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CIRCULAR OF THE GENERAL OFFICE UNDER THE STATE COUNCIL ON THEAPPROVAL AND TRANSMISSION OF A REPORT SUBMITTED BY THE NATIONAL TOURISMADMINISTRATION CONCERNING THE FURTHER CHECKING-UP AND RECTIFICATION OFTOURIST AGENCIES

CIRCULAR OF THE GENERAL OFFICE UNDER THE STATE COUNCIL ON THEAPPROVAL AND TRANSMISSION OF A REPORT SUBMITTED BY THE NATIONAL TOURISMADMINISTRATION CONCERNING THE FURTHER CHECKING-UP AND RECTIFICATION OFTOURIST AGENCIES Important Notice: This English document is coming from the "LAWS AND REGULATIONS OF THE PEOPLE'S REPUBLIC OF CHINA GOVERNING FOREIGN-RELATED MATTERS" (1991.7) which is compiled by the Brueau of Legislative Affairs of the State Council of the People's Republic of China, and is published by the China Legal System Publishing House.

In case of discrepancy, the original version in Chinese shall prevail.

Whole Document CIRCULAR OF THE GENERAL OFFICE UNDER THE STATE COUNCIL ON THE APPROVAL AND TRANSMISSION OF A REPORT SUBMITTED BY THE NATIONAL TOURISM ADMINISTRATION CONCERNING THE FURTHER CHECKING-UP AND RECTIFICATION OF TOURIST AGENCIES (April 10, 1990) The report, "Suggestions Concerning Further Checking-up and Rectification of Tourist Agencies", submitted by the National Tourism Administration, has been approved by the State Council; and now the report is hereby transmitted to you for implementation.

SUGGESTIONS CONCERNING FURTHER CHECKING-UP AND RECTIFICATION OF TOURIST AGENCIES In order to promote the sound development of tourist industry in our country, and in accordance with the decision of the Central Committee of the Communist Party of China and the State Council concerning the checking-up and rectification of companies, our suggestions are hereby advanced on the further checking-up and rectification of tourist agencies (including tourist companies and other similar organizations; the same below): 1. Various localities and departments shall carry out conscientiously the checking-up and rectification on the tourist agencies that are under their jurisdiction. The emphasis of the checking-up and rectification shall be placed on the tourist agencies of Categories 1 and 2 that handle international tourist business operations, and also on those tourist agencies that are engaged, without permission, in soliciting tourists from abroad. Those tourist agencies that do not possess the prerequisites as prescribed for tourist business operations shall be abolished or merged, and the problems concerning multilateral connections with overseas business parties, the reduction of tourist prices for competition, and poor-quality tourist services shall be earnestly dealt with.

2. A tourist agency that comes under one of the following circumstances shall be abolished or merged with other tourist agencies.

(1) Tourist agencies which are in operation, but do not possess the prerequisites of a certain category as prescribed in "Interim Regulations on the Administration of Tourist Agencies" and "Rules for the Implementation of the Interim Regulations on the Administration of Tourist Agencies" in terms of the actual registered capital, employed personnel; site for business operations, and organizational setups.

(2) Tourist agencies of Category 1 which, from the date "Rules for the Implementation of the Interim Regulations on the Administration of Tourist Agencies" are promulgated for implementation to the end of March, 1990, have not reached the prescribed annual accumulative total of tourists received and the amount of foreign exchange earned.

(3) Tourist agencies which have been engaged in such serious illegal business activities as reducing tourist prices for competition, evading foreign exchange regulations and practising arbitrage, procuring foreign exchange by illegal means, and reselling foreign exchange for a profit.

(4) Tourist agencies with inefficient business operations, poor management, unsound internal rules and regulations, and insufficient earnings for repaying debts.

(5) Tourist agencies whose services are so poor that they have incurred frequent complaints from tourists; whose tourist guides and other employed personnel have been presumptuous in seeking and accepting tips and commission, or whose ill conduct has frequently brought damage to the reputation of our country and has thus created very bad influence.

(6) Tourist agencies which are unable to recover the travelling expenses owed for a long period of time by foreign tourist agents, and have, since 1988, new debts added to old ones, thus suffering heavy economic losses.

(7) The branch offices of a tourist agency, the head office of which has been abolished or merged.

(8) Tourist agencies set up and run by hotels (or guest houses).

(9) Tourist agencies (including their business offices) that have been established in foreign countries or in the regions of Hong Kong and Macao by various localities or departments without the approval of the National Tourism Administration. With respect to those tourist agencies which are to be abolished according to the pertinent decisions, the competent authorities over them shall, in accordance with the pertinent provisions, set up a liquidation organization to check up and settle the creditors' financial claims and to liquidate liabilities, and to attend to the winding-up business.

3. The task of the checking-up and rectification of the existing tourist agencies shall be completed by the end of the third quarter of this year.

Various localities and departments shall have to submit their plans for the abolition, merging, or retention of tourist agencies to the National Tourism Administration for examination and approval, and also to the National Leading Group of Checking-up and Rectifying Companies for the record. Those tourist agencies that have been retained shall, by presenting the document of approval issued by the National Tourism Administration, apply anew for their re-establishment, and go through the registration procedures in accordance with the law. In order to prevent the setting up of an excessive number of tourist agencies of Categories 1 and 2, within 2 years beginning from 1990, no applications for the establishment of new tourist agencies of Categories 1 and 2 shall be examined and approved. With respect to those tourist agencies the applications for the establishment of which have already been approved by the National Tourism Administration or by the tourism bureaus of the provinces, autonomous regions, or municipalities directly under the Central Government but which have not yet gone through the registration procedures with the administrative departments for industry and commerce, the original document of approval shall be declared invalid.

4. In the course of the checking-up and rectification of tourist agencies, it shall be imperative to implement the policy of deepening the reforms, and further streamline the administration of tourist agencies. Tourist agencies shall separate themselves in such respects as working personnel, financial matters, and assets and materials from Party and government organs, institutions, and public organizations, and establish themselves as economic entities, which shall have independent business accounting, assume sole responsibility for their profits and losses, and conduct their business operations according to law. The business operations of tourist agencies shall be placed under the administration of the administrative department for tourism.

5. The checking-up and rectification of tourist agencies shall be carried out in close link with the establishment and improvement of the relevant rules and regulations and administrative systems, so as to further strengthen the administration of tourist agencies.

(1) In order to protect the State interests and to check the competition between various tourist agencies by reduction of tourist prices, all tourist agencies must strictly implement the unified stipulation on price standard, rules for the calculation of prices, and the measures for preferential treatment, as formulated by the National Tourism Administration and the State Administration for Commodity Prices.

(2) In 1990, the State auditing organs shall carry out trade auditing on the financial revenue and expenditure situation and the business activities of tourist agencies of Categories 1 and 2. The National Tourism Administration and the tourism bureaus of various provinces, autonomous regions, and municipalities directly under the Central Government shall, working in coordination with the commodity prices authorities at the same level, carry out regular inspections of the situation concerning the business operations and the prices for overseas sales relating to tourist agencies of Categories 1 and 2.

(3) In accordance with the provisions of Interim Measures for the Control of Foreign Exchange from Tourism, promulgated by the State Administration for Control of Foreign Exchange and the National Tourism Administration, the foreign exchange earnings, collected by those units and enterprises which, without the approval of the competent authorities for tourism, presumptuously conduct international tourist business operations, shall all be converted, and no retention of foreign exchange shall be allowed.

(4) The competent authorities for tourism that are vested with the right to issue notice of visa must, strictly in accordance with the pertinent provisions of the Ministry of Foreign Affairs and the National Tourism Administration, check and issue notices of visa; they shall not be permitted to issue notices of visa on behalf of other units or of those tourist agencies which do not have the right to solicit tourists from abroad. Those who have violated the aforesaid provisions shall have their right to issue visa notice revoked.


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