Laws of the People's Republic of China

The Ministry of Foreign Trade and Economic Cooperation

Circular of the Ministry of Foreign Trade and Economic Cooperation for Issuing the Interim Measures for the Administration of Processing Trade in Export Processing Zones

WaiJingMaoGuanFa [2001] No.141

March 21,2001

The committees (Offices, 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 Commissioner's Offices and Bureaus of Quota License Affairs:

For the purpose of making experiments with export processing zones, implementing the Reply of the General Office of the State Council on Conducting Experiments with Export Processing Zones and the Reply of the State Council Concerning the Interim Measures of the General Administration of Customs of the People's Republic of China for the Control of Export Processing Zones (respectively GuoBanHan [2000] No. 37 and GuoHan [2000] No.38), and with the consent of the General Administration of Customs, the Interim Measures for the Administration of Processing Trade in Export Processing Zones is formulated and is hereby issued to you for your implementation. If any problems arise in the implementation, please report to the Ministry of Foreign Trade and Economic Cooperation (Trade Administration Department).

There is hereby the notification. Attachment: Interim Measures for the Administration of Processing Trade in Export Processing Zones

Chapter I General Provisions

Article 1

These Measures are formulated in accordance with the Reply of the General Office of the State Council on Conducting Experiments with Export Processing Zones and the Reply of the State Council Concerning the Interim Measures of the General Administration of Customs of the People's Republic of China for the Control of Export Processing Zones, with a view to conducting administration of export processing zones and promoting the sound and stable development of processing trade.

Article 2

"Processing trade" referred to in these Measures means that an enterprise in the export processing zone imports from abroad or purchases in domestic market raw and processed materials, parts, components and packing materials, etc, processes and assembles them and then exports the finished goods, including processing materials supplied by clients and processing imported materials.

Article 3

All enterprises in the export processing zone must, in accordance with the relevant existing legal provisions of the state, be registered and established according to law. They must obtain corporate capacity. The enterprises with foreign investment must go through formalities according to the existing regulations on the administration of foreign investment.

Article 4

In principle, the relevant department of the local government is to be responsible for inviting investment to the export processing zone. When inviting investment, the local governments shall abide by the guidance of the relevant industrial policy of the state, and give priority to attracting large, newly established enterprises of downstream processing trade (e.g. manufacturers of complete machinery, which require large amount of raw and processed materials transferred from other enterprises of processing trade) to the zone.

Chapter II the Administration of the Processing Trade Business in the Export Processing Zone

Article 5

The department of foreign trade and economic cooperation of the government at the provincial level shall be responsible for the administration of processing trade business in the export processing zone. The Management Committee of an export processing zone (hereinafter referred to as the Management Committee), which has been set up with the approval of the government at a higher level shall take charge of the examination and approval of the processing trade business in the zone. The Management Committee shall keep informed of the operation state of the enterprises in the zone and report regularly to the department of foreign trade and economic cooperation of the government at the provincial level. In regions where conditions permit, the Management Committee shall, through the Port Electronic System for Law Enforcement, find out from the Customs the data of import and cancellation after verification of the enterprises in the zone.

Article 6

After established in the zone, the enterprise must, by presenting its business license, submit to the Management Committee a written application for engaging in processing trade. The application shall contain the form and content of the processing trade by the enterprise, and be attached with the list of the equipment and the list of materials and articles to be imported for the processing and the list of the finished goods to be exported (The three lists may be submitted separately for approval if they cannot be submitted together, for the formats of which, refer to the Attachment).

Article 7

After receiving the application of an enterprise in the zone, the Management Committee shall make strict examination in accordance with the relevant provisions of the state and then issue an Approval Certificate for Processing Trade Business in the Export Processing Zone (for the format of it, refer to the Attachment) and approve the attached lists, for those applications for the processing trade business which is not prohibited by the state. The Customs shall register and put on records the enterprise according to the approval.

Article 8

In regions where the conditions permit, the enterprise shall submit their application and the attached lists to the Management Committee through the Port Electronic System for Law Enforcement, the Management Committee shall examine such application and attached lists also through the same System. The Customs shall register the enterprise according to the electronic documents approved by the Management Committee.

Article 9

The enterprise in the zone may start the processing trade business within the approved scope only after it has been registered by the Customs; where any new processing trade business manages beyond the approved scope, the enterprise must go through the examination and approval procedures with the Management Committee in accordance with the provisions of Article 6 for such new business.

Article 10

Products finished in the zone shall be exported. Under special circumstances or where the finished products need to be sold in domestic market out of the zone according to the contract (articles of association) of the enterprise with foreign investment, the relevant enterprise in the zone shall go through the exit-zone formalities with the Customs, while the relevant enterprise out of the zone shall go through the entry-zone procedure with the Customs of the zone in accordance with the relevant import provisions, and submit the import license if such finished products belong to the products of import licenses administration.

Article 11

Leftover bits and pieces, defective or substandard products and waste products brought about during the processing production of the enterprise in the zone shall be managed according to the relevant measures for the management of those outside the zone. If any leftover bits and pieces and waste products really need to be transported outside the zone for destruction, such transport and destruction shall be subject to the approval of the Management Committee and the department of environmental protection at the place of destruction., the Customs shall check them according to the approval. The enterprise must, after the destruction, submit the destruction proof to the Management Committee for record.

Chapter III Import and Export of Goods

Article 12

No goods imported or exported between the export processing zone and any area outside the country shall be subject to any import or export quota or license, except the goods subject to passive quota control, hypertoxic chemicals, chemical weapon prosoma, solid waste, and other materials, which, according to the relevant provisions of the state, shall be subject to license and which the Customs may release only upon valid certificate.

Article 13

Goods trading between the export processing zone and any domestic enterprise outside the zone is regarded as normal import and export, and shall be handled in accordance with the relevant existing provisions. Goods subject to import or export allocation license shall be released by the Customs upon valid certificate.

Article 14

The goods whose import or export is prohibited by the state may not in principle enter the export processing zone. Where any domestic enterprise outside the zone needs to transport any goods whose export is prohibited by the state or which are subject to unified operation to the zone for processing and then transport the processed products to any domestic region outside the zone, an application shall be submitted to the Ministry of Foreign Trade and Economic Cooperation for approval, and the Customs shall make supervision thereon in accordance with the relevant administrative regulations concerning processing exported materials.

Article 15

Imported equipment provided, not as investment, by the foreign party under processing trade contract shall, when entering the export processing zone, be exempt from any import license, and shall, however, be under the supervision and control of the Customs, and be returned outside the country upon the expiration of the contract; for those, after the expiration of the contract, cannot be returned and require the Customs to release the supervision and control in order to be transported outside the zone, the Customs shall handle the affairs according to the relevant provisions concerning normal import.

Chapter IV Supplementary Provisions

Article 16

All enterprises in the zone must do their business in accordance with the relevant laws and regulations of the state.

Article 17

The Management Committee of each export processing zone shall, in accordance with the relevant provisions of the State and these Measures and the operational procedures for the Port Electronic System for Law Enforcement, and in the light of the local conditions, formulate proper implementation rules, and submit them to the Ministry of Foreign Trade and Economic Cooperation for record.

Article 18

These Measures shall enter into force as of April 1, 2001. The Ministry of Foreign Trade and Economic Cooperation and the General Administration of Customs shall be responsible for the their interpretation.