Laws of the People's Republic of China

(Jointly formulated by the State Administration for the Inspection of Import and Export Commodities and the Ministry of Foreign Trade and Economic Cooperation on April 1, 1997)

   Article 1 These Rules are formulated hereby with the aim of improving the business order of export of canned and salted mushrooms, bettering the quality of export products, and safeguarding the general interests of the country.

   Article 2 The commodities covered by these Rules are canned and salted mushrooms for export, with their serial numbers being 20031010.01 and 07119033 respectively.

   Article 3 Distribution of export quotas (excluding exports to the European Union)

1. Distribution and readjustment of quotas shall be carried out according to the principle of fairness, justice, and competitiveness.

2. Business operations in scale and with good economic returns shall be encouraged, and quotas shall be distributed according to the actual use of quotas by local foreign trade companies and those directly affiliated to various ministries and commissions (hereinafter referred top as the various units) as well as the prices of their exports and the quality of their export commodities.

3. Distribution of quotas shall be carried out according to the following principle:

1) On the basis of determining the total quotas for the following year, the base amount of quotas of the various units shall be calculated according to their proportions against the total amount of quotas in the current year.

2) The base amount of quotas of the units that use their quotas at a rate below the national average between January and September of the current year (as is shown in Customs statistics, the same below) shall be cut by 10-15 per cent (with the specific figures to be fixed according to the overall situation of the use of quotas by the various units). The fixed rate of cut shall be appli to all units subject to quota cuts. The cut quotas shall be re-distributed as a reward to units that use their quotas at a rate above the national average.

If the rates of quota use by the various units are all above 70 per cent (including 70 per cent), or if the national average is above 80 per cent (including 80 per cent), there shall be no rewards or punishments.

3) The base amount of quotas of the units whose export prices determined according to clauses on FOB prices are 5-10 per cent below the national average sold at the same market from January to September of the current year (as shown in statistics of export licenses, the same below) shall be cut by 5-10 per cent (with the specific figures to be fixed during distribution of quotas according to the overall situation of the export prices of the various units). The fixed rate of cut shall be applied to all units subject to quota cuts. The cut quotas shall be redistributed as a reward to units that export at prices the same as or above the national average and those whose export commodities are name-brand and of high quality.

4) If the total amount of quotas need be readjusted or increased, the increased amount shall be distributed according to the rules in the preceding clause to units that boast big rates of quota use, that export at high prices, and whose export commodities are name-brand and of high quality.

4. Re-distribution of quotas by the various units shall also be carried out according to stipulations in Clause 3 of these Rules. The amount of quotas distributed to each export enterprise shall not be smaller than 500 tons at minimum. Local foreign trade companies and those directly affiliated to various ministries and commissions whose amount of quotas exceeds 5,000 tons shall distribute these quotas to six enterprises at maximum. Those whose amount of quotas is below 5,000 tons (including 5,000 tons) shall distribute these quotas to three enterprises at maximum. The results of distribution of quotas by the various units shall be reported timely to (the Administration of Foreign Trade) of the Ministry of Foreign Trade and Economic Cooperation and the China Chamber of Foodstuffs, Native Produce and Animal Products Importers and Exporters (hereinafter referred to as the Chamber). The Ministry of Foreign Trade and Economic Cooperation shall publish in International Business Daily name lists of the enterprises that have won re- distributed quotas.

   Article 4 Management of export licenses

1. Export licenses for canned and salted mushrooms shall be issued by departments authorized by the Ministry of Foreign Trade and Economic Cooperation.

2. The departments shall issue export licenses in strict accordance with the duplicates of export contracts examined and signed by the Chamber.

3. Export enterprises applying for export licenses shall declare the sanitation registration code of the enterprises producing export commodities, the batch numbers of production, and the trade marks (or fixed trade marks if the trade marks are provided by foreign businessmen). The departments issuing licenses shall write down these details in the Note columns of export licenses.

   Article 5 Quality control of export commodities

1. Canned and salted mushrooms shall be processed and produced only in factories or workplaces that have gone through sanitation registration with commodity inspection departments.

2. Factories using salted mushrooms to produce canned mushrooms shall win approval from the State Administration of Commodity Inspection and organize production according to prescribed production technology and quantity.

3. Canned mushrooms and salted mushrooms shall be inspected by commodity inspection departments on the spot before they are exported. Vouchers for obtaining export licenses shall be provided to commodities passing inspections. To be written in these vouchers shall be the serial numbers of sanitation registration of the factories or workplaces producing canned or saled mushrooms, specifications and quantities of the canned or salted mushrooms, and destination tags. In case of commodities exported in other export ports, the commodity inspection departments in these ports shall carry out examination, exchange of vouchers, and pass in accordance with stipulations of the State Administration of Commodity Inspection.

4. Commodity inspection departments concerned shall make regular report of the amount of canned or salted mushrooms they have inspected for export to the State Administration of Commodity Inspection, with copies sending to the Ministry of Foreign Trade and Economic Cooperation and the Chamber.

Article Coordination of export operations

1. The Chamber shall coordinate export of canned and salted mushrooms. It shall, in particular, strengthen coordination of the targeted markets, prices and transactions of canned and salted mushrooms for export.

2. The Ministry of Foreign Trade and Economic Cooperation shall authorize the Chamber to take charge of preliminary examination of the prices of export contracts and follow-up supervision and examination after completion of export. The Chamber shall feed relevant information to pertinent administrative departments.

3. Rules on the coordination of export of canned and salted mushroon's shall be formulated by the Chamber.

   Article 7 The canned or salted mushrooms exported by production enterprises that have been granted by the Ministry of Foreign Trade and Economic Cooperation to handle foreign trade independently shall be commodities produced by these enterprises themselves.

   Article 8 The canned or salted mushrooms exported by foreign-funded enterprises shall be commodities produced by these enterprises themselves, and the amount of export shall not exceed the limit set by the Ministry of Foreign Trade and Economic Cooperation. They shall also subject themselves to the unified coordination by the Chamber via the China Association of Foreign-funded Enterprises.

   Article 9 Custom offices shall pass canned or salted mushrooms declared for export on the strength of export licenses and commodity inspection vouchers.

   Article 10 Rules on punishment

1. Enterprises that export at low prices or commodities of poor quality, waste or transfer quotas without authorization, sell export licenses, or violate stipulations of these Rules in other aspects shall be criticized, warned, have their quotas cut, or deprived of the power to handle foreign trade independently after confirmation of their cases and the seriousness of their cases.

2. Departments in charge of issuance of export licenses and those in charge of issuance of commodity inspection vouchers that violate stipulations of these Rules shall be handled according to regulations on the management of export licenses and on commodity inspection.

   Article 11 The right to explain these Rules will stay with the Ministry of Foreign Trade and Economic Cooperation. Should any stipulations in other regulations contradict these Rules, these Rules shall prevail.