Laws of the People's Republic of China

Ministry of Commerce

Order of the Ministry of Commerce

No. 27

The "Provisional Measures Governing the Processing Trade in Export Processing Zones", which were deliberated and adopted at the executive meeting of the Ministry of Commerce, are hereby promulgated, and shall come into force on January 1, 2006.

Minister Bo Xilai

November 22, 2005

Provisional Measures Governing the Processing Trade in Export Processing Zones

Chapter I General Provisions

Article 1

These Measures are formulated in accordance with the "Foreign Trade Law of the People's Republic of China", the "Decision of the State Council on Amending the Interim Measures on the Supervision of Export Processing Zones by the Customs of the People's Republic of China", as well as other relevant laws and administrative regulations, for the purpose of promoting the healthy development of the processing trade, leading to the upgrading of the processing trade, and further regulating the administration of the export processing zones.

Article 2

An export processing zone is a special area established upon the approval of the State Council and supervised by the customs in a closed way. .

Article 3

"Processing trade in an export processing zone" shall refer to the production and business operation activities that the enterprises inside the zone purchase raw materials, parts and components, elements, packing materials, etc. from the outside or inside the territory of China, and transport the finished products processed or assembled to outside the territory of China.

Article 4

"The enterprise inside the export processing zone" refers to an enterprise which meets the requirements of industrial development of China and in accordance with the relevant laws, regulations or rules of the state, is established inside the export processing zone according to law , and has the qualification as an independent legal person. Thereinto, the foreign-funded enterprises must go through the relevant procedures in accordance with the laws and regulations of the state on administration of foreign investments.

Chapter II Administration of Processing Trade Business in Export Processing Zones

Article 5

The Ministry of Commerce is the competent department for the policy and business of the processing trade inside export processing zones. The administrative committee for export processing zone (hereinafter referred to as the administrative committee) shall take charge of administering the processing trade business inside the export processing zone. The competent department of commerce of each province, autonomous region, municipality directly under the Central Government, municipality under separate state planning, or Xinjiang Production and Construction Corps where the export processing zone is located, and the municipal competent department of commerce of Harbin, Changchun, Shenyang, Nanjing, Guangzhou, Chengdu, Xi'an or Wuhan (hereinafter referred to as the competent department of commerce at the provincial level) shall administer the processing trade business in a centralized way.

Article 6

An export processing zone shall follow the relevant industrial policy guidance of the state, make great efforts to attract processing trade enterprises with high technical level and large value-added content, and drive the large downstream enterprises that have a strong match capacity to enter into the zone. The processing trade business that fails to meet the requirements of the industrial policy and development of the state, such as the processing trade business of high consumption on energy or heavy pollution, etc. shall be prohibited from being carried out inside the export processing zones. The export processing zones in the eastern coastal regions shall improve their industrial grades, and shall no longer approve the establishment of any labor-intensive enterprise on low level or low added value in the zones; while the export processing zones in the middle and western regions shall, in light of the advantages of the local regions, selectively develop the export processing industry with local characteristics, and actively take over the industries transferred from the eastern coastal regions in a gradient way.

Article 7

Where an enterprise inside an export processing zone intends to engage in the processing trade business, it must, based on the effective approval document for its establishment, submit to the administrative committee a written application report on carrying out the processing trade business, and must, for the particularly prescribed project, provide in addition the relevant approval document issued by the relevant department. The application report shall state the methods and contents of the processing trade business to be carried out by the enterprise, and be accompanied by a list of the processing and producing equipment and materials to be imported or the finished products to be exported.

Article 8

The administrative committee shall, after receipt of the enterprise's application, verify it in accordance with the relevant provisions of the state, and shall, within 10 working days, issue an "Approval Certificate for Processing Trade Business in the Export Processing Zone" and the attached list (attached specimen) to the qualified enterprise of processing trade business, while the customs shall register and archive for the enterprise, upon the strength of the "Approval Certificate for Processing Trade Business in the Export Processing Zone" affixed with the administrative committee's seal. .

Article 9

In any area where it is possible, the enterprises concerned shall, through the "Port Electronic Law Enforcement System", submit an application report and the accompanying list to the administrative committee, while the administrative committee shall, through the "Port Electronic Law Enforcement System", ratify the application and accompanying list submitted by the enterprise. The customs shall make registration and archival filing upon the strength of the electronic documents ratified by the administrative committee.

Article 10

An enterprise inside an export processing zone may carry out the processing trade business within the scope approved by the administrative committee only after it has been registered and archived by the customs. If it needs to carry out the processing trade business beyond the previously approved scope, it must, in accordance with Article 7 of these Measures, go to the administrative committee to go through the ratification procedures.

Article 11

The administrative committee shall, before January 15 of each year, collect the information on examination and approval of the last year in the export processing zone, and submit it to the competent department of commerce at the provincial level, while the competent department of commerce at the provincial level shall submit the relevant materials to the Ministry of Commerce.

Chapter III Administration of Goods Entering into or Exiting from Export Processing Zones

Article 12

Unless it is otherwise prescribed by the state, the import and export quota or licence administration shall not apply to the import and export goods carried between an export processing zone and the outside of the territory.

Article 13

The goods prohibited by the state from import or export shall not enter into or exit from an export processing zone. Unless it is otherwise prescribed by any law or regulation, the processing trade business prohibited outside an export processing zone may not be carried out inside the export processing zone, either.

Article 14

No dismantling or revamping business shall be carried out inside an export processing zone.

Article 15

The business of after-sale maintenance of electromechanical products exported from China is allowed to be carried out in an export processing zone. An enterprise shall, before carrying out the business of maintaining electromechanical products in an export processing zone, provide the administrative committee with relevant materials proving that the maintained products are origin produced in China, and the enterprise is the manufacturer of the products, or the maintenance is carried out upon authorization or entrustment by the manufacturer, in addition to going through the ratification procedures in the administrative committee in accordance with Article 7 of these Measures.

Article 16

The goods carried between the enterprises in an export processing zone and the domestic enterprises outside the zone (including domestic sale of goods from the export processing zone), shall be handled in accordance with the relevant provisions on the import and export of goods. If the import and export permit administration is involved, the relevant certificates must be provided to the administrative department. The leftover pieces, defective products and wasters caused by the enterprises inside a zone during processing and production shall be treated in accordance with the relevant provisions.

Chapter IV Administration of Deep Processing Carry-over of the Goods Exiting from Export Processing Zones

Article 17

The expression "deep processing carry-over of the goods exiting from an export processing zone" as mentioned in these Measures shall refer to the business activities whereby a processing enterprise inside the zone (hereinafter referred to as out-going enterprise) transfers the products produced by itself directly to a processing trade enterprise in another export processing zone or out of the zone to be subject to the special supervision of the customs (hereinafter referred to as in-going enterprise) for the purpose of re-export after further processing.

Article 18

The bonded materials which have not been essentially processed shall not be carried over for deep processing as goods exiting from the export processing zone.

Article 19

An out-going enterprise shall, before making deep processing carry-over of the goods exiting from the export processing zone, report the information on the carried-over materials, etc. to the administrative committee in advance. The administrative committee shall, after verification, issue an "Approval Certificate for Deep Processing Carry-over Business in the Export Processing Zone" and the accompanying list (specimen attached) to the enterprise. The customs shall, upon the strength of the "Approval Certificate for Deep Processing Carry-over Business in the Export Processing Zone" affixed with the administrative committee's seal, make archival filing of the deep processing carry-over of the goods exiting from the zone for the out-going enterprise.

Article 20

Where an in-going enterprise is located in another export processing zone or a similar area under special supervision of the customs, it shall, before carrying out the business of inward deep processing carry-over, go through the carry-over procedures in the customs in accordance with the preceding paragraph upon strength of the "Approval Certificate for Deep Processing Carry-over Business in the Export Processing Zone" affixed with the seal of the administrative committee of the zone that it is located.

Article 21

An in-going enterprise located outside the area supervised by the customs specially shall, in accordance with the presently applicable provisions on examination and approval of processing trade, file an application to the competent department of commerce. The competent department of commerce shall verify the proof document of the in-going enterprise on its production capacity under processing trade, and issue an "Approval Certificate for Processing Trade Business" to the enterprise so as to treat the goods as bonded imported materials. While the customs shall, upon the strength of the "Approval Certificate for Processing Trade Business" issued by the competent department of commerce, handle the archival filing procedures. If the carried-over products belong to the commodities subject to import licence administration of processing trade, the in-going enterprise must provide the relevant import licence to the competent department. .

Article 22

The products of deep processing carry-over, which are moved out of a zone, shall all be processed for re-export. If it is really necessary to be sold in the domestic market due to the special reason, it shall be handled according to the relevant provisions on administration of domestic sale of processing trade.

Chapter V Supplementary Provisions

Article 23

The power and responsibility to interpret these Measures shall remain with the Ministry of Commerce.

Article 24

These Measures shall come into force on January 1, 2006. The former "Notice of the Ministry of Foreign Trade and Economic Cooperation on Printing and Distributing the Interim Measures for the Administration of Processing Trade in Export Processing Zones" (No. 141 [2001] Distributed by the MOFTEC) shall be repealed as of the date when these Measures come into force.

Appendices:

1.

Approval Certificate for Processing Trade Business in the Export Processing Zone (Omitted)

2.

Approval Certificate for Deep Processing Carry-over Business in the Export Processing Zone (Omitted)