(Issued on November 18, 2000)

Foreign Trade and Economic Committees (Departments/Bureaus) of each province, autonomous region, municipality and city directly under State planning:

In order to carry out the State council's spirit to further encourage foreign investment, General Administration of Customs(GAC) printed an distributed the Notice on Importation duty Policies Concerning Further Encouragement of Foreign Investment (GAC Tax Doc. No.[1997]791). Upon consultation with General Administration of Customs, we now give notice on some issues concerning the import of equipment by foreign invested enterprises of the encouraged class and restricted class B, foreign invested R&D centers, export-oriented and technology advanced foreign invested enterprises as follows.

I. Certificates for the Import of Renewal Equipment, Technology, Fittings and Spare Parts by Foreign Invested Enterprises of the Encouraged Class and Restricted Class B

(1) As for foreign invested enterprises of the encouraged class and restricted class B with formerly approved project confirmations, if they need to update or maintain former equipment on their own fund besides the investment amount, the certificates for the import of renewal equipment, technology, fittings and spare parts shall be awarded by the governing departments which awarded the former project confirmations. In other cases, such as additional fund is needed for the projects, the certificates shall be awarded by the approving state departments, and the projects under limitations shall be awarded by the provincial approving departments.

Certificate format is shown on office in Annex 1: GAC Tax Doc. No.[1999]791, the same below:

(2) As for foreign invested enterprises of the encouraged class and restricted class B authorized to be set up before Dec 31, 1997, if they need to update or maintain former equipment on their own fund besides the investment amount, the certificates for the import of renewal equipment, technology, fittings and spare parts shall be awarded by the foreign economic and trade governing departments that authorized the establishment of the enterprises( those of local projects shall be awarded by the provincial foreign economic and trade departments.)

II. Certificates for the Import of Equipment, Technology, Fittings and Spare Parts by Foreign Invested R&D Centers

(1) As for foreign invested R&D centers (including the internal R&D institutions of foreign invested enterprises) set up as approved by the foreign economic and trade governing departments in accordance with relevant regulations, the project confirmations as encouraged for foreign-investment shall be awarded by these governing departments( those of the local projects shall be awarded by the provincial foreign economic and trade departments), the format is as the Annex, which shall be filled out considering the requirements for Annex 4 o f the Urgent Notice of General Administration of Customs Concerning Implementing the Notice of the State Council on Adjustment of Revenue Policies of the Import of Equipment(GAC Tax Doc. No.[1997]1062).

(2) As for foreign invested R&D centers (including the internal R&D institutions of foreign invested enterprises), if they need to update or maintain former equipment on their own fund besides the investment amount, the certificates for the import of renewal equipment technology, fittings and spare parts shall be awarded by the governing departments that approved the project confirmations of the foreign invested R&D centers.

(3) As for foreign invested R&D centers set up in form of corporate business, the foreign exchange quota for importing the tariff-free equipment are checked and ratified according to the total investment amount and their own funds.

(4) As for foreign invested R&D centers set up in form of non-corporate business by foreign invested enterprises allowable class and restricted class A, they shall be set up in form of branch company in principle, the foreign exchange quota for importing the tariff-free equipment are checked and ratified according to the sanctified operation fund; for R&D centers set up within enterprises, the foreign exchange quota shall be one-off checked and ratified by the approving governing departments according to the list and amount of the tax-deductible equipment for import as declared by the enterprises, however, the project confirmations and certificates for the import of renewal equipment, technology, fittings and spare parts shall still be awarded by the provincial approving departments. The enterprises should list their detailed financial budget, the equipment list and foreign exchange quota only for the R&D centers, and offer the previous year's audited financial report forms.

III. Certificates for the Import of Renewal Equipment, Technology, Fittings and Spare Parts by Export-Oriented and Technology Advanced Foreign Invested Enterprises

As for export-oriented and technology advanced foreign invested enterprises, if they need to update or maintain former equipment on their own fund besides the investment amount, the certificates for the import of renewal equipment, technology, fittings and spare parts shall be awarded by the MOFIEC or the foreign economic and trade governing departments of the provincial special economic zone government that issued the Confirmations of Export-Oriented Foreign Invested Enterprises or the Confirmations of Technology Advanced Foreign Invested Enterprises.

If the above-mentioned enterprises belong to more than two of the five classes of enterprises, they may apply for the certificates for the import of renewal equipment, technology, fittings and spare parts at their own discretion.

IV. Criteria for Examination and Clearance of the Import for Equipment

As for foreign invested enterprises, if they need to import renewal equipment, technology, fittings and spare parts on their own fund besides the investment amount for their own use of manufacturing, the import shall be included in the import items of "joint venture/cooperative equipment" or "foreign invested equipment & goods", which shall be controlled in accordance with the regulations concerning the import under the items of investments, examined and discharged by the customs according to the "special stamp for examination and clearance of the import of foreign invested enterprises" affixed by MOFTEC or provincial foreign economic and trade governing departments on the list of equipment and materials for import. If the goods are restricted by the state for import, they shall apply for import licenses/documents based on the approved documents of the above-mentioned foreign economic and trade departments.

Each foreign economic and trade governing departments must take seriously the issuance of project confirmations and import certificates in accordance with the supplementary notice and regulations. No region is allowed to gradually transfer the examination and approval purview to a lower level. In the course of implementation, if any problem appears, please feed back to MOFTEC ( Foreign Investment Department).

This text shall be carried out from the date of issuance. As for the above-mentioned imported goods had reached the port but had not passed customs formalities and customs entry examination and clearance before the text issuance, procedures are needed to be made up according to the text.