Measures for the Recordation Administration of Overseas Projects in Shaanxi Province

Chapter I General Provisions

Article 1 In order to promote and standardize foreign investment in Shaanxi province and transform the administrative functions of overseas projects, these Measures are developed in accordance with the AdministrativeLicense Law of PRC, Administrative Measures for the Confirmation and Recordation of Overseas Projects (OrderNo. 9 of the National Development and Reform Commission), Notice on the implementation of Administrative Measures for the Confirmation and Recordation of Overseas Projects by NDRC (NDRC waizi (2014) No. 0947).

Article 2 Overseas project adopt a dual level confirmation and recordation management system, namely national and provincial level. Overseas projects involving sensitive countries and regions and industries shall be subject to the confirmation of NDRC or the State Council regardless of their scale. Overseas projects with Chinese investment of over 300 million dollars shall be recorded with NDRC. Overseas projects beyond the afore-mentioned scope shall record with provincial-level development and reform commissions.

Article 3 The measures apply to various legal entities except for centrally managed enterprises (“investment entities”) in Shaanxi administration region and overseas investment projects in the form of new construction, M&A, share subscription, capital increase and capital injection as well as when investors provide financing or collaterals through their foreign enterprises or institutions.

Article 4 Overseas projects in this Measure refer to activities when investment entities invest cash, marketable securities, intellectual property or technologies, equity, debt or guarantees to gain interests of overseas ownership, management rights and so on.

Article 5 Chinese investment amount in this Measure refers to the total amount of assets and equities such as cash, marketable securities, intellectual property or technologies, stock equity or debt equities, or the amount of guarantees provided.

Article 6 Provincial development and reform commission works along with relevant departments to strengthen macro guidance, investment guidance and comprehensive service so as to provide a favorable external environment for investors’ overseas investment projects.

Chapter II Recordation Organs and Authorities

Article 7 If Chinese investment is below 300 million dollars and no sensitive countries and regions, and industries are involved, the overseas projects shall file with provincial level development and reform commissions for recordation. If the investment amount is above 300 million dollars and no sensitive countries and regions, and industries are involved, the overseas projects shall file with the National Development and Reform Commission for recordation.

The sensitive countries and regions mentioned in this Measure include: countries with no diplomatic relations with China or under international sanctions, countries or regions inflicted with war or internal civil strife.

The sensitive industries include: basic telecommunication operation, trans-border water resource development and utilization, large-scale land development, power transmission, power grid, news and media etc.

Article 8 For overseas projects with long periods of preparatory work, and huge amount of preparatory costs (including deposits, transaction fee of L/C, intermediary service fee, resource exploration fee etc.), investment entities shall file for preparation expense recordation with provincial development and reform commissions in accordance with the current foreign exchange management requirements. And the filed project’s preparatory expense shall be included in Chinese investment amount.

Article 9 For overseas acquisition or bidding projects with over 100 million dollars Chinese investment, the investment entity shall file project information materials with provincial reform and development commission before substantial investments are made. The information report materials include letter of submission and project information report. Having received the report materials, provincial development and reform commission shall confirm or transfer the project that complies with the overseas investment policy to NDRC within 7 working days. If there are major unfavorable factors involved, provincial commission will highlight risks by adding special notes in the letter of confirmation. Provincial commission will strictly examinethis kind of project during recordation process. Investment entities and relevant financial institutions shall make prudent decisions.

The overseas acquisition project in this Measure refers to cases where investment entities acquire all or part of equities, assets or other owners’ interests by way of agreements or offers. Overseas bidding project refers to cases where investment entities acquire all or part of equities, assets or other owner’s interests by way of open or closed competitive bidding process. Substantial work by overseas acquisition project herein refers to signing binding agreements with foreign counterparties, giving binding offers and filing for application with examination authorities in counterparty’s country or region. Trans-border bidding project refers to official bidding.

Chapter III Recordation Procedure and Conditions

Article 10 Projects subject to provincial development and reform commission recordation shall submit materials and documentations to provincial commission after pre-examination by prefecture level investment authorities. Province-affiliated enterprises and provincial governments’ work units can directly submit materials and documentation to the provincial development and reform commission.

Application materials include:

1. Application document for recordation

2. Project recordation application form

3. Board decision or relevant financing decision, SOE foreign investment shall attach examination opinion from state asset management department

4. Bidding, acquisition or joint venture projects shall submit Letter of Investment Interest or framework agreements etc.

Projects subject to NDRC recordation shall directly submit recordation application materials toprovincial development and reform commission with opinions fromlocal and prefecture development and reform commission attached. Provincial development and reform commission shall transfer to NDRC within 7 days.

Article 11 If the application forms and appendix are not complete or do not meet requirements, provincial development and reform commission shall notify project applicants at once within 5 working days for any remedies to be made.

Article 12 Provincial-level development and reform commission shall issue recordation notice to qualified overseas investment project within 7 working days after handling project recordation application. If the application is rejected, a written notice shall be issued to the applicant with reasons given and the applicant is entitled to administrative review or file for administrative lawsuit.If the decision cannot be made within 7 working days, the person in charge can approve an extension of 7 working days and notify the applicants of the reasons for extension.

Article 13 Conditions for recordation with provincial development and reform commission are:

1. Within the scope of recordation management.

2. Compliance with relevant laws and regulations, Industry policy and overseas investment policy.

3. Compliance with regulations on state-owned asset management.

4. No threat to national sovereignty, security and public interests.

5. Investment entities shall be financially capable of investment.

Article 14 If any one of the following scenarios happens to the recorded project, an application for changes shall be filed with provincial development and reform commission in accordance with Article 7 of this Measure.

1. Change of main contents and scale.

2. Change of investment entities or equity structure.

3. Chinese investment exceeds no less than 20% of the original amount.

Chapter IV Validity of the Recordation Documents

Article 15 Investment entities shall go through the procedure of foreign exchange, customs, entry and exit administration and taxation based on the recordation notice. Projects without going through the procedure with authorized departments shall be rejected of any formalities and denied of any loans by financial institutions.

Article 16 For any signed documents for their overseas investment project to be legally binding, investment entities shall obtain recordation notice first; or the signed document shall contain a clause saying that condition for the document to be effective is receiving a recordation notice.

Article 17 The recordation notice shall contain duration of effectiveness among which recordation notice for construction projects lasts 2 years, while the rest for one year.

If the investment entity cannot finish relevant procedures provided in Article 15 within duration of effectiveness, the entity shall apply for an extension within 30 working days before the expiration of the notice.

Chapter V Legal Liabilities

Article 18 If employees of the provincial development and reform commission show any of the following behavior, they shall be ordered to make amendments and in accordance with Regulations on the Administrative Sanctions of Civil Servants, the responsible party shall be given administrative sanctions. If the behavior constitutes a crime, the wrongdoer shall be prosecuted for criminal liability according to law

1. Abuse of power, malpractice, jobbery or bribery.

2. In violation of the procedures and conditions provided in this Measure for project recordation.

3. Other behaviors that violate this Measure.

Article 19 Investment entity shall be responsible for the authenticity and legality of the application materials. Where the project applicant obtains the project approval and recordation document through improper means such as violation of rules and regulations or providing false materials, the provincial reform and development commission shall reject the applicant for recordation or transfer. For the recorded projects, the approval and recordation organ shall revoke their recordation document and give warnings to them.

Article 20 For projects initiated at free will without obtaining recordation notice or that are implemented not in accordance with the recordation notice and that should submit project information report but have not received information report confirmation letter, the relevant party shall be prosecuted for criminal liability according to law by provincial development and reform commission and relevant departments.

Chapter VI Supplementary Provisions

Article 21 This Measure also applies to overseas investments in equity participation or establishment of equity investment fund.

Specific Administrative Measure shall apply to overseas investment projects by natural person or other organizations.

Implementing confirmed overseas investment project shall conform to the Administrative Measures for the Confirmation and Recordation of Overseas Projects (OrderNo. 9 of the National Development and Reform Commission).

Article 22 This Measure also applies to investments made in Hong Kong Special Administration Region and Macao Special Administration Region investors. Other specific Administrative Measure applies to investments made in Taiwan.

Article 23 This Measure shall be effective as of June 27, 2015 and terminated as of June 26, 2020.