Laws of the People's Republic of China

National Development and Reform Commission, Ministry of Information Industry, State Taxation Administration, General Administration of Customs

Circular of NDRC, MII, SAT, GAC on Printing and Distributing Measures for the Administration of Accreditation of the Integrated Circuit Enterprises Encouraged by the State (for Trial Implementation)

Fa Gai Gao Ji [2005] No. 2136

The development and reform commissions and the economic commissions (economic and trade commissions), authorities in charge of information industry, state tax bureaus, local tax bureaus and customs of all provinces, autonomous regions, municipalities directly under the central government, municipalities separately listed in the state plan,:

In order to implement Several Policies concerning Encouraging the Development of Software Industry and Integrated Circuit (Guo Fa [2000] No.18) and its supporting preferential policies, to standardize the accreditation of integrated circuit enterprises encouraged by the State, Measures for the Certified Administration of the Integrated Circuit Enterprises Encouraged by the State (for Trial Implementation) is hereby given to you for observing hereof and doing well the relevant work.

Appendix: Measures for the Administration of the Integrated Circuit Enterprises Encouraged by the State (for Trial Implementation)

National Development and Reform Commission

Ministry of Information Industry

State Taxation Administration

General Administration of Customs

October 21, 2005 Appendix:Measures for the Administration of Accreditation of the Integrated Circuit Enterprises Encouraged by the State (for Trial Implementation)

Article 1

In order to make enterprises enjoy preferential policies in Several Policies concerning Encouraging the Development of Software Industry and Integrated Circuit (Guo Fa [2000] No.18) (hereinafter referred to as Several Policies) and its supporting policies and to accelerate the development of China's integrated circuit industry, the Measures is hereby formulated in accordance with Article 49 of Several Policies and the relevant provisions.

Article 2

Integrated circuit enterprises as mentioned in the Measures refers to organizations with independent legal person qualification which are established lawfully within China's territory (with Hong Kong, Macao and Taiwan excluded) and involved in the manufacture, packaging, testing of integrated circuit chip and the manufacture of silicon single crystal with its size no less than 6 inches, with the integrated circuit design enterprises excluded.

Article 3

The National Development and Reform Commission, the Ministry of Information Industry, the State Taxation Administration and the General Administration of Customs constitute the competent departments responsible for the accreditation and administration of national integrated circuit enterprises (hereinafter referred to as competent departments). Its responsibilities include£º

(i)

Organizing the integrated circuit enterprises accreditation authorities (hereinafter referred to as accreditation authorities) to carry out accreditation;

(ii)

Supervising and checking the accreditation of national integrated circuit and auditing its accreditation results; and

(iii)

Accepting the opposition appeal of determined results, annual inspection results as well as the relevant accreditation decision.

Article 4

The competent departments shall jointly entrust China Semiconductor Industry Association to act as the accreditation authority, responsible for the accreditation and annual inspection of integrated circuit enterprises. Its responsibilities include:

(i)

Accepting the accreditation application of integrated circuit enterprises;

(ii)

Organizing the accreditation of integrated circuit enterprises and raising accreditation advice; and

(iii)

Taking charge of the annual inspection of integrated circuit enterprises and submitting the result to the competent departments.

Article 5

Such integrated circuit enterprises as apply for its accreditation shall meet the following conditions:

(i)

Judicial entity which is lawfully established and engaged in the manufacture, packaging and testing of integrated circuit and the manufacture of silicon single crystal material with its size no less than 6 inches;

(ii)

Meeting basic conditions such as production size, software and hardware as well as personnel geared to integrated circuit manufacture, its production procedures and management standard being in line with the basic flow of integrated circuit production and having the means and capacity to meet production;

(iii)

The sales income of self-production (including agent processing) accounting for more than 60% of the total income of the same year (the newly enterprises excluded); and

(iv)

The relevant competent tax authorities having determined that the enterprises are free from such offences against the law as bad faith tax arrears, tax dodging and fraud.

Article 6

The enterprises shall, in the process of applying for integrated circuit accreditation, submit relevant documents in accordance with the accreditation enforcement regulations which shall be authentic and effective.

Article 7

The accreditation of the integrated circuit enterprises shall be applied by these enterprises to the accreditation authorities. The accreditation shall be undertaken in accordance with the relevant enforcement regulations, and the accreditation opinion as well as the relevant documents shall be raised to the competent departments within 15 working day.

The National Development and Reform Commission, the Ministry of Information Industry, the State Taxation Administration and the General Administration of Customs shall give their approval or denial opinion in written form within 45 working days.

Article 8

The accreditation results shall be published in the website of the accreditation authority and the relevant media and shall be subject to social supervision.

Article 9

The state implements annual inspection system upon the determined integrated circuit enterprises. The enterprise shall submit annual inspection report to the accreditation authority and the latter shall submit the annual inspection opinion to be filed with the authorities in charge.

Article 10

The enterprises shall, within the prescribed time limit, submit their annual inspection report to the accreditation authorities, those failed to do so shall be deemed as waiving its accreditation qualification; the integrated circuit enterprises failing to pass the annual inspection shall have its accreditation qualification canceled as of the ensuing year.

Article 11

Where such alterations as adjustment, separation, merger, restructure arise from the certified integrated circuit enterprise, the enterprise shall, within 30 days as of the alteration decision being made, handle its alteration accreditation or reapplication procedure in the original accreditation agency. The enterprise without the accreditation from the National Development and Reform Commission and the relevant authorities shall have its accreditation qualification canceled and have its enjoying preferential policy ceased.

Article 12

Where such offences against the law as tax evasion are discovered, the accreditation qualification of the enterprise shall be canceled after the verification, with its enjoying preferential policies being ceased at the same time.

Article 13

Where such a enterprise as provided faked documents in the process of applying integrated circuit enterprises is discovered, its accreditation application shall be ceased; where it is ascertained, the accreditation qualification of the integrated enterprise shall be cancelled and thereby be exposed to the public, with the reduced and exempted sum being retrieved; the accreditation authorities shall not handle the application hereof within three years.

Article 14

The certified integrated circuit enterprise shall hold the accreditation issued jointly by the authorities in charge to handle procedures for preferential policies.

Article 15

The Measures shall be interpreted by the National Development and Reform Commission, the Ministry of Information Industry, the State Taxation Administration and the General Administration of Customs.

Article 16

The Measures shall be enforced as of the date of its printing and issuing.