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Foreign Trade Law - 2004

Chapter I General Provisions

Chapter II Foreign Trade Business Operators

Chapter III The Import and Export of Goods and Technology

Chapter IV International Service Trade

Chapter V Foreign-trade-related Intellectual Property Protection

Chapter VI Foreign Trade Order

Chapter VII Foreign Trade Investigation

Chapter VIII Foreign Trade Relief

Chapter IX Foreign Trade Promotion

Chapter X Legal Liabilities

Chapter XI Supplementary Provisions

Chapter I General Provisions

Article 1 The present Law is enacted for the purpose of broadening the opening to the outside world, developing foreign trade, maintaining the order of foreign trade, protecting the lawful rights and interests of the foreign trade business operators, and promoting the healthy development of the socialist market economy.

Article 2 The present Law applies to foreign trade and the protection of foreign-trade-related intellectual property.

The term "foreign trade" as mentioned in the present law refers to the import and export of goods, technology, and the international trade of services.

Article 3 The administrative department of the State Council in charge of foreign trade shall take charge of the nationwide foreign trade according to the present Law.

Article 4 The state practices a uniform system of foreign trade, encourages the development of foreign trade, and maintains an order of fair and free foreign trade.

Article 5 The People's Republic of China promotes and develops foreign trade relations with other countries and regions, concludes or accedes to regional economic and trade agreements such as customs or tariff union agreements, free trade zone agreements, etc., and joins regional economic organizations according to the principle of equality and reciprocity.

Article 6 In the field of foreign trade, the People's Republic of China grants, according to the international treaties and agreements it concluded or acceded to, most-favored-nation treatment or national treatment to other contracting parties or members, or grants most-favored-nation treatment or national treatment to its counterparts according to the principle of mutual benefit and reciprocity.

Article 7 For any country or region that takes discriminatory banning, restriction or other acts against the People's Republic of China in terms of trade, the People's Republic of China shall be entitled to adopt, in accordance with the actual circumstances, corresponding measures against them.

Chapter II Foreign Trade Business Operators

Article 8 The term "foreign trade business operator" as mentioned in the present Law refers to any legal person, other organization, or individual, that has handled industrial and commercial registration or other formalities for business operation and is engaged in the foreign trade business activities according to the provisions of the present Law and other relevant laws and administrative regulations.

Article 9 Any foreign trade business operator that is engaged in the import and export of goods or technology shall be registered for archival purposes with the administrative department of foreign trade of the State Council or the institution entrusted thereby, unless it is otherwise provided for by any law, administrative regulation or the foreign trade department of the State Council. The specific measures for archival registration shall be formulated by the foreign trade department of the State Council. Where any foreign trade business operator that fails to file for archival registration according to relevant provisions, the customs may not handle the procedures of customs declarations and release of the import or export goods.

Article 10 Anyone who is engaged in international service trade shall abide by the present Law and other relevant laws and administrative regulations.

An entity that is engaged in the overseas contracting of engineering projects or overseas labor cooperation shall have lawfully obtained corresponding competence or qualifications. The specific measures shall be formulated by the State Council.

Article 11 The State may employ the administration of state-run trade to the import and export of some goods. The import and export of the goods subject to the administration of state-run trade can be managed by the authorized enterprises only, with the exception, however, of the goods, which is allowed by the state to be partially imported or exported by unauthorized enterprises. The catalogue of the goods subject to the management of state-run trade and that of authorized enterprises shall be determined, adjusted and published by the foreign trade department of the State Council in collaboration with other relevant departments.

Where anyone who imports or exports, as in violation of Paragraph 1 of the present article, any of the goods subject to the management of state-run trade, the customs may not release the goods.

Article 12 A foreign business operator may accept the entrustment of other people and handle foreign trade businesses on their behalf within its scope of business.

Article 13 A foreign trade business operator shall submit to the relevant departments the documents and materials relating to its foreign trade activities in accordance to the provisions of the foreign trade department of the State Council and those of other relevant departments of the State Council. And the relevant departments shall keep the business secrets of the providers to themselves.

Chapter III The Import and Export of Goods and Technology

Article 14 The state allows the free import and export of goods and technology, unless it is otherwise provided for by any law or administrative regulation.

Article 15 The foreign trade department of the State Council may, where the monitoring of import and export so requires, employ the system of automatic license of import and export to some of the freely imported and exported goods, and publish the catalogue thereof.

For the goods subject to automatic license of import and export, if the consignor or consignee applies for automatic license prior to handling the formalities of customs declaration, the foreign trade department of the State Council and the institutions entrusted thereby shall grant approval. Where it fails to handle the formalities of automatic license, the customs may not release the goods thereunder.

To import or export any technology subject to free import and export, one shall have its contracts registered with the foreign trade administrative department of the State Council or the institution entrusted thereby for archival purposes.

Article 16 The state may restrict or forbid the import or export of relevant goods or technology if:

1. it is necessary to restrict or forbid the import or export for the purpose of maintaining state security, social public good or public morality;

2. it is necessary to restrict or forbid the import or export for the purpose of protecting human health or security, protecting the life or health of any animal or plant, or protecting the environment;

3. it is necessary to restrict the import or export for the purpose of implementing the measures relating to the import or export of gold or silver;

4. it is necessary to restrict or forbid the export of any of the exhaustible natural resources that are in short supply or subject to effective protection;

5. it is necessary to restrict the export due to the limited market capacity of the destination country or region;

6. it is necessary to export due to the serious disorder of the export business management;

7. it is necessary to restrict the import for the purpose of establishing or accelerating the establishment of a particular domestic industry;

8. it is necessary to restrict the import of any form of product in the agriculture, animal husbandry, or fishing industry;

9. it is necessary to restrict the import for the purpose of safeguarding the international financial status of the state or of the international balance of payments;

10. it is necessary to restrict or forbid the import or export under any other circumstance as provided for in any other law or administrative regulation; or

11. it is necessary to restrict or forbid the import or export under any other circumstance as provided for in any international treaty or agreement that China has concluded or acceded to.

Article 17 The state may, for the purpose of defending state security, take any necessary measures for managing the import and export of any matter of fission or fusion or any matter that derives such matter and the import and export of any weapon, ammunition, or any other military supply.

When in war or for keeping international peace and security, the state may take any necessary measures in terms of the import or export of goods or technology.

Article 18 The foreign trade administrative department of the State Council may, in collaboration with any other relevant department of the State Council, formulate, adjust and publish catalogues of goods and technology restricted or forbidden from import or export according to the provisions of Article 16 or 17 of the present Law.

The foreign trade administrative department of the State Council may, independently or in collaboration with any other department of the State Council, make provisional decisions, upon the approval of the State Council and within the scope of Articles 16 and 17 of the present Law, on restricting or forbidding the import or export of certain goods or technology that are not found in the catalogue as mentioned in the preceding paragraph.

Article 19 The state adopts the system of quota, license, etc, to the goods subject to import or export restrictions, while adopts the system of license to the technologies restricted or prohibited from import or export.

For the goods and technologies subject to the administration of quota or license, they cannot be imported or exported unless it has been approved by the foreign trade department of the State Council independently or in collaboration with other departments of the State Council.

The state may practice tariff quota administration to some of the import goods.

Article 20 The quotas and tariff quotas for the import and export goods shall be distributed by the foreign trade department of the State Council or other relevant departments of the State Council within their respective duties in accordance with the principles of openness, fairness, impartiality, and efficiency. The specific measures shall be made by the State Council.

Article 21 The state practices a uniform system of commodity quality assessment, and makes authentications, inspections, and quarantines to the import and export commodities according to the provisions of relevant laws and administrative regulations.

Article 22 The state applies the administration system of origin to the import and export goods. The specific measures shall be formulated by the State Council.

Article 23 With regard to cultural relics, wild animals or plants, and the products thereof, if it is restricted or prohibited by any law or administrative regulation from import or export, the provisions of such laws and administrative regulations shall apply.

Chapter IV International Service Trade

Article 24 The People's Republic of China opens, in accordance with its commitments made in the international treaties and agreements of international service trade that it has concluded or acceded to, its market to the other contracting parties or members and grants them with the national treatment.

Article 25 The foreign trade department of the State Council and other relevant departments of the State Council may, according to the present Law or any other relevant law or administrative regulation, administer the trade of international services.

Article 26 The state may restrict or prohibit the trade of relevant international services if:

1. it is necessary to restrict or prohibit it for the sake of maintaining state security, social public good or public morality;

2. it is necessary to restrict or prohibit it for the purpose of protecting human health or security, protecting the life or health of any animal or plant, or protecting the environment;

3. it is necessary to restrict it for the purpose of establishing or accelerating the establishment of a certain domestic service industry;

4. it is necessary to restrict it for the purpose of ensuring the balance of international payments of the state;

5. it is necessary to restrict or prohibit it for any other reason as provided for in any law or administrative regulation; or

6. it is necessary to restrict or prohibit it for any other reason as provided for in any international treaty or agreement that China has concluded or acceded to.

Article 27 For the military-related trade of international services and the international service trade of any matter of fission or fusion or any matter that derives such matter, the state may take any necessary measures to safeguard the security of the state.

When in war or for keeping international peace and security, the state may take any necessary measures regarding the international service trade.

Article 28 The foreign trade department of the State Council formulates, adjusts, and publishes, in collaboration with other relevant departments of the State Council, market entry catalogues of the international service trade in accordance with the provisions of Articles 26 and 27 of the present Law and other relevant laws and administrative regulations.

Chapter V Foreign-trade-related Intellectual Property Protection

Article 29 The state protects the intellectual property relating to foreign trade in accordance with relevant laws and administrative regulations concerning intellectual property.

Where any of the import goods violates any intellectual property right and, at the same time, endangers the foreign trade order, the foreign trade department of the State Council may take such measures as prohibiting the import of the relevant goods that the infringer has produced or sold for a certain period of time.

Article 30 In case any intellectual property right holder commits any of the acts of hindering the licensee from questioning the validity of the intellectual property right involved in the license agreement, conducting forced package license, or providing exclusive selling back conditions in the license agreement, etc. and, at the same time, endangers the fair competition order of foreign trade, the foreign trade department of the State Council may take necessary measures to eliminate such danger.

Article 31 Where any country or region fails to grant national treatment to the legal persons, other organizations, or individuals of the People's Republic of China in the protection of intellectual property rights, or fails to provide sufficient and effective intellectual property protection to the goods, technologies or services whose origin is the People's Republic of China, the foreign trade department of the State Council may, according to the present Law or any other law or administrative regulation, and according to the international treaties or agreements that the People's Republic of China has concluded or acceded to, take necessary measures against the trade with the said country or region.

Chapter VI Foreign Trade Order

Article 32 No one may, in the business activities of foreign trade, implement any act of monopolization against the relevant anti-monopolization laws or administrative regulations.

Anyone who carries out any monopolizing act in its foreign trade business activities shall be dealt with in accordance with the relevant anti-monopolization laws and administrative regulations. If any of the illegal acts as described in the preceding paragraph endangers the foreign trade order at the same time, the foreign trade department of the State Council may take necessary measures to eliminate the harm.

Article 33 No one may, in the business activities of foreign trade, conduct such unfair competition acts as selling commodities at unjustified low prices, colluding bid invitation and tendering for bid, disseminating false advertisements, or offering commercial bribes, etc.

Anyone who conducts any unfair competition act in its foreign trade business activities shall be dealt with in accordance with the relevant laws and administrative regulations regarding counteracting unfair competition.

If any of the illegal acts as described in the preceding paragraph endangers the foreign trade order at the same time, the foreign trade department of the State Council may take such measures as prohibiting the business operator involved from importing or exporting relevant goods or technologies so as to eliminate the said illegal act.

Article 34 No one may, in foreign trade activities, commit any of the following:

1. Forging or altering the marks of origin of the import or export goods; forging, altering or trading the certificates of origin, the licenses of import or export, the certificates of import or export quotas of the import or export goods, or any other certification documents of import or export;

2. Cheating for export refunds;

3. Smuggling;

4. Evading inspections and quarantines as provided for by any law or administrative regulation; or

5. Committing any other violation of law or administrative regulation.

Article 35 All foreign trade business operators shall abide by the provisions of the state regarding foreign exchange administration in their foreign trade business activities.

Article 36 Anyone who violates the present Law and endangers the foreign trade order shall be made public by way of announcements made by the foreign trade department of the State Council.

Chapter VII Foreign Trade Investigation

Article 37 In order to maintain the foreign trade order, the foreign trade department of the State Council may investigate into the following matters by itself or jointly with other relevant departments of the State Council in accordance with the laws and administrative regulations:

1. The impact of the import or export of goods or technology or international service trade on domestic industries and the competitiveness thereof;

2. The trade barriers of relevant countries or regions;

3. The matters that need to be investigated into for the purpose of determining whether it is necessary to take such foreign trade relief measures as antidumping, countervailing, or safeguard measures, etc.;

4. The evasion of trade relief measures;

5. The matters of foreign trade that concern the security or interest of the state;

6. The matters that need to be investigated into for the purpose of implementing Article 7, Paragraph 2 of Article 29, Article 30, Article 31, Paragraph 3 of Article 32, and Paragraph 3 of Article 33; and

7. Any other matter that need to be investigated into as a result of affecting the foreign trade order.

Article 38 When a foreign trade investigation is initiated, an announcement shall be issued by the foreign trade department of the State Council.

An investigation may be made by way of written questionnaires, holding hearings, making site investigations, and entrusting other people to make the investigation, etc.

The foreign trade department of the State Council may, based on the result of investigation, put forward an investigation report or make a ruling, and make an announcement for it.

Article 39 Relevant entities and individuals shall offer cooperation and assistance in foreign trade investigations.

The foreign trade department of the State Council and other departments of the State Council as well as the functionaries thereof shall, in the process of foreign trade investigations, be obliged to keep to themselves the state secrets and commercial secrets that they have access to.

Chapter VIII Foreign Trade Relief

Article 40 The state may take appropriate trade relief measures according to the result of foreign trade investigations.

Article 41 In case any of the products of any country or region is dumped into China at an abnormally low price and thus causes substantial injury or the threat of substantial injury to an established domestic industry, or substantially impedes the establishment of a domestic industry, the state may take antidumping measures so as to eliminate or alleviate such injury or threat of injury or impediment.

Article 42 In case any product of any country or region is exported to any third country at an abnormally low price and thus causes substantial injury or the threat of substantial injury to an established domestic industry, or substantially impedes the establishment of a domestic industry, the foreign trade department of the State Council may, as per the request of the corresponding domestic industry, hold negotiations with the government of the third country, and urge it to take appropriate measures.

Article 43 Where any imported product is given, directly or indirectly, any special subsidy by the exporting country or region in any form, and thus causing substantial injury or threat of substantial injury to an established industry, or substantially impeding the establishment of a domestic industry, the state may take countervailing measures so as to eliminate or alleviate such injury or threat of injury or impediment.

Article 44 In case the sharp increase of any imported product brings about any serious injury or threat of serious injury to the domestic industry that produces identical product or directly competing products, the state may take necessary safeguarding measures so as to eliminate or alleviate such injury or threat of injury, and may provide necessary support to the industry concerned.

Article 45 In case the increase of any service provided by any service provider of any country or region to China has caused injury or threat of injury to the domestic industry that provides identical service or directly competing services, the state may take necessary relief measures so as to eliminate or alleviate such injury or threat of injury.

Article 46 In case the import of any product to into China increases sharply as a result of the restriction of import by any third country, and thus causes injury or threat of injury to an established domestic industry, or substantially impedes the establishment of a domestic industry, the state may take necessary measures to restrict the import of the product.

Article 47 Where any country or region that has entered into any economic or trade treaty or agreement with the People's Republic of China violates the treaty or agreement so that the interest enjoyable by the People's Republic of China according to the treaty or agreement is lost or injured or the achievement of the objective of the treaty or agreement is impeded, the government of the People's Republic of China is entitled to demand the country or region concerned to take appropriate measures of relief, and may suspend or terminate the performance of relevant obligations according to the relevant treaties or agreements.

Article 48 The foreign trade department of the State Council is, according to the provisions of the present Law or other relevant laws, responsible for the bilateral or multilateral discussions, negotiations, and dispute settlement.

Article 49 The foreign trade department of the State Council and other relevant departments of the State Council shall establish an emergency prewarning mechanism of the import and export of goods, technology, and international service trade so as to deal with the abrupt or abnormal situations in foreign trade and safeguard the economic security of the state.

Article 50 For the acts of evading the trade relief measures as provided for in the present Law, the state may take necessary anti-evasion measures.

Chapter IX Foreign Trade Promotion

Article 51 The state formulates its strategy for foreign trade development, establishes and improves its foreign trade promotion mechanisms.

Article 52 The state establishes and improves its foreign-trade-oriented financial institutions and establishes foreign trade development funds and risk funds according to the demand of foreign trade development.

Article 53 The state employs such foreign trade promotion measures as import and export credit, export credit insurance, export tax refund, etc. to develop its foreign trade.

Article 54 The state establishes a foreign trade public information service system so as to provide information services to the foreign trade business operators and the general public.

Article 55 The state takes measures to encourage foreign trade business operators to explore the international market, and employ diversified means including foreign investment, foreign engineering project contracting, and labor cooperation, etc. to develop its foreign trade.

Article 56 Foreign trade business operators may lawfully establish and join relevant associations and chambers of commerce.

Relevant associations and chambers of commerce shall abide by the laws and administrative regulations, and provide, according to their constitutions, services to their members in terms of production, marketing, information, training, etc. relating to foreign trade, plays the role of coordination and self-discipline, makes applications for foreign trade relief measures according to law, defend the interests of their members and the corresponding industry, passes onto the relevant department of the government the suggestions of their members regarding foreign trade, and conduct foreign trade promotion activities.

Article 57 The Chinese international trade promotion organizations carry out foreign contacts according to their respective constitutions, hold exhibitions, provide information, consultation and conduct other foreign trade promotion activities.

Article 58 The state supports and promotes small and medium-sized enterprises to engage in foreign trade.

Article 59 The state supports and promotes minority ethnic group regions and economically underdeveloped regions to engage in foreign trade.

Chapter X Legal Liabilities

Article 60 Anyone who violates Article 11 of the present Law by unlawfully importing or exporting any of the goods subject to state-run trade without authorization shall be fined up to 50,000 yuan by the foreign trade department of the State Council or other relevant departments of the State Council. If the circumstances are serious, the application of the offender for engaging in the import or export of the goods subject to state-run trade may be turned down for a period of three years as of the day when the decision on administrative sanction takes effect, or the authorization to engage in the import or export of goods subject to state-run trade that has already been granted may be canceled.

Article 61 Anyone who imports or exports any goods that are banned from import or export or unlawfully imports or exports any goods that are restricted from import or export without approval shall be dealt with and punished by the customs office according to relevant laws or administrative regulations. If the offence constitutes any crime, it shall be subject to criminal liabilities.

Anyone who imports or exports any technology that is banned from import or export or unlawfully imports or exports any technology that is restricted from import or export shall be ordered by the foreign trade department of the State Council to correct, and be fined two times up to 5 times the illegal proceeds and the illegal proceeds shall be confiscated. Where there are no illegal proceeds or the illegal proceeds are not as much as 10,000 yuan, it shall be fined 10,000 yuan up to 50,000 yuan. If the offence constitutes any crime, it shall be subject to criminal liabilities.

As of the day when the decision on administrative sanction as described in the two preceding paragraphs takes effect, the foreign trade department of the State Council or other relevant departments of the State Council may, within a period of three years, refuse to accept the offender's applications for import or export quotas or licenses, or prohibit the offender from engaging in the import or export of relevant goods or technology within a period of one year up to three years.

Article 62 Anyone who is engaged in any banned international service trade or is unlawfully engaged in any restricted international service trade without approval shall be punished according to relevant laws and administrative regulations. Where it is not provided for in any law or administrative regulation, it shall be ordered by the foreign trade department of the State Council to correct and be fined two times up to five times the illegal proceeds, and the illegal proceeds shall be confiscated. Where there are no illegal proceeds or the illegal proceeds are not as much as 10,000 yuan, it shall be fined 10,000 yuan up to 50,000 yuan. If the offence constitutes any crime, it shall be subject to criminal liabilities. The foreign trade department of the State Council may prohibit the offender from engaging in the business activities relating to international service trade for a period of one year up to three years as of the day when the offender is given an administrative sanction or criminal penalty.

The foreign trade department of the State Council may prohibit the offenders from engaging in the business activities of international service trade for a period of one year up to three years as of the day when the decision on administrative sanction as described in the preceding paragraph takes effect or as of the day when the judgment of criminal punishment takes effect.

Article 63 Anyone who violates Article 34 of the present Law shall be penalized according to relevant laws and administrative regulations. If the offence constitutes any crime, the offender shall be subject to criminal liabilities.

The foreign trade department of the State Council may prohibit the offenders from engaging in relevant foreign trade activities for a period of one year up to three years as of the day when the decision on administrative sanction as described in the preceding paragraph takes effect or as of the day when the judgment of criminal punishment takes effect.

Article 64 In case anyone is banned from engaging in relevant foreign trade business according to Articles 61 through 64 of the present Law, the customs shall, during the period of banning, refuse to handle relevant customs inspection and release formalities for the relevant import or export goods of the foreign trade business operator according to the decision of banning made by the foreign trade department of the State Council, and the administrative department of foreign exchange or the designated foreign exchange banks shall refuse to handle relevant foreign exchange settlement and sale.

Article 65 Where any functionary of the department that is responsible for the administration of foreign trade according to the present Law neglects his duties, practices fraud for private benefits or abuses his power so that any crime is committed, he shall be subject to criminal liabilities. If the offence is not so serious as to constitute a crime, he shall be subject to administrative sanctions.

Where any functionary of the department that is responsible for the administration of foreign trade according to the present Law solicits any property from any other person by taking advantage of his position, or unlawfully accepts any property of any other person for the benefit of that person so that any crime is constituted, he shall be subject to criminal liabilities; if the offence is not so serious as to constitute a crime, he shall be subject to administrative sanctions.

Article 66 Where any of the parties concerned of foreign trade business activities is dissatisfied with the concrete administrative act made by the department that is responsible for the administration of foreign trade according to the present Law, it may apply for administrative reconsideration according to law or lodge an administrative action with the people's court.

Chapter XI Supplementary Provisions

Article 67 Where there are different provisions in any law or administrative regulation concerning the administration of the foreign trade of any military matter, any matter of fission or fusion or any matter that derives such matter and concerning the administration of import or export of cultural products, such provisions shall prevail.

Article 68 The state employs flexible measures and grants favorable treatment to and facilitates the trade between the border areas of China and those of neighboring countries as well as the frontier trade between border residents. The specific measures shall be formulated by the State Council.

Article 69 The present Law shall not apply to the separate customs territories of the People's Republic of China.

Article 70 The present Law shall come into force as of July 1, 2004.




This translation, together with any explanatory material, is provided courtesy of Lehman Tax & Accounting.


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