Laws of the People's Republic of China

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

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

No.4

Detailed Rules for the Implementation of Automatic Import Licenses of the Enterprises with Foreign Investment is hereby promulgated according to the Regulation of the People's Republic of China on the Administration of the Import and Export of Goods, and come into force as of the date of promulgation.

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

Minister of the General Administration of Customs Mu Xinsheng

February 8, 2002

Detailed Rules for the Implementation of Automatic Import Licenses of the Enterprises with Foreign Investment

Article 1

The present Detailed Rules have been enacted on the basis of the Measures for the Administration of the Automatic Import License of Goods for the purpose of standardizing the administration of the automatic import licenses of the enterprises with foreign investment.

Article 2

The present Detailed Rules shall be applicable to the administration of automatic import licenses of the enterprises with foreign investment for importing goods to within the 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) is in charge of guiding and administering the enterprises with foreign investment concerning the import of goods that are subject to automatic import licenses, and shall, together with the State Administration of Customs, publicize the list of names of the institutions for issuing automatic import licenses to the enterprises with foreign investment (see Attachment I). The department of foreign trade and foreign investment of all provinces, autonomous regions, municipalities directly under the Central Government and the cities under separate State planning (hereinafter referred to as the local departments of foreign trade and foreign investment) are in charge of the administration of the automatic import license of the enterprises with foreign investment within their respective jurisdictions.

Article 4

The enterprises with foreign investment shall provide the following materials for handling the automatic import licenses:

1.

An application form of automatic import licenses (see Attachment II);

2.

A photocopy of the approval certificate of the enterprise with foreign investment (including the record of passing the joint annual inspections);

3.

A photocopy of the business license of the enterprise with foreign investment;

4.

A photocopy of the contract of the enterprise with foreign investment for joint equity or cooperation or the articles of incorporation;

5.

A photocopy of the report of asset appraisal;

6.

An account of the actual production capacity of the enterprise with foreign investment;

7.

Other materials that are requested.

Article 5

The import of goods that belong to automatic import licenses by the enterprises with foreign investment shall conform to the relevant provisions of the laws or administrative regulations and shall satisfy the following conditions:

1.

The enterprises with foreign investment that applies for import shall have no record of violations of laws or regulations such as evading foreign exchanges, arbitrage, obtaining export refunded taxed by fraudulent means, smuggling, etc. within the recent 3 years;

2.

The imported goods shall conform to the relevant provisions of the bilateral or multilateral trade agreements to which China has acceded;

3.

The relevant provisions of other laws, administrative regulations or industrial policies.

Article 6

The following procedures shall be followed when handling the automatic import licenses of enterprises with foreign investment:

1.

The raw materials and spare parts that are used for investment or their own use for the items under the investment of the enterprises with foreign investment are goods subject to automatic import licenses, and there is no need to apply for an Automatic Import Licenses. The goods imported for the purpose of investment and their own use of the enterprises with foreign investment shall refer to the machinery, equipments and other materials imported by the foreign investors as a way of investment or to satisfy the demand of production and business operation with the fund within the total amount of investment or other self-possessed funds (to be specific, the reserving funds, developments funds, depreciations and post-tax profits of the enterprises).

2.

Where the goods imported by the enterprises with foreign investment for processing trade are subject to the administration of automatic import licenses, there is no need for such enterprises to apply for an Automatic Import License, and they shall be exported after being processed.

3.

When importing goods that are subject to the administration of automatic import licenses for producing products which are to be marketed internally (see the goods under List I and List II in Attachment I of the Measures for the Administration of Goods Subject to Automatic Import Licenses), the enterprises with foreign investment shall, before handling the formalities of customs declarations, go to the local department of foreign trade and foreign investment to handle the formalities of automatic import licenses. The enterprises with foreign investment shall, within one month prior to applying for handling the formalities of Automatic Import Licenses, inform the local department of foreign trade and foreign investment of the import contracts and the estimated time of fetching the harbor, and the local department of foreign trade and foreign investment shall record down truthfully and report to the MOFTEC on the monthly basis.

4.

After receiving the Application Form of Automatic Import License and other relevant materials that conform to the provisions of the present Detailed Rules, the local departments of foreign trade and foreign investment shall immediately issue the Automatic Import License (see Attachment III) or, under special circumstances, within no more than ten working days.

Article 7

When the enterprises with foreign investment import goods that are subject to the administration of automatic import licenses for the purpose of investment or for self use, the customs release the goods according to the repertoire of equipments and materials on which the department of foreign trade and foreign investment has put the "Special Seal for Examining the Import of enterprises with foreign investment" (see Attachment IV).

Article 8

Where the goods imported by the enterprises with foreign investment for processing trade are subject to the administration of automatic import licenses, the customs shall handle the formalities of releasing the imported goods according to the documents such as contracts for processing trade that have been approved by the department of foreign trade.

Article 9

Where the goods imported by the enterprises with foreign investment for processing trade are subject to the administration of automatic import licenses but are necessary to be marketed internally due to special circumstances, the customs shall handle the verification and writing of the contract according to the "Approval Certificate for the Internal Sale of Imported Bonded Materials for Processing Trade" and the Automatic Import License as issued by the department of foreign trade on the provincial level and after the tariffs and interest thereof for delayed payment have been fully paid according to relevant provisions.

Where any enterprise with foreign investment cannot submit the "Approval Certificate for the Internal Sale of Imported Bonded Materials for Processing Trade" and the Automatic Import License during the prescribed time period for verifying and writing off contracts, the customs shall handle the formalities of verifying and writing off the contract after levying the tariffs and the interest thereof for delayed payment and has imposed a fine according to relevant provisions.

Article 10

When importing goods that are subject to the administration of automatic import licenses for the purpose of producing products to be marketed internally, the enterprises with foreign investment shall handle the formalities of selling and paying foreign exchanges by submitting the Automatic Import Licenses to the bank, and the customs shall release the goods according to the Automatic Import Licenses.

Article 11

The contents of Columns I and II of the Automatic Import License of the enterprises with foreign investment shall include the code number of the importing or exporting enterprises. The codification rule of the "Number of Automatic Import License" in Column III of the Licenses is: code of region-year-WZ-sequential number in 5 digits. For example, the number of the automatic import licenses of the enterprises with foreign investment of Beijing Municipality in the year 2002 shall be 1100-2002-WZ-XXXXX; the rest may be deduced by analogy for other provinces. The "Effective Deadline of the Automatic Import License" as mentioned in Column IV shall be no later than December 31 of the year when the license is issued. If the goods imported by any enterprise with foreign investment for the purpose of producing products for marketing internally, the "Way of Trade" as mentioned in Column V of the License shall be: "imported by joint equity enterprise", "imported by cooperative enterprise" or "imported by solely enterprise with foreign investment".

Article 12

The valid period of an Automatic Import License" shall be half year. The license shall be valid for the same year and shall be subject to the administration of issuing licenses without approval, but it shall not be used for more than 6 times at maximum. The customs shall make a remark in round hand print in the Column of Remarks for Releasing Goods" on original copy of the Automatic Import License, with the duplicate being kept by the customs and when the License is used for the last time, the original copy shall be kept by the customs.

None of the content in the Automatic Import License may be altered. Where it is necessary to make revisions to relevant items or it is necessary to postpone during the valid period due to special reasons, the enterprises with foreign investment shall change licenses by submitting the original copy of the Automatic Import License at the original issuing authority. During the valid period of the Automatic Import License, the License may be postponed once. The original issuing authority shall take back the old copy and print the characters of "changing licenses" in the Column of Remarks of the new copy.

Article 13

In case any Automatic Import License is missing, the enterprises with foreign investment shall report to the original issuing authority immediately of the loss, and the issuing authority has confirmed and if no bad effects will result, another copy shall be reissued.

Article 14

Where it is determined that any Automatic Import License that has already been applied by the enterprises with foreign investment cannot be used, it shall be returned to the original issuing authority in time.

Article 15

If, in the process of applying for automatic import licenses, any enterprise with foreign investment has any dispute with the local department of foreign trade and foreign investment, it may apply for administrative reconsideration or institute an administrative litigation.

Article 16

The Automatic Import Licenses shall be printed under the uniform supervision of the MOFTEC.

Article 17

The valid seal to be used on the Automatic Import License of the enterprises with foreign investment shall be the "Special Seal of Enterprises with Foreign Investment for Automatic Import Licenses" (see Attachment V) which shall be made under the uniform supervision of the MOFTEC.

Article 18

The power to interpret the present Detailed Rules shall remain with the MOFTEC and the State Administration of Customs. In case any preceding relevant provision is inconsistency with the present Detailed Rules, the present Detailed Rules shall prevail.

Article 19

The present Detailed Rules shall take effect on the day when it is promulgated.

Attachment I: List of Names of the Issuing Authorities for Issuing Automatic Import Licenses to Enterprises with Foreign Investment

Attachment II: Application Form of Automatic Import Licenses (omitted)

Attachment III: Automatic Import License (omitted)

Attachment IV: Special Seal for Examining the Import of Enterprises with Foreign Investment

Attachment V: Special Seal for the Automatic Import Licenses of Enterprises with Foreign Investment Attachment I:List of Names of Issuing Authorities for Issuing Automatic Import Licenses to Enterprises with Foreign Investment

Ministry of Foreign Trade and Economic Cooperation

Beijing Municipal Commission of Foreign Trade and Economic Cooperation

Tianjin Municipal Commission of Foreign Trade and Economic Cooperation

Hebei Provincial Department of Foreign Trade and Economic Cooperation

Shanxi Provincial Department of Foreign Trade and Economic Cooperation

Inner Mongolia Autonomous Region Department of Foreign Trade and Economic Cooperation

Liaoning Provincial Department of Foreign Trade and Economic Cooperation

Dalian Municipal Commission of Foreign Trade and Economic Cooperation

Jilin Provincial Department of Foreign Trade and Economic Cooperation

Heilongjian Provincial Department of Foreign Trade and Economic Cooperation

Shanghai Municipal Working Commission of Foreign Investment

Jiangsu Provincial Department of Foreign Trade and Economic Cooperation

Zhejiang Provincial Department of Foreign Trade and Economic Cooperation

Ningbo Municipal Bureau of Foreign Trade and Economic Cooperation

Anhui Provincial Department of Foreign Trade and Economic Cooperation

Jujian Provincial Department of Foreign Trade and Economic Cooperation

Xiamen Municipal Working Commission of Foreign Investment

Jiangxi Provincial Department of Foreign Trade and Economic Cooperation

Shandong Provincial Department of Foreign Trade and Economic Cooperation

Qingdao Municipal Bureau of Foreign Trade and Economic Cooperation

Henan Provincial Department of Foreign Trade and Economic Cooperation

Hubei Provincial Department of Foreign Trade and Economic Cooperation

Hunan Provincial Department of Foreign Trade and Economic Cooperation

Guangdong Provincial Department of Foreign Trade and Economic Cooperation

Shenzhen Municipal Bureau of Foreign Trade and Economic Cooperation

Guangxi Zhuang Autonomous Region Office of Foreign Investment

Hainan Provincial Department of Foreign Trade and Economic Cooperation

Chongqing Municipal Commission of Foreign Trade and Economic Cooperation

Sichuan Provincial Department of Foreign Trade and Economic Cooperation

Guizhou Provincial Department of Foreign Trade and Economic Cooperation

Yunnan Provincial Department of Foreign Trade and Economic Cooperation

Tibet Autonomous Region Department of Foreign Trade and Economic Cooperation

Shaanxi Provincial Department of Foreign Trade and Economic Cooperation

Guansu Provincial Department of Foreign Trade and Economic Cooperation

Qinghai Provincial Department of Foreign Trade and Economic Cooperation

Ningxia Hui Autonomous Region Department of Foreign Trade and Economic Cooperation

Xinjiang Uygur Autonomous Region Department of Foreign Trade and Economic Cooperation

Xinjiang Production and Construction Corps Bureau of Foreign Trade and Economic Cooperation.