Laws of the People's Republic of China

The General Administration of Customs

Decree of the General Administration of Customs of People's Republic of China

No.139

The Provisions of the General Administration of Customs of People's Republic of China on Implementing the Rules of Origin for the China- Pakistan Free Trade Area, has been approved after deliberation at the executive meeting of this Administration on December 27, 2005. It is hereby promulgated and shall be implemented on January 1, 2006.

Mu Xinsheng, the General Director

December 29, 2005

The Provisions of the General Administration of Customs of People's Republic of China on Implementing the Rules of Origin for the China- Pakistan Free Trade Area

Article 1

With a view to implementing the Rules of Origin for the China- Pakistan Free Trade Area under the Agreement on the Early Harvest Program for the Free Trade Agreement Between the Government of the People's Republic of China and the Government of the Islamic Republic of Pakistan (hereinafter referred to as the Agreement on the Early Harvest), correctly determining the origin of the imported goods under the Agreement on the Early Harvest, and promoting the economic and trade activities between China and Pakistan, this Provisions are formulated in accordance with the Customs Law of People's Republic of China.

Article 2

This Provisions are applied to the goods imported from Pakistan under the Agreement on the Early Harvest (refer to the Customs Import and Export Tariff of the People's Republic of China for details of list); however, the goods imported in the form of processing trade shall be excluded.

Article 3

The imported goods that are directly transported from Pakistan and consistent with any requirements of the hereinafter article, shall be regarded as goods of Pakistan origin, and the conventional tariff of the Agreement on the Early Harvest shall be applicable with respect to:

(1)

Goods fully obtained or produced in Pakistan; and

(2)

Goods that are not fully obtained or produced but that are consistent with Article 5 and 6 of this Provisions.

Article 4

The term "goods fully obtained or produced in Pakistan" as mentioned in Item 1) of Article 3 of this Provisions refers to:

(1)

Plant and their products harvested, picked or collected in Pakistan;

(2)

Live animals borne and bred in Pakistan;

(3)

Products that are obtained from the animals mentioned in Item 2) of this Article in Pakistan;

(4)

Products obtained from hunting, trapping, fishing, aqua breeding, collecting, or catching in Pakistan;

(5)

Minerals or other natural materials other than those above mentioned in Item 1) through Item 4) that are exploited or extracted from the territory, territorial waters, seabed or seabed subsoil in Pakistan;

(6)

Products that are obtained from the waters, seabed or seabed subsoil outside the territorial waters of Pakistan, provided that the said country has the right to develop the aforesaid waters, seabed and seabed subsoil pursuant to the provisions of the international law;

(7)

Aquatic and other marine products obtained from the high sea by ships registered with Pakistan or hanging the flag of Pakistan;

(8)

Products obtained from processing or manufacturing of the products aforesaid in Item 7) on the processing ships registered with Pakistan or hanging the flag of Pakistan;

(9)

Parts or raw materials recovered in Pakistan from materials that can neither be used for their original purpose nor be restored or repaired;

(10)

Materials collected in Pakistan that can neither be used for their original purpose nor be restored or repaired, and that are only fit for discarding or recovery of raw materials, or for recycling purpose;

(11)

Scrap materials generated in the course of producing and processing in Pakistan; and

(12)

Products obtained from processing of the products listed above only in Item 1) through Item 11) in Pakistan.

Article 5

The "goods that are not fully obtained or produced" as mentioned in Item 2) of Article 3 of this Provisions refers to the goods of which the components of Pakistan are no less than 40%, the origin of the goods shall be regarded as Pakistan.

The following formula shall be used to calculate the contents of origin, Value of the non-original material / FOB price ¡Á 100% <60%

The value of the material not originating from Pakistan used in the formula refers to:

(1)

The CIF price of the materials; or

(2)

The price, as determined in the first place, paid for the materials of unidentified origin in Pakistan where the manufacturing or processing is carried out.

Article 6

Except otherwise herein provided, where the goods that meet the requirement of Article 3 of this Provisions and are used as the materials within Pakistan to be manufactured or processed into finished products to which the conventional tariff of the Agreement on the Early Harvest shall be applied, and the accumulated contents originated from China and Pakistan in those finished products are no less than 40%, the origin of those finished products shall be Pakistan.

Article 7

The goods is subject to Pakistan as its Original Country if it is processed and manufactured in Pakistan and conforming to the Special Original Standard for the products in the Rules of Origin for the China- Pakistan Free Trade Area. The standard is a part of this Provisions and is to be promulgated separately by the General Administration of Customs.

Article 8

When determining the origin complying with the Article 3 hereof, the following processing and disposing should be regarded as trivial and will be out of consideration. They are as follows:

(1)

The processing to keep the good condition of the goods in transportation and storage, such as drying, freezing, keeping by salt solution, ventilating, spreading out, making cool, putting into aqueous solution of salt or Sulfur Dioxide, getting ride of the damaged parts or other similar processing;

(2)

Clearing dust, selecting, classification, grading, matching (marking the goods forming into a suit), washing, painting and cutting apart;

(3)

Changing package and disintegrating and assembling for delivering goods;

(4)

All the simple packaging operation such as simple cutting apart, piece cutting and re-packaging, or putting into the bottle, beg, cage and fixing to the hard paperboard or board or other operations;

(5)

Pasting mark, label or other distinguishing signs on the products or packaging;

(6)

Simple mixing from the products belonging to any same or different kinds, if such mixture, as one or more components, cannot acquire the qualification of the origin from meeting the conditions regulated by the regulation hereof;

(7)

Assembling the components of a product into a simple whole;

(8)

Disassembling and assembling;

(9)

Butchering animal;

(10)

Diluting only using water or other matter without changing the character of the goods; and

(11)

Composing of any two or more operations stating in the section (1) to section (10).

Article 9

The term "directly transport" stated in the Article 3 herein means transporting directly the goods subjecting to the Agreement of the Early Harvest from Pakistan to China.

The goods imported to China would be regarded as transported directly from Pakistan, if

(1)

The goods are not transported through the territory of any country or other area other than China and Pakistan; or,

(2)

The goods are transported through one or more territories of any country or area other than China and Pakistan during transporting progress and the following additional conditions are met meanwhile, no matter whether the means of transportation are changed in such country or area or goods are temporarily stored thereof or not . The additional conditions are as follows:

(a)

it happens only because of geography reasons or necessity of the transportation; and,

(b)

the goods are not available to the field of trade or consume in such country or area herein; and

(c)

the goods are not processed anything except loading and unloading or other measures carried out to keep the goods in good condition in such country or area herein.

Article 10

In determining the origin of goods, we should neglect and take no consideration to the goods' package, packaging material, the container, accessory, spare part, instrument and instructing material for the goods, which are declared and imported accompany with and categorized as a whole with the goods complying with Customs Tariff of Import and Export of the People's Republic of China.

Article 11

Except otherwise provided, in determining the origin of goods, the origin of the following commodities or materials would not take any account, which are the commodities used for the producing, testing and inspection of the goods and with no actual physico-chemical effect to the goods, or the goods used to do factory maintenance or equipment operation relating to the manufacture of the goods, or the material resulting nothing in the goods during its producing or the material that doesn't play as a component of the goods. The commodities and materials include:

(1)

The fuel and energy resource;

(2)

The equipment, model and casting mould;

(3)

The accessories and materials used for the factory and equipment's maintenance;

(4)

The lubricant, the lubricating oil, the mix material and other material used for manufacturing or the equipment's operation or the factory;

(5)

The gloves, the glasses, the shoes, the clothes, the security setting and the articles for use;

(6)

The equipment setting and the articles for use for the testing or inspection of the goods;

(7)

The catalyzator and the solvent; and

(8)

Any other commodities as proven to be used in the producing of the goods without becoming a component of the goods.

Article 12

When the receiver of the goods declared to the customs, he should forwardly state the application of the agreed tariff rate as provided in the Agreement of the Early Harvest, and submit to the customs the certificate of origin issued by authorities appointed by Pakistan, and the form of which could be found in the annex of this Provisions.

If the goods have been transported through one or more countries or areas other than China and Pakistan, the receiver of the goods should submit to the customs the following documents:

(1)

Combined transport B/L issued in Pakistan;

(2)

Certificate of origin issued by relevant authorities of Pakistan;

(3)

Original commercial invoices of the goods; and

(4)

Certification documents meeting the conditions contained in item 2) of Article 9 of this Provision.

Article 13

The receiver of the goods should submit the original certificate of origin to the customs where the declaring happens; the original certificate of origin should be printed in international normal paper of A4 and written in English.

The certificate of origin should not be altered or of superimposition.

The certificate of origin submitted by the receiver of the goods should be issued by relevant authorities of Pakistan according to the Rules of Origin for the China- Pakistan Free Trade Area before or during the exporting or within 15 days after goods have been exported.

Article 14

If the goods are not issued certificate of origin according to the date stipulated in the third paragraph of Article 13 , the receiver of goods may submit to the customs where the declaring happens the certificate of origin signed and issued within 1 year after the goods have been loaded and indicated clearly "reissued".

Article 15

If the certificate of origin is stolen, lost or damaged, within 1 year from date of issuance of the Certificate, the receiver of the goods could ask the consigner to apply for issuing real copy of the certificate of origin which has been verified and "the real copy of certificate of origin which has been verified" should be specified in volume 12 of the Certificate. The copy should specify the date of issuance.

Article 16

Unless "force majure" happens, the certificate of origin should be submitted to the Chinese customs within 6 months from the date of issuance. If the conditions of paragraph 2) Article 9 have been met, goods having been transported through one country or area or more other than China and Pakistan, time limitation for the submission of the above certificate of origin could be prolonged to 8 months.

The customs will not accept them if the Certificates have not been submitted within the period afore-mentioned

If the goods have been actually imported within the time limit stipulated in the first paragraph hereof, time limitation for submission of the certificate of origin could not be limited by the stipulation of the first paragraph. If the receiver of the goods could not submit qualified certificate of origin at the time of import declaration, the customs should give priority after they received deposits equal to tariff according to the Most-Favored-Nation tariff rate or normal tariff rate, and then conduct import procedures and customs statistics.

Article 17

If the goods are originated from Pakistan and the FOB price of each shipment is not more than ¡ç200, the submission of the certificate of origin could be omitted .

Article 18

If the customs where the declaring happens suspects the reality of the content of certificate of origin, they could ask relevant authorities of Pakistan to check the certificate of origin through the General Administration of Customs or its appointed authorities. The result should be provided within 6 months after receiving the request.

During the check process, the customs where the declaring happens could give priority after customs receive deposits equal to tariff collected according to the Most Favored Nation tariff rate or normal tariff rate, and then conduct importing procedures and customs statistic.

After checking, the customs where the declaring happens should conduct procedures about return of deposits or transformation from deposits to importing tariff.

If check result could not be provided within the time limit, the customs where the declaring happens should immediately conduct procedures to transform the deposits into the import tariff. Customs statistic should be corrected accordingly.

If the goods fall into categories of goods whose import are restricted or suspected illegal, the customs should not release the goods until the certificate of origin have been checked.

Article 19

Except for the customs' foreign trade statistics, the documents between China and Pakistan used to check the certificate of origin should be kept confidentiality.

Article 20

Those declared goods which are imported from Pakistan and will be collected at the tariff level as provided in the Agreement on the Early Harvest Programme should be reported to the customs in written form by the receiver if the destination changed before being released. The customs should restore the original certificate to the receiver after specifying the changes in the certificate of origin.

Article 21

Those goods which are transported to China for exhibition and sold within the territory in or after the exhibition period will be collected as provide in the Agreement on the Early Harvest Programme, if they are satisfied with the requirements which are specified in the Rules of Origin for China-Pakistan Free Trade Area. They should also fulfill the following requirements:

(1)

The goods have actually been transported to China by the consigner and already been exhibited;

(2)

The consigner has virtually sold or transferred the goods to the Chinese receiver; and

(3)

The goods to be exhibited are transported to China in the period of exhibition or immediately after that period.

In order to implement the afore-mentioned paragraph, the receiver must submit the following documents to the customs: the certificate of origin; the certificate listing the name and address of the exhibition, which is signed and issued by relevant authority; and those certification documents which are listed in Item 4) of Article 12 .

The "exhibition" in this article refers to: commercial, agricultural or handicraft industry exhibition hall; trade fair or such display or show put on in a store or commercial undertaking, which is hold to sell the foreign goods. The goods should be in the supervision of the customs in the period of exhibition.

Article 22

In case anyone violates this Provisions, the customs shall handle it in accordance with the relevant provisions of the Customs Law of the People's Republic of China and the Regulation of the People's Republic of China on the Implementation of Customs Administrative Punishment; if a crime is constituted, he shall be subject to criminal liabilities.

Article 23

The following terms in this Provisions shall mean:

"CIF Price" means the price paid or should be paid to the consigner after the goods have been discharged from the vehicle in the import port. It concludes the cost of the goods and the insurance premium and freight which occurs because of the transportation to the destination port.

"FOB Price" means the price which is paid or should be paid to the consigner after the goods have been loaded onto the vehicle. It concludes the cost of the goods and the cost of the transportation to the vehicle.

"Agreement on Customs Vabluation" means the Agreement on Implementation of Article ¢÷ ,GATT 1994.

"Material" includes components, parts, units, assembly, and the goods which are part of another or are used in the production of other goods.

"The Special Original Standard" means those rules of origin which adopts the test of Change in Tariff Classification, Particular Manufacture or Process Techniques or Price Ratio, or the combination of above tests.

"Non-original material" means those materials used in the production of the goods which are produced in the areas which are out of the China-Pakistan Free Trade Area and those materials the origin of which are unknown.

"Produce" means the method to acquire the goods, including manufacturing, producing, assembling, processing, feeding, planting, breeding, exploiting, extracting, harvesting, fishing, trapping, gathering, collecting, hunting, capturing.

Article 24

The power to interpret this Provisions shall remain with the General Administration of Customs.

Article 25

This Provisions shall come into force as of January 1st, 2006.

Annex: the format of certificate of origin (omitted)