Provisions of the Ministry of Foreign Economic Relations and Tradeofthe People's Republic of China on the Administration of the TextileExport Quota
Provisions of the Ministry of Foreign Economic Relations and Tradeofthe People's Republic of China on the Administration of the TextileExport Quota
(Promulgated by the Ministry of Foreign Economic Relations andTrade of the People's Republic of China on December 31, 1992)
Whole Doc.
Chapter 1 General Rules
Article 1
The present Provisions are formulated for the purpose of implementing
the bilateral agreements on trade in textile products concluded between
the Government of the People's Republic of China and the governments of
textile importing countries applying quantitative restrictions, and
keeping effective administration on textile quotas to develop the exports
of textile products to these countries in an orderly way.
Article 2
(1) The Ministry of Foreign Economic Relations and Trade of the
People's Republic of China (hereinafter referred to as MOFERT) has the
centralized authority of the overall administrations of exports of textile
products to the restricting countries. MOFERT is responsible, externally,
for negotiations of the bilateral agreements and consultations with
importing countries to settle the problem in the course of implementing
the agreements, and internally responsible for the administration,
allocation, adjustment and supervision of the utilization of the textile
export quotas. It also confers the issuing authorizations to the
localities and departments concerned for issuing the export certificates
of textile products, and supervises a unified controlling on the
certificates and their statistics.
(2) The Commissions (Departments) of Foreign Economic Relations and
Trade, or the Foreign Trade Bureaus in all the provinces, autonomous
regions, municipalities directly under the Central Government and the
cities with separate plannings (hereinafter referred to as the local
authorities) are the administrative organizations which supervise the
exports in their own areas of textile products to the restricting
countries. As authorised by MOFERT. their responsibilities include:
issuing the export certificates, coordinating the transfer of the textile
quotas between enterprises of the same area, administering and supervising
the quota utilization of their enterprises, and reporting to MOFERT the
statistical information of their textile exports to the restricting
countries.
(3) The General Administration of Chinese Customs and its subordinate
Offices throughout the country shall supervise and control all the exports
of textile products destined to the restricting countries. Every shipment
shall be verified and released upon the presentation of valid export
certificates.
Categories of textile products (both for quotas and non- quota items)
classified by restricting countries are listed in Annex I to the
Provisions.
Article 3
The restricting countries referred in the Provisions are the
countries that have concluded with China the bilateral agreements on trade
in textile products. They are the United States of America, the European
Economic Community, Canada, Finland, Norway and Austria.
Article 4
The textile quota refereed in the Provisions means are the
quantitative limits for export of textile and finished products made of
cotton, wool, man-made fibers, vegetable fibers other than cotton and silk
blends under the bilateral agreements, classifications and units of quota
are specified by the agreements.
Chapter 2 Export License System
Article 5
Exports of textile products to the restricting countries are subject
to controlling systems of textile quotas and export license. Textile
quotas are allocated by MOFERT in compliance with the relevant provisions
of the Provisions; Export Licenses are issued by the Quota and License
Issuing Department under MOFERT and local issuing authorities delegated by
MOFERT according to the quantities of MOFERT allocation.
Article 6
Only the enterprises, which are entitled by the State to handle the
textile export businesses and committed to hand over foreign exchange
earnings to the government, can apply for the quotas that cover the
products falling into the scope of their businesses.
Article 7
Before actual shipment, enterprises which have been allocated with
quotas shall apply to their local issuing authorities for Export License
and other certificates, by presenting the original or copy of sales
contract, commercial invoice, certificates of domestic production or
processing, Letter of Credit or cashier's cheque. The original of the
Export License is delivered to the importer, who shall, by presenting the
original, apply for the Customs clearance of the goods or for import
permissions with their authorities. Two copies (Customs supervision) are
submitted to Chinese Customs, one is for Customs file and the other shall
be returned to the issuing authorities after it is checked and sealed by
the Customs.
Article 8
All the export certificates shall be filled up with typewriter or
computer in strict accordance with "The Explanatory Notes On Certificate
Declaration" compiled by MOFERT. Once they are issued, the certificates
can not be amended by the holder. The types of the certificates are listed
in the Anuex II.
Article 9
The issuing date in the certificates shall be as close to the actual
date of shipment as possible, and the quota year shown in the certificates
shall be the calendar year in which the goods are shipped. All the
certificates are valid for 3 months after the day of issuing. In normal
case, it takes no more than 3 working days to get a certificate issued.
Article 10
Certificates are issued with cost charges according to the relevant
regulations of the State. All the incomes shall be spent on the related
fields of textile quota administration.
Chapter 3 Quota Allocation
Article 11 Principles of Allocation
In order to stabilize the market and increase foreign exchange
earnings, and for the purpose of more effective controlling, the
allocation of quota shall be relatively concentrated rather than widely
dispersed. Quota should mainly be allocated to the enterprises which have
the government permission to handle textile export business, undertake to
submit foreign exchange earnings to the State, and meanwhile have had past
performance of exporting the products prior to restriction. The quantities
of quota allocated to an enterprise are decided by its export performances
of the proceeding year, the export prices, its contributions to China's
total exports of textile products and its qualification measured by the
provisions of rewards and penalties of the Provisions.
Article 12 Allocation Approaches
(1) Allocation of Basic Quota Allocation of basic quota is conducted
every yea r in two steps, the preliminary allocation in September of the
proceeding year and the final allocation in March of the current year.
((1)) The preliminary allocation of basic quota
a. Every year in September, quota is distributed preliminarily for
the followi ng year. Enterprises that have basic quotas and utilized up to
60% during January to August will be allocated 80% of its basic quota. The
formula is:
basic quantity x 80% = quantity of preliminary allocation for the
following ye ar
b. Enterprises that actually used less than 60% of their basic quota
will get the preliminary quantity pro rata. The formula is:
basic quantity x actual utilized percentage = quantity of preliminary
allocation for the following year
((2)) The final allocation of basic quota
Under normal trade conditions, enterprises that utilized in the
proceeding yea r 90% of their basic quota can obtain 100% of their share
for the current year; If the utilization was less than 90% but the unused
quantity had been submitted before July 15 of the same year, they would
obtain 100% of their basic quota as well. The formula is:
basic quota of the proceeding year x 100% = basic quota of the
current year
If the basic quota has not been used up in two consecutive years, the
unused quantities would be deducted for the third year even it was
submitted in time.
If the submission was conducted in August and September, 25% of the
submitted quantities would be deducted for the following year. The formula
is:
basic quota of the proceeding year-balance submitted x 25% = basic
quota of the current year
If submitted in October and November, 50% would be deducted and the
formula is:
basic quota of the proceeding year-balance submitted x 50% = basic
quota of th e current year
If submitted after 1st of December, whether submitted or not, 100%
would be deducted. The formula is:
basic quota of the proceeding year-balance submitted or not = basic
quota of the current year
In case the balance is not submitted in two consecutive years or the
quota is wasted considerably, the enterprise will be punished to have its
quantities double deducted.
(2) Allocation of the annual growth quota
((1)) The annual-growth quota quantities are allocated by MOFERT, in
aggregate amounts to each local authorities and the departments under
other Ministries and Commissions, in accordance with the contributions of
their enterprises to China's total export of textile products. The Foreign
Trade Commissions of the local governments recommend to MOFERT the
allocation of this aggregate quantities. Upon MOFERT's approval, the
allocated aggregate quantities shall be designated, together with the
final allocation of basic quota, to the enterprise. Quota for the
departments of other Ministries and Commissions are allocated directly to
them, together with the final allocation, according to their contributions
to total textile export.
((2)) Contribution to total textile export refers to the ratio, to
the nation's gross textile export value, of the total textile export value
of a province, autonomous region, municipality directly under the Central
Government, municipality with separate plannings and departments under
other Ministries and Commissions.
((3)) The annual growth allocation formula:
a.
The nation's gross textile export value
--------------
annual growth quantities in terms of standardized quota
= average value per standardized unit
b.
Total textile export value of province x x
------------
quantity of annual growth
= average value per standardized unit allocation to province x x
(3) Allocation of quota under other flexibilities clauses
This quota refers to the quantities available from the flexibilities
clauses stipulated in the bilateral agreements (carry-over and category
transfer), the deducted quantities as applying penalties and the submitted
quantities from localities.
((1)) Allocation of carry-over and category transfer quantities:
a. Part of th em will be distributed by MOFERT in the final
allocation to enterprises of outstanding performance according to the
provisions in Article 11, Chapter 3 of the Provisions.
b. The rests will be allocated according to Article 14, Chapter 4 of
the Provisions.
((2)) Penalized quota shall be first used to compensate the
enterprises which have been affected from fully utilizing their quotas.
The surplus, if there be any, will be allocated according to Article 17,
Chapter 6 of the Provisions.
((3)) Submitted quota shall be handled in accordance with Article 14,
Chapter 4 of the Provisions.
(4) Quota Tendering
((1)) For the purpose of encouraging the export of higher quality
garments, increasing economic benefit and offering more opportunities of
fair competition to qualified enterprises, certain amount of quotas shall
be arranged by MOFERT every year for open tender.
((2)) A Working Committee on Tenders (comprised by representatives
from Foreign Trade Administration, MOFERT and China Chamber of Commerce
for Import and Export of Textiles) takes charge of bidding processes.
((3)) Quota tendering shall follow the regulations formulated by
MOFERT.
Chapter 4 Quota Transfer and Adjustment
Article 13 Quota Transfer
(1) Export enterprises in same area may consult with each other to
transfer their basic quotas. This transfer will become valid only after it
has been approved by the local authorities and filed with MOFERT and
confirmed with a Notice of Transfer.
(2) Export enterprises in different areas may also consult with each
other to transfer their basic quotas. This transfer will become valid only
after it has been approved by the local authorities of the transferor and
filed with MOFERT and confirmed with a Notice of Transfer.
(3) Quotas transferred out must be the basic portion of export
enterprises and shall not exceed 20% of the relevant categories. Otherwise
the over-exceeded quantities will be deducted in the next year. If a
category were involved to be transferred out for two consecutive years,
quantities will be deducted accordingly in the third year.
(4) Quota transfer can be validated only among the enterprises that
have the basic quotas. If quotas are to be transferred to export
enterprise of no basic quota but approved by the State to handle textile
export business and committed to hand over foreign exchange earnings, this
transfer shall be approved by the local authorities of the transferor and
filed with MOFERT and confirmed with a Notice of Transfer.
(5) Transferees shall not re-transfer out the quotas that are
transferred in.
Article 14 Quota Adjustment
(1) Quota adjustments among the export enterprises of same area can
be made possible by the local authorities depending on the quota
utilizations of each enterprise. This adjustment will become valid only
after it has been approved by the local authorities of the transferor and
filed with MOFERT and confirmed with a Notice of Adjustment.
Adjustments, to the enterprise which are approved by the State to
handle textile export business and committed to hand over foreign exchange
earnings but have no quotas shall be filed with and approved by MOFERT.
(2) MOFERT will organize nationwide quota adjustments in the second
half of the year depending on the utilizations.
((1)) Source of quotas for adjustments are mainly from the unused
quotas returned from local authorities, and some of the quantities from
the flexibilities clauses (i. e. carryover and category-transfer).
((2)) Quota adjustment shall be conducted according to the provisions
of Article 17, Chapter 6 of the Provisions.
((3)) Quota adjustment shall be made relatively concentrated and
openly.
((4)) Applications for adjustment shall be presented through local
authoritie s. MOFERT will not, in normal cases, accept applications from
export enterprise.
Chapter 5 Quota Calculation and Statistics
Article 15
Quotas are calculated in terms of calendar year.
Article 16
Statistics of Export Licenses for Textile Products shall be
implemented in accordance with the Rules on Statistics and Monitoring of
Export Licenses for Textile Products to Restricted Countries promulgated
by MOFERT.
Chapter 6 Rewards and Penalties
Article 17
The export enterprises that strictly follow the Provisions and
effectively use the quota up to 95% or more, will get certain rewards for
one of the following qualifications.
(1) Making a remarkable progress to export high-grade products.
(2) Promoting the export of non-quota products.
(3) Using more domestic-made fabrics than other enterprises.
Article 18
Penalty will be applied to the following cases:
(1) Wastage: The enterprises that do not return back the unused quota
in accordance with the provisions of the Provisions will be penalized as
stipulated by Article 12, Chapter 3.
(2) Over-using: If an enterprise overuses quota, the overused
quantities will be deducted as much or in multiplicity; and if issuing
authorities over-issue export license, a notice of reprimand will be
circulated nationwide and in serious cases, their issuing authorizations
will be suspended.
(3) Low Prices: If an enterprise exports its products at over low
prices, certain amount of its next year's quotas for relevant category
will be deducted.
(4) Fraudulent Practices: If an enterprise applies for export
licenses but does not actually export the goods, double quantities of the
next year's quotas will be deducted.
(5) Illegal Transshipment: If an enterprise violates the rules of
origin made by importing countries by using the certificates of origin or
labels of the third country (region) to transship Chinese textile products
illegally to the countries which have restrictions on the products under
bilateral textile agreements with China either the quantities involved or
in multiplicity will be deducted from the quotas of the enterprises or the
quotas of the regions where the enterprises are located, or the goods be
confiscated and a fine be imposed or legal penalty be imposed, all
depending on the seriousness of the cases.
(6) Misses of Licences: If blank export licences are last due to
administration and therefore cause the unauthorized occupation of quota,
the quantities involved will be double deducted from quota of the parties
concerned
(7) Falsifications: Anybody who alters the content of Export License
without official permission or forges Export License, severer penalties
shall be applied, including submission to judicial authorities for
investigating the legal responsibilities.
(8) The Chinese Customs can impose a fine on or confiscate the goods
for export if they are handled in violation of the Provisions depending on
the seriousness of the case.
Article 19
The sources of the rewarding quota are the quantities from penalties
and the quota offered by the Flexihilities Clauses. But the quantities
from penalties shall be used as priority to compensate the enterprises who
have been affected from fully utilizing their quota.
Article 20
The rewarded quota to the enterprises is not accounted as their
additional basic level for the following years
Chapter 7 Supplementary Rules
Article 21
All the works on quota administration shall strictly follow the
provisions of the Provisions to avoid any irregularities. Administrative
officials in both MOFERT and local authorities shall accept supervisions.
After investigation and verification, those who abuse their privileges to
seek personal gains and violate the Provisions, disciplinary punishment
and even criminal penalty shall be imposed according to the nature of the
case.
Article 22
Enough specialized personnel shall be deployed and kept stable in all
local authorities and enterprises.
Article 23
Within the framework of the Provisions and taking into account the
practical situation in the areas, all the local authorities shall set up
and file with MOFERT the detailed rules for implementing the Provisions.
Article 24
The Provisions shall enter into force on January 1, 1993, and replace
the previous Provisions published on January 1, 1985.
Note: In order to let the readers to understand it more easier, there
is a little different in the layout between Chinese and English, but there
is no change in the content of the Provisions.
|