FOREIGN TRADE LAW OF THE PEOPLE'S REPUBLIC OF CHINA

(Adopted at the 7th Session of the Standing Committee of  the  8th

National People's Congress and Promulgated on May 12, 1994)

Chapter I Principles

Article 1This Law is formulated with a view to developing  the  foreign  trade,maintaining the foreign trade order and promoting a healthy development ofthe socialist market economy.

Article 2  Foreign trade as mentioned in this Law  shall  cover  the  import  andexport of goods,technologies and the  international  trade  in  services.

Article 3The authority responsible for foreign  trade  and  economic  relationsunder theStateCouncil is in charge of the administration of the  foreigntrade of the entire country pursuant to this Law.

Article 4The State shall apply the foreign trade system on a uniform basis  andmaintain a fair and free foreign trade order in accordance with law.

    The State encourages the development of its foreign  trade,  exercisesthe initiative of localities  and  safeguards  the  autonomy  of  businessoperation of the foreign trade dealers.

Article 5The People's Republic of China promotes and develops trade  ties with other countries and regions on  the  principles  of  equality  and  mutualbenefit.

Article 6The People's Republic of China shall,  under international treaties oragreements to which the People's Republic of China is a contracting  party or  a  participating  party,  grant  the  other contracting  parties   or participating parties, or  on  the  principles  of  mutual  advantage  and

reciprocity,  grant  the  other  party  most-favored-nation  treatment  or national treatment within the field of foreign trade.

Article 7  In the  event  that  any  country  or  region  applies  discriminatoryprohibition, restriction or  other  like  measures  against  the  People'sRepublic of China in respect of trade, the People's Republic of China may,as the case may be, take counter-measures against the country or region in

question.

  Chapter II Foreign Trade Dealers

Article 8Foreign trade dealers as mentioned in this Law shall cover  the  legalentities and other organizations engaged  in  foreign  trade  dealings  in compliance with the provisions of this Law.

Article 9  A foreign trade dealer who intends to engage in the import and  exportof goods and technologies shall fulfill  the  following  requirements  and acquire the permit from the authority responsible for  foreign  trade  and economic relations under the State Council:

 1. having its own name and corporate structure;

  2. having definite scope of business in foreign trade;

  3. having place of  business,  financial  resources  and  professional personnel essential to the foreign trade  dealings  which  it  intends  to engage in;

  4. having a required record of import and export which  were  effected on its behalf or having necessary sources of goods for import or export;

   5. other requirements provided in  relevant  laws  and  administrative regulations.

    The detailed rules for the implementation of the  preceding  paragraph are to be laid down by the State Council.

    Enterprises with foreign investment shall be exempt  from  the  permit requirement provided in paragraph  1  with  respect  to  their  import  of non-productive articles for their own use, import of  equipments  and  raw materials and other articles necessary for their production as well as the

export of the products they produce under the relevant provisions of  laws and  administrative  regulations  governing   enterprises   with   foreign investment.

Article 10 The establishment  and  operation  of  enterprise an organizationsengagedininternational trade in services shall be in compliance with the provisions  of  this  Law  and  other  relevant  laws  and  administrative regulations.

Article 11Foreign trade dealers shall enjoy  full  autonomy  in  their  businessoperation  and  be  responsible  for  their  own  profits  and  losses  inaccordance with law.

Article 12  In foreign trade activities foreign trade dealers should  honor  theircontracts, ensure the quality of the commodity and perfect the  after-saleservices.

Article 13  Any organization or individual without foreign trade operation  permitmay entrust a foreign trade dealer  located  in  China  as  its  agent  toconduct its foreign trade  business  within  the  business  scope  of  the

latter. The entrusted foreign trade dealer shall provide  the  principal  withactual business information such as market situation, commodity prices andclient position. The agent and the principal shall conclude  and  sign  anagency agreement, in which the rights  and  obligations  of  both  partiesshould be specified.

Article 14 Foreign  trade  dealers  are  obligated  to  provide  documents   and information in relation to their foreign trade dealings  to  the  relevant authorities pursuant to the regulations of theauthority  responsible  for foreign trade and economic relations under the State Council.Therelevantauthorities  shall  not  disclose  the  business  proprietary  informationprovided by the dealers.

   Chapter III Import and Export of Goods and Technologies

 Article 15 The State allows free import and  export  of  goods  and  technologies except  where  laws  or  administrative  regulations  provided  otherwise.

Article 16The State may impose restrictions on the import or export of goods andtechnologies in any of the following circumstances:

    (1) where the import  or  export  shall  be  restricted  in  order  tosafeguard the national security or public interest;

    (2) where the export  shall  be  restricted  on  account  of  domestic shortage  in  supply  or  effective  protection  of  exhaustible  domestic resources;

    (3) where the export shall be restricted due  to  the  limited  market capacity of the importing country or region;

    (4) where the import shall be restricted  in  order  to  establish  or accelerate the establishment of a particular domestic industry;

    (5) where the  restriction  on  the  import  of  agricultural,  animal husbandry or fishery products in any form is necessary;

    (6) where the import shall be restricted  in  order  to  maintain  the State's international financial status and the  balance  of  international payments.

    (7) where, as the international treaties or agreements  to  which  the People's Republic of China is a contracting party or a participating party require, the import or export shall be restricted.

Article 17 The State prohibits the import or export of any goods or  technologies in any of the following circumstances:

    (1) where such goods or technologies will endanger  national  security or public interest;

    (2) where the import or export of such goods or technologies  must  be prohibited in order to protect human life or health;

    (3) where such goods  or  technologies  will  disrupt  the  ecological environment;

    (4) where the import or export of such goods or technologies shall  be prohibited in accordance with the provisions of international treaties  or agreements to which the People's Republic of China is a contracting  party or participating party.

Article 18The authority responsible for foreign  trade  and  economic  relations under  the  State  Council  shall,  in  collaboration  with  the  relevant authorities under the State Council and in accordance with the  provisions of Article 16 and Article 17 of this Law, formulate,  adjust  and  publish the list of goods and technologies whose import or export are  subject  to

restrictions or prohibitions.

    Upon the approval of the State Council the authority  responsible  for foreign trade and economic relations under the State Council  may,  within the  framework  of  Article  16  and  Article  17,  independently  or in collaboration with  the  relevant  authorities  under  the  State  Councildetermine, on a temporary basis, to impose restriction or  prohibition  on the import or export of particular goods or technologies not  included  in the list mentioned in the preceding paragraph.

Article 19 Goods whose import or export is restricted shall be subject  to  quota and/or  licensing  control;  technologies  whose  import or export is restricted shall be subject to licensing control.

    Import or export of any goods and technologies subject to quota and/or licensing  control  will  be  effected  only  with  the  approval  of  the authorities responsible for foreign trade and economic relations under the State Council or the joint approval of the foregoing authorities and other

authorities concerned under the  State  Council  in  compliance  with  the provisions of the State Council.

Article 20 Import and export quotas of goods shall be distributed on the basis of the conditions including but not limited to the actual  import  or  export performance and capability of the applicants in foreign trade dealings and on the basis of the principles of efficiency, impartiality,   transparency and fair competition by the authority responsible for  foreign  trade  and

economic relations under the State Council  or  the  relevant  authoritiesunder the State Council within their respective responsibilities.

    The ways and means of the distribution of quotas are to  be  regulatedby the State Council.

Article 21 Where the import or  export  of  goods,   articles  such  as  culturalrelics, wildlife animals, plants and the products thereof  are  prohibited or restricted by other laws or administrative regulations, the  provisionsof the laws and regulations in question shall be observed.

   Chapter IV International Trade in Services

Article 22The State promotes the progressive development  of  the  internationaltrade in services.

Article 23With respect to international trade in services, the People's Republic of China, pursuant to the commitments made in  international  treaties  or agreements to which the People's Republic of China is a contracting  party or a  participating  party,  grants  the  other  contracting  parties  and

participating parties market access and national treatment.

Article 24The State may restrict international trade in services on the basis of any of the following considerations:

    1. in order to safeguard the national security or public interest;

    2. in order to protect the ecological environment;

    3. in  order  to  establish  or  accelerate  the  establishment  of  a particular domestic service industry;

    4. in order to maintain the State's balance of international payments;

    5. other restrictions provided in  relevant  laws  and  administrative regulations.

Article 25 The State prohibits any international trade in services which:

    1. may endanger national security or public interest;

    2. is contrary to the  international  obligations  undertaken  by  the People's Republic of China;

    3. is prohibited by  relevant  laws  and  administrative  regulations.

Article 26 The authority responsible for foreign  trade  and  economic  relations under the State Council and  the  relevant  authorities  under  the  State Council are responsible for the administration of international  trade  in services  in  accordance  with  this  Law  and  other  relevant  laws  and administrative regulations.

Chapter V Foreign Trade Order

 Article 27 In foreign trade activities, foreign trade dealers shall operate theirbusiness inaccordance with  law  and  abide  by  the  principle  of  fair competition and are prohibited from the following acts:

    (1) forgery, distortion or  trading  of  certificates  of  country  oforigin and import or export licenses;

    (2) infringement on the intellectual property rights protected by  thelaws of the People's Republic of China;

    (3) squeezing out competitors with undue conducts of competition;

    (4) defrauding the State of the refunded tax on exports;

    (5) other acts contrary to the provisions of laws  and  administrativeregulations.

Article 28

    In foreign trade activities, foreign trade dealers  shall  settle  and use foreign exchanges in  accordance  with  relevant  regulations  of  the State.

Article 29 Where a product is imported in such increased quantities as  to  cause or threaten to cause serious injury  to  domestic  producers  of  like  or directly competitive products, the  State  may  take  necessary  safeguard measures to remove or ease such injury or threat of injury.

Article 30  Where a product is imported at less than normal value of  the  productand causes or  threatens  to  cause  material  injury  to  an  established domestic industry concerned, or materially retards the establishment of  a particular domestic industry, the State may  take  necessary  measures  in order to remove or ease such injury or threat of  injury  or  retardation.

Article 31  Where an imported product  is  subsidized  in  any  form  directly  or indirectly by the country of export  and  causes  or  threatens  to  cause material  injury  to  an  established  domestic  industry   concerned   or materially retards the establishment of a domestic industry, the State may take necessary measures in order to remove or ease such injury  or  threat of injury or retardation.

Article 32 In the events referred to in Article 29,  Article 30 and  Article  31,the authority or agency designated by  the  State  Council  shall  conduct investigations and make determinations in accordance  with  relevant  laws and administrative regulations.

  Chapter VI Promotion of Foreign Trade 

Article 33 The State shall  establish  and  improve  financial  institutions  for foreign trade and establish funds for foreign trade development  and  risk as the development of foreign trade requires.

Article 34 The State may take import and export credit,  export  tax  refund  and other foreign trade promotion measures for the purpose of the  development of foreign trade.

Article 35 Foreign trade dealers may establish or join Chambers of  Commerce  for Importers and Exporters in accordance with law.

    Chambers of Commerce  for  Importers  and  Exporters  shall  abide  by relevant laws and administrative regulations,  coordinate  and  guide  the foreign  trade  activities  of  their  members  under  their  Articles  of Association, provide advisory services, report to the relevant authorities

of the Government the suggestions of their members with respect to foreign trade promotion,  and actively promote foreign trade.

Article 36The international trade promotion  organization  of  China  shall,  in accordance with its Articles of  Association,  engage  in  development  of foreign trade relations,  sponsor  exhibitions,  provide  information  and advisory services and carry out other foreign trade promotive  activities.

Article 37 The State shall support and promote the development of  foreign  trade

in national  autonomous  areas  and  economically  under-developed  areas.

   Chapter VII Legal Liabilities

Article 38Anyone who smuggles  goods  that  are  subject  to  import  or  export prohibitions or restrictions,  and hereby commits criminal offenses, shall be subject to criminal prosecution pursuant to the Supplementary  Decision on the Punishment of Smuggling Crimes. Those offenses of  smuggling  which do  not  constitute  crimes  shall  be  subject  to  sanctions  under  the

provisions of the Customs Law. In addition, the authority responsible  for foreign trade and economic relations under the State Council may  withdraw the foreign trade operation permit of the offender in question.

Article 39  Anyone who commits forgery distortion of certificates  of  country  of origin or license for import  or  export  shall  be  subject  to  criminal prosecution under Article 167 of the  Criminal  Law.  Anyone  who  commits trading of certificates of country of origin  or  license  for  import  or

export or trading of forged or distorted certificates of country of origin or license for import or export shall be subject to  criminal  prosecution in the light of Article 167 of the Criminal Law.

 Where the criminal offenses referred to in the preceding paragraph are committed by an entity, the entity in question shall be imposed fine while the persons in charge of the entity directly responsible for the  offenses and other persons directly responsible for the offenses shall  be  subject to criminal prosecutions in accordance with or in the light of Article 167 of the Criminal Law. In addition,  the authority responsible  for  foreign trade and economic relations under the  State  Council  may  withdraw  the foreign trade operation permit of the entity in question.

  Anyone who knowingly uses forged or distorted import or export license in importing or exporting goods shall be imposed sanctions  in  accordance with the provisions of Article 38 of this Law.

Article 40 Anyone who imports or exports technologies that are subject to  import or export prohibitions or  restrictions  in  violation  of  this  Law  and commits criminal offenses, shall be subject to  criminal  prosecutions  in the light of the Supplementary Decision on  the  Punishment  of  Smuggling Crime.

Article 41 Personnel serving in the State's foreign trade authorities who  commit any neglect of duty,  malpractice, irregularities or abuse of power, which constitute criminal offenses, shall be subject  to  criminal  prosecutions pursuant to law; as to those offenses  which  do  not  constitute  crimes, administrative sanctions shall apply.

    Personnel serving in the State's foreign trade authorities who  extort property from others with job  convenience  or  illegally  accept  others'property and seek advantages for them in return and thus  commit  criminal offenses shall be subject to criminal prosecutions in accordance with  the

Supplementary Decision on  the  Punishment  of  Embezzlement  and  Bribery Crimes;  where  such  conducts  do  not  constitute   criminal   offenses,administrative sanctions shall apply.

  Chapter VIII Final Provisions

Article 42 The State applies flexible measures,   provides  favorable  conditions and conveniences to the trade between the towns on the frontier and  those towns of neighboring countries on frontier as well as trade  among  border residents. Detailed rules are to  be  laid  down  by  the  State Council.

Article 43 This Law shall not apply to the separate customs  territories  of  the People's Republic of China.

Article 44  This Law shall enter into force as of July 1, 1994.