Laws of the People's Republic of China

Measures for Foreign Exchange Management in International Maritime Industry State Administration of Foreign Exchange

May 26, 2001

In order to promote the further development of international maritime industry, standardize the management over the foreign exchange receipts and disbursements in the international maritime industry, after consultation with the Ministry of Communication, the Ministry of Foreign Trade and Economic Cooperation and other departments, related issues concerning the management of the purchase and payment of foreign exchange and the accounts of foreign exchange in international marine are hereby notified as follows:

1.

Maritime freight and related charges under the international trade must be paid by enterprises which are authorized to engage in import and export trade by the departments of Foreign Trade and Economic Cooperation (hereinafter referred to as freighters) from their foreign exchange accounts or by purchasing foreign exchange in the designated foreign exchange banks to domestic international shipping agencies (hereafter referred to as shipping agencies) which have been approved by the communication departments to engage in the international shipping agency business, or international shipping transport companies (hereinafter referred to as shipping transport companies) which have been approved by the communication departments to engage in the international carrying trade , or domestic solely foreign-funded shipping enterprises . Freighters may entrust international goods transport agencies (hereinafter referred to as goods transport agencies), which have been approved by the departments of Foreign Trade and Economic Cooperation to engage in the international goods agency business to pay the maritime freight and other charges for themselves.

Freighters may not pay the maritime freight and related charges directly to overseas transport enterprises in international trade. Any maritime freight and related charges received within the territory of China may not go through the procedures of remitting abroad only after the overseas transport enterprises have authorized domestic shipping agencies or domestic solely foreign-funded shipping enterprises to go through related procedures in accordance with the Measures for Tax Collection of Shipping Transport Incomes of Foreign Companies.

2.

When the freighters pay the international maritime freight and related charges in international trade to domestic goods transport agencies, shipping agencies, shipping transport companies and solely foreign-funded shipping enterprises, they shall apply to pay or purchase foreign exchange from their foreign exchange accounts in the designated foreign exchange banks with the following certificates and documents. The procedures of purchasing or paying the foreign exchanges shall be gone through only after the designated foreign exchange banks have examined and guaranteed the correctness, and the originals of the special invoices for international transport industry of joint foreign exchange purchase and payment shall be kept for 5 years for archivist purposes: (1) import contracts or export contracts; (2) special invoices for international transport industry.

Special invoices for international transport industry refer to the "special transport invoices for international maritime industry", "special invoices for shipping agency of international maritime industry" provided in the Circular of Related Issues concerning the Implementation of Special Invoices for International Maritime Industry (No.9 (2000) SAT) issued by the State Administration of Taxation and the Ministry of Communications, and the "special invoices for international goods transport agency industry" provided in the Circular of Adding Joint Foreign Exchange Purchase and Payment in the ˇ®Special Invoices for International Goods Transport Agency Industry' (Letter No.155 (2001) SAT) issued by the State Administration of Taxation and the Ministry of Foreign Trade and Economic Cooperation

3.

The goods agencies may go thorough the procedures of transferring the international maritime freight and related charges to the domestic shipping agencies with the "special invoices for marine agency of international maritime industry"; the goods agencies and shipping agencies may go thorough the procedures of transferring the international maritime freight and related charges to the domestic shipping transport companies or solely foreign-funded shipping enterprises with the "special transport invoices for international maritime industry" .

Neither goods agencies nor shipping agencies may purchase foreign exchange to pay international maritime freight and related charges.

4.

When the shipping transport companies pay port charges, fuel charges and other related transport charges under the head of international transport, they shall pay the charges from their foreign exchange accounts with invoices or payment lists and other related certificates and may not pay the charges by purchasing foreign exchange. .

5.

The goods agencies, shipping agencies and shipping transport companies may open special foreign exchange accounts for international maritime business upon the approval of the State Administration of Foreign Exchange or its subsidiaries (hereinafter referred to as foreign exchange administrations).

6.

The special foreign exchange accounts for international maritime business opened by the goods agencies and shipping agencies may receive international maritime freight and related charges paid by domestic freighters, goods agencies and shipping agencies, and the international maritime freight and related charges paid abroad; The accounts may be used to pay international maritime freight and related charges paid abroad, and the international maritime freight and related charges transferred to domestic goods agencies, shipping agencies, shipping transport companies and solely foreign-funded shipping enterprises .

7.

The special foreign exchange account for international maritime opened by the shipping transport companies may be used to receive international maritime freight and related charges paid by domestic freighters, goods agencies and shipping agencies, and the international maritime freight and related charges paid abroad; and such accounts may be used to pay port charges, fuel charges and related charges paid abroad.

8.

The goods agencies, shipping agencies, shipping transport companies shall open the special foreign exchange accounts for international maritime shipping in accordance with the related provisions in Chapter 2 of the Provisions Concerning the Management of Domestic Foreign Exchange Accounts

9.

When the goods agencies, shipping agencies and shipping transport agencies open special foreign exchange accounts for international maritime shipping, the Administration of Foreign Exchange shall appraise and decide the maximum amount limitations of the accounts in accordance with 3 times of the monthly average amount of foreign exchange used in last year, and shall indicate it in the Use Permit of Foreign Exchange Account.

Regarding the newly established goods agencies, shipping agencies, shipping transport companies, the maximum amount limitations of their accounts shall be appraised and decided in accordance with the maximum limitations of the same kind of enterprises of the same size. The Administration of Foreign Exchange shall adjust the maximum amount limitations of the accounts for the year.

10.

The opening and usage of foreign exchange accounts of solely foreign-funded shipping enterprises, as well as the appraisal and determination of the maximum amount limitations shall be in accordance with the Regulation on Administration of Domestic Foreign Exchange Account and other provisions in respect of the management of foreign exchange accounts.

11.

If the foreign exchange income of the goods agency, shipping agency, shipping transport company or solely foreign-funded shipping enterprises exceed the maximum amount limitations of foreign exchange account thereof, the agency or company shall sell foreign exchange to the designated foreign exchange banks within 5 workdays, and for those failed to settle the foreign exchange before the expiry date, the banks at which they have opened an account shall report to the local administration of foreign exchange and the administration shall order the agency or company to settle the foreign exchange.

12.

The foreign exchange administrations shall, jointly with the departments of foreign trade and economy and the departments of traffic management, check the expenses and receipts, sales and purchase of foreign exchange and account opening of domestic goods agencies, shipping agencies and shipping transport companies on a yearly basis. And the administrations of foreign exchange shall punish those that violate the related provisions concerning foreign exchange management in accordance with the Regulations of the People's Republic of China on the Administration of Foreign Exchange and other provisions.

13.

The designated foreign exchange banks and the financial institution which open the accounts shall take the response for go through the procedures of receiving, paying, selling and purchasing the foreign exchange and opening the account for the goods agencies, shipping agencies, shipping transport companies, solely foreign-funded shipping enterprises and freighters in accordance with the provisions of the present circular and other provisions concerning foreign exchange management. The administrations of foreign exchange shall punish those that violate the provisions in accordance with the Regulations of the People's Republic of China on the Administration of Foreign Exchange and other provisions.

14.

The present Circular shall enter into force as of June 1, 2001. In case any provisions previously promulgated conflict with the present circular, the present circular shall prevail.