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 on Issuing the Provisions for the Control of Enterprises' Qualification to Engage in Import and Export Business

WaiJingMaoMaoFa [2001] No.370

July 10, 2001

With a view to speeding up the reform of foreign trade operation system and promoting and standardizing the import and export business by various enterprises, the Ministry has formulated the Provisions for the Control of Enterprises' Qualification to Engage in Import and Export Business, which are hereby issued for your implementation.

This is hereby notified. Attachment:Provisions for the Control of Enterprises' Qualification to Engage in Import and Export Business

With a view to speeding up the reform of foreign trade operation system and promoting and standardizing the import and export business by various enterprises, certain problems concerning enterprises' qualification to engage in import and export business are provided as follows:

I.

A registration and verification system shall be adopted for the control of enterprises' qualification to engage in import and export business, with the principles of voluntary application, openness and transparency, unity and standardization, and supervision according to law. The control of the qualification to engage in import and export business of enterprises of various ownerships (excluding enterprises with foreign investment, enterprises of commercial goods and materials, supply and marketing cooperatives, enterprises of small-sum border trade, and enterprises in special economic zones and Pudong New Zone. Same below) shall be conducted with unified standards and measures

The Commission (Department, Bureau) of Foreign Economic Relations and Trade of various provinces, autonomous regions, provincial-level municipalities, municipalities separately listed on the State plan and Harbin, Changchun, Shenyang, Xi'an, Chengdu, Nanjing, Wuhan, Guangzhou, Zhuhai and Shantou, and the Bureau of Foreign Economic Relations and Trade of Xinjiang Production and Construction Corps (hereinafter referred to as the authorized license-issuing organ) shall be authorized by the Ministry of Foreign Trade and Economic Cooperation to handle the registration of enterprises' qualification to engage in import and export business and issue the People's Republic of China Certificate of Import and Export Enterprise.

II.

Enterprises' qualification to engage in import and export business shall be controlled according to their registered or verified business scope under the following classification:

1.

qualification to engage in foreign trade (engaging in the import and export of various goods and technologies, with the exception of those of which the business is limited by the state to certain companies or of which the import and export are forbidden).

2.

Manufacturing Enterprises' qualification to engage in import and export business (engaging in the export of their own products and the import of machines and other equipment, spare parts and raw and supplementary materials for their own use, with the exception of those goods and technologies of which the business is limited by the state to certain companies or of which the import and export are forbidden).

When verifying or registering enterprises' scope of import and export business, the Ministry of Foreign Trade and Economic Cooperation and the authorized license-issuing organ shall no longer indicate the methods of conducting trade. The enterprises may engage in import and export business with various methods according to the relevant provisions of the state.

III.

Requirements for Enterprises Applying for the qualification to Engage in Import and Export Business and Materials Required to Be Submitted for Such Application

1.

Requirements for Enterprises Applying for the Qualification to Engage in Foreign Trade and Materials Required to Be Submitted for Such Application

(1)

Requirements

(a) The enterprise shall have a corporate capacity, have been established for at least one year, registered with the administrative department for industry and commerce and obtained the Business License for Enterprise Legal Person, and gone through the annual inspection according to the relevant provisions of the state;

(b) The registered capital (money) shall not be less than 5 million Renminbi Yuan (or 3 million Renminbi Yuan for those in the middle or western regions; the currency is the same below);

(c) The enterprise must have gone through tax registration, paid taxes according to law and gone through the annual tax inspection according to the relevant provisions of the state; and

(d) The legal representative or the person in charge of the enterprise was not the legal representative or the person in charge of an enterprise that was revoked of their license for engaging in foreign trade in the past three years (referring to the case where the enterprise was revoked of their license for engaging in foreign trade for their illegal or improper acts during his office of the legal representative or person in charge).

(2)

Materials Required to Be Submitted

(a) A written application;

(b) A copy (that has been signed and sealed by the administrative department for industry and commerce) of the duplicate of the Business License for Enterprise Legal Person that has gone through the annual inspection;

(c) A copy of the Certificate of Tax Registration that has gone through the annual inspection;

(d) A copy of the ID card of the legal representative as registered with the Business License for Enterprise Legal Person; and

(e) Other materials required to be submitted.

2.

Requirements for Applying for a Manufacturing Enterprise's Qualification to Engage in Import and Export Business and Materials Required to Be Submitted

(1)

Requirements

(a) The enterprise shall have a corporate capacity or be an enterprise of individual ownership or a partnership enterprise (hereinafter all referred to as enterprise) established according to law, and shall have gone through the registration with the administrative department for industry and commerce and obtained the Business License for Enterprise Legal Person or Business License;

(b) The registered capital (money) of the enterprise shall not be less than 3 million Yuan (or 2 million Yuan for enterprises in the middle or western regions or minority nationality regions, or 1 million Yuan for scientific research institutes, high-tech enterprises and manufacturing enterprises of mechanical and electrical products);

(c) The enterprise must have gone through tax registration and paid taxes according to law; and

(d) The legal representative or the person in charge of the enterprise was not the legal representative or the person in charge of an enterprise that was revoked of their license for engaging in foreign trade in the past three years (referring to the case where the enterprise was revoked of their license for engaging in foreign trade for their illegal or improper acts during his office of the legal representative or person in charge).

(2)

Materials Required to Be Submitted:

(a) A written application;

(b) A copy (that has been signed and sealed by the administrative department for industry and commerce) of the duplicate of the Business License for Enterprise Legal Person or Business License that has gone through the annual inspection;

(c) A copy of the Certificate of Tax Registration that has gone through the annual inspection;

(d) A copy of the Certificate of Chinese Organization Code;

(e) A copy of the ID card of the legal representative as registered with the Business License for Enterprise Legal Person or the person in charge as registered with the Business License;

(f) In case of an enterprise of individual ownership or a partnership enterprise, a capital verification report rendered by an accounting firm, auditing firm or other qualified capital verification institutions;

(g) In case of a high-tech enterprise or a manufacturing enterprise of mechanical and electrical products, a copy of the certificate issued by the administrative department of science and technology or other department concerned; and

(h) Other materials required to be submitted.

IV.

The registration and verification of enterprises' qualification to engage in import and export business shall be handled in accordance with the prescribed procedure and requirements.

1.

Enterprises applying for the qualification to engage in import and export business shall submit their application to the authorized license-issuing organ of the province or municipality where they are located. The authorized license-issuing organ shall accept the application upon receiving all required materials.

For an application for a manufacturing enterprise's qualification to engage in import and export business, the authorized license-issuing organ shall, within 10 working days from receipt of the application, make a decision to approve or disapprove the registration thereof, issue the People's Republic of China Certificate of Import and Export Enterprise in case of approval, and give reasons for disapproval.

Applications for the qualification to engage in foreign trade shall be verified by the Ministry of Foreign Trade and Economic Cooperation. Applications by local enterprises shall be submitted through the authorized license-issuing organ to the Ministry of Foreign Trade and Economic Cooperation for verification; applications by central enterprises and their subsidiaries shall be submitted by the central enterprises to the Ministry of Foreign Trade and Economic Cooperation for verification. The Ministry of Foreign Trade and Economic Cooperation shall, within 10 working days from receipt of the report by the authorized licensed-issuing organ or the central enterprise, make a decision to approve or disapprove the application. The authorized license-issuing organ shall issue the People's Republic of China Certificate of Import and Export Enterprise within 5 working days from receipt of the approval.

2.

The authorized license-issuing organ shall, upon the registration of an enterprise's qualification to engage in import and export business, file the materials submitted by the enterprise together with a copy of the issued People's Republic of China Certificate of Import and Export Enterprise and, through the network, submit the relevant data indicated in the People's Republic of China Certificate of Import and Export Enterprise to the Ministry of Foreign Trade and Economic Cooperation.

3.

The enterprise shall, by the People's Republic of China Certificate of Import and Export Certificate, go through the relevant formalities for the import and export business respectively with the administrative departments of industry and commerce, customs, quality supervision, inspection and quarantine, foreign exchange control and tax authorities.

V.

The activities of various import and export enterprises shall be standardized. All enterprises having obtained the qualification to engage in import and export business shall do their import and export business in accordance with laws, regulations and other relevant provisions, and make customs declarations, apply for inspections, make settlement and use of exchange and handle export drawbacks according to the relevant provisions of the state.

1.

No import and export enterprise may allow any others to conclude import or export contracts or make customs declarations, apply for inspections, make settlement and use of exchange or handle export drawbacks in the name of their enterprise by affiliation or borrowing their qualification to engage in import and export business. The enterprise shall strengthen their internal regulation, establish and constantly improve an operational mechanisms of clear authority and responsibility and effective restrictive functions, prevent selling either directly or in disguise the power to engage in import and export business, guard against illegal or improper acts such as smuggling, illegally keeping or procuring foreign exchange and getting export drawbacks by fraud.

2.

Those engaging in the import and export of goods subject to quota or license control shall apply for such quota or license in accordance with laws, regulations and other relevant provisions.

3.

The enterprise shall join the Chamber of Import and Export Enterprises according to the relevant provisions.

VI.

Various authorized license-issuing organs shall establish a proper contact system for the exchange of information with the administrative departments of industry and commerce, customs, quality supervision, inspection and quarantine, foreign exchange control and tax authorities, improve the measures for annual inspection of the People's Republic of China Certificate of Import and Export Enterprise, and be cooperative with the relevant departments in work.

1.

The authorized license-issuing organ shall conduct annual inspection on People's Republic of China Certificates of Import and Export Enterprise from January 1 to April 30 each year. Where conditions permit, the annual inspection may be conducted conjunctly with other departments concerned.

2.

The authorized license-issuing organ shall determine whether an enterprise may continue to have the qualification to engage in import and export business in the light of the materials submitted by the enterprise for annual inspection and materials provided by such departments as customs, quality supervision, inspection and quarantine, foreign exchange control and tax authorities concerning the business activities of the enterprise.

3.

The control of credit and files of the enterprises shall be improved. For any enterprise having been given an administrative punishment, the authorized license-issuing organ shall have the illegal or improper business activities and the administrative punishment imposed recorded in the enterprise's People's Republic of China Certificate of Import and Export Enterprise and, through the network, submit the relevant data to the Ministry of Foreign Trade and Economic Cooperation.

The authorized license-issuing organ shall promptly have the list of the enterprises that are punished reported to the departments concerned such as the departments of customs, industry and commerce, foreign exchange control and tax authorities, and conduct preventive control over the business activities of the enterprises with bad records.

4.

In case of any changes in their name, place of business, legal representative or person in charge and scope of import and export business, the enterprise shall modify the registration of the People's Republic of China Certificate of Import and Export Enterprise with the authorized license-issuing organ. The latter shall, through the network, submit the relevant data to the Ministry of Foreign Trade and Economic Cooperation.

5.

It is forbidden to falsify, alter, lease, lend, transfer or sell the People's Republic of China Certificate of Import and Export Enterprise. No copy of the People's Republic of China Certificate of Import and Export Enterprise shall be valid unless there is a seal of the authorized license-issuing organ on it.

VII.

Further strengthen and improve the supervision and control system, impose on the enterprises committing illegal or improper acts administrative punishment in strict conformity with law, and establish a control system for enterprises' qualification to engage in import and export business with both access and disqualification mechanisms.

1.

Any import and export enterprise engaging in smuggling or violating customs control shall be given an administrative punishment in accordance with the Foreign Trade Law of the People's Republic of China and the Interim Provisions for Administrative Punishment Such as Warning, Suspension or Revocation of License of Foreign Trade or International Shipping Agent on Enterprises Committing Improper Acts or Engaging in Smuggling (WaiJingMaoZhengFa No. [1998] 929, issued jointly by the Ministry of Foreign Trade and Economic Cooperation and the General Administration of Customs; hereinafter referred to as the Interim Provisions).

2.

Any import and export enterprise illegally keeping or procuring foreign exchange shall be given an administrative punishment in accordance with the Decision of the State Council on Resolutely Cracking Down the Act of Getting Export Drawbacks be Fraud and Giving Drastic Penalties for Unlawful Acts in Financial and Taxation Fields (Guofa No. [1996] 4; hereinafter referred to as the Decision) and the Interim Provisions of the Ministry of Foreign Trade and Economic Cooperation for Imposing Administrative Punishment on Foreign Trade Enterprises Illegally Keeping or Procuring Foreign Exchange (WaiJingMaoJiCaiFa No. [1998] 713).

3.

Any import and export enterprise getting export drawbacks by fraud shall be given an administrative punishment in accordance with the Decision and the Interim Provisions for Imposing Administrative Punishment on Enterprises Getting Export Drawbacks by Fraud (WaiJingMaoFaZhanFa No. [2000] 513, issued jointly by the Ministry of Foreign Trade and Economic Cooperation and the State Administration of Taxation).

4.

Any import and export enterprise falsifying, altering, buying or selling import or export license, quota or certificate of origin shall be given an administrative punishment in accordance with the Foreign Trade Law of the People's Republic of China and the Interim Provisions.

5.

Any enterprise failing to respond to action for the alleged dumping of their exported products shall be given an administrative punishment in accordance with the Provisions for Encouraging and Urging Enterprises to Respond to Dumping Cases Abroad (WaiJingMaoFaZi [1999] No. 3).

6.

Any enterprise affirmed by the customs, administrative departments of industry and commerce, quality supervision, inspection and quarantine or judicial organ as exporting fake and shoddy goods shall be given a warning in case of exporting fake and shoddy goods in a volume of less than 500,000 US dollars for the first time, or an administrative punishment of suspending their license for engaging in foreign trade for a year in case of exporting fake and shoddy goods in a volume of not less than 500,000 but not up to 1 million US dollars for the first time, or an administrative punishment of revoking their license for engaging in foreign trade in case of exporting fake and shoddy goods in a volume of not less than 1 million US dollars for the first time or exporting fake and shoddy goods again within two years after the last punishment.

7.

Any enterprise committing trademark infringement shall be given a punishment of suspending their license for engaging in foreign trade for a year, if it has been punished by the customs or the administrative department for industry and commerce for their trademark infringement that does not constitute a crime, or be given an administrative punishment of revoking their license for engaging in foreign trade, if it has been affirmed by the judicial organ or ruled by an arbitral body as having committed grave trademark infringement and caused heavy damages to the owner of the trademark.

8.

Enterprises whose license for engaging in foreign trade has been revoked may not make fresh application for the registration or verification of the qualification to engage in import and export business in three years from the date of such revocation.

9.

Enterprises failing to apply for the People's Republic of China Certificate of Import and Export Enterprise or go through the annual inspection shall be regarded as automatically giving up and being cancelled of the qualification to engage in import and export business and may not make fresh application for the registration or verification of the qualification to engage in import and export business in a year from the such cancellation.

VIII.

Any personnel of the Ministry of Foreign Trade and Economic Cooperation or the authorized license-issuing organ, who violate these Provisions, practice fraud, seriously neglect duty, abuse authority, practice graft, solicit or accept bribes, shall be given an administrative sanction in the light of the circumstances or, in case of violation of criminal law, be investigated by the judicial organ for their criminal responsibility according to law.

IX.

The authorized license-issuing organ shall report an enterprise to the administrative department for industry and commerce if the legal representative or person in charge of the enterprise falls into any circumstances in which, according to the Provisions for the Registration and Control of Legal Representatives of Enterprise Legal Persons, a person may not be the legal representative of any enterprise, but the enterprise failed to make changes in the registration of their legal representative or person in charge. Those having obtained the qualification to engage in import and export business shall be disqualified for such qualification, while those being applying for the qualification to engage in import and export business shall be rejected.

X.

For requirements and control measures for the procurement of the qualification to engage in import and export business by enterprises of commercial goods and materials, supply and marketing cooperatives, enterprises of small-sum border trade, and enterprises in special economic zones and Pudong New Zone, the existing provisions shall continue to be applied.

XI.

Import and export companies established by manufacturing enterprises, which have already obtained the qualification to engage in import and export business, shall be regarded as having obtained the qualification to engage in foreign trade, and such enterprises shall, within the prescribed time limit, make changes in the registration of "form of business" in the People's Republic of China Certificate of Import and Export Enterprise with the original authorized license-issuing organ.

These Provisions shall come into force as of the date of issue. Any provisions inconsistent with these Provisions shall be abrogated simultaneously.