Laws of the People's Republic of China

The Ministry of Foreign Trade and Economic Cooperation

Order of the Ministry of Foreign Economic Relations and Trade of the People's Republic of China

No.11

The Measures for the Invitation of Bid for Export Commodity Quotas which is enacted according to the Foreign Trade Law of the People's Republic of China and the Regulation of the People's Republic of China on the Administration of the Import and Export of Goods has been passed at the ninth executive meeting of the ministers of the Ministry of Foreign Trade and Economic Cooperation of the year 2001 and is hereby promulgated for implementation as of January 1, 2002.

Minister of the Ministry of Foreign Trade and Economic Cooperation : Shi Guangsheng

October 20, 2001

Measures for the Invitation of Bid for Export Commodity Quotas

Chapter I General Provisions

Article 1

The present Measures have been formulated according to the Foreign Trade Law of the People's Republic of China and the Regulation of the People's Republic of China on the Administration of the Import and Export of Goods for the purpose of perfecting the administrative system of export commodity quotas, establishing a mechanism of fair competition, safeguarding the overall interests of the state and the lawful rights and interests of the export enterprises and maintaining the normal order of foreign trade activities.

Article 2

An invitation for bid may be carried out for the export of commodities subject to the administration of quotas. The export enterprises onerously obtains uses the export commodity quotas as determined by the state by independently submitting a bid for competition.

Article 3

The Ministry of Foreign Trade and Economic Cooperation (hereinafter referred to as "MOFTEC") is in charge of the uniform administration of the invitation for bid for the export commodity quotas and is responsible for determining and publicizing the types of commodities as well as the total amount of commodities subject to the invitation for bids.

Article 4

The principles of "efficiency, impartiality, openness and fair competition" shall be followed in the invitation for bid for the quotas of export commodities.

Article 5

The present Measures shall be applicable to the commodities subject to the invitation for bid which are to be exported to the global markets in all kinds of trade methods, including the export by way of general trade, processing with imported materials, processing materials supplied by customers, barter trade, border trade, compensation trade, etc. and the commodities subject to the invitation for bid which result from the contracting of projects and labor services export, however, with the exception of those for which there are otherwise provisions by the State Council.

Article 6

The principles for determining the commodities subject to the invitation for bid are:

1.

bulk resources commodities that are not renewable;

2.

the commodities that occupy a leading position in the international market and the prices of which are not easily affected by the volume of export;

3.

the commodities that are in oversupply, in relatively dispersed management and are liable to dumping at low prices and thus causing antidumping litigations of foreign countries.

4.

the commodities that are subject to the administration of export quotas as prescribed in the multi-lateral and bilateral agreements as concluded between China and those countries that has set limits for the commodities.

Chapter II Administrative Organs for the Invitation for Bids

Article 7

The MOFTEC is responsible for the leadership and supervision of invitations for bids via the Committee for the Invitation for Bid for Export Commodity Quotas (hereinafter referred to as "CIBECQ") which is directly responsible to the MOFTEC. The CIBECQ consists of the leaders of the MOFTEC and the members from relevant departments and bureaus under the MOFTEC.

Article 8

The CIBECQ has the following functions and duties:

1.

determining, according to the different circumstances, the times of invitations for bids for specific commodities, the quantity of quota for each invitation for bid, the way of invitation for bid and the proportion of each way of invitation for bid within the total invitations for bids;

2.

examining the plans for the invitations for bids for the export commodity quotas, taking charge of the opening and appraisals of bids, and examining the result of bid-winning of the invitations for bid for quotas;

3.

releasing all kinds of notices, public announcements and decisions, etc concerning the invitations for bids for quotas;

4.

accepting the quotas submitted by the office of invitation for bids and the record-keeping of the transfer of quotas;

5.

inspecting the collection of the caution money for winning bids and bid-winning money as well as the use of the quotas;

6.

checking and ratifying the list of enterprises for tendering bids according to the qualifications for the tendering of bids.

The department in-charge under the MOFTEC shall be responsible for the routine work of the CIBECQ.

Article 9

The CIBECQ shall set up offices for the invitation for bid for export commodity quotas (hereinafter referred to as "OIB") within the relevant chambers of commerce for import and export according to the types of commodities subject to the invitation for bid.

The OIBs shall be responsible for the specific work of implementing the invitations for bids. The OIBs shall consist of representatives from the relevant chambers of commerce for import and export, the China Society of Enterprises with Foreign Investment and other relevant departments for the coordination among different industries and shall be responsible to the CIBECQ.

The relevant chambers of commerce for import and export shall be responsible for the routine work of their respective OIB.

Article 10

The functions and duties of the OIBs are: drawing out plans of invitations for bids for specific commodities according to the opinions of different industries; reviewing the list of enterprises to be allowed to tender bids according to the qualifications for the tendering of bids; participating in the opening and appraisal of bids, checking the payment of caution money for winning bids and the bid-winning money by the enterprises; accepting the quotas submitted by the enterprises, accepting and ratifying the applications of the enterprises for transferring their quotas; tracking and keeping informed of the use of quotas and licenses as well as the changes in the commodities subject to invitations for bids and the markets thereof, and report such information to the CIBECQ; printing and issuing bid-winning certification document according to uniform formats and relevant provisions, and handling other matters relating to the invitation for bid as requested by the CIBECQ.

Chapter III Qualifications for the Invitation for Bid

Article 11

Qualifications for the invitation for bid

The invitation for bid for export commodity quotas shall be carried out by means of public invitations and negotiated invitations. Different ways of bid invitations may be adopted for different commodities.

Any export enterprise (including enterprises with foreign investment) that has the qualifications for import and export business operations, has been registered at the administrations for industry and commerce, and has joined relevant chambers of commerce for import and export (in case of an enterprise with foreign investment, it has joined the China Society of Enterprises wtih Foreign Investment), and whose volume of export or amount of export supply of relevant commodities has come up to a certain rate may participate in the bid invitations after being registered at relevant OIBs and satisfying the conditions of bid invitations. The qualifications for the public invitations and negotiated invitations of different commodities shall be separately formulated by the MOFTEC according to the present Measures on the basis of different commodities.

Article 12

Examination of the qualifications for the tendering of bids

The commissions, departments and bureaus of all provinces, autonomous regions, municipalities directly under the Central Government and the municipalities separately listed on the State plan (hereinafter referred to as "local departments of foreign trade") shall make preliminary examinations over the qualifications of the bid-tendering enterprises of the locality according to the requirements of the CIBECQ and submit relevant materials. The OIBs shall carry out reviews of the qualifications of the bid-tendering enterprises within the prescribed time limits and report the results of reviews together with relevant materials to the CIBECQ for examination and approval.

Article 13

The export performances of the bid-tendering enterprises shall be based on the statistics of the customs offices.

Chapter IV Rules and Procedures for the Appraisal of Bids

Article 14

The CIBECQ shall take charge of the bid invitations for export commodity quotas.

Article 15

In any of the following circumstances, an electronic bid shall be deemed as an invalid bid:

1.

a bid that the enterprise applies to the OIB for invalidation prior to the opening of bids;

2.

a bid serviced after the prescribed deadline;

3.

a same enterprise has successfully serviced more than two (including two) bids before the deadline without regard whether the bids are the same or not;

4.

other circumstances under which a bid shall be invalidated according to the present Measures.

Article 16

In the case of a public invitation, the enterprises may independently decide the price for tendering their bids. The CIBECQ may, according to the specific situations, predetermine and publicize the minimum price for tendering bids.

If the price in the bid tendered by an enterprise is too high or is obviously against the history of prices, the bid shall be deemed as an invalid one.

The minimum price for tendering a bid in negotiated invitations may be determined by the CIBECQ according to the average profits of specific commodities exported, the market situation of the export commodities, the bid-winning prices for the quotas in the past years and other relevant elements.

Article 17

In order to avoid the over-concentration or over-decentralization of bid-winning quotas, the CIBECQ may set a maximum and minimum limit for specific commodities. A bid that is higher than the maximum limit or lower than the minimum limit shall be deemed as an invalid one.

Article 18

The enterprises shall tender their bids by way of electronic bids prior to the prescribed time limit, and the electronic version of the bids shall prevail. Only one bid may be submitted for a same commodity in a same way. An enterprise that cannot submit its electronic bid prior to the prescribed time limit shall be deemed as automatically quitting the bid tendering.

Article 19

The determination of the bid-winning enterprises

In the case of public invitations: All the eligible bid-tendering enterprises shall be arrayed in terms of the prices of the bids with the highest coming first, and the quantity of bids of the bid-tendering enterprises shall be accumulated according to the sequence. When the accumulated quantity of bids tendered is identical to the total amount bids invited for, the enterprise that falls within the total amount of accumulated (namely, the total amount of bids invited) shall be a bid-winning enterprise.

If the sum of the bids tendered by the enterprises that fall within the minimum limit for winning the bid exceeds the quantity of remained quotas, all such enterprises shall be the winners of the bid.

In the case of a negotiated invitation: All the enterprises whose bidding prices are not lower than the minimum prices as prescribed by the CIBECQ shall be the winners of the bid.

Article 20

The determination of the bid-winning prices and quantities

1.

The bid-winning prices of the bid-tendering enterprises in a public invitation shall be the prices of the tendered bids. The bid-winning prices of the bid-tendering enterprises in a negotiated invitation shall be separately determined by the CIBECQ according to the specific situations of the different commodities.

2.

The determination of the bid-winning quantities

(1)

In a public invitation, the bid-winning quantity of the bid-winning enterprise shall be the quantity of the tendered bids. If the total sum of the tendered bids of the enterprises that fall within the minimum bid-winning prices exceeds the quantity of the remained quotas, the enterprises whose price is above the limit shall share the remained quotas among themselves. If the total sum of the bid-winning quantities is lower than the minimum bid-tendering quantity, they shall be deemed as failing the bid.

(2)

The bid-winning quantity in a negotiated bid:

a. The bid-winning quantity of an enterprise shall be calculated according to the following formula:

Bid-winning quantity of the enterprise = total amount of bid invitation * [amount of money tender by the enterprise (price for quota in the tender bid * the quantity in the tendered bids) / the total sum of the money in the tendered bids of all bid-winning enterprises (price for quota in the tender bid * the quantity in the tendered bids)] or

b. The maximum bid-winning quantity of an enterprise shall be the quantity of the bids tendered thereby.

The total bid-winning amount shall of an enterprise with foreign investment for a whole year shall be limited to the scale of export of the enterprise as ratified by the MOFTEC.

Article 21

The CIBECQ shall publicize public announcements of bid invitations on designated mass media.

Article 22

The OIBs shall publicize the preliminary results of bid winning within the prescribed time limit after the bid appraisal is finished. In case any bid-tendering enterprise is in doubt, it may interrogate the competent OIB within 2 working days after the preliminary result of bid winning is publicized. The OIB shall, within 3 working days after the publication, report the preliminary bid-winning results to the CIBECQ for examination and approval.

Article 23

After examining and approving the result of bid winning, the CIBECQ shall inform the OIBs in time and publicize the names of the bid-winning enterprises.

Chapter V Bid-winning Money

Article 24

The payment of the bid-winning money

The bid-winning enterprises determined according to the rules for appraising the bids shall pay caution money for winning the bid and bid-winning money according to relevant provisions. The proceeds from the bid invitations shall be turned into the Central Fund for Developing Foreign Trade.

The CIBECQ shall open special accounts at designated banks for the collection of caution money and bid-winning money. The specific matters may be entrusted to relevant chambers of commerce for import and export for handling.

The OIBs shall report to the CIBECQ about the collection of the caution money within 5 working days after the deadline for collecting the caution money expires.

Article 25

The bid-winning enterprises shall pay caution money and bid-winning money according to the following provisions and such money may not be paid by other enterprises instead:

1.

The bid-winning enterprises shall transfer the caution money for winning bids to the accounts at designated banks by way of checks, bills, or remittances within the prescribed time limit. The specific proportion of the caution money for winning bids shall be separately determined by the CIBECQ according to the specific situations of the commodities. The caution money will not be refunded without regard to the use of the quotas won in the bids.

2.

Prior to applying for an export license each time, the bid-winning enterprise shall pay the balance of the bid-winning money to the designated bank accounts according to the quota specified in the application for export license.

Article 26

The OIB concerned shall, after receiving the bid-winning money paid by the enterprise, issue a certification document to the enterprise concerning the application for an export license of commodities subject to quota administration.

Chapter VI Turn-over, Transfer, Acceptance and Withdrawal of Quotas

Article 27

Where a bid-winning enterprise cannot use or use up the bid-won quotas, it shall turn over or transfer the quotas according to prescribed procedures.

Article 28

The time for turning over the quotas of export commodities subject to bid invitation shall be determined by the CIBECQ according to the specific situations of different commodities.

Article 29

A bid-winning enterprise may not file an application for transferring its quotas of export commodities until it has paid the bid-winning money to the designated bank accounts according to the proportion as set down by the CIBECQ.

Article 29

Both parties to the transfer of the quotas shall submit their application for transferring and accepting the quotas to the OIB concerned for examination and approval. The transferee of the quotas shall have the qualifications for tendering bids. The measures for encouraging or restricting the transfer of bid-won quotas between different commodities shall be separately determined by the CIBECQ.

Article 30

The bid-won quotas for which the bid-winning money is not paid in full amount at the expiration of the prescribed time limit shall be deemed by the CIBECQ as unusable and be withdrawn by the CIBECQ, and the caution money already paid shall not be refunded. The specific date for withdrawing the quotas shall be separately determined by the CIBECQ, and the a certain proportion of the withdrawn quotas shall be deemed as wasted quotas and be calculated in the rate of waste quotas.

Article 31

With regard to the quotas that have been withdrawn or turned over and other remained quotas, the CIBECQ may hold additional bid invitations according to the largeness of the quotas or it may deal with the quotas by other means as ratified by the MOFTEC.

Chapter VII Export Licenses

Article 32

The bid-won quotas shall be valid for the current year. After obtaining the quotas, the enterprise shall apply to the designated authorities for export licenses during the valid term of the quotas.

The list of names of the enterprises that have won bids of quotas together with the bid-winning quantities shall be subject to the examination and approval of the MOFTEC and distributed to the license-issuing authorities and the local departments of foreign trade.

Article 33

All relevant license-issuing authorities shall issue export licenses according to the Rules on the Administration of Export Licenses on the basis of the certification documents issued by the OIB concerned to prove the winning of bids.

Chapter VIII Penalty Provisions

Article 34

Any individual, organization or enterprise that violates the provisions of the present Measures by disturbing the bid invitations shall be subject to administrative punishment by the MOFTEC according to the seriousness of the offense. If the offense has constituted a criminal offence, it shall be turned over to the judicial departments for assuming penal liabilities.

Article 35

Any enterprise or individual shall be entitled to report or complain about the fraudulent activities that occur as against the provisions of the present Measures in the process of inviting for bids. If the afore-mentioned activities is affirmed through investigations, the MOFTEC shall be entitled to veto the bid-winning results.

Article 36

Any member from the CIBECQ or the OIBs that violates the provisions of the present Measures may be given a punishment by the MOFTEC according to the seriousness of the offense or even be handed over to the judicial organs for assuming penal liabilities.

Article 37

If any enterprises collude in tendering bids or make false reports of their qualifications for bid tendering or disturbing the bid invitations by any other means, the bid-won quotas thereof shall be withdrawn by the CIBECQ and the enterprises involved shall be disqualified for tendering bids for the same commodity for one to three years.

Article 38

If any enterprise that has won a bid fails to pay caution money for winning bids according to relevant provisions, the CIBECQ shall withdraw the quotas won in the bids and disqualify it for tendering bids for relevant commodities for one to three years.

Article 39

The quotas that are not turned over or transferred according to relevant provisions nor are they acquired before the valid period of the quotas nor are they used after being acquired shall be deemed as wasted quotas. The enterprises whose bid-won quotas exceed a certain proportion shall be disqualified for tendering bids for the export of the commodity for one to three years according to the seriousness of the waste. The specific punishments shall be determined by the CIBECQ according to the specific conditions of the different commodities.

Article 40

If activities of any of the offending enterprise as mentioned in the circumstances of the present chapter have constituted the intentional disruption of bid invitations and the circumstances are serious enough, the CIBECQ may disqualify the enterprise for tendering bids for a single commodity or all commodities permanently and may be handed over to the judicial organs for punishment.

Article 41

If any bid-winning enterprise fails to pay bid-winning money (including caution money for winning bids) according to relevant provisions due to force majeure, it shall submit within a reasonable time period a certificate issued by relevant organs, and may, upon the approval of the CIBECQ, be exempted from part or all of its liabilities.

Article 42

If the rate of obtaining export licenses for a certain commodity is relatively low due to the international market, the relevant bid-winning enterprises may be exempted from part or all of their liabilities upon the approval of the CIBECQ.

Chapter IX Supplementary Provisions

Article 43

The expenses incurred from the bid invitation for export quotas itself by the MOFTEC, the CIBECQ, the OIBs and all local departments of foreign trade shall be handled in accordance with the principle of separation between revenue and expenditure, and the MOFTEC shall examine the expenses and make budgets for each year so that the Ministry of Finance will allocate from the Central Fund for Developing Foreign Trade and have expenses settled at the end of the year.

Article 44

No entity, organization or individual may disseminate any rule, public announcement or notice, etc relating to the bid invitation of export commodities quotas without the approval of the MOFTEC or the CIBECQ.

Article 45

The power to interpret the present Measures shall remain with the MOFTEC.

Article 46

The present Measures shall enter into force as of January 1, 2002. The original Measures for the Bid Invitation for Quotas of Export Commodities and the Rules for the Implementation of the Measures for the Bid Invitation for Quotas of Export Commodities (GuanFa [1998] No. 974 of the MOFTEC) shall be concurrently nullified.