Laws of the People's Republic of China

    Overseas Chinese and compatriots from Hong Kong, Macao and Taiwan have
made their contributions to the modernization construction and their
hometowns' construction by giving donations with full patriotic zeal and the
love to their old home. The state are always encouraging and all for the
patriotic activities by them. Pursuant to the spirit of the CPC Central
Committee concerning the improvement of the economic environment and the
straightening out of the economic order and the decision of the State Council
concerning the strict control of the import of high-grade consumer goods,
these Provisions are made for the purpose of improving the work of accepting
donations, guiding a correct orientation for accepting donations and
eliminating confusions in the work related.

    1. With regard to donations of goods and materials by overseas Chinese
and compatriots from Hong Kong, Macao and Taiwan, the principle of
voluntariness in donating and acceptance for one's own use shall be followed.
No state organs at various levels may accept donations by overseas Chinese
or compatriots from Hong Kong, Macao or Taiwan. Leaders at various levels
shall strictly abide by these Provisions and may not make any instruction to
interfere the approval and administration work.

    2. Overseas Chinese and compatriots from Hong Kong, Macao and Taiwan are
encouraged to donate necessary means of production for industrial and
agricultural production and undertakings of culture and education, science
and technology and public welfare. Goods and materials used for the above-
mentioned purposes shall be exempt from duty by the customs in accordance
with provisions of Document Guofa NO.(1982)110 and Document Guofa No.(1986)10.

    3. Donations of cash foreign exchange shall be encouraged. Cash foreign
exchange donated by overseas Chinese or compatriots from Hong Kong, Macao or
Taiwan as private individuals may, with the approval from the State
Administration of Exchange Control, participate in swap in the State Foreign
Exchange Swap Center. The specific measures shall be formulated by the State
Administration of Exchange Control in conjunction with relevant departments
and implemented after submitted to and approved by the State Council.

    4. With regard to donations of any of the thirteen types of machinery
and electronics products the import of which is restricted under quota
administration according to Document Guofa No.(1986)10 and Document Jingshen
No.(1988)22 issued by the former State Economic Commission and the General
Administration of Customs, the people's governments of various provinces,
autonomous regions and municipalities directly under the central government
shall conduct examination and approval of accepting donations in strict
accordance with the donation quotas stipulated by the state. No that beyond
the quotas may be approved to import. If any approval is given by overstepping
of authority, the relevant leader and the person directly handling the
matters shall be investigated for responsibility, and the accepted donation
products shall be seriously dealt with by the General Administration of
Customs in conjunction with relevant departments according to relevant
provisions.

    5. With regard to donations of any machinery or electronics products the
import of which is restricted but for which no definite donation quota has
been specified, the Machinery and Electronics Equipment Import Examination
Office of the relevant province, autonomous region or municipality directly
under the central government shall, in conjunction with the Office of
Overseas Chinese Affairs or the Taiwan Affairs Office of the province,
autonomous region or municipality directly under the central government, make
verification and submit matters to the Machinery and Electronics Equipment
Import Examination Office of the State Council for examination and approval,
as well as the Office of Overseas Chinese Affairs of the State Council or
the Taiwan Affairs Office of the State Council for record.

    6. Donated machinery and electronics products the import of which
is restricted under the examination and approval control (see the Appendix),
including those accepted in the form of "selling tickets abroad and taking
delivery at home", may only be used by the direct recipient units themselves.
The recipient units may not transfer, sell the added value or make any
exchange of the donations, nor sell them on market after having them
assembled or processed. For accepting donations of machinery and electronics
products the import of which is restricted by the state, one shall apply to
the Ministry of Foreign Economic Relations and Trade or its authorized agency
for an import license against the approval document. The customs shall make
inspection and release against the import license.

    7. With regard to donations of monopoly goods and materials or goods and
materials the import of which is under import license control, subject to
Articles 4 and 5 of these Provisions, the Office of Overseas Chinese Affairs
or the Taiwan Affairs Office of the relevant province (autonomous region or
municipality directly under the central government) shall make verification
and submit matters to the state competent department concerned for
examination and approval, and the customs shall make inspection and release
in accordance with relevant provisions. Except those for one's own use, the
donation shall be turned over to the monopoly unit or be purchased by the
administrative department for goods and materials or the administrative
commercial department at a reasonable price, and the purchasing unit
(including the monopoly unit) shall pay the tax in accordance with relevant
provisions. The specific measures shall be formulated by the Ministry of
Materials and Equipment and the Ministry of Commerce in conjunction with
relevant departments, and implemented after submitted to and approved by the
State Council.

    8. Donations by overseas Chinese and compatriots from Hong Kong, Macao
and Taiwan do not include donations of goods and materials or other various
aids given gratis to Chinese units by foreign representatives of foreign
investment enterprises or enterprises engaging in external processing and
assembling or compensation trade, by Chinese-funded institutions sent abroad
(or to the region of Hong Kong or Macao), or by foreign governments, foreign
non-governmental economic or trading organizations or foreign businessmen in
external contacts, which shall be handled in accordance with relevant
provisions of the state.

    9. Those, under the guise of donation, acting in collaboration to
illegally procure foreign exchange, dodge licensing control, evade taxes or
commit other illegal activities such as scalping shall be punished according
to law with all their illegal earnings confiscated.