Laws of the People's Republic of China

Circular of the Ministry of Commerce concerning Printing and Distributing of Detailed Rules on the Implementation of Coordination and Management of Large Scale Complete Set Telecommunication Export Items

Shang Chan Fa [2006] No. 185

The commerce authorities in charge in all provinces, autonomous regions, municipalities directly under the Central Government, cities specifically designated in the state plan and Xinjiang Production and Construction Corps the relevant chambers of commerce, the relevant enterprises, as well as all field commercial authorities:

In accordance with the Measures of the Ministry of Foreign Trade and Economic Cooperation for the Administration and Coordination of Large Scale Unit Machine and Complete Set Telecommunication Equipment Export Items ([2001] No. 33), the Ministry of Commerce, through consultation with the relevant authorities, formulated the Detailed Rules on the Implementation of Coordination and Management of Large Scale Complete Set Telecommunication Export Items. It is hereby printed and distributed to you for observance and implementation. You shall inform the Ministry of Commerce of any problems in the process of implementation.

The Ministry of Commerce of the People's Republic of China

June 5 2006 Appendix: Detailed Rules on the Implementation of Coordination and Management of Large Scale Complete Set Telecommunication Export Items Chapter I General Principles

Article 1

In order to further standardize the market order of Chinese large-scale complete set telecommunication equipment export, strengthen the coordination and administration upon export items, prevent inappropriate competition activities, promote the sound, sustained and stable development of the export of large-scale complete set telecommunication equipment and to maintain the overall interest of China as well as the legitimate interests and rights of the enterprises, the Detailed Rules is hereby formulated in accordance with the Measures of the Ministry of Foreign Trade and Economic Cooperation for the Administration and Coordination of Large Scale Single Machine and Complete Set Telecommunication Equipment Export Items ([2001] No. 33).

Article 2

The large-scale complete set telecommunication equipment as mentioned in the Detailed Rules refers to the telecommunication export item with the contractual sum no less than $10 million, the telecommunication export items valued no less than $ 5 million using the export credit loan of the People's Republic of China, the preferential governmental foreign assistance loan or the buyer-side credit loan for preferential export, as well as the export credit insurance.

Article 3

The Ministry of Commerce and the relevant authorities shall establish the leading group for the coordination of the export items of large-scale complete set telecommunication equipment to guarantee the smooth implementation of the Detailed Rules. The directorship of the leading group shall be assumed by the leaders of the Ministry of Commerce and the member units shall include the relevant authority in charge of the Ministry of Foreign Affairs, the Ministry of Information Industry, the Import and Export Bank of China, as well as the relevant departments and bureaus of, the regional departments, the mechanic and electrical chambers of commerce, and the contract of chamber of commerce. The office of the leading group shall be established in the Department of Mechanical, Electronic and Hi-tech Industry of the Ministry of Commerce. The leading group shall authorize the mechanical and electronic chamber of commerce and the contract chamber of commerce (hereinafter referred to as "the chamber of commerce") to be responsible for the detailed coordination matters.

The responsibilities of the leading group shall include: to be responsible for formulating the whole strategy for standardizing the market order of large-scale complete-set telecommunication equipment, to strengthen the communication and exchange and coordination of different sectors, and to be responsible for reporting the relevant issues regularly. The concrete measures for the coordination mechanism of the leading group shall be otherwise formulated.

Chapter II Business Scope of the Items and the Access Qualification of the Enterprises

Article 4

The large-scale whole complete set telecommunication equipment as mentioned herein includes the following scopes

(1)

Content of the item: supply of equipment, technological design, technology transfer, installation, adjustment and guidance, the supply of parts of components, after-sale service as well as the corresponding services.

(2)

Means of the public item bidding: international public bidding, biding invitation, tender discussion as well as other means of bidding invitation.

(3)

Means for the implementation of the item: general contract, subcontract as well as other means.

Article 5

The enterprises participating in the export items of large-scale complete set telecommunication equipments shall have the following conditions:

(1)

Having the business license of the enterprise legal person verified and issued by the industrial and commercial administrative authority;

(2)

Having sound capital credit and business operation;

(3)

Having the necessary technical staff for carrying out large-scale complete set telecommunication equipment, complete and sound organs, perfect rules and regulations;

(4)

According with other conditions prescribed in the relevant national laws, rules and regulations.

Chapter III Coordination Principle and Procedure

Article 6

The coordination for the export of large-scale complete set telecommunication equipment shall abide by the following principles:

(1)

Openness, fairness, equity, good faith, and high efficiency;

(2)

To stop inappropriate competition and guarantee the legitimate rights and interests of the enterprises;

(3)

To maintain the normal export order and the whole national interest;

(4)

To protect the interest of the market developers, and " the developers shall benefit from it";

(5)

To fully respect the opinion of the embassies and consulates(the economic and commercial counselor's office )£»

(6)

To encourage the alliance of enterprises to cope with the competition of foreign ones and to realize advantageous complementation;

(7)

Helpful to the improvement of the rate of bidding of Chinese enterprises;

(8)

Helpful to the promotion of the economic efficiency of the enterprises.

Article 7

The chamber of commerce shall be responsible for the early period of coordination of the export items of large-scale complete set telecommunication equipment. Such enterprises as are scheduled to attend the items of large-scale complete set telecommunication equipment shall submit to the chamber of commerce its application for the bid-invitation within 25 days prior to the tender closing date and the tender-discussion items within 20 days as of the conclusion of the summary of conference report and the cooperation agreement respectively. The enterprises shall promptly and initiatively report the progress of the items to the Chinese embassies and consulates in foreign countries (the economic and commercial counselor's office) and shall be subject to the guidance hereof.

The chamber of commerce shall otherwise prescribe the disciplines and rules for standardizing the acts of the enterprises.

Article 8

The export enterprises of large-scale complete set telecommunication equipment enterprises shall present the following documents while applying for the items herein:

(1)

The item application report;

(2)

The Declaration of Export Items of Large-scale Single Machine and Complete Set Equipment;

(3)

The explanation about the negotiation with the clients and the technical requirement of the items;

(4)

Such documents as letter of intent, summary of conference and memorandums concluded with the clients;

(5)

The opinions of the Chinese embassy and the consulate in written form about the access of the enterprise;

(6)

Where the item is involved in the export technology limited by the national government, the Approval Intent Letter of the Technology of the People's Republic of China shall be submitted;

(7)

Other relevant documents necessary for the item.

Article 9

The chamber of commerce shall, within 20 working days after the expiration date of the item application, strictly examine the declaration documents of the enterprises and raise the coordination opinion and inform the relevant enterprises in written in accordance with the principle of coordination on the basis of soliciting the opinions of all parties such as the embassy, consulate in foreign countries( the economic and commercial counselor's office) and experts, and submit the copy one to the leading groups office, the relevant departments and bureaus, the relevant Chinese embassy and consulate in foreign country£¨the economic and commercial counselor's office£©for record.

In accordance with the concrete situation, the chamber of commerce may, by means of convening item coordination conference and expert panel discussion, invite the leading group office and the relevant departments, bureaus, experts, banks and the insurance institution to attend and coordinate it after having verified the item, fully heard the opinions of all parties. The important coordination items shall be determined after the chamber of commerce has raised the relevant opinion and reported it to the leading group for study.

Article 10

The chamber of commerce shall submit to the relevant banks and insurance institutions the copy of the coordination opinion about the items which require the submission of export credit loan, preferential governmental foreign assistance loan or the preferential buyer-side export credit loan. The relevant banks and insurance institutions shall undertake independent assessment in accordance with the coordination opinion hereof and the relevant provisions of export credit loan and export insurance administration, and issue the letter of intents of loan acceptance and insurance for those items meeting the export requirement.

Article 11

The large-scale complete set telecommunication equipment export enterprises shall, after having received the coordination opinion of the chamber of commerce, abide by and fulfill it and inform the chamber of commerce of the progress of the items. The enterprises hereof shall, after having concluded contract with foreign businessman, submit to the chamber of commerce the major contents of the contract as well as the relevant issues in written form.

Article 12

Where the large-scale complete set equipment export enterprise has objection to the coordination opinion hereof, it shall, within 15 days after its receipt of the cooperation opinion, lodge a complaint to the leading group office, which shall, within 10 days as of its receipt of the application, make a rule hereupon, and submit the important proceedings to be decided by the leading group. The rule shall, once received, come into effect and be abided by the complainant. The enterprises shall, during the period of complaint, fulfill the coordination opinion of the chamber of commerce.

Article 13

Where the large-scale complete set telecommunication equipment export enterprise disagrees with the rule made by the leading group (office), it may lodge administration reconsideration or administrative suit.

Article 14

The leading group shall encourage and actively promote the establishment of middle and high-level consultation mechanism among the large-scale complete set telecommunication equipment export enterprises and the chamber of commerce shall take the lead in conducting market coordination, information exchange and jointly concluding various discipline agreements among enterprises.

Article 15

When the large-scale complete set telecommunication export enterprises apply for the for the access of the items concerning the signature ceremony of high level visit during the period of abroad visit of national leaders and the visit of foreign leaders, they shall meet the following conditions:

(1)

the items which are necessary for the diplomacy of the People's Republic of China and win the express support of the embassy and consulate hereof(the economic and commercial counselor's office);

(2)

the items which have been applied to and been recommended by the chamber of commerce;

(3)

the items which require the financial institutions of the People's Republic of China to provide finance and export insurance acceptance items and have the letter of intent concerning loan and insurance acceptance;

(4)

the items which are mature and meet the relevant agreement concluded during the period of high-level visit;

(5)

the item owner and the authorities in charge of that country agree to sign the relevant agreement.

Whether the items shall be included in the signature ceremony of high-level visit shall be determined by the authority in charge with the consultation of the relevant departments of the Ministry of Commerce after the suggestion hereof has been raised by the chamber of commerce, submitted to the leading group and been jointly studied and approved by the leading group and the relevant authorities.

Where the large-scale complete set telecommunication equipment export enterprise apply to donate equipment to a foreign side during the period of the abroad visit of the national leader hereof and the visit of the foreign leader, the chamber of commerce shall raise the suggestion by the chamber of commerce in accordance with the actual situation, submitted to and determined by the leading group.

Article 16

The large-scale complete set telecommunication equipment export item using preferential export credit loan of the buyer's side shall be administered in accordance with such documents as the Circular of the Ministry of Finance, the Ministry of Foreign Affairs, the Ministry of Commerce and the People's Bank of China on Printing and Distributing the Interim Measures for the Administration of Preferential Export Credit from the Buyer's Side(Cai Jin[2004] No.46) and the coordination shall be enforced by referring to the Detailed Rules hereof.

The export items of large-scale complete set telecommunication equipment using preferential governmental foreign assistance loan shall be administered in accordance with such documents as the Circular of the Ministry of Foreign Trade and Economic Cooperation, the Ministry of Finance, the People's Bank of China, China Import and Export Bank concerning the promulgation of the Measures about the Supply of Preferential Loan Assistance to Foreign Countries( Wai Jing Mao Yuan Fa [2001] No. 122) and the cooperation shall be enforced by referring to the Detailed Rules hereof.

Chapter IV the Coordination Rules and the Penalty Discipline

Article 17

The relevant personnel involved in the coordination of the items shall strictly abide by the industrial morality and the coordination discipline and impartially undertake the coordination in accordance with the rules. Where the abuse of power, favoritism, negligence and the revelation of commercial credentials occur in the process of the coordination of the items, the relevant authority shall give the corresponding administrative treatment. Where they constitute crime, the judicial authority shall trace the legal liability in accordance with the relevant law.

Article 18

The enterprises involved in large-scale complete set telecommunication equipment export items shall strictly abide by the relevant laws, rules and operation it in accordance with the relevant laws, shall not harm the national interest and the legitimate interest of the enterprises of the same profession. The following acts of the enterprises shall be deemed as unfair competition:

(1)

Harming the interest of the nation and the other domestic enterprises;

(2)

Interfering the items which have won the bid and concluded contract by means of donation and low price;

(3)

Maliciously defaming other domestic enterprises by any means;

(4)

Hunting the staff of other enterprises by unfair means;

(5)

Not applying the items in accordance with the relevant laws and rules or participating the items without accepting the coordination;

(6)

Not implementing the coordination opinion, participating the items without lodging complaint within the prescribed time limit and fulfilling the rule;

(7)

Revealing the coordination and other relevant situation outside;

(8)

Violating the coordination procedure;

(9)

Having falsification in the application, registration or bid tender(invitation);

(10)

Offering price outside about the domestic financial items without the authorization of the relevant domestic financial institution;

(11)

Not abiding by the laws, rules and customs of the local nation or region;

(12)

Other acts in violating of the relevant laws and rules.

Article 19

Where the large-scale complete set telecommunication export equipment violates the relevant laws, the chamber of commerce shall investigate, verify and submit the information hereof to the leading group, which shall render warning, grave warning or notice of criticism and give such punishments as the temporary suspension of the item participation qualification, and the exclusion these items of the promotion and support in the bilateral governmental mechanism, the preferential governmental loan or the preferential export credit from the buyer's side.

Article 20

The leading group shall inform the relevant banks and insurance institutions of the relevant situation about the large-scale complete set telecommunication equipment export enterprises of which violate the relevant rules and the banks and financial institutions herein shall not issue the letter of intents of item loan acceptance and item insurance acceptance.

Chapter V Supplementary Provisions

Article 21

The Ministry of Commerce shall be responsible for interpreting the Detailed Rules herein.

Article 22

The Detailed Rules shall be implemented as of 30 days after the promulgation of the Detailed Rules.