Laws of the People's Republic of China

Announcement No. 78 2006 of the Ministry of Commerce on Non State-run Trade Permissible Import Amount, Distribution Basis and Application Procedure of Crude Oil in 2007

No.78

In accordance with the Regulation of the People's Republic of China on the Administration of the Import and Export of Goods and China's commitments on the entry into WTO, Non State-run Trade Permissible Import Amount, Distribution Basis and Application Procedure of Crude Oil in 2007 is hereby announced.

Any qualified crude oil import unit may apply to the Administrative Organization of Key Industrial Products authorized by the Ministry of Commerce, or to the Ministry of Commerce directly. The cognizance duration of the Ministry of Commerce is from October 10, 2006 to November 10, 2006.

Appendix: Non State-run Trade Permissible Import Amount, Distribution Basis and Application Procedure of Crude Oil in 2007

the Ministry of Commerce

October 10, 2006 Appendix: Non State-run Trade Permissible Import Amount, Distribution Basis and Application Procedure of Crude Oil in 2007.

1.

The Non State-run Trade Permissible Import Amount

The non state-run trade permissible import amount of crude oil in 2007 is 16.68 million tons.

2.

The Distribution Basis

(1)

the previous import performance of the applicants,

(2)

whether or not the previous distributed amounts have been fully used,

(3)

the production capacity, operation scale, sales performance of the applicant,

(4)

the number of applicants,

(5)

the applications of new import operators, and

(6)

other factors which need to be taken into account.

3.

Conditions for the application of non state-run trade permissible import amount of crude oil

(1)

as regards an oil products enterprise meeting the following requirements:

(a)

it is established upon approval under law with a registered capital of no less than 50 million Yuan;

(b)

it has a crude oil import port with tonnages of no less than 50,000;

(c)

it has a crude oil tank with a volume of no less than 200,000 cubic meters;

(d)

it has a crude oil reserve the business volume of which is not less than 10% ;

(e)

it has no records of smuggling, violations of rules, tax evasion, evasion of foreign exchange and illegal arbitrage;

(f)

it has a good credit, A-level or above in credit rating, credit amount of the bank of no less than 20 million US dollars;

(g)

it has at least two professionals engaging in the international oil trade; and

(h)

other factors which need to be taken into account.

(2)

as regards a small-scale border trade enterprise meeting the following requirements:

(a)

it is established upon approval under law with the registered capital no than 50 million Yuan and engaging in oil products business;

(b)

it has a sound unloading capacity and transferring capacity;

(c)

it has business performances of crude oil import in the recent three years (2004-2006);

(d)

it has a crude oil reserve of no less than 10% of the business volume;

(e)

it has no records of smuggling, violations of rules, tax evasion, evasion of foreign exchange and illegal arbitrage;

(f)

it has a good credit, A-level or above in credit rating; and

(g)

other factors that need to be taken into account.

(3)

As regards a foreign-invested enterprise, it must be an independent legal entity with independent import performances.

4.

Documentation submission and application procedure

The applicants shall submit application documentations in line with the requirements prescribed in Article 3 (the applicants need not to ask the local customs to issue records of no smuggling and violations of rules, upon which the General Administration of Customs will carry out unified verification after negotiation with the Ministry of Commerce at the appointed time), and the documentations shall be transferred to the Ministry of Commerce through the Import Administrative Organization of Key Industrial Products authorized by Ministry of Commerce in the city or province where the applicants are located. The enterprises directly under the Central Government may submit the documentations directly to the Ministry of Commerce.