Circular of the State Council on Implementing Measures to Align Policies with High-standard International Rules and Advance Institutional Opening-up in Eligible Pilot Free Trade Zones and Pilot Free Trade Ports

2023-06-29

To accelerate the establishment of a new development paradigm and promote high-quality development, the following measures are hereby proposed, focusing on piloting the alignment of policies in priority areas with high-standard trade rules in eligible pilot free trade zones and trade ports, balancing opening up and security, and creating the systems and a regulatory framework that contribute to high-standard institutional opening-up.

I. Advance the Innovative Development of Trade in Goods

1. Support pilot programs for importing re-manufactured products in key industries. The products imported are not subject to any prohibitions or restrictions specified by China for the import of used goods. However, it is essential that these products comply with all relevant national technical requirements applicable to similar new products, which include but are not limited to the requirements for quality characteristics, safety, and environmental performance. Moreover, they must conform to the pertinent regulations governing re-manufactured products. It is also crucial to prominently label them as "re-manufactured products". The designated pilot areas are obligated to develop customized plans based on their realities. These plans should include a list of imported products, alongside detailed standards, requirements, conformity assessment procedures, and regulatory measures. Upon receiving the plans, the relevant competent authorities are expected to review and collectively make decisions within six months. The competent authorities and local governments should intensify their supervisory, management, and inspection efforts concerning re-manufactured products, to effectively prevent the import of foreign waste and used goods masqueraded as re-manufactured products. (Applicable areas include the Pilot Free Trade Zones in Shanghai, Guangdong, Tianjin, Fujian, and Beijing, and Hainan Free Trade Port. The measures listed below are applicable to these areas unless otherwise specified.)

4. Tariff, import value-added tax (VAT), and excise tax exemptions are granted to specific goods temporarily imported into the designated pilot areas from foreign countries and regions, provided that the relevant taxpayers present guarantees to the customs upon the entry of such goods. These eligible goods encompass professional equipment (e.g. software; instruments, devices and items used for news reporting, filming, or television production) essential for temporarily inbound personnel engaging in business operations, trade, and other professional activities in compliance with Chinese laws. Additionally, exemptions apply to goods used for exhibitions or displays; commercial samples, advertising films, and sound recordings; and sports equipment required for sports competitions, performances, or training. The aforementioned goods must be transported out of China within a six-month period starting from the entry date and cannot be used for commercial purposes such as selling or leasing during their temporary stay in China. In cases where the deadlines for transporting the goods out of China need to be extended, necessary procedures for extensions must be followed in accordance with applicable laws and regulations.

5. The customs authorities in the designated pilot areas should not withhold preferential tariff benefits for goods solely for minor errors. These errors may include but are not limited to misprints, typos, and non-essential information omissions found in the certificates of origin, and minor discrepancies between related documents.

6. Advance ruling requestors may apply for an extension of the ruling periods to the customs in the designated pilot areas, provided that the laws, facts, and circumstances according to which the rulings are issued remain unchanged. The customs in these pilot areas shall make prompt decisions before the expiration of the corresponding ruling periods.

7. After meeting China's customs supervision requirements and undergoing mandatory quarantine procedures, express air shipments should be released by the customs in the designated pilot areas within six hours of their arrival, upon the submission of requisite customs documents.

8. Upon compliance with applicable Chinese laws, regulations, and provisions, as well as the completion of mandatory quarantine procedures, goods should be released by the customs in the designated pilot areas within 48 hours of their arrival, provided that all the necessary information for customs clearance has been submitted.

9. In the case where the tariffs, other import taxes, or administrative fees have not been determined prior to the arrival (including upon arrival) of goods, while all other release requirements are met, with an adequate guarantee provided to the customs or the required dispute payments made, the customs in the designated pilot areas should proceed with the release of the goods.

10. If the competent authorities in the designated pilot areas approve the eligibility of qualified overseas conformity assessment agencies or recognize it through alternative means, they should follow the same or equivalent procedures, standards, and requirements applicable to domestic conformity assessment agencies. The corporate capacity obtained by overseas conformity assessment agencies or establishment of representative offices in China should not be a prerequisite for accepting their assessment results or assessment-related inspection and testing results.

11. Where information technology equipment products are imported in the designated pilot areas, the relevant authorities should consider the supplier's declaration of conformity as a sufficient guarantee that the products meet the necessary electromagnetic compatibility (EMC) standards or technical regulations.

12. In the designated pilot areas, the import of wines that bear labels containing descriptions or adjectives such as chateau, classic, clos, cream, crushed/crusting, fine, late bottled vintage, noble, reserve, ruby, special reserve, solera, superior, sur lie, tawny, vintage, or vintage character is permitted.

II. Promote the Liberalization and Facilitation of Trade in Services

13. Except for certain new financial services, foreign-funded financial institutions in the designated pilot areas should be allowed to offer a range of new financial services comparable to those provided by domestic financial institutions. The financial authorities may ex officio define the eligible institutions capable of offering new financial services, including specifying their types and characteristics. These institutions are also obliged to acquire the necessary licenses approved by the financial authorities to provide such services. The financial authorities must make decisions within a reasonable timeframe, and they may only reject the issuance of licenses for new financial services based on prudent considerations.

14. The financial authorities in the designated pilot areas are obligated to maintain consistency in their processing of domestic and overseas applications. Upon receiving a complete and legally valid application from overseas financial institutions, investors in overseas financial institutions, or providers of cross-border financial service regarding the provision of financial services, the authorities are required to make a decision within 120 days and promptly notify the applicant of the result. If the financial authorities are unable to reach a decision within the designated timeframe, they must notify the applicant promptly and strive to make a decision within a reasonable timeframe.

15. Enterprises registered in the designated pilot areas and individuals residing or working in those areas are allowed to purchase overseas financial services using legitimate cross-border methods. The financial authorities possess the power to determine the specific classifications of overseas financial services according to separate regulations.

16. Efforts will be made to encourage the lawful provision of professional services by overseas professionals to businesses and residents in the designated pilot areas. Furthermore, support will be provided to these areas in establishing and improving mechanisms for assessing the capabilities of overseas professionals.

III. Facilitate the Temporary Entry of Business Personnel

17. Spouses and family members accompanying experts employed by foreign-funded enterprises in the designated pilot areas are entitled to the same entry and temporary stay as the experts themselves are.

18. Senior executives of foreign enterprises planning to establish branches or subsidiaries in the designated pilot areas are eligible for an extended validity period of two years for their temporary stay after entry. Furthermore, their accompanying spouses and family members are entitled to the same entry facilitation and duration of temporary stay.

IV. Foster the Sustainable Growth of Digital Trade

19. Government departments and their staff members are forbidden from demanding the transfer or acquisition of source codes owned by enterprises or individuals as a condition for importing, distributing, selling, or utilizing mass-market software (excluding software for critical information infrastructure) and products that include such software.

20. The designated pilot areas will receive assistance in strengthening their consumer rights and interests protection system, along with implementing measures to prohibit online business activities that involve fraud and commercial deception, which could harm consumers or pose a risk to their rights and interests.

V. Further Optimize the Business Environment

21. The designated pilot areas should be responsible for guaranteeing convenient and timely transfers that are accurate, lawful, and directly linked to the investments made by foreign investors. The transfers cover various aspects, including capital contributions, profits, dividends, interest, capital gains, royalties, management and technical guidance fees, as well as other related payments. Additionally, they encompass proceeds obtained from the sale or liquidation of investments in whole or in part; payments made under contractual agreements such as loan agreements, legally obtained compensation or indemnification, and payments from dispute resolutions.

22. In the designated pilot areas, purchasers who opt for single source government procurement are obligated to provide an explanation for their decisions while announcing the transaction results.

23. In accordance with applicable regulations, the competent authorities are responsible for publicly disclosing information regarding published patent applications and granted patents associated with business entities operating within the designated pilot areas. The information includes search and examination results (encompassing details or information on relevant existing technologies), non-confidential responses from patent applicants, as well as patent and non-patent literature citations provided by both applicants and relevant third parties.

24. Upon the request for intellectual property rights remedies and the submission of legally obtained evidence that demonstrates a preliminary case of actual or potential infringement of the applicants' rights, the people's court in the designated pilot areas should expeditiously take necessary measures for business entities, in accordance with relevant judicial regulations, without necessitating the opposing party to provide the statements.

25. While investigating suspected cases of unfair competition, the competent authorities in the designated pilot areas are required to provide guidance for the business operators under investigation. If these operators make appropriate commitments and take prompt measures to eliminate or mitigate the negative consequences as committed, they may face lighter, mitigated, or no administrative penalties as prescribed by law.

26. Enterprises, commercial organizations, and non-governmental organizations operating within the designated pilot areas are encouraged to create voluntary mechanisms to improve their environmental performance. These mechanisms may involve voluntary auditing and reporting, providing market-oriented incentives, voluntarily sharing information and expertise, and fostering collaboration between the government and private sector investors. Furthermore, these entities are encouraged to participate in the development and revision of environmental performance assessment standards for voluntary mechanisms.

27. Enterprises operating within the designated pilot areas are encouraged to voluntarily uphold corporate social responsibility principles pertaining to the environment. The applicable principles must be consistent with the international standards and guidelines that are endorsed or supported by China.

28. Efforts will be made to assist labor and personnel dispute arbitration institutions in the designated pilot areas in issuing written arbitration awards to the involved parties in a standardized and timely manner while ensuring public disclosure according to law.

VI. Build a Sound Risk Prevention and Control System

29. The designated pilot areas should establish a sound mechanism to identify significant risks and prevent systemic risks. The Ministry of Commerce, in conjunction with relevant competent authorities, will strengthen coordination, guidance, and evaluations. The focus will be on improving analyses, research, and assessments of different risks, and strengthening safety risk investigations, dynamic monitoring, and real-time early warning mechanisms.

30. The safety assessment mechanism will be strengthened. The Ministry of Commerce, in partnership with relevant competent central and local authorities, will closely monitor the progress made in the designated pilot areas and evaluate emerging situations and issues, taking into account changes in the external environment and global trends. Depending on the level of risk, appropriate measures such as adjustments, suspension, or termination will be implemented. Moreover, there will be continual optimization of the measures implemented for the pilot areas.

31. Efforts to enhance risk prevention and resolution will be focused on improving prevention and control measures, as well as establishing a safety protection system that integrates policies, management, and technologies.

32. The responsibility for risk prevention and control will be clearly defined. Local authorities should take on their primary responsibility by establishing and strengthening measures to support risk prevention and control, implementing necessary reforms, and improving the production safety responsibility system. Additionally, the relevant central authorities should intensify guidance and supervision efforts while fulfilling their regulatory duties.

33.The competent authorities should enhance proactive, ongoing and ex-post supervision, improve regulatory rules, introduce innovative regulatory approaches, foster collaborative supervision, and establish a regulatory system featuring clearly defined rights and responsibilities, fairness, equity, transparency, and efficiency. Additionally, a holistic approach to market, quality, safety, and financial supervision will be promoted.

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