Regulation on China (Shanghai) Pilot Free Trade Zone

· Document Number：Announcement No. 14 of the Standing Committee of the Shanghai Municipal People's Congress

· Area of Law： Reform and Opening-up China (Shanghai) Pilot Free Trade Zone

· Level of Authority： Provincial Local Regulations

· Date issued：07-25-2014

· Effective Date：08-01-2014

· Status： Effective

· Issuing Authority： Shanghai Municipality People's Congress (incl. Standing Committee)

Announcement of the Standing Committee of the Shanghai Municipal People's Congress
(No. 14)
The Regulation on China (Shanghai) Pilot Free Trade Zone, as adopted at the 14th meeting of the Standing Committee of the 14th Shanghai Municipal People's Congress on July 25, 2014, is hereby issued, and comes into force on August 1, 2014.
Standing Committee of the Shanghai Municipal People's Congress
July 25, 2014
Regulation on China (Shanghai) Pilot Free Trade Zone
(Adopted at the 14th meeting of the Standing Committee of the 14th Shanghai Municipal People's Congress on July 25, 2014)
Chapter I General Provisions
Article 1 To enhance and guarantee the building of China (Shanghai) Pilot Free Trade Zone, and maximize its “test field” role in advancing reform and improving the level of an open economy, this Regulation is developed 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 China (Shanghai) Pilot Free Trade Zone, the Framework Plan for China (Shanghai) Pilot Free Trade Zone (hereinafter referred to as the “Framework Plan”) as approved by the State Council, the Decision of the State Council on Temporarily Adjusting the Relevant Administrative Approval Items Prescribed in the Relevant Administrative Regulations and Documents of the State Council or Special Access Management Measures in China (Shanghai) Pilot Free Trade Zone, and other relevant laws and administrative regulations.
Article 2 This Regulation applies to China (Shanghai) Pilot Free Trade Zone (“SHFTZ”) established upon the approval of the State Council.
Article 3 Facilitating the building of SHFTZ shall focus on the strategic requirements of the state and the development of Shanghai as an international financial center, an international trade center, an international shipping center, and an international economic center, follow the principles of pilot programs, risk control, progressive advancement, and gradual improvement, combine the expansion of opening-up with system reform, combine the cultivation of functions with policy innovations, accelerate the transformation of government functions, form a system of fundamental rules compatible with the generally accepted international rules for investment and trade, cultivate an internationalized, market-oriented and regulated business environment, and build a pilot free trade zone meeting international standards and featuring investment and trade facilitation, efficient and convenient regulation, and satisfactory legal environment.
Article 4 To facilitate the building of SHFTZ in Shanghai, efforts shall be made to focus on the key areas and links of system innovation, make full use of the current legal systems and policy resources, reform the systems or mechanisms that impede system innovation, continuously arouse the initiatives for system innovation, and create a good atmosphere of independent reform and proactive attitude.
Article 5 Efforts shall be made to fully incentivize market participants, and encourage citizens, legal persons and other organizations to conduct reforms and innovations in SHFTZ on matters not prohibited by any law, regulation or rules.
Chapter II Management System
Article 6 It is required to, in accordance with the requirements of deepening the administrative system reform, adhere to the simplification of administrative procedures and decentralization of powers, and the combination of delegation with administration, actively promote such systems as the notification and undertaking system, and establish an administrative system featuring scientific division of authority, efficient and uniform management and open and transparent operation in SHFTZ.
Article 7 The Municipal Government shall, under the guidance and support of the State Council leaders and the relevant authorities of the state, organize the implementation of the pilot reform according to the targets and pilot programs specified in the Framework Plan, and develop rules, policies and measures concerning the building and management of SHFTZ according to the law.
This Municipality shall establish a coordination mechanism for the building of SHFTZ, promote the pilot reform, and organize the relevant departments to determine and implement the objectives and measures for each stage of the pilot reform.
Article 8 China (Shanghai) Free Trade Zone Management Committee (hereinafter referred to as the “SHFTZ Management Committee”) which, as an external agency of the Municipal Government, undertakes the specific reform tasks of SHFTZ and plans, manages and coordinates administrative affairs related to SHFTZ shall perform the following functions in accordance with this Regulation:
(1) Organizing the implementation of the development plans, policies and measures for SHFTZ, and developing the relevant administrative rules.
(2) Conducting administrative management of investment, trade, financial services, urban planning and land, construction, traffic, landscaping and city image, environmental protection, human resources, intellectual property, statistics, housing, civil defense, water affairs, and municipal administration, among others, in SHFTZ.
(3) Leading the administrative management work in SHFTZ of the industry and commerce, quality supervision, taxation, public security, and other departments and coordinating the administrative management work in SHFTZ of the financial affairs, customs, inspection and quarantine, maritime affairs, border inspection, and other departments.
(4) Organizing the implementation of credit management and regulatory information sharing in SHFTZ, and performing functions related to national security review and anti-monopoly review according to the law.
(5) Planning and guiding the industry distribution and the development and construction activities in SHFTZ, and coordinating and promoting the construction of major investment projects in SHFTZ.
(6) Releasing public information, and providing guidance, advices and services for enterprises and related institutions.
(7) Performing other functions vested by the Municipal Government.
The Municipal People's Government shall establish integrated approval and relatively centralized administrative punishment systems or mechanisms in SHFTZ, in which the SHFTZ Management Committee exercises the relevant administrative approval powers and administrative punishment powers in a centralized manner. The specific matters subject to the administrative approval or administrative punishment of the SHFTZ Management Committee shall be determined and published by the Municipal People's Government.
Article 9 The administrative departments of customs, inspection and quarantine, maritime affairs, border inspection, industry and commerce, quality supervision, taxation, and public security, among others, shall establish offices in SHFTZ (hereinafter referred to as “SHFTZ offices”) to perform relevant administrative functions in SHFTZ according to the law.
Other relevant departments of the Municipal Government and the Pudong New Area Government (hereinafter referred to as “related authorities”) shall support the work of the SHFTZ Management Committee, and undertake other administrative affairs in SHFTZ according to their respective functions.
Article 10 The SHFTZ Management Committee shall establish a cooperative, coordinated and interacted law enforcement mechanism with SHFTZ offices and related authorities to improve the efficiency and management of law enforcement.
Article 11 The SHFTZ Management Committee and SHFTZ offices shall publish the lists and operation processes of administrative approval powers, administrative punishment powers and relevant administrative powers they exercise according to the law, and update them in a timely manner in the case of any adjustment.
Chapter III Opening up to Investment
Article 12 SHFTZ shall further open up in the fields of financial services, shipping services, commerce and trade services, professional services, cultural services, social services, and general manufacturing, among others, and suspend, remove or relax special market access management measures such as qualification requirements for investors, shareholding limits, and restrictions on the scope of business.
Article 13 The special access management measures required by the state to be applied for foreign investment in SHFTZ shall be published by the Municipal Government in the form of a negative list, which shall be adjusted in light of the actual development situation.
In SHFTZ, the pre-establishment national treatment and a negative list management mode shall apply to foreign investment. In those fields outside the negative list, the recordation system shall be applied to foreign investment projects under the principle of “equal treatment to investors both at home and abroad,” except for domestic investment projects which the State Council reserves the right to confirm, and the formation and modification of foreign-funded enterprises shall be subject to recordation administration. In those fields covered by the negative list, the confirmation system shall be applied to foreign investment projects, except for those which the State Council reserves to be subject to recordation, and the formation and modification of foreign-funded enterprises shall be subject to approval administration.
The recordation measures for foreign investment projects and foreign-funded enterprises shall be developed by the Municipal People's Government.
Article 14 SHFTZ promotes the facilitation of the enterprise registration system, and applies the registered capital subscriptions registration system according to the law.
The administrative department for industry and commerce shall organize to establish a single-window working mechanism for the access of enterprises regarding the confirmation (recordation) of foreign investment projects, the approval (recordation) of the formation and modification of enterprises, and other administrative affairs, so as to accept application materials and serve relevant documents in a unified way. Investors that form foreign-funded enterprises in SHFTZ may agree on the term of business, unless otherwise specified by any law or administrative regulation.
Enterprise formed upon registration in SHFTZ (hereinafter referred to as “enterprises in SHFTZ”) may make investment or operate business outside of SHFTZ, but shall undergo the relevant procedure, if so required by special-purpose provisions.
Article 15 An enterprise in SHFTZ may engage in general production and other business operations upon obtaining a business license; and, to engage in any production or other business operation which requires approval, may apply to the competent authority for approval after obtaining a business license.
Where any law or administrative regulation requires that the formation of an enterprise must be subject to prior approval, the approval formalities shall be undergone before the enterprise applies for a business license.
Article 16 Investors in SHFTZ may make overseas investment in various forms. Ordinary overseas investment projects shall be subject to recordation administration. Overseas establishments shall be primarily governed by the recordation system, under which the SHFTZ Management Committee accepts application materials and serves relevant documents in a unified way.
The recordation measures for overseas investment projects and overseas establishments shall be developed by the Municipal People's Government.
Article 17 In the event of dissolution or being declared bankrupt, an enterprise in SHFTZ shall be subject to liquidation and shall undergo the deregistration procedure according to the law.
For an enterprise in SHFTZ subject to the registered capital subscriptions registration system, its shareholders shall be liable to the liabilities of the company only with their subscriptions to registered capital or subscriptions to shares.
Chapter IV Trade Facilitation
Article 18 The administration between SHFTZ and areas outside of China is “first line” administration, while the administration between SHFTZ and domestic areas outside of SHFTZ is “second line” administration. Regulatory models adapted to the development needs of international trade and other businesses shall be established in SHFTZ under the principle of “release of the first line, safe and efficient control over the second line, and free movement in SHFTZ.”
Article 19 Innovation in the regulatory rules of the customs shall be conducted in SHFTZ in accordance with the requirements for convenient, safe and efficient customs clearance, so as to promote the development of new types of trade.
The customs shall establish a categorized supervision system based on the status of goods, apply electronic fence management, and promote the paperless operation of customs clearance and the low-risk and rapid release.
Goods shipped from areas outside of China to SHFTZ may be carried into SHFTZ on the basis of import manifests before the entry declaration formalities are handled step by step. For goods exported through ports, customs declaration formalities shall be handled before they arrive in ports.
For goods shipped between SHFTZ and domestic areas outside of SHFTZ, regulatory systems such as crosschecking of exit recordation lists, account book management, and electronic information networking shall be adopted.
No storage life deadline is set for bonded goods stored in SHFTZ. The movement process of goods in SHFTZ shall be simplified, and delivery of goods in batches and centralized customs declaration shall be permitted. Efforts shall be made to realize convenient and fast movement of goods in SHFTZ between SHFTZ and other areas under special customs supervision.
Article 20 Innovation in inspection and quarantine regulatory systems shall be conducted in SHFTZ under the principle of entry quarantine with proper relaxing of control over import and export inspection and the principle of facilitating entry and exit with strict control of quality and safety risks.
The inspection and quarantine department shall apply information technologies in SHFTZ to establish entry-exit quality, safety and epidemic risk management mechanisms, carry out paperless declaration, visa issuance and customs release, realize the gathering, analysis, reporting and utilization of risk information, and provide inward and outward goods inspection and quarantine inquiry services.
Goods that enter in SHFTZ from overseas areas shall be subject to entry quarantine if they are within the scope of quarantine. Goods other than key sensitive goods are exempted from inspection.
Upon the application of enterprises, the pre-inspection system shall be applied to goods in SHFTZ leaving the zones, in which goods shall be subject to inspection as a single batch but shall be released upon verification in batches. Bonded exhibits that enter or exit SHFTZ shall be exempted from inspection.
Goods subject to warehousing and logistics between enterprises in SHFTZ shall be exempted from inspection and quarantine.
In SHFTZ, management rules favorable for the development and regulation of third-party inspection and certification institutions shall be established, and the inspection and quarantine department shall admit the inspection results of third-party inspection and certification institutions in accordance with international practices.
Article 21 In SHFTZ, efforts shall be made to establish a single window for international trade, form an interdepartmental integrated management service platform for trade, transportation, processing, storage and other business operations, and realize information exchange, mutual recognition in supervision, and mutual assistance in law enforcement between departments.
Enterprises may submit all standard electronic data required by the relevant administrative departments at one time through the single window, and the handling result will be notified through the single window.
Article 22 The integrated development of domestic and foreign trade is encouraged in SHFTZ, and enterprises in SHFTZ are encouraged to develop international and domestic trade under an overall plan and cultivate new trade forms and functions to form new competitive advantages in foreign trade focusing on technology, brand, quality and service.
SHFTZ supports the mode transformation and upgrading of basic businesses, such as international trade, warehousing and logistics, processing, and manufacturing, and encourages the development new types of trade, such as offshore trade, international bulk commodity trading, financial leasing, bonded delivery of futures, and cross-border e-commerce, and promotes the development of outsourced services such as the research and development of biological medicine, software and information services, and data processing services.
SHFTZ encourages multinational companies to establish headquarters in SHFTZ, as well as operation centers integrating trade, logistics, settlement, and other functions.
Article 23 Efforts shall be made to strengthen the interaction of SHFTZ with sea port and airport hubs, strengthen the coordinated development with shipping industry clusters outside of SHFTZ, and explore and form internationally competitive shipping development rules and modes of operation.
SHFTZ supports the development international transit, LCL (less than container load) and deconsolidation services, container transshipment services, and the international transit of air cargo. Shipping enterprises that satisfy the prescribed conditions may engage in coastal carriage of foreign trade import and export containers between domestic coastal ports and the Shanghai Port.
Efforts shall be made to improve the development environment of shipping services, develop shipping finance, international shipping, international vessel management, international seaman service, international shipping brokerage, and other relevant industries in SHFTZ, develop the trading of shipping freight index derivatives, and concentrate shipping service functional institutions.
The international ship registration system using “Yangshan Port, China” as the port of registry shall be applied in SHFTZ, and an efficient ship registration process shall be established.
Article 24 In SHFTZ, efforts shall be made to streamline the procedures for licensing and approving the employment of foreign nationals by enterprises in SHFTZ, relax restrictions on the validity of visas and residence permits, and provide entry, exit and residence conveniences for them.
For foreign nationals who engage in commercial trade upon the invitation of enterprises in SHFTZ, the entry-exit administrative department shall offer visa-free transit and temporary entry conveniences in accordance with the relevant provisions.
Where the Chinese nationals employed by enterprises in SHFTZ needs to go abroad or overseas frequently for business reasons, the entry and exit administrative department shall provide conveniences for them to obtain exit permits.
Chapter V Financial Services
Article 25 Conditioned upon controllable risks, conditions may be created to steadily implement pilot programs for RMB convertibility under capital accounts, interest rate liberalization in the financial market, RMB cross-border use, and reform of foreign exchange administration, among others, in SHFTZ.
Financial factor markets and financial institutions are encouraged to conduct innovation in financial products, businesses, services, and risk management, among others, in SHFTZ in accordance with the state provisions. The relevant departments of this Municipality shall provide support and facilitation for financial innovation in SHFTZ.
This Municipality shall establish a financial work coordination mechanism joined in by the institution stationed in Shanghai by the financial regulatory authority of the state, the financial service department of this Municipality, and the SHFTZ Management Committee.
Article 26 A free trade account system good for risk management shall be established in SHFTZ to conduct management through separate accounting. Residents in SHFTZ may open resident free trade accounts in accordance with relevant provisions; non-residents in SHFTZ may open non-resident free trade accounts with banks in SHFTZ, and enjoy financial services under the pre-establishment national treatment principle; and financial institutions in Shanghai may provide financial services involving free trade accounts by setting up separate accounting units.
Funds may be transferred freely between free trade accounts, and between free trade accounts and overseas accounts or domestic non-resident institutional accounts outside of SHFTZ. Free trade accounts may be used for cross-border financing, cross-border guarantee and other cross-border transactions in accordance with relevant provisions. Funds transfers between resident free trade accounts and domestic bank settlement accounts outside of SHFTZ shall be managed as cross-border transactions. Funds may be transferred in accordance with the relevant provisions between the resident free trade account and another bank settlement account of the same non-financial institution.
Article 27 The cross-border capital flows in SHFTZ shall be managed under the macro prudential principle. In SHFTZ, the exchange procedure for cross-border direct investment shall be simplified, the cross-border direct investment shall be disconnected with the pre-approval requirement, and enterprises shall directly handle cross-border receipts, payments and exchange transactions involved in direct investment with banks. All subjects in SHFTZ may engage in exchange businesses for cross-border investment and financing in accordance with the relevant provisions.
Individuals in SHFTZ may conduct cross-border RMB receipts and payments under current accounts and make various cross-border investments including securities investments in accordance with the relevant provisions. Individual industrial and commercial households in SHFTZ may provide cross-border loans to their overseas business establishments, if necessary for business development.
Financial institutions and enterprises in SHFTZ may conduct investments and transactions at stock and options exchanges in accordance with the relevant provisions. The overseas parent companies of enterprises in SHFTZ may issue RMB bonds in the domestic capital market in accordance with the relevant provisions. Enterprises in SHFTZ may make overseas investments in securities and derivatives in accordance with the relevant provisions.
Enterprises, non-bank financial institutions and other economic organizations in SHFTZ may raise funds in domestic and foreign currencies outside of China, and conduct risk hedging management in SHFTZ or outside of China in accordance with the relevant provisions.
Article 28 According to the relevant provisions of the People's Bank of China, all policies and measures issued by the state that encourage and support the expansion of the cross-border use of RMB shall apply in SHFTZ.
The cross-border use of RMB under current accounts and direct investment shall be simplified in SHFTZ. Financial institutions and enterprises in SHFTZ may borrow RMB funds outside of China. Enterprises in SHFTZ may engage in the cross-border bilateral RMB cash pooling business and the cross-border centralized RMB receipts and payments under current accounts, if necessary for their business operations. Banking financial institutions in Shanghai may cooperate with payment institutions that satisfy the prescribed conditions in providing RMB settlement services fro cross-border e-commerce.
Article 29 In SHFTZ, the building of the interest rate liberalization system shall be facilitated, the pricing monitoring mechanism for the interest rate liberalization of funds in domestic and foreign currencies in free trade accounts shall be improved, financial institutions in SHFTZ that satisfy the prescribed conditions may enjoy priority in issuing large-denomination negotiable certificates of deposits, and the upper limit on the interest rate for foreign currency deposits shall be removed.
Article 30 A foreign exchange administration system that meets the development needs of SHFTZ shall be established. The procedures for document examination under current accounts and for foreign exchange registration under direct investment shall be simplified. The control over external claims or debts shall be relaxed. The centralized operation and management of foreign exchange funds by the headquarters of multinational companies, and the foreign exchange administration of foreign cash pools and international trade settlement centers shall be improved. The administration of foreign exchange settlement and sale transactions shall be improved. Facilitation shall be provided for the over-the-counter trading of the derivatives of bulk stocks.
Article 31 If necessary for the development of SHFTZ, upon the approval of the financial regulatory authority, financial institutions of different levels, functions, types and ownership systems are encouraged to enter SHFTZ. Efforts shall be made to lead and encourage the investment of private capital in the financial industry in SHFTZ, support the development of the internet finance in SHFTZ, support the building of international financial trading and service platforms in SHFTZ to provide registration, depository, trading and liquidation services, and support the building and improvement of trust registration platforms and the exploration of the trust usufruct transfer mechanism in SHFTZ.
Article 32 This Municipality will cooperate with the financial regulatory authority in improving the monitoring and assessment of financial risks and in establishing a risk prevention mechanism meeting the development of the financial industry in SHFTZ.
Financial institutions and specific non-financial institutions in Shanghai that engage in SHFTZ businesses shall file relevant information with the financial regulatory authority as required, fulfill their obligations against money laundering, terrorist financing, and tax evasion, among others, cooperate with the financial regulatory authority in paying attention to abnormal cross-border capital flows, and undertake their responsibilities for protecting financial consumers and investors.
Chapter VI Tax Administration
Article 33 According to the relevant state provisions, the relevant tax policies promoting investment and trade shall be applied in SHFTZ. Relevant tax policies for areas under special customs supervision shall be applied accordingly in Shanghai Waigaoqiao Free Trade Zone, Shanghai Waigaoqiao Bonded Logistics Park, Yangshan Free Trade Port Area, and Shanghai Pudong Airport Free Trade Zone, the four areas subordinate to SHFTZ.
Conditioned upon consistence with the direction of tax reform and international practice and prevention of transfer of profits and erosion of tax base, the tax policies adapted to the development of overseas equity investment and offshore business shall be researched and improved.
Article 34 The tax authority shall establish a convenient tax service system in SHFTZ, conduct professional and centralized examination of tax affairs, gradually cancel pre-verification, promote the work modes of approval before inspection and separation between inspection and approval, promote online tax services, provide consulting services for tax payment, inquiry services for tax-related matters and other relevant services, and gradually realize uniform procedures for handling tax affairs across regions.
Article 35 The tax authority shall carry out the pilot program of modernization of the administration of tax collection in SHFTZ, improve tax efficiency, and create a tax environment favorable for enterprise development and fair competition.
The tax authority shall monitor tax risks through the tax information system and the SHFTZ regulatory information sharing platform to improve the administrative of tax collection.
Chapter VII Comprehensive Supervision
Article 36 In SHFTZ, efforts shall be made to innovate in the administrative mode, promote the change in administration from focusing on ex ante approval to focusing on interim and ex post regulation, increase the public participation in the regulatory work, and facilitate the building of a comprehensive supervision system featuring administrative supervision, industry self-discipline, social supervision and public participation.
Article 37 A national security vetting system for foreign investments shall be established in SHFTZ. For foreign investments within the scope of national security vetting, investors shall apply for national security vetting, and the relevant administrative department, industry association, enterprises in the same sector, and downstream and upstream enterprises may offer national security vetting suggestions.
The parties concerned shall cooperate in national security vetting by providing the necessary materials and information and accepting the relevant inquires.
Article 38 An anti-monopoly mechanism shall be established in SHFTZ.
For a concentration of undertakings that involves enterprises in SHFTZ, if it has reached the reporting criteria as set out by the State Council, the undertakings to the concentration shall report it beforehand, or the concentration may not be conducted. Investigation and law enforcement shall be carried out against acts of excluding or restricting competition by using monopoly agreements, abusing dominant market positions, or abusing administrative powers.
Article 39 The SHFTZ Management Committee, offices in SHFTZ and relevant authorities shall record the credit information and other information of enterprises and their responsible persons, and enter such information into the SHFTZ sub-platform of the Municipal Public Credit Information Service Platform.
The SHFTZ Management Committee, offices in SHFTZ and relevant authorities may check the credit information of the counterparts in handling matters concerning market access, customs clearance of goods, government procurement and bidding, use credit products, provide facilitation for enterprises and individuals with good credit records, and take restraining and disciplinary actions against enterprises and individuals with bad credit records.
SHFTZ encourages credit service providers to use credit information from various aspects to develop credit products and to provide credit services for administrative supervision and market transactions, and encourages enterprises and individuals to use credit products and services.
Article 40 An annual report disclosure system and an abnormal operation catalogue system shall be applied to enterprises in SHFTZ.
Enterprises in SHFTZ shall file annual reports as required, and undertake the truth and legality of the information contained in their annual reports. Annual reports shall be disclosed to the public, except parts involving state secrets, trade secrets, or personal privacy.
The administrative department for industry and commerce shall oversee and inspect the performance of enterprises in SHFTZ in the filing of annual reports. Where any enterprise fails to fulfill the annual report disclosure obligation as required, it shall be put on the catalogue of abnormal operations and be disclosed to the public.
Citizens, legal persons and other organizations may consult the annual reports of enterprises, the catalogue of abnormal operations, and other information disclosed to the public, and the administrative department for industry and commerce shall provide convenience.
The measures for the disclosure of the annual reports of enterprises and the management of the catalogue of abnormal operations shall be developed separately by the Shanghai Administration for Industry and Commerce.
Article 41 A uniform regulatory information sharing platform shall be established in SHFTZ to enhance the gathering, exchange and sharing of regulatory information. The SHFTZ Management Committee, offices in SHFTZ and relevant authorities shall timely and actively provide information and participate in information exchange and sharing.
The SHFTZ Management Committee, offices in SHFTZ and relevant authorities shall, by using the regulatory information sharing platform, integrate regulatory resources, promote dynamic supervision over the entire process, and improve the efficiency of joint supervision and collaborative service.
The SHFTZ Management Committee shall organize offices in SHFTZ and relevant authorities to develop measures for the gathering, exchange and sharing of regulatory information.
Article 42 Law firms, accounting firms, certified tax agents, intellectual property service agencies, customs declaration and inspection declaration institutions, inspection and testing institutions, certification authorities, shipping and manning agencies, notary offices, judicial expertise institutions, credit service providers, and other specialized institutions are encouraged to engage in business operations in SHFTZ.
The SHFTZ Management Committee, offices in SHFTZ and relevant authorities shall entrust matters suitable for handling by specialized institutions to specialized institutions by establishing the relevant rules, or guide and cultivate the development of specialized institutions by introducing a competition mechanism or purchasing services.
Article 43 A social participation mechanism comprising representatives from enterprises and relevant organizations shall be established in SHFTZ to guide enterprises and relevant enterprises to express interest demands and to participate in the evaluation of pilot policies and market supervision.
Efforts shall be made to support industry associations and chambers of commerce in participating in the building of SHFTZ, urge them to develop management criteria and conventions for the relevant industries, and strengthen self-discipline in such industries.
Enterprises in SHFTZ shall observe social ethics and commercial morality and accept the supervision of the public when engaging in business operations.
Article 44 In SHFTZ, efforts shall be made to facilitate E-government building, promote electronic signature, and electronic official documents with legal effect in administrative management, archive electronic documents, and manage electronic files. Electronic files and paper files shall have the same legal effect.
Article 45 This Municipality shall establish a comprehensive assessment mechanism for SHFTZ. The Municipal Development and Reform Department shall, together with the SHFTZ Management Committee and relevant authorities, conduct evaluation on the innovation in regulatory rules, the implementation of pilot policies in the entire industry and by enterprises in the industry, and risk prevention, among others, or commission third parties to do so, so as to offer policy suggestions for improvement and furthering of the opening-up of the relevant fields, the reform of the pilot program, and the system innovative measures.
Chapter VIII Legal Environment
Article 46 It is necessary to make various reforms and innovations in SHFTZ by adhering to the concept and means of the rule of law so as to create a good legal environment for the building of SHFTZ.
Where there is any adjustment in the pilot reform measures for investment, trade, financial affairs, and taxation, among others, in SHFTZ, or the state provides for that any pilot reform measure developed for any other zone may apply to SHFTZ, such provisions shall apply.
Where any local regulation of this Municipality fails to meet the development needs of SHFTZ, the Municipal People's Government may request the Municipal People's Congress and the Standing Committee thereof to develop provisions governing the application of the said local regulation in SHFTZ. If any rules of this Municipality fail to meet the development needs of SHFTZ, the SHFTZ Management Committee may request the Municipal People's Government to develop provisions governing the application of the said rules in SHFTZ.
Article 47 The equal status and development rights of various types of market participants in SHFTZ are under the protection of law. Various types of market participants in SHFTZ are entitled to fair treatment in supervision, taxation, and government procurement, among others.
Article 48 The enterprises, equity, intellectual property, profits, and other properties and commercial interests legally owned by investors in SHFTZ are under the protection of law.
Article 49 The rights of laborers in SHFTZ to employment equality, to free choice of employment, to remuneration for labor, to rest and vocation, to labor safety and health protection, to receive vocational skill training, to enjoy social insurance and benefits, and to participate in the democratic management of enterprises, among others, are under the protection of law.
The collective negotiation mechanism between enterprises and laborers shall be promoted in SHFTZ so as to encourage both parties to have equal negotiations for remuneration, labor safety and health, and other relevant matters. The role of trade unions in protecting the rights and interests of employees and maintaining the harmony and stability of employment relationships shall be played.
It is necessary to improve the fair, open, efficient and convenient mechanisms for labor safety supervision and labor dispute settlement in SHFTZ so as to protect the lawful rights and interests of both employees and employers.
Article 50 It is necessary to strengthen environmental protection in SHFTZ, explore classified management based on environmental impact assessment, and improve the environmental protection management level and efficiency.
Enterprises in SHFTZ are encouraged to apply for internationally accepted certification of environmental and energy management systems, adopt advanced production techniques or technologies, save energy, and reduce the discharge of pollutants and the emission of greenhouse gas.
Article 51 It is necessary to strengthen intellectual property protection in SHFTZ, and improve the mechanism connecting administrative protection with judicial protection.
The relevant authorities of this Municipality shall strengthen cooperation with the relevant authorities of the state, have management coordination and law enforcement cooperation in the entry and exit protection and the domestic protection of intellectual property, and try to establish systems or mechanisms for the uniform management and law enforcement of intellectual property in SHFTZ.
Efforts shall be made to improve the diversified intellectual property dispute settlement mechanism for SHFTZ, and encourage industry associations and mediation, arbitral, intellectual property intermediary and other institutions to play their roles in settling intellectual property disputes.
Article 52 When developing any local regulation, governmental rules or regulatory document concerning SHFTZ, this Municipality shall voluntarily disclose the contents of the draft to solicit the opinions of the public, relevant industry organization and enterprises. After the document is adopted and published, an explanation shall be made on the handling of the opinions of relevant parties. A reasonable period of time shall be reserved between publication and implementation as a preparatory period for implementation, unless it requires immediate development and implementation due to emergency or any other reason.
The local regulations, governmental rules and regulatory documents developed by this Municipality concerning SHFTZ shall be published promptly after being adopted, and interpretations and explanations shall be made thereon.
Article 53 Any citizen, legal person or other organization that has any opposition to a regulatory document developed by the SHFTZ Management Committee may request the Municipal People's Government to review. The review rules shall be developed by the Municipal People's Government.
Article 54 An information release system shall be established by this Municipality for SHFTZ to release information about SHFTZ in a timely manner in the form of news release conferences, information briefs or written releases.
The SHFTZ Management Committee shall gather information about the laws, regulations, rules, policies and procedures established by the state and this Municipality for SHFTZ, and publish it on the portal website of SHFTZ for relevant parties to consult.
Article 55 A relatively centralized administrative reconsideration power system is applied in SHFTZ.
Against a specific administrative action taken in SHFTZ by the SHFTZ Management Committee, any other department of the Municipal Government or its office in SHFTZ, or the Pudong New Area People's Government, a citizen, a legal person or any other organization may apply to the Municipal People's Government for administrative reconsideration; against a specific administrative action taken in SHFTZ by a department under the Pudong New Area People's Government, a citizen, a legal person or any other organization may apply to the Pudong New Area People's Government for administrative reconsideration. A major, complex or difficult administrative reconsideration case shall be tried by the Administrative Reconsideration Committee.
Article 56 A judicial organ shall be established in SHFTZ according to the law so as to protect the lawful rights and interests of the parties in and outside of China.
The arbitral institutions legally formed in this Municipality shall, in accordance with laws, regulations and the international practices for commercial arbitration, improve their arbitration rules and internationalization level in arbitration of commercial disputes based on the characteristics of SHFTZ, and provide independent, impartial, professional and efficient arbitration services based on the independent decisions of the parties.
The industry associations and chambers of commerce as established by this Municipality, as well as professional mediation institutions for commercial disputes, may participate in settling commercial disputes in SHFTZ to play their roles in settling disputes.
Chapter IX Supplementary Provisions
Article 57 This Regulation comes into force on August 1, 2014. The Regulation on Shanghai Waigaoqiao Free Trade Zone, as deliberated and adopted at the 32nd meeting of the Standing Committee of the 10th Shanghai Municipal People's Congress on December 19, 1996, shall be repealed concurrently.