Laws of the People's Republic of China

No.5

Interim Measures for the Administration of Foreign assistance material projects examined and approved at the 6th ministerial conference of the year 2006 of the Ministry of Commerce of the People's Republic of China on May 17, 2005 is hereby announced and shall come into force as of September 1, 2006. Minister of the Ministry of Commerce, Bo Xilai

July 7, 2006

Interim Measures for the Administration of Foreign Assistance Material Projects Chapter I General Provisions

Article 1

The Measures is formulated in accordance with the relevant laws, administrative regulations for the purpose of strengthening the administration of foreign assistance material projects( hereinafter referred to as "foreign assistance material projects", ensuring the quality hereof and enhancing the economic and social efficiency of foreign aid.

Article 2

The foreign assistance material projects as stated in the Measure shall refer to, under the free assistance, loan with no or low interest as well as other special aid fund provided by the Chinese government, such foreign aid programs as common products, necessities, technological products or unique equipment which purchased by, and such supporting technologies as relevant installation, adjustment, and operation guidance if necessary, provided by the enterprises designated by the Chinese government.

Article 3

The Ministry of Commerce shall administer foreign assistance material projects in accordance with the Measures.

Article 4

The foreign assistance material projects as the main implementary body selected by the Ministry of Commerce shall, in accordance with the Measures as well as other relevant laws, administrative regulations, implement the inter-governmental agreement of foreign assistance material projects signed with the Chinese government, and shall enjoy the relevant rights and bear the relevant obligations and legal liability.

Chapter II Confirmation of supply list

Article 5

The Ministry of Commerce shall, in accordance with the inter-governmental agreement of foreign aid, determine the supply list.

The supply list shall include such basic information as name of supplying material, technology standard, quantity of supplying material, quality standard and technology service and etc.

Article 6

The following principles shall be observed in the process of determining supply list:

(1)

The basic requirement of the supplier shall, in accordance with the economic and reasonable principle, be satisfied within the limit of aid fund;

(2)

Competition shall be removed or limited by any means;

(3)

The products produced in the People's Republic of China shall, under the same applicable condition, be chosen;

(4)

The volume and reliable products shall be chosen, unless the receiver has specific requirement. Where the product has such compulsory standards as guarantee the heath of human body, life and property safety as well as environmental protection, it shall accord with the standard hereof.

Article 7

The Ministry of Commerce, shall, in accordance with the requirement of Article 6 and the relevant polices, formulate and promulgate Catalogue for the Guidance of Foreign Aid Material and the receiver shall offer the requirement of providing material and the supply list determined by the Ministry of Commerce.

The Ministry of Commerce shall undertake dynamic administration upon Catalogue for the Guidance of Foreign Aid Material, rechecking and readjusting it once every year.

Article 8

Where the supply list shall be determined outside the Catalogue for the Guidance of Foreign Aid Material under specific circumstances, the Ministry of Commerce may entrust the intermediary agencies or enterprises to act as the list organizer of foreign assistance material projects (hereinafter referred to as "list organizer") to provide economic and technology service as the determination of data of supply list as well as reference price.

The Ministry of Commerce shall not entrust such an intermediary agency or enterprise as have been subject to criminal punishment, administrative penalty due to its involvement in illegal business operation or violation of the provisions related to the administration hereof or have serious fault in the process of undertaking the task of the administration of foreign assistance material projects, to act as list organizers.

Article 9

The order organizer shall, strictly abiding by the principles raised in Article 6 , raise the proposal about the supply list and be responsible for the accuracy and applicability of the content hereof.

The inventory organizer shall submit the proposed supply list to the Ministry of Commerce for approval. The Ministry of Commerce shall, within 20 working days, inform the list organizer the auditing result in written form.

Article 10

The list organizer shall not collude with the tender enterprises undertaking foreign assistance material projects to raise the supply list which is disadvantageous to other valid tender enterprises, or disclose information about the inventory hereof to the relevant tender or bid negotiation enterprises, or collude with the supplier to seek unjustifiable benefits.

Article 11

The Ministry of Commerce shall submit its settled supply list about foreign assistance material projects to the receiver for confirmation.

In the process of implementing foreign assistance material projects, any unit shall, without the approval of the Ministry of Commerce, not alter the information of the inventory hereof. Where the inventory really needs adjusting, it shall be submitted to the Ministry of Commerce for approval, which shall, within 10 working days as of having received the acceptance application, make settlement and inform the applicant in written form; where it needs the approval of the receiver, the Ministry of Commerce shall, as of 10 working days after the formal confirmation is made by the receiver, make settlement and inform the applicant in written form.

Chapter III The implementation and administration of foreign assistance material projects

Article 12

The Ministry of Commerce shall, within the enterprise scope with the qualification of foreign assistance material projects in accordance with Measures for Determining the Qualification of Enterprises of Undertaking Foreign Assistance Goods Supply Projects (for Trail Implementation) (Decree No. 10, 2004 the Ministry of Commerce), choose the implementing enterprises hereof by means of inviting bid or negotiating bid. The detailed means shall be determined by the Ministry of Commerce in accordance with the scale, nature, specialty and character of the foreign assistance material projects.

Article 13

The Ministry of Commerce, shall not invite such enterprises as have been subject to criminal punishment, administrative penalty within two years because of its illegal business activities or its violation of the relevant national provisions about the administration of foreign aid, or have committed serious faults and caused unfavorable influence in the process of implementing foreign assistance material projects, to participate in the bid invitation and negotiation hereof.

Article 14

Where the selected enterprises hereof alter the commitment of bid or bid invitation, the Ministry of Commerce may choose again the enterprises undertaking foreign assistance material projects among the other bidding enterprises to organize bid invitation or bid negotiation.

Article 15

The Ministry of Commerce shall deliver task notice about foreign assistance material projects to the designated enterprises undertaking foreign assistance material projects.

The task notice shall be the proof of the foreign assistance material projects to handle the purchase, storage, checking, clearance, transportation and entry and exit procedures of the relevant personals.

Article 16

Where the inter-governmental agreement of foreign assistance material projects needs signing contracts, the enterprises hereof shall, in accordance with the authorization of the Ministry of Commerce, sign the foreign implementation contract hereof with the organs designated by the receiver.

The rights, obligations and means of cooperation agreed by the parties to the contract shall be in conformity with laws, inter-governmental agreement of foreign assistance material projects as well as the commitment in biding or bid negotiation.

The enterprise undertaking foreign assistance material projects shall, prior to the signing of the contract hereof, submit contract version to be signed to the Ministry of Commerce for auditing. The Ministry of Commerce shall, within 20 working days as of having received the contract version to be signed, inform the enterprises undertaking foreign assistance material projects of the result of auditing in written form.

Article 17

The enterprises undertaking foreign assistance material projects shall, in accordance with the supply list confirmed by the Ministry of Commerce as well as by the receiver and the commitment of biding or bid invitation, or such activities as production, purchase, be responsible for the acceptance check before the ex store, shall not alter such substantial contents without authorization as name of articles, specification and type, technical parameter and standards, amount of supplied goods, manufacturer, meals of package, technical service personal and its plan.

Article 18

The enterprises undertaking foreign assistance material projects shall, in accordance with the conditions of supplying goods committed by bidding or bid invitation, handle storage, checking and quarantine as well as such particulars as domestic and international transport and insurance from the production or purchase site to the destination, shall not alter the means of transportation and time limit of arrival without authorization.

Article 19

The enterprise of foreign assistance material projects shall bear the responsibility of the quality of supplied goods after its arrival at the destination and shall shoulder free change of products as well as the necessary expenses once problems about the quality of products arises not from the foreign party within the guarantee period.

Article 20

Where the provider has exerted inappropriate influence upon the choosing choice of the enterprise of foreign assistance material projects or unfavorable effect upon the foreign aid material program, the Ministry of Commerce shall list the provider in the name list of unqualified providers. The enterprise of foreign assistance material projects shall not purchase the products of the providers listed herein.

The measures for the administration of unqualified providers shall be prescribed otherwise by the Ministry of Commerce.

Article 21

In the process of implementing the projects hereof, the enterprises undertaking foreign assistance material projects shall neither illegally contract/subcontract the charged foreign assistance material projects, nor misappropriate the foreign assistance fund to undertake other activities irrelevant to the projects.

Article 22

Where the foreign assistance material projects needs providing the relevant technology service, the enterprise of foreign assistance projects shall, in accordance with the characteristics of the provided material and technology service plan required by the receiver, send technology service personnel to provide to the receiver such services as installation, adjustment, operational guidance and training local technology personal. The technology service plan shall be implemented after having been examined by the Ministry of Commerce.

The enterprise of foreign assistance material projects shall select excellent technology service personnel and provide the necessary material conditions in the implementation of technology service to ensure the quality of technology service. The enterprise of foreign assistance material projects may, if necessary, take in technology service personnel from the receiver to come to China to receive the operational guidance and technology training.

Article 23

The personnel responsible for the implementation of foreign assistance material projects shall abide by the relevant laws and rules of China as well as of the receiver, keep national secret and confidential information of technology.

Article 24

The Ministry of Commerce shall be responsible for the supervision and administration of foreign assistance material projects and the allocation of funds as well as handling the inter-governmental activities related to the projects. The embassies and consulates (office of economic and commercial counselor) shall assist the Ministry of Commerce to undertake supervision and administration upon the foreign assistance material projects, and handle the relevant inter-governmental affairs with the authorization of the Ministry of Commerce.

Article 25

In the process of implementing the projects, the enterprise of foreign assistance material projects shall arrange and store the relevant documents and submit the implementation and progression of the projects to the Ministry of Commerce and, within 20 days after the completion of the projects, submit to the Ministry of Commerce the project completion report and the relevant documents.

Article 26

The Ministry of Commerce shall, in accordance with the project completion report, be responsible for handling the inter-governmental handling-over procedure with the government of the receiving party.

Article 27

The Ministry of Commerce shall be responsible for evaluating the implementation and result of the foreign assistance material projects.

Article 28

The foreign assistance material purchased and transported from the tariff boundary of the People's Republic of China shall, in accordance with measures for the administration of checking the foreign assistance material formulated by the Ministry of Commerce and the authorities of Quality Supervision, Inspection and Quarantine, be subject to the compulsory examination.

The foreign assistance material purchased and transported from the tariff boundary of the People's Republic of China shall be undertaken the checking of export site.

Article 29

The foreign assistance material purchased and transported from the tariff boundary of the People's Republic of China shall, in accordance with the regulations for the checking and clearance of foreign assistance material signed between the Ministry of Commerce and the General Customs Administration, handle the checking and clearance procedures hereof.

Article 30

The enterprise of foreign assistance material projects shall, in the process of implementing hereof, handle cargo transport insurance as well as other necessary insurances. As for the losses within the scope of insurance liability, the enterprise shall claim losses to the insurance company of itself.

Article 31

The Ministry of Commerce may give appropriate compensation to the enterprises undertaking foreign assistance material projects for the economic losses and expense adjustment arisen from the following causes:

(1)

War, turbulence, coup, strike and political factors between the two nations (such as policy adjustment, cession of diplomatic relations and etc.);

(2)

Adjustment about goods supply with the agreement between the Ministry of Commerce and the receiver;

(3)

Force majeure, unless the insurance shall be handled in accordance with the prescription in Article 30 .

Except the prescription in the precedent paragraph, other risks in the process of implementing foreign assistance material project shall be born by the enterprise of its own.

Chapter IV Legal responsibilities

Article 32

Where the list organizer has any of the following occasions, the Ministry of Commerce shall give warming and may fine less than 30,000 Yuan:

(1)

The name of articles, technology standard, quality standard, amount of supplied goods, technology service and reference price in the inventory have serious error;

(2)

The organizer violates the inventory principle in Article 6 of the Measures;

(3)

The organizer, in violation of Article 10 of the Measures, colludes with the relevant bidding enterprises to raise the inventory, which is unfavorable to other bidding enterprises, or disclose the information of supplied goods to the relevant bidding or bid negotiation enterprises in advance, or colludes with providers to seek inappropriate interest.

Article 33

Where the enterprise participating biding or bid negotiation of foreign assistance material projects has one of the following acts, the Ministry of Commerce shall give warming to the enterprise and may fine 30,000 Yuan; where the enterprise has been selected, the selection shall be null and void; where the enterprise violates the relevant laws, administrative rules, it shall, in accordance with laws and administrative rules, be subject to administrative penalty; where the acts of the enterprise constitutes a crime, the enterprise shall be investigated for criminal responsibility according to law.

(1)

seeking unfair competition advantage by fraud;

(2)

colluding to bull price;

(3)

disturbing tender and bid order by illegal means.

Article 34

Where the enterprise of foreign assistance material projects has one of the following occasions, the Ministry of Commerce shall give warming to the enterprise hereof, and may impose a fine of less than 30,000 Yuan; where the enterprise violates the relevant laws, administrative rules, it shall, in accordance with laws and administrative rules, be subject to administrative penalty; where the acts of the enterprise constitutes a crime, the enterprise shall be investigated for criminal responsibility according to law.

(1)

alters the commitment of bidding or bid negotiation;

(2)

illegally contracts or subcontracts its charged foreign assistance material projects;

(3)

refuses to fulfill the foreign implementation contract and the commitment of bidding or bid negotiation, and thereby have seriously hindered the normal operation of foreign assistance material projects and exerted side effect in the international community;

(4)

seriously violates the prescription of the Measures and have caused the relevant economic losses more than 100,000 Yuan;

(5)

misappropriates foreign assistance fund to undertake activities irrelevant to the projects, and have influenced the normal implementation of the foreign assistance material program;

(6)

purchases the products of the providers listed in the name list of unqualified providers;

(7)

The personnel implementing the foreign assistance material projects violate the prescription in Article 23 and have exerted side effect in the international community.

Chapter V Supplementary Provisions

Article 35

The Measures shall be interpreted by the Ministry of Commerce.

Article 36

The Measures shall come into force as of September 1, 2006.