REGULATIONS OF THE PEOPLE'S REPUBLIC OF CHINA ON THE CONTROL OFGOLD AND SILVER

REGULATIONS OF THE PEOPLE'S REPUBLIC OF CHINA ON THE CONTROL OFGOLD AND SILVER 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 REGULATIONS OF THE PEOPLE'S REPUBLIC OF CHINA ON THE CONTROL OF GOLD AND SILVER (Promulgated by the State Council on June 15, 1983) Chapter I General Provisions Article 1 These Regulations are formulated for the purpose of tightening control of gold and silver, ensuring the demands for gold and silver in national economic construction, and banning smuggling and speculation in gold and silver.

Article 2 The gold and silver referred to in these Regulations include: (1) gold and silver extracted form ore deposits, and gold and silver refined as a by-product; (2) gold and silver bars, nuggets, bullion and powder; (3) gold and silver coins; (4) gold and silver articles and gold- or silver-based alloy articles; (5) gold and silver contained in chemical products; and (6) gold and silver tailings, and gold and silver contained in residual, liquid and solid wastes.

Platinum shall be controlled according to the relevant State provisions.

The gold and silver with a cultural relic nature shall be controlled according to the Law of the People's Republic of China on Protection of Cultural Relics.

Article 3 The State pursues a policy of unified control and monopoly purchase and allocation with regard to gold and silver.

All gold and silver earnings and expenditures of State organs, armed forces, organizations, schools, State-owned enterprises, institutions, urban and rural collective economic organizations within the territory of the People's Republic of China (hereinafter referred to as organizations within territory) shall be incorporated in the State plan for gold and silver earnings and expenditures.

Article 4 The competent agency of the State responsible for gold and silver is the People's Bank of China.

The People's Bank of China is responsible for managing the State's gold and silver reserves; responsible for the purchase, allocation and sale of gold and silver; it shall work out and control purchasing, allocating and selling prices of gold and silver in conjunction with the State competent agency responsible for commodity prices; it shall work in conjunction with the relevant competent agencies to examine and approve units dealing in (including processing and retailing) gold and silver articles and chemical products containing gold and silver and the recovery of gold and silver from residual, liquid and solid wastes containing them (hereinafter referred to as business units), and shall control and inspect the gold and silver market; it shall supervise the implementation of these Regulations.

Article 5 All gold and silver in the possession of the organizations within territory except the raw materials, equipment, vessels and souvenirs retained for use with the permission of the People's Bank of China, must be sold to the Bank and shall not be disposed of or kept without authorization.

Article 6 The State protects the possession of gold and silver lawfully obtained by individuals.

Article 7 No units and individuals within the territory of the People's Republic of China are allowed to use gold and silver to calculate prices, to engage in private buying and selling of gold and silver, or to use it as a mortgage in respect of borrowing and lending.

Chapter II Control of Gold and Silver Purchase Article 8 The purchase of gold and silver is monopolized by the People's Bank of China. No unit or individual is permitted to purchase gold and silver unless permitted or entrusted by the Bank.

Article 9 All gold and silver mined and refined by factories and mines, rural communes, brigades and teams, armed forces and individuals engaging in and producing gold and silver (including that extracted from ore deposits and refined as by-product), must be sold to the People's Bank of China, and must not be kept for sale, exchange or use by themselves without authorization.

The producing units listed in the preceding paragraph must tighten control over finished and semi-finished gold and silver products in the manufacturing process according to the relevant provisions, and must not sell or otherwise dispose of such products themselves without authorization.

Article 10 The State encourages business units and those units using gold and silver to recover gold and silver from associated mineral ores and from residual liquid and solid wastes containing gold and silver.

Units listed in the preceding paragraph must sell their recovered gold and silver to the People's Bank of China, and must not keep them for sale, exchange or use by themselves without authorization, except those retained for reuse by units using gold and silver with the permission of the People's Bank of China.

Article 11 All gold and silver extracted or refined by organizations within territory as a by-product from imported gold, silver or ore products must be sold to the People's Bank of China, except for the gold and silver kept with the permission of the Bank or those for reexport following processing the imported materials in accordance with relevant provisions, and must not be sold, exchanged or retained for use by themselves.

Article 12 Individuals wishing to sell gold or silver must sell it to the People's Bank of China.

Article 13 Any excavated gold and silver objects without legal owners belong to the State. No unit or individual may melt down, destroy, or take possession of such gold and silver. Excavated gold and silver objects without legal owners discovered by any unit or individual shall be sold to the People's Bank of China and the receipts from such sales shall be turned over to the Treasury; those found to be of historical value upon evaluation by local cultural administration departments shall be handled in accordance with the Law of the People's Republic of China on the Protection of Cultural Relics.

Article 14 All gold and silver confiscated by the public security, judicial, Customs, industry and commerce administration, taxation and other State organs according to law must be sold to the People's Bank of China, and must not be disposed of by these organs or substituted with other articles. The sale proceeds from confiscated gold and silver shall be turned over to the Treasury according to relevant provisions.

Chapter III Control of Allocation and Sale of Gold and Silver Article 15 Units requiring gold and silver for use shall submit to the People's Bank of China a plan requesting the use of gold and silver according to specified procedures, and the Bank shall supply such gold and silver after examination and approval. The People's Bank of China shall supply gold and silver according to the approved plan, and must not reduce at will the amount approved or delay delivery.

Article 16 Foreign-capital enterprises, Chinese-foreign equity joint ventures and foreign businessmen within the territory of the People's Republic of China purchasing gold and silver articles or processing goods containing gold and silver thus wishing to acquire gold and silver supplies in China shall make application according to the specified procedures to the People's Bank of China for examination and approval and fulfillment of the request.

Article 17 Units using gold and silver must establish their utilization system, comply strictly with the earmarked utilization, and return any unused portion. Without the permission of the People's Bank of China, they shall not transfer gold and silver materials (including semi-finished products) to others or use them for any other purposes.

Article 18 The People's Bank of China has the authority, within the scope provided for in these Regulations, to supervise and check up on units using gold and silver. The units concerned shall provide the Bank with truthful information and data in regard to the use of gold and silver.

Chapter IV Control of Business Units and Self-Employed Silver- smiths Article 19 Units applying for dealing in (including processing and marketing of) gold and silver articles and chemical products containing gold and silver, and those recovering gold and silver from residual, liquid and solid wastes containing them, shall be subject to examination and approval of the People's Bank of China and the relevant competent agencies according to the relevant provisions and approving procedures of the State and shall register with and obtain operating licences from the administrative department for industry and commerce before they begin operations.

Article 20 Business units must conduct their business within the approved scope, and shall not alter the scope of business without authorization, embezzle gold and silver or use them for any other purpose, or illegally purchase them in the course of their operations.

Article 21 The minting and issuing of gold- and silver-based souvenir coins shall be handled by the People's Bank of China, and no other unit may mint, imitate or issue such coins. The export of gold- and silver-based souvenir badges (or plaques) shall be handled respectively by the People's Bank of China and the Ministry of Foreign Economic Relations and Trade of the People's Republic of China.

Article 22 Commission stores and second-hand shops may not purchase or sell on commission gold and silver articles and appliances. Jewellery shops may purchase jewellery inlaid with gold and silver for sale abroad, but may not purchase or sell gold and silver articles and appliances. The People's Bank of China is responsible for purchasing gold and silver articles for export and supplying them to the foreign trade departments.

Article 23 Self-employed silversmiths in border areas inhabited by minority nationalities and in coastal areas with a concentration of relatives of overseas Chinese, may engage in processing and repairing gold and silver articles for clients upon the approval of the People's Bank of China at the county level or above and of the administration for industry and commerce, but are not allowed to purchase or sell gold and silver articles.

Article 24 The State allows individuals to send gold and silver jewellery by post, and specific measures for control thereof shall be worked out by the People's Bank of China in conjunction with the Ministry of Post and Telecommunications.

Chapter V Control of Gold and Silver Taken into or out of the Territory of China Article 25 There is no limit to the quantity of gold and silver to be brought into the People's Republic of China. However, this must be declared at the Customs of the People's Republic of China at the port of entry.

Article 26 Gold and silver taken or retaken out of China shall be inspected and released by the Customs of the People's Republic of China according to the quantity specified in the certificate issued by the People's Bank of China or the declaration form at the time of entry; it may not be taken out if no certificate is produced or if the amount exceeds that specified in the declaration form at the time of entry.

Article 27 Gold and silver jewellery (including inlaid jewellery handicraft and art products and vessels) to be carried out of China by tourists shall be inspected and released by the Customs of the People's Republic of China against the special invoices issued by the domestic units dealing in gold and silver articles. Without such invoices, the articles may not be taken out of China.

Article 28 When Chinese citizens, foreign nationals or stateless persons wish to leave the People's Republic of China to immigrate abroad, they may each carry out up to 1 liang (31.25 grams) in gold jewellery, 10 liang (312.50 grams) in silver jewellery and 20 liang (625 grams) in silver vessels.

Items not exceeding these limits shall be allowed to be carried out upon inspection by the Customs of the People's Republic of China.

Article 29 There is no limit to the quantity of gold and silver to be imported as raw materials by foreign-capital enterprises and Chinese-foreign equity joint ventures in the People's Republic of China. Export products containing a high percentage of gold and silver shall be released upon verification and approval by the People's Bank of China. Items not verified and approved or in excess of the approved amount shall not be exported.

Chapter VI Rewards and Penalties Article 30 Units or individuals who make the following contributions shall be commended or given appropriate material rewards by the State: (1) those who have made marked successes in recovering or controlling gold and silver in strict implementation of the State policies and decrees concerning gold and silver; (2) those who have had outstanding performance in the protection of gold and silver for the State in the struggle against violations of law and criminal acts such as smuggling and speculation; (3) those who have promptly reported or handed over to the responsible organ upon discovery of unearthed gold and silver without legal owner, thus rendering a service to the state; and (4) those who have donated to the State their personal gold and silver collections.

Article 31 The following acts in violation of these Regulations shall be subject to penalty imposed, in accordance with the severity of the case, by the People's Bank of China, or by the administrative department for industry and commerce, or by the Customs, according to their respective terms of reference: (1) If gold and silver have been purchased, sold, exchanged or retained without authorization in violation of Articles 8, 9, 10, and 11 of these Regulations, the People's Bank of China or the administrative department for industry and commerce shall resort to compulsory purchase or devalued purchase. In cases of serious violation, the administrative department for industry and commerce may impose fines in addition, or simply confiscate the gold and silver in question.

In cases of violation of Articles 8, 9, 10, and 11 of these Regulations, the administrative department for industry and commerce may revoke violators' business licences in addition.

(2) If unearthed gold and silver objects without legal owners have been melted down, destroyed or held in possession in violation of Article 13 of these Regulations, the People's Bank of China shall recover the unearthed objects or the administrative department for industry and commerce shall impose fines.

(3) If the intended use of gold and silver is altered, or gold and silver used as raw materials are transferred without authorization in violation of Article 17 of these Regulations, the People's Bank of China shall either issue a warning or recover the gold and silver allocated. In cases of serious violation, fines shall be imposed or even supplies suspended.

(4) For such acts as dealing in gold and silver without authorization, altering the scope of business without authorization, illegally purchasing or using gold and silver for other purpose, or embezzling gold and silver, in violation of Articles 19, 20, 21, 22 and 23 of these Regulations, the administrative department for industry and commerce shall impose fines or confiscate the goods. In cases of serious violation, business licenses may be revoked in addition and suspension of business operations be ordered.

(5) If gold and silver are used to calculate prices, bought or sold privately, or used as a means of a mortgage in respect of borrowing and lending in violation of Article 7 of these Regulations, the People's Bank of China or the administrative department for industry and commerce shall purchase such gold and silver compulsorily or at devalued prices. In cases of serious violation, the administrative department for industry and commerce may impose fines or confiscate the gold and silver in question.

(6) If the provisions in Chapter V of these Regulations concerning the gold and silver taken into or out of China are violated or various means are used to smuggle gold and silver out of China, the Customs shall deal with such cases in accordance with these Regulations and the Customs law and regulations.

(7) If the provisions of Article 14 of these Regulations are violated, the People's Bank of China shall purchase the gold and silver in question. The administrative liability of those directly responsible shall be investigated by the relevant units.

Article 32 If violations of these Regulations constitute crimes, the judicial organs shall investigate the criminal responsibilities according to law.

Chapter VII Supplementary Provisions Article 33 The rules for implementation of these Regulations shall be formulated by the People's Bank of China in conjunction with the relevant departments under the State Council.

Article 34 If modified regulations are required for gold and silver control in border areas inhabited by minority nationalities, the people's governments of the provinces and autonomous regions concerned shall formulate them in conjunction with the People's Bank of China in accordance with these Regulations.

Article 35 These Regulations shall go into effect as of the date of promulgation.

Measures of gold and silver control previously formulated by the related departments thus are hereby nullified.