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Circular of the State Council on Issues Covering Border Trade
(Promulgated by the State Council on January 3,1996)
In order to encourage development of border trade and economic
cooperation between our border areas and the neighboring countries, the State formulated
in the past years a series of policies and measures which are aimed to support and
encourage border trade and economic development in our border areas. Those policies and
measures had played a positive role in vigorous promotion of economic development in the
border areas. strengthening the unification of nationalities as well as consolidation and
development of making the border areas prosperous and stable, harmony and friendly
relations with the neighboring countries. Along with the deepening of our reform and
opening-up, there exists a need to adjust, regulate and perfect those policies and
measures in compliance with general requirements of building socialist market economy. The
circular on the relevant issues is hereby given a follows:
1.Issues on the administrative forms of the border trade
Based on the real situation of the border trade and following the
international common practice, the present border trade shall be administrated in the
following two forms:
Exchanging goods by border residents, which refers to the trade
activity of exchanging goods by the border residents with the goods not more than the set
amount or quantity at the open-up points or markets designated by the government within
the border areas 20 kilometers from the boundary line. Exchanging goods by border
residents shall be governed by administrative rules unifiedly set by the Ministry f
Foreign trade and Economic cooperation (MOFTEC) and the Customs General Administration and
the rules shall be concretely implemented by the people’s governments of the border
provinces and autonomous regions.
Border trade in small amount, refers to the trade activity between the
Chinese enterprises which are granted with operation tight of border trade on small amount
in the administrative areas of the open border counties(banners) or border towns along the
boundary line (hereinafter referred as border area) approved by the state, and the
enterprises or other trade organizations in the border areas of the neighboring countries
at the land border trade activities other than exchanging goods by the border residents
shall be brought into the uniform administration of border trade on small amount and
subject to its related policies. The administrative rules on border trade in small amount
shall be promulgated by MOFTEC in consultation with the concerned departments under the
State Council.
2.Issues on tariffs and import duties of border trade.
Goods imported as exchanging goods by the border residents in mount
less than RMB1,000 yuan per person per day shall be exempt from tariffs and import duties.
In case that the amount exceeds RMB1,000 Yuan ,the excessive amount shall be levied
tariffs and import duties in compliance with stipulated tax rates. The Customs General
Administration shall adjust relevant supervision and administrative regulations
accordingly.
Except for cigarettes, wines and cosmetics as well as other commodities
subject to tariffs and duties in accordance with the state regulations, commodities
originally produced in the neighboring countries to be imported by the enterprises in
business of border trade in small amount at designated border ports shall be levied half
duties and import duties against the stipulated rates, in the first three years of the
Ninth five—Year Plan period (1996—1998).
Commodities imported other than border trade but through barter trade
and under economic and technical cooperation with the former Soviet Union, the Eastern
European countries and other neighboring countries shall be carried out according to the
national uniform import taxation policies.
3.Issues on import and export administration of
border trade in small amount
The operation rights of an enterprise engaged in border trade in small
amount shall be examined and approved by the border provinces and autonomous regions based
n the operational qualifications and conditions formulated by MOFTEC as well as within the
numbers of enterprises authorized. The list of enterprises engaged in border trade in
small amount must be reported to MOFTEC for verification and approval and reported to the
concerned departments of the State Council for record are not allowed to conduct border
trade in small amount. In principle, operation of border trade in small amount will not be
restricted by the forms of trade and business scope.
The border provinces and autonomous regions are allowed to designate 1—2
enterprises engaged in border trade in small amount to export to those land neighboring
countries the commodities produced locally and jointly conducted by the companies
authorized by the state. and to import the commodities handled exclusively by the
companies designated by the state. The list enterprises engaged in those business must be
reported to the MOFTEC for verification and approval.
Except for those commodities that are subject to unified tender
nationwide and required to be jointly conducted or chemicals that may be commonly used for
military and civil purpose as well as chemicals from which poison is easily made, No quota
or license is needed for the enterprises engaged in border trade in small amount to export
the commodities that are under quota and license administration by the state, but the
MOFTEC and the State Planning Commission shall adopt macro administration over such
business, Within the trade volume stipulated by MOFTEC, the Customs shall release goods
according to the export contracts of the enterprises and the documents issued by the
foreign trade and economic administrative departments of the border provinces and
autonomous regions.
The State Planning Commission and the State Economic and Trade
Commission (the Office for Import and Export of Machinery and Electronic Products ) shall
specially allocate certain quantity of import quotas annually in connection with border
trade in small amount based on the situation of the previous year’s importation and
demand and supply in domestic market. Within the set quota, the foreign trader and
economic administrative departments of the border provinces and autonomous regions
authorized By MOFTEC shall be responsible for issuing import license. The commodities
under the quota administration of the state imported by the enterprises in the business of
border trade in small amount shall be released by the Customs upon the quota certificates
and import license issued by the foreign trade and economic administrative departments of
the border provinces and autonomous regions. Proper simplified procedures shall also be
introduced for the commodities under special and registration administration imported by
the enterprises engaged in border trade in small amount. Detailed rules shall be
promulgated by the State Planning Commission (the Office for Import and Export of
Machinery and Electrical Products ) in consultation with concerned departments.
4.Issues on administration of import and export commodities under
economic and technical cooperation between the border areas and their neighboring
countries.
Commodities imported by the enterprises in the border areas with
operation rights in foreign economic and technical cooperation approved by MOFTEC
(hereinafter referred to as foreign economic cooperation enterprises in the border
area)under economic cooperation with the neighboring countries shall be subject to import
taxation policies for border trade in small amount. Commodities and materials for
compensation under contracted projects and labor service cooperation shall be allowed
along with the project and shall not be restricted by the business scope. Equipment and
materials exported under labor service cooperation and contracted projects between foreign
economic cooperation enterprises and the neighboring counties and the daily necessities
within reasonable quantities of the labor service personnel shall not be restricted by
export quota and business scope and free from obtaining export license.
The customs shall release the commodities to be imported or exported
under economic and technical cooperation between the foreign economic cooperation
enterprises in the border areas and the issued by the foreign economic and trade
departments in charge. Detailed administrative rules shall be jointly promulgated by the
MOFTEC and the Customs General Administration.
Issues on strengthening administration of border trade
The people's governments of the border provinces and autonomous
regions in compliance with the unified regulations set by the State Council and the
concerned departments shall formulate detailed implementation rules and designate relevant
departments in charge of border trade to virtually strengthen the guidance and
administration of border trade and economic cooperation in their own respective provinces
and autonomous regions with a view to promoting healthy development of border trade.
All the concerned departments under the State Council shall formulate
at the earliest time their administrative rules in concerned fields in accordance with
this circular in order to actively support the development of border trade and foreign
economic cooperation in the border areas. MOFTEC ,together with concerned departments
shall timely study and formulate nationwide policies and macro management measures for
border trade and economic cooperation. While improving service, the Customs shall
strengthen supervision and administration and crack down smuggling activities in order to
ensure the implementation of the border trade policies.
This circular shall become effective April 1,1996.all the regulations
set in the past which are not in conformity with this circular shall be subject to this
circular.
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