PRC Foreign Trade Law (Revised)

For the purposes of this Law, the term "foreign trade" means the import and export of goods and technology, and international trade in services.

Article 3: The State Council department in charge of foreign trade shall be in charge of foreign trade activities throughout the country pursuant to this Law.

Article 4: The state shall implement a unified foreign trade system, encourage the development of foreign trade, and maintain fair and free operations in foreign trade.

Article 5: The People's Republic of China, on the basis of the principles of equality and mutual benefit, promotes and develops trade relations with other countries and regions, concludes or accedes to regional economic and trade agreements such as customs union agreements and free-trade area agreements, and joins regional economic organizations.

Article 6: In the area of foreign trade, the People's Republic of China grants most-favored-nation treatment or national treatment or other treatment to opposite concluding or acceding parties in accordance with international treaties or agreements concluded or acceded to; or grants most-favored-nation treatment or national treatment or other treatment to the other party on the basis of the principles of mutual benefit and reciprocity.

Article 7: If any country or region adopts sanctions, restrictions or other similar measures of a discriminatory nature against the People's Republic of China with respect to foreign trade, the People's Republic of China may take corresponding measures against such country or region in line with actual circumstances.

PART TWO: FOREIGN TRADE OPERATORS

Article 8: For the purposes of this Law, the term "foreign trade operator" means a legal person, other organization or individual engaged in foreign trade business activities in accordance with this Law and other relevant laws and administrative regulations after completing industry and commerce registration or other business commencement formalities in accordance with the law.

Article 9: A foreign trade operator engaged in import and export of goods or technology shall handle registration for the record with the State Council department in charge of foreign trade or its entrusted institution, except where laws, administrative regulations or provisions of the State Council department in charge of foreign trade do not require such registration. Specific procedures for registration for the record will be set forth by the State Council department in charge of foreign trade. If a foreign trade operator fails to handle registration for the record in accordance with provisions, customs shall refuse to handle customs declaration and release the goods being imported or exported.

Article 10: Conduct of international trade in services shall observe this Law and other relevant laws and administrative regulations.

Entities engaging in foreign service cooperation shall possess the corresponding qualifications. Specific measures shall be set forth by the State Council.

Article 11: The state may exercise state operated trading management for import and export of certain goods. The business of import and export of goods subject to state operated trading management can only be operated by delegated enterprises, except where the state permits the business of import and export of a certain number of goods subject to state-operated trading management to be operated by non-delegated enterprises. The lists of goods subject to state-operated trading management and enterprises delegated with the operation thereof will be determined, revised and published by the State Council department in charge of foreign trade in conjunction with other relevant departments of the State Council.

If goods subject to state operated trading management are being imported or exported without authorization in violation of the first paragraph hereof, customs will not grant release of such goods.

Article 12: A foreign trade operator may accept entrustment by other parties and, within its business scope, handle foreign trade business as an agent.

Article 13: Foreign trade operators shall submit documents and information concerning their foreign trade business activities to the relevant departments in accordance with the provisions formulated according to law by the State Council department in charge of foreign trade or other relevant State Council departments. The relevant departments shall protect the business secrets of the provider.

PART THREE: IMPORT AND EXPORT OF GOODS AND TECHNOLOGIES

Article 14: The state permits the free import and export of goods and technologies, except where otherwise provided for by laws or administrative regulations.

Article 15: The State Council department in charge of foreign trade may, based upon the need to monitor import and export activities, grant automatic import and export licensing to certain freely imported and exported goods and publish the list thereof.

With respect to import and export goods entitled to automatic licensing, if the shipper or consignee applies for automatic licensing before customs declaration, the State Council department in charge of foreign trade or its entrusted institution shall grant licensing. If formalities for automatic licensing have not been completed, customs will not grant release of the goods.

Imports and exports of technologies that are of the type of free import and export shall have their contract registered with the State Council department in charge of foreign trade or its entrusted institution for the record.

Article 16: The state may restrict or prohibit the import or export of relevant goods or technologies under any of the following circumstances:

(1) where it is necessary to restrict or prohibit imports or exports to maintain national security, public interest or common ethics;

(2) where it is necessary to restrict or prohibit imports or exports to protect the health or safety of people, or the lives or health of animals or plants, or the environment;

(3) where it is necessary to restrict or prohibit imports or exports to implement relevant measures with regard to the import and export of gold or silver;

(4) where it is necessary to restrict or prohibit exports due to a shortage of domestic supplies or in order to effectively protect exhaustible domestic natural resources;

(5) where it is necessary to restrict exports due to the limited market capacity of the importing country or region;

(6) where it is necessary to restrict exports due to severe disorder in export business operations;

(7) where it is necessary to restrict imports in order to establish or accelerate the establishment of specific domestic industries;

(8) where it is necessary to restrict imports of agricultural, animal husbandry or fishery products in any form;

(9) where it is necessary to restrict imports in order to safeguard the state's international financial position and balance of payments;

(10) where it is necessary to restrict or prohibit other imports or exports in accordance with laws or administrative regulations; or

(11) where it is necessary to restrict or prohibit other imports or exports under international treaties or agreements concluded or acceded to by China.

Article 17: With regard to the import and export of goods or technologies related to fission or fusion substances or substances from which fission or fusion substances are derived, or the import and export of weapons, ammunition or other military related materials, the state may adopt any necessary measures to protect national security.

During wartime or to maintain world peace and security, the state may adopt any necessary measures regarding the import and export of goods and technologies.

Article 18: The State Council department in charge of foreign trade in conjunction with other relevant departments of the State Council shall formulate, revise and publish lists of the goods and technologies the import or export of which are restricted or prohibited in accordance with Articles 16 and 17 hereof.

The State Council department in charge of foreign trade may unilaterally, or in conjunction with other relevant departments of the State Council, decide within the scope specified in Articles 16 and 17 hereof and on an interim basis to restrict or prohibit the import or export of specific goods and technologies not specified in the lists mentioned in the preceding paragraph, subject to the approval of the State Council.

Article 19: The state shall impose administrative measures such as quota or licensing control on goods the import or export of which are restricted. Technologies the import or export of which are restricted shall be subject to licensing control.

Goods and technologies subject to quota or licensing control may only be imported or exported with the sole permission of the State Council department in charge of foreign trade or with the permission of the department in conjunction with other relevant departments of the State Council in accordance with the provisions of the State Council.

The state may impose tariff-rate quota administration on certain imported goods.

Article 20: Import and export quotas and tariff-rate quotas for goods shall be allocated by the State Council department in charge of foreign trade or other relevant departments of the State Council within their own scope of duties and on the basis of the principles of openness, fairness, equality and beneficial results. Specific procedures shall be set forth by the State Council.

Article 21: The state shall implement a unified qualification appraisal system for merchandise and carry out certification, inspection and quarantine of import and export merchandise in accordance with relevant laws and administrative regulations.

Article 22: The state shall have rules of origin for import and export goods. Specific procedures shall be set forth by the State Council.

Article 23: With respect to cultural relics, wild animals or plants, and the products thereof, etc., where other laws or administrative regulations prohibit or restrict the import and export thereof, such laws or administrative regulations shall prevail.

PART FOUR: INTERNATIONAL TRADE IN SERVICES

Article 24: With respect to international trade in services, the People's Republic of China grants market access and national treatment to concluding or acceding parties in accordance with its commitments made under international treaties or agreements concluded or acceded to.

Article 25: The State Council department in charge of foreign trade and other relevant departments of the State Council shall regulate international trade in services in accordance with this Law and other relevant laws or administrative regulations.

Article 26: The state may restrict or prohibit relevant international trade in services under any of the following circumstances:

(1) where it is necessary to restrict or prohibit international trade in services to maintain national security, public interest or common ethics;

(2) where it is necessary to restrict or prohibit international trade in services to protect the health or safety of people, or the lives or health of animals or plants, or the environment;

(3) where it is necessary to restrict international trade in services to establish or accelerate the establishment of specific domestic service industries;

(4) where it is necessary to restrict international trade in services to ensure balancing foreign exchange revenue and expenditure of the state;

(5) in the case of other restrictions or prohibitions deemed necessary according to laws or administrative regulations; or

(6) in the case of other restrictions or prohibitions deemed necessary under international treaties or agreements concluded or acceded to by China.

Article 27: With respect to international trade in services related to military affairs, or related to fission or fusion substances or substances from which fission or fusion substances are derived, the state may adopt any necessary measures to protect national security.

During wartime or to protect international peace and security, the state may adopt any necessary measures regarding international trade in services.

Article 28: The State Council department in charge of foreign trade in conjunction with other relevant departments of the State Council shall formulate, revise and publish the market access catalogue of international trade in services in accordance with Articles 26 and 27 hereof and other relevant laws and administrative regulations.

PART FIVE: FOREIGN TRADE-RELATED INTELLECTUAL PROPERTY RIGHTS PROTECTION

Article 29: The state shall protect intellectual property rights related to foreign trade in accordance with relevant intellectual property rights laws and administrative regulations.

If any imported goods have infringed the intellectual property rights of others and endangered the order in foreign trade activities, the State Council department in charge of foreign trade may take measures such as prohibiting the import of relevant products manufactured or sold by the infringer within a set period of time.

Article 30: If an intellectual property rights holder has conducted such acts as preventing licensees' challenges to the validity of the intellectual property rights in the licensing contract, or imposing coercive package licensing, or including exclusive grantback conditions in the licensing contract, and has jeopardized the fair competition operation of foreign trade activities, the State Council department in charge of foreign trade may adopt necessary measures to eliminate harm.

Article 31: If another country or region does not grant national treatment on intellectual property protection to legal persons, other organizations or individuals of the People's Republic of China, or is not able to offer sufficient and effective intellectual property protection for goods, technology or services originating from the People's Republic of China, the State Council department in charge of foreign trade may take necessary measures against trade between the country or region concerned and the People's Republic of China in accordance with this Law and other relevant laws and administrative regulations as well as international treaties or agreements concluded or acceded to by the People's Republic of China.

PART SIX: ORDER IN FOREIGN TRADE ACTIVITIES

Article 32: Carrying out monopolistic acts in foreign trade business activities in violation of relevant anti-monopoly laws or administrative regulations is not allowed.

Carrying out monopolistic acts in foreign trade business activities that jeopardize the fair market competition shall be handled in accordance with relevant anti-monopoly laws or administrative regulations. If there are unlawful acts as the aforementioned that jeopardize the order in foreign trade activities, the State Council department in charge of foreign trade may take necessary measures to remove the harm.

Article 33: In foreign trade business activities, unfair competition acts such as selling products at an unfair low price, colluding with other bidders in submitting bids, releasing false advertisements, or involving in commercial bribery are not allowed.

Carrying out unfair competition acts in foreign trade business activities shall be handled in accordance with relevant anti-unfair competition laws or administrative regulations.

If there are unlawful acts as the aforementioned that jeopardize the order in foreign trade activities, the State Council department in charge of foreign trade may take necessary measures such as prohibiting the import and export of relevant goods or technology of such business operator to remove the harm.

Article 34: The following acts are prohibited in foreign trade business activities:

(1) forgery or distortion of labels of origin; forgery, distortion or trading of certificates of origin, import and export licenses, import and export quota certificates or other import and export documents;

(2) cheating on export tax rebates;

(3) smuggling;

(4) evading certification, inspection, or quarantine as stipulated by laws or administrative regulations; or

(5) other acts in violation of laws or administrative regulations.

Article 35: In foreign trade business activities, foreign trade operators shall abide by relevant state provisions on foreign exchange administration.

Article 36: The State Council department in charge of foreign trade may publicize the violations of this Law that jeopardize the order in foreign trade activities.

PART SEVEN: INVESTIGATIONS RELATED TO FOREIGN TRADE

Article 37: In order to maintain order in foreign trade activities, the State Council department in charge of foreign trade may, independently or in conjunction with other relevant departments of the State Council, investigate the following items in accordance with laws and administrative regulations:

(I) the impact of the import and export of goods, technology or international trade in services on domestic industries and the competitiveness thereof;

(2) trade barriers of relevant countries or regions;

(3) matters that need to be investigated in order to determine whether to adopt antidumping, countervailing, safeguard measures or other forms of foreign trade remedial measures;

(4) acts that circumvent foreign trade remedial measures;

(5) matters in foreign trade concerning national security and state interests;

(6) matters that need to be investigated for the implementation of Article 7, the second paragraph of Article 29, Article 30, Article 31, the third paragraph of Article 32, the third paragraph of Article 33 hereof; or

(7) other matters that influence the order in foreign trade activities and require investigation.

Article 38: The State Council department in charge of foreign trade shall make a public announcement upon initiation of an investigation related to foreign trade.

Investigations may adopt the methods of questionnaire, holding of a hearing, on-the-spot investigation and entrusted investigation, etc.

The State Council department in charge of foreign trade shall provide an investigation report or make determinations and publicize the same based on the investigation results.

Article 39: The relevant entities and individuals shall fully cooperate with and provide assistance in investigations related to foreign trade.

The State Council department in charge of foreign trade and other relevant departments of the State Council and their personnel are obliged to protect the confidentiality of state secrets and trade secrets learnt in the course of investigations related to foreign trade.

PART EIGHT: REMEDIES RELATED TO FOREIGN TRADE

Article 40: The state may take appropriate foreign trade remedial measures based upon the results of investigations related to foreign trade.

Article 41: If a product of another country or region is imported to the China market at a dumping price less than the normal value of the product and causes or threatens to cause material injury to an established domestic industry, or materially impedes the establishment of a particular domestic industry, the state may take antidumping measures to remove or ease such injury or threat of injury or impediment.

Article 42: If a product of another country or region is exported to a third country at a dumping price less than the normal value of the product and causes or threatens to cause material injury to an established domestic industry in China, or materially impedes the establishment of a particular domestic industry in China, the State Council department in charge of foreign trade may, upon request of the domestic industry, negotiate with the third country and request it to take appropriate measures.

Article 43: In the case that an imported product has directly or indirectly received specific subsidies in any form from the exporting country or region and causes or threatens to cause material injury to an established domestic industry or materially impedes the establishment of a domestic industry, the state may take countervailing measures to remove or ease such injury or threat of injury or impediment.

Article 44: If a considerable increase in the amount of imports of a product causes serious injury, or threatens to cause injury, to the domestic industry that produces similar products or directly competitive products, the state may take necessary safeguard measures to remove or ease such injury or threat of injury, and provide necessary support to the industry.

Article 45: If an increase in the services provided for China by service suppliers of another country or region causes serious injury, or threatens to cause injury, to the domestic industry that provides similar services or directly competitive services, the state may take necessary remedial measures to remove or ease such injury or threat of injury.

Article 46: If a considerable increase in the import of a type of product to the China market caused by the import restrictions of a third country causes serious injury, or threatens to cause injury, to an established domestic industry, the state may take necessary remedial measure to restrict the import of such product.

Article 47: If a country or region that has concluded or jointly acceded to an economic and trade treaty or agreement with the People's Republic of China violates such treaty or agreement, and causes loss or damage to the interests of the People's Republic of China entitled to under such treaty or agreement or impedes the fulfilment of the purposes of such treaty or agreement, the Government of the People's Republic of China shall have the right to request the relevant country or region to take appropriate remedial measures, and may suspend or terminate performance of the relevant obligations in accordance with such treaty or agreement.

Article 48: The State Council department in charge of foreign trade shall conduct bilateral or multilateral discussion, negotiation and resolution of conflicts in respect of foreign trade in accordance with this Law and other relevant laws.

Article 49: The State Council department in charge of foreign trade and other relevant departments of the State Council shall set up a pre-alert and contingency mechanism for import and export of goods and technology, and international trade in services to deal with unexpected and unusual situations in foreign trade activities and protect state economic security.

Article 50: The state may take necessary counter-circumventing measures against acts that circumvent foreign trade remedial measures as provided by this Law.

PART NINE: PROMOTION OF FOREIGN TRADE

Article 51: The state shall formulate the development strategy of foreign trade, set up and improve the mechanism for promotion of foreign trade.

Article 52: The state shall establish and improve financial institutions involved in foreign trade services, and establish a development or risk fund for foreign trade in line with the needs of foreign trade development.

Article 53: The state shall develop foreign trade by means of import and export credits, import and export credit insurance, export tax rebates and other measures in support of foreign trade.

Article 54: The state shall establish a public information service system for foreign trade to provide information services to foreign trade operators and the public.

Article 55: The state shall take measures to encourage foreign trade operators to develop the international market, and develop foreign trade through various means such as investing abroad, contracting overseas projects and foreign labor cooperation.

Article 56: Foreign trade operators may establish or join relevant associations and chambers of commerce in accordance with law.

The relevant associations or chambers of commerce shall abide by laws and administrative regulations to provide services related to foreign trade such as production, marketing, information and training for their members pursuant to their articles of association; coordinate their members and exercise self-discipline; apply for foreign trade remedial measures according to law; protect the interests of their members and the industry; transmit the members' suggestions on foreign trade to relevant government departments and carry out foreign trade promotion activities.

Article 57: Chinese organizations for the promotion of international trade shall, in accordance with their articles of association, develop foreign links, hold exhibitions and provide information, consultancy services and other foreign trade promotional activities.

Article 58: The state shall support and promote small and medium-sized enterprises to start foreign trade.

Article 59: The state assists, supports and encourages the development of foreign trade in ethnic minority autonomous regions and in economically underdeveloped areas.

PART TEN: LEGAL LIABILITY

Article 60: Where goods subject to state operated trading management are imported or exported without authorization in violation of Article 11 hereof, the State Council department in charge of foreign trade or other relevant departments of the State Council may impose a fine of not more than Rmb50,000. If the circumstances are serious, the application for engaging in the import and export business of goods subject to state operated trading management by the offender will not be handled for three years from the effective date of the administrative penalty decision, or the delegation to engage in the import and export of goods subject to state operated trading management will be revoked.

Article 61: Import or export of goods whose import and export are prohibited, or import or export of goods whose import and export are restricted without authorization shall be handled and penalized by customs in accordance with laws and administrative regulations. If a crime is committed, criminal liability shall be pursued according to law.

Import or export of technologies whose import and export are prohibited, or import or export of technologies whose import and export are restricted without authorization shall be handled and penalized in accordance with relevant laws and administrative regulations. If it is not provided in laws or administrative regulations, the State Council department in charge of foreign trade shall order rectification thereof, confiscate the illegal income and impose a fine of not less than one time and not more than five times the illegal income. If there is no illegal income or the illegal income is less than Rmb10,000, a fine of not less than Rmb10,000 and not more than Rmb50,000 shall be imposed. If a crime is committed, criminal liability shall be pursued according to law.

The State Council department in charge of foreign trade or other relevant departments of the State Council may refuse to handle the offender's application for import or export quotas or license for three years, or prohibit the offender from engaging in the import and export business activities of relevant goods or technology for a period of one to three years, upon the effective date of the administrative penalty decision or criminal judgment in the two abovementioned paragraphs.

Article 62: Engaging in international trade in services that are prohibited or engaging in international trade in services that are restricted without authorization shall be subject to penalties pursuant to relevant laws and regulations. If it is not provided in laws or administrative regulations, the State Council department in charge of foreign trade shall order rectification thereof, confiscate the illegal income and impose a fine of not less than one time and not more than five times the illegal income. If there is no illegal income or the illegal income is less than Rmb10,000, a fine of not less than Rmb10,000 and not more than Rmb50,000 shall be imposed. If a crime is committed, criminal liability shall be pursued according to law.

The State Council department in charge of foreign trade may prohibit the offender from engaging in relevant business activities of international trade in services for a period of one to three years upon the effective date of the aforementioned administrative penalty decision or criminal judgment in the abovementioned paragraph.

Article 63: Violation of Article 34 hereof shall be subject to penalties pursuant to relevant laws and administrative regulations; if a crime is committed, criminal liability shall be pursued according to law.

The State Council department in charge of foreign trade may prohibit the offender from engaging in relevant foreign trade business activities for a period of one to three years upon the effective date of the aforementioned administrative penalty decision or criminal judgment in the above mentioned paragraph.

Article 64: For foreign trade operators that have been prohibited from engaging in foreign trade business activities according to Articles 61 to 63 hereof, customs shall refuse to handle customs declaration and release the relevant import and export goods of the offenders according to the prohibition decision made according to law by the State Council department in charge of foreign trade, and foreign exchange administration or designated foreign exchange banks shall refuse to handle relevant foreign exchange payment and sale formalities for the offender, within the period of prohibition.

Article 65: Where a crime is committed by personnel in the departments responsible for foreign trade administration according to this Law by neglect of duties, practicing favoritism and malpractice or abuse of power, criminal liability shall be pursued in accordance with the law. Where a crime is not committed, administrative penalties shall be imposed.

Where a crime is committed by personnel in the departments responsible for foreign trade administration according to this Law by taking advantage of their positions to extort property from other parties or by illegally receiving property from other parties in order to seek benefits for such parties, criminal liability shall be pursued according to law. Where a crime is not committed, administrative penalties shall be imposed.

Article 66: Any foreign trade business-related party who is dissatisfied with specific administrative acts of the departments responsible for foreign trade administration according to this Law may apply for an administrative review or file an administrative case to the people's court in accordance with law.

PART ELEVEN: SUPPLEMENTARY PROVISIONS

Article 67: With regard to the administration of foreign trade of military products, fission and fusion substances or substances from which fission and fusion substances are derived, or import and export of cultural products, where laws or administrative regulations have provided otherwise, such laws or administrative regulations shall prevail.

Article 68: The state shall adopt flexible measures by offering preferential treatment and otherwise facilitating trade between border areas and towns of China and those of neighboring countries, as well as to cross-border market trading between residents of border areas. Specific measures shall be determined by the State Council.

Article 69: This Law shall not apply to the regions of the People's Republic of China that independently levy tariffs.

Article 70: This Law shall be effective as of July 1, 2004.