Foreign Trade Law of the People’s Republic of China

Foreign Trade Law of the People's Republic of China

(Adopted at the 7th Meeting of the Standing Committee of the Eighth National People’s Congress on May 12, 1994; revised at the 8th Meeting of the Standing Committee of the Tenth National People’s Congress on April 6,2004; amended for the first time in accordance with the Decision on Amending the Foreign Trade Law of the People’s Republic of China and Other Eleven Laws adopted at the 24th Meeting of the Standing Committee of the Twelfth National People's Congress on November 7, 2016; and amended for the second time in accordance with the Decision on Amending the Foreign Trade Law of the People’s Republic of China at the 38th Meeting of the Standing Committee of the Thirteenth National People's Congress on December 30, 2022)

Contents

Chapter I    General Provisions

Chapter II   Foreign Trade Dealers

Chapter III   Import and Export of Goods and Technologies

Chapter IV   International Trade in Services

Chapter V   Intellectual Property Rights Protection in Foreign Trade

Chapter VI   Foreign Trade Order

Chapter VII   Foreign Trade Investigation

Chapter VIII  Foreign Trade Remedies

Chapter IX   Foreign Trade Promotion

Chapter X    Legal Liability

Chapter XI   Supplementary Provisions

Chapter I

General Provisions

Article 1  This Law is enacted with a view to opening wider to the outside world, developing foreign trade, maintaining foreign trade order, protecting the legitimate rights and interests of foreign trade dealers and promoting the sound development of the socialist market economy.

Article 2  This Law is applicable to foreign trade and intellectual property rights protection in foreign trade.

For purposes of this Law, foreign trade refers to the import and export of goods and technologies, as well as international trade in services.

Article 3  The department of foreign trade under the State Council is in charge of foreign trade throughout the country pursuant to this Law.

Article 4  The state applies a unified system of foreign trade, encourages the development of foreign trade and maintains the foreign trade order featured by fairness and freedom.

Article 5  The People’s Republic of China, based on the principle of equality and mutual benefit, promotes and develops trade relations with other countries and regions, concludes or accedes to such regional economic and trade agreements as customs union agreements and free trade zone agreements, and joins regional economic organizations.

Article 6  In the field of foreign trade, the People’s Republic of China, in accordance with the international treaties and agreements it has concluded or acceded to, grants most-favored-nation treatment or national treatment to other contracting parties; or, based on the principle of mutual benefit and reciprocity, grants other trading parties most-favored-nation treatment, national treatment, or other treatment.

Article 7  In the event that any country or region adopts prohibitive, restrictive or other similar measures that are discriminatory in nature against the People’s Republic of China in trade, the People’s Republic of China may, in light of the actual conditions, take countermeasures against the country or region in question.

Chapter II

Foreign Trade Dealers

Article 8  For purposes of this Law, foreign trade dealers refer to the legal persons, other organizations or individuals that have completed the formalities of industrial, commercial or other registration in accordance with law and engage in foreign trade activities in compliance with the provisions of this Law and other relevant laws and administrative regulations.

Article 9  The international trade in services shall be carried out in compliance with the provisions of this Law and other relevant laws and administrative regulations.

Entities engaged in foreign labor service cooperation shall meet the corresponding eligibility criteria. The specific measures therefor shall be formulated by the State Council.

Article 10  The state may put the import and export of certain goods under the state trading administration. Such goods shall only be imported and exported by the authorized enterprises; meanwhile, a certain quantity of the import and export of these goods may be undertaken by unauthorized enterprises as an exception.

The catalogs of the goods under the state trading administration and the authorized enterprises shall be determined, adjusted and published by the department of foreign trade under the State Council in conjunction with other relevant departments under the State Council.

Where, in violation of the provisions in the first paragraph of this Article, the goods under the state trading operation are imported or exported without permission, the Customs shall not grant clearance thereto.

Article 11 A foreign trade dealer may accept the entrustment by another person to engage in foreign trade as an agent within the scope of its business operations.

Article 12 A foreign trade dealer shall, in compliance with the regulations laid down in accordance with law by the department of foreign trade under the State Council or any other relevant department under the State Council, submit to relevant departments the documents and information related to its foreign trade activities. The latter shall keep confidential the business secrets of the former.

Chapter III

Import and Export of Goods and Technologies

Article 13 The state permits free trade of goods and technologies, except where otherwise provided for in laws and administrative regulations.

Article 14 The department of foreign trade under the State Council may, based on the need to monitor the import and export, implement an automatic import and export licensing system for certain freely traded goods and shall publish the catalog thereof.

Where the consignee or consignor, before going through the Customs declaration formalities, submits an application for automatic licensing for the import or export of the goods under the automatic licensing system, the department of foreign trade under the State Council or its authorized department shall grant permission thereto. The Customs shall not grant clearance to the goods before the automatic licensing formalities are completed.

In the case of importing or exporting freely traded technologies, the contracts thereof shall be filed with the department of foreign trade under the State Council or the authority it entrusts with such filing.

Article 15  In the following circumstances, the state may restrict or prohibit the import or export of the relevant goods and technologies:

(1) where it is necessary to restrict or prohibit the import or export for safeguarding national security, public interests or ethics;

(2) where it is necessary to restrict or prohibit the import or export for safeguarding human health or safety, protecting the lives or health of animals and plants, or conserving the environment;

(3) where it is necessary to restrict or prohibit the import or export for implementing the measures related to the import and export of gold or silver;

(4) where the short domestic supply or the need to effectively conserve exhaustible natural resources makes it necessary to restrict or prohibit the export;

(5) where it is necessary to restrict the export because of the limited market size of the importing country or region;

(6) where it is necessary to restrict the export because of serious chaos in export order;

(7) where it is necessary to restrict the import for establishing or speeding up the establishment of a particular domestic industry;

(8) where it is indispensable to restrict the import of any form of products from agriculture, animal husbandry or  fishery;

(9) where it is necessary to restrict the import for maintaining the international financial position and the balance of international payments of the state;

(10) other circumstances where, as required by laws and administrative regulations, it is necessary to restrict or prohibit the import or export; or

(11) other circumstances where, in accordance with the provisions of international treaties or agreements China has concluded or acceded to, it is necessary to restrict or prohibit the import or export.

Article 16  With regard to the import and export of goods and technologies related to fissile and fusion materials or the substances from which such materials are derived, and the import and export related to arms, ammunition or other military supplies, the state may adopt any necessary measure to safeguard national security.

In wartime or for the purpose of maintaining international peace and security, the state may adopt any necessary measure in respect of the import and export of goods and technologies.

Article 17  The department of foreign trade under the State Council shall, in conjunction with other departments under the State Council and in accordance with the provisions in Articles 15 and 16 of this Law, formulate, adjust and publish the catalog of goods and technologies of which the import or export is restricted.

With the approval of the State Council, the department of foreign trade under the State Council or the said department in conjunction with other relevant departments under the State Council may, within the scope specified by the provisions in Articles 15 and 16 of this Law, decide on temporary restriction or prohibition on the import or export of specific goods and technologies other than the ones listed in the catalog mentioned in the preceding paragraph.

Article 18  The state administers the goods subject to import or export restriction through quotas, licensing, etc; with regard to the technologies subject to import or export restriction, it adopts administration through licensing.

The goods and technologies subject to administration through quotas or licensing may only be imported or exported upon permission by the department of foreign trade under the State Council, or upon joint permission by the said department and other relevant departments under the State Council, as required by the regulations of the State Council.

The state administers certain imported goods by setting tariff-rate quotas.

Article 19 Quotas for imported and exported goods and tariff-rate quotas shall be set by the department of foreign trade under the State Council or the relevant departments under the State Council within the limits of their respective responsibilities, on the principles of openness, fairness, impartiality and efficiency. The specific measures in this regard shall be formulated by the State Council.

Article 20 The state implements a unified commodity assessment system and, in accordance with the provisions of relevant laws and administrative regulations, carries out certification, inspection and quarantine in respect of commodities to be imported and exported.

Article 21  The state applies rules of origin to the imported and exported goods. The specific measures in this regard shall be formulated by the State Council.

Article 22 Where the import or export of cultural relics, wild animals and plants and their products is prohibited or restricted by the provisions of other laws or administrative regulations, the provisions of those laws and administrative regulations shall prevail.

Chapter IV

International Trade in Services

Article 23 In respect of international trade in services, the People’s Republic of China shall, in accordance with its commitments made in the international treaties or agreements it has concluded or acceded to, grant the other contracting parties market access and national treatment.

Article 24 The department of foreign trade under the State Council and the relevant departments under the State Council shall, pursuant to the provisions of this Law and the relevant laws and administrative regulations, regulate international trade in services.

Article 25 In any of the following circumstances, the state may restrict or prohibit the relevant international trade in services:

    (1) where restrictions or prohibitions are needed for safeguarding state security and public interests and ethics;

(2) where restrictions or prohibitions are needed for safeguarding human health or safety, protecting the lives or health of animals and plants, or conserving the environment;

(3) where restrictions are needed for establishing or speeding up the establishment of a particular domestic service industry;

(4) where restrictions are needed for maintaining the balance of foreign exchange receipts and payments of the state;

(5) where restrictions or prohibitions are needed for other reasons, as laws and administrative regulations so provide; or

(6) where restrictions or prohibitions are needed as required by the provisions of the international treaties or agreements which China has concluded or acceded to.

Article 26 With regard to military-related international trade in services, as well as international trade in services related to fissile and fusion materials or the substances from which such material is derived, the state may adopt any necessary measure to safeguard state security.

In wartime or for the purpose of maintaining international peace and security, the state may adopt any necessary measure in respect of international trade in services.

Article 27 The department of foreign trade under the State Council shall, in conjunction with the other relevant departments under the State Council and in accordance with the provisions in Articles 25 and 26 of this Law and relevant laws and administrative regulations, formulate, adjust and publish the market access catalog for international trade in services.

Chapter V

Intellectual Property Rights Protection in Foreign Trade

Article 28 The state protects intellectual property rights in foreign trade in accordance with the laws and administrative regulations concerning intellectual property rights.

Where any imported good infringes upon intellectual property rights and impairs foreign trade order, the department of foreign trade under the State Council may take such measures as prohibiting, for a specified period of time, the import of the relevant goods produced or sold by the infringer.

Article 29 Where the owner of intellectual property rights commits any of such acts as preventing the licensee from challenging the validity of the intellectual property right in the licensing contract, imposing mandatory package licensing on the licensee or incorporating exclusive grant-back conditions in the licensing contract, which undermines the order of fair competition in foreign trade, the department of foreign trade under the State Council may take any necessary measure to eliminate the harm.

Article 30 If any country or region fails to grant the legal persons, other organizations or individuals from the People’s Republic of China national treatment in respect of the protection of intellectual property rights, or cannot adequately or effectively protect the intellectual property rights in respect of the goods, technologies or services from the People’s Republic of China, the department of foreign trade under the State Council may, in accordance with the provisions of this Law, other relevant laws and administrative regulations, and the international treaties or agreements which the People’s Republic of China has concluded or acceded to, take any necessary measure in respect of trade with the country or region in question.

Chapter VI

Foreign Trade Order

Article 31 In foreign trade activities, monopolistic behaviors in violation of the provisions of the laws and administrative regulations against monopoly are prohibited.

In foreign trade activities, any monopolistic behavior that jeopardizes fair market competition shall be dealt with in accordance with the provisions of the laws and administrative regulations against monopoly.

In the event that violations as mentioned in the preceding paragraph are committed, which undermine the foreign trade order, the department of foreign trade under the State Council may take any necessary measure to eliminate the harm.

Article 32 In foreign trade activities, no one may engage in unfair competition, such as selling commodities at unreasonably low prices, colluding in tenders, publishing false advertisements and practising commercial bribery.

Unfair competition in foreign trade activities shall be dealt with in accordance with the provisions of laws and administrative regulations against unfair competition.

In the event that violations as mentioned in the preceding paragraph are committed, which undermine the foreign trade order, the department of foreign trade under the State Council may take any measure such as prohibiting the dealer from importing and exporting relevant goods and technologies to eliminate the harm.

Article 33 In foreign trade activities, the following acts are prohibited:

(1) forging or altering marks of origin of imported or exported goods; forging, altering or dealing in origin certificates of imported or exported goods, import or export licenses, certificates of import or export quotas, or other import or export certificates;

(2) obtaining export tax refund by fraudulent means;

(3) smuggling;

(4) evading certification, inspection or quarantine required by laws and administrative regulations; or

(5) other acts in violation of the provisions of laws and administrative regulations.

Article 34 In foreign trade activities, foreign trade dealers shall act in compliance with the state regulations on foreign exchange administration.

Article 35 The department of foreign trade under the State Council may make known to the public any case that undermines the foreign trade order in violation of this Law.

Chapter VII

Foreign Trade Investigation

Article 36 To maintain foreign trade order, the department of foreign trade under the State Council may, on its own or jointly with other relevant departments under the State Council, investigate the following matters in accordance with the provisions of laws and administrative regulations:

(1) the impact on domestic industries and their competitiveness exerted by the imported and exported goods, imported or exported technologies, and international trade in services;

(2) trade barriers of relevant countries or regions;

(3) matters that need investigating in order to determine whether such foreign trade remedies as anti-dumping, countervailing and safeguards should be taken in accordance with law;

(4) acts circumventing foreign trade remedies;

(5) matters concerning national security and interests in foreign trade;

(6) matters that need investigating in order to enforce the provisions in Article 7, the second paragraph of Article 28, Articles 29 and 30, and the third paragraph of Article 31 and of Article 32; and

(7) other matters that may have an impact on foreign trade order and need investigating.

Article 37 The initiation of a foreign trade investigation shall be announced by the department of foreign trade under the State Council with a notice issued.

The investigation may take the form of questionnaires in writing, hearings, on-the-spot investigations, entrusted investigations, and the like.

The department of foreign trade under the State Council shall, based on the findings, submit an investigation report or make a ruling, and make the matter known to the public by giving a notice.

Article 39 The entities and individuals concerned shall provide cooperation and assistance in foreign trade investigations.

The department of foreign trade and other relevant departments under the State Council and their staff members shall have the obligation to keep confidential the state secrets and business secrets they are exposed to in the course of foreign trade investigation.

Chapter VIII

Foreign Trade Remedies

Article 39 The state may, based on the findings of foreign trade investigation, take appropriate measures of foreign trade remedies.

Article 40 Where a product from other countries or regions is dumped into China’s market at a price lower than its normal value, thus causing or threatening to cause substantive damage to any of China’s established domestic industries, or presenting a substantive impediment to the establishment of a domestic industry, the state may take anti-dumping measures to eliminate or mitigate such damage, threat of damage, or impediment.

Article 41 Where a product from other countries or regions is exported to the market of a third country at a price lower than its normal value, thus causing or threatening to cause substantive damage to any of China’s established domestic industries, or presenting a substantive impediment to the establishment of a domestic industry, the department of foreign trade under the State Council may, in response to the application submitted by the domestic industry, conduct consultations with the government of that third country and request it to take appropriate measures.

Article 42 Where an imported product to which specific subsidies of any form are directly or indirectly granted by the exporting country or region causes or threatens to cause substantive damage to any of China’s established domestic industries, or presents a substantive impediment to the establishment of a domestic industry, the state may take countervailing measures to eliminate or mitigate such damage, threat of damage, or impediment.

Article 43 Where a substantial increase in the quantity of an imported product causes or threatens to cause serious damage to China’s industry of like products or directly competitive products, the state may take the necessary safeguard measures to eliminate or mitigate such damage or threat of damage, and may provide the industry concerned with necessary support.

Article 44 Where an increase in the services provided to China by the service supplier of another country or region causes or threatens to cause damage to a domestic industry that provides like or directly competitive services, the state may take the necessary remedial measures to eliminate or mitigate such damage or threat of damage.

Article 45 Where a substantial increase in the quantity of a certain product imported into China’s market, as a result of the restrictions imposed by a third country on its import, causes or threatens to cause damage to any of China’s established domestic industries, or presents an impediment to the establishment of a domestic industry, the state may take the necessary remedial measures to restrict the import of the said product.

Article 46 Where a country or region that has concluded or jointly acceded to the economic and trade treaties or agreements with the People’s Republic of China violates the provisions of such treaties and agreements and thus causes losses or damage to the interests the People’s Republic of China is entitled to under these treaties and agreements, or impedes the achievement of the objectives set in the treaties and agreements, the government of the People’s Republic of China has the right to request the government of the country or region concerned to adopt appropriate remedies and may suspend or terminate its performance of relevant obligations according to the relevant treaties and agreements.

Article 47 The department of foreign trade under the State Council shall, in accordance with the provisions of this Law and other relevant laws, carry out bilateral or multilateral consultations, negotiations and dispute settlement concerning foreign trade.

Article 48 The department of foreign trade and other relevant departments under the State Council shall establish an early warning and emergency response mechanism for the import and export of goods, technologies, and services to cope with unexpected and unusual situations in foreign trade and safeguard the economic security of the state.

Article 49 The state may take necessary anti-circumvention measures against actions to circumvent the foreign trade remedies prescribed in this Law.

Chapter IX

Foreign Trade Promotion

Article 50 The state formulates strategies for the development of foreign trade and establishes and improves the mechanism for promoting foreign trade.

Article 51 The state establishes and improves financial institutions in the service of foreign trade and establishes funds for developing foreign trade and dealing with risks.

Article 52 The state develops foreign trade by means of import and export credit, export credit insurance, export tax rebate and other means designed to promote foreign trade.

Article 53 The state establishes a system of public information service targeting foreign trade to provide foreign trade dealers and the public with information services.

Article 54 The state takes measures to encourage foreign trade dealers to exploit international market, and develop foreign trade by a variety of means such as outbound investment, foreign project contracting and foreign labor service cooperation.

Article 55 Foreign trade dealers may establish or join relevant associations or chambers of commerce in accordance with law.

The relevant associations and chambers of commerce shall observe laws and administrative regulations; provide their members with foreign-trade-related services in production, marketing, information, training, etc. in compliance with their articles of association; give full play to their role in coordination and self-discipline; submit applications for foreign trade remedies measures in accordance with law; safeguard the interests of their members and industries; report their members’ suggestions regarding foreign trade to the relevant government departments; and carry out activities to promote foreign trade.

Article 56 China’s organization for the promotion of international trade shall, in accordance with its articles of association, develop external relations, hold exhibitions, provide information and advisory services and carry out other activities to promote foreign trade.

Article 57 The state supports and facilitates small and medium-sized enterprises to develop foreign trade.

Article 58 The state supports and promotes the development of foreign trade in ethnic autonomous regions and economically under-developed areas.

Chapter X

Legal Liability

Article 59 The department of foreign trade or other relevant departments under the State Council may impose a fine of not more than RMB 50,000 yuan on enterprises that, in violation of the provisions in Article 10 of this Law, import or export the goods under state trading administration without authorization; and may, if the circumstances are serious, refuse to accept applications submitted by said enterprises for engaging in import and export of goods under state trading administration, or withdraw the authorization granted thereto concerning the import and export of other goods under such administration, within three years from the date when the administrative penalty decision takes effect.

Article 60 Any dealer that imports or exports the goods the import or export of which is prohibited or, without authorization, imports or exports the goods the import or export of which is restricted shall be dealt with and punished by the Customs in accordance with the provisions of relevant laws and administrative regulations; if the abovementioned act constitutes a crime, the dealer shall bear criminal responsibility in accordance with law.

Any dealer that imports or exports the technologies the import or export of which is prohibited or, without authorization, imports or exports the technologies the import or export of which is restricted shall be dealt with and punished in accordance with the provisions of relevant laws and regulations. Where there is no provision in laws or administrative regulations applicable to such circumstances, the department of foreign trade under the State Council shall order the said dealer to make rectification, confiscate its unlawful gains and, in addition, impose a fine of not less than the amount of the unlawful gains but not more than five times that amount. If there are no unlawful gains or such gains are less than RMB 10,000 yuan, a fine of not less than RMB 10,000 yuan but not more than RMB 50,000 yuan shall be imposed. If the abovementioned act constitutes a crime, the dealer shall bear criminal responsibility in accordance with law.

Within three years from the date when the administrative penalty decision or the criminal punishment judgment takes effect, as specified in the preceding two paragraphs, the department of foreign trade or other relevant departments under the State Council may refuse to accept the application submitted by the offender for import or export quotas or licenses, or prohibit the offender from engaging in the import or export of relevant goods and technologies for a period of not less than one year but not more than three years.

Article 61 Any dealer that engages in the prohibited international trade in services or, without authorization, engages in the restricted international trade in services shall be punished in accordance with the provisions of relevant laws and administrative regulations. Where there is no provision in laws or administrative regulations applicable to such circumstances, the department of foreign trade under the State Council shall order the dealer to make rectification, confiscate its unlawful gains and  impose a fine of not less than the amount of the unlawful gains but not more than five times that amount. If there are no unlawful gains or such gains are less than RMB 10,000 yuan, a fine of not less than RMB 10,000 yuan but not more than RMB 50,000 yuan shall be imposed. If the act constitutes a crime, the dealer shall bear criminal responsibility in accordance with law.

The department of foreign trade under the State Council may prohibit the offender from engaging in the relevant international trade in services for a period of not less than one year but not more than three years from the date when the administrative penalty decision or the criminal punishment judgment takes effect, as specified in the preceding paragraph.

Article 62 Any dealer that violates the provisions in Article 33 of this Law shall be punished in accordance with the provisions of relevant laws and administrative regulations. If its act constitutes a crime, the dealer shall bear criminal responsibility in accordance with law.

The department of foreign trade under the State Council may prohibit the offender from engaging in the relevant foreign trade activities for a period of not less than one year but not more than three years from the date when the administrative penalty decision or the criminal punishment judgment takes effect, as specified in the preceding paragraph.

Article 63 During the period of time in which a foreign trade dealer is, in accordance with the provisions in Articles 60, 61 and 62 of this Law, prohibited from engaging in the relevant foreign trade activities, the Customs shall, in accordance with the prohibition decision made by the department of foreign trade under the State Council in accordance with law, refuse to process the procedures of declaration, inspection and release for the relevant goods that the said dealer intends to import or export, and the department of foreign exchange or the designated foreign exchange bank shall not handle the foreign exchange settlement or sales for the said dealer.

Article 64 Where a staff member of the department responsible for foreign trade administration in accordance with this Law neglects his duties, engages in malpractice for private gain or abuses his power, which constitutes a crime, he shall bear criminal responsibility. If his act does not constitute a crime, he shall be given an administrative sanction in accordance with law.

Where a staff member of the said department, taking advantage of his position, extorts money or other forms of property from another person or illegally accepts another person’s money or other forms of property and seeks benefits for that person in return, which constitutes a crime, he shall bear criminal responsibility in accordance with law. If his act does not constitute a crime, he shall be given an administrative sanction in accordance with law.

Article 65 Any party engaged in foreign trade activities, who does not agree with the specific administrative act by the department responsible for foreign trade administration in accordance with this Law, may apply for administrative reconsideration or bring an administrative lawsuit before the people’s court in accordance with law.

Chapter XI

Supplementary Provisions

Article 66 Where other laws and administrative regulations provide otherwise in respect of foreign trade administration concerning military supplies, fissile or fusion materials or the substances from which such materials are derived, or the administration of the import and export of cultural products, those laws and administrative regulations shall prevail.

Article 67 The state adopts flexible measures and provides preferential treatment and convenience for trade between the border areas of China and those of its neighboring countries as well as trade among border residents. The specific measures in this regard shall be formulated by the State Council.

Article 68 This Law is not applicable to the separate customs territories of the People’s Republic of China.

Article 69 This Law shall come into force as of July 1, 2004.