The Foreign Trade Law of the People’s Republic of China

The Foreign Trade Law of the People’s Republic of China, adopted as amended at the Eighth Session of the Standing Committee of the tenth National People’s Congress on 6 April 2004, is hereby promulgated and shall come into effect as of 1 July 2004.

Chapter I General Principles

Article 1  This Law is formulated in order to broaden the opening to the outside world, develop the Foreign Trade, maintain the Foreign Trade order, protect the legitimate rights and interests of Foreign Trade Operators, and promote a healthy development of the socialist market economy.

Article 2  This Law shall apply to the Foreign Trade and the protection of Foreign Trade related intellectual property rights.

Foreign Trade, for the purpose of this Law, means the import and export of goods and import and export of technologies and the international trade in services.

Article 3  The State Council’s Competent Foreign Trade authority is in charge, in accordance with this Law, of the administration of the Foreign Trade nationwide.

Article 4  The State implements a uniform Foreign Trade system, encourages the development of the Foreign Trade and maintains a fair and free Foreign Trade order.

Article 5  The People’s Republic of China will, based on the principles of equality and mutual benefit, promote and develop trade relations with other countries and regions, conclude or accede to agreements on Customs Unions or free trade zones and other regional economic and trade agreements, and join regional economic organizations.

Article 6  The People’s Republic of China, in respect of the Foreign Trade, in accordance with international treaties or agreements to which the People’s Republic of China is a contracting party or acceding party, grants the other contracting parties or acceding parties the most-favoured-nation treatment, national treatment or other treatments, or on the principles of mutual advantage and reciprocity, grants the other party the most-favoured-nation treatment, national treatment or other treatments.

Article 7  In the event that any country or region applies discriminatory prohibitions, restrictions or other like measures against the People’s Republic of China in respect of trade, the People’s Republic of China may depending on actual circumstances, take countermeasures against the aforesaid country or region.

Chapter II Foreign Trade Operators

Article 8  For the purpose of this law, Foreign Trade Operator means a legal person, other organization or an individual that has carried out industrial and commercial registration or other business practicing procedures in accordance with the law, and is engaged in Foreign Trade activities in accordance with this Law and other relevant laws and administrative regulations.

Article 9  Foreign Trade Operators engaged in the import and export of goods or the import and export of technologies shall register with the State Council’s competent Foreign Trade authority or the institutions delegated by it, unless laws, administrative regulations or provisions of the State Council’s competent Foreign Trade authority specify that registration is not required.  The specific measures for registration will be formulated by the State Council’s competent Foreign Trade authority.

If a Foreign Trade Operator fails to register as required in accordance with the regulations, the Customs Administration shall not carry out the procedures of custom declaration, inspection or release for imports or exports of its good.

Article 10  To engage in the international trade in services, this Law and other relevant laws and administrative regulations shall be complied with.

Units engaged in overseas project contracting and those providing labour services abroad shall have corresponding qualifications or competence.  Specific measures shall be formulated by the State Council.

Article 11  The State may subject import and export of certain goods to the state trading administration.  Such business as subject to the state trading administration shall only be carried out by authorized enterprises unless the State permits the import and export of a certain quantity of goods subject to the state trading administration to be carried out by non-authorized enterprises.

The catalogue of goods subject to the state trading administration and catalogue of authorized enterprises will be formulated, adjusted and published by the State Council’s competent Foreign Trade authority together with other relevant State Council authorities.

If the provisions of the first paragraph of this Article are violated by importing or exporting goods subject to the state trading administration without authorization, the Customs Administration shall not release the goods.

Article 12  A Foreign Trade Operator may, under entrustment, undertake Foreign Trade business on behalf of such others within its business scope.

Article 13  A Foreign Trade Operator shall, in compliance with the provisions issued by the State Council’s competent Foreign Trade authority or other relevant State Council authorities in accordance with laws, submit documents and information related to its Foreign Trade activities to the relevant authorities.  The relevant authorities shall keep confidentiality of the business secrets for the providers of such documents and information.

Chapter III Import and Export of Goods and Import and Export of Technologies

Article 14  The State permits goods and technologies to be imported and exported freely, unless otherwise provided by laws and administrative regulations.

Article 15  The State Council’s competent Foreign Trade authority may, based on import and export monitoring requirements, implement an automatic import and export licensing system on certain goods that are imported and exported freely, and publish the catalogue thereof.

When the consignor or consignee subject to automatic licensing submits an application for an automatic license prior to carrying the Customs declaration procedures for those goods imported or exported under the automatic licensing, the State Council’s competent Foreign Trade authority or an institution it delegates shall grant the license;  where the automatic licensing procedure is not carried out, the Customs Administration shall not allow clearance of the goods.

When importing or exporting technologies that belong to free import and export, the contracts concerned shall be registered with the State Council’s competent Foreign Trade authority or the authority delegated by it.

Article 16  The import or export of relevant goods and technologies may be restricted or prohibited by the State based on any of the following reasons:

(1)  there is a necessity to restrict or prohibit import or export in order to safeguard national security, social and public interests or public morals;

(2)  there is a necessity to restrict or prohibit import or export in order to protect human health or safety, the life or health of animals or plants, or to protect the environment;

(3)  there is a necessity to restrict or prohibit import or export in order to implement measures relating to the import and export of gold or silver;

(4)  there is a necessity to restrict or prohibit export due to shortage in domestic supply or in order to effectively protect domestic resources which are possibly being exhausted;

(5)  there is a necessity to restrict export due to the limited market capacity of an importing country or region;

(6)  there is a necessity to restrict export when severe disturbance in export business order arises;

(7)  there is a necessity to restrict import in order to establish or accelerate the establishment of specific domestic industries;

(8)  there is a necessity to restrict the import of agricultural, animal husbandry or fishery products in any form;

(9)  there is a necessity to restrict import in order to maintain the State’s international financial position and the balance of international payments;

(10)  there is a necessity to restrict or prohibit other imports or exports in accordance with the provisions of laws and administrative regulations;

(11)  there is a necessity to restrict or prohibit other imports or exports in accordance with the provisions of international treaties or agreements concluded or acceded to by the People’s Republic of China.

Article 17  The State may take any necessary measure to safeguard national security on the import and export of goods and technologies relating to fissionable and fusionable materials or the materials from which they are derived, and with respect to the import and export of arms, ammunition or other military materials.

The State may take any necessary measure on the import and export of goods and technologies in time of war or for the maintenance of international peace and security.

Article 18  The State Council’s competent Foreign Trade authority, together with other relevant State Council authorities, in accordance with the provisions of Article 16 and 17 of this Law, formulates, adjusts and publishes the lists of goods and technologies that are restricted or prohibited for import or export.

With the approval of the State Council and within the scope of Article 16 and 17, the State Council’s competent Foreign Trade authority may independently or together with other relevant State Council authorities decide provisionally to restrict or prohibit the import or export of specific goods or technologies not in the list mentioned in the preceding paragraph.

Article 19  The State implements quotas, licenses or other administrative measures on goods that are restricted for import or export and implements licenses on technologies that are restricted for import or export.

Goods or technologies subject to quotas or licenses shall, in accordance with provisions of the State Council, be imported or exported only when permitted by the State Council’s competent Foreign Trade authority, either independently or in collaboration with other relevant State Council authorities.

The State may impose tariff quotas on certain imported goods.

Article 20  Import and export quotas and tariff quotas will be allocated by the State Council’s competent Foreign Trade authority or other relevant State Council authorities within their respective scopes of responsibility and on the basis of the principles of transparency, fairness, impartiality and efficiency.  Specific measures will be formulated by the State Council.

Article 21  The State implements a uniform merchandise conformity assessment system, and certifies, inspects and quarantines the import and export merchandise in accordance with relevant laws and administrative regulations.

Article 22  The State applies rules of origin to import and export goods.  Specific measures will be formulated by the State Council.

Article 23  Where cultural relics, wild animals and plants and products made therefrom are restricted or prohibited for import or export by other laws and administrative regulations, the provisions of such laws and administrative regulations shall apply.

Chapter IV International Trade in Services

Article 24  With respect to international trade in services, the People’s Republic of China, pursuant to its commitments under international treaties or agreements to which the People’s Republic of China is a contracting party or an acceding party, grants market access and national treatment to other contracting parties or acceding parties in such treaties or agreements.

Article 25  The State Council’s competent Foreign Trade authority and other relevant State Council authorities are responsible for the administration of international trade in services in accordance with this Law and other relevant laws and administrative regulations.

Article 26  The State may restrict or prohibit the relevant international trade in services based on any of the following reasons:

(1)  there is a necessity for a restriction or prohibition in order to safeguard national security, social and public interest or public morals;

(2)  there is a necessity for a restriction or prohibition in order to  protect human health or safety, the life or health of animals or plants or to protect the environment;

(3)  there is a necessity for a restriction in order to establish or accelerate the establishment of specific domestic service industries;

(4)  there is a necessity for a restriction in order to guarantee the balance of international foreign exchange payments;

(5)  there are necessities for other restrictions or prohibitions in accordance with laws and administrative regulations;

(6)  there are necessities for other restrictions or prohibitions in accordance with the provisions of international treaties or agreements concluded or acceded to by the People’s Republic of China.

Article 27  The State may take any necessary measure to safeguard national security against the international trade in services relating to military affairs, fissionable and fusionable materials or the materials from which they are derived.

The State may take any necessary measure against international trade in services in time of war or for the maintenance of international peace and security.

Article 28  The State Council’s competent Foreign Trade authority, together with other relevant State Council authorities in accordance with the provisions of Article 26, 27 of this Law and other relevant laws and administrative regulations, formulates, adjusts and publishes lists of market access for international trade in services.

Chapter V Protection of Foreign Trade-related Intellectual Property Rights

Article 29  The State protects Foreign Trade-related intellectual property rights according to relevant laws and administrative regulations on intellectual property rights.

Where imported goods infringe intellectual property rights and harm the Foreign Trade order, the State Council’s competent Foreign Trade authority may take measures that include prohibiting importation of relevant goods produced or sold by the infringers within a certain period of time.

Article 30  Where the intellectual property right holder conducts any of the practices that include preventing the licensee from challenging the validity of the intellectual property rights in licensing contracts, coercive package licensing or providing exclusive grantback conditions in licensing contracts, and thereby harms the Foreign Trade order, the State Council’s competent Foreign Trade authority may take necessary measures to eliminate such harm.

Article 31  Where other countries or regions failed to accord national treatment to legal persons, other organizations or individuals from the People’s Republic of China with regard to the protection of intellectual property rights or failed to provide full and effective protection with regard to intellectual property rights for goods, technologies or services originating from the People’s Republic of China, the State Council’s competent Foreign Trade authority may, according to this Law and other relevant laws or administrative regulations, and in compliance with the international treaties or agreements the People’s Republic of China concluded or acceded to, take necessary measures in respect of the trade with that country or region.

Chapter VI Foreign Trade Order

Article 32  Monopoly practices carried out in Foreign Trade activities that violate the relevant
anti-trust laws or administrative regulations are not allowed.

Monopoly practices carried out in Foreign Trade activities that harm the fair competition of the market, shall be dealt with according to the relevant anti-trust laws and administrative regulations.

Where the illegal practices referred to in the above paragraphs exist, and harm the Foreign Trade order, the State Council’s competent Foreign Trade authority may take necessary measures to eliminate the harm.

Article 33  The practices of unfair competition in Foreign Trade activities such as selling commodities at unreasonably low prices, colluding with one another in a bid, false advertising, or commercial bribery etc. are not allowed.

The practices of unfair competition in Foreign Trade activities shall be dealt with according to the laws and administrative regulations of anti-unfair competition.

Where the illegal practices referred to in the above paragraphs harm the Foreign Trade order, the State Council’s competent Foreign Trade authority may take measures that include prohibiting the import and export of relevant goods or technologies of that operator to eliminate the harm.

Article 34  In Foreign Trade activities, the following acts are prohibited:

(1)  the forgery or alteration of marks of origin on import and export goods;  the forgery, alteration, purchase or sale of certificates of origin for import and export goods, import or export licenses, certificates of quota for import and export, or other kinds of certificates for import and export;

(2)  fraudulently obtaining for refunded tax on exports;

(3)  smuggling;

(4)  circumventing the authentication, inspection or quarantine specified by laws or administrative regulations;

(5)  other activities in violation of the provisions of laws and administrative regulations.

Article 35  In Foreign Trade activities, the Foreign Trade Operators shall abide by the requirements of foreign exchange regulations of the State.

Article 36  The State Council’s competent Foreign Trade authority may publish cases that violate this Law and harm the Foreign Trade order.

Chapter VII Foreign Trade Investigation

Article 37  In order to maintain Foreign Trade order, the State Council’s competent Foreign Trade authority may conduct, either by itself or together with other relevant State Council authorities, investigation with regard to the following matters in accordance with the provisions of laws and administrative regulations:

(1)  impact of the import and export of goods, the import and export of technologies or international trade in services on the domestic industries and their competitiveness;

(2)  trade barriers of relevant countries or regions;

(3)  matters that require investigation in order to determine whether trade remedy measures as
anti-dumping, countervailing, or safeguard measures, etc. should be taken;

(4)  acts circumventing Foreign Trade remedies;

(5)  matters concerning the security interests of the State with respect to Foreign Trade;

(6)  matters that require investigation for implementing Article 7, paragraph 2 of Article 29, Article 30, Article 31, paragraph 3 of Article 32, paragraph 3 of Article 33 of this Law;

(7)  other matters affecting the Foreign Trade order that require investigation.

Article 38  An announcement will be published by the State Council’s competent Foreign Trade authority to initiate any Foreign Trade investigation.

A Foreign Trade investigation may be conducted by such means as written questionnaire, hearing,
on-site investigation, investigation through entrustment, etc.

The State Council’s competent Foreign Trade authority shall give reports or make decisions, and publish announcements in accordance with the investigation results.

Article 39  Relevant units and individuals shall provide cooperation and assistance during the Foreign Trade investigation.

When conducting Foreign Trade investigations, the State Council’s competent Foreign Trade authority, other relevant State Council authorities and their staffs shall be obliged to keep confidentiality of all the State secrets and business secrets which they have learned.

Chapter VIII Foreign Trade Remedies

Article 40  The State may take appropriate Foreign Trade remedies in accordance with the results of Foreign Trade investigations.

Article 41  Where products from other countries or regions are dumped into China’s market at less than normal values, causing or threatening to cause material injury to the established domestic industries, or materially impeding the establishment of the domestic industries, the State may take anti-dumping measures to eliminate or mitigate such injury, threat of injury or impediment.

Article 42  Where products of other countries or regions are exported to a third country at less than normal values, causing or threatening to cause material injury to the established domestic industries, or materially impeding the establishment of the domestic industries, the State Council’s competent Foreign Trade authority may, upon applications by the domestic industries, negotiate with the government of the third country, and require the latter to take appropriate measures.

Article 43  Where the imports are benefited directly or indirectly from specific subsidies granted in any kind by the exporting countries or regions, causing or threatening to cause material injury to the established domestic industries, or materially impeding the establishment of the domestic industries, the State may take countervailing measures to eliminate or mitigate such injury, threat of injury or impediment.

Article 44  Where the imports are increased in such quantities that cause or threaten to cause serious injury to the domestic industries producing like or directly competitive products, the State may take necessary safeguard measures to eliminate or mitigate such injury or threat of injury, and provide necessary support to the domestic industries.

Article 45  Where services provided by the service providers of other countries or regions to China are increased in such quantities that cause or threaten to cause injury to the domestic industries providing like or directly competitive services, the State may take necessary remedies to eliminate or mitigate that injury or threat of injury.

Article 46  Where an import restriction by third country results in a dramatic increase of certain products entering China’s market, causing or threatening to cause injury to the established domestic industries, or impeding the establishment of the domestic industries, the State may take necessary remedies to restrict the import of such products.

Article 47  Where a country or region that has concluded economic and trade treaties or agreements with the People’s Republic of China or has acceded to such treaties or agreements together with the People’s Republic of China fails to abide by the provisions of such treaties or agreements, causing the loss of or damage to the rights and interests of the People’s Republic of China under such treaties or agreements, or impeding the realization of the objectives of such treaties or agreements, the Government of the People’s Republic of China shall have the right to require the government of the relevant country or region to take appropriate compensatory measures, and may in accordance with relevant treaties or agreements, suspend or terminate the performance of its relevant obligations under such treaties or agreements.

Article 48  The State Council’s competent Foreign Trade authority will proceed with bilateral or multilateral consultations, negotiations and settlement of disputes regarding Foreign Trade in accordance with this Law and other relevant laws and regulations.

Article 49  The State Council’s competent Foreign Trade authority and other relevant State Council’s authorities shall establish early warning and emergency response mechanism for the import and export of goods, the import and export of technologies and international trade in services, so as to cope with any contingencies and unusual circumstances that may occur in the course of Foreign Trade and thus maintain the security of national economy.

Article 50  The State may take necessary anti-circumvention measures against the circumvention of the Foreign Trade remedies provided by this Law.

Chapter IX Promotion of Foreign Trade

Article 51  The State formulates Foreign Trade development strategies, establishes and improves the mechanism for promotion of Foreign Trade.

Article 52  Based on the requirements for the development of Foreign Trade, the State will establish and improve financial institutions for Foreign Trade, and establish Foreign Trade development funds and risk funds.

Article 53  The State will develop Foreign Trade by ways of import and export credits, export credit insurance, export tax refunds and other promotion measures.

Article 54  The State will establish a public Foreign Trade information service system to provide information services to Foreign Trade Operators and others of the public.

Article 55  The State will take measures to encourage Foreign Trade Operators to explore international markets and to develop Foreign Trade through various means such as investing abroad, contracting overseas projects and conducting labour cooperation in foreign countries, etc.

Article 56  Foreign Trade Operators may establish and join relevant associations or chambers of commerce in accordance with the law.

Such associations or chambers of commerce shall observe the laws and administrative regulations in accordance with its articles of association, provide its members with such services as production, marketing, information and training, perform the function of harmonizing and self-discipline, submit applications for Foreign Trade remedies in accordance with the law, maintain the interests of its members and industry, convey to relevant government authorities any proposals raised by its members on Foreign Trade, and conduct Foreign Trade promotion activities.

Article 57  The international trade promotion organizations of China shall, in accordance with its articles of association, develop foreign contact, sponsor exhibitions, provide information and advisory services and engage in other Foreign Trade promotion activities.

Article 58  The State will support and promote the development of Foreign Trade conducted by small and medium-sized enterprises.

Article 59  The State will support and promote the development of Foreign Trade in national autonomous regions and economically underdeveloped areas.

Chapter X Legal Liability

Article 60  Where the provision under Article 11 of this Law is violated by conducting importation or exportation of goods which are subject to the state trading administration without authorization, the State Council’s competent Foreign Trade authority or the State Council’s other relevant authorities may impose a fine of not more than RMB 50,000;  where the circumstances are serious, the aforesaid authorities may, within three years from the date on which the administrative penalty decision takes effect, refuse to accept the application of the violator to engage in the import and export of goods subject to the state trading administration, or revoke the authorization granted such party to engage in the import and export of other goods subject to the state trading administration.

Article 61  Those who import or export goods that are prohibited for import or export, or import or export goods that are restricted for import or export without permission, shall be disposed of or punished by the Customs Administration in accordance with the provisions in relevant laws or administrative regulations;  where criminal offences are constituted, criminal liability shall be prosecuted in accordance with the law.

Those who import or export technologies that are prohibited for import or export, or import or export technologies that are restricted for import or export without permission, shall be disposed of or punished in accordance with the provisions in relevant laws or administrative regulations; where there are no such provisions in relevant laws or administrative regulations, the State Council’s competent Foreign Trade authority will order correction, confiscate unlawful income, and impose a fine of more than one time and less than five times of the unlawful income;  where there is no unlawful income or the unlawful income is less than RMB10,000, a fine of more than RMB10,000 and less than RMB50,000 shall be imposed;  where criminal offences are constituted, criminal liability shall be prosecuted in accordance with the law.

From the date on which the administrative penalty decision takes effect or the criminal prosecution judgment takes effect as stipulated in the two aforesaid paragraphs, the State Council’s competent Foreign Trade authority or other relevant State Council authorities may, for a period of three years, refuse the application of the violator for any importing or exporting quota or license, or prohibit the violator from conducting any importation and exportation of relevant goods or technologies for a period of more than one year and less than three years.

Article 62  Where any international trade in services that is prohibited is engaged in, or where any international trade in services that is restricted is engaged in without permission, punishment shall be imposed in accordance with relevant laws or administrative regulations;  where there are no such provisions in the relevant laws or administrative regulations, the State Council’s competent Foreign Trade authority will order correction, confiscate unlawful income, and impose a fine of more than one time and less than five times of the unlawful income;  where there is no unlawful income or the unlawful income is less than RMB10,000, a fine of more than RMB10,000 and less than RMB50,000 shall be imposed;  where criminal offences are constituted, criminal liability shall be prosecuted in accordance with the law.

The State Council’s competent Foreign Trade authority may, from the date on which the administrative penalty decision takes effect or the criminal prosecution judgment takes effect, prohibit the violator from conducting any relevant international trade in services for a period of more than one year and less than three years.

Article 63  Where the provisions under Article 34 of this Law are violated, punishment shall be imposed in accordance with the provisions in relevant laws and administrative regulations;  where criminal offences are constituted, criminal liability shall be prosecuted in accordance with the law.

The State Council’s competent Foreign Trade authority may, from the date on which the administrative penalty decision takes effect or the criminal prosecution judgment takes effect, prohibit the violator from conducting any relevant foreign trade activities for a period of more than one year and less than three years.

Article 64  Where a violator is prohibited from conducting any relevant Foreign Trade activities in accordance with the provisions under Articles from 61 to 63, during the prohibition period, the Customs Administration will not carry out any customs declaration and inspection or release procedures for the relevant importing or exporting goods of such violator based on the prohibition decision made by the State Council’s competent Foreign Trade authority, and the foreign exchange authorities or the designated banks of foreign exchange shall not proceed with any relevant settlement or sale of foreign exchange.

Article 65  If the working staff of the authorities in charge of administration of Foreign Trade according to this Law is derelict in its duty, conducts malpractice or abuses of its authority, where a criminal offence is constituted, criminal liability shall be prosecuted pursuant to the law;  where a criminal offence is not constituted, administrative penalty sanctions shall be imposed in accordance with the law.

If the working staff of the authorities in charge of administration of Foreign Trade according to this Law extorts property from others using the privileges of his position or illegally accepts others property to seek advantages for them in return, where a criminal offence is constituted, criminal liability shall be prosecuted pursuant to the law;  where a criminal offence is not constituted, administrative penalty sanctions shall be imposed in accordance with the law.

Article 66  Any party engaged in Foreign Trade activities who is not satisfied with the specific administrative action taken by the authorities in charge of administration of Foreign Trade according to this Law, may apply for an administrative review pursuant to the law or bring an administrative suit before the people’s court.

Chapter XI Supplementary Provisions

Article 67  Where laws or administrative regulations provide otherwise concerning the administration of Foreign Trade of military substances or fissionable or fusionable materials or materials from which such materials are derived, or concerning the administration of import or export of any cultural products, such laws or administration regulations shall prevail.

Article 68  The State will adopt flexible measures that grant preferential treatment and facilities to the trade between its border regions and the border regions of adjacent countries as well as to the trade between border residents.  Specific measures shall be formulated by the State Council.

Article 69  This Law shall not apply in the separate customs territories of the People’s Republic of China.

Article 70  This Law shall enter into effect on 1 July 2004.

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