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TOBACCO MONOPOLY LAW

Category  TOBACCO MONOPOLY Organ of Promulgation  The Standing Committee of the National People's Congress Status of Effect  In Force
Date of Promulgation  1991-06-29 Effective Date  1992-01-01  

Law of the People's Republic of China on Tobacco Monopoly



Contents
Chapter I  General Provisions
Chapter II  Plantation, Purchase and Allocation of Leaf Tobacco
Chapter III  Production of Tobacco Products
Chapter IV  Sale and Transportation of Tobacco Products
Chapter V  Production and Sale of Cigarette Paper, Filter Rod, Cigarette
Chapter VI  Import and Export Trade and Foreign Economic and
Chapter VII  Legal Responsibility
Chapter VIII  Supplementary Provisions

(Adopted at the 20th Meeting of the Standing Committee of the Seventh

National People's Congress on June 29, 1991, promulgated by Order No. 46 of
the President of the People's Republic of China on June 29, 1991, and
effective as of January 1, 1992)
Contents

    Chapter I     General Provisions

    Chapter II    Plantation, Purchase and Allocation of Leaf Tobacco

    Chapter III   Production of Tobacco Products

    Chapter IV    Sale and Transportation of Tobacco Products

    Chapter V     Production and Sale of Cigarette Paper, Filter Rod,

                  Cigarette Tow and Cigarette Manufacturing Equipment

    Chapter VI    Import and Export Trade and Foreign Economic and

                  Technological Co-operation

    Chapter VII   Legal Responsibility

    Chapter VIII  Supplementary Provisions
Chapter I  General Provisions

    Article 1  This Law is enacted with a view to exercising tobacco monopoly
administration, organizing the production and management of tobacco monopoly
commodities in a planned way, improving the quality of tobacco products,
safeguarding consumers' interests and ensuring the national revenue.

    Article 2  As used in this Law, "tobacco monopoly commodities" refer to
cigarettes, cigars, cut tobacco, redried leaf tobacco, leaf tobacco,
cigarette paper, filter rods, cigarette tow and cigarette manufacturing
equipment.

    Cigarettes, cigars, cut tobacco and redried leaf tobacco are generally
referred to as tobacco products.

    Article 3  The State shall according to law exercise monopoly
administration over the production, sale, import and export of tobacco
monopoly commodities, and practice a tobacco monopoly license system.

    Article 4  The department of tobacco monopoly administration under the
State Council shall be responsible for the nation-wide tobacco monopoly. The
departments of tobacco monopoly administration in the provinces, autonomous
regions and municipalities directly under the Central Government shall be
responsible for the tobacco monopoly within the areas under their respective
jurisdiction, and shall be under the dual leadership of the department of
tobacco monopoly administration under the State Council and the people's
governments of the relevant provinces, autonomous regions and municipalities
directly under the Central Government, with the leadership of the department
of tobacco monopoly administration under the State Council as the main
leading authority.

    Article 5  The State shall strengthen the scientific research and
technical development of tobacco monopoly commodities, so as to improve the
quality of tobacco products and reduce the content of tar and other hazardous
ingredients in such products.

    The State and society shall intensify the publicity of and education in
the fact that smoking is hazardous to health, forbid or restrict smoking on
public traffic vehicles and in public places, dissuade teen-agers and
youngsters from smoking, and forbid primary school pupils and middle school
students from smoking.

    Article 6  The State shall exercise administration of tobacco monopoly in
national autonomous areas, and shall, according to the relevant provisions of
this Law and the Law on Regional National Autonomy, take the interests of
national autonomous areas into account and give preferential treatment to the
plantation of leaf tobacco and the production of tobacco products in such
areas.
Chapter II  Plantation, Purchase and Allocation of Leaf Tobacco

    Article 7  For the purpose of this Law, the term "leaf tobacco" means
fluecured tobacco and selected air- and sun-cured tobacco needed for the
production of tobacco products. The catalogue of selected air- and sun-cured
tobacco items shall be determined by the department of tobacco monopoly
administration under the State Council.

    Other air- and sun-cured tobacco items which are not included in the
abovementioned catalogue may be sold at rural or urban trade markets.

    Article 8  In growing tobacco, good varieties of tobacco shall be
cultivated and popularized in line with the local conditions. Good varieties
of tobacco shall, after examination and approval by the national or
provincial tobacco evaluation committees, be supplied by local tobacco
companies.

    Article 9  Leaf tobacco purchasing plans shall be assigned by the
planning departments of the local people's governments at or above the county
level on the basis of the plans assigned by the planning department under the
State Council. No other organizations or individuals shall make any
modifications thereto.

    Tobacco companies or their authorized agencies shall conclude leaf
tobacco purchasing contracts with tobacco growers. Any leaf tobacco
purchasing contract shall specify the agreed area for leaf tobacco plantation.

    The purchasing prices of leaf tobacco shall be set, on a grading basis,
by the pricing authorities under the State Council in conjunction with the
department of tobacco monopoly administration under the State Council.

    Article 10  A unified purchase of leaf tobacco shall be effected by
tobacco companies or their authorized agencies in accordance with the
standards and prices set by the State. No other organizations or individuals
may effect any leaf tobacco purchase.

    Tobacco companies or their authorized agencies shall, after setting price
on a grading basis and according to the State-prescribed standards, purchase
all the leaf tobacco grown by leaf tobacco growers within the plantation
areas specified in the leaf tobacco purchasing contracts. The grades and
prices thereof shall not be forced down, and disputes arising from leaf
tobacco purchasing shall be dealt with properly.

    Article 11  The plans for allocating leaf tobacco and redried leaf
tobacco among the provinces, autonomous regions and municipalities directly
under the Central Government shall be assigned by the planning department
under the State Council; the plans for allocating leaf tobacco and redried
leaf tobacco within areas under the jurisdiction of each province, autonomous
region or municipality directly under the Central Government shall be
assigned by the planning department of the relevant province, autonomous
region or municipality directly under the Central Government. No other
organizations or individuals may make any modifications thereto.

    A contract must be concluded for any allocation of leaf tobacco or
redried leaf tobacco.
Chapter III  Production of Tobacco Products

    Article 12  The establishment of an enterprise producing tobacco products
shall be subject to the approval of the department of tobacco monopoly
administration under the State Council and the acquisition of a license for
the tobacco monopoly production enterprise, and then to the registration upon
its examination and approval by the administrative department for industry
and commerce; the splitup, merger or dissolution of an enterprise producing
tobacco products shall be subject to the approval of the department of
tobacco monopoly administration under the State Council and go through
formalities for the change and cancellation of the registration with the
administrative department for industry and commerce. The administrative
department for industry and commerce shall not approve and register an
enterprise that has not obtained a license for the tobacco monopoly
production enterprise.

    Article 13  Capital construction or technological innovation to be
conducted by an enterprise producing tobacco products for expanding
production capacity shall be subject to the approval by the department of
tobacco monopoly administration under the State Council.

    Article 14  The total annual production plans for cigarettes and cigars
of the provinces, autonomous regions and municipalities directly under the
Central Government shall be assigned by the planning department under the
State Council. The total annual production plans for cigarettes and cigars of
an enterprise producing tobacco products shall be assigned by the department
of tobacco monopoly administration at the provincial level on the basis of
the plans assigned by the planning department under the State Council and in
light of the marketing conditions. Local people's governments shall not
assign additional production quotas to an enterprise producing tobacco
products. If an enterprise producing tobacco products, in light of the
marketing conditions, finds it necessary to manufacture cigarettes and cigars
exceeding the total annual production plans, it must obtain the approval of
the department of tobacco monopoly administration under the State Council.

    The national tobacco company shall, on the basis of the total annual
production plans set by the planning department under the State Council,
assign cigarette output targets with grading and classification
specifications to the tobacco companies at the provincial level, which shall,
on the basis of the cigarette output targets with grading and classification
specifications set by the national tobacco company and in light of the
marketing conditions, assign cigarette output targets with grading and
classification specifications to the enterprise producing tobacco products.
An enterprise producing tobacco products may, in light of the marketing
conditions, make appropriate adjustments to the cigarette output targets with
grading and classification specifications, within the scope of the total
annual production plans of the enterprise.
Chapter IV  Sale and Transportation of Tobacco Products

    Article 15  Any enterprise which is to engage in the wholesale trade of
tobacco products shall be subject to the approval of the department of
tobacco monopoly administration under the State Council or the department of
tobacco monopoly administration at the provincial level, and the acquisition
of a license for the tobacco monopoly wholesale enterprise, and then to the
approval and registration by the administrative department for industry and
commerce.

    Article 16  Any enterprise or individual that is to engage in the retail
trade of tobacco products shall be subject to the examination and approval
of, before the issuance of a license for tobacco monopoly retail trade by,
the administrative department for industry and commerce under the people's
government at the county level on the commission of the department of tobacco
monopoly administration at the next higher level. In areas where departments
of tobacco monopoly administration at the county level have been set up, such
departments may, after their examination and approval, also issue tobacco
monopoly retail licenses.

    Article 17  The department of tobacco monopoly administration under the
State Council shall, together with the pricing authorities under the State
Council, select on a grading basis cigarettes of certain brands as
indicators. The prices of such indicators shall be set by the pricing
authorities under the State Council together with the department of tobacco
monopoly administration under the State Council. The prices of nonindicator
cigarettes, of cigars and cut tobacco shall be fixed by the department of
tobacco monopoly administration under the State Council or by the departments
of tobacco monopoly administration of the provinces, autonomous regions and
municipalities directly under the Central Government, as authorized by the
department of tobacco monopoly administration under the State Council, and
shall be submitted for the record to the pricing authorities under the State
Council or to the pricing authorities under the people's governments of the
relevant provinces, autonomous regions and municipalities directly under the
Central Government.

    Article 18  The State shall lay down the tar content grading standards
for cigarettes and cigars. The packages of cigarettes and cigars shall
indicate the grade of tar content and that smoking is hazardous to your
health.

    Article 19  Advertising for tobacco products shall be banned on
broadcasting stations, television stations, or in newspapers or periodicals.

    Article 20  Applications must be made for the registration of trade marks
of cigarettes, cigars and packed cut tobacco, which shall not be manufactured
and marketed before the trade mark is registered upon approval.

    The production and sale of tobacco products with counterfeit trade marks
shall be forbidden.

    Article 21  Trade mark labels for tobacco products must be printed by
enterprises designated by the administrative department for industry and
commerce at the provincial level. Non-designated enterprises may not print
trade mark labels for tobacco products.

    Article 22  Whoever consigns the transportation of tobacco monopoly
commodities to others or undertakes the transportation thereof by himself
must hold a transportation permit signed and issued by the department of
tobacco monopoly administration or its authorized agency; consignees may not
undertake the transportation for any consignor who does not hold a
transportation permit.

    Article 23  Whoever sends by post or brings from another place leaf
tobacco or tobacco products shall not exceed the quantity limits prescribed
by the competent department under the State Council.

    Article 24  Any individual who enters the territory of China shall not
carry tobacco products more than the quantity limits prescribed by the
competent department under the State Council.
Chapter V  Production and Sale of Cigarette Paper, Filter Rod, Cigarette
Tow and Cigarette Manufacturing Equipment

    Article 25  Any enterprise which is to engage in the production of
cigarette paper, filter rods, cigarette tow or cigarette manufacturing
equipment must apply to the department of tobacco monopoly administration
under the State Council for approval and obtain a license for the tobacco
monopoly production enterprise.

    As used in this Law, the term "cigarette manufacturing equipment" means a
complete set of equipment for cigarette manufacturing.

    Article 26  Any enterprise engaged in the production of cigarette paper,
filter rods, cigarette tow or cigarette manufacturing equipment shall
organize production in accordance with the plans assigned by the department
of tobacco monopoly administration under the State Council and the order
contracts concluded with the enterprises producing tobacco products.

    Article 27  Any enterprise engaged in the production of cigarette paper,
filter rods, cigarette tow or cigarette manufacturing equipment may sell its
products only to tobacco companies or enterprises producing tobacco products
with the license for tobacco monopoly production enterprises.
Chapter VI  Import and Export Trade and Foreign Economic and
Technological Co-operation

    Article 28  The department of tobacco monopoly administration under the
State Council shall, in accordance with the relevant regulations of the State
Council, exercise control over tobacco industry's import and export trade and
its foreign economic and technological cooperation.

    Article 29  Any enterprise engaged in the import and export of tobacco
monopoly commodities, the consignment for sale of foreign tobacco products or
the purchase and sale of dutyfree foreign tobacco products within a customs
surveillance zone shall be subject to the approval of the department of
tobacco monopoly administration under the State Council or the department of
tobacco monopoly administration at the provincial level and must obtain a
special license for the tobacco monopoly operation enterprise.

    Any enterprise with a special license for the tobacco monopoly operation
enterprise must, in accordance with the relevant regulations of the
department of tobacco monopoly administration under the State Council, submit
to the department the plans and statements about its purchases, sales and
stock.
Chapter VII  Legal Responsibility

    Article 30  Whoever, in violation of this Law, purchases leaf tobacco
without authorization shall be fined by the department of tobacco monopoly
administration, and the leaf tobacco illegally purchased shall be repurchased
by the said department at the price set by the State; if the illegal purchase
involves large quantities, the leaf tobacco purchased and the illegal income
derived therefrom shall be confiscated.

    Article 31  Whoever transports or consigns to others the transportation
of tobacco monopoly commodities without a transportation permit, or in excess
of the quantity specified in the transportation permit, shall be fined by the
department of tobacco monopoly administration, and the tobacco monopoly
commodities thus involved may be purchased by the said department at the
price set by the State; if the circumstances are serious, the tobacco
monopoly commodities illegally transported and the illegal income derived
therefrom shall be confiscated.

    A consignee who, knowing that the goods to be transported are tobacco
monopoly commodities, undertakes the transportation thereof for units or
individuals that do not hold transportation permits, shall be confiscated of
the illegal income derived therefrom by the department of tobacco monopoly
administration, with the concurrent punishment of a fine.

    Whoever brings from another place leaf tobacco or tobacco products far in
excess of the quantity limits prescribed by the State shall be dealt with in
accordance with the provisions of the first paragraph of this Article.

    Article 32  Where an enterprise that does not hold a license for the
tobacco monopoly production enterprise produces tobacco products, the
department of tobacco monopoly administration shall order it to close down,
confiscate the illegal income derived therefrom and concurrently impose
a fine.

    Where an enterprise that does not hold a license for the tobacco monopoly
production enterprise produces cigarette paper, filter rods, cigarette tow or
cigarette manufacturing equipment, the department of tobacco monopoly
administration shall order it to stop the production of the said products,
confiscate the illegal income derived therefrom and may concurrently impose
a fine.

    Article 33  Where an enterprise that does not hold a license for the
tobacco monopoly wholesale enterprise engages in the wholesale trade of
tobacco products, the department of tobacco monopoly administration shall
order it to close down or to stop the wholesale trade of tobacco products,
confiscate the illegal income derived therefrom and concurrently impose
a fine.

    Article 34  Where an enterprise that does not hold a special license for
the tobacco monopoly operation enterprise engages in the import and export of
tobacco monopoly commodities, the consignment for sale of foreign tobacco
products, or the purchase and sale of duty-free foreign tobacco products, the
department of tobacco monopoly administration shall order it to stop the
aforesaid operations, confiscate the illegal income derived therefrom and
concurrently impose a fine.

    Article 35  Where an enterprise or individual that does not hold a
tobacco monopoly retail license engages in the retail sale of tobacco
products, the administrative department for industry and commerce shall order
it or him/her to stop retail business, confiscate the illegal income derived
therefrom and concurrently impose a fine.

    Article 36  Where an enterprise or individual produces or sells
cigarettes, cigars or packed cut tobacco without registered trade marks, the
administrative department for industry and commerce shall order it or him/her
to stop the production and sales thereof and shall concurrently impose a fine.

    Where an enterprise or individual produces or sells tobacco products with
counterfeit trade marks, the administrative department for industry and
commerce shall order it or him/her to stop the infringing act and to
compensate the losses of the infringed, and may concurrently impose a fine;
if the infringement constitutes a crime, the offender's criminal
responsibility shall be investigated according to law.

    Article 37  Where an enterprise or individual, in violation of the
provisions of Article 21 of this Law, illegally prints trade mark labels for
tobacco products, the administrative department for industry and commerce
shall destroy the printed trade mark labels, confiscate the illegal income
derived therefrom and  concurrently impose a fine.

    Article 38  Where an enterprise or individual profiteers in tobacco
monopoly commodities and the profiteering constitutes a crime of illicit
speculation, such profiteer's criminal responsibility shall be investigated
according to law; if the circumstances are not so serious as to constitute
a crime, the administrative department for industry and commerce shall
confiscate the profiteered tobacco monopoly commodities as well as the
illegal income derived therefrom and may concurrently impose a fine.

    Personnel of a department of tobacco monopoly administration or of
a tobacco company, who, by taking advantage of their office, commit the crime
specified in the preceding paragraph, shall be subjected to heavier
punishments according to law.

    Article 39  Any enterprise or individual that forges or alters the
licenses prescribed in this Law such as those for tobacco monopoly production
enterprises, tobacco monopoly business, as well as transportation permits,
shall be investigated for criminal responsibility according to law.

    Any enterprise or individual that purchases or sells the licenses
prescribed in this Law such as those for tobacco monopoly production
enterprises, tobacco monopoly business, as well as transportation permits,
shall be investigated for criminal responsibility by applying mutatis
mutandis the provisions of Article 117 of the Criminal Law.

    Personnel of a department of tobacco monopoly administration or of a
tobacco company who, by taking advantage of their office, commit the crimes
specified in the preceding two paragraphs shall be subjected to heavier
punishments according to law.

    Article 40  Where the smuggling of tobacco monopoly commodities
constitutes the crime of smuggling, the smuggler's criminal responsibility
shall be investigated in accordance with the Supplementary Provisions
Concerning the Punishment of the Crimes of Smuggling; if the smuggling does
not involve tobacco monopoly commodities in large quantities, thus not
constituting the crime of smuggling, the smuggled commodities and articles as
well as the illegal income derived therefrom shall be confiscated by the
Customs, and a fine may concurrently be imposed.

    Personnel of a department of tobacco monopoly administration or of a
tobacco company who, by taking advantage of their office, commit the crime
specified in the preceding paragraph shall be subjected to heavier
punishments according to law.

    Article 41  The department of tobacco monopoly administration shall have
the right to carry out inspection on the implementation of this Law. Whoever
by means of violence or threat obstructs such inspectors from carrying out
their duties according to law shall be investigated for criminal
responsibility according to law; whoever refuses or obstructs such inspectors
from carrying out their duties according to law, but without resorting to
violence or threat, shall be punished by the public security organs in
accordance with the Regulations on the Administrative Penalties for Public
Security.

    Article 42  Personnel from a people's court or a relevant department
dealing with lawbreaking cases who share out the confiscated tobacco products
shall be investigated for criminal responsibility in accordance with the
provisions of Article 1 and Article 2 of the Supplementary Provisions
Concerning the Punishment of the Crimes of Embezzlement and Bribery.

    Personnel from a people's court or a relevant department dealing with
lawbreaking cases who purchase the confiscated tobacco products shall be
ordered to return the products and may be subjected to administrative
sanctions.

    Article 43  Personnel from the department of tobacco monopoly
administration or from a tobacco company who abuse their power, seek personal
interests and commit malpractice or neglect their duties shall be subjected
to administrative sanctions; if the circumstances are so serious as to
constitute a crime, the offender shall be investigated for criminal
responsibility according to law.

    Article 44  A party, if not satisfied with the decision on administrative
sanctions made by the department of tobacco monopoly administration or the
administrative department for industry and commerce, may, within 15 days
after receiving the notice about the decision on punishment, apply for
reconsideration to the authorities at the next higher level over the
authorities that made the decision on punishment; the party may also, within
15 days after receiving the notice about the decision on punishment, directly
bring a suit in a people's court.

    The reconsideration department shall, within 60 days after receiving the
application for reconsideration, make a reconsideration decision. The party,
if not satisfied with the reconsideration decision, may, within 15 days after
receiving the reconsideration decision, bring a suit in a people's court; if
the reconsideration department fails to make a reconsideration decision
within the time limit, the party may, within 15 days after the expiration of
the time limit for reconsideration, bring a suit in a people's court.

    If a party has not applied for reconsideration, nor brought a suit in
a people's court within the time limit, nor complied with the decision on
punishment, the department that has made the decision may apply to a people's
court for compulsory execution.
Chapter VIII  Supplementary Provisions

    Article 45  The State Council shall formulate implementing regulations on
the basis of this Law.

    Article 46  This Law shall enter into force on January 1, 1992. The
Regulations on Tobacco Monopoly promulgated by the State Council on September
23, 1983 shall be annulled simultaneously.



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