Administrative Measures for the Confirmation and Recordation of Foreign-Funded Projects in Shaanxi Province

Chapter I General Provisions

Article 1 In order to deepen reform of the foreign investment projects administration and standardize foreign investment management and improve service quality, this administrative measure is hereby promulgated in accordance with Administrative License Law of PRC, Regulations on the Guidance of Foreign Investment (Order of the State Council 2002 No. 346), Administrative Measures for the Confirmation and Recordation of Foreign-Funded Projects (Order of the National Development and Reform Commission No. 12), Regulations on the revision of ‘Administrative Measures for the Confirmation and Recordation of Foreign-Funded Projects’ and ‘Administrative Measures for the Confirmation and Recordation of Outbound Investment Projects’ (Order of the National Development and Reform Commission No. 20), Catalogue of Investment Projects Subject to the Approval of Government (“Catalogue”).

Article 2 This measure applies to various foreign-funded projects such as joint ventures, sino-foreign joint cooperation, wholly foreign-owned enterprises, foreign-invested partnerships, foreign acquisition of domestic enterprises, foreign-funded enterprises additional shares subscription and reinvestment.

Chapter II Project Management Model

Article 3 The management models of foreign-fundedprojects are confirmation and recordation.

Article 4 The authority and scope of project confirmation shall be compliant with the Catalogue. Approval authority for projected subject to the investment authority of municipal government shall not be delegated to lower authorities.

Article 5 Foreign-funded projects that comply with industry policy and are beyond the scope of Article 4 shall be recorded.

1. Foreign funded projects with a total investment above 500 million dollars shall be recorded by provincial development and reform commission.

2. Projects under 500 million dollars shall be recorded by municipal level investment authorities.

For projects that should be recorded by municipal level investment authorities, recordation authorities should be further divided by municipalities and counties in accordance with local conditions.

Article 6 Projects to be phased out under Catalogue for the Guidance of Industry Restructuring shall not be confirmed nor recorded.

Article 7 The Project confirmation and recordation authority under this method refers to authorized administrative authorities in Shaanxi province.

Hancheng city, Yangling Demonstration Zone, Xixian New Zone, Shenmu County, Fugu County and other prospering countries are authorized to confirm and record projects within their own jurisdiction.

Article 8 The total investment of foreign-funded enterprises additional capital injection is calculated based on additional investment amounts while that of Merger & Acquisition projects shall be calculated on transaction volume.

Article 9 Foreign-funded investments that involve national security shall be subject to security investigation in accordance with relevant regulations.

Chapter III Project Confirmation

Article 10 Foreign-funded projects shall compile application report in reference to the NDRC’s general template and the sample application report of major industries. The application report shall include the following:

1. Overview of the project and investors

2. Impact analysis of resource recycling and ecological environment

3. Economic and social impact analysis

In the case of foreign investors’ acquisition of domestic enterprises, acquirer’s overview, acquisition arrangements, financing plan and overview of the acquired party, the operation and scope of business, equity structure and the expenditure of earnings after M&A etc.

Article 11 The following documents shall be attached.

1. Certificate of Enterprise Registration, audited latest corporate financial reports (including balance sheet, income statement and cash flow statement) of Chinese and the foreign side, credit certificate issued by banks.

2. Letter of Interest, Board Decision on capital injection and M&A projects.

3. Letter of Location Selection issued by Urban and Rural Planning Authority (leasing state-owned land use rights only).

4. Preliminary Land Use Opinion issued by administrative authority of Land and Resource Department (Project expansion in existing construction land without adding new land can be exempt from preliminary land examination and only original land use right should be provided).

5. Approval documents issued by environment protection authorities on environment impact assessment.

6. Opinion on energy saving examination issued by relevant authority.

7. Confirmation letter is required by relevant authorities if the project is also funded by state-owned assets.

8. Other documents that shall be submitted in accordance with relevant laws and regulations.

Article 12 Projects subject to NDRC approval shall file with NDRC after preliminary opinions are given by provincial development and reform commissions. Conglomerates and centrally managed enterprises is projected to be singled out which can file with NDRC directly with provincial commission’s opinions attached.

Projects subject to provincial reform and development commission approval should solicit preliminary opinions from local investment authorities and then file application report with provincial level ones. Conglomerates, centrally managed enterprise, provincially owned enterprises and provincial governments’ work units can directly file for application report with the provincial level commission with municipal and local investment authorities’ opinions attached.

Article 13 If the application materials are not complete or do not meet requirements, the authority shall notify project applicants 5 working days after receiving the materials.

The approval authority shall finish the approval process within 15 working days after receiving project application. If the decision cannot be made within 15 working days, the person in charge can approve an extension of ten working days and notify the applicants if the reasons for extension.

Article 14 For projects involving relevant industry administration, the approval authority shall solicit written examination opinions from the administration within seven working days. No written examination opinion after seven working days is deemed as consent.

Project approval authority shall entrust certified consultancy to evaluate major issues that need to be proved within four working days after the application is handled and the entrusted consultancy shall produce evaluation report within required period of time.

For projects that may exert a huge influence on public interest, the approval authority shall solicit public opinion during approval procedure. For especially critical projects, an expert evaluation system may be applied.

The approval duration stipulated in Article 13 does not include third party consultancy evaluation, public opinion soliciting and expert discussion.

Article 15 Approval conditions for foreign-funded projects are:

1. Compliance with relevant laws and regulations, Catalogue For The Guidance Of Foreign Investment Industries, Catalogue Of Advantaged Industries For Foreign Investments In Central And Western Regions.

2. Compliance with access standards, development plan and industry policy.

3. Rational development and effective utilization of resources.

4. No negative impact on national security and ecological safety.

5. No major negative impact on public interests.

6. Compliance with relevant regulations on capital account management and foreign debt management.

Article 16 For the approved projects, approval authority shall issue written approval documents in reference to the template of NDRC and copy to other relevant departments of industry administrations, urban and rural planning, land and resources, environment protection, energy-saving examination and so on. For the disapproved projects, a written explanation shall be provided and applicants shall be notified that they have the right to administrative review or file for lawsuit.

Chapter IV Project Recordation

Article 17 The applicant for foreign-funded project shall submit information on the project and investors. Related materials such as Certificate of Enterprise Registration, Letter of Investment Interests, and Board Decision on shares subscription and M&A projects shall be attached.

Article 18 Projects subject to provincial development and reform commission recordation shall submit materials and documentations to provincial commission after soliciting preliminary opinions from prefecture level investment authorities. Singled out conglomerates, centrally managed enterprises, province-affiliated enterprises, and provincial governments’ work units can directly submit materials and documentation to the provincial development and reform commission with municipal and local investment authorities’ opinions attached.

Article 19 If the application materials are not complete or do not meet requirements, the authority shall notify project applicants 3 working days after receiving the materials for additional materials submission.

The approval authority shall finish the recordation procedure within 7 working days after handling project recordation application. 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 if the reasons for extension.

For projects rejected for recordation, the authority shall issue written opinions and clarify its reasons within 7 working days.

Article 20 Recordation conditions for foreign-funded projects are:

1. Compliance with relevant laws and regulations, Catalogue For The Guidance Of Foreign Investment Industries, Catalogue Of Advantaged Industries For Foreign Investments In Central And Western Regions.

2. Compliance with access standards, development plan and industry policy.

3. Compliance with relevant regulations on capital account management and foreign debt management.

Article 21 For the approved projects, recordation authority shall issue written recordation notice in reference to the template of NDRC and copy to other relevant departments of industry administrations, urban and rural planning, land and resources, environment protection, energy-saving examination and so on. For the disapproved projects, a written explanation shall be provided and applicants shall be notified that they have the right to apply for administrative review or file for a lawsuit in accordance with law.

Chapter V Change of project

Article 22 If any one of the following scenarios happens to the approved or recorded project, an application for changes shall be filed with the original authority.

1. Change of geographical location for the project.

2. Change of investors or equity.

3. Change in main construction items and scale.

4. Other cases when changes are required in accordance with relevant laws and regulations.

Article 23 The aforementioned provisions also apply to the procedure for changes of approval and recordation.

Article 24 If the approved project falls into the confines of project to be recorded after the change, the recordation procedure shall apply. If the recorded project falls into the confines of project to be approved after the change, the approval procedure shall apply. If the approved or recorded project is beyond the jurisdiction of the original approval and recordation authority, the applicant shall reapply for approval and recordation in relevant approval and recordation authority.

Chapter VI Monitoring and Management

Article 25 Approval or recordation documents shall specific its effective duration. If the project has not started construction within the effective duration, the applicant shall file for extension with the original approval or recordation authority 30 working days before the expiration of the document. If the project has not begun construction and no extension application is filed, the original approval or recordation document becomes ineffective automatically.

Article 26 For projects that are not approved or recorded in accordance with due procedure or authority, relevant departments shall not handle their application and financial institutions shall not provide credit support to them.

Article 27 Approval and recordation authorities at all levels shall fulfill their due approval and recordation obligations, improve oversight, management and service, enhance administrative efficiency and disclose information about project approval and recordation in accordance with relevant regulations.

Article 28 Development and reform commissions at all levels shall work with departments of management, urban and rural planning, public land and resources, environmental protection, financial oversight, safety production inspection to inspect and monitor project execution and the approval and recordation of foreign-funded projects so as to improve the information system building, establish development plans, industry policy, access standards, credit record system, and strictly investigate and deal with violations. In this way, the information can be shared between administrative approval agencies and market oversight bodies.

Article 29 Provincial-level development and reform commissions shall work with municipal, county (regional) level investment authorizes to improve electronic information management system for foreign-funded projects to facilitate the search and monitor of the projects and improve regulation after the projects are approved.

Chapter VII Legal Liabilities

Article 30 If the project approval and recordation authority and its employees violate the regulation, the higher-level administrative or inspection authorities shall order them to make amendments. In cases of serious violation, the person directly in charge or other directly responsible party shall be given administrative sanctions in accordance with law.

Article 31 Any staff member of the project approving organ who commits abuse of power, malpractice, jobbery or bribery in the project approving process shall be given administrative sanctions by law; if the irregularity constitutes a crime, the wrongdoer shall be prosecuted for criminal liability according to law.

Article 32 The consulting agency and its staff member, expert consultants that breaks national and provincial laws and regulations and this administrative measure during the compilation of project application report, evaluation process entrusted by the approval authority, or expert discussion and evaluation process shall be prosecuted for criminal liability according to law.

Article 33 Where the project applicant obtains the project approval and recordation document through improper means of breaking up the project or providing false materials, the project approval and recordation organ shall reject the applicant. For the approved or recorded projects, the approval and recordation organ shall revoke their documents. For projects already under construction, the authority shall order the cease of the construction. Relevant approval and recordation authorities shall record the misbehavior and the relevant party shall be prosecuted for criminal liability according to law.

Chapter VIII Supplementary Provisions

Article 34 For projects to be first approved, recorded or examined by provincial development and reform commission and then filed with the NDRC, provincial development and reform commission shall formulate and promulgate Service Guidance to list application materials and specify the formats, attachments needed, handling method, procedure and duration so as to provide guidance and support to the applicant.

Article 35 Hong Kong Special Administration Region, Macao Special Administration Region and Taiwan investors funded projects in Shaanxi province also apply in this procedure. Foreign funded projects in Shaanxi in RMB also apply in this procedure.

Article36 Where the laws, administrative regulations, and the relevant provisions of the state have otherwise provisions on the procedures and methods for the examination and approval of foreign-funded enterprises, those provisions shall be observed.

Article 37 These Procedures shall be effective as of June 27, 2015 and terminated as of June 26, 2020.