Laws of the People's Republic of China

    Article 1  These Measures are formulated in order to strengthen the
control of the participation of foreign firms in the activities salvaging
sunken ships and objects in the Chinese coastal waters and to ensure the
lawful rights and interests of the parties concerned.

    Article 2  These Measures shall apply to the participation of foreign
firms in the activities salvaging sunken ships and objects with commercial
value in the Chinese coastal waters.

    These Measures shall not apply to the cases where the owners of the sunken
ships and objects engage in the salvage themselves or invite salvage agencies
to undertake the salvage in the Chinese coastal waters.

    Article 3  For the purpose of these Measures, the following terms shall
have the meanings respectively defined hereunder:

    (1) "Foreign firm" means enterprises or other economic organizations or
individuals of foreign countries.

    (2) "Coastal waters" means the internal seas and territorial seas of the
People's Republic of China as well as all the other sea areas under its
jurisdiction.

    (3) "Sunken ships and objects" means all kinds of vessels and objects
which have sunken under the surface of water or have been buried beneath the
mud surface at seabed in the Chinese coastal waters, which include the main
bodies of the sunken ships or objects and their equipments, and all of the
cargoes or other sundries loaded thereon.  

    Sunken warships and weaponry with important military value and sunken
ships and objects confirmed as cultural relics are not covered in the scope of
salvage by the participation of foreign firms.

    (4) "Salvage operation" means all kinds of operational activities for
salvaging sunken ships and objects according to a joint salvage contract or a
contract for a Chinese-foreign salvage cooperative enterprise, including the
implementation of survey, identification, salvage and other activities related
thereto.

    (5) "Operator of salvage" means any unit or individual that actually
operates the salvage.

    Article 4  The Chinese Government shall protect, in accordance with the
law, the gains and other lawful rights and interests due to the Chinese and
foreign parties who participate in the salvage of sunken ships and objects in
the Chinese coastal waters (hereinafter referred to as "Chinese and foreign
parties participating in the salvage").

    All the activities of Chinese and foreign parties participating in the
salvage shall comply with the related laws, rules and regulations of the
People's Republic of China, and be subjected to the control and supervision of
the competent authorities of the Chinese Government.

    Article 5  The Ministry of Communications of the People's Republic of
China is in charge of the affairs regarding the participation of foreign firms
in the salvage of sunken ships and objects in the Chinese coastal waters.

    Article 6  Foreign firms may participate in the salvage of sunken ships
and objects in the Chinese coastal waters in either of the following modes:

    (1) to sign a joint salvage contract with a Chinese operator of salvage
and undertake the salvage activities in accordance with the rights and duties
of each party as stipulated in the contract;

    (2) to establish a Chineseforeign salvage cooperative enterprise with a
Chinese operator of salvage and undertake the salvage activities.

    Article 7  Any Chinese operator of salvage shall be a professional salvage
agency with the qualification of undertaking salvage, and such qualification
shall be examined and approved by the Ministry of Communications of the
People's Republic of China pursuant to the state-formulated requirements of
the professional salvage agency.

    Article 8  Definite salvage targets must be expressly fixed in either a
joint salvage contract or a contract for a Chineseforeign salvage cooperative
enterprise. Any sunken ships or objects other than those fixed in the
contracts found during the salvage operation may not be salvaged by either
Chinese or foreign party participating in the salvage without authorization.

    Article 9  The Ministry of Communications of the People's Republic of
China shall be responsible for uniformly organizing negotiations with foreign
firms on affairs concerning the salvage of sunken ships and objects in the
Chinese coastal waters, determining salvage projects and organizing Chinese
operators of salvage to sign joint salvage contracts or contracts for
Chinese-foreign salvage cooperative enterprises with foreign firms in
accordance with the law.

    Article 10  The joint salvage contract signed between a foreign firm and a
Chinese operator of salvage shall accord with the related stipulations of the
Law of the People's Republic of China on Economic Contracts Involving Foreign
Interest and be subject to the approval by the Ministry of Communications of
the People's Republic of China.  

    The Chinese-foreign salvage cooperative enterprise formed by a foreign
firm and a Chinese operator of salvage shall go through the formalities of
examination and approval as well as registration in accordance with the
stipulations of the Law of the People's Republic of China on Chinese-Foreign
Contractual Joint Ventures.

    Article 11  While a joint salvage contract or a contract for a
Chinese-foreign salvage cooperative enterprise is submitted to the authorities
for examination and approval, the relevant documents of the implementing
salvage plan approved by the harbour superintendency establishments of the
People's Republic of China (hereinafter referred to as harbour
superintendency) shall be presented; where an area of fishing port is
involved, the relevant documents approved by the fishery administrative
authorities and fishing harbour superintendency establishments shall be
presented; where a military forbidden area or district is involved, the
relevant documents approved by the competent military authorities shall be
presented.  

    The examination and approval authorities shall, within 45 days after
receiving the application for examination and approval of the above-mentioned
contract, decide whether to approve or disapprove.

    Article 12  After the approval of the joint salvage contract, the foreign
firm shall apply for business registration to the State Administration for
Industry and Commerce of the People's Republic of China within 30 days after
its receipt of the document of approval and obtain a business license; it
shall register with the local tax authorities within 30 days after obtaining
the business license.

    Article 13  A foreign firm participating in the salvage of sunken ships
and objects within the internal seas and territorial seas of the People's
Republic of China shall bear all the costs and expenses as well as the
financial risks during the salvage operation. The Chinese operator of salvage
is responsible for the coordination with the relevant authorities, the
fulfilment of the necessary formalities and the guardianship during the
salvage operation.  

    A foreign firm participating in the salvage of sunken ships and objects
beyond the internal seas and territorial seas of the People's Republic of
China and within other sea areas under its jurisdiction shall bear all the
costs and expenses as well as the financial risks in the phase of survey and
identification. The Chinese and foreign parties shall implement the salvage
operation according to the stipulations of the contract where the salvage is
necessary.

    Article 14  The vessels, equipments and labour services needed by the
foreign firm in implementing the joint salvage contract shall first be leased
and employed from the Chinese operator of salvage, if the conditions are the
same.

    Article 15  The objects recovered from the salvage of sunken ships and
objects in the Chinese coastal waters with the participation of a foreign firm
(hereinafter referred to as "recovered objects") shall be disposed of in the
following ways:

    (1) The ownership of the sunken ships and objects recovered within the
internal seas and territorial seas of the People's Republic of China resides
in the People's Republic of China. The foreign firm shall obtain its gains
from the recovered objects or the sum evaluated in terms of money in
accordance with the stipulations of the joint salvage contract or the contract
for the Chineseforeign salvage cooperative enterprise.  

    The Chinese operator of salvage shall obtain its gains from the recovered
objects or the sum evaluated in terms of money in accordance with the relative
stipulations of the State or those of the contract for the Chinese-foreign
salvage cooperative enterprise.

    (2) The sunken ships and objects recovered from beyond the internal seas
and territorial seas of the People's Republic of China but within other sea
areas under its jurisdiction shall be distributed to Chinese and foreign
parties participating in the salvage according to the proportions stipulated
in the contract, in form of the recovered objects or the sum evaluated in
terms of money.

    (3) Any cultural relics found in the recovered objects or during the
salvage operation shall be reported to the local administrative department for
cultural relics without delay. The department for cultural relics shall
dispose of them in accordance with the law and regulations of the People's
Republic of China concerning cultural relics protection and give appropriate
rewards to the personnel concerned.

    Article 16  The recovered objects obtained by the foreign firms according
to law can be purchased by the relevant authorities of Chinese Government at
the price of international market or transported abroad by the foreign firms
after being taxed and going through the Customs formalities pursuant to the
Chinese Law.  

    Foreign currency of other gains obtained by the foreign firms can be
remitted abroad after being taxed according to Law.

    Article 17  Before the salvage operation, the operators of salvage shall
apply for the issuance of a navigation warning in accordance with the relevant
stipulations of the Maritime Traffic Safety Law of the People's Republic of
China.  

    The Ministry of Communications of the People's Republic of China shall
circulate the related data such as the commencement and termination time of
the salvage operation and its geographical position to the State Bureau of
Oceanography and other relevant authorities.  

    The operators of salvage shall engage in their salvage operation within
the operational area approved by the harbour superintendency and report the
progress of the salvage activities according to the requirements of the
harbour superintendency. Any methods detrimental to marine resources, marine
environment, underwater facilities, marine military installations and other
interests of the People's Republic of China may not be used in salvage
operation.

    Article 18  The relevant personnel from Chinese and foreign parties
participating in the salvage shall, from the beginning to the end, take part
in the salvage operation and are jointly responsible for the work of
registering and storing the recovered objects.

    Article 19  All the recovered objects shall receive the inspection by the
relevant authorities at the place assigned by the competent authorities of the
Chinese Government.

    Article 20  Anyone who has violated these Measures to salvage sunken ships
and objects in the Chinese coastal waters shall be ordered to stop the salvage
operation and be warned or fined by harbour superintendency. The violator who
has already caused losses to the State or other individuals shall bear the
liability of compensation.  

    The amount of fine shall be appraised and decided according to the related
penalty provisions of the State marine traffic administration.

    Article 21  The participation of any enterprise or individual or other
economic organization from Hong Kong, Macao or Taiwan in the salvage of sunken
ships and objects in the Chinese coastal waters shall be handled with
reference to these Measures.

    Article 22  The Ministry of Communications of the People's Republic of
China shall be responsible for the interpretation of these Measures.

    Article 23  These Measures shall go into effect as of the date of
promulgation.