Laws of the People's Republic of China

Ministry of Commerce

Order of the Ministry of Commerce

No. 19

The Measures Governing Foreign-funded International Freight Forwarding Agent Enterprises were amended and adopted at the 15th executive meeting of the Ministry of Commerce of the People's Republic of China on October 19, 2005, and the amended Measures Governing Foreign-funded International Freight Forwarding Agent Enterprises are hereby promulgated and shall come into force as of December 11, 2005.

Minster Bo Xilai

December 1, 2005

The Measures Governing Foreign-funded International Freight Forwarding Agent Enterprises

Article 1

With a view to promoting the healthy development of China's international freight forwarding industry and to regulating the establishment and business operations of the foreign-funded international freight forwarding agent enterprises, these Measures are formulated in accordance with the relevant laws and regulations on foreign-funded enterprises and the Provisions of the People's Republic of China for the Administration of the International Freight Forwarding Industry.

Article 2

The term "foreign-funded international freight forwarding agent enterprises" as mentioned in these Measures refers to the foreign-funded enterprises that are established by foreign investors in the form of Chinese-foreign equity joint venture, Chinese-foreign contractual joint venture or sole foreign proprietorship, and that deal with international freight forwarding and relevant businesses for their consignors in their consignors' name or their own name upon commission of the consignees or consignors of the imported goods, and collect remunerations for the services it provides (hereinafter referred to as foreign-funded international freight forwarding agent enterprises).

Article 3

The international freight forwarding agent enterprises established by foreign investors for international express delivery shall be subject to the examination, approval and administration of the Ministry of Commerce; the international freight forwarding agent enterprises established by foreign investors for other businesses shall be subject to the examination, approval and administration of the commercial administrative departments in all provinces, autonomous regions, municipalities directly under the Central Government and cities under separate state planning, and that of Sinkiang Production and Construction Corps. (hereinafter referred to as the provincial commercial administrative department).In case any foreign-funded international freight forwarding enterprise established prior to the implementation of these Measures does not engage in international express delivery, the alteration and other matters shall be deputized by the provincial commercial administrative department at the place of its registration.

Article 4

A foreign-funded international freight forwarding enterprise shall abide by the laws, administrative regulations, and the relevant rules of the People's Republic of China, and its proper business operations and lawful rights and interests shall be protected by the laws and regulations of China.

Article 5

Foreign investors may establish foreign-funded international freight forwarding agent enterprises within the territory of China in the form of Chinese-foreign equity joint venture or Chinese-foreign contractual joint venture.Wholly foreign-funded international freight forwarding agent enterprises are allowed to be established as of December 11, 2005.Foreign investors may purchase the established foreign-funded international freight forwarding agent enterprises by purchasing their stock equity thereof, however, the equity ratio and investors' qualification shall meet the requirements as prescribed in these Measures, and where state-owned assets are involved, the relevant laws and regulations shall be followed.

Article 6

The minimum registered capital for setting up a foreign-funded international freight forwarding enterprise shall be 1 million US dollars.The above-mentioned minimum registered capital shall apply to the principle of national treatment as of December 11, 2005.

Article 7

A foreign-funded international freight forwarding enterprise may deal with part or all of the following businesses upon approval:

(1)

booking (ship leasing, air chartering and cabin chartering), consigning, storing and packaging;

(2)

supervision of loading and unloading of goods, consolidating and devanning, distribution, transferring and relevant short-distance transport services;

(3)

acting as an agent to make customs declarations, check and inspection, and to purchase insurance;

(4)

preparing the relevant documents, paying for the freight, settling and paying the miscellaneous expenses;

(5)

freight forwarding of international exhibits, personal articles and goods in transit;

(6)

international multimode transport and consolidation (including container shipping);

(7)

international express (excluding delivery of personal letters and official documents of any political party, the political and military bodies at and above the county level); and

(8)

consultation and other international freight forwarding businesses.

Article 8

An enterprise undertaking international express delivery of letters or articles with the nature of letters (excluding delivery of personal letters and official documents of any political party, the political and military bodies at and above the county level) shall, upon approval of the commercial administrative department, go through the post authorization formalities with the post department.

Article 9

To set up a foreign-funded international freight forwarding enterprise, the documents as prescribed in Article 10 shall be submitted to the provincial administrative department according to the procedures as provided for in the existing state laws and regulations on foreign-funded enterprises.The provincial administrative department shall, within 30 days upon receipt of all the application documents, make a decision on approval or disapproval of the application, and shall issue a Document of Approval of Foreign-funded Enterprises if it approves the application upon examination; or shall explain the reasons in written form if it disapproves the application. Where the provincial administrative department has no such examination and approval power according to Article 3 of these Measures or other laws and regulations on foreign investment, it shall, within 15 days upon receipt of all the application documents, report the application to the Ministry of Commerce after it has conducted a preliminary examination of the documents to be submitted.The Ministry of Commerce shall, within 60 days upon receipt of all the application documents, make a decision on approval or disapproval of the application, and shall issue a Certificate of Approval of Foreign-funded Enterprises if it approves the application upon examination; or shall explain the reasons in written form if it disapproves the application.

Article 10

The following documents shall be provided for the establishment of a foreign-funded international freight forwarding enterprise:

(1)

an application form;

(2)

a feasibility study report on the project;

(3)

the contract and articles of association for the establishment of the foreign-funded international freight forwarding enterprise, or the articles of association for the establishment of a wholly foreign-funded international freight forwarding enterprise;

(4)

the name list of the members of the board of directors and the appointment letters of each director;

(5)

the notice on advance approval of enterprise name issued by the industrial and commercial department; and

(6)

the registration certification and credit certification issued by the country or region where the investor is located.

Article 11

If a foreign-funded international freight forwarding enterprise has started business operations for one year or more and its registered capital has been paid, it may apply for setting up branches in other places in the Mainland. The business scope of a branch shall fall within that of the parent company. The civil liabilities of the branch shall be borne by the parent company.The registered capital of a foreign-funded international freight forwarding enterprise shall be subject to an increase of RMB 500,000 Yuan for each branch undertaking international freight forwarding businesses it sets up. If its registered capital has exceeded the minimum one, the exceeding part may be used as money for increasing the registered capital of the company.

Article 12

To apply for setting up a branch, the applicant shall file an application with the provincial commercial administrative department at the locality of the parent company, which can approve the application after obtaining the consent of the provincial commercial administrative department at the locality of the branch to be set up. Where the provincial administrative department has no such examination and approval power according to Article 3 of these Measures or other laws and regulations on foreign investment, it shall, upon preliminary examination, report all the application materials and the letter on approval of the competent commercial department at the locality of the branch to be set up to the Ministry of Commerce for examination and approval. The procedures and time limits for examination and approval shall be those as prescribed in Article 9 .

Article 13

A foreign-funded international freight forwarding enterprise shall submit the following documents for setting up a branch:

(1)

an application form;

(2)

the resolution of the board of directors;

(3)

in the case of increasing the capital, the resolution of the board of directors on increasing the capital, the matters on increasing the capital, and the agreement on amending the contract on joint venture and the articles of association shall be submitted; and a wholly foreign-funded international freight forwarding enterprise shall only submit the agreement on amending the articles of association; and

(4)

the report on the capital verification of the enterprise.

Article 14

Foreign-funded international freight forwarding agent enterprises are encouraged to join in the civil organizations and trade guilds, such as China International Freight Forwarders Association and China Association of Foreign-funded Enterprises, and voluntarily subject themselves to industrial supervision and direction.

Article 15

The investment and establishment of international freight forwarding agent enterprises in the mainland of China by the companies, enterprises, other economic organizations and individuals from Hong Kong, Macao and Taiwan Region shall be conducted by referring to these Measures.

Article 16

The application of foreign-funded enterprises for adding international freight forwarding businesses shall be conducted by referring to these Measures.

Article 17

The archival filing of foreign-funded international freight forwarding agent enterprises shall be subject to the jurisdiction of the Ministry of Commerce, and the specific matters shall be separately notified by the Ministry of Commerce.

Article 18

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

Article 19

These Measures shall come into force as of December 11, 2005. The original Measures for the Administration of Foreign-funded International Freight Forwarding agent enterprises (Order No.36 [2002] of the Ministry of Foreign Trade and Economic Cooperation of the People's Republic of China) and the Supplementary Provisions on the Measures for the Administration of Foreign-Funded International Freight forwarding agent enterprises (Order No.12 [2003] of the Ministry of Commerce) shall be simultaneously repealed.

Annex:

In order to promote Hong Kong and Macao to establish closer economic and trade relationship with the Mainland, encourage service providers from Hong Kong and Macao to establish enterprises engaging in international freight forwarding businesses within the Mainland, we hereby give the following supplementary provisions on the investments of Hong Kong and Macao investors in international freight forwarding businesses in accordance with the Mainland and Hong Kong Closer Economic Partnership Arrangement and the Mainland and Macao Closer Economic Partnership Arrangement as approved by the State Council:

I.

Service providers from Hong Kong and Macao are permitted to establish international freight forwarding agent enterprises within the Mainland by means of equity joint venture, contractual joint venture or sole foreign proprietorship.

II.

The minimum registered capital of a qualified service provider from Hong Kong or Macao that invests in the Mainland to establish an international freight forwarding enterprise shall meet the following requirements:

(1)

If he/it runs maritime international freight forwarding businesses, the minimum registered capital shall be 5 million Yuan;

(2)

If he/it runs aerial international freight forwarding businesses, the minimum registered capital shall be 3 million Yuan; and

(3)

If he/it runs overland international freight forwarding businesses, the minimum registered capital shall be 2 million Yuan.If he/it runs two or more items of businesses in the preceding paragraphs, the minimum registered capital shall be the minimum amount of the higher/highest one.

III.

After a service provider from Hong Kong or Macao that invests in the Mainland to establish an international freight forwarding enterprise has paid all the registered capital, it may apply for setting up branches in other places in the Mainland. Its registered capital shall be subject to an increase of RMB 500,000 Yuan for each branch it sets up. If its registered capital has exceeded the minimum one, the exceeding part may be used as money for increasing the registered capital for setting up branches.

IV.

The "service providers from Hong Kong and Macao" as mentioned in these Measures shall separately meet the requirements on the definition of "service providers" in the Mainland and Hong Kong Closer Economic Partnership Arrangement and the Mainland and Macao Closer Economic Partnership Arrangement, and in other relevant provisions.

V.

Other provisions on the application for setting up international freight forwarding agent enterprises by the service providers from Hong Kong and Macao shall be implemented in accordance with these Measures.