Laws of the People's Republic of China

the Ministry of Commerce

Order of the Ministry of Commerce of the People's Republic of China

No. 23

Adopted at the 14th Executive Meeting of the Ministry of Commerce on November 15, 2004, the Interim Measures for the Control of Processed Oil Market are hereby promulgated and shall go into effect as of January 1, 2005.

Minister of Commerce Bo Xilai

December 2, 2004

Interim Measures for the Control of Product Oil Market

Chapter I General Provisions

Article 1

With a view to strengthening the supervision and control of the processed oil market, standardizing the processed oil business activities and maintaining the order of the processed oil market, these Measures are formulated in accordance with the Decision of the State Council on Applying Administrative Licensing to Matters that Need to Remain Subject to Administrative Examination and Approval (No. 412 of the State Council) and other relevant laws and regulations.

Article 2

The enterprises engaging in the wholesale, storage and retail of processed oil within the territory of the People's Republic of China must observe these Measures and other relevant laws and regulations.

Article 3

The Ministry of Commerce shall be in charge of the supervision and control of the processed oil market throughout the country pursuant to law.

The competent administrative departments of commerce of the governments of all provinces, autonomous regions and municipalities directly under the Central Government and all cities under separate State planning (hereinafter referred to as the competent administrative department of commerce of the people's government at the provincial level) shall be in charge of formulating the development planning for filling stations and storage sector, and of organizing and coordinating the supervision and administration of processed oil business activities in their respective administrative regions.

Article 4

Product oil as mentioned in the present Measures means gasoline, kerosene and diesel oil.

Chapter II Applications for Processed Oil Business Licenses and Acceptance of Applications

Article 5

An enterprise that wishes to engage in the wholesale of processed oil shall submit an application to the competent administrative department of commerce of the people's government at the provincial level at the enterprise's locality. The latter shall, after making examination, submit the application documents and its preliminary comments thereon to the Ministry of Commerce. The Ministry of Commerce shall make a decision about whether or not to grant a business license for the wholesale of product.

Article 6

An enterprise that wishes to engage in the storage or retail of processed oil shall submit an application to the competent administrative department of commerce of the people's government at the city (city divided into districts, the same below) level at the enterprise's locality. The latter shall, after making examinations, submit the application documents and its preliminary comments thereon to the administrative department of commerce of the people's government at the provincial level. The competent administrative department of commerce of the people's government at the provincial level shall make a decision about whether or not to grant a business license for the storage or retail of processed oil.

Article 7

An enterprise applying for a business license for the wholesale of processed oil must fulfill the following requirements:

(1)

having a stable supply of processed oil;

(2)

having a wholly-owned or controlling-share-held processed oil depot with a capacity of not less than 4,000 cubic meters, the construction of which must be in conformity to the Code for Design of Oil Depots (GBJ74-84);

(3)

having pipelines for unloading processed oil, a special railroad line or a port for transporting processed oil and other necessary facilities;

(4)

its oil depot and other facilities conforming to the relevant provisions of the state concerning safety in production and environmental protection;

(5)

having specialized technical personnel with the knowledge of inspection, metrology, storage and fire safety of processed oil;

(6)

meeting the requirements of the development plan for processed oil wholesale networks; and

(7)

having sound management systems.

Article 8

An enterprise applying for a business license for the storage of processed oil must fulfill the following requirements:

(1)

its oil storage facilities conforming to the planning for the layout of tank farm;

(2)

having an oil depot with a capacity of not less than 4,000 cubic meters, the construction of which must be in conformity to the Code for Design of Oil Depots (GBJ74-84);

(3)

having pipelines for unloading processed oil, a special railroad line or a port for transporting processed oil and other necessary facilities;

(4)

the design and construction of its oil depots conforming to the relevant provisions concerning safety in production and environmental protection;

(5)

having specialized technical personnel with knowledge of inspection, metrology, storage and fire safety of processed oil; and

(6)

having sound management systems.

Article 9

An enterprise applying for a business license for the retail of processed oil must meet the following requirements:

(1)

having a stable supply of processed oil and having reached an oil supply agreement with the enterprises with a business license for the wholesale of processed oil;

(2)

complying with the development plan for local the filling station industry;

(3)

the design and construction of its filling stations conforming to the relevant national standards;

(4)

the construction of its filling stations conforming to the relevant provisions of the state concerning agrarian administration, fire safety and environmental protection;

(5)

having specialized technical personnel with knowledge of inspection, metrology, storage and fire safety of processed oil; and

(6)

its aquatic filling stations (vessels) used in the supply of processed oil for vessels conforming to the relevant provisions concerning ports, water transportation safety and prevention and control of water pollution, in addition to the above-mentioned provisions.

As for the filling outlets for the needs of rural areas and limited to the sale of diesel oil, the competent administrative departments of commerce of the people's governments at the provincial level shall, in the light of the local conditions, formulate their respective provisions and administrative measures.

Article 10

Each competent administrative department of commerce shall, in its working place, make public the requirements, procedures, time limit, documents to be submitted and a model application form for the application for processed oil business license.

Article 11

If the competent administrative department of commerce receiving the application holds that the application documents are incomplete or they are not in conformity to the requirements, it shall, immediately or within five working days after receiving the application, notify the applicant of the documents to be added or corrections to be made. In case no such notification has been made within the prescribe time limit, the application shall be treated as accepted as of the receipt of the application documents.

Article 12

If the applicant has submitted complete and proper application documents or has added the application documents or made corrections as required, the competent administrative department of commerce shall accept an application for processed oil business license.

The competent administrative department of commerce shall issue a dated certificate with the special stamp of the department affixed thereon, to certify its acceptance of the application for a processed oil business license.

In the case of refusal to accept an application for a processed oil business license, the competent administrative department of commerce shall issue a dated certificate with the special stamp of the department affixed thereon, explaining the reasons for the refusal and notifying the applicant of his right to apply for an administrative reconsideration or take an administrative action.

Article 13

The competent administrative department of commerce accepting an application shall examine the submitted application documents and put forward comments thereon and, in the case of the application subject to the examination of an competent administrative department of commerce at a higher level, submit the application documents and its preliminary comments thereon to the competent administrative department of commerce at a higher level.

Chapter III Procedures and Time Limits for the Examination of Applications for Processed Oil Business Licenses

Article 14

The competent administrative department of commerce of the people's government at the provincial level shall, after receiving an application for a license for the wholesale of processed oil, appoint at least two persons to complete the examination within 20 working days and to submit the application documents and its preliminary comments thereon to the Ministry of Commerce.

The Ministry of Commerce shall, within 20 working days, complete the examination from receipt of the materials submitted by the competent administrative department of commerce of the people's government at the provincial level. An applicant fulfilling the requirements as provided for in Article 7 hereof shall be given a license for the wholesale of processed oil and a Certificate of Approval for the Wholesale of Processed Oil. An applicant failing to fulfill the relevant requirements shall be given a written notice of the decision of disapproval with reasons stated.

Article 15

After receipt of an application for a license for the storage of processed oil, the competent administrative department of commerce of the people's government at the city level shall appoint at least two persons to complete the examination within 20 working days and shall submit the application documents and its preliminary comments thereon to the competent administrative department of commerce of the people's government at the provincial level.

The competent administrative department of commerce of the people's government at the provincial level shall, within 20 working days, complete the examination after receiving the materials submitted by the competent administrative department of commerce of the people's government at the city level. An applicant fulfilling the requirements as provided for in Article 8 hereof shall be given a license for the storage of processed oil and a Certificate of Approval for the Storage of Processed Oil; an applicant failing to fulfill the relevant requirements shall be given a written notice of the decision of disapproval with reasons therefor. If no decision can be made within 20 working days, the time limit may be extended for another 10 days with the approval of the person in charge of the department, and the applicant shall be notified of the reasons for such extension.

Article 16

After receiving an application for a license for the retail of processed oil, the competent administrative department of commerce of the people's government at the city level shall appoint at least two persons to complete the examination within 20 working days and shall submit the application documents and its preliminary comments thereon to the competent administrative department of commerce of the people's government at the provincial level.

The competent administrative department of commerce of the people's government at the provincial level shall, within 20 working days, complete the examination after receiving the materials submitted by the administrative department of commerce of the people's government at the city level. An applicant fulfilling the requirements as provided for in Article 9 hereof shall be given a license for the retail of processed oil and a Certificate of Approval for the Retail of Processed Oil; an applicant failing to fulfill the relevant requirements shall be given a written notice of the decision of disapproval with reasons therefor. If no decision can be made within 20 working days, the time limit may be extended for another 10 days with the approval of the person in charge of the department, and the applicant shall be notified of the reasons for such extension.

Article 17

If the competent administrative department of commerce considers it necessary to hold a hearing on any application for a processed oil business license, it shall make a public announcement and hold such a hearing.

Article 18

An enterprise engaging in processed oil business that wishes to establish a branch shall go through the application formalities for such establishment in accordance with the present Measures.

An enterprise engaging in processed oil business that is to suspend or terminate its business shall go through the formalities of suspension or cancellation with the department issuing the license.

Chapter IV Issue of and Changes in Certificates of Approval for Processed Oil Business

Article 19

The certificates of approval for processed oil business shall be uniformly made and printed by the Ministry of Commerce. The Certificates of Approval for the Wholesale of Processed Oil shall be issued by the Ministry of Commerce; the Certificates of Approval for the Storage of Processed Oil and the Certificates of Approval for the Retail of Processed Oil shall be issued by the competent administrative departments of commerce of the people's governments at the provincial level.

Article 20

Where an enterprise engaging in the wholesale of processed oil wishes to change any particular of its Certificate of Approval for the Wholesale of Processed Oil, upon the strength of the enterprise's presenting of the relevant certifying documents and the original certificate of approval, an application shall be submitted to the Ministry of Commerce through the competent administrative department of commerce of the people's government at the provincial level . In the case of change of the corporate name, a certificate issued by the competent administrative department for industry and commerce certifying such change shall be submitted; in the case of change of the legal representative of the corporation, the corresponding certificates shall be submitted. Those still qualified for the wholesale of processed oil shall have a new Certificate of Approval for the Wholesale of Processed Oil issued by the Ministry of Commerce.

Article 21

Where an enterprise engaging in the storage or retail of processed oil wishes to change any particular concerned, an application, together with the relevant certifying documents on the change, shall be submitted to the competent administrative department of commerce of the people's government at the provincial level. In the case of change of the corporate name, a certificate certifying such change issued by the administrative department for industry and commerce shall be submitted; in the case of change of the legal representative of the corporation, the corresponding certificates shall be submitted. The competent administrative department of commerce of the people's government at the provincial level shall conduct examination and issue a new Certificate of Approval for the Storage of Processed Oil to the enterprise that is still qualified for the storage of processed oil, or a new Certificate of Approval for the Retail of Processed Oil to the enterprise that is still qualified for the retail of processed oil.

Article 22

The changes in the Certificate of Approval for the Wholesale of Processed Oil, the Certificate of Approval for the Storage of Processed Oil or the Certificate of Approval for the Retail of Processed Oil of an enterprise due to the change of the competent authority of the enterprise shall apply other provisions that shall be separately formulated.

Chapter V Supervision and Control

Article 23

The administrative departments of commerce at a higher level shall conduct supervision and inspection on the administration by the administrative departments of commerce at a lower level on the processed oil market control and promptly correct irregular acts in the work of processed oil market control.

Article 24

The administrative departments of commerce of the people's governments at various levels shall intensify the supervision and control on the local processed oil market and investigate into and deal with the irregular acts of enterprises engaging in processed oil business.

Article 25

No fees shall be charged for the administrative licensing for processed oil business or follow-up supervision and control by the competent administrative departments of commerce. The competent administrative departments of commerce shall apply to the local financial administration for funds required for processed oil market control.

Article 26

The Ministry of Commerce and the administrative departments of commerce of the people's governments at the provincial level shall publish the names of enterprises that have obtained a processed oil business license and of enterprises engaging in processed oil business that have had any change or been cancelled.

Article 27

No one may forge, sell or purchase, let, lend or otherwise transfer any certificate of approval for processed oil business.

Article 28

The processed oil for specific use by special users shall be used in accordance with the provisions of the state concerning the use level, use purpose and the extent of supply and may not be sold to others by such special users.

Article 29

The enterprises engaging in processed oil business shall do business lawfully and may not commit any of the following acts:

(1)

doing business without certificate or license or with certificate and license not consistent with each other or beyond its authorized scope of business;

(2)

failure of any filling station to use oiling machines or other measuring instruments or to use tax-control devices as required;

(3)

using any oiling machine that is not tested or exceeds the term of validity of test and that does not meet the requirements for explosion prevention, or modifying any oiling machine without authorization or skimping oil by other means;

(4)

mixing with impurities or imitations, passing a fake product off as a genuine one or passing a shoddy product off as high-quality one;

(5)

selling the processed oil whose use has been expressly prohibited by the state or whose quality is inferior;

(6)

dealing in processed oil that is smuggled or illegally refined;

(7)

driving up oil prices or dumping oil in violation of the processed oil price policy of the state; and

(8)

other activities prohibited by laws or regulations of the state.

Article 30

Each enterprise engaging in the retail of processed oil shall purchase processed oil from enterprises that is qualified for the wholesale of processed oil.

No enterprise engaging in the retail of processed oil may sell processed oil on a commission basis for any entity unqualified for the wholesale of processed oil.

No enterprise engaging in the wholesale of processed oil may sell processed oil to any enterprise unqualified for doing processed oil business.

When storing processed oil for other entities, an enterprise engaging in the storage of processed oil must verify the legality of the source of the processed oil.

Article 31

The competent administrative department of commerce that made a decision to give a processed oil business license or the competent administrative department of commerce at a higher level may, at the request of the interested parties or by virtue of its authority, annul the said decision, if

(1)

the decision was made by a functionary of the administrative organ by abusing his authority or neglecting his duty when the applicant did not fulfill the statutory requirements;

(2)

the decision was made beyond the authority;

(3)

the decision was made when the applicant was not qualified or did not fulfill the statutory requirements; or

(4)

it involves any other circumstances in which a decision on administrative licensing may be annulled according to law.

Chapter VI Legal Responsibility

Article 32

Any competent administrative department of commerce or any of its functionary who commits any of the following acts in violation of these Measures shall be ordered by the competent administrative department at a higher level to make corrections, with the directly responsible person in charge and other directly responsible personnel being given an administrative sanction when the case is of gross violation:

(1)

failing to accept an application that meets the statutory requirements;

(2)

failing to give an applicant the reasons for refusing to accept its application or to grant license;

(3)

granting a license to an applicant not meeting the statutory requirements or beyond its authority;

(4)

refusing to make an approval decision or failing, without reasonable ground, to make such a decision within the prescribed time limit for an applicant meeting the statutory requirements; and

(5)

failing to perform or effectively perform its supervisory duty, which causes serious consequences.

Article 33

Any competent administrative department of commerce that charges fees without authorization during its administrative licensing for processed oil business shall be ordered by the competent administrative department at a higher level to refund the fees illegally charged, with the directly responsible personnel being given an administrative sanction.

Article 34

Any enterprise engaging in processed oil business that commits any of the following acts shall be given an administrative penalty by the competent administrative department of commerce. When the circumstances are serious, its certificate of approval for processed oil business shall be revoked:

(1)

altering, selling, letting, lending or otherwise illegally transferring its certificate of approval for processed oil business;

(2)

any special user of processed oil selling specific oil without permission;

(3)

building any filling station or oil depot without observing the requirements or procedures provided for herein;

(4)

selling processed oil by mixing with impurities or imitations, passing a fake product off as a genuine one, passing a shoddy product off as high-quality one or passing an inferior product off as a standard one, or that expressly prohibited by the state.

(5)

selling smuggled processed oil;

(6)

any enterprise engaging in the wholesale of processed oil selling processed oil to any enterprise without a processed oil business license;

(7)

any enterprise engaging in the retail of processed oil purchasing processed oil from any enterprise without a license for the wholesale of processed oil;

(8)

obtaining a business license by means of fraud or bribery or other improper means;

(9)

doing business beyond its authorized scope of business;

(10)

concealing the relevant facts from, or providing false information or refusing to provide real information about its business activities to, the supervision and inspection authorities; and

(11)

other illegal acts as provided for by laws, regulations or rules.

Article 35

If any applicant conceals the relevant facts or provides false information, the competent administrative department of commerce shall make a decision of refusal to accept its application or grant a license, and give a warning to the applicant.

Article 36

Any citizen, corporation or other organization that engages in processed oil business without being licensed by the administrative department of commerce shall be prohibited and given an administrative penalty by the local competent administrative department of commerce in conjunction with other relevant departments.

Chapter VII Supplementary Provisions

Article 37

The power to interpret these Measures shall be vested in the Ministry of Commerce.

Article 38

These Measures shall go into effect as of January 1, 2005.