Laws of the People's Republic of China

No. 21

The Interim Measures for the Administration of the Export of Textile Products have been deliberated and approved by the Ministry of Commerce and agreed by the General Administration of Customs, General Administration of Quality Supervision , Inspection and Quarantine and are hereby promulgated and shall come into effect as of the date of promulgation. The quotas of interim export of textile products in 2006 shall be implemented in accordance with the Interim Measures for the Administration of Textile Products (Decree of the Ministry of Commerce [2005] No.20). The Interim Measures for the Administration of Textile Products (the Ministry of Commerce shall be annulled as of January 1, 2007. Minister of the Ministry of Commerce: Bo Xilai

September 18, 2006

The Interim Measures for the Administration of the Export of Textile Products

Article 1

For the purpose of standardizing the export and operation order of textile products, the Measures herein are hereby formulated in accordance with the Foreign Trade Law of the People's Republic of China and the Administrative License Law of the People's Republic of China.

Article 2

The Ministry of Commerce shall be responsible for administrating of the export of national textiles and for cooperating with the General Administration of Customs, the General Administration of Quality Supervision, Inspection and Quarantine to formulate and adjusting the Catalogue of Commodities Subject to Interim Administration of the Export of Textile Products (hereinafter referred to as "the Catalogue of Commodities Subject to Administration").

The Catalogue of Commodities Subject to Administration shall be released by means of an announcement, and shall cover such contents as the type, the number of tax regulations, and the country or region concerned, the time limit for the implementation, and the overall licensed quantity of the products hereof.

Article 3

The Ministry of Commerce shall authorize the authority in charge of commerce of all provinces, autonomous regions, municipalities directly under the Central Government, cities specifically designated in the state plan, Xinjiang Production and Construction Corps, Harbin, Changchun, Shenyang, Nanjing, Wuhan, Chengdu, Guangzhou, and Xi'an (hereinafter referred to as "the local authorities in charge of commerce") to be responsible for administrating the interim export license of textile products).

The General Administration of Quality Supervision, Inspection and Quarantine shall, by referring to the advice of the Ministry of Commerce, provisionally authorize the aforesaid authorities to be responsible for issuing the certification of the place of origin of the textile products listed in the Catalogue of Commodities Subject to Administration.

Article 4

The export destination countries as mentioned herein refers to the ultimate destination countries (regions), and the countries involved in processed trade export refers to the actual export countries with declaration. And the administration of entrepot trade shall not be governed by the Measures herein.

Article 5

The Measures herein shall be applicable to the license administration of general trade, barter trade, processing and assembling trade, bonded factory and other means of textile products export.

Where the textile products enter such special supervision zones of customs and bonded place as bonded area and export processing zone from the outside zone within the territory of the People's Republic of China and fall under the textile products listed in the Catalogue of Commodities Subject to Supervision, the customs shall not examine and check the license hereof.

Where the textile products listed in the Catalogue of Commodities Subject to Administration are to be exported via the warehouses under export supervision (export distribution warehouses), the customs shall check the license when the products are entered in the warehouse and within the time limit (departure from the territory of the People's Republic of China) as specified in the license, the products shall be exported to the countries(regions) designated in the Catalogue of Commodities Subject to Administration and shall not be remained within the territory of the People's Republic of China.

Article 6

The textile products listed in the Catalogue of Commodities Subject to Administration shall be subject to interim export administration. The Ministry of Commerce shall authorize the Quota & License Administrative Bureau to be responsible for consolidated administration and guidance of the License of Interim Export of Textile Products( hereinafter referred to as "the License") of the local authorities in charge of commerce. The name list of the certificate authority, the form of the license and the stamp for special use shall be otherwise promulgated by the Ministry of Commerce, the General Administration of Customs, and the General Administration of Quality Supervision, Inspection and Quarantine.

Article 7

The foreign trade operators (hereinafter referred to as "the operators") shall, prior to the export of the textile products listed in the Catalogue of Commodities Subject to Supervision, handle the examination and approval procedures of interim export license and withdraw the license in the local authorities in charge of commerce and handle the procedures of customs declaration, examination and clearance formalities on the strength of the license.

Article 8

The commodities shall be listed in the Catalogue of Commodities Subject to Supervision in any of the following circumstances.

(1)

The relevant countries and regions set limit upon the textile products of the People's Republic of China;

(2)

The textile products needed to be subject to the interim quantitative administration in accordance with the agreement made through bilateral agreement.

Article 9

The interim export licensed quantity of the textile products listed in the Catalogue of the Commodities Subject to Administration shall be allocated to all the operations by means of achievement distribution, the agreement of bid invitation. The detailed types and quantity shall be otherwise promulgated by the Ministry of Commerce.

The achievement distribution shall be implemented in accordance with the Measures herein. The specific rules about the agreement of bid invitation shall be otherwise announced by the Ministry of Commerce under the Measures herein.

Where such special situations occurs as volatile market change, the excessively low use rate of export licensed quantity or the chaotic export order, the Ministry of Commerce may, in accordance with the proposal of textile export industry, adopt the interim measures except Article 1 herein to restore the normal export order.

Article 10

The operation shall, in accordance with the relevant national labor, safety, and environmental protection laws and rules, conduct the operational activities.

As for the operators confirmed by the relevant sectors and yet fail to fulfill the obligations of labor, security and environmental protection, the Ministry of Commerce may abrogate the qualification the interim export licensed quantity herein obtained in accordance with Article 9 herein and withdraw all the licensed quantity.

Article 11

The achievement distribution part shall be based upon the actual export achievement of the relevant commodities, and the applicable amount with the interim export license (hereinafter referred to as "the applicable volume") subject to the actual achievement of customs export shall be determined in accordance with the following formula:

S£½T¡Á£¨70%¡ÁQ1/M1+30%¡ÁQ2/M2£©

Where

(1)

S stands for the applicable volume;

(2)

T stands for the confirmed national total volume of temporary export licenses;

(3)

Q1 stands for the export performance of an operator to a restricting country (region). Q2 stands for the export performance of an operator to all other countries and regions except the restricted ones (Q1¡Ù0);

(4)

M1 stands for the export performance of all operators of the country to the restricting countries (regions); M2 stands for the export performance of all operators to the whole world (Q1¡Ù0£©except the restricted countries(regions);

(5)

The minimum applicable amount of all types of commodities shall be otherwise promulgated by the Ministry of Commerce. Where the applicable amount calculated in accordance with the aforesaid formula is lower than the minimum applicable amount, the applicable amount of the operator shall be zero;

(6)

The surplus amount lower than the minimum amount shall be allocated completely in accordance with the principle of priority of achievement.

Article 12

The Ministry of Commerce shall, in accordance with the following principles, determine the export achievement of the relevant commodities:

(1)

The export statistics subject to the 10-digit tariff line of China's customs;

(2)

The time of statistics is the 12 months prior to the interim export license amount;

(3)

The export achievement of general trade, processing trade shall be calculated pursuant to 100% of the statistic export sum of China's customs;

(4)

The export achievement of the enterprises in western region of China shall be calculated in accordance with 150% of the statistical export volume of China's customs, the middle region and the enterprises in the northeast old industrial base shall be calculated in accordance with 130% of the statistical export volume of Chinese customs;

(5)

The group enterprises with many subsidiaries and branches or holding company shall, in accordance with the actual amount of the operators (the code of customs enterprises) and the amount of interim export license shall be calculated under the name of various operators.

Article 13

The Ministry of Commerce shall, in accordance with the aforesaid distribution principle, determine the types and amounts of the applicable amount of various operators and distribute to the local authorities in charge of commerce by means of batches and the electronic form and publish it in the website of the Ministry of Commerce.

Article 14

The operators shall, within the applicable types and amounts delivered by the Ministry of Commerce, raise the license amount application with the local authorities in charge of commerce.

Article 15

The local authorities in charge of commerce shall, within 15 days as of the receipt of the applicable amount, summarize the application of the local operators and submit them attached by the electronic data to the Ministry of Commerce.

The Ministry of Commerce shall, within 15 days as of the receipt of the application report from the local authorities in charge of commerce, determine to deliver the distribution amount of interim export of the national operators.

Article 16

The licensed amount of interim export of textile products shall be allowed to be transferred. The transferor and the receiver may log in the website of the interim export licensed amount of textile products £¨http:\\xk.ec.com.cn£©and transact it directly, the transferor in some region may also have its technology transfer conducted by the regional authority in charge of commerce. The receiver shall register in the industrial and commercial administrative authority, record and register in the authority in charge of foreign trade and fulfill such obligations as labor, safety, and environmental protection.

Article 17

The temporary export licenses of textile product shall be subject to the system of "one license valid for one batch of products" and "one license valid only for one customs authority clearance". The licenses herein shall be effective within a calendar year and the validity period shall be 6 months.

Where the textile products herein are not exported within the prescribed time limit, the holders of temporary export licenses of textile products may go to the original license issuing authority to handle the extension procedures within at most three months. Where the license is delayed or altered, the new one shall replace the original one.

Article 18

Where the operator who has obtained the interim export license amount does not completely use the quantity of the interim export license, the operator shall hand the remaining part to the Ministry of Commerce via local authorities in charge of commerce.

Article 19

The amount which is handed over, fails to be applied for or relinquished shall be calculated in the remaining amount of interim export of textile products of that year. The remaining overall amount shall be continuously distributed by the Ministry of Commerce in accordance with Article 11 and shall complete the distribution hereof prior to at least 75 days as of the completion f the licensing year.

Article 20

Where the operator who has obtained the interim export licensed amount of textile products has used more than 20% yet no more than 30% of the achievement distribution within the effective time limit, the Ministry of Commerce shall deduct it from the equal amount in the distribution amount of the next year. Where the unused amount exceeds 30% of the achievement performance within the effective time limit, the Ministry of Commerce shall deduct it doubly from the distribution amount of the next year.

Article 21

Where the operator who has obtained the interim export license amount applies for and withdraws the license, the operator shall fill in the Application Form for License and seal the seal of the unit. Where the operator applies via Internet, the operator shall faithfully fill in the relevant electronic form and deliver it to the relevant license issuing authority.

Where the operator conducts the application in written form or via the Internet, the operator shall deliver the copy of the relevant export contract to the license issuing authority at the same time.

Article 22

Every license issuing authority shall, after having received the substantially faithful and formally complete and effective application of the license amount hereof, issue the license within three working days in accordance with the approved document of interim export quantity and the relevant electronic data distributed by the local authority in charge of commerce with the authorization of the Ministry of Commerce.

Article 23

As for the commodities subject to the interim export license administration, the operator shall, after having conducted the interim export license, apply for and withdraw the certificate of the original place of textile products from the interim certificate issuing authority authorized by the General Administration of Quality Supervision , Inspection and Quarantine. The certificate issuing authority shall issue the certificate of the original place of textile products pursuant to the license.

The certificate of the original place shall be identity with such content as the quantity and sum in the license.

Article 24

The operator shall handle the export declaration procedure on the basis of the licenses stamped with the special seal for textiles license; the commodities shall be cleared on the strength of the electronic data and written licenses from the Ministry of Commerce and the certificate of original place of issued by competent issuing authorities.

Article 25

In the course of handling textiles export relevant procedures, the customs shall inspect and verify the licenses stamped with the special seal for textile licenses. As for the textile products subject to legitimate inspection, the customs shall also handle the clearance procedures on the strength of the Clearance Note of Entry Goods issued by the inspection and quarantine authorities.

The Ministry of Commerce as well as the General Customs Administration shall verify the license via Internet. The administration about electronic check mechanism and the relevant inspection and verification shall be promulgated otherwise.

Article 26

The interim export license of textile products shall not be forged and altered. Where the export license approval document or the export license are forged or altered, the parties involved in shall be given the relevant punishment in accordance with the Foreign Trade Law of the People's Republic of China, the Customs Law of the People's Republic of China, Regulations of the People's Republic of China on the Administration of Import and Export Commodities and Measures Governing Goods Subject to Export Licenses.

Article 27

The exported sample products may be exempted from obtaining export licenses in cases where the quantity of each batch of exported commodities does not exceed 50 pieces (including sets, pairs, kilograms or other commodities unit, excluding dozen, double ,dozen, dozen set, ton); where the products are subject to license administration by the customs authority of the importing country, the operators shall apply to the issuing bodies for licenses within the quota of license for the enterprise.

Article 28

The export of articles for overseas exhibition and articles for sales shall be handled in accordance with the relevant provisions of the Measures for the Administration of Goods Subject to Export Licenses; where the goods are allowed for clearance in accordance with the requirement of customs of the import country (region), it shall be handled in accordance with the Measures herein.

Article 29

Where the operator evades the Measures herein to transit the commodities produced in China to the countries (regions) prescribed in the Catalogue of Commodities subject to Administration, the Ministry of Commerce shall render the relevant punishment hereto, and prohibit the operator from being involved in the export operational activities within one year as of the date when the relevant administrative punishment comes into effect.

Article 30

The inspection upon the issue of the license, the investigation of the law enforcement body, the verification upon the certificate issuing authority as well as the punishment upon the certificate issuing authority in violation of the Measures herein and upon the operators who forge or alter the license shall be handled in accordance with the Measures for the Administration of the License of Exported Goods, unless otherwise prescribed.

Article 31

Such textile products as are processed in the mainland of China and yet its original place is outside the mainland shall not be applicable to the Measures herein.

Article 32

The Ministry of Commerce shall be responsible for interpreting the Measures herein.

Article 33

The Measures herein shall come into effect as of the date of its promulgation.