Laws of the People's Republic of China

The State Administration for Industry and Commerce

Circular of the State Administration for Industry and Commerce on the Issue of Registration and Administration of the Enlargement of Enterprises with Foreign Investment's Right to Import and Export Operation

GongShangWaiQiZi [2002] No.7

January 14, 2002

All authorized local industrial and commercial bureaus:

In order to execute the policies on encouraging enterprises with foreign investment to enlarge export, the departments of foreign trade and economic cooperation, taxation, customs, etc. have successively made the relevant measures according to the policies of the 2001 national foreign investment conference on permitting large enterprises with foreign investment with the annual export amount of 10 million USD or more to purchase the products not manufactured by itself for export, and permitting enterprises with foreign investment to participate in invitation for bids for export commodity quotas, as well as comprehensively implementing the encouragement of export. Among these policies, the MOFTEC distributed the Circular on the Relevant Issues concerning the Enlargement of Enterprises with Foreign Investment's Right to Import and Export Operation (WaiJingMaoZiZi [2001] No. 62). Concerning the issues relevant to the approval and registration, we hereby notify as follows:

I.

Foreign-funded enterprises which meet the conditions for enlarging the right to export operation may, upon approval by the approval organ, apply to the original registration organ for modification registration in accordance with the Regulations of the People's Republic of China for Controlling the Registration of Enterprises as Legal Persons and the detailed rules for the implementation thereof. Upon verification, the newly increased business item shall be described as "the business of purchasing and exporting commodities subject to non-quota license administration and commodities subject to non-special administration".

II.

If companies with foreign investment import systematic and integrated set of products or import products for tested sale, the scope of business shall be ratified in accordance with the Supplementary Provisions to the 'Interim Provisions on the Establishment of Investment Companies by Foreign Investors' (II) of the MOFTEC (Decree No. 1 of the MOFTEC in 2001).

III.

Where a research and development center with foreign investment imports and sells a small number of hi-tech products manufactured by its parent company for the market test of the products to be researched and developed by itself, the approval organ's approval documents shall indicate the categories and quantities of the imported products. Upon verification by the registration organ, the categories and quantities of the imported products shall be included in the scope of business. No enterprise with foreign investment or its research and development center shall sell the imported products by enlarging the categories or quantities without authorization, and any violator shall be considered to exceed the scope of business and be punished accordingly.

IV.

All relevant registration organs shall strengthen the dynamic control on the modification registration of this type of enterprises, and shall, in combination with the annual inspection of the next year, accurately count up the numbers of the modified enterprises, the import and export amount as well as the information on the investigation of illegal operation, which shall, along with the gathered annual inspection materials, be submitted to the Registration Bureau of Enterprises with Foreign Investment under the State Administration for Industry and Commerce.