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Regulations of China (Shanghai) Pilot Free Trade Zone 07 th July. 2016

(Adopted at the 14th Session of the Standing Committee of the 14th Shanghai Municipal People's Congress of Shanghai on July 25, 2014)

Chapter I  General Provisions

Article 1 For the purposes of pushing forward and ensuring the construction of China (Shanghai) Pilot Free Trade Zone, giving full play to its role of “experimental plot” in advancing reforms and raising the level of open economy, these Regulations are formulated in accordance with the Decision of the Standing Committee of the National People’s Congress on Authorizing the State Council to Temporarily Adjust the Relevant Administrative Approval Items Prescribed in Laws in the China (Shanghai) Pilot Free Trade Zone, the Framework Plan for China (Shanghai) Pilot Free Trade Zone (hereinafter referred to as the “Framework Plan”) approved by the State Council, the Decision of the State Council on Adjusting Temporarily Administrative Approval Items or Special Administrative Measures for Access Prescribed by Related Administrative Regulations and the State Council’s Documents and other related laws and administrative regulations.

Article 2 These Regulations apply to the China (Shanghai) Pilot Free Trade Zone (hereinafter referred to as the “PFTZ”) established with approval of the State Council.

Article 3 To push forward the construction of the PFTZ, it is imperative to focus on the national strategic requirements and the building of Shanghai international financial center, international trade center, international shipping center and international economic center, follow the principles of taking the lead in making the first try, putting risks under control, advancing by stages and making gradual perfection, combine the expanded opening and the institutional reform, combine the cultivating function and policy innovation, accelerate the transformation of government functions, establish the basic institutional system and surveillance mode in line with the common international investment and trade rules, cultivate an internationalized, market-driven and law-based business environment, and build up a pilot free trade zone up to the international standards with convenient investment and trade, highly active and efficient supervision and standardized legal administration.

Article 4 To push forward the construction of the PFTZ in this Municipality, it is imperative to focus on key fields and links of institutional innovation, make full use of the existing legal regime and policy resources, reform the system and mechanism that hamper the institutional innovation, constantly motivate the initiative and enthusiasm in institutional innovation so as to build up a good atmosphere of independent reform and proactive attitude.

Article 5 The vitality of market subjects shall be motivated fully and in respect of matters not prohibited by laws, rules and regulations; citizens, legal persons and other organizations shall be encouraged to actively conduct activities of reform and innovation in the PFTZ.

 

Chapter II  Administrative System

Article 6 As required for deepening reforms of the administrative system, it is necessary to streamline administration and delegate powers to the lower levels, combine the delegation and supervision, actively promote the notification-promise system and others, and establish an administrative management system in the PFTZ with scientific division of powers and efficient, unified management and open, transparent operation.

 Article 7 The Municipal People’s Government shall, under the leadership of the State Council and with the guidance and support of relevant state departments, in accordance with the target location and first-try tasks Prescribed in the Framework Plan, organize the implementation of pilot reforms, draw up according to law rules and policy measures relating to the construction and management of the PFTZ.

This Municipality shall establish a coordination mechanism for the construction of the PFTZ, advance the pilot reforms and organize relevant departments to draw up and carry out phase targets and every measure.

Article 8 China (Shanghai) Pilot Free Trade Zone Administration (hereinafter referred to as the “Administrative Committee”) is the agency of the Municipal People’s Government, specifically carrying out the pilot reforms in the PFTZ, making overall management and coordination of administrative affairs relating to the PFTZ and performing the following duties under these Regulations:

1. Taking charge of organizing the implementation of the development plan and policy measures of the PFTZ, and drawing up the relevant administrative management system.

2. Taking charge of such administrative management work such as the investment, trade, financial services, planning and land resources, construction, transportation, greening and city appearance, environmental protection, human resources, intellectual property rights, statistics, housing, civil defense, water affairs and municipal works.

3. Exercising leadership over the administrative management work of the departments of industry and commerce, quality and supervision, taxation and public security in the zone; coordinating the administrative management work of the departments of finance, customs, inspection and supervision, maritime affairs and frontier inspection in the zone.

4. Organizing the implementation of the sharing work of credibility management and surveillance information in the PFTZ, performing duties relating to richard mille replica watches examination of national security and examination of anti-monopoly according to law.

5. Making overall guidance to the industrial layout and development construction activities in the zone, coordinating in pushing forward the construction of major investment projects.

6. Releasing public information, providing guidance, consultation and services for enterprises and relevant institutions.

7. Performing other duties entrusted by the Municipal People’s Government.

The Municipal People’s Government shall establish in the PFTZ a system and mechanism for comprehensive examination and relatively concentrated administrative penalty, and the Administrative Committee shall exercise this Municipality’s power of relevant administrative examination and approval and administrative penalty in a concentrated manner. The specific matters under the administrative examination, approval and penalty to be exercised by the Administrative Committee shall be determined and promulgated by the Municipal People’s Government,

Article 9 The departments of customs, inspection and quarantine, maritime affairs, frontier inspection, industry and commerce, quality supervision, taxation and public security shall set up  agencies in the PFTZ ( hereinafter referred to as the “Zone-stationed Agencies”),  which shall perform relevant administrative management duties according to law.

The Municipal People’s Government and other relevant departments and the people’s government of Pudong New Area (hereinafter referred to as the “Relevant Departments”) shall, according to their respective duties and functions, support all the work of the Administrative Committee and assume other administrative affairs in the PFTZ.

Article 10 The Administrative Committee shall, in conjunction with the Zone-stationed Agencies and the Relevant Departments, establish a working mechanism of cooperation, coordination and joint law enforcement to raise the efficiency of law enforcement and the level of administration.

Article 11 The Administrative Committee and the Zone-stationed Agencies shall publish the powers of administrative examination and administrative penalty and the list of relevant administrative powers and operation procedures to be exercised by law and shall update them in time in case of adjustment.

 

Chapter III  Investment Opening

Article 12  The PFTZ shall expand the opening in the fields such as the financial service, shipping service, commercial and trade service, professional service, cultural service, social service and general manufacturing, suspend, cancel or relax the qualification requirements of investors, restrictions in share ratio of foreign investment and business scope and other special management measures for access.

Article 13 The special management measures for access in the PFTZ prescribed by the State in respect of foreign investment shall be stated in the negative list released by the Municipal People’s Government and shall be adjusted in time according to the development practice.

The PFTZ shall exercise the management mode of national treatment plus negative list before foreign investment access. As for fields outside of the negative list, according to the principle of no difference between the domestic and overseas investment, foreign-funded projects are subject to the filing system, except for approval reserved for inbound investment projects as prescribed by the State Council; the establishment and alteration of foreign-funded enterprises are subject to filing administration. In respect of fields within the negative list, foreign-funded projects are subject to the approval system, except for those subject to the filing as prescribed by the State Council; the establishment and alteration of foreign-funded enterprises are subject to examination and approval administration.   

The filing procedures for foreign investment projects and foreign-funded enterprises shall be formulated by the Municipal People’s Government.

Article 14 The PFTZ shall facilitate the enterprise registration system, exercising according to law the registered capital subscription registration system.

The administration for industry and commerce shall organize the setting up of enterprise access single-window working mechanism for such administrative affairs as the approval (filing) of foreign investment projects, and the examination (filing) of establishment and alteration of enterprises, accepting the application submissions and serving relevant documents in a unified manner. The investors who establish foreign-funded enterprises in the PFTZ may arrange on their own the business term, except that laws and regulations provide for otherwise.

The enterprises established with registration in the PFTZ (hereinafter referred to as “the enterprise in the zone”) may make reinvestment or launch business outside the zone. Where special provisions require for handling relevant formalities, such provisions shall apply.

Article 15 The enterprise in the zone, after obtaining the business license, may conduct general production and business activities; as for those in need of examination and approval, application may be made to the relevant department after obtaining the business license.

In respect of production and business activity in need of pre-examination and approval as required by laws, administrative regulations or decisions of the State Council, approval formalities shall be completed according to law before application for the business license.

Article 16 The investors in the PFTZ may make diversified overseas investments. General overseas investment projects are subject to the filing administration. And overseas investment in enterprise running is subject to administration mainly under the filing system, the Administrative Committee accepting the application submissions and serving the relevant documents in a unified manner.

The filing procedures for overseas investment projects and overseas investment in enterprise running shall be formulated by the Municipal People’s Government.

Article 17 In respect of dissolution and bankruptcy of an enterprise in the zone, liquidation shall be made according to law and registration canceling formalities shall be handled.

In respect of an enterprise in the zone subject to the registered capital subscription system according to law, shareholders shall take responsibility for debts of the enterprise limited by their capital or share subscription.

 

Chapter IV  Trade Facilitation

Article 18 The administration between the PFTZ and overseas is “front-line” administration, and that between the PFTZ and the place inside the border and outside the zone is “back-line” administration; according to the principles of “opening at front-line, exercising efficient control over the back-line, and free circulation within the zone”, a supervision mode shall be set up in the PFTZ in line with the development demands of international trade and other business.

Article 19 As required by the clearance facilitation, security and efficiency, the innovation in customs supervision system shall be conducted in the PFTZ, to promote the development of new trade business mode.

The customs shall institute the supervision system of goods status classification in the PFTZ, conduct the electronic seine management, and carry out paper-free clearance and low-risk rapid clearance.

Goods entering the zone from abroad may enter the zone by presentation of import manifest first and then go through the entry declaration formalities step by step. The export goods at the port are subject to declaration first and then entry.

The goods entry and exit between the zone and the place inside the border and outside the zone are subject to the check of entry-exit filing bills, enterprise account book management, electronic information networking and such other supervision system.

There is no storage term for bonded storage goods in the zone. The procedure for circulation of goods within the zone shall be streamlined; separate distribution, centralized declaration and transportation under self-control shall be allowed, so as to make goods circulate in an efficient and rapid manner between the zone and other special areas under customs supervision.

Article 20 According to the principles of making entry quarantine, relaxing appropriately export inspection, facilitating entry and exit, taking strict precaution against quality safety risk, the innovation in the supervision system for inspection and quarantine shall be conducted in the PFTZ.

The inspection and quarantine department shall employ the means of information technology in the PFTZ to establish a risk management mechanism for entry-exit quality safety and epidemic situation, exercise paper-free declaration, visa and clearance, carry out the collection, analysis, notification, and application of information on risks, and provide inquiry service of information on entry-exit goods inspection and quarantine.

Goods entering the zone from abroad, if falling in the quarantine scope, are subject to the entry quarantine; except for key sensitive goods, other goods are exempt from inspection.

In respect of goods in the zone to leave the zone, the pre-inspection system shall be practiced depending on the application by enterprises, one-time centralized inspection and clearance being made by verification in batches.  Bonded goods for display entering and leaving the PFTZ are exempt from inspection.

Goods under storage and interflow between enterprises in the zone are exempt from inspection and quarantine.

The administration system in favor of the development and standardization of the third-party inspection and appraisal institutions shall be established in the PFTZ, and the inspection and quarantine department shall admit the third-party test results according to the international prevailing rules.

Article 21 The single window for international trade shall be set up in the PFTZ to form a comprehensive management service platform for trans-department trade, transportation, processing, storage and other business in the zone, and realize the inter-department exchange of information, mutual recognition of supervision and mutual aid in law enforcement.

Enterprises may, through the single window, make one-time submissions of standardized electronic information as required by different administrations, and the feedback of handling outcome shall be given through the single window.

Article 22 In the PFTZ, the integrated development of domestic and foreign trade shall be carried out, and the enterprise in the zone shall be encouraged to make overall plan for conducting international and domestic trade, cultivate the trade new business mode and function, and form the competition edge with technology, brand, quality and service as the core.

The PFTZ shall support the transformation and upgrading of basic businesses of international trade, storage and logistics, processing manufacture and the development of service trade. Encourage shall be given to the development of offshore trade, international bulk commodity transaction, financing lease, bonded delivery of futures, trans-border e-commerce and other new trade, promoting the development of outsourcing businesses such as biomedical R&D, software and information service  and data processing .

Transnational companies are encouraged to establish headquarters in the zone, setting up the operation center that consolidates trade, logistics, settlement and such other functions.

Article 23 The PFTZ shall strengthen the linkage with the seaport and airport hub, enhance the coordinated development with shipping industry clusters outside of the zone, and explore and form the shipping development system and operation mode with international competition edge.

The PFTZ shall support the development of international transshipment, consolidation (LCL) and distribution as well as container transfer business and air cargo international transshipment. Eligible shipping enterprises may conduct cabotage incidental business of foreign trade export-import containers between domestic coastal ports and Shanghai port.

The shipping service development environment shall be improved, with  industries of shipping finance, international shipping transport, international ship management, international seamen service and international shipping brokerage to be developed and with shipping freight index derivative trading business to be expanded and with functional agencies of shipping service to be clustered in the PFTZ.

In the PFTZ the international ship registration system with China Yangshan Port as the port of registry shall be carried out with efficient ship registration procedures to be set up.

Article 24 In the PFTZ the examination formalities for employment permit to the  foreign employees of enterprises in the zone shall be simplified, with visa and valid term of residence permit to be relaxed and with entry, exit and residence to be facilitated.

To foreigners who conduct commercial trade at the invitation of enterprises in the zone, the entry-exit administration shall, pursuant to regulations, give visa waiver and easy temporary entry.

For Chinese employees of enterprises in the zone who need to go abroad or outside the border frequently, the entry-exit administration shall provide easy process of exit papers.

 

Chapter V  Financial Service

Article 25 Under the premise of risk under control, conditions shall be created in the PFTZ for steadily conducting the first try of RMB capital account convertibility, market-driven interest rate of financial market, RMB cross-border use and foreign exchange reform and such other aspects.  

The financial factor market and financial institutions shall be encouraged to conduct innovation in financial products, business, services, and risk management in the PFTZ pursuant to the State provisions. Relevant departments of this Municipality shall provide support and facility for financial innovation in the PFTZ.

This Municipality shall establish the PFTZ financial work coordination mechanism with participation of Shanghai-stationed agencies of the national financial management department, the municipal financial service department and the Administrative Committee.

Article 26 The PFTZ shall establish a free trade account system in favor of risk management and exercise separate accounting management. Residents in the zone may open resident free trade accounts pursuant to regulations; non-residents may open non-resident free trade accounts in the banks in the zone, and accept relevant financial service on the principle of pre-access national treatment; financial institutions in Shanghai areas may, through setting up separate accounting units, provide financial service relating to free trade accounts.

Funds may be transferred freely between free trade accounts and between free trade accounts and overseas accounts and domestic outside-the-zone non-resident institution accounts. Free trade accounts may, pursuant to regulations, handle cross-border financing and guarantee business. Fund flow between resident free trade accounts and domestic outside-the-zone bank settling accounts shall be deemed as cross-border business management. The resident free trade accounts in the same non-financial institution subject may, pursuant to regulations, handle fund transfer to other bank settling accounts.

Article 27 The cross-border fund flow in the PFTZ shall be under management on the financial macro-prudential principle. The cross-border direct investment remittance formalities shall be simplified in the PFTZ, the PFTZ cross-border direct investment, disconnected from the pre-approval, may directly handle the involved cross-border payment and remittance business at the bank. Various subjects in the zone may, pursuant to regulations, conduct relevant cross-border investment or financing remittance business.

Individuals in the zone may, pursuant to regulations, handle current-account cross-border RMB receipt and payment business and conduct various cross-border investments including securities investment. Individual businessmen in the zone may, depending on business needs, provide cross-border loan to their overseas business subjects.

Financial institutions and enterprises in the zone may, pursuant to regulations, enter the securities and futures trading place to make investment and transaction. Overseas parent companies of the enterprises in the zone may, pursuant to regulations, issue RMB bonds in the domestic capital market. Enterprises in the zone may, pursuant to regulations, conduct overseas securities investment and derivatives investment business.

Enterprises, non-bank financial institutions and other economic organizations may, pursuant to regulations, borrow domestic and foreign currency funds from overseas, and conduct the hedge risk management in the zone or overseas.

Article 28 Pursuant to relevant provisions of China People’s Bank, all policy measures hammered out by the State for encouraging and supporting the expanded RMB cross-border use apply to the PFTZ.

The cross-border use of RMB under the current accounts and direct investment in the PFTZ shall be simplified. Financial institutions and enterprises in the zone may borrow RMB funds from overseas. Enterprises in the zone may, according to their business needs, conduct cross-border two-way RMB fund pool and current-account cross-border RMB concentrated receipt and payment business. The banking industry financial institutions in Shanghai areas may cooperate with eligible payment institutions in providing cross-border e-commerce RMB settlement service.

Article 29 The building of an interest-rate market-driven system is to be pushed forward in the PFTZ, with the monitoring mechanism of free trade account domestic and foreign currency funds interest rate market-driven pricing to be improved, and eligible financial institutions in the zone may have priority in issuing negotiable certificates of deposits (NCDS), with the interest-rate ceiling to be opened for foreign-currency deposit in the zone.

Article 30 A foreign exchange management system shall be established in line with the development demands of the PFTZ. The current account document check and direct investment foreign exchange registration formalities shall be simplified. External debt claims management is to be relaxed. The centralized operation management of transnational corporation’s headquarters foreign exchange fund and the foreign exchange management of foreign currency fund pool and the international trade settlement center shall be improved. The foreign exchange settlement and sale management shall be perfected to facilitate the counter transactions of bulk commodity derivatives.

Article 31 Depending on the needs of the PFTZ and upon approval by the financial administration, support shall be given to financial institutions at different levels, with different functions, in different types and with different ownerships to let them enter the PFTZ; non-government capital shall be guided and encouraged to invest in the financial industry in the zone; the Internet financial development in the PFTZ shall be supported; support is given to the building of a platform geared to international financial transaction and service so as to provide registration, trusteeship, transaction, liquidation and other services; support is also given to the building and improving of a trust registration platform to explore the transfer mechanism of the beneficial right of the trust.

Article 32 This Municipality shall, in cooperation with the financial administration, perfect the financial risk monitoring and evaluation, and establish a risk prevention mechanism in line with the financial business development in the PFTZ.

Financial institutions and specified non-financial institutions in Shanghai areas that conduct business in the PFTZ shall, pursuant to regulations, submit relevant information to the financial administration, discharge obligations of anti-money laundering, anti-terrorist financing, and anti-tax evasion, cooperate with the financial administration to pay attention to cross-border abnormal capital flow and carry out the responsibility for protection of financial consumers and investors.

 

Chapter VI  Taxation Management

Article 33 The PFTZ shall, pursuant to the state’s provisions, implement taxation policy relating to promoting investment and trade; Shanghai Waigaoqiao bonded area, Shanghai Waigaoqiao bonded logistic park, Yangshan bonded port area and Shanghai Pudong airport comprehensive bonded area under its jurisdiction shall execute the corresponding taxation policy of special areas under customs supervision.

It is imperative to follow the direction of tax reform and international conventions, actively study and perfect the tax policy that does not cause the profit transfer, the tax base erosion but adapts to overseas equity investment and offshore business development.

Article 34 The tax department shall establish a convenient tax service system in the PFTZ, exercise the tax professional concentrated examination, gradually cancel prior examination, carry out the working pattern of first examination and then verification, separating examination from verification; pursue online tax, provide online services of tax payment consultation and tax-involved matters handling inquiry, and gradually realized the cross-regional tax process.

Article 35 The tax department shall conduct the pilot modernization of tax collection in the PFTZ, raise tax revenue efficiency, and build up a tax environment in favor of enterprise development and fair competition.

The tax department shall conduct tax risk monitoring by using the tax information system and the supervision information sharing platform in the PFTZ to raise the level of tax administration.

 

VII  Comprehensive Supervision

Article 36 It is imperative to innovate in the administrative management mode in the PFTZ, push forward the government administration from paying attention to prior examination to paying attention to mid- and post-event supervision, increase the participation in supervision, and promote the institution of a comprehensive supervision system of administrative supervision, industrial self-discipline, social supervision and public participation.

Article 37 The PFTZ shall establish a working mechanism of national security examination involving foreign investment. As for foreign investment under the scope of national security examination, the investor shall apply for national security examination; relevant administrations, trade associations, enterprises in the same industry and upstream and downstream firms may propose suggestions on the national security examination.

The party concerned shall cooperate in the national security examination, providing necessary material and information and accept relevant inquiry.

Article 38 The PFTZ shall establish an anti-monopoly working mechanism.

Involving the agglomeration of operators of the enterprises in the zone and reaching the declaration standard as prescribed by the State Council, the operator shall make prior declaration, and shall not carry out agglomeration without declaration. In respect of monopoly agreements, abuse of market-dominating positions and competition elimination and restriction by abusing administrative power, and such other behaviors, investigation and law enforcement shall be conducted according to law.

Article 39 The Administrative Committee, the zone-stationed agencies and the relevant departments shall record information on credit of enterprises and relevant persons in charge thereof, and, according to the public credit information catalogue, send to the PFTZ sub platform of the municipal public credit information service platform for integration.

The Administrative Committee, the zone-stationed agencies and the relevant departments may, in the work of market access, goods clearance, government purchase and bids and bid invitations, inquire about the relative credit record and use credit products to grant convenience to enterprises and individuals with good credit and impose restriction and punishment on those who break their promise.

The PFTZ shall encourage credit service institutions to use all sides’ credit information to develop credit products and provide credit service for administrative supervision and market transactions; enterprises and individuals are encouraged to use credit products and service.

Article 40 The PFTZ shall exercise the publication system of enterprises’ annual reports and the system of directory of enterprises with abnormal operation.

The enterprises in the zone shall, pursuant to regulations, submit enterprise’s annual reports and be responsible for the truth and legality of information thereon. The enterprise’s annual report shall be published to society as prescribed except for contents involving state secrets, business secrets and personal privacy.

The administration for industry and commerce shall conduct supervisory inspection on submission of annual reports by the enterprises in the zone. If finding out that any enterprise failed to discharge the obligation of publishing its annual report, the said administration shall record the enterprise in the directory of enterprises with abnormal operation and make it known to the public.

Every citizen, legal person and other organization may get access to the enterprise’s annual report and the directory of enterprises with abnormal operation and such publication information, and the administration for industry and commerce and other departments shall provide convenience for inquiry.

The procedures for management of publication of enterprise annual reports and the directory of enterprises with abnormal operation shall be formulated by the municipal administration for industry and commerce.

Article 41 A unified supervision information sharing platform shall be built in the PFTZ to promote the collection, exchange and sharing of supervision information. The Administrative Committee, zone-stationed agencies and relevant departments shall provide information on their initiative and in time, participating in information exchange and sharing.

The Administrative Committee, zone-stationed agencies and relevant departments shall rely on the supervision information sharing platform to consolidate supervision resources, promote full dynamic supervision and raise efficiency of combined supervision and coordinated service.

The procedures for collection, exchange and sharing of supervision information shall be formulated by the Administrative Committee, zone-stationed agencies and relevant departments.

Article 42 The professional institutions of law firms. accounting firms, certified tax agents offices, IP right service institutions, customs inspection institutions, inspection and testing institutions, certification authorities, ship and crew agencies, notarization institutions, forensic appraisal institutions and credit service institutions  are encouraged to conduct business in the PFTZ.

The Administrative Committee, zone-stationed agencies and relevant departments shall, by institutional arrangement, refer the matters in the zone that fit for handling by professional institutions thereto, or adopt the competition mechanism or purchase of service to guide and cultivate the development of professional institutions.

Article 43 The PFTZ shall establish a mechanism of social participation composed of enterprises and representatives of relevant organizations, to guide enterprises and relevant organizations to lodge claims for interests and participate in pilot policy evaluation and market supervision.

Trade associations and chambers of commerce are supported to participate in the construction of the PFTZ, and they are urged to draw up the trade management standard and trade convention to strengthen trade self-discipline.

The enterprises in the zone engaged in business activities shall observe social morality, business ethics and accept supervision of the general public.

Article 44 In the PFTZ it is imperative to speed up the development of E-government, promote electronic official documents with electronic signature that have force of law, and carry out electronic documents filing and electronic archives management. Electronic records and paper files have the same legal effect.

Article 45 This Municipality shall establish a comprehensive evaluation mechanism for the PFTZ. The municipal development and reform department shall, in conjunction with the Administrative Committee and relevant departments, conduct, by themselves or by a third party they entrust, evaluation of the innovation in the supervision system, the whole industry, the implementation of pilot policy on industrial businesses and risk prevention, and propose policy-related suggestions for promoting, improving and expanding the opening fields, pilot reform tasks and measures for institutional innovation.

Chapter VIII  Law-based Environment

Article 46 It is imperative to adhere to applying the thought and mode of rule by law to innovate in every reform in the PFTZ, so as to build a good environment of rule by law for the construction of the PFTZ.

Where there are adjustments to the pilot reform measures provided for by the State for investment, trade, finance, and tax in the PFTZ or where the pilot reform measures in other regions provided for by the State apply to the PFTZ, the implementation shall be done according to relevant provisions.

Where this Municipality’s local bylaws do not adapt to the development of the PFTZ, the Municipal People’s Government may request the Municipal People’s Congress and its standing committee to make relevant provisions on the application thereof in the PFTZ; where this Municipality’s regulations do not adapt to the development of the PFTZ, the Administrative Committee may request the Municipal People’s Government to make relevant provisions on the application thereof in the PFTZ.

Article 47 The equal positions and rights to development of various market subjects in the PFTZ shall be protected by law. Various market subjects in the zone shall enjoy equal treatment in terms of supervision, tax and government purchase.

Article 48 The enterprise, equity, intellectual property right, profit and other property and business interests owned legally by the investors in the PFTZ shall be protected by law.

Article 49 The rights of workers in the PFTZ in terms of equal employment, vocational choice, labor remuneration, rest and holiday, labor safety and health protection, vocational skill training, social insurance and benefits, and participation in democratic management shall be protected by law.

In the PFTZ it is imperative to carry out a mechanism of collective consultation between the enterprise and workers, promote the equal consultation between both parties on labor remuneration, labor safety and health and relevant matters. It is imperative to give play to the role of trade unions in maintaining the rights and interests of employees and promoting the harmonious and steady labor relationship.

In the PFTZ it is imperative to perfect the mechanism of conducting fair, open, efficient and convenient labor and social security inspection and labor dispute settlement so as to protect legitimate rights and interests of workers and employers.

Article 50 It is imperative to strengthen the environmental protection work in the PFTZ, explore and conduct the classified management of EIA, and raise the level and efficiency of environmental protection management.

The enterprises in the zone shall be encouraged to apply for international prevailing certification of environment and energy management system standard, adopt advanced production techniques and technologies, save energy and reduce the emission of pollutants and greenhouse gases.

Article 51 It is imperative to strengthen the intellectual property right protection work in the PFTZ, and improve the mechanism of linking the administrative protection and judicial protection.

This Municipality’s relevant departments shall strengthen cooperation with relevant State departments, carry out the coordinated management and law enforcement of IP entry-exit protection and domestic protection, explore and establish the system and mechanism of unified management and law enforcement of intellectual property rights in the PFTZ.

It is imperative to perfect the multiple settlement mechanism of IP disputes in the PFTZ, encourage trade associations and institutions of mediation, arbitration and IP intermediary service to play their role in the coordinated settlement of IP disputes.

Article 52 When formulating local regulations, government rules and normative documents regarding the PFTZ, this Municipality shall publish  the draft contents on its initiative to solicit opinions from the general public, relevant industrial organizations and enterprises; and after passage and promulgation thereof, explanation shall be given for disposition of opinions from all sides of society; in the period between the promulgation and implementation, a rational term shall be reserved for preparation for implementation, and however, with an exception of need for prompt formulation and implementation due to emergency and for other reasons.

The local regulations, government rules and normative documents regarding the PFTZ formulated by this Municipality shall, after passage thereof, be published in time, with interpretation and explanation.

Article 53 Every citizen, legal person and other organization, if having any objection to the normative documents drawn up by the Administrative Committee, may request the Municipal People’s Government for review. The review rules shall be formulated by the Municipal People’s Government.

Article 54 This Municipality shall establish the release mechanism of PFTZ information, releasing in time the information relating to the PFTZ through the press conference, regular meeting of information notification or release in writing or in other way.

The Administrative Committee shall collect information on laws, regulations, rules, policies and administrative procedures relating to the PFTZ provided for by the State and this Municipality, publish on the portal website of China (Shanghai) Pilot Free Trade Zone to facilitate inquiry by all sides.

Article 55 The system of relatively concentrated administrative reconsideration right is exercised in the PFTZ.

 Every citizen, legal person or other organization, if disagreeing with the specific administrative act made in the PFTZ by the Administrative Committee, the working department and the zone-stationed agency of the Municipal People’s Government, or the Pudong New Area people’s government, may apply for administrative reconsideration to the Municipal People’s Government; if disagreeing with the specific administrative act made by the working department of the Pudong New Area people’s government, they may apply for administrative reconsideration to the Pudong New Area people’s government. The major, complex and difficult administrative reconsideration case shall be reviewed by the administrative reconsideration committee.

Article 56 The judicial organ shall be established according to law in the PFTZ to safeguard the legitimate rights and interests of Chinese and foreign parties in a just and efficient manner.

The arbitration institution established according to law in this Municipality shall, pursuant to laws and regulations and by using for reference international arbitration conventions, perfect the arbitration rules to adapt to the characteristics of the PFTZ, raise the internationalized level of business dispute arbitration and, based on their own choice of the clients, provide independent, just, professional and efficient arbitration service.

The trade associations, chambers of commerce, and professional mediation institutions for business disputes established in this Municipality may take part in the mediation of business disputes in the PFTZ and give play to their role in dispute settlement.

Chapter IX  Supplementary Provision

Article 57 These Regulations shall be effective as of August 1, 2014. The Regulations of Shanghai Waigaoqiao Bonded Area adopted at the 32nd session of the 10th Shanghai People’s Congress on December 19, 1996 shall be repealed at the same time.

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