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Export Commodities Inspection and Appraisal Enterprises with Foreign
Investment

BIZCHINA / Foreign Trade

Provisions on Examination and Approval of Establishment of Import and
Export Commodities Inspection and Appraisal Enterprises with Foreign
Investment

Updated: 2006-04-18 10:50

(Promulgated by the State Administration for the Import and Export
Commodities Inspection and the Ministry of Foreign Trade and Economic
Cooperation on October 9, 1995)

Article 1 These Provisions have been formulated in the light of relevant
laws and regulations to strengthen the control over the work on import
and export commodities inspection and thus ensure the quality of this
inspection work and facilitate the development of foreign trade.

Article 2 The import and export commodities inspection and appraisal
enterprises with foreign investment mentioned in this set of Provisions
refer to enterprises with foreign investment established as
Chinese-foreign joint equity or cooperative ventures engaging in
inspection, appraisal and certification of import and export commodities
as a third party under the consignment of consignors and of consignees
commodities or other related parties, hereinafter referred to as FFCIEs.

Article 3 Joint venturing FFCIEs but not wholly foreign-owned ones are
allowed to be set up in the territories of China.

Article 4 With official approval, FFCIE can engage in all or part of the
operations listed below:

Inspection, appraisal and certification on consignment of quality,
specifications, quantity, weight, package, damage, value and technical
conditions of shipment of import and export commodities.

Article 5 The Chinese investor in an FFCIE should be an enterprise
engaged in the inspection and appraisal of import and export commodities
with approval or consent, or by appointment, of the department in charge.

The foreign investor in an FFCIE should be an enterprise which has more
than three years of experience in the import and export commodity
inspection, appraisal and certification business, accommodated with
qualified managerial, professional and technical personnel and technical
equipment for the work, a relatively steady clientele of its own and a
fairly good international reputation.

Article 6 The registered capital of an FFCIE should not be less than
U.S. $ 500,000. It should have a fixed working site and the technical
conditions and professional personnel suitable for its business
operations.

Article 7 The operational term of an FFCIE is generally not more than 30
years.

Article 8 The establishment of an FFCIE should be approved by the
Ministry of Foreign Trade and Economic Cooperation (hereinafter referred
to as MOFTEC) of the Peoples Republic of China.The qualifications for
business and business scope of the FFCIE will be examined and
administered by the State Administration for Import and Export
Commodities Inspection of the People's Republic of China (hereinafter
referred to as SCIA).

Article 9 Procedures for the establishment of an FFCIE:

1. The Chinese partner submits an application for the establishment of
the FFCIE together with the related documents to its higher authorities.
After agreed by the authorities, the local department of foreign trade
and economic cooperation, having consulted the local bureau of import and
export commodities inspection, will send the application with its own
comments and report to MOFTEC. If the applicant is an enterprise directly
under a ministry, commission or bureau of the State Council, it should
submit the application with related documents for the establishment of an
FFCIE to its higher authorities and, after having agreed by the higher
authorities, report the application to MOFTEC which, on receiving will
consult SCIA on the documents.

2. SCIA will examine the project proposal and feasibility study report
for the proposed FFCIE and its technical force, technical level and
technical equipment as well as its scope of business. Finding the
application qualified after examination, SCIA will issue a written
Comment on Qualifications Examination of the proposed FFCIE.

3. Having received an affirmative reply from SCIA, MOFTEC will examine
the documents sent in. After it has approved the project, MOFTEC will
issue a certificate of approval of an enterprise with foreign investment.

4. The Chinese partner, with the MOFTEC certificate of approval of an
enterprise with foreign investment and other relevant documents, applies
to industrial and commercial administrative offices for business
registration to get the business license.

5. With the certificate of approval and the business license, the FFCIE
has to get the Qualification Certificate for FFCIE at SCIA before it can
formally open for business.

Article 10 The FFCIE applicant has to submit the following documents to
MOFTEC:

1. Comments of the local department of foreign trade and economic
cooperation or a ministry, commission or bureau of the State Council to
the application for the establishment of an FFCIE.

2. The project proposal for the proposed FFCIE.

3. The feasibility study report, contract and articles of association
signed by all parties concerned.

4. Certificates of credit status, business registration (duplicates) and
legal representation (duplicates) of all parties to the project.

5. Other documents as requested by MOFTEC.

Otherwise specified as duplicates, all the documents should be the
original. The unofficial representative who has signed the documents
should produce the document of authorization by the legal representative
for acting on his/her behalf.

Article 11 The establishment of subsidiary setups of FFCIEs shall be
handled according to this set of Provisions.

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