Laws of the People's Republic of China

    Article 1  Vessel tonnage dues (hereinafter referred to as tonnage) shall
be levied by the Customs in accordance with these Measures on foreign
registered vessels and Chinese registered vessels chartered by foreign firms
and Chinese or foreign registered vessels used by Chinese-foreign equity joint
ventures (including vessels sailing exclusively within the ports) sailing in
the ports of the People's Republic of China.

    It is not necessary for the said vessels paying tonnages to pay additional
vehicle and vessel service licence fees to the tax authorities.

    Article 2  Tonnages are divided into two types: one to be paid once every
three months and the other to be paid once every 30 days, to be chosen by the
payers themselves when they apply for the payment of the tonnages. The scale
and rate of the tonnages are as follows:

    1. Those to be paid once every three months:

  ----------------------------------------------------------------------

  |  Category of  |      Tonnes     |Tonnage per tonne|    Remarks     |

  |    Vessel     |                 |   (RMB yuan)    |                |

  |---------------|-----------------|-----------------|----------------|

  |               | below 50 tonnes |   3 jiao        |Tonnages to be  |

  |               |    51 tonnes to |                 |calculated and  |

  |               |      150 tonnes |   3 jiao 5 fen  |levied by net   |

  |               |   151 tonnes to |                 |weight. The odd |

  |               |      300 tonnes |   4 jiao        |amount less than|

  |               |   301 tonnes to |                 |1/2 tonne is    |

  |               |      500 tonnes |   4 jiao 5 fen  |exempt from     |

  |Power-driven   |   501 tonnes to |                 |taxation; 1/2   |

  |               |    1,000 tonnes |   6 jiao        |tonne or more is|

  |Vessels (Steam-| 1,001 tonnes to |                 |considered as 1 |

  |               |    1,500 tonnes |   7 jiao 5 fen  |tonne. Small    |

  |ships, motor-  | 1,501 tonnes to |                 |vessels less    |

  |               |    2,000 tonnes |   9 jiao        |than 1 tonne    |

  |boats or       | 2,001 tonnes to |                 |shall be taxed  |

  |               |    3,000 tonnes |   1 yuan 1 jiao |as 1 tonne      |

  |tugboats)      | 3,001 tonnes to |                 |except for those|

  |               |    4,000 tonnes |   1 yuan 3 jiao |those enjoying  |

  |               | 4,001 tonnes to |                 |exemption       |

  |               |    5,000 tonnes |   1 yuan 5 jiao |specially       |

  |               |over 5,001 tonnes|   1 yuan 8 jiao |granted by the  |

  |               |                 |                 |General Custom  |

  |               |                 |                 |Administration. |

  |---------------|-----------------|-----------------|----------------|

  |Non-power-     | below 10 tonnes |   1 jiao 5 fen  |                |

  |Driven Vessels |  11 tonnes to   |                 |                |

  |(various       |     50 tonnes   |   2 jiao        |                |

  |manually-      |  51 tonnes to   |                 |                |

  |driven boats,  |    150 tonnes   |   2 jiao 5 fen  |                |

  |lighters and,  | 151 tonnes to   |                 |                |

  |junks)         |    300 tonnes   |   3 jiao        |                |

  |               | over 301 tonnes |   3 jiao 5 fen  |                |

  ----------------------------------------------------------------------

    2. Those to be paid once every 30 days shall be levied at half the rates
in the above list.

    The tonnage shall be levied on an incoming vessel from the date of its
declaration for entry. If the vessel does not leave China at the expiration
of the tonnage licence, the levy shall continue as of the next day of the
expiration.

    Article 3  The tonnage for a vessel which is registered in or belongs to
a foreign country which has entered into a treaty or agreement with the
People's Republic of China for mutual preferential treatment of tonnages or
fees levied on vessels shall be levied at a preferential rate. The rates of
tonnages to be levied once every three months are as follows:

  ----------------------------------------------------------------------

  |  Category of  |      Tonnes     |Tonnage per tonne|    Remarks     |

  |    Vessel     |                 |   (RMB yuan)    |                |

  |---------------------------------------------------------------------

  |               | below 50 tonnes |   3 jiao        |The procedures  |

  |               |    51 tonnes to |                 |for calculaion  |

  |               |      150 tonnes |   3 jiao 5 fen  |and levy are    |

  |Power-driven   |   151 tonnes to |                 |the same as in  |

  |               |      300 tonnes |   4 jiao        |the preceding   |

  |Vessels (Steam-|   301 tonnes to |                 |list.           |

  |               |      500 tonnes |   4 jiao 5 fen  |                |

  |ship, motor-   |   501 tonnes to |                 |                |

  |               |    1,000 tonnes |   5 jiao 5 fen  |                |

  |boats or       | 1,001 tonnes to |                 |                |

  |               |    1,500 tonnes |   6 jiao 5 fen  |                |

  |tugboats)      | 1,501 tonnes to |                 |                |

  |               |    2,000 tonnes |   8 jiao        |                |

  |               | 2,001 tonnes to |                 |                |

  |               |    3,000 tonnes |   9 jiao 5 fen  |                |

  |               |over 3,001 tonnes|   1 yuan 1 jiao |                |

  |--------------------------------------------------------------------|

  |Non-power-     | below 10 tonnes |   1 jiao 5 fen  |                |

  |Driven Vessels |  11 tonnes to   |                 |                |

  |(various       |     50 tonnes   |   2 jiao        |                |

  |manually-      |  51 tonnes to   |                 |                |

  |driven boats,  |    150 tonnes   |   2 jiao 5 fen  |                |

  |lighters and,  | 151 tonnes to   |                 |                |

  |junks)         |    300 tonnes   |   3 jiao        |                |

  |               | over 301 tonnes |   3 jiao 5 fen  |                |

  ----------------------------------------------------------------------

    If a vessel paying the tonnage as stipulated under this Article applies
to make payment once every 30 days in accordance with the procedures in the
preceding Article, the tonnage shall be levied at half the rates in the above
list.

    Article 4  A foreign registered vessel or a Chinese registered vessel
chartered by a foreign firm shall submit the vessel tonnage licence and the
declaration at the Customs for examination and entry or clearance purposes
as stipulated by the Customs when it arrives at or leaves a port where there
is a Customs establishment. If the original licence has expired at the time
of entry or the tonnage has not been paid before, it shall file a declaration
at the time of entry, make the declaration at the Customs and pay the tonnage
by submitting (1) the certificate of the vessel's registry (or the testimonial
signed and issued by the port authorities to testify that this certificates
has been kept in their custody) and (2) the certification of the vessel's
tonnage for examination.

    Article 5  If the term of validity of the tonnage licence of the above
vessel has expired after its declaration for entry or if it sails exclusively
within the port, it shall make a declaration at the Customs, pay the tonnage
and obtain a new licence as stipulated in the preceding Article upon
expiration of the original licence. If it fails to make a declaration and pay
the tonnage within 5 days of expiration, it shall be fined according to file
stipulation in Article 14 of these Measures.

    Article 6  A foreign registered vessel specially permitted to sail to or
from a place where there is no Customs establishment shall submit the vessel
tonnage licence to the local port authorities for examination (it shall be
submitted to the local frontier public security organs or frontier forces for
examination in a place without port authorities) as stipulated in Article
4 of these Measures when it arrives at or leaves the port. At the expiration
of the original licence, it shall also make a declaration at the local tax
bureau as stipulated in Article 4 and Article 5 of these Measures and the
bureau shall collect the tonnage and issue a new licence in lieu of the
Customs according to these Measures. If it fails to make a declaration within
the time limit, it shall be fined in accordance with Article 14.

    Article 7  The payer shall pay the tonnage within 5 days (Sundays and
statutory holidays excepted) of the issue of the Notice of Tonnage Payment by
the Customs (or the tax bureau) and the Customs (or the bureau) shall issue
the vessel tonnage licence. If the time limit is exceeded, the Customs (or the
bureau) shall collect a fine for delaying payment of 1 millesimal of the
payable tonnage daily from the sixth day to the day of full payment of the
tonnage and pay it into the treasury as Customs fines.

    Article 8  In the case of a Chinese registered vessel chartered by a
foreign firm or a foreign registered vessel chartered by a Chinese public or
private enterprise, the vehicle and vessel service licence tax or the vessel
tonnage already paid shall remain valid if it has not expired at the beginning
or termination of the charter. However. the vessel shall make a declaration
at the Customs' and pay the tonnage or make the declaration at the tax bureau
and pay the vehicle and vessel service licence tax upon its expiration on the
basis of the charter at the time.

    Article 9  The tonnage amount shall not be readjusted within the term of
validity of the tonnage licence already obtained even if the net weight of a
vessel is increased or reduced due to repairs. However, at the time of the
next payment of tonnage, an application shall be made for the adjustment of
the tonnage amount on the basis of the certificate of tonnage after its
change of weight. If the increase in weight is not disclosed and declared
with the intention of evading tonnage payment, the vessel shall be fined as
stipulated in Article 14 of these Measures.

    Article 10  In any of the following cases for a vessel which has paid
tonnage, the Customs shall annotate and comment on the extension of the term
of the licence validity according to the actual number of days after examining
the papers submitted by the port authorities:

    (1) a vessel sailing into a port in the country for asylum or repair;

    (2) a vessel under quarantine and unable to embark or disembark passengers
or cargos;

    (3) a vessel having been commandeered and chartered by the Central
Government or a local people's government.

    Article 11  The following foreign registered vessels shall be exempt
from tonnages:

    (1) vessels for use by embassies, legations and consulates of countries
having diplomatic relations with China;

    (2) vessels with papers from the local port authorities to take asylum,
undergo repairs, suspend service or be disassembled and not to embark or
disembark passengers or cargos;

    (3) mooring pontoons, floating-bridge pontoons and floating boats used
exclusively for embarking or disembarking passengers or cargos and storing
goods;

    (4) vessels commandeered or chartered by the Central Government or local
people's governments;

    (5) international vessels which are exempt from making declarations at
the Customs for entry as stipulated in Article 27 of the Provisional Customs
Law.(Note 1.)

    Article 12  If a charter-party goes through Customs formalities before
the vessel arrives at the port, it shall submit a written guarantee to the
Customs house to assure submission upon entry of the vessel of the tonnage
licence for examination or payment of the tonnage and application for licence
according to regulations. The term of validity of the licence shall begin on
the date of the vessel's declaration for entry.

    Article 13  If the tonnage licence obtained by a charter-party is defaced
or lost during the term of validity, it shall make a written application to
the original licence-issuing Customs establishment (or for tax bureau) for a
copy of the tonnage licence. No further payment required.

    Article 14  All formalities shall be observed within the time limit set.
A charter-party who fails to make a declaration, pay the tonnage and obtain
the licence shall be fined not more than three times the payable tonnage
amount and the fine shall be paid into the treasury as Customs' fines.