Laws of the People's Republic of China

The Ministry of Foreign Trade and Economic Cooperation, the General Administration of Customs

Decree of the Ministry of Foreign Trade and Economic Cooperation and the General Adminitration of Customs

No.24

The "Detailed Rules for the Implementation of the Administration of Import of Certain Machinery and Electronic Products" are hereby promulgated in accordance with the "Foreign Trade Law of the People's Republic of China", the "Regulations of the People's Republic of China on the Administration of Import and Export of Goods" and the "Measures on the Administration of Import of Machinery and Electronic Products", and shall come into force on January 1, 2002. The "Attestations on Import of Machinery and Electronic Products" issued by the Ministry of Foreign Trade and Economic Cooperation before January 1, 2002 shall continue to be valid within the validity period, and shall be invalidated after the expiry as the validity period shall not be extended.

Shi Guangsheng, Minister of the Ministry of Foreign Trade and Economic Cooperation

Mu Xinsheng, Director General of the General Administration of Customs

December 20, 2001 Attachment:Detailed Rules for the Implementation of the Administration of Import of Certain Machinery and Electronic Products

Article 1

These Detailed Rules are enacted in accordance with the "Regulations of the People's Republic of China on the Administration of Import and Export of Goods" and the "Measures on the Administration of Import of Machinery and Electronic Products" in order to regulate the administration of import of certain machinery and electronic products.

Article 2

These Detailed Rules shall be applicable to the import by importing entities of certain machinery and electronic products inside the customs territory of the People's Republic of China.

Article 3

The Ministry of Foreign Trade and Economic Cooperation of the People's Republic of China (hereinafter referred to as "the MOFTEC") shall be responsible for enacting, adjusting and promulgating jointly with the General Administration of Customs the catalogue of certain machinery and electronic products and organizing the implementation.

Article 4

The qualifications and conditions for applying for importing certain machinery and electronic products are as follows:

(1)

the entity applying for import shall have no such acts in violation of laws or regulations within the latest three years as evasion of exchange, arbitrage of exchange, fraudulently obtaining tax refund for exports, smuggling, etc.;

(2)

the entity applying for import shall be entitled to operate the certain products in application;

(3)

the entity applying for import shall have the capabilities of manufacture, sale, maintenance, provision of services and supply of fittings, which are suitable for the certain products in application;

(4)

the entity applying for import shall be in a good financial status;

(5)

an applicant who applies for the import of certain products for its own use does not have to fulfill the qualifications and conditions provided for in Items (2), (3) and (4) of this Article, provided that it shall submit a justifiable reason for application and appropriate quantity in application.

Article 5

Whoever applies for the import of certain machinery and electronic products shall provide the following documents:

(1)

report on applying for importing certain machinery and electronic products;

(2)

application form for import of machinery and electronic products (as indicated in Attachment 1);

(3)

business license and legal documents for the administrative department to approve the business scope (copies);

(4)

the "Notice of Bid Evaluation Result of International Invitation for Bidding" issued by the institution in charge of international invitations for bidding shall be provided at the same time if the certain products are imported by means of international invitation for bidding;

(5)

other documents needed to be provided.

Article 6

The principles for approving the import of certain machinery and electronic products are as follows:

(1)

to guarantee the needs in scientific research, education, culture, hygiene and other commonweal careers if the goods are imported for the importer's own use;

(2)

to give priority to considering the applications of the importing entities with strong capability of manufacture, sale and provision of services;

(3)

to consider the actual effective performance of the entities applying for import in respect of the import of the certain products in the latest three years;

(4)

to properly consider the newly increased entities applying for import;

(5)

other factors needed to be considered.

Article 7

An entity applying for import shall, when importing certain products, truthfully fill in the "Application Form for Import of Machinery and Electronic Products" in duplicate, and go through the verification formalities in the institution in charge of foreign trade and economic cooperation of the province, autonomous region, municipality directly under the Central Government, coastal city open to the world or special economic zone, as well as the office for the import and export of machinery and electronic products of the relevant department under the State Council (hereinafter referred to as "the local institution in charge of foreign trade and economic cooperation" and "the departmental office of machinery and electronic products". If no office of machinery and electronic products is established in the department, the entity applying for import shall go through the verification formalities in the institution in charge of foreign trade and economic cooperation located in the place of its industrial and commercial registration or legal person registration. After the verification by the local institution in charge of foreign trade and economic cooperation and the departmental office of machinery and electronic products, the entity applying for import shall apply to the MOFTEC for going through the import formalities.

Article 8

Upon receipt of the importing entity's application, the MOFTEC shall, within 30 days, check the application and decide on whether issuing the "Import License for Machinery and Electronic Products" (as indicated in Attachment 2).

Article 9

The importing entity shall conclude contracts with foreign parties and purchase exchanges with the "Import License for Machinery and Electronic Products", and the customs and handle the inspection and release formalities with the "Import License for Machinery and Electronic Products".

Article 10

The validity period of the "Import License for Machinery and Electronic Products" and of the modified, changed or extended "Import License for Machinery and Electronic Products" shall be one year. Where the importing entity needs to change any content in the relevant items of the "Import License for Machinery and Electronic Products" within the validity period due to a particular reason, it shall go through the formalities of modifying or changing the license in the original organ issuing the license with the original "Import License for Machinery and Electronic Products"; the original organ issuing the license shall take back the old license, and shall print the characters of "(change of certificate)" in the remark column of the newly issued license. Where the amount of actually used exchange does not exceed 10 % of the planned amount, the "Import License for Machinery and Electronic Products" does not need to be modified. Where the period of the "Import License for Machinery and Electronic Products" needs to be extended within the validity period due to any particular reason, the importing entity shall apply to the original organ issuing the license for going through the formalities of changing the license for extension, and the period of the "Import License for Machinery and Electronic Products" shall be extended for only once.

Article 11

Where the "Import License for Machinery and Electronic Products" is lost, the importing entity shall immediately report the loss to the original organ issuing the license. If, after verification by the original organ issuing the license, no bad consequence occurs, the "Automatic Import License" shall be re-issued.

Article 12

These Detailed Rules shall also be applicable in any of the following circumstances:

(1)

the imported parts of certain products constitute the feature of a whole machine;

(2)

the certain products are imported in processing trade for manufacturing products of domestic sale or for the importer's own use;

(3)

the certain products are imported by enterprises with foreign investment for manufacturing products of domestic sale;

(4)

the certain products are imported in such modes of trade as leasing trade, compensation trade, etc.;

(5)

the certain products are imported in such a manner as gratis aid, donation or present in economic exchanges, etc.;

(6)

the certain products, which are purchased outside the territory by Chinese institutions abroad or Chinese enterprises carrying out construction projects outside the territory, need to be moved back to China for their own uses;

(7)

other circumstances separately provided for in laws and administrative regulations.

Article 13

These Detailed Rules shall not be applicable in any of the following circumstances:

(1)

the certain products imported in processing trade are used for re-export;

(2)

the certain products are imported into China's bonded zones or export processing zones for re-export;

(3)

the certain products are temporarily imported under the supervision and administration of the customs;

(4)

the certain products are imported by foreign-funded enterprises for investment or for their own uses;

(5)

other circumstances separately provided for in laws and administrative regulations.

Article 14

The MOFTEC is responsible for the interpretation of these Detailed Rules. In case of any previous relevant provision inconsistent with these Detailed Rules, these Detailed Rules shall prevail.

Article 15

These Detailed Rules shall enter into force on January 1, 2002.