Laws of the People's Republic of China

The Ministry of Foreign Trade and Economic Cooperation, the State Administration of Foreign Exchange

Circular of the Ministry of Foreign Trade and Economic Cooperation (MOFTEC) and the State Administration of Foreign Exchange (SAFE) on Strengthening the Administration of Foreign Exchange Sale and Payment Related to Technology Import Contracts

WaiJingMaoJiFa [2002] No.50

February 20, 2002

Commissions (departments or bureaus) of foreign trade and economic cooperation of all provinces, autonomous regions, municipalities directly under the Central Government and municipalities separately listed on the State plan, all SAFE branches, exchange administration offices in Beijing and Chongqing, SAFE branches in the cities of Shenzhen, Dalian, Qingdao, Xiamen and Ningbo, and all designated Chinese-funded foreign exchange banks:

The related issues on handling foreign exchange sale and payment procedures concerning technology import contracts are hereby notified as follows in accordance with the Regulations of the People's Republic of China on the Administration of Technology Import and Export (Decree [2001] No.331 of the State Council) (hereinafter referred to as the Regulations), the Measures for the Administration of Technologies Banned and Restricted from Import (Decree [2001] No.18 of MOFTEC and the State Economic and Trade Commission ), the Administrative Measures on Registration of Technology Import and Export Contracts (Decree [2001 ] No. 17 of MOFTEC), and the Circular on Issues Related to Strengthening the Administration of Foreign Exchange Sale and Payment for Import of Intangible Assets (HuiGuanHanZi [1998] No.092), with a view to perfecting the administration of technology import contracts, standardizing and safeguarding financial order, and preventing and cracking down on foreign exchange evasion and frauds:

1.

With regard to the import of any technology restricted from import (referring to such

technology listed in the category of technologies restricted from import in the Chinese Catalogue of Technologies Banned and Restricted from Import), presentation of the License for Technology Import (See Attachment 1) issued by the department in charge of foreign trade and economic cooperation and the Data Sheet of Technology Import Contract (See Attachment 3) is required in handling the procedures for foreign exchange sale and payment related to the technology import contract. The procedures for foreign exchange sale and payment may be handled only after examination by the designated foreign exchange bank that finds no error.

2.

With regard to the import of any technology that may be freely imported (referring to such technology not listed in the Chinese Catalogue of Technologies Banned and Restricted from Import), presentation of the Certificate for Registration of Technology Import Contracts (See Attachment 2) issued by the department in charge of foreign trade and economic cooperation and the Data Sheet of Technology Import Contract (See Attachment 3) is required in handling the procedures for foreign exchange sale and payment related to the technology import contract. The procedures for foreign exchange sale and payment may be handled only after examination by the designated foreign exchange bank that finds no error.

3.

The MOFTEC examines the contracts for technologies restricted from import, issues the License for Technology Import and seals on the Data Sheet of Technology Import Contract filled in by the operating units according to the Regulations and the Measures for the Administration of Technologies Banned and Restricted from Import. While handling the foreign exchange sale and payment procedures, the operating units use two original documents, namely, the License for Technology Import and the Data Sheet of Technology Import Contract. The banks fill in the amount and date of each foreign exchange sale and payment and also affix the business seal to related columns in the original document of the Data Sheet of Technology Import Contract. The total amount of foreign exchange sold and paid may not exceed the total contractual price of the Data Sheet of Technology Import Contract.

4.

The departments in charge of foreign trade and economic cooperation at all levels register the contracts for technologies that may be freely imported, issue the Certificate for Registration of Technology Import Contract and seal on the Data Sheet of Technology Import Contract filled in by the operating units according to the Regulations and the Administrative Measures on Registration of Technology Import and Export Contracts. While handling the foreign exchange sale and payment procedures, the operating units use two original documents, namely, the Certificate for Registration of Technology Import Contract and the Data Sheet of Technology Import Contract. The banks fill in the amount and date of each foreign exchange sale and payment and also affix the business seal to related columns in the original document of the Data Sheet of Technology Import Contract. The total amount of foreign exchange sold and paid may not exceed the total contractual price of the Data Sheet of Technology Import Contract.

5.

For any technology import contract regarded as an appendix of a joint venture contract or articles of association when an enterprise with foreign investment is established, the Data Sheet of Technology Import Contract shall be filled in and sealed by the foreign investment administrative department. When the foreign exchange sale and payment procedures are handled, relevant approval documents and the Data Sheet of Technology Import Contract shall be presented at the same time. For any technology import contract signed by an enterprise with foreign investment after its establishment, the technology import contract examination or registration procedures shall be handled according to relevant regulations.

6.

Technology import contracts include: (1) contract for assignment of patent right; (2) contract for transfer of patent application right; (3) contract for patent implementation license; (4) contract for license or transfer of exclusively-owned technology; (5) contract for licensed use of computer software; (6) contract for licensed use or transfer of trademark containing license of patent or exclusively-owned technology; (7) cooperative for technological service; (8) contract for technological consulting; (9) contract for cooperative designing; (10) contract for cooperative research; (11) contract for cooperative development; and (12) contract for cooperative production.

7.

The departments in charge of foreign trade and economic cooperation at all levels shall check on strictly and supervise the operating units to conscientiously fill in the Data Sheet of Technology Import Contract so as to ensure full and genuine reflection of the contents of the contract.

8.

If any change happens to the contents of the Data Sheet of Technology Import Contract, the operating unit shall handle the change procedures at the original organ of registration. The department in charge of foreign trade and economic cooperation shall fill in and affix a seal to the Data Change Record Sheet of Technology Import Contract (See Attachment 4), which shall be used jointly with the original Data Sheet of Technology Import Contract and other related approval documents.

9.

The License for Technology Import Contract and the Certificate for Registration of Technology Import Contract shall be printed in a unified way by the MOFTEC, and the Data Sheet of Technology Import Contract and the Data Change Record Sheet of Technology Import Contract are subject to random printing.

10.

The MOFTEC and the SAFE will establish an online check system in cooperation with related departments. Anyone who alters the registration certificate or the contract data sheet without authorization shall, once found, be severely punished according to law.

11.

This Circular shall take effect as from March 1, 2002. For any contract already registered and put into force before issuance of this Circular but whose implementation has not yet been completed, the original Certificate for Registration and Enter-into-Force of Technology and Equipment Import Contract and the Data Sheet of Technology Import Contract will continue to be valid till the end of the contract validity. The original Supplementary Circular on Strengthening the Administration of Technology Import Contracts and Foreign Exchange Sale and Payment (WaiJingMaoJiFa [2001] No.98) and the Circular on Implementing Relevant Provisions of the Circular on Issues Related to Strengthening the Administration of Foreign Exchange Sale and Payment for Import of Intangible Assets (WaiJingMaoJiFa-HanZi [1998] No.50) shall be annulled at the same time.

Attachments:

1. License for Technology Import of the People's Republic of China (omitted)

2. Certificate for Registration of Technology Import Contract (omitted)

3. Data Sheet of Technology Import Contract (omitted)

4. Data Change Record Sheet of Technology Import Contract (omitted)