Foreign Trade Law of the People's Republic of China

The Foreign Trade Law of the People's Republic of China, amended and adopted at the 8th Meeting of the Standing Committee of the 10th National People's Congress on April 6, 2004, is now promulgated and shall enter into force as of July 1, 2004.

President of the People' Republic of

China: HU Jintao

April 6, 2004

Chapter I General Principles

Article 1 This Law is formulated with a view to further expand opening up, developing the foreign trade, maintaining the foreign trade order, safeguarding the legitimate rights of foreign trade dealers, and promoting a healthy development of the socialist market economy.

Article 2 This Law is applicable to foreign trade and protection of trade related aspects of intellectual property rights.

Foreign trade as mentioned in this Law shall cover the import and export of goods, technology and the international trade in services.

Article 3 The authority responsible for foreign trade under the State Council is in charge of the administration of foreign trade for the entire country pursuant to this Law.

Article 4 The State shall apply the foreign trade system on a uniform basis, encourage the development of foreign trade, and maintain a fair and free foreign trade order.

Article 5 The People's Republic of China promotes and develops trade ties with other countries and regions, enters into or participates in customs union agreements, free trade agreements and other regional economic and trade agreements, and participates in regional economic organisations on the principles of equality and mutual benefit.

Article 6 The People's Republic of China shall, under international treaties or agreements to which the People's Republic of China is a contracting party or a participating party, grant the other contracting parties or participating parties Most-Favoured-Nation treatment, National Treatment and other treatments, or on the principles of mutual advantage and reciprocity, grant the other party Most-Favoured-Nation treatment, National Treatment and other treatments within the field of foreign trade.

Article 7 In the event that any country or region applies discriminatory prohibition, restriction or other similar measures against the People's Republic 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 8 Foreign trade dealers as mentioned in this Law shall cover the legal entities, other organisations or individuals having handled registration with the industrial and commercial administration, or other formalities with regard to practicing foreign trade, and engaged in foreign trade dealings in compliance with the provisions of this Law, other related laws and administrative regulations.

Article 9 A foreign trade dealer who intends to engage in the import and export of goods and technology shall proceed with the record-filing registration with the authority responsible for foreign trade under the State Council or agencies authorized by the authority, unless otherwise specified by laws, administrative regulations and the authority responsible for foreign trade under the State Council. The detailed measures governing record-filing registration shall be specified by the authority responsible for foreign trade under the State Council. The Customs shall not handle the formalities related to customs declaration and clearance of import and export commodities for foreign trade dealers failing to handle the record-filing registration as requested.

Article 10 When engaging in international trade in services, the foreign trade dealers shall abide by the provisions of this Law and other laws and administrative regulations.

Units engaged in contracting of overseas engineering projects or foreign labour service co-operation shall have corresponding qualifications or quality. The detailed measures shall be specified by the State Council.

Article 11 The State shall exercise state trading management over the import and export of certain commodities. The import and export of commodities subject to state trading shall only be conducted by licensed enterprises, but the State may allow the import and export of certain quantities of commodities subject to state trading administration to be conducted by unlicensed enterprises. Catalogues of commodities subject to state trading administration and licensed enterprises shall be identified, adjusted and published by the authority responsible for foreign trade under the State Council jointly with other related departments under the State Council.

The Customs shall not grant access to commodities subject to state trading administration imported or exported without permission and in violation of the provisions of paragraph 1 of this article.

Article 12 Foreign trade dealers may accept trusts from others to conduct foreign trade business as agents within their business scope.

Article 13 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 the authority responsible for foreign trade under the State Council or related regulations of other departments under the State Council. The relevant authorities shall keep the business proprietary information provided by the dealers confidential.

Chapter III Import and Export of Goods and Technology

Article 14 The State allows free import and export of goods and technology except where laws or administrative regulations provide otherwise.

Article 15 The authority responsible of foreign trade under the State Council, in view of the need to monitor the import and export, may exercise automatic license over certain commodities imported and exported freely and publish the catalogue of such commodities.

For the import and export of commodities subject to automatic license, the consignor and consignee shall submit applications for automatic license before handling the customs declaration formalities, and the authority responsible for foreign trade under the State Council or agencies entrusted by it shall grant licenses. The customs shall not grant access to the imported or exported commodities without an automatic license.

When Importing and exporting technology that is imported or exported freely, the dealer shall handle the record-filing registration of contracts with the authority responsible for foreign trade under the State Council, or the agencies it has entrusted.

Article 16 The State may impose restrictions or ban on the import or export of goods and technology under any of the following conditions:

1. where the import or export shall be restricted or banned in order to safeguard the national security, public interest, or public ethics;

2. where the import or export shall be restricted or banned in order to protect the health or safety of human beings, protect the life or health of animals or plants, or protect the environment;

3. where the import or export shall be restricted or banned in order to exercise measures related to the import and export of gold or silver;

4. where the export shall be restricted or banned on account of domestic shortage in supply or effective protection of exhaustible natural resources;

5. where the export shall be restricted due to the limited market capacity of the importing country or region;

6. where the export shall be restricted due to serious disturbance with the export order;

7. where the import shall be restricted in order to establish or accelerate the establishment of a particular domestic industry;

8. where the restriction on the import of agricultural, animal husbandry or fishery products in any form is necessary;

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

10. where the import or export shall be restricted or banned as regulated by laws or administrative regulations;

11. where, as the international treaties or agreements to which China is a contracting party or a participating party require, the import or export shall be restricted or banned.

Article 17 The State may take any necessary measures to protect the national security with regard to the import and export of commodities or technology related to fissionable or fusionable materials or materials that may be used to produce fissionable or fusionable materials, as well as the import and export of weapons, ammunitions or other military materials.

The State may adopt any necessary measures with regard to the import and export of goods and technology at the time of war or in order to protect the international peace and security.

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

Upon the approval of the State Council the authority responsible for foreign trade 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 Council determine, on a temporary basis, to impose restriction or prohibition on the import or export of particular goods or technology 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; technology whose import or export is restricted shall be subject to licensing control.

Import or export of any goods and technology subject to quota and /or licensing control will be effected only with the approval of the authority responsible for foreign trade under the State Council or the joint approval of the preceding authorities and other authorities concerned under the State Council in compliance with the provisions of the State Council.

The State exercises tariff rate quota administration over the import of certain goods.

Article 20 Import and export quotas or tariff rate quotas of goods shall be distributed on the basis of the principles of efficiency, impartiality, transparency and fair competition by the authority responsible for foreign trade under the State Council or the relevant authorities under the State Council within their respective responsibilities.

The detailed measures will be worked out by the State Council.

Article 21 The State adopts a uniform commodities conformity assessment system and conducts accreditation, inspection and quarantine over import and export commodities in line with the provisions of related laws or administrative regulations.

Article 22 The State exercises rules of origin administration over the import and export of commodities, with the detailed measures to be worked out by the State Council.

Article 23 Where the import or export of goods, articles such as cultural relics, wildlife animals, plants and the products there of are prohibited or restricted by other laws or administrative regulations, the provisions of the laws and regulations in question shall be observed.

Chapter IV International Trade in Service

Article 24 With 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 participating party, grants the other contracting parties and participating parties market access and national treatment.

Article 25 The authority responsible for foreign trade under the State Council and other related authorities under the State Council shall administer international trade in services pursuant to the provisions of this Law, and other related laws or administrative regulations.

Article 26 The State may restrict or prohibit international trade in services on the basis of the following considerations:

1. where restriction or prohibition is imposed in order to safeguard the national security, public interest or public ethics;

2. where restriction or prohibition is imposed in order to protect the health or safety of human beings, protect the life or health of animals and plants, and protect the environment;

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

4. where restriction is imposed in order to maintain the State's balance of international payments;

5. where restriction or prohibition is imposed as requested by provisions of laws or administrative regulations;

6. where, as the international treaties or agreements to which China is a contracting party or a participating party require, the restriction or prohibition is imposed.

Article 27 The State may take any necessary measures to protect the national security with regard to the conduct of international trade in services in relation to military and goods or technology related to fissionable or fusionable materials or materials that may be used to produce fissionable or fusionable materials.

The State may adopt any necessary measures with regard to the international trade in services at the time of war or in order to protect the international peace and security.

Article 28 The authority responsible for foreign trade under the State Council and relevant authorities under the State Council are responsible for the formulation, adjustment and publishing of the catalogue of market access of international trade in services in accordance with Articles 26 and 27 of this Law and other relevant laws and administrative regulations.

Chapter V Protection of Trade Related Aspects of

Intellectual Property Rights

Article 29 The State shall protect foreign trade related aspects of intellectual property rights pursuant to laws and administrative regulations on intellectual property rights.

Where imported goods infringe intellectual property rights and do harm to the foreign trade order, the authority responsible for foreign trade under the State Council shall take measures to prohibit importation of related goods produced and sold by the violator within a specified period of time.

Article 30 In cases where an intellectual property right holder is found to engage in acts of preventing challenges to validity, coercive package licensing, specifying exclusive grant-back conditions in licensing contracts, and others, which has caused harm to the fair and competitive order of foreign trade, the authority responsible for foreign trade under the State Council may take necessary measures to eliminate the harm caused.

Article 31 In cases where other countries or regions fail to grant national treatment to legal entities, other organisations or individuals of the People's Republic of China with regard to protection of intellectual property rights or fail to grant full and effective protection of intellectual property right to goods, technology or services originated from the People's Republic of China, the authority responsible for foreign trade under the State Council may take necessary measures in relation to trade with the country or region pursuant to the provisions of this Law and other related laws and administrative regulations and in line with the international treaties or agreements to which the People's Republic of China is a signatory or participant.

Chapter VI Foreign Trade Order

Article 32 Monopolistic acts in violation of provisions of laws and administrative regulations on anti-monopoly are not allowed in foreign trade activities.

Parties engaged in monopolistic activities in violation of fair market competition in foreign trade activities will be handled in line with the provisions of related laws and administrative regulations on anti-monopoly. In the case of illegal acts mentioned in the previous paragraph, which have caused harm to the foreign trade order, the authority responsible for foreign trade under the State Council shall take necessary measures to eliminate the harm caused.

Article 33 During foreign trade activities, selling commodities at unfairly low prices, collusion in the bidding, releasing false advertisements, conducting commercial bribery and other unfair competitive acts are not allowed.

Parties engaged in unfair competitive activities in foreign trade shall be dealt with pursuant to provisions of related laws and administrative regulations on anti-competitive activities.

In cases where the illegal acts mentioned in the previous paragraph have caused harm to the foreign trade order, the authority responsible for foreign trade under the State Council shall take such measures as prohibiting the dealer from conducting import and export of related goods or technologies to eliminate the harm caused.

Article 34 The following acts are not allowed in foreign trade activities:

1.Forgery or distortion of marks of country of origin of import and export goods, forgery distortion or trading of certificates of country of origin of import and export goods, import and export licenses, certificate of import and export quotas or other testifying documents for import and export;

2.defrauding the State of refunded tax on exports;

3.smuggling;

4.evading accreditation, inspection or quarantine as requested by laws and administrative regulations;

5.oher acts contrary to the provisions of laws and administrative regulations.

Article 35 Foreign trade dealers shall abide by provisions of the State on foreign exchange administration in their foreign trade activities.

Article 36 In cases where foreign trade order is harmed, in violation of the provisions of this Law; the authority responsible for foreign trade under the State Council shall make it known to the public.

Chapter VII Foreign Trade Investigations

Article 37 The authority responsible for foreign trade under the State Council shall, on its own initiative or jointly with other related authorities under the State Council, initiate investigations into the following matters pursuant to provisions of laws and administrative regulations in order to protect foreign trade order:

1.impact of import and export of goods, technology and international trade in services on domestic industries and their competitiveness;

2.trade barriers of related countries or regions;

3.matters warranting investigation in order to determine whether anti-dumping countervailing or safeguard measures and other foreign trade remedial measures shall be launched according to laws;

4.acts evading foreign trade remedial measures;

5.matters related to the national security interests in foreign trade.

6.matters requiring investigations in order to implement provisions of article 7, paragraph 2 of article 29, articles 30 and 31, paragraph 3 of article 32, and paragraph 3 of article 33 of this Law;

7.matters requiring investigations related to the impact on foreign trade order.

Article 38 When launching a foreign trade investigation, the authority responsible for foreign trade under the State Council shall issue a public notice.

Investigations may take the form of written questionnaires, holding of hearings, on-the-spot investigation, entrusted investigation and others.

The authority responsible for foreign trade under the State Council shall submit investigation reports or make a ruling in light of the results of investigations, and issue a public notices to that effect.

Article 39 Related units and individuals shall provide co-operation and assistance to foreign trade investigations.

In the course of conducting foreign trade investigations, the authority responsible for foreign trade under the State Council and other related authorities under the State Council and their staff are responsible for keeping national secrets and commercial secrets know to them confidential.

Chapter VIII Foreign Trade Remedies

Article 40 The State may take appropriate foreign trade remedial measures in light of the results of foreign trade investigations.

Article 41 Where products of other countries or regions are dumped on China's market at a price lower than the normal value, which has caused material injury to the domestic industry already established or poses a threat of material injury, or constituted material impediments to domestic industries already established, the State may take anti-dumping measures to remove or alleviate the injury or threat of injury or impediment.

Article 42 Where products of other countries or regions are exported to the market of a third country at a price lower than the normal value, which has caused or threatened to cause material injury to an established domestic industry, or materially impeded the establishment of a domestic industry, the authority responsible for foreign trade under the State Council may conduct consultations with the government of the third country, requesting it to adopt appropriate measures.

Article 43. Where an imported product is specifically subsidized in any form directly or indirectly by the country or region of export and causes or threatens to cause material injury to an established domestic industry or materially retards the establishment of a domestic industry, the State may take countervailing measures to eliminate or alleviate such injury or threat of injury or retardation.

Article 44 Where products are imported in substantially increased quantity, which causes or threatens to cause material injury to the domestic industry producing the same products or products directly in competition with the imported products, the State shall take necessary safeguard measures to remove or alleviate the injury or threat of injury, and shall provide necessary support to the industry concerned.

Article 45 Where services provided by service suppliers of other countries or regions to China increase and causes or threatens to cause material injury to the domestic industry providing the same type of services or services in direct competition with the imported services, the State shall take necessary remedial measures to eliminate or ease the injury or threat of injury.

Article 46 Where the restrictions imposed on import by a third country cause certain products to enter into China with substantially increased quantity and cause or threaten to cause material injury to an established domestic industry or materially retard the establishment of a domestic industry, the State may take necessary remedial measures to restrict the import of the products.

Article 47 Where countries or regions having entered into economic and trade treaties or agreements with the people's Republic of China or being parties to such treaties or agreements together with the People's Republic of China violate the provisions of such treaties or agreements and cause losses or impairment to the benefits China is entitled to, according to the agreements or treaties, or hinder the realisation of the objectives of treaties or agreements, the government of the People's Republic of China shall have the right to request the governments of the related countries or regions to take appropriate remedial measures and may terminate or cease to implement the related obligations to be performed according to the related agreements or treaties.

Article 48 The authority responsible for foreign trade under the State Council shall, pursuant to the provisions of this Law and other related laws, conduct bilateral and multilateral consultations, negotiations and settlement of disputes related to foreign trade.

Article 49 The authority responsible for foreign trade under the State Council and other related authorities under the State Council shall develop a surveillance mechanism to deal with emergencies related to import and export of goods and technology and international trade in services, to cope with emergent and abnormal circumstances in foreign trade, and safeguard the country's economic security.

Article 50 The State may take necessary measures to combat activities evading foreign trade remedial measures specified in this Law.

Chapter IX Promotion of Foreign Trade

Article 51 The State shall formulate development strategies for foreign trade, and develop and improve the foreign trade promotion mechanism.

Article 52 The State shall establish and improve financial institutions servicing foreign trade and establish funds for foreign trade development and risk as the development of foreign trade requires.

Article 53 The State shall promote foreign trade through import or export credit, export credit insurance, export tax refund and other foreign trade promotion measures.

Article 54 The State shall develop a public information service mechanism for foreign trade, providing information services to foreign trade dealers and other social public.

Article 55 The State shall take measures to encourage foreign trade dealers to explore the international market, and promote foreign trade by means of investing abroad, contracting overseas engineering projects, conducting labour service co-operation and others.

Article 56 Foreign trade dealers shall establish or join related associations or Chambers of Commerce in accordance with the law.

The related associations or Chambers of Commerce shall abide by relevant laws and administrative regulations, provide services related to production, marketing, information, training and other aspects in relation to foreign trade to their members according to their articles of association, play the role of co-ordination and self-discipline, file applications in line with laws for related foreign trade remedial measures, protect the rights of members and industries, report to the relevant authorities of the Government the suggestions of their members with respect to foreign trade, and actively promote foreign trade.

Article 57 The international trade promotion organisation of China shall, in accordance with its Articles of Association, engage in the development of foreign trade relations, sponsor exhibitions, provide information and advisory services and carry out other foreign trade activities.

Article 58 The State shall support and promote the conduct of foreign trade by small and medium-sized enterprises.

Article 59 The State shall support and promote the development of foreign trade in national autonomous areas and economically under-developed areas.

Chapter X Legal Liabilities

Article 60 Any party importing or exporting goods subject to state trading administration without authorisation in violation of the provisions of article 11 of this Law will be imposed a fine up to RMB 50,000 by the authority responsible for foreign trade under the State Council or other relevant authorities under the State Council. In cases where the acts are serious, the application filed by such a violator for conducting import and export of goods subject to state trading administration will not be processed within three years upon the date of entry into force of the administrative punishment, or the authorisation granted to the violator allowing it to conduct the import and export of other goods subject to state trading administration will be cancelled.

Article 61 Where any party imports or exports goods that are prohibited from import and export, or import or export goods without permits, that are restricted from import and export, the Customs shall deal with the violation or punish the violator according to the provisions of related laws and administrative regulations. In cases where crimes have been constituted, the criminal liability will be investigated.

Where any party imports or exports technology that is prohibited from import and export, or imports and exports technology without permits, that is restricted from import and export, the violator will be dealt with or punished in accordance with the provisions of related laws and administrative regulations. In cases where the laws or administrative regulations have no specifications on this, the authority responsible for foreign trade under the State Council will be responsible for ordering a rectification, confiscating the illegal income earned, and imposing a fine between one to five times that of the illegal income. In cases where there is no illegal income or the illegal income is less than RMB 10,000, a fine of between RMB10,000 and RMB50,000 will be imposed on the violator. In cases where crimes have been constituted, the criminal liability shall be investigated.

Upon the day of entry into force of the decision of administrative punishment or criminal punishment ruling mentioned in the previous two paragraphs, the authority responsible for foreign trade under the State Council or other related authorities under the State Council may decide not to accept applications filed by the violator for import and export quotas or licenses within three years, or decide to prohibit the violator from conducting import and export of related goods or technology during a period of one to three years.

Article 62 Any party conducting prohibited international trade in services or engaging in restricted international trade in services without license shall be punished pursuant to the provisions of related laws and administrative regulations. In cases where laws or administrative regulations have no specifications on this, the authority responsible for foreign trade under the State Council will be responsible for ordering a rectification, confiscating the illegal income earned, and imposing a fine between one to five times that of the illegal income. In cases where there is no illegal income or the illegal income is less than RMB10,000, a fine of between RMB10,000 and RMB50,000 will be imposed on the violator. In cases where crimes have been constituted, the criminal liability shall be investigated.

The authority responsible for foreign trade under the State Council may prohibit violators from engaging in related international trade in services for a period of one to three years, starting from the day when the administrative punishment decision or criminal punishment ruling mentioned in the previous paragraph enters into force.

Article 63 Any party guilty of acts in violation of the provisions of article 34 of this Law shall be punished pursuant to the provisions of related laws and administrative regulations. In cases where crimes have been constituted, the criminal liability shall be investigated.

The authority responsible for foreign trade under the State Council may prohibit violators from engaging in related foreign trade activities for a period of one to three years, starting from the day when the administrative punishment decision or criminal punishment ruling mentioned in the previous paragraph enters into force.

Article 64 In cases of prohibition from engaging in related foreign trade activities imposed pursuant to the provisions of articles 61 to 63 of this Law, the Customs shall not handle the customs declaration and clearance formalities for related import and export goods by parties, subject to such prohibition, during the prohibition period on the strength of the prohibition decision made by the authority responsible for foreign trade under the State Council in accordance with the law. Likewise, the foreign exchange administration or designated foreign exchange banks shall not handle the formalities related to foreign exchange settlement and sales for parties subject to prohibition during the prohibition period.

Article 65 Personnel serving in authorities responsible for foreign trade according to this Law 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 receive 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 conduct does not constitute criminal offenses, administrative sanctions shall apply.

Article 66 Parties concerned in foreign trade activities having objections to the specific administrative acts of the authority responsible for foreign trade pursuant to this Law may apply for administrative review or file an administrative lawsuit to the People's Court in accordance with the law.

Chapter XI Final Provisions

Article 67 In cases where laws or administrative regulations have specific provisions on the foreign trade administration of military articles, fissionable and fusionable materials or materials that are able to be used to produce fissionable and fusionable materials and the import and export administration of cultural articles, the provisions shall apply.

Article 68 The State applies flexible measures, provides favourable conditions and convenience to the trade between the areas on the frontier and those of neighbouring countries on the frontier as well as trade among border residents. Detailed rules are to be laid down by the State Council.

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

Article 70 This Law shall enter into force as of July 1st, 2004.

Promulgated by the Standing Committee of the National People's Congress on April 6, 2004.