General Administration of Customs Order No. 134

On approval by Working Meeting of the General Administration of Customs on November 1, 2005, the Measures on Bonded Logistics Park Management by Customs of the People’s Republic of China, hereby published, will go into effect on January 1, 2006.

Director, Mou Xinsheng

Date: November 28, 2005

Measures on Bonded Logistics PArk Management by Customs of the People’s Republic of China

Chapter I General Provisions

Article 1 The Measures shall be formulated to regulate the management of the customs on the bonded logistics park and the goods in and out of the same, enterprises in the bonded logistics park and their operations in accordance with Customs Law of the People’s Republic of China and relevant laws, regulations and rules.

Article 2 The bonded logistics Park mentioned hereby (hereinafter referred to as “the Park”) means the customs special supervision area set on approval of the State Council in the planning area of the free trade zone or special port adjacent to the free trade zone for special development of modern international logistics industry.

Article 3 The outlets of the customs in the Park shall provide 24-hour supervision over goods, transportation means, personal belongings and relevant sites in the areas.

Article 4 The passes, fence isolation facilities, video supervision system and other facilities necessary for custom shall be set between the Park and other regions in People’s Republic of China (hereinafter referred to as the “other area”).

Article 5 Warehouses, stacking area, inspection areas and necessary operation command places, transfer and operation places set in the Park shall not build industrial production and processing places as well as commercial consumption facilities.

The offices of the administrative institutions and their operation principals of the customs and the Park, enterprises set in the Park (hereinafter referred to as the park enterprises) and other entities shall be set in the comprehensive office area of the Park in the planned area and beyond the fence. Except the security guards and personnel of relevant departments as well as the on-duty personnel of the enterprises, other persons shall not reside in the Park.

Article 6 After General Administration of Customs accepts as qualified, together with the competent authorities of the State Council, the relevant facilities and places specified in Article 4 and Article 5(1) hereof, the Park can carry out relevant businesses.

Article 7 The Park can carry out the following businesses:

(1) storing the import/export goods and other goods that have not gone through customs procedures;

(2) Conducting simple liquidity processing and value-added service for the stored goods;

(3) import/export trade, including transit trade;

(4) international purchase, distribution and allocation;

(5) international transition;

(6) test and maintenance;

(7) goods exhibition;

(8) other international logistics businesses approved by the customs.

Article 8 The Park shall not carry out commercial retail, processing and manufacturing, renovation, splitting and other businesses irrelevant to the Park.

Article 9 In the following situations, enterprises in the Park shall report in writing to the competent authorities of customs in the Park and go through relevant procedures within required time;

(1) force majeure and other disasters;

(2) goods under supervision of the customs is seized or detained as an enforcement by the administrative enforcement authorities or judicial authorities;

(3) goods under supervision of the customs is stolen;

(4) other situations required by laws and administrative regulations.

The above situations shall be reported within 5 working days after the date of (1) or within 3 working days after the date of (2)-(4).

Article 10 For the goods under supervision of the customs entering and leaving the Park and the other regions, the competent customs of the Park may require the enterprises to provide appropriate guarantee.

Article 11 The goods and articles prohibited by the laws and administrative regulations shall not go in and out of the Park.

Chapter II The Customs’ Management of the Enterprises in the Park

Article 12 The enterprises in the Park shall be corporations. Before starting operation, the park enterprises shall register at the customs in accordance with the Regulations of the Customs of the People’s Republic of China on Registration Management of the Declaration Applicants and other relevant regulations.

In special situations, on approval of the department directly under the customs, the corporations out of the Park can set branches in the Park by law.

Article 13 Enterprises in the Park shall have the following conditions:

(1) the ability to pay taxes to the customs and fulfill other statutory obligations;

(2) having special operation places in the Park.

Article 14 To change the area, address and other matters of the operation places, the park enterprises shall apply to the department directly under the customs for approval; change of name, organizations, nature, legal representatives, registered capital and the registration items shall be report to the department directly under the customs for record within 5 working days after the change.

In case of the change rather than specified in the preceding paragraph, the park enterprises shall report to the competent customs in the Park and go through relevant procedures according to the relevant provisions of laws and administrative regulations.

Article 15 For the park enterprises, the customs will adopt electronic books supervision system and computer network management system.

The administrative agencies of the Park or their business entities shall set public computer information platform for electronic data exchange and information sharing by the customs, park enterprises and other relevant departments through “E-port” and under the guidance of the customs.

The Park shall set up a computer management system in line with customs supervision requirements, provide terminal facilities to the customs for data checking and connect to the customs according to the verification methods and data standards required by the customs.

Article 16 The park enterprises shall regulate financial management, set books and statements in line with customs supervision requirements, record financial status of the enterprise as well as stocking, transfer, transition, sales, rough processing, use, etc. in relation to the goods and articles going in and out of the Park and truthfully complete relevant documents and books and carry out legal and effective voucher and verification according to the Accounting Law of the People's Republic of China and relevant provisions of laws and administrative regulations

The park nterprises shall compile monthly statements in relation to entering, leaving, transfer and storing and annual accounting reports and regularly report to the competent customs of the Park.

Chapter III Supervision of the Customs over Goods Going in and out of the Park

Section 1 Supervision over Goods Going in and out of the Park

Article 17 The customs will adopt filing system management over the goods going between the Park and the outside borders, excluding the tax-free import goods used by the Park, international transit goods or goods required otherwise by laws and regulations. On arrival of overseas goods at the port, the park enterprises (or agents thereof) may directly ship the goods to the Park with the shipping manifest and then declare to the competent customs in the Park with the entry goods filing list.

Article 18 The goods going between the Park and the outside borders shall be declared to the competent customs in the Park. Should the entry/exit port of the goods from the Park be not in the jurisdiction of the competent customs of the Park, the goods can be declared at the port customs on approval of the competent customs of the Park.

Article 19 In case of CL entry/exit, secondary LCL and other international transit businesses in the Park, the enterprises carrying out the businesses shall send electronic manifest data to the customs. To apply for lading, consolidation, etc. to the competent customs in the park, the park enterprises shall go through entry/exit declaration procedures with the manifest and other documents.

Article 20 The goods shipped from the Park to the outside borders shall be exempted from export tariff, unless stipulated otherwise by the laws and regulations.

Article 21 For the following goods and articles shipped from the Park to the outside borders, the customs will process tax exemption:

(1) facilities, materials, etc. needed for the infrastructure construction project of the Park;

(2) machinery, handling equipment, storing facilities, management facilities necessary for operation of the park enterprises as well as the consumables, parts and tools thereof for maintenance ;

(3) reasonable quantity of office items used by administrative management institutions and business entities thereof as well as the park enterprises.

Article 22 For the following goods and articles entering the Park from the outside borders, the customs will process tax exemption:

(1) the goods and packing materials thereof necessary for operation of park enterprises;

(2) imported goods for processing and trade;

(3) goods from transit trade;

(4) foreign goods for temporary storage;

(5) materials and parts for international sailing ships and air crafts;

(6) export goods on consignment;

(7) entry test and maintenance of goods and parts thereof;

(8) exhibits and samples for sample ordering;

(9) general trade goods that have not gone through the full customs procedures;

(10) other entry goods approved by the customs.

Article 23 The transportation means and living consumption products of the administrative institutions, their business entities and the park enterprises for self use shall be declared to the customs according to the relevant regulations of general trade and import goods.

Article 24 The goods going between the Park and the outside borders are not subject to import/export license management, unless stipulated otherwise by laws and regulations.

Section 2 Supervision over goods between the Park and other regions

Article 25 For goods going between the Park and other regions, the park enterprises or the shipper and the consignee (or their agents) of the other regions shall declare to the competent customs of the Park.

In the event that the park enterprises are engaged in import/export trade and their goods do not actually enter the park, they can declare at the competent customs where the consignee or shipper is located or the customs of the port where the goods actually cross the borders.

Article 26 It shall be deemed as import to ship goods from the Park to other regions, and the park enterprises or consignees (or their agents) in other regions shall declare to the competent customs in the Park according to applicable regulations on imported goods, for which the customs will handle according to actual supervision means for goods going out of the Park.

Article 27 Cross-jurisdiction goods distribution by park enterprises or cross-jurisdiction goods lading by enterprises from other regions can be declared a or transited at the competent customs of the Park according to the customs regulations.

Article 28 Except for the goods that can not be collectively declared according to laws, regulations and rules,the park enterprises with small-quantity and frequent entry/exit goods can be declared on approval of the competent customs in the park at the current tax rate and foreign exchange rate on the date of goods declaration accepted by the customs for each goods entry/exit. The period for collective declaration shall not be longer than 1 month nor processed beyond the year.

Article 29 It shall be deemed as export to ship goods from the Park to other regions, and the park enterprises or consignees (or their agents) in other regions shall declare to the competent customs of the Park. The customs will levy export tariff from the goods concerned according to the related regulations; valid export license shall be submitted to the customs for goods subject to license, unless required by laws, regulations and rules to submit export license at exit declaration linkage.

It shall be subject to the following regulations to complete the issuing procedures of export goods customs declaration page certification for export rebate:

(1) For domestic goods and their packing materials going in the Park for operation of park enterprises, the park enterprises or consignee (or their agents) in other regions shall complete the export goods customs declaration form, and the customs will handle according to the related regulations on export goods and issue export goods customs declaration certificate; for customs transit and export, by electronic receipt from the competent customs of the Park as a confirmation that the transited goods have entered the Parka, the customs at the departure place will issue the page certification of export goods customs declaration;

(2) For domestic construction materials, machinery, handling equipment, management equipment, etc. shipped into the Park for the use of the administrative institutions, their business entities in the Park and park enterprises, the customs will handle according to the related regulations on export goods and issue the page certification of export goods customs declaration certificate;

(3) For living consumption products, office items, transportation means, etc. shipped into the Park for the use of the administrative institutions, business entities in the Park and the park enterprises, the customs will not issue the page certification of export goods customs declaration certificate;

(4) For the original import goods, packing materials, facilities, infrastructure, etc. shipped into the Park, the park enterprises shall submit the list of the above goods or articles to the customs and declare according to the related regulations on export goods, the customs shall not issue the page certification of export goods declaration form certificate, and the paid tariff, import linkage VAT and excise tax will not be returned..

Article 30 If the goods leaving the Park is free from tax, the customs shall handle according to the regulations applicable to tax-free goods.

Article 31 On approval of the competent customs of the Park, the park enterprises can hold commodity exhibitions at the special exhibition places of the comprehensive office area in the Park. The exhibited goods shall be kept on record by the competent customs in the Park and subject to customs supervision.

To hold exhibitions at other places out of the Park, the park enterprises shall go through required procedures by reference to the management regulations of the customs on temporary import goods.

Article 32 The machinery, equipment, office items, etc. for use by the administrative institutions, their business entities and park enterprises and requiring test and maintenance out of the Park, require an application submitted to the competent customs of the Park and acquire approval from the competent customs in the Park.

Article 33 The machinery, equipment, office items, etc. for test and maintenance out of the Park shall not be used out of the Park and shipped back to the Park within 60 days since the date of shipping out. In case of failure to ship back on time in some special situations, the administrative institutions, their business entities and park enterprises shall apply to the competent customs in the Park in writing for extension, up to 30 days, within 10 days before the expiry.

Article 34 The machinery, equipment, etc. shall be the original ones on returning to the park after the test and maintenance. The parts or elements for replacement shall be shipped back at the same time.

For the changed domestic parts or attachments out of the Park in case of rebate, the enterprises in or out of the Park shall make applications and the competent customs of the Park shall process according to related regulations on export goods and issue the page certification of export goods declaration form certificate.

Article 35 To be shipped back to the outside borders or reshipped in China, the original imported goods out of the Park shall not cross the national borders through the Park or enter the Park for storing.

The goods once imported out of the Park and replaced according to the regulations on goods compensated at no cost shall not enter the Park, if remaining out of the park rather than returning to the outside borders.

Section 3 Supervision over the goods in the Park

Article 36 The goods can be circulated freely in the Park. To transfer and transit the goods, the park enterprises shall file by electronic data of the actual names, quantity, amount, etc. of the goods at the customs and conduct cancellation after verification after the transfer and transition.

Article 37 Unless approved by the competent customs of the Park, the park enterprises shall not mortgage, pledge, lien, appropriate or dispose of otherwise the stored goods.

The goods and articles entering the Park without taxes according to Article 21 hereof shall be governed by the preceding paragraph.

Article 38 The park enterprises may carry out simple liquidity processing and value-added services, including grading and categorization, splitting and sorting, subpackage, measurement, combination packaging, fixing films, adding shipping marks, pasting signs, packaging change, combined container loading and other business-value-added secondary operations.

Article 39 The enterprises applying for operation of maintenance businesses in the Park shall be corporations and file at the competent customs in the Park. The products repaired by the enterprises in the Park and the parts thereof shall bey from the overseas only , while the products and replaced parts and materials produced during the maintenance shall be reshipped out of the Park to the original outside borders.

Article 40 Since the date of business operation, the pakr enterprises shall apply for verification at the competent customs in the Park. The competent customs of the Park shall verify the stocking within 30 days after acceptance of verification. Relevant books and original data of the enterprises shall be kept for at least 3 years since the end of the stocking verification.

Article 41 In the event that the domestic export goods entering the Park fail to go through rebate procedures and need to be returned to the exporters for the reasons of quality or specifications, the park enterprises shall submit application within 1 year after declaration of the goods to enter the Park, and provide rebate certification issued by the local competent taxation authorities on failure to complete export rebate and then ship back without payment of import tariff, import linkage VAT and excise tax; and the export tariff levied by the customs shall be returned. When the goods enter the Park through transit and the park enterprises issue customs shipping back contact form, the competent customs of the Park shall process relevant procedures.

Without simple liquidity processing, the entry goods shall be returned out of China with the original status, and the park enterprises may apply to the competent customs in the Park for shipping back.

For shipping back, the goods that have conducted export rebate or received simple liquidity processing (including entry goods) shall go through procedures according to the related regulations applicable to import/export procedures.

Article 42 Except the goods that have received simple liquidity processing, the goods already in the Park need to be returned, in their original status, to the export enterprises for replacement due to inconsistence of quality and specifications with the contract, the park enterprises shall conduct replacement procedures at the competent customs of the park within 1 year after the goods enter the Park after declaration. The customs shall process according to the related regulations of Measures of Import/export Goods Taxation Management of People’s Republic of China.

On entering the Park, the replaced goods can be exempted from export license and export tariff, but the customs will not issue the page certification of the export goods customs declaration.

Article 43 To store dangerous chemicals and inflammable and explosive materials, the enterprises shall acquire administrative approval of safe production management, fire fighting, environment protection and other competent authorities and file the same to the competent customs of the Park. The tanking, devices, equipment and other facilities shall meet the supervision requirements of the customs.

The goods piped in and out of the Park shall be equipped with measurement test devices and other facilities or equipment for convenient supervision of the customs.

Article 44 Unless prohibited by laws and regulations, the park enterprises can apply for abandoning of goods after announcement.

The abandoned goods shall be withdrawn and sold by the competent customs of the Park, and the income therefrom shall be disposed of by the customs. After sales by law, the enterprises can conduct cancellation after verification with the application for abandoning the goods and relevant documents of the competent customs of the Park on withdrawal and sales of the goods; the enterprises can dispose at their discretion to some extent the goods that fail to be sold for use value with verification of the customs, for which the competent customs in the Park will directly process cancellation after verification. The costs for storing necessary for withdrawal and sales of the goods at the customs shall be solely borne by the enterprises.

If required by the regulations, the abandoned goods shall be destroyed by the enterprises, subject to the supervision by persons assigned by the competent customs of the Park. By certification of the competent authorities, the competent customs of the Park will process cancellation after verification.

Article 45 For damage, destruction and destroy of goods in the Park for force majeure, the park enterprises shall prompreport in writing to the competent customs of the Park with reasonable explanation and provide relevant certification by insurance and disaster verification authorities. After verification by the competent customs of the Park, the disposal shall be subject to the following regulations:

(1) In case of destroy of the goods or complete loss of use value, the customs shall process cancellation after verification and tax exemption;

(2) If the damaged or destructed imported goods can be recycled, though losing their original use values, the park enterprises can apply to the competent customs of the Park for shipping back. To ship the goods out of the Park but not back to the the outside borders, the park enterprises shall submit application with verification to the competent customs in the Park and then ship the goods out of the Park according to the evaluation of the use values of the affected goods.

(3) If the damaged or destructed imported goods out of the Park can be recycled, though losing their original use values, the enterprises can replace the goods with the same name, specifications, quantity and price of the damaged goods and apply to the competent customs in the Park for shipping back.

If the goods need to be shipped back out of the Park without export rebate, the enterprises can apply to the competent customs in the Park for shipping back; the goods already with export rebate shall be handled according to the applicable regulations on the imported goods shipped out of the Park in (2).

Article 46 Damage, destruction and destroy of goods for ill storing and force majeure shall be subject to the following regulations:

(1) For the goods from the outside borders to the Park, the park enterprises shall pay by law tariff, import linkage VAT and excise to the customs according to the original values of the damaged or destructed goods according to the general regulations on trade and import goods and at the tax rates, the foreign exchange rates of the date when the customs accepts the declaration on entering of the goods into the Park;

(2) For goods from out of the Park, the park enterprises shall repay relevant taxes returned for export at domestic linkage and the customs will process cancellation after verification

Article 47 Goods in the Park are subject to no storing limit.

Section 4 The supervision over goods going between the Park and other special customs supervision areas and bonded supervision places.

Article 48 The customs will maintain bonded supervision over the goods between the Park and other special customs supervision areas and bonded supervision places without issuing the page certification of the export goods customs declaration. However, for goods from the special supervision customs areas and bonded supervision places subject to no domestic goods export rebate system at the linkage of entering the Park (warehouse), declaration shall be made according to the applicable regulations on actual departure of the goods, and the customs of the transfer-out place will issue the page certification of the export goods customs declaration.

Article 49 The goods trade and circulation between the Park and other special supervision customs areas and bonded supervision places will be exempted from applicable taxes of export linkage and domestic circulation linkage.

Chapter IV The Supervision over the Transportation Measures, Personal Belongings and Articles Going in and out of the Park

Article 50 The transportation means and persons shall go in the Park through the special passages designated by the customs.

Article 51 The goods going between the Park and other ports, special supervision customs areas or bonded supervision places will be carried through the transportation means filed with or verified by the customs. The carriers shall follow the management regulations on transportation means and the loaded goods.

Article 52 For the goods between the Park and other special supervision customs areas and bonded supervision places, the enterprises may carry the goods by vehicles other than under supervision of the customs. When going in and out of the entrances of the Park, the carrying vehicles shall be registered at the customs, which will verify and inspect the cargo and carrying vehicles.

Article 53 When going in and out of the Park, the following goods may be carried or solely transported by special persons designated by the park enterprises after relevant procedures according to the customs regulations and the inspection by the competent customs in the Park:

(1) worth of a small amount as USD 10,000 or lower;

(2) replaced shipped back out of the Park for ill quality;

(3) having gone through import tax payment procedures;

(4) that the enterprises do not require export rebate;

(5) verified otherwise by the customs.

Chapter V Supplemental Provisions

Article 54 Unless the international transit or required otherwise, the goods shipped in the Park and from the Park to the outside borders shall be listed into customs import statistics. The goods shipped in or out of the Park shall be listed into single customs statistics.

The goods transferred or transited between the park enterprises and

shipped between the Park and other special supervision customs areas and bonded supervision places shall not be listed in customs statistics.

Article 55 The terms hereof have the following meaning:

The comprehensive office area in the Park means the places for office, commercial, customs clearance and commodity display and other functions set by the Park administrative management institutions or business entities in the planned area of the Park and beyond the fence for use by the customs, the park enterprises and other relevant institutions.

LCL (less than container load) means a logistics operation where the transited goods in the international containers shipped from the outside borders separately receive simple liquidity processing and value-added services by the park enterprises according to orders of the shippers and the consignees during the storing in the transition ports or combination again with other import or export goods of the countries or regions where the transition ports are located to be reloaded aboard ships and transported to the same overseas destination ports.

Warehouse verification means the operation where on enterprises' application of the customs inspecting their actual inventory and compare and verify the entry, exit, transfer and storing data of customs and enterprise electronic books.

Special customs supervision area means the free trade zones, export processing areas, the Parks, bonded port area and other special supervision areas.

The bonded supervision area means the bonded logistics center (Category A and B), bonded warehouses, export supervision warehouses and other bonded supervision places set on approval of the customs.

Article 56 In case of embezzlement in violation of these Measures or customs supervision regulations, the customs will impose penalty to the Customs Law of the People’s Republic of China, Customs Administrative Penalty Implementation Rules of the People’s Republic of China, and any crime shall be persecuted for criminal liabilities.

Article 57 These Measures shall be interpreted by the General Administration of Customs.

Article 58 These Measures will go into effect on January 1, 2006.