[1999]外经贸管发第315号
(Issued by the Ministry of Foreign Trade and Economic Cooperation on 27 May 1999 and effective as of 1 June 1999.)
颁布日期：19990527 　实施日期：19990601 　颁布单位：对外贸易经济合作部

Article 1　These Procedures are formulated in accordance with the State Council General Office, Transmission of the State Economic and Trade Commission and Others, Further Improving the Security Bank Deposit Account System for Processing Trade Opinion Circular (ref. Guo Ban Fa [1999] No. 35), in order to strengthen the administration of the processing trade, to standardize the examination and approval of the domestic sale of materials and parts imported for processing trade and to ensure the sound development of the processing trade and relevant domestic industries.

Article 2　The term "domestic sale of bonded materials and parts imported for processing trade" refers to the situation where an operating enterprise is required to sell domestically, or to use in the production of products for domestic sale, bonded imported materials or parts or finished products thereof, because it is unable to process and re-export the same in accordance with regulations for a certain reason.

Article 3　All bonded materials and parts imported for the processing trade must be processed and re-exported; if they truly need to be sold domestically due to special reasons, the same must be submitted for the approval of the provincial-level department in charge of foreign economic relations and trade (except in the case of merchandise for ordinary trade which is subject to import quotas and licensing or import registration).

Article 4　To apply for domestic sale of bonded materials and parts imported for processing trade, the operating enterprise must meet any of the following conditions:

1. the foreign business entity has consulted with the operating enterprise and, for a certain reason, requires it to terminate the implementation of the original export contract ahead of schedule, provided that the operating enterprise is able to produce relevant evidence and that price considerations and other such factors make it difficult to enter into a new export contract;

2. due to a drop in prices on the international market, the operating enterprise would suffer serious financial losses if it were to continue implementing the original specified-price export contract, provided that the operating enterprise is able to produce the agreement reached with the foreign business entity concerning early termination of the implementation of the contract;

3. the processing and use of the imported materials and parts has commenced, but the quality of the finished products resulting from the processing does not meet the standards of the export contract signed, provided that the operating enterprise is able to produce relevant certification from an export merchandise quality inspection authority or a domestic quality supervision authority;

4. part of the materials has become redundant as a result of improved processing techniques or reduced unit consumption, or the technical requirements in terms of processing techniques made the creation of a reasonable quantity of leftover bits and pieces of materials inevitable, provided that the operating enterprise is able to produce relevant certification from the authority in charge of its production industry;

5. an event of force majeure has made it impossible to continue implementation of the export contract signed; or

6. it has other justifiable grounds for requesting domestic sale.

Article 5　An operating enterprise that wishes to apply for domestic sale of bonded materials and parts imported for processing trade must submit its application and provide the following documents to the specified authority in charge of foreign economic relations and trade before the specified deadline for sell-back of the finished products:

1. an application for domestic sale (original copy), describing details of the export verification procedures already carried out and of the reason for domestic sale;

2. the " Processing Trade Business Approval Certificate " (original);

3. the processing trade import and export contract (photocopy);

4. the " Customs Processing Trade Registration Handbook " (original);

5. the " List of Processing Materials and Parts for Which a Recordal Application Is Made " and the " List of Recorded Finished Products Exported and Corresponding Imported Materials and Parts Consumed " (original); and

6. a list of the bonded materials and parts which were imported for the processing trade and for which domestic sale is applied (specifying the names, codes, specifications, quantities and amounts of the merchandise).

Article 6　Operating work units which have submitted all the required materials and whose submissions meet the requirements of Article 5 hereof shall be issued an " Approval Certificate for Domestic Sale of Bonded Materials and Parts Imported for Processing Trade " (see appendix for the format) by the authorities in charge of foreign economic relations and trade. The merchandise names, codes, specifications, quantities and amounts of the imported materials and parts approved for domestic sale shall be noted on the approval certificate, and the Special Seal for Examination and Approval of Processing Trade Business shall be affixed to it.

Article 7　If the materials and parts which were imported for the processing trade and are to be sold domestically are not subject to import quotas and licensing or import registration, Customs shall levy duty and tax on the imported materials and parts plus interest on such duty and tax in accordance with relevant State regulations and subsequently carry out the verification procedures in respect of processing trade registration handbook, on the strength of the Approval Certificate for Domestic Sale of Bonded Materials and Parts Imported for Processing Trade issued by the authorities in charge of foreign economic relations and trade.

Article 8　If the materials and parts which were imported for the processing trade and are to be sold domestically are subject to import quotas and licensing or import registration, the verification procedures in respect of the processing trade registration handbook shall be carried out in accordance with the following regulations:

1. if the operating enterprise can produce, within the prescribed time limit for verification, a corresponding import licence or corresponding proof of registration for ordinary trade, Customs shall carry out verification procedures in respect of the processing trade registration handbook with reference to Article 7 hereof;

2. if the operating enterprise cannot produce, within the time limit, a corresponding import licence or corresponding proof of registration for ordinary trade, Customs shall levy duty and tax plus interest on such duty and tax in accordance with regulations and, in addition, impose a fine of not more than 100% and not less than 30% of the value of the imported materials and parts involved in the case, and only then shall it carry out verification procedures in respect of the processing trade registration handbook.

Article 9　Unauthorized domestic sale of materials or parts imported for processing trade, or finished products thereof, shall be handled by Customs in accordance with the PRC, Customs Law and the PRC, Customs Law Administrative Sanctions Implementing Rules.

Article 10　All provincial-level authorities in charge of foreign economic relations and trade must consolidate the details of their examination and approval of domestic sale of materials and parts imported for the processing trade within their respective jurisdictions on a daily basis and centrally report the same to the Ministry of Foreign Trade and Economic Cooperation through the China International Electronic Commerce Network.

Article 11　The authorities in charge of foreign economic relations and trade at all levels shall strictly adhere to the relevant provisions of these Procedures when examining and approving the domestic sale of materials and parts imported for processing trade. If such authorities violate these Procedures, the Ministry of Foreign Trade and Economic Cooperation will circulate a notice of criticism or revoke their right to examine and approve the domestic sale of materials and parts imported for processing trade. Cases which involve criminal offences will be turned over to the judicial authorities for handling.

Article 12　Examination and approval of the domestic sale of materials and parts imported for the processing trade by foreign investment enterprises shall be handled in accordance with these Procedures.

Article 13　The Ministry of Foreign Trade and Economic Cooperation is in charge of interpreting these Procedures.

Article 14　These Procedures shall be implemented as of 1 June 1999.