MOFCOM Announcement No. 86, 2012 on 2013 Rare Earth Export Quota Application

Issuer: The Ministry of Commerce of China (MOFCOM)
File No.: Announcement No. 86 of 2012
Issue Date: November 27, 2012

In accordance with China's Foreign Trade Law and its Goods Import & Export Regulations, the MOFCOM hereby promulgates China's Conditions and Procedures for Enterprise Application for Rare Earth Export Quotas of 2013.

Ⅰ Conditions for Application for Rare Earth Export Quotas

Enterprises meeting the following conditions are permitted to apply for the rare earth export quotas of 2013:

(1) Production Enterprises:

1. Having import and export operating qualifications or registered as foreign trade operators with independent legal personality; those registered in or after 2005 must have approvals by governing state authorities.

2. Compliant with rare earth industrial planning, policies and regulations; having export performances each year in 2009-2011 (those obtaining the export quotas in or after 2009 shall have export performances each year from the obtaining year till 2011, and relevant data shall resort to China Customs statistics).

3. Raw rare-earth materials must be supplied from qualified rare-earth mining firms that are publicized by China Ministry of Land and Resources.

4. Smelting separation and metal smelting enterprises must be qualified environment-friendly firms that are publicized by China Ministry of Environmental Protection.

5. Compliant with state policies and regulations on land management;

6. Conforming to state and local regulations on coverage and payment of all kinds of social insurances, and providing certificates issued by local social security authorities for timely full payment of all the premiums.

7. No violation of any state laws and regulations.

(2) Circulation Enterprises:

1. Having import and export operating qualifications or registered as foreign trade operators with independent legal personality;

2. Having registered capital of not less than CNY 50 million; having export performances each year in 2009-2011, and relevant data shall resort to China Customs statistics;

3. Export products must be supplied from qualified environment-friendly firms that are publicized by China Ministry of Environmental Protection on the strength of relevant certificates and value-added tax invoices;

4. Conforming to state and local regulations on coverage and payment of all kinds of social insurances, and providing certificates issued by local social security authorities for timely full payment of all the premiums;

5. Certified on quality management system with ISO9000 Certification by the International Organization for Standardization;

6. No violation of any state laws and regulations.

(3) As regards any enterprise found in violation of annual export quota regulations and of state industrial or resource or environment policies, the state may withdraw the annual export quota from the enterprise, suspend or revoke its qualification as an applicant for the annual quota.

Ⅱ Procedures for Application and Inspection

1. Local rare earth exporters shall apply to local provincial commerce authorities;

2. And the provincial commerce authorities shall, based on the application conditions aforesaid, conduct preliminary inspection of local applicants and shall, by December 7, 2012, submit to the MOFCOM the information of local qualified applicants along with their written preliminary comments, meanwhile copying to China Chamber of Commerce of Metals Minerals & Chemicals Importers & Exporters (CCCMC).

3. Central government-owned corporations shall submit their applications to the MOFCOM's Foreign-Trade Department and to the CCCMC.

4. Entrusted by the MOFCOM, the CCCMC may review the conditions of the applicants and submit its comments to the MOFCOM's Foreign-Trade Department by December 14, 2012.

5. The MOFCOM may, based on the CCCMC comments, conduct examination of any qualified applicants, and allocate quotas as per relevant formula to finalized applicants, which may be announced on the MOFCOM website.

Ⅲ Materials Required to Submit

Along with their applications, the quota applicants shall submit the following materials that must be signed by their legal representatives:

(1) ISO9000 Certificates on quality management system;

(2) Certificates issued by local social security authorities for coverage and full payment of all kinds of social insurances;

(3) The production enterprises shall provide relevant certificates or documents of 2011, including: for self-run exports, provide tax exemption/offset certificates or original application for tax exemption/offset/refund, export declaration forms (copy) and export verification sheets (copy); for exports purchased by exporters, provide original VAT invoices, export declaration forms (copy) and export verification sheets (copy); for exports by agents, provide original export invoices, export declaration forms (copy), export verification sheets (copy), and agent export certificates (copy); valid approvals by land authorities for land use.

The production enterprises shall provide the list of raw rare-earth materials mines, information of their purchase volume, VAT invoices, and the mine enterprise certificates.

(4) The circulation enterprises shall provide relevant certificates or documents of 2011, including: original VAT invoices, original export invoices, export declaration forms (copy), export verification sheets (copy), and agent export certificates (copy) issued by taxation authorities.

Annex: Table of Inspection Comments on Rare Earth Export Quota Application Conditions of 2013

The Ministry of Commerce of China

November 27, 2012