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CIRCULAR OF THE STATE COUNCIL CONCERNING FURTHER STRENGTHENING EPHEDRINE CONTROL

    China is one of the major producing and exporting countries of natural
ephedrine. Ephedrine is both the raw material for medicine and the precursor
for making methamphetamine ("ice" drug). In recent years, international drug
trafficking groups have, in collusion with drug traffickers at home, smuggled
large quantities of ephedrine out of the country, or engaged in illegal
processing and manufacturing of methamphetamine at home in the name of
establishing plants with investment, joint ventures for making medicine and
production of chemicals for civilian applications and smuggled their products
or semi-products out of the country. A small number of localities and
departments provided lawless persons with an opportunity to manufacture
methamphetamine in the production and management of ephedrine in large
quantities in pursuit of economic benefits in violation of the relevant
state provisions. This state of affairs has aroused the concern of the
international community especially that of the International Anti-drug
Organization and has been detrimental to the international image of China.
The relevant questions are hereby notified as follows with a view to further
strengthening ephedrine control, preventing ephedrine from getting into
illegal channels and ensuring people's health:

    I.People's governments at all levels and the departments concerned
should enhance their understanding, earnestly strengthen the leadership
of ephedrine control, strictly abide by state laws and regulations and
practise the ephedrine control responsibility system. Strong measures
should be taken for the sorting out and consolidation of enterprises
producing and managing ephedrine; enterprises or units engaging in illegal
production and management of ephedrine should be firmly banned according to
law; with respect to those production and management enterprises that
caused ephedrine to get into illegal channels due to mismanagement should
be firmly nullified of their production and management qualifications and
personnel directly responsible of the departments and units concerned shall
be investigated of the legal liability according to law.

    II.The State practises the special-purpose control system with respect
to the production, management, use and export of ephedrine (including extracts
from ephedra grass and chemically synthesized, levorotatary and dextrotatory)
as well as their saline categories such as ephedrine hydrochloride, ephedrine
oxalic, ephedrine sulphate and raw products of ephedrine (including ephedrine
extracts, ephedrine extract powder and ephedra powder), ephedrine derivatives
and prescribed preparations made with ephedrine as the raw material.

    (1) Planned production of ephedrine shall be carried out at designated
points in fixed quantity.

    The designated enterprises for the production of ephedrine shall be
appointed by the state department of pharmaceutical administration and
submitted to the Office of the National Anti-drug Leading Group for the
record. No unit or individual without appointment shall engage in production
activities of ephedrine.

    The annual production plan of ephedrine shall be examined and finalized by
the state department of pharmaceutical administration. Designated production
enterprises of ephedrine shall work out production plans for the following
year (including supply plans for export) and submit them to the state
department of pharmaceutical administration for verification and approval upon
preliminary examination and consent of the departments of pharmaceutical
administration of the provinces, autonomous regions and municipalities
directly under the Central Government wherein the enterprises are located.
No designated production enterprise shall overproduce ephedrine beyond the
plan in violation of state provisions.

    No designated production enterprise of ephedrine shall expand the
production scale of ephedrine in the form of technology transfer, joint
management or establishing branch plant without the approval of the state
department of pharmaceutical administration. A designated enterprise
without production task for two years may be nullified of its designation.

    (2) Strengthening ephedrine management control.

    The State practises monopoly for the purchase and marketing of ephedrine.
The state department of pharmaceutical administration shall, in conjunction
with the department of public health, study and formulate measures for
the designated points for the supply of ephedrine and submit the same to
the Office of the National Anti-drug Leading Group for the record. No unit
or individual without appointment shall operate ephedrine business.
Pharmaceutical, medical and scientific research units that use ephedrine
can only make the purchase at the designated management enterprises of
ephedrine appointed in accordance with provisions.

    Establishing ephedrine purchase and marketing verification rules.
An application in writing shall be filed at the department of pharmaceutical
administration of a province, an autonomous region or a municipality directly
under the Central Government for the purchase of ephedrine, a certificate for
purchase and use obtained upon examination and approval and the purchase
made at the designated management enterprise of ephedrine appointed.
Certificates for ephedrine purchase and use shall be uniformly printed by
the state department of pharmaceutical administration and one certificate
shall be valid for a single use. Speculation and transfer of certificates
for ephedrine purchase and use shall be prohibited.

    Management enterprises of ephedrine are strictly prohibited to sell
ephedrine to any enterprise or individual without a certificate of purchase
and use. Use of cash shall be prohibited in the purchase and marketing
activities of ephedrine.

    (3) Strengthening ephedrine warehouse and transport control.

    Production and management enterprises of ephedrine must establish strict
warehouse rules and should set aside special-purpose stock rooms and appoint
special persons for the control thereof. A transport permit must be obtained
from the provincial public security organ for the transportation of ephedrine
under escort by designated persons. Ephedrine transport permits shall be
uniformly printed by the Ministry of Public Security and one certificate
shall be valid for a single use.

    (4) Standardizing control over ephedrine use.

    Departments of public health must enhance control over prescribed
ephedrine preparations. Prescribed ephedrine preparations can only be sold
to medical units which shall sell on the strength of doctors' prescriptions.
All categories of pharmacies of society and private clinics are strictly
prohibited to sell prescribed ephedrine preparations.

    Units that use ephedrine and its prescribed preparations must establish
registration rules for the purchase, use and destruction thereof to strictly
prevent ephedrine and its prescribed preparations from getting into illegal
channels.

    (5) Stepping up ephedrine import-export control.

    The State practises licence control system for the export of ephedrine.
Ephedrine export enterprises and export plan shall be determined by the
Ministry of Foreign Trade and Economic Co-operation in consultation with the
state department of pharmaceutical administration. No other units or
individuals shall engage in ephedrine export business.

    An ephedrine export enterprise must, in applying for export formalities,
present the import licence issued by the government of the country, region
or the agency entrusted by the government of the country, region in which the
foreign import firm is located and the original of the contract to the
Ministry of Foreign Trade and Economic Co-operation, upon examination and
approval of the Ministry of Foreign Trade and Economic Co-operation, submit it
to the Office of the National Anti-drug Leading Group for international
verification, and upon confirmation as legal, be issued an ephedrine export
licence by the Ministry of Foreign Trade and Economic Co-operation.

    An ephedrine export enterprise shall go through the formalities for
the obtainment of the certificate of purchase and use for ephedrine export
at the state department of pharmaceutical administration along with the
ephedrine export licence issued by the Ministry of Foreign Trade and Economic
Co-operation and the afore-said materials and make the purchase at the
designated ephedrine management enterprise appointed. Certificates for
purchase and use for ephedrine export shall be uniformly printed by the
state department of pharmaceutical administration and one certificate
shall be valid for a single use.

    An ephedrine export enterprise must, within 30 days after the customs
declaration and shipment of ephedrine, present to the Ministry of Foreign
Trade and Economic Co-operation photocopies of the export licence and export
goods declaration form signed and annotated by customs. An enterprise that
has failed to effect the shipment within the validity of the licence due to
unforeseen reasons must, within 15 days after the expiry of the export
licence and the certificate of purchase and use for export, return the
afore-said certificates to the original licensing units in time. The ephedrine
not exported must not be disposed of without authorization and without the
approval of the state department of pharmaceutical administration.
Speculation and transfer of ephedrine export licences and certificates of
purchase and use for export are prohibited.

    Customs exercises supervision and control over ephedrine export and
examines the licence and issues customs clearance against the ephedrine
export licence. Ports of ephedrine export shall be designated by the
General Administration of Customs, ports not designated by the General
Administration of Customs are not allowed to export ephedrine. With respect
to passengers bringing or individuals sending by post prescribed ephedrine
preparations out of the country, customs shall make inspection and
examination and issues clearance against doctor's special prescription
specified by the department of public health.

    No ephedrine shall be imported any more under any circumstances as of the
date of issuance of this Circular.

    III.People's governments at all levels and the departments concerned
should assume their respective responsibilities, strengthen coordination
and cooperation in jointly and successfully carrying out ephedrine control
and sternly cracking down on illegal criminal activities of smuggling and
trafficking ephedrine in accordance with law.

    IV.Where relevant provisions previously issued by localities and
departments are inconsistent with this Circular, this Circular shall prevail.