SAFE,
and to the head offices of the corresponding commercial banks before the head offices of the commercial bank submit them to the SAFE.
The head offices of commercial banks located in Beijing Municipality shall submit the electronic statements to Beijing Foreign Exchange
Administrative Department of the SAFE, which shall then submit them to the SAFE; and the head offices of commercial bank that are
not located in Beijing Municipality shall submit the electronic statements to the local braches of the SAFE, and the relevant branches
shall then submit them to the SAFE.

It is suggested that the commercial banks adopt the TXPT V310 (Communication platform software version V310) for submitting the electronic
statements to the SAFE, and TXPT has designated the following configuration methods for this application:

The application type (apptype) of this application has been designated as “FQ10” , and the sub-application type (sub_apptype) has
been designated as “00”, and the mode for opening the files has adopted the binary system (1).

The commercial banks may copy a new file from the transmission configuration file of the monitoring system of the international payments
statistics, correspondingly adjust the application type and sub-application types of the new file and designate the “remote path”
as “/fxq/”, thus forming the transmission configuration file of this application, which may be adopted for transmitting the relevant
electronic statements.

The branches of the SAFE adopt the file server in the firewall DMZ zone for receiving the files, with the receiving directory designated
as /fxq, and the power limits of the directory is Sybase. Thus, the branches shall add the directory of the corresponding power limits
to the file serve and add a line (with the content of “FQ1000###Sybase”) in the file of “/txpt/config/svcfile.sys”. The business
personnel of the branches of the SAFE may by use of the TXPT receive the files transmitted to the file services by commercial bank
in the computer for further processing. The “application type”, “sub-application type” and mode for filing opening in the TXPT receiving
configuration of the PC should be adjusted the same way.

2.

From branches of the SAFE to the SAFE

The internal electronic information exchanges of the SAFE shall adopt the internal electronic information transmission system of the
SAFE. The SAFE has designated as special email at fxq@inspect.safe for receipt of the electronic statements of such applications,
to which the branches may send the electronic statements.

II.

File names and formats

The file name of the application electronic statements consists of 24 digits, among which digits 1 through 6 refer to local codes,
digits 7 through 10 refer to bank codes, digits 11 through refer to bank sequence, digits 13 through 18 refer to codes of date in
the form of “yy (year)mm(month)dd(day)”, digits 19 through 20 refer to bill codes, and digits 21 through 24 refer to the bill sequence.

The local codes of digits 1 through 6 and the bank code of digits 7 through 10 adopt the codes allocated in the monitoring system
of international payments statistics.

The corresponding relations of bill codes are as follows:

01� � monthly statements of the transactions of large-sum foreign exchange capital of enterprises;

02� � monthly statements of the transactions of large-sum foreign exchange capital of individual residents and non-residents;

03�� monthly statements of the transactions of doubtful foreign exchange capital; and

Other codes should be determined by the branches and sub-branches of the SAFE at their own discretion.



 
The State Administration of Foreign Exchange
2003-03-18

 







ANNOUNCEMENT OF THE STATE ADMINISTRATION OF FOREIGN EXCHANGE

The State Administration of Foreign Exchange

Announcement of the State Administration of Foreign Exchange

[2003] No.1

April 15, 2003

According to the Decisions of the State Council on Canceling the First Batch of Administration Examination and Approval Projects (GuoFa
[2002] No.24) and the Decisions of the State Council on Canceling the Second Batch of Administration Examination and Approval Projects
and Altering the Administrative Methods for Some Administration Examination and Approval Projects (GuoFa [2003] No.5), the State
Administration of Foreign Exchange has cancelled 26 items to be administratively approved. The relative issues after these items
are cancelled for administrative approvals are hereby announced as follows:

I.

The “examination and approval of opening, altering and canceling accounts for foreign exchange loans in China” is canceled

The administration on the specific domestic accounts for foreign exchange loans shall be in accordance with Article 4 of the Circular
of the State Administration of Foreign Exchange on Reforming the Methods of Administration of Foreign Exchange in Domestic Foreign
Exchange Loans (HuiFa [2002] No.125) promulgated by the State Administration of Foreign Exchange on December 6, 2002.

II.

The “examination and approval of opening, altering and canceling accounts for B-share guarantee funds (hereinafter referred to as
“B-share transaction settlement fund account”) that opened at foreign-invested banks in China by securities companies” is canceled

When securities companies open or alter B-share transaction settlement fund accounts, Article 3 of Circular of the State Administration
of Foreign Exchange on the Transitional Policy and Measures after Canceling Administrative Examination and Approval of Foreign Exchange
Administration of Some Capital Projects (HuiFa [2003] No.50) promulgated by the State Administration of Foreign Exchange on April
1, 2003 shall be implemented.

III.

Four items including “examination and approval of the conditions of Chinese organizations for long-and-medium-term loans in China”,
“examination and approval of the financial conditions of Chinese organizations for financing and leasing in China”, “examination
and approval of the time selection and financing conditions for issuing debts abroad” and “examination and approval of the financial
conditions for project financing ” are canceled

If Chinese organizations (including designated banks of foreign exchange) borrow long-and-medium-term loans, issue long-and-medium-term
foreign currency bonds or perform financial leasing and financing, the provisions in Article 1 of the Circular of the State Administration
of Foreign Exchange on the Transitional Policy and Measures after Canceling Administrative Examination and Approval of Foreign Exchange
Administration of Some Capital Projects (HuiFa [2003] No.50) promulgated by the State Administration of Foreign Exchange on April
1, 2003 shall be implemented.

IV.

The “examination and approval of large-amount financing for overseas branches of Sino-capital financial organizations” is canceled

When the overseas branches of Sino-capital financial organization in China raise large amount of funds, the provisions in Article
2 of the Circular of the State Administration of Foreign Exchange on the Transitional Policy and Measures after Canceling Administrative
Examination and Approval of Foreign Exchange Administration of Some Capital Projects (HuiFa [2003] No.50) promulgated by the State
Administration of Foreign Exchange on April 1, 2003 shall be implemented.

V.

The “audit of the foreign exchange risks in overseas investments by domestic organizations” is canceled

According to the provisions in Article 4 of the Circular of the State Administration of Foreign Exchange on the Transitional Policy
and Measures after Canceling Administrative Examination and Approval of Foreign Exchange Administration of Some Capital Projects
(HuiFa [2003] No.50) promulgated by the State Administration of Foreign Exchange on April 1, 2003, the overseas investment risks
of domestic organizations shall not be audited and approved by the administrations of foreign exchange, and the auditing procedures
on the fund resources of overseas investments will be further simplified. For specific procedures, refer to the Circular of the
State Administration of Foreign Exchange on Simplifying the Examination of Foreign Exchange Capital Source of Investment Abroad (HuiFa
[2003] No.43).

VI.

The “examination and approval of guarantee funds for transferring back the profits of overseas investments” is canceled

According to the provisions in the Circular of the State Administration of Foreign Exchange on Guarantee Funds for transferring back
the profits of overseas investments (HuiFa [2002] No.110) promulgated by the State Administration of Foreign Exchange on November
12, 2002, the State Administration of Foreign Exchange will not collect the guarantee funds for transferring back the profits of
overseas investments.

VII.

The “examination and approval of prepayment or incidental charges under boarder trades” is canceled

The prepayment or incidental charges under boarder trades shall be in accordance with the provisions in Article 1 of the Circular
of the State Administration of Foreign Exchange on Canceling Administrative Examination and Approval on the Foreign Exchange in Current
Accounts (HuiFa [2002] No.53) promulgated by the State Administration of Foreign Exchange on April 1, 2003.

VIII.

The “examination and approval of the current account foreign exchange brought or remitted into China by individuals, which one-time
payment of foreign currency or changing for Renminbi equivalent of no less than $50,000” is canceled

If individuals need to draw foreign currencies or change them for Renminbi, the provisions in Article 2 of the Circular of the State
Administration of Foreign Exchange on Canceling Administrative Examination and Approval on the Foreign Exchange in Current Accounts
(HuiFa [2002] No.53) promulgated by the State Administration of Foreign Exchange on April 1, 2003 shall be implemented.

IX.

The “examination and approval of foreign exchange used for tax-free commodities and selling the tax-free commodities bought by tax-free
stores in RMB due to damages or overstock” is canceled

If the headquarter of the stores selling tax-free commodities in foreign exchange, or sell the commodities in RMB due to damages or
overstock, which will be paid abroad, the provisions in Article 3 of the Circular of the State Administration of Foreign Exchange
on Canceling Administrative Examination and Approval on the Foreign Exchange in Current Accounts (HuiFa [2002] No.53) promulgated
by the State Administration of Foreign Exchange on April 1, 2003 shall be implemented.

X.

The “verification of foreign exchange payments for the equipments under foreign-invested projects and foreign-funded equipments and
articles” is canceled

According to the Circular of the State Administration of Foreign Exchange and the General Administration of Customs Concerning Sales/Purchases
of Foreign Exchange and Verification by Presenting Custom Declaration Certificates for Imported Goods (HuiFa [2003] No.15), the designated
banks of foreign exchange or administrations of foreign exchange shall verify the declarations of the import which goods were imported
after May 1, 2002 as the “trades that may sell/purchase foreign exchange”. After the authentications of the declarations are verified
and put records in the Import Declaration Networking Verification System or are disposed for closing the cases, the sales/purchases
of foreign exchange and the verification can be performed according to the Administrative Provisions on Settlement, Sale and Purchase
of Foreign Exchange, the Interim Measures of Supervising the Verifications on Import Payments in Foreign Exchange and other related
provisions.

XI.

Three items including “verification and filing of letters of credit of over 90 days under import items”, “verification and filing
of collections of over 90 days under import items” and “verification and filing of arrivals of over 90 days under import items (excluding
prepayment over proportion or over amount) are canceled

If importers settle the payments in foreign exchange in a mode of “letter of credit of over 90 days, collection of over 90 days and
arrival of over 90 days (excluding prepayment over proportion or over amount), it may directly go to the designated banks of foreign
exchange for payments in foreign exchange according to the Circular of Further Regulating the Administrative Policies on Import and
Export Verification (HuiFa [2002] No.65) promulgated by the State Administration of Foreign Exchange on July 10, 2002, and the designated
banks of foreign exchange shall perform verifications according to the administrative provisions on sales/purchases in foreign exchange.

XII.

The “verification of opening, using and altering of foreign exchange accounts by insurance companies” is canceled

The insurance companies with approval for trading foreign exchange may, according to the Circular of the State Administration of Foreign
Exchange and China Insurance Supervision and Administration Committee on Promulgation and Implementation of the Interim Provisions
on Administration on Foreign Exchange for Insurance Operations (HuiFa [2002] No.95) promulgated by the State Administration of Foreign
Exchange and China Insurance Supervision and Administration Committee, open foreign exchange accounts, and shall report it to the
local administrations of foreign exchange for record within 10 working days after opening such accounts.

XIII.

The “audit of the counterfoils of verification forms provided by the exporters within 60 days after custom declaration” is canceled

Exporters shall, according to the Circular of Pilots for Networking Verification System for Export Proceeds Using Electronic Law Execution
at Ports (HuiFa [2001] No.7) promulgated by the State Administration of Foreign Exchange and General Administration of Customs on
January 22, 2001, submit the verification forms used for custom declaration to the local administrations of foreign exchange via
the “China Port Electronic System for Export Proceeds in Foreign Exchange”.

XIV.

The “verification of re-remittance (to the original remitter by individuals residing in China) of foreign exchange deposits remitted
from abroad” is canceled

If individuals re-remit the foreign exchange deposits to the remitters who remit the foreign exchange to the individuals, provisions
in Article 4 of the Circular of the State Administration of Foreign Exchange on Canceling Administrative Examination and Approval
on the Foreign Exchange in Current Accounts (HuiFa [2002] No.53) promulgated by the State Administration of Foreign Exchange on April
1, 2003 shall be implemented. And, the Official Reply Concerning Remittance Abroad of Foreign Exchange Deposits of Individuals residing
in China and Alteration of Account Names of Foreign Exchange Accounts (HuiFu [2000] No.291) shall be repealed at the same time.

XV.

The “verification of transfers of foreign exchange within China by insurance companies and their branches” is canceled

For the capital transactions between insurance companies and its branches and between their foreign exchange accounts within the same
insurance companies, according to the provisions in the Circular of the State Administration of Foreign Exchange and China Insurance
Supervision and Administration Committee on Promulgation and Implementation of the Interim Provisions on Administration on Foreign
Exchange for Insurance Operations (HuiFa [2002] No.95) promulgated by the State Administration of Foreign Exchange and China Insurance
Supervision and Administration Committee, such transfers may be made within the banks of deposits provided that such transfers shall
be in accordance with the payment/proceed scope of the accounts.

XVI.

The “verification on the debtors repaying domestic foreign exchange loans to local banks using their own foreign exchange” is canceled

If debtors repay domestic foreign exchange loans to local banks using their own foreign exchange, the provisions in Article 4 of
the Circular of the State Administration of Foreign Exchange on Reforming the Methods of Administration of Foreign Exchange in Domestic
Foreign Exchange Loans (HuiFa [2002] No.125) promulgated by the State Administration of Foreign Exchange on December 6, 2002 shall
be implemented.

XVII.

The “verification of capital settlements of enterprises with foreign investment” is canceled

The verifications on capital settlements of enterprises with foreign investment shall be in accordance with the Circular of Reforming
the Administrative Method of Capital Settlement under Foreign-Investment Items (HuiFa [2002] No.59) promulgated by the State Administration
of Foreign Exchange on June 17, 2002 and the Circular of the State Administration of Foreign Exchange on Improving the Administration
of Foreign Exchange in Foreign Direct Investments (HuiFa [2003] No.30).

XVIII.

The “registration and verification of the domestic debtors for foreign exchange loans” is canceled

The Sino-capital financial organizations shall, when granting foreign exchange loans within China, implement the provisions of the
Circular of the State Administration of Foreign Exchange on Reforming the Methods of Administration of Foreign Exchange in Domestic
Foreign Exchange Loans (HuiFa [2002] No.125) promulgated by the State Administration of Foreign Exchange on December 6, 2002.

XIX.

The “verification of annual audits on the foreign exchange proceeds/payments of ocean fishing operations of ocean fisheries” is canceled

According to the Circular of the State Administration of Foreign Exchange on Canceling Administrative Examination and Approval on
the Foreign Exchange in Current Accounts (HuiFa [2002] No.53) promulgated by the State Administration of Foreign Exchange on April
1, 2003, the following provisions in the Interim Provisions on the Foreign Exchange Proceeds/Payments of Ocean Fishing Operations
of Ocean Fisheries (HuiFa [2001] No. 49) promulgated by the State Administration of Foreign Exchange and the Ministry of Agriculture
shall be repealed, including: Article 16 – “The administration of foreign exchange shall implement a system of annual audits on
the foreign exchange proceeds/payments of ocean fishing operations of ocean fisheries; Article 17 – “All branches of the administrations
of foreign exchange shall report the annual audit results as well as the information on sales/purchases of all local ocean fisheries
to the State Administration of Foreign Exchange before May 30 each year and make copies for local fishery administrations”; Article
18 – “The State Administration of Foreign Exchange shall inform the Ministry of Agriculture of the national annual audit results
as well as the utilization of foreign exchange by the ocean fisheries after the annual audits, and the Ministry of Agriculture shall
publicize the annual audit results to all the ocean fishery enterprises to establish a inter-supervision and impeachment among the
enterprises”.

XX.

The “verification of the over costs paid in foreign exchange out from the accounts of travel agencies for entry tours ” is canceled

According to the Circular Concerning Further Regulating the Administrative Policy on the Foreign Exchange Accounts under Current Accounts
(HuiFa [2002] No. 87) promulgated by the State Administration of Foreign Exchange on September 9, 2002, the account of a travel agency
for entry tours and for abroad tours shall be merged into one current account foreign exchange account. The travel agency may expend
directly from the this current account foreign exchange account without need to apply to local administration of foreign exchange
for approval.

XXI.

The “verification and approval of the administration of foreign exchange on the purchase of foreign exchange and by domestic foreign
exchange debtor and repaying loans at other locations” is canceled

If the debtors repay foreign exchange loans within China, the provisions in Article 5 of the Circular of the State Administration
of Foreign Exchange on Reforming the Methods of Administration of Foreign Exchange in Domestic Foreign Exchange Loans (HuiFa [2002]
No.125) promulgated by the State Administration of Foreign Exchange on December 6, 2002 shall be implemented.

The specific procedures for the corresponding items after they are canceled for verification and approval have been specified in the
laws and regulations promulgated by the State Administration of Foreign Exchange, which can be referred via the governmental website
of the State Administration of Foreign Exchange or from the Announcements of the State Administration of Foreign Exchange.



 
The State Administration of Foreign Exchange
2003-04-15

 







MEASURES OF FINANCIAL LICENSE CONTROL

China Banking Regulatory Commission

Decree of China Banking Regulatory Commission

No. 2

The Measures of Financial License Control was approved by the first chairmen meeting of China Banking Regulatory Commission on May
26, 2003, promulgated herein and shall enter into force as of July 1, 2003.

Chairman of the China Banking Regulatory Commission Liu Mingkang

May 31, 2003

Measures of Financial License Control

Article 1

These measures are formulated in accordance with relevant provisions and laws such as the Commercial Bank Law of the People’s Republic
of China and the Regulations of the People’s Republic of China Governing Financial Institutions with Foreign Capital for the purpose
of strengthening the admittance management of the financial institutions and pushing forward financial institution’s legal operations.

Article 2

Financial License refers to the legal papers issued by China Banking Regulatory Commission (hereafter referred to as CBRC) to allow
financial institutions to deal with financial operations.

The issuing, changing, detaining, withdrawing shall be conducted by CBRC according to relevant laws and provisions, any other units
and individuals shall not exert any activities mentioned herein.

Article 3

Financial license only applies to those institutions whose financial operations have been approved and those under the supervision
of CBRC.

Financial institutions herein refers policy banks, commercial banks, finance capital management corporations, Credit Cooperatives,
Post services, trust funds investment companies, finance companies of corporation group, monetary leasing companies, financial institutions
of foreign investment and so on.

Article 4

When considering the financial license, CBRC adheres to such management principals as delegating the right at different level, moderately
separate the right for institution examination with right for issuing the license.

(I)

CBRC shall be responsible for the issuing and management of the financial license of those financial entity institutions under the
direct supervision of CBRC (policy banks, state solely ?C owned commercial banks, joint ?C stock commercial banks, financial capital
management corporation, trust fund investment companies, finance companies of corporation group, monetary leasing companies and so
on); CBRC shall be responsible for the issuing and management of the financial license of foreign capital financial institutions
as foreign banks and their branches, joint ?C venture banks and their branches, branches of foreign banks, foreign finance companies,
and joint ?C venture finance companies and so on.

(II)

CBRC bureaus at the provincial ( autonomous region, municipality directly under the Central Government) level and bureaus directly
under CBRC shall be responsible for the issuing and management of the financial license of the following financial institutions:
1, policy-related banks, state solely-owned commercial bank (including branches out side the territory) within the territory; 2,
branches of financial capital management companies (offices); 3, city commercial bank entity institutions and their branches; 4,
institutions below the level of foreign capital bank’s branches (branches exclusive); 5, other financial institutions and their branches
other than such financial institutions under direct supervision of CBRC as trust fund investment companies, finance companies of
corporation group, monetary leasing companies; 6, city credit cooperatives, rural credit cooperatives (provincial level and county
level), entity institutions for rural commercial banks ;7, outlets of the financial institutions in one area..

(III)

CBRC bureaus at county level shall be responsible for the issuing and management of other financial institutions rather than those
mentioned herein.

Article 5

Financial institutions shall, within 60 days from the date of receiving a certificate of approval form CBRC, come to CBRC and its
representative offices to obtain or change a financial license with the following documents:

(I)

a certificate of approval form CBRC or its representative offices;

(II)

financial institution’s recommendation letter;

(III)

legal and effective identity certificate of the person who obtains the license;

(IV)

other documents required by CBRC and or its representative offices.

Article 6

CBRC or its representative offices shall, within 5 working days from the date of receiving the effective documents, issue the license.

Article 7

The financial license shall state clearly the following issues:

(I)

code of the institution (see the attachment)

(II)

name of the institution (rural credit cooperatives shall indicate their entity institutions or branch institutions by bracket )

(III)

law and regulations in accordance with;

(IV)

date for approving the establishment of the institution;

(V)

location for operation;

(VI)

date for issuing the license;

(VII)

seal of the CBRC or its representative offices.

Article 8

In any of the following circumstances, financial institutions shall submit the CBRC or its representative offices application for
changing financial license:

(I)

change of the name of the institution;

(II)

change of the operation location (limited to change of the liquidation code);

(III)

dilapidation of the license;

(IV)

loss of the license;

(V)

circumstances where CBRC or its representative offices require the change of the license.

The applicant shall hand over the license in case of change of institution’s name or change of the operation location to CBRC or its
representative offices and apply for a new license with the documents as indicated in Article 5 of these measures.

In case of dilapidation, the applicant shall hand over the license when applying for a new license.

In case of loss, financial institutions shall declare the invalidation of the lost license in newspaper designated by CBRC or its
representative offices, and apply for new license.

Article 9

In principal, the license code for financial institutions shall be the same unless in such circumstances as change of the name of
the institution, change of the operation location (limited to liquidation code), or withdrawal of the license.

In the case of loss or dilapidation, the original code shall continue to be effective when applying for changing the license.

In the case of withdrawal, the code for the institution shall be invalidated as of the same date.

Article 10

In case of issuing and changing of the license, financial institutions shall declare the validation of the new license in newspaper
designated by CBRC or its representative offices, and apply for new license.

In case of withdrawal and cancellation, financial institutions shall declare the invalidation of the lost license in newspaper designated
by CBRC or its representative offices, and apply for new license.

Article 11

The declaration shall contain the following information: name of the institution, operation location, code of the financial institution,
postal code, and telephone number.

Article 12

The financial license shall be put in an obvious place of the financial institutions. Financial institutions shall introduce its operations
and persons in charge in an obvious place by appropriate means.

Article 13

Any units and individual shall not forge and change the financial license. Financial institutions shall not rent, lend or transfer
financial licenses.

Article 14

CBRC and its representative offices shall strengthen the information management of the financial license, establish institution management
document systems, and publicize information related to financial license according to relevant laws and regulations.

Article 15

CBRC shall charge the applicants examination and registration fees when applicants receive the license and change the license.

Article 16

In case of any of the following circumstances, CBRC shall serve a warning, and require correcting within time limit. In case of failure
to correct within the time limit, CBRC may fine an amount less than 30,000 RMB; but CBRC may also deprive the persons in charge where
serious offenses are committed:

(I)

fail to comply with the regulations of getting a license

(II)

mangle the financial license;

(III)

lose the financial license and fail to report to CBRC

(IV)

fail to show the license in the operation location;

(V)

forgery, change, leasing, lending, transferring of the license.

Article 17

Any renting, lending, transferring of financial license shall be penalized under the relevant provisions of the Commercial Bank Law
of the People’s Republic of China.

Article 18

Any forgery, changes to the financial license of the commercial banks will be punished according to the Commercial Bank Law of the
People’s Republic of China.

Article 19

The financial license shall be printed and managed by CBRC. CBRC shall print the financial license according to the financial license
coding system. The license will be in effect when with the seal of CBRC or its representative offices.

Financial license shall be specially kept as important warrant. The issuing, printing, keeping of the license as different functions
shall be separated from each other, and the three functions can counterbalance with each other. And registration systems for issuing,
printing, withdrawing and canceling of the license shall be established at the same time.

The used license during the issuing process shall be marked as “useless” and filed as important blank warrant to be destroyed regularly,

Article 20

The measures shall enter into force as of July 1, 2003. In case of discrepancy, the Measures of Financial License Control shall prevail.

Attachment:

Financial Institution License Coding System (omitted)



 
China Banking Regulatory Commission
2003-05-31

 







REGULATIONS OF THE PEOPLE’S REPUBLIC OF CHINA ON FISHING VESSEL INSPECTION

The State Council

Decree of the State Council of the People’s Republic of China

No.383

The Regulations of the People’s Republic of China on Fishing Vessel Inspection, which were adopted at the 11th executive meeting of
the State Council on June 11, 2003, are hereby promulgated and shall come into force on August 1, 2003.

Wen Jiabao, Premier of the State Council

June 27, 2003

Regulations of the People’s Republic of China on Fishing Vessel Inspection

Chapter I General Provisions

Article 1

In order to regulate the inspection of fishing vessels, to guarantee that the fishing vessels have the conditions for safe voyage
and operation, to safeguard the safety of the fishing vessels and the life and properties of the fishermen, and to prevent environmental
pollution, the Regulations are formulated in accordance with the Fishing Law of the People’s Republic of China.

Article 2

The Regulations shall apply to the inspection of the fishing vessels that are registered and are to be registered in the People’s
Republic of China (hereinafter referred to as fishing vessels). Accessory fishing vessels engaging in international shipping shall
be exempted.

Article 3

The administrative department of fishing under the State Council shall be in charge of the inspection of fishing vessels, as well
as the supervision and administration thereof, of the whole nation.

The Bureau of Fishing Vessel Inspection of the People’s Republic of China (hereinafter referred to as the state fishing vessel inspection
agency) shall exercise the function of fishing vessel inspection and of the supervision and administration thereof.

The local agencies of fishing vessel inspection shall, pursuant to the Provisions hereof, be responsible for the relevant fishing
vessel inspection work.

The departments of public security, frontier defense, quality supervision, and industry and commerce administration, etc. at various
levels shall, within the scope of their respective duties, assist in the work of fishing vessel inspection and of supervision and
administration.

Article 4

The state applies compulsory inspection to fishing vessels. Compulsory inspection is divided into preliminary inspection, operation
inspection, and temporary inspection.

Article 5

The principles of giving priority to safety, guaranteeing quality, and facilitating fishermen shall be abided by in the inspection
of fishing vessels.

Chapter II Preliminary Inspection

Article 6

Preliminary inspection of fishing vessel refers to the overall inspection carried out over a fishing vessel by the agency of fishing
vessel inspection before that vessel is put into operation.

Article 7

The owner or operator of any of the following fishing vessels shall apply for a preliminary inspection:

1)

Manufactured fishing vessels;

2)

Rebuilt fishing vessels (including the fishing vessels rebuilt from non-fishing vessels, and the ocean fishing vessels rebuilt from
fishing vessels sailing within China);

3)

Imported fishing vessels.

Article 8

With respect to manufactured and rebuilt fishing vessels, the design drawings and technical documents thereof shall be subject to
the examination and approval by the agency of fishing vessel inspection, and the preliminary inspection shall be applied for prior
to the start of manufacturing or rebuilding. The agency of fishing vessel inspection shall, within 20 workdays upon receipt of the
design drawings and technical documents, make the examination decision and notify the party concerned in writing.

The entities that design, manufacture, and rebuild fishing vessels shall meet the conditions set forth by the state, and abide by
the technical rules for fishing vessels of the state.

Article 9

The preliminary inspection of a fishing vessel to be manufactured or rebuilt shall be carried out at the same time with the manufacturing
or rebuilding.

The important equipment, parts, and materials that are used to manufacture or rebuild a fishing vessel and that are related to the
voyage, operation, personal and property safety, and prevention of environmental pollution shall, before being used, go through the
inspection by the agency of fishing vessel inspection, and only those passing the inspection may be used.

The catalogue of the important equipments, parts and materials subject to inspection as specified in the preceding paragraph shall
be formulated by the administrative department of fishing under the State Council.

Article 10

With respect to imported fishing vessels, the design drawings and technical documents thereof shall be subject to the examination
and confirmation by the agency of fishing vessel inspection, and the preliminary inspection shall be applied for before the vessels
are put into operation. With respect to import of old fishing vessels, the technical assessment certificate for old fishing vessels
issued by the agency of fishing vessel inspection of the state shall be obtained before the import.

Article 11

With respect to the fishing vessels passing the inspection, the agency of fishing vessel inspection shall issue the certificate of
fishing vessel inspection within 5 workdays upon the completion of the inspection; and with respect to those failing the inspection,
the agency shall notify the parties concerned in writing, and explain the reasons thereto.

No entity or individual may change, without authorization, the tonnage, load line, main engine power, fixed personnel number, and
navigable areas of a fishing vessel that has passed the inspection; or remove without authorization any of its important equipment
or parts that are related to the voyage, operation, personal and property safety, and prevention of environmental pollution. Where
alteration or removal is necessary, ratification shall be obtained from the agency of fishing vessel inspection that made the inspection.

Article 12

The preliminary inspection of imported fishing vessels and ocean fishing vessels shall be organized by the state fishing vessel inspection
agency in a unified way. The preliminary inspection of any other fishing vessel shall be implemented by the agency of fishing vessel
inspection of the port of registry; where the place of manufacturing or place of rebuilding of a fishing vessel is inconsistent with
the port of registry of that vessel, the preliminary inspection shall be implemented by the agency of fishing vessel inspection of
the place of manufacturing or rebuilding; that agency of fishing vessel inspection shall, within 5 workdays upon completion of inspection,
handover the technical materials, such as the inspection report, and inspection records, etc., to the agency of fishing vessel inspection
of the port of registry.

Chapter III Operation Inspection

Article 13

Operation inspection of fishing vessel refers to the conventional inspection carried out over a fishing vessel in operation by the
agency of fishing vessel inspection.

Article 14

The owner or operator of a fishing vessel in operation shall apply for operation inspection pursuant to the time provided for by the
administrative department of fishing under the State Council.

An agency of fishing vessel inspection shall carry out inspection of the following items pursuant to the provisions of the administrative
department of fishing under the State Council and according to the operation term and safety requirements of the fishing vessels:

1)

Structure and the mechanical and electrical equipment of the fishing vessel;

2)

Equipments and parts related to the safety of the fishing vessel;

3)

Equipments and parts related to the prevention of environmental pollution;

4)

Other inspection items specified by the administrative department of fishing under the State Council.

Article 15

An agency of fishing vessel inspection shall carry out an operation inspection within 3 workdays from the day on which the fishing
vessel applying for inspection reaches the place of inspection. If the vessel passes the inspection, the agency shall affix opinions
on or issue the certificate of fishing vessel inspection within 5 workdays upon the completion of the inspection; in the event of
issuing inspection certificate for an ocean fishing vessel inspected overseas, the period may be extended for 15 workdays. If the
vessel fails the inspection, the agency shall notify the party concerned in writing and explain the reasons thereto.

Article 16

Where a fishing vessel needs to be repaired upon inspection, the owner or operator of that vessel shall select a repairer that meets
the conditions provided for by the state. The repair of fishing vessels shall be in compliance with the technical rules on fishing
vessels of the state.

The important equipment, parts, and materials that are used to repair a fishing vessel and that are related to the voyage, operations,
personal and property safety, and prevention of environmental pollution shall, before being used, go through the inspection by the
agency of fishing vessel inspection, and only those passing the inspection may be used.

Article 17

Where a fishing vessel in operation needs to change any of the important equipment, parts, and materials that are related to the voyage,
operation, personal and property safety, and prevention of environmental pollution, the owner or operator of that vessel shall abide
by Paragraph 2 of Article 16 hereof.

Article 18

The operation inspection of ocean fishing vessels shall be organized by the state fishing vessel inspection agency in a unified way.
The operation inspection of any other fishing vessel shall be implemented by the agency of fishing vessel inspection of the port
of registry; where a fishing vessel is unable to return to the port of registry for the operation inspection, the agency of fishing
vessel inspection of the port of registry shall entrust the correspondent agency of the place of operation or repair of that vessel
to make the inspection; the agency of fishing vessel inspection that makes the inspection shall, within 5 workdays upon the completion
of the inspection, handover the technical materials, such as the inspection report, and inspection records, etc., to the agency of
fishing vessel inspection of the port of registry.

Chapter IV Temporary Inspection

Article 19

Temporary inspection of fishing vessel refers to the unconventional inspection carried out by the agency of fishing vessel inspection
over a fishing vessel in operation that is involved in certain circumstances.

Article 20

With respect to any of the fishing vessels involved in any of the following circumstances, the owner or operator shall apply for the
temporary inspection:

1)

Being unable to return to the port of registry in time as a result of invalidation of the inspection certificate;

2)

Being ordered to be inspected for inconformity with the relevant requirements of the laws and regulations on water transportation
safety or environmental protection;

3)

Being in any other specific circumstances provided for by the administrative department of fishing under the State Council.

Article 21

An agency of fishing vessel inspection shall carry out a temporary inspection within 2 workdays from the day on which the fishing
vessel applying for inspection reaches the place of inspection. If the vessel passes the inspection, the agency shall affix opinions
on or issue the certificate of fishing vessel inspection within 3 workdays upon the completion of the inspection; if the vessel fails
the inspection, the agency shall notify the party concerned in writing and explain the reasons thereto.

Article 22

The division of jurisdiction over temporary inspection of fishing vessels shall comply with the provisions of Article 18 hereof on
the division of jurisdiction over operation inspection.

Chapter V Supervision and Administration

Article 23

An agency of fishing vessel inspection may not accept the applications for inspection with respect to the fishing vessels involved
in any of the following circumstances:

1)

Those of which the design drawings and technical documents are not examined and approved or confirmed by the agency of fishing vessel
inspection;

2)

Those manufactured or rebuilt in violation of Paragraph 2 of Article 8 and Paragraph 2 of Article 9 of the Regulations;

3)

Those repaired in violation of Article 16 or 17 of the Regulations.

Article 24

Local agencies of fishing vessel inspection shall carry out the inspection within the scope ratified by the state fishing vessel inspection
agency.

Article 25

The personnel engaging in fishing vessel inspection shall pass the examination by the agency of fishing vessel inspection of the state
before taking the corresponding fishing vessel inspection work.

Article 26

Fishing vessel inspection agencies and the inspection personnel thereof shall strictly abide by the rules for fishing vessel inspection,
carry out the inspection on spot, and be responsible for the inspection conclusions.

The rules for fishing vessel inspection shall be formulated by the state fishing vessel inspection agency, and be promulgated for
implementation upon approval by the administrative department of fishing under the State Council.

Where the state has not formulated corresponding inspection rules for the fishing vessels or products for vessel use that are newly
created, the inspection rules acknowledged by the state fishing vessel inspection agency may be applied.

Article 27

A party having any objection to the inspection conclusion of a local agency of fishing vessel inspection may apply for re-inspection
pursuant to the provisions of the state fishing vessel inspection agency.

Article 28

The charges for inspection of fishing vessels shall comply with the charging standards stipulated by the administrative departments
of price and finance under the State Council.

Article 29

The formats of the inspection certificate, inspection records, and inspection report of fishing vessels, as well as the official inspection
stamp, shall be set forth by the state fishing vessel inspection agency in a unified way.

Article 30

The fishing vessel inspection personnel, when performing duties according to law, shall have the right to check the inspection certificates
and technical status of the fishing vessels, and the relevant entities and individuals shall cooperate.

The investigation and handling of major maritime casualties of fishing vessels shall have the participation of the agency of fishing
vessel inspection.

Article 31

With respect to a fishing vessel in any of the following circumstances, the owner or operator thereof shall, 7 workdays prior to the
day of disuse, registry alteration, or rebuilding of the fishing vessel or within 20 workdays upon loss of the fishing vessel, apply
for writing off the certificate of fishing vessel inspection with the agency of fishing vessel inspection; for failure to file the
application within the said time limit, the certificate of fishing vessel inspection shall be invalidated as of the day of completion
of the registry alteration or rebuilding of the fishing ship or the day of disuse or loss of the fishing vessel, and the agency of
fishing vessel inspection shall write off the certificate of fishing vessel inspection:

1)

Being disused pursuant to the relevant provisions of the state;

2)

Alteration of registry from China to any foreign country;

3)

Being rebuilt from a fishing vessel to a non-fishing vessel;

4)

Being lost as the result of sinking, etc.

Chapter VI Legal Liabilities

Article 32

If any fishing vessel, in violation of the Regulations, goes into operation in water without being inspected and obtaining the certificate
of fishing vessel inspection, that fishing vessel shall be confiscated.

If any fishing vessel that should be disused pursuant to the provisions continues to operate, the operation shall be ordered to be
stopped immediately, the invalidated certificate of fishing vessel inspection shall be withdrawn, the fishing vessel that shall be
disused shall be dismantled forcibly, and a fine ranging from 2,000 Yuan to 50,000 Yuan shall be imposed concurrently; and the criminal
liabilities shall be investigated for according to law if a crime is constituted.

Article 33

For failure to, in violation of the Regulations, apply for operation inspection or temporary inspection for any fishing vessel for
which the inspection shall be applied for, that vessel shall be ordered to be stopped from operation and the inspection shall be
applied for within a prescribed time limit; for failure to apply for the inspection within the said time limit, a fine ranging from
1,000 Yuan to 10,000 Yuan shall be imposed, and the certificate of fishing vessel inspection may be suspended.

Article 34

If any party, in violation of the Regulations, commits any of the following acts, that party shall be ordered to correct the act immediately,
and be imposed on a fine ranging from 2,000 Yuan to 20,000 Yuan; if the vessel is being operated, the operation shall be ordered
to be stopped immediately; if the party refuses to correct the act or refuses to stop the operation, the important equipment, parts
and materials illegally used shall be dismantled forcibly or the certificate of fishing vessel inspection shall be suspended; and
the criminal liabilities shall be investigated for according to law if a crime is constituted:

1)

Using any important equipment, parts, and materials that are related to the voyage, operations, personal and property safety, and
prevention of environmental pollution and that have not passed the inspection to manufacture, rebuild, or repair a fishing vessel;

2)

Dismantling without authorization any of the important equipment and parts that are related to the voyage, operations, personal and
property safety, and prevention of environmental pollution;

3)

Changing without authorization the tonnage, load line, main engine power, fixed personnel number, or navigable areas of a fishing
vessel.

Article 35

If any working person of the agency of fishing vessel inspection takes up the work of fishing vessel inspection without passing the
examination, that person shall be ordered to stop the inspection work immediately, and be imposed on a fine ranging from 1,000 Yuan
to 5,000 Yuan.

Article 36

If any party, in violation of the Regulations, is involved in any of the following circumstances, that party shall be ordered to correct
the act immediately, and the directly liable personnel in charge and other directly liable personnel shall be given the sanctions
of demotion, removal from post, or cancellation of inspection qualification; the criminal liabilities shall be investigated for according
to law if a crime is constituted; and the certificate of fishing vessel inspection already issued shall be invalidated:

1)

Failing to carry out the inspection pursuant to the relevant provisions of the administrative department of fishing under the State
Council;

2)

Issuing the certificate of fishing vessel inspection issued or the inspection records or inspection report that are inconsistent with
the actual status of the fishing vessel;

3)

Carrying out the fishing vessel inspection beyond the prescribed authority.

Article 37

Forged or altered certificates of fishing vessel inspection, inspection records or inspection reports, and privately engraved official
stamp of fishing vessel inspection shall be confiscated; and the criminal liabilities shall be investigated for according to law
if a crime is constituted.

Article 38

The administrative punishments provided for in the Regulations shall be decided by the administrative departments of fishing of the
people’s governments of county level and above or the administrative enforcement agencies of fishing affiliated thereto.

Where the organs making administrative punishments specified in the preceding paragraph, or the functionary thereof accept money or
properties, or other benefits from others by taking advantage of the post, or fail to perform the supervision duties, or fail to
investigate the illegal acts that have been found out, or has any other act of neglect of duties, abuse of powers, or seeking private
benefits through wrongful means, and constitutes a crime, the directly liable person in charge and other directly liable persons
shall be investigated for criminal liabilities according to law; and administrative sanctions shall be given if a crime has not been
constituted.

Chapter VII Supplementary Provisions

Article 39

Where the flag country of a foreign fishing vessel entrusts the People’s Republic of China to inspect that vessel, the provisions
of the Regulations shall be followed in the execution.

Article 40

The Regulations shall come into force on August 1, 2003.



 
The State Council
2003-06-27

 







AGREEMENT BETWEEN THE GOVERNMENT OF THE PEOPLE’S REPUBLIC OF CHINA AND THE GOVERNMENT OF THE REPUBLIC OF DJIBOUTI ON THE PROMOTION AND PROTECTION OF INVESTMENTS

AGREEMENT BETWEEN THE GOVERNMENT OF THE PEOPLE’S REPUBLIC OF CHINA AND THE GOVERNMENT OF THE REPUBLIC OF DJIBOUTI ON THE PROMOTION
AND PROTECTION OF INVESTMENTS

The Government of the People’s Republic of China and the Government of the Republic of Djibouti (hereinafter referred to as the Contracting
Parties),

Intending to create favorable conditions for investment by investors of one Contracting Party in the territory of the other Contracting
Party;

Recognizing that the reciprocal encouragement, promotion and protection of such investment will be conducive to stimulating business
initiative of the investors, flow of capital and technology, and will increase prosperity and economic development and that fair
and equitable treatment of investments is desirable in both States;

Desiring to intensify the cooperation of both States on the basis of equality and mutual benefits;

Have agreed as follows:

Article 1

DEFINITIONS

For the purpose of this Agreement,

1,

The term “investment” means every kind of asset invested by investors of one Contracting Party in accordance with the laws and regulations
of the other Contracting Party in the territory of the latter, and in particular, though not exclusively, includes:

(a)

movable and immovable property and other property rights such as mortgages and pledges;

(b)

shares, debentures, stock and any other kind of participation in companies;

(c)

claims to money or to any other performance having an economic value associated with an investment;

(d)

intellectual property rights, in particular, copyrights, patents, trade-marks, trade-names, technical process, know-how and good-will;

(e)

business concessions conferred by law or under contract permitted by law, including concessions to search for, cultivate, extract
or exploit natural resources.

Any change in the form in which assets are invested does not affect their character as investments.

2,

The term “investor” means,

(a)

natural persons who have nationality of either Contracting Party in accordance with the laws of that Contracting Party;

(b)

economic entities, including companies, corporations, associations, partnerships and other organizations, incorporated and constituted
under the laws and regulations of either Contracting Party and have their seats in that Contracting Party.

3,

The term “return” means the amounts yielded from investments, including profits, dividends, interests, capital gains, royalties and
other legitimate income.

Article 2

PROMOTION AND PROTECTION OF INVESTMENT

1,

Each Contracting Party shall encourage investors of the other Contracting Party to make investments in its territory and admit such
investments in accordance with its laws and regulations.

2,

Investments of the investors of either Contracting Party shall be accorded fair and equitable treatment and shall enjoy the constant
protection and security in the territory of the other Contracting Party.

3,

Without prejudice to its laws and regulations, neither Contracting Party shall take any unreasonable or discriminatory measures against
the management, maintenance, use enjoyment and disposal of the investments by the investors of the other Contracting Party.

4,

Subject to its laws and regulations, one Contracting Party shall provide assistance in and facilities for obtaining visas and working
permit to nationals of the other Contracting Party engaging in activities associated with investments made in the territory of that
Contracting Party.

Article 3

TREATMENT OF INVESTMENT

1,

Investments of investors of each Contracting Party shall all the time be accorded fair and equitable treatment in the territory of
the other Contracting Party.

2,

Without prejudice to its laws and regulations, each Contracting Party shall accord to investments and activities associated with
such investments by the investors of the other Contracting Party treatment not less favorable than that accorded to the investments
and associated activities by its own investors.

3,

neither Contracting Party shall subject investments and activities associated with such investments by the investors of the other
Contracting Party to treatment less favorable than that accorded to the investments and associated activities by the investors of
any third State.

4,

The provisions of Paragraphs 1 to 3 of this Article shall not be construed so as to oblige one Contracting Party to extend to the
investors of the other Contracting Party the benefit of any treatment, preference or privilege by virtue of:

(a)

any customs union, free trade zone, economic union and any international agreement resulting in such customs union, free trade zone,
economic union;

(b)

any international agreement or arrangement relating wholly or mainly to taxation;

(c)

any international agreement or arrangement facilitating frontier trade.

Article 4

EXPROPRIATION

1,

Neither Contracting Party shall expropriate, nationalize or take other similar measures (hereinafter referred to as “expropriation”)
against the investments of the investors of the other Contracting party in its territory, unless the following conditions are met:

(a)

for the public interests;

(b)

under domestic legal procedure;

(c)

without discrimination;

(d)

against compensation.

2,

The compensation mentioned in Paragraph 1 of this Article shall be equivalent to the value of the expropriated investments immediately
before the expropriation is taken or the impending expropriation becomes public knowledge, which is earlier. The value shall be determined
in accordance with generally recognized principles of valuation. The compensation shall include interest from the date of expropriation
until the date of payment. The compensation shall also be made without delay, be effectively realizable and freely transferable.

Article 5

COMPENSATION FOR DAMAGES AND LOSSES

Investors of one Contracting Party whose investments in the territory of the other Contracting Party suffer losses owing to war, a
state of national emergency, insurrection, riot or other similar events in the territory of the latter Contracting Party, shall be
accorded by the latter Contracting Party, if it takes relevant measures, treatment, as regards restitution, indemnification, compensation
and other settlements no less favorable than that accorded to the investors of its own or any third State.

Article 6

REPATRIATION OF INVESTMENTS AND RETURNS

1,

Each Contracting Party shall, subject to its laws and regulations, guarantee to the investors of the other Contracting Party the
transfer of their investments and returns held in its territory, including:

(a)

profits, dividends, interests and other legitimate income;

(b)

proceeds obtained from the total or partial sale or liquidation of investments;

(c)

payments pursuant to a loan agreement in connection with investments;

(d)

royalties in relation to the matters in Paragraph 1 (d) of Article 1 ;

(e)

payments of technical assistance or technical service fee, management fee;

(f)

payments in connection with contracting projects;

(g)

earnings of nationals of the other Contracting Party who work in connection with an investment in its territory.

2,

Nothing in Paragraph 1 of this Article shall affect the free transfer of compensation paid under Article 4 of this Agreement.

3,

The transfer mentioned above shall be made in a freely convertible currency and at the prevailing market rate of exchange applicable
within the Contracting Party accepting the investments and on the date of transfer.

Article 7

SUBROGATION

If one Contracting Party or its designated agency makes a payment to its investor under an indemnity given in respect of an investment
made in the territory of the other Contracting Party, the latter Contracting Party shall recognize the assignment of all the rights
and claims of the indemnified investor to the former Contracting Party or its designated agency, by law or by legal transactions,
and the right of the former Contracting Party or its designated agency to exercise by virtue of subrogation any such right to same
extent as the investor.

Article 8

SETTLEMENT OF DISPUTES BETWEEN CONTRACTING PARTIES

1,

Any dispute between the Contracting Parties concerning the interpretation or application of this Agreement shall, as far as possible,
be settled with consultation through diplomatic channel.

2,

If a dispute cannot thus be settled within six months, it shall, upon the request of either Contracting Party, be submitted to an
ad hoc arbitral tribunal.

3,

Such tribunal comprises of three arbitrators. Within two months of the receipt of the written notice requesting arbitration, each
Contracting Party shall appoint one arbitrator. Those two arbitrators shall, within further two months, together select a national
of a third State having diplomatic relations with both Contracting Parties as Chairman of the arbitral tribunal.

4,

If the arbitral tribunal has not been constituted within four months from the receipt of the written notice requesting arbitration,
either Contracting Party may, in the absence of any other agreement, invite the President of the International Court of Justice to
make any necessary appointments. If the President is a national of either Contracting Party or is otherwise prevented from discharging
the said functions, the Member of the International Court of Justice next in seniority who is not a national of either Contracting
Party or is not otherwise prevented from discharging the said functions shall be invited to make such necessary appointments.

5,

The arbitral tribunal shall determine its own procedure. The arbitral tribunal shall reach its award in accordance the provisions
of this Agreement and the principles of international law recognized by both Contracting Parties.

6,

The arbitral tribunal shall reach its award by a majority of votes. Such award shall be final and binding upon both Contracting Parties.
The arbitral tribunal shall, upon the request of either Contracting Party, explain the reasons of its award.

7,

Each Contracting Party shall bear the costs of its appointed arbitrator and of its representation in arbitral proceedings. The relevant
costs of the Chairman and tribunal shall be borne in equal parts by the Contracting Parties.

Article 9

SETTLEMENT OF DISPUTES BETWEEN INVESTORS AND ONE CONTRACTING PARTY

1,

Any legal dispute between an investor of one Contracting Party and the other Contracting Party in connection with an investment in
the territory of the other Contracting Party shall, as far as possible, be settled amicably through negotiations between the parties
to the dispute.

2,

If the dispute cannot be settled through negotiations within six months, the investor of one Contracting Party may submit the dispute
to the competent court of the other Contracting Party.

3,

Any dispute, if unable to be settled within six months after resort to negotiations as specified in Paragraph 1 of this Article,
shall be submitted at the request of either party to

(a)

International center for Settlement of Investment Disputes (ICSID) under the Convention on the Settlement of Disputes between States
and Nationals of Other States, done at Washington on March 18,1965; or

(b)

an ad hoc arbitral tribunal

provided that the Contracting Party involved in the dispute may require the investor concerned to exhaust the domestic administrative
review procedure specified by the laws and regulations of that Contracting Party before submission of the dispute the aforementioned
arbitration procedure.

However, if the investor concerned has resorted to the procedure specified in Paragraph 2 of this Article, the provisions of this
Paragraph shall not apply.

4,

Without prejudice to Paragraph 3 of this Article, the ad hoc arbitral tribunal referred to in Paragraph 3 (b) shall be constituted
for each individual case in the following way: each party to the dispute shall appoint one arbitrator, and these two shall select
a national of a third State which has diplomatic relations with both Contracting Parties as the Chairman. The first two arbitrators
shall be appointed within two months of the written notice requesting for arbitration by either party to the dispute to the other
and the Chairman shall be selected within four months. If, within the period specified above, the tribunal has not been constituted,
either party to the dispute may invite the Secretary General of the International Center for Settlement of Investment Disputes to
make the necessary appointments.

5,

The ad hoc arbitral tribunal shall determine its own procedure. However, the tribunal may, in the course of determination of procedure,
take as guidance the arbitration Rules of the International Center for Settlement of Investment disputes.

6,

The tribunal referred to in Paragraph 3 (a) and (b) of this Article shall reach an award by a majority of votes. Such award shall
be final and binding upon both parties to the dispute. Both Contracting Parties shall commit themselves to the enforcement of the
award.

7,

The tribunal referred to in Paragraph 3 (a) and (b) of this Article shall adjudicate in accordance with the law of the Contracting
Party to the dispute accepting the investment including its rules on the conflict of laws, the provisions of this Agreement as well
as the applicable principles of international law.

8,

Each party to the dispute shall bear the costs of its appointed arbitrator and of its representation in arbitral proceedings. The
relevant costs of the Chairman and tribunal shall be borne in equal parts by the parties to the dispute. The tribunal may in its
award direct that a higher proportion of the costs be borne by one of the parties to the dispute.

Article 10

OTHER OBLIGATIONS

1,

If the legislation of either Contracting Party or international obligations existing at present or established hereafter between
the Contracting Parties result in a position entitling investments by investors of the other Contracting party to a treatment more
favorable than is provided for by the Agreement, the position shall not be affected by this Agreement.

2,

Each Contracting Party shall observe any commitments it may have entered into with the investors of the other Contracting Party as
regards to their investments.

Article 11

APPLICATION

This Agreement shall apply to investment, which are made after its entry into force by investors of either Contracting Party in accordance
with the laws and regulations of the other Contracting Party in the territory of the latter.

Article 12

CONSULTATIONS

1,

The representatives of the Contracting Parties shall hold meetings from time me for the purpose of:

(a)

reviewing the implementation of this Agreement;

(b)

exchanging legal information and investment opportunities;

(c)

resolving disputes arising out of investments;

(d)

forwarding proposals on promotion of investment;

(e)

studying other issues in connection with investment.

2,

Where either Contracting Party requests consultation on any matter of Paragraph 1 of this Article, the other Contracting Party shall
give prompt response and the consultation be held alternatively in Beijing and Djibouti.

Article 13

ENTRY INTO FORCE, DURATION AND TERMINATION

1,

This Agreement shall enter into force on the first day of the following month after the date on which both Contracting Parties have
notified each other in writing that their respective internal legal procedures necessary therefor have been fulfilled and remain
in force for a period of ten years.

2,

This Agreement shall continue on force if either Contracting Party fails to give a written notice to the other Contracting Party
to terminate this Agreement one year before the expiration of the period specified in Paragraph 1 of this Article.

3,

After the expiration of initial ten years period, either Contracting Party may at any time thereafter terminate this Agreement by
giving at least one year’s written notice to the other Contracting Party.

4,

With respect to investments made prior to the date of termination of this Agreement, the provisions of Article 1 to 12 shall continue
to be effective for a further period of ten years from such date of termination.

IN WITNESS WHEREOF the undersigned, duly authorized thereto by respective Governments, have signed this Agreement.

Done in duplicate in Beijing, on August 18,2003, in the Chinese and English languages, both texts being equally authentic.

For the Government of￿￿￿￿￿￿￿￿￿￿￿￿￿￿￿￿￿￿￿￿￿￿￿￿￿￿￿￿￿￿￿￿￿￿For the Government of

The People’s Republic of China￿￿￿￿￿￿￿￿￿￿￿￿￿￿ ￿￿￿￿￿￿￿￿￿￿￿￿The Republic of Djibouti



 
The Government of the People’s Republic of China
2003-08-18

 







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...