Laws of the People's Republic of China

the National Development and Reform Commission, the Ministry of Finance, the Ministry of Commerce, the General Administration of Customs£¬the State Administration of Taxation

Circular of NDRC, MOF, MOFCOM, GAC, SAT concerning Relevant Issues on Adjusting the Policies on Export of Finished Oil

Fa Gai Jing Mao [2005] No. 1606

China National Petroleum Corporation, China Petrochemical Corporation, the development and reform commissions, public finance departments or bureaus, administrative departments of commerce, and state taxation bureaus of all provinces, autonomous regions, municipalities directly under the Central Government, municipalities under separate state planning and Xinjiang Production and Construction Army Corps, the Guangdong Branch, and Tianjin and Shanghai Special Dispatched Offices of the General Administration of Customs, and all customs directly under the General Administration of Customs:

With a view to guaranteeing the domestic supply of refined oil, we hereby notice of you as follows the relevant policies on achieving the control of export of finished oil by the end of this year:

I.

The tax refund for export of gasoline and naphtha shall be temporarily suspended. The specific provisions shall be promulgated by the Ministry of Finance and the State Administration of Taxation by separate notice.

II.

In principle, no new contract on the process trade of crude oil may be approved. As to the approved contracts on the process trade of crude oil, which have been archived in the customs, the gasoline and diesel oil products shall all be retained for domestic sale and no longer be exported. And the procedures for making up the payment of taxes for process trade of crude oil in domestic shall be gone through for this purpose. Where any contract really needs to be performed and the gasoline and diesel oil products need to be exported, it shall be reported to the National Development and Reform Commission, the Ministry of Commerce and the General Administration of Customs for approval. And the competent customs shall release the said products upon the strength of relevant approval documents.

III.

The process trade businesses of several enterprises and the long-term contractual businesses between China Petrochemical Corporation and overseas enterprises shall be treated in the following methods:

(1)

West Pacific Petrochemical Co., Ltd. and Zhanjiang Dongxing Petroleum Enterprise Co., Ltd. may continue being engaged in the process trade of crude oil. The quantity of processing shall, in light of the principle of strict control, be subject to the approval of the National Development and Reform Commission, the Ministry of Commerce, and the General Administration of Customs. When it is required domestically, the gasoline and diesel oil produced by the two companies shall be purchased by China Petroleum Engineering & Construction Corporation and China Petrochemical Corporation and be sold in the domestic market, with the payment of taxes due to domestic sale to be made up according to Article 2 of this Document.

(2)

As for the aviation gasoline supplied by China Petrochemical Corporation to Hong Kong, Macao and Vietnam markets, the import of crude oil may continue by means of process trade and then aviation gasoline may be exported. The specific quantity shall be subject to the approval of the National Development and Reform Commission and the Ministry of Commerce. The processed gasoline and diesel oil shall be retained by China Petrochemical Corporation for sale in the domestic market, and shall generally not be exported, with the payment of taxes due to domestic sale to be made up according to Article 2 of this Document. The quantity under the long-term contracts of the supply of gasoline and diesel oil by China Petrochemical Corporation to Macao, Myanmar, Vietnam by means of process trade shall be subject to the approval of the National Development and Reform Commission and the Ministry of Commerce.

(3)

The process trade contracts on the abovementioned businesses shall be subject to the examination and approval of the Ministry of Commerce. And copies shall be sent simultaneously to the National Development and Reform Commission and the General Administration of Customs for archival filing. The customs shall, upon the strength of the approval certificate for process trade as ratified and issued by the administrative department of commerce, go through the procedures for archival filing of process trade.

The aforesaid provisions shall be effective from September 1 to December 31, 2005.

The National Development and Reform Commission

The Ministry of Finance

The Ministry of Commerce

The General Administration of Customs

The State Administration of Taxation

August 24, 2005