Article 1 Pursuant to the Customs Law of the People's Republic of China and other related laws and regulations, the present rules are hereby formulated for purposes of promoting a healthy development of the exchange and trading of goods by border residents, making border economy prosperous and enforcing the administration of Customs supervision.

Article 2 The exchange and trading of goods by border residents is defined as the activity of exchanging commodities by inhabitants of 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.

Requirements for carring out such trade as the exchange of goods by border residents:

1.The trading place shall be located close to the land border or boundary river;

2.The trading place shall be approved by the People's Government of the border province or the autonomous region;

3.Trade areas(spots) fox exchanging goods by border residents shall have a clear boundary line;

4.Facilities for Customs supervision and administration shall meet the requirements of the Customs.

Article 3 Inhabitants of border areas in China as well as border residents of the other country can enter the trade areas (spots )to undertake the exchange of goods.

Enterprises like shops, supply and marketing cooperatives in the border areas of China are subject to the management of frontier trade if they set up a stand in the trade area(spot)of exchanging goods by border residents and engage in the activity of exchanging commodities.

Article 4 When inhabitants of the border area carry goods with them to enter or exit the trade area(spot)of exchanging goods by border residents or a border port, they shall declare the variety ,amount and values of the goods exactly as they are, and shall submit to the supervision, administration and inspection of the Customs.

Article 5 Goods taken by one border resident from the border ports or the area(spot)for exchanging and trading goods by border inhabitants each day shall be exempt from import duties and taxes if it is less than RMB 1,000 yuan in value; if the value is between RMB 1,000 and 5,000 yuan, the excess part shall be levied with import duties in line with regulations described in Provisions of the People's Republic of China on the Levy of Import Duties on Personal Luggage of Passengers and Personal Postal Parcels Arriving in China; if the value is beyond RMB 5,000 yuan, the goods shall be levied with import duties and taxes in accordance with the Customs Regulations of Import Tariff of the People's Republic of China and shall go through related formalities as the import and export of goods.

Article 6 Border residents and enterprises engaging in the exchanging of commodities of both countries shall not carry or transport goods which is prohibited by the State to import or export into or out of the area (spot)for exchanging and trading goods by residents of border areas.

Commodities which are under the State limit for import and export or are under the license management shall be dealt with according to the State's relevant regulations.

Article 7 In places for the exchange and trading of goods by border residents which can be closed and are linked to the other country, residents of the other country, residents of the other country shall declare to the Customs stationed in area for supervision and administration when they take goods to enter China.

Article 8 If there is no Customs institution locally, related departments can be entrusted by the provincial government or that of the autonomous region after consulting with the directly subordinated Customs to carry out the administration. The local government should strengthen management, formulate detailed regulations for implementation upon agreement after discussing with the Customs. The Customs should give instructions and work jointly with the local government to check the management irregularly.

Article 9 Customs of all levels shall enforce the management of the exchange and trading of goods by border residents, crack down with severity the illegal activity of smuggling under the cover of exchanging and trading goods by border in habitants. Activities against the Customs Law and regulations of these Rules shall be dealt with by the Customs in line with the Customs Law and Detailed Implementation Rules on Administrative Penalties of the Customs Law.

Article 10 The Customs General Administration shall be responsible for the interpretation of these Rules.

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