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INTERIM REGULATIONS ON THE LICENCING SYSTEM FOR IMPORT COMMODITIES

    Article 1  These Regulations are formulated to strengthen planning and
administration of imports, and to upgrade the economic efficiency, so as to
facilitate the construction of socialist modernization.

    Article 2  The People's Republic of China implements the licencing system
for import commodities. With respect to all those commodities subject to a
licence for import as stipulated in these Regulations, except as otherwise
provided by the state, an application must be filed in advance for obtaining an
import licenee, and the import order for the required commodities shall be
handled by a company approved by the state to be engaged in the import business
of the said commodities. The Customs shall give clearance against the import
licences and other relevant documents.

    Article 3  The Ministry of Foreign Economic Relations and Trade of the
People's Republic of China shall, on behalf of the state, be responsible for
the unified issue of the import licences.

    The departments of foreign economic relations and trade at the provincial
level may, within the scope of competence prescribed by the Ministry of Foreign
Economic Relations and Trade, issue import licences related to the importation
of the respective provinces, autonomous regions, or municipalities directly
under the Central Government.

    The Ministry of Foreign Economic Relations and Trade may also authorize its
accredited representatives' offices stationed at the main ports to issue,
within the prescribed scope of competence, the import Iicences.

    Article 4  Various categories of companies that have been approved by the
state to engage in import business must handle the import business operations
strictly in accordance with the approved scope of business and with the
catalogue of import commodities.

    The goods, which are imported by the national foreign trade corporations
engaged in specialized import and export business, or by import and export
companies attached to various ministries, or by import and export companies
attached to various provincial governments referred to by the term "companies"
mentioned in the preceding paragraph, shall, with the exception of those goods
under import restrictions imposed by the state, be exempt from the import
licences, and the Customs shall give clearance against the relevant import
documents.

    All departments and enterprises without the approval of the state to engage
in import business are forbidden to import goods without authorization.

    Article 5  The goods which are imported in accordance with the provisions
of the state, and with the approval of the relevant ministries or commissions
under the State Council or of the people's governments of the respective
provinces, autonomous regions, and municipalities directly under the Central
Government, for executing various agreements and contracts concluded with
parties from abroad for processing supplied materials, for assembling supplied
parts and components, for compensation trade, or for contracting of
construction projects, and which have not exceeded the scope of the approved
items, shall be exempt from import licences. However, where the importation
with respect to the compensation trade or the contracting of construction
projects goods under import restrictions by the state; or where the materials
or the parts and components or the finished products after processing, imported
for executing contracts for processing supplied materials or for assembling
supplied parts and components are needed to diverse for domestic sale, an
application must filed for obtaining an import licence.

    Article 6  In respect of the importation of goods under import restrictions
imposed by the state, irrespective of their forms of import, sources of
foreign exchange, and channels for import, the matter shall be submitted to the
competent administrative departments and the relevant examining departments
for examination and approval in accordance with the scope of competence and
limits of authority for examination and approval provided by the state; and
then, the ordering units shall apply for the import licences by presenting the
approval document.

    The varieties of goods under import restrictions imposed by the state shall
be uniformly adjusted and made known to the public by the Ministry of Foreign
Economic Relations and Trade in accordance with the provisions formulated by
the state.

    Article 7  The following imports, which do not fall under the scope of
varieties stipulated in the second paragraph of the preceding article, shall be
exempt from the import licences:

    1. samples purchased or provided free of charge by foreign businessmen, in
the course of import and export business, by various categories of companies
which have been approved by the state to engage in import and export business;

    2. articles urgently required for professional usage which are purchased
from abroad at the international market price of 5,000 U.S. dollars or less, by
such departments as scientific research, education, culture, physical culture,
medicine, and public health, with the approval of the Ministry of Foreign
Economic Relations and Trade, or the administrative departments of foreign
economic relations and trade at the provincial level, or the accredited
representatives' offices of the Ministry of Foreign Economic Relations and
Trade stationed at various ports;

    3. machinery and electrical instruments and fittings urgently required in
production which are purchased from abroad by industrial or mining enterprises
at the international market price of 5,000 U.S. dollars or less, with the
approval of the Ministry of Foreign Economic Relations and Trade, or the
administrative departments of foreign economic relations and trade at the
provincial level, or the accredited representatives' offices of the Ministry of Foreign Economic Relations and Trade stationed at various ports;

    4. commodities imported with the special approval by the state.

    The Customs shall give clearance to the imported goods mentioned in Items
2, 3 and 4 of the preceding paragraph against the approval documents.

    Article 8  With respect to the goods purchased as mentioned in Items 2 and
3 of the first paragraph of the preceding article, if they are bought at an
international market price that exceeds the prescribed limit, an application
must be filed for obtaining the import licences.

    If departments or public institutions other than those mentioned in Items 2
and 3 of the first paragraph of the preceding article are to purchase from
abroad the urgently required articles, they must also apply for obtaining the
import licences.

    Article 9  With respect to the goods and materials required in production
by Chinese-foreign equity joint ventures, if they cannot be obtained in the
domestic market, the aforesaid equity joint ventures may order them from abroad
through the relevant foreign trade companies, or the equity joint ventures
may, within their scope of business operation, import the goods and materials
by themselves. Matters concerning the scope of and the procedures for the
import licenoes shall be handled in accordance with the provisions of Article
63 of the Rules for the Implementation of the Law of the People's Republic of
China on Chinese-Foreign Equity Joint Ventures.

    Article 10  Under any one of the following circumstances, the Ministry of
Foreign Economic Relations and Trade shall not issue the import licence, or
revoke the import licence already issued:

    1. goods the importation of which the state has decided to stop or to stop
for the time being;

    2. goods the importation of which is not in conformity with the foreign
policy of the state;

    3. the imported goods that are not in conformity with the contents of
bilateral trade agreements or the agreements of payment;

    4. the imported goods that are not in conformity with the sanitation
criteria or the quarantine criteria for medicine, foodstuff, animals and
plants, agricultural products, livestock products, aquatic products. as set by
the state public health departments and the departments of agriculture, animal
husbandry and fishery;

    5. other imported goods that jeopardize the interests of the state, or that
are handled illegally.

    Article 11  To apply for the import licence, the applicant must present an
official certifying letter issued by a unit at the provincial department or
bureau level or higher, and submit also the certifying document indicating the
approval of the importation of the said goods by the relevant competent
administrative departments and the examining departments. The application shall
contain such items as the names of the imported goods, specifications,
quantity, amount of money paid, purposes of usage, the
country from which the goods are to be imported, sources of foreign exchange,
and the domestic units that shall conclude the transaction with external units.
The licence issuing department shall issue the import licence after it has
examined the application and found it to be in conformity with relevant
provisions.

    In applying for the licence for import goods, the applying unit must make
the application strictly according to the facts and must not resort to
deception or trickery. Violators shall be investigated and punished.

    Article 12  The term of validity of the import licence shall be one year.
In the event that within the term of validity the goods have not been imported,
the unit that holds the licence may make an application to the licence issuing
authorities for an extension of the term of validity; the licence issuing
authorities may, in accordance with the stipulations of the relevant contract,
extend the term of validity accordingly.

    Article 13  In the event of a violation of the provisions of these
Regulations, with respect to the goods imported arbitrarily without applying
for the import licence in advance, the Customs may confiscate the goods or give
an order for the goods to be shipped back; where the importation has been
verified by the licence issuing department and the import licence has been
issued afterwards, the Customs may, at its discretion, impose a fine on the
violator and then give clearance. With respect to the forgery, alteration or
illegal transfer of the import licence, the case shall be dealt with by the
Customs in accordance with the pertinent provisions of the Customs laws and
regulations.

    Article 14  Matters concerning goods imported by the special economic zones
for the use within the special economic zones shall be handled in accordance
with the special provisions of the special economic zones; matters concerning
the imported goods and the goods manufactured in the special economic zones,
which are to be transported to the inland of the country, shall all be handled
in accordance with the provisions of these Regulations.

    Article 15  The Ministry of Foreign Economic Relations and Trade shall be
responsible for the interpretation of these Regulations; and the rules for the
implementation of these Regulations shall be formulated jointly by the Ministry
of Foreign Economic Relations and Trade and the General Administration of
Customs.

    Article 16  These Regulations shall go into effect as of the date of
promulgation.?