1993.04.02
HAINAN PROVINCE
　 PROCEDURES　 FOR THE ADMINISTRATION OF THE BONDED AREA IN HAIKOU CITY,
HAINAN PROVINCE
　 (PROMULGATED　 BY　 THE　 HAINAN　PROVINCIAL　PEOPLE'S　GOVERNMENT　ON
FEBRUARY 24, 1993)
　 @@　 Article　　1.　 For　a　wider　opening to the outside world and a
better　development　　of　　the　　external-oriented　 economy,　 these
procedures　 are　formulated　 in　the　light　of　relevant　State　laws
and with reference to international practices.
　 @@　 Article　　2.　 The　Haikou　Bonded Area (hereinafter referred to
as　 the　Bonded　 Area)　 is　 a　 special　 customs　 supervised　 and
controlled　district located　in　Jinpan　Industrial Development Zone of
Haikou　city.　Well-formed separation　facilities　will　be　erected　on
the boundary line between the Bonded Area and non-bonded areas.
　 @@　 Article　　　3.　　The　Bonded　Area's　main　scope　of　business
is　　the　development　 of　 bonded　warehousing,　entrepot　trade　and
technology-intensive　 processing　　trade　　for　　export,　 including
international　trade,　transhipped　trade,　　transit　　trade,　 barter
trade,　 transport,　 storage,　 packaging,　commodity　exhibition,　and
banking and insurance.
　 @@　 Article　　 4.　　The　 legitimate　 rights　 and　 interests　of
Chinese　and foreign　investors　in　the　Bonded　Area　are protected by
Chinese　law.　All　enterprises　 and　 other economic organizations and
individuals　in　the　Bonded　Area　 shall　 abide　 by　 the　laws　and
regulations　of　the　People's　Republic of China and the regulations of
Hainan province and these Procedures.
　 @@　　Article　　　 5.　　 The　　Bonded　　Area　　is　　under　 the
leadership　　and　 administration　of　the　Haikou　Municipal　People's
Government.
　 The　 Bonded　Area　will　have an Administration Commission which will
act　on　behalf　 of　 the　 Haikou　 Municipal　People's　Government in
exercising　unified control　over　the　administrative　matters　of　the
Bonded　 Area　 and help coordinate the work of related State functional
agencies in the Bonded Area.
@@　Article　 6.　The Administration Commission is chiefly to:
　 (1)　exercise　unified　control　of the Bonded Area in accordance with
these Procedures;
　 (2)　 formulate　and　promulgate　detailed administrative rules of the
Bonded　Area　 and　 organize　 the　implementation　of the overall plan
for　 the　 Bonded　Area　approved　by　the　Haikou　Municipal　People's
Government;
　 (3)　formulate and organize the implementation of economic development
plans for the Bonded Area;
　 (4)　 exercise　 administrative　functions in the spheres of planning,
finance,　industry,　　foreign　 economic　 relations,　 foreign　trade,
land,　 long-term　programs, housing property, industrial and commercial
administration,　 labor,　personnel,　 public　 security,　environmental
protection,　and　public utilities within　the Bonded Area and to assist
customs,　taxation,　banking,　insurance,　commercial　 inspection,　and
sanitation　inspection, agencies in the Bonded Area for their work;
　 (5)　　examine　　and　　approve　　applications　 for　 leaving　 the
country　　of　 administrative　　personnel,　　Chinese　　and　 foreign
enterprise　　personnel　 and　 Chinese　 personnel　 of　 foreignfunded
enterprises　 in　 the　 Bonded Area and transfer　the　applications　to
Hainan　provincial　foreign　affairs and public security departments for
performing passport and visa procedures;
　 (6)　 execute　 other　functions　and　powers authorized by the Hainan
provincial and Haikou city governments.
　 @@　 Article　　　7.　　 Administrative　　offices　 of　the　customs,
commodity　 inspection,　 foreign　 exchange,　 finance　and　sanitation
inspection　 and　proxy　and　 service　agencies　for　labor,　auditing,
accounting and law will be set up in the Bonded Area.
　 @@　 Article　　8.　 Investors　intending to set up enterprises in the
Bonded　Area　 shall　 register　 and　obtain　business　licenses at the
industrial　and　commercial　administrative　office　of　the Bonded Area
according to related regulations.
　 @@　Article　　9.　 With　their　business　licenses,　the　enterprises
shall　perform　 the　 required　procedures　at the customs and taxation
offices in the Bonded Area.
　 @@　 Article　　10.　　Engineering　and　construction　projects of the
enterprises　in　the Bonded Area must conform to the overall planning of
the Bonded Area.
　 @@　 Article　　11.　 Enterprises in the Bonded Area must keep special
account　books　 for　 duty-free　 and　bonded　import　and export goods
approved by the customs.
　 @@　 Article　　12.　　Enterprises　in the Bonded Area must practise a
system of social insurance and labor insurance for all their employees.
　 @@　Article　 13.　Enterprises in the Bonded Area are permitted to get
loans　secured　 by　 immovable　 property　from banks and other finance
outfits inside and outside the country.
　 @@　 Article　　14.　　All　 enterprises　 in　 the　 Bonded　Area are
permitted　to engage　in foreign trade, including entrepot, transit, and
barter　trades　and　to　 directly　engage　in　processing　for　foreign
customers related to their own production.
　 Goods　 subject　to　import　and　export　licensing,　except otherwise
regulated　by　the　 State,　 can　 be brought into the Bonded Area from
abroad　or　sent　out　of　the　 Bonded　Area　to abroad without seeking
import　and　export　licenses, but their　movement　from the Bonded Area
to　non-bonded　areas　of the country, or vice-versa,　is　to be handled
according to existing relevant regulations of Hainan province.
　 @@　 Article　　15.　　Enterprises　 in　 the　Bonded　Area　have full
autonomy　over　matters　　of　　their　 own　organizations,　personnel,
production,　business management,　product　pricing,　project tendering,
assets disposal, and wage remuneration.
　 @@　 Article　　16.　 Enterprises　in　the Bonded Area shall go to the
industrial　and　commercial　administration　and taxation offices in the
Area　to　perform the　procedures　for　changes or cancellation of their
registrations　in　case　of　 a　 change　 in　 their　 names　or　legal
representatives,　or a change in the line　 of　production,　a　removal,
a　 merger,　 a　 sublease,　 or　 premature　termination　 within　 the
Bonded　 Area,　 and　 report　to　the Administration Commission and the
customs for the record.
　 @@　 Article　　17.　　The　Bonded　Area　permits the setting up, with
approval　 by　 the　 People's　 Bank　 of　 China,　of　foreign　banks,
Sino-foreign　joint venture banks　and　other　financial　and　insurance
businesses　 within　 the　 Area.　Domestic　 and　foreign　banking　and
insurance　 businesses　set up in Hainan province　with　approval of the
People's　Bank　of China are permitted to open their business offices in
the Bonded Area.
　 @@　 Article　 18.　 Foreign　exchange　earnings of enterprises in the
Bonded　 Area　　are　　subject　　to　 control　 according　 to　 State
regulations　on　foreign　exchange　 control　 in　 bonded　 areas　 and
relevant　regulations　of　Hainan province.
　 @@　　Article　　19.　 Profits　derived　by　foreign　investors　from
enterprises　and　salaries　 and　 other　 legal　income of employees of
foreign　nationalities are allowed　to　be　remitted　out of the country
on presenting certificates for tax payment and clearance.
　 @@　 Article　　20.　　Enterprises　 in　 the　 Bonded　Area can, with
permission,　issue　 stocks　and　bonds　inside　or outside the country,
and　 raise　 foreign　 exchange　　funds　 outside　 the　 country　 in
compliance　with　relevant State regulations.
　 @@　 Article　　21.　Enterprises in the Bonded Area can participate in
foreign　exchange　 transaction　at the exchange swapping centers inside
or　outside the Bonded　Area　in　accordance　with　relevant regulations
on foreign exchange adjustments.
　 @@　Article　 22.　 Goods　brought　into　the　Bonded　Area are put in
bond.　Outbound　 goods　 in　transit through the Bonded Area are exempt
from customs duties.
　 @@　 Article　　23.　 Outbound　goods　produced　by enterprises in the
Bonded　Area　are　exempt　from　customs　duties　and the product (added
value)　tax.　Their products　to　be　sold in the Bonded Area are exempt
from the product (added value) tax.
　 @@　 Article　 24.　 Machinery,　equipment,　components and parts, raw
materials,　 building　　 materials,　　 office　 supplies　 and　 daily
articles　 produced　 in　non-bonded　 areas　in the country and brought
into　the　Bonded Area for local use　are　exempt　from　performance　of
export　procedures and from customs duties after customs inspection.
　 @@　 Article　　25.　 The　entry　into non-bonded areas in the country
of　duty　free　 goods　brought　into the Bonded Area and goods produced
by　enterprises　in　the　Bonded Area is regarded as goods import and to
be treated according to laws and regulations of Hainan province.
　 @@　 Article　　26.　　The　 entry　of goods into the Bonded Area from
non-bonded　areas　 in　 the　country　is　regarded as goods export, and
the taxes paid on them can be refunded.
　 @@　 Article　　27.　　Other　 tax　 incentives　 will　 be　practised
according　to　relevant　regulations of the Hainan Special Economic Zone
on tax incentives.
　 @@　 Article　　28.　 Articles　banned　by　the State from entering or
leaving the country are not allowed into or out of the Bonded Area.
　 @@　 Article　　29.　　Transport　 means　 and　 vehicles entering and
leaving　the　Bonded　 Area　 with　 passes issued by the Administration
Commission　should　go　through　 the　 designated　points　of　entrance
and exit, and accept customs inspection.
　 Article　　 30.　　 People　 entering　 or　leaving　the　Bonded　Area
with valid certificates　 recognized　 by　the Administration Commission
should　go through the designated　　points　　of　entrance and exit and
personal effects are　subjec to customs inspection.
　 @@　 Article　　31.　　It　is　strictly　prohibited　to use the Bonded
Area　for smuggling　and　other illegal activities and violators will be
dealt with by proper departments according to law and regulations.
　 @@　Article　 32.　Responsibility for explanations of these Procedures
rests with the Hainan Provincial People's Government.
　 @@　Article　33.　These Procedures will come into force as of April 2,
1993.