Member Article

The Ministry of Commerce (“MOFCOM”) issued the following notices on 20 January 2006: the Notice on Entrusting the Provincial Level Authorities in Charge of Commerce with the Examination and Approval, and Administration of Non-Vessel Carrier Enterprises with Foreign Investment, the Notice on Entrusting the Provincial Level Authorities in Charge of Commerce with the Examination and Approval, and Administration of Road Transportation Enterprises with Foreign Investment, the Notice on Entrusting the Provincial Level Authorities in Charge of Commerce with the Examination and Approval, and Administration of Construction Enterprises with Foreign Investment, the Notice on Entrusting the Provincial Level Authorities in Charge of Commerce with the Examination and Approval, and Administration of Construction Project Design Enterprises with Foreign Investment and the Notice on Entrusting the Provincial Level Authorities in Charge of Commerce with the Examination and Approval, and Administration of Printing Enterprises with Foreign Investment. The Notices, which became effective on 31 March 2006, are aimed at simplifying the approval system for the setting up of foreign investment enterprises (“FIEs”) in the various sectors concerned. Delegation of approval authority Under the Notices, MOFCOM delegates authority over FIEs in the non-vessel carrier, road transportation, construction, construction project design and printing sectors to the authorities in charge of commerce of the provinces, autonomous regions, municipalities directly under the central government, the municipalities with independent development plans and the Xinjiang Production and Construction Corps (“provincial commerce authorities”) and the administrative committees of state level economic and technological development zones (“zone committees”). The authority granted to the provincial commerce authorities and zone committees includes the power to examine and approve the establishment of, and subsequent changes in, FIEs which are active in these sectors. The provincial commerce authorities and zone committees are further put in charge of the administration of these FIEs. The relevant authorities are required to abide by the various regulations pertinent to the establishment and operation of FIEs in the industry sectors concerned. The general foreign investment approval procedures will still apply.