(Promulgated by State Economic and Trade Commission, Ministry of Foreign Trade and Economic Cooperation and the Customs General Administration on March 29,1996)

Article 1 In light of the State Council's Circular Relevant Issues of Frontier Trade (Decree No.2,promulgated by the State Council in 1996)and the Provisional Regulations on the Administration of Import of Machinery and Electronic Products, the present Rules are hereby formulated for the purpose of simplifying the management of small- volume frontier trade of importing machinery and electronic products.

Article 2 The small - volume frontier trade stated in the present Rules refers to trading activities through the State's designated border port between enterprises accredited with small-volume frontier trade right in the border counties

(banners)or border cities which have been granted the right to open to the outside world by the State along the land border of China, and enterprises or trade institutions in the border areas of the neighboring countries.

Modes of frontier trade for importing machinery and electronic products other than the exchange of goods by border residents already carried on in the border areas shall be uniformly administrated as small-volume frontier trade.

The exchange of goods by border residents stated in the previous clause refers to the activity of exchanging commodities by inhabitants of the border areas in the open spots or designated fairs approved by the government within 20 kilometers to the land border of China, which shall not go beyond the limited volume of trade or quantity.

Article 3 Machinery and electronic products originally manufactured in the neighboring countries, when imported by enterprises with small-volume frontier trade right through State's designated land border ports, including quota-controlled products, special products and registered products shall be subject to these Rules.

The import of machinery and electronic products by border residents through means of exchange if the value is under RMB 1,000 yuan each day per person, is not regulated by these Rules and shall be subject to the relevant Customs supervision regulations.

Article 4 Management on small-volume frontier trade of importing quota-controlled products.

1.The administrative offices for the import of machinery and electronic products in border provinces and autonomous regions((Hereinafter referred to as the Import Offices in Border Provinces and Regions)shall report the quota-controlled products required by next year's local small-volume frontier trade to the State Office for Import and Export of Machinery and Electronic Products(SOIEMEP)before October 31 every year. SOIEMEP shall collect and coordinate the application and incorporate them into the State's import plan of quota-controlled products, and report to the State Council for approval.

2.SOIEMEP shall divide the total Import quotas of the small-volume frontier trade approved by the State Council and shall specially allocate the quotas according to products(excluding that of automobiles and their key components) to the Import Offices of Border Provinces and Regions.

To guarantee a normal small-volume frontier trade, SOIEMEP shall at the end of each year, before the allocating next year's total import quota, arrange in advance next year's import quota in accordance with the implementing conditions in third quarter of the year, SOIEMEP shall adjust the allocated year's total import quota.

3.Quotas allocated for small-volume frontier trade shall not be used by other modes of trade.

4.SOIEMEP shall authorize the Import Offices of Border Provinces and Regions with the examing and approving right for local enterprises with small-volume frontier trade right to import quota controlled goods produced originally by the neighboring countries through the State's designated land border ports, which must be within the total import quota for small-volume frontier trade as signed by the State.

5.Small-volume frontier trade enterprises when importing quota-controlled products (excluding automobiles and their key components),shall apply to the Import Offices of Border Provinces or Regions in charge in consideration of administrative subordination for Application Form for Importing Machinery and Electronic Products(in duplicate).The filled form shall be examined and approved by the Import Offices of the Provinces or Regions in charge who will issue the Certificate for Import Quotas (see Appendix 1 as the sample).

6.Small-volume frontier trade enterprises, when importing automobiles and their key components, shall fill in the Application Form for Importing Machinery and Electronic Products (in duplicate)with reference to relevant explanations, which shall be transferred to SOIEMEP for approval by the Import Offices of Border Provinces and Regions, and SOIEMEP shall issue the Certificate for Import Quotas.

7.Small-volume frontier trade enterprises, when importing quota-controlled products except automobiles and their key components, shall apply to the Departments of Foreign Trade and Economic Cooperation of the province or the autonomous region for the Import License, upon the Certificate for Import Quotas issued by Import Offices of Border Provinces and Regions, upon the Certificate for Import Quotas and Import License, the Customs shall examine and release the goods.

Small-volume frontier trade enterprises, when importing quota-controlled products of automobiles and their key components, shall apply to MOFTEC-authorized issuing institutions for Import License with Certificate for Import Quotas issued by Import Offices of Border Provinces and Regions; the Customs shall check and release goods upon Certificate for Import Quotas and Import License.

Article 5 Management on small-volume frontier trade of importing special products

1.SOIEMEP shall authorize the Import Offices of Border Provinces and Regions with the approving rights for local enterprises with small-volume frontier trade right to import special goods produced originally by neighboring countries through the State's designated land border ports.

2.Small-volume frontier trade enterprises can import the above-mentioned special products by means other than bidding.

3.Small-volume frontier trade enterprises, when importing special products, shall apply to the Import Offices of Border Provinces or Regions in charge in consideration of administrative subordination for Application Form for Importing Machinery and Electronic Products(in duplicate).The filled form shall be approved by the Import Offices of Border Provinces or Regions in charge who will issue the Certificate for Importing Machinery and Electronic Products (see Appendix 2 as the sample).

The Customs will examine and release the goods upon the Certificate for Importing Machinery and Electronic Products issued by the Import Offices of Border Provinces or Regions.

Article 6 Small-volume frontier trade enterprises, when importing registered products, shall apply to the Import Offices of Border Provinces or Regions in charge in consideration of administrative subordination for Application Form for Importing Machinery and Electronic Products and fill it in as application for registration. The Import Offices of Border Provinces or Regions in charge shall check and issue the Registration Form of Importing Machinery and Electronic Products. The Customs shall examine and release the goods with the Registration Form of Importing Machinery and Electronic Products.

Article 7 The validity, revision procedure of the Certificate for Import Quotas, Certificate for Importing Machinery and Electronic Products and Registration Form for Importing Machinery and Electronic Products used in small-volume frontier trade of importing machinery and electronic products as well as those relevant matters not regulated by the present Rules shall be decided in line with related regulations stipulated in the Detailed Implementation Rules on the Administration of Importing Quota-Controlled Products, Detailed Implementation Rules on the Administration of Importing Special Products and Notice on the Registration for Importing Machinery and Electronic Products, which have been promulgated jointly by State Economic and Trade Commission, MOFTEC and the Customs General Administration.

Article 8 Import Offices of Border Provinces and Regions shall strictly abide by the statistic system of importing machinery and electronic products and transfer the import data in time as requested.

Import Offices of Border Provinces and Regions shall submit the counterfoil for issuing certificates entrusted to them in the previous month and return the invalid certificates to SOIEMEP for record before the fifth day each month.

SOIEMEP shall regulate and check the fulfillment of the small-controlled products and special products.

Article 9 As for unit who violates these Rules for approval beyond its authorization or issuance of certificate for import and licenses in excess to quotas, SOIEMEP and MOFTEC shall either circulate a notice of criticism or suspend or even disqualify its approving and issuing rights in accordance with the seriousness of the case. Those who violate law shall be investigated under criminal law.

Actions that violate the Customs Law shall be dealt with in light with the Customs Law of the People's Republic of China and Implementation Rules on Administrative Penalty of the Customs Law.

Article 10 SOIEMEP shall be responsible for the interpretation of these Rules.

Article 11 These Rules shall enter into effect on April 1,1996

Appendix 1:Sample of Certificate for Import Quotas(omitted.)

Appendix 2:Sample of Certificate for Importing Machinery and Electronic Products (Omitted.)