Laws of the People's Republic of China

The Ministry of Foreign Trade and Economic Cooperation, the Ministry of Construction

Circular of the Ministry of Foreign Trade and Economic Cooperation and the Ministry of Construction Concerning Circulating the Relevant Provisions Concerning the Handling of Quality and Safety Problems of Foreign Contracted Projects

WaiJingMaoFa [2002] No.500

October 15, 2002

The Department (Commission or Administration) of Foreign Trade and Economic Cooperation and the Department (Commission) of Construction of all provinces, autonomous regions, centrally governed municipalities and municipalities separately listed on the State plan, the relevant enterprises under the jurisdiction of the Central Government, all economic and commercial institutions stationed abroad:

With a view to carry out the strategy of "winning through high quality", enhancing the supervision and administration of the Chinese enterprises that contract projects abroad, and promoting the healthy development of the cause of foreign contracting projects, the Ministry of Foreign Trade and Economic Cooperation and the Ministry of Construction have jointly formulated the Relevant Provisions Concerning the Handling of Quality and Safety Problems of Foreign Contracted Projects (see Attachment) on the basis of relevant statutory provisions including the Construction Law of the People's Republic of China and the Foreign Trade Law of the People's Republic of China, etc. It is hereby distributed to you. We hope that you will implement it and forward it to other relevant entities. Attachment:Provisions Concerning the Handling of Quality and Safety Problems of Foreign Contracted Projects

Article 1

The present Provisions have been formulated on the basis of relevant laws and administrative regulations including the Construction Law of the People's Republic of China and the Foreign Trade Law of the People's Republic of China, etc. for the purpose of enhancing the supervision and administration of the enterprises contracting projects abroad and promoting the healthy development of the business of contracting projects abroad.

Article 2

The term "contracting project" as mentioned in the present Provisions refers to the surveying, designing, construction, quality control and other engineering service activities conducted abroad by the enterprises within the territory of the People's Republic of China and exterritorial enterprises by way of establishing equity joint ventures or cooperation (hereafter "intra-territorial enterprises").

Article 3

The present Provisions shall apply to the handling of quality and safety problems incurred in the contracting of projects abroad by intra-territorial enterprises.

Article 4

An enterprise that contracts projects abroad shall have obtained certificates of enterprises qualifications for surveying, designing, construction and quality control, etc. issued by the administrative departments of construction, and shall have obtained a Qualifications Certificate for Foreign Economic Cooperative Management as issued by the administrative department of foreign trade and economic cooperation under the State Council. An enterprise contracting projects abroad shall engage in the contracting of projects abroad within the scope allowed by its qualification grade and Certificate of Qualifications for Foreign Economic Cooperative Management.

Where an enterprise that has already obtained a Certificate of Qualifications for Foreign Economic Cooperative Management but not yet obtained a certificate of enterprises qualifications for surveying, designing, construction and quality control shall obtain corresponding qualification certificates according to relevant provisions concerning the administration of qualifications.

Article 5

The performances and quality and safety situation of the intra-territorial enterprises contracting projects abroad shall form the content of the enterprise qualification administration in terms of surveying, designing, construction, and quality control, etc. exercised by the domestic organs.

Article 6

The performances of contracting projects abroad may be used as the performances for the enterprise concerned to apply for the certificate of enterprise qualifications for surveying, designing, construction, and quality control, etc. and for the annual inspection of qualifications. An enterprise that declares performances of contracting projects abroad shall submit corresponding declaration materials according to the provisions concerning the administration of qualifications.

Article 7

Where any of the following quality or safety accidents or serious quality or safety problems occurs in the contracting of projects abroad, the enterprise that contracts projects abroad shall, within 24 hours as of the accident takes place, report to the economic and commercial institution under the Chinese embassy (consulate) stationed abroad, and the economic and commercial institution under the embassy (consulate) stationed abroad shall report to the administrative department of construction under the State Council, and send a copy to the administrative department of foreign trade and economic cooperation under the State Council:

a.

A quality or safety accident causing one death and more or three serious injuries and more or causing direct economic losses of over 1 million yuan;

b.

Causing other problems of quality or safety by seriously violating the laws or regulations concerning engineering construction and technology or the coercive standards adopted by the country or region where the project is situated;

c.

Other acts that violate the laws or regulations concerning quality and safety which have brought about bad consequences in the country or region where the project is situated.

Article 8

In case any serious quality or safety accident or any other serious problem of quality or safety incurs in the contracting of projects abroad which has brought about abominable effects in the country or region where the project is situated, the administrative department of foreign trade and economic cooperation under the State Council and the administrative department of construction under the State Council may organize joint investigation groups to make investigations.

Article 9

With regard to the enterprises that have had quality or safety accidents or any other serious problem of quality or safety in the process of contracting projects abroad, the administrative department of construction shall deal with them in accordance with the Provisions Concerning the Qualifications Administration of Construction Enterprises (Order No. 87 of the Ministry of Construction) and other relevant provisions. The administrative department of foreign trade and economic cooperation shall give them warnings or dejecting the annual inspection of the Qualifications Certificate for Foreign Economic Cooperative Management thereof according to the relevant provisions.

Article 10

With regard to the enterprises that conceal the quality or safety accidents or the serious problems of quality or safety in their contracting of projects abroad, they, apart from being dealt with according to Article 9 of the present Provisions, may not apply for the promotion of qualifications grade or for adding new qualifications. Neither may they apply for expanding the scope of foreign economic cooperative management.

Article 11

The administrative departments of foreign trade and economic cooperation and the administrative departments of construction shall record the serious accidents of quality or safety and the serious problems of quality or safety incurred in the contracting of projects abroad into the credit files of the enterprises involved, and have them published on the relevant websites.

Article 12

The present Provisions shall apply by reference to the handling of quality and safety problems incurred in the contracting of projects in the Hong Kong Special Administrative Region, the Macao Special Administrative Region and the Taiwan Region.

Article 13

The interpretations concerning the present Provisions shall be subject to the joint making of the administrative department of foreign trade and economic cooperation under the State Council and the administrative department of construction under the State Council.

Article 14

The present Provisions shall enter into force as of December 1, 2002.