Measures of the State Council for the Administration of Foreign Investors' Participation in the Salvage of Sunken Vessels and Objects in Coastal Waters of China

• Document Number：Order No. 666 of the State Council
• Area of Law： Traffic and Transport
• Level of Authority： Administrative Regulations
• Date issued：02-06-2016
• Effective Date：07-12-1992
• Status： Effective
• Issuing Authority： State Council

Measures of the State Council for the Administration of Foreign Investors' Participation in the Salvage of Sunken Vessels and Objects in Coastal Waters of China
(Promulgated by the Order No. 102 of the State Council of the People's Republic of China on July 12, 1992; revised according to the Decision of the State Council on Abolishing and Amending Some Administrative Regulations on January 8, 2011 for the first time; and revised according to the Decision of the State Council on Amending Some Administrative Regulations on February 2, 2016 for the second time)
Article 1 These procedures are formulated to strengthen control over foreign businesses in participating in the salvaging of sunken ships and sunken articles in China's coastal waters to safeguard the lawful rights and interests of the various parties concerned.
Article 2 These procedures apply to activities involving salvaging of sunken ships and sunken articles of commercial value in China's coastal waters with the participation of foreign businesses.
These procedures are not applicable in case that the sunken ships and sunken articles in China's coastal waters are salvaged by the owners themselves or agencies entrusted by the owners.
Article 3 Definitions of terms used in these procedures:
(1)Foreign businesses refer to foreign enterprises, other economic organizations or individuals.
(2) Coastal waters refer to inland sea and territorial sea of the People's Republic of China (PRC) and sea areas under the jurisdiction of PRC.
(3) Sunken ships and sunken articles refer to all kinds of ships and articles, including their main bodies and equipment, all goods and other articles on board, that have sunken under surface of China's coastal waters or buried under mud on the seabed.
Sunken naval ships and weaponry of important military value and sunken ship and sunken articles specified as cultural relics are not included in the category of objects to be salvaged with the participation of foreign businesses.
(4) Salvage operations refer to the engineering operations on the sunken ships and sunken articles, including scanning, measuring, surveying and probing as well as actual lifting and related activities, carried out in accordance with the joint salvage contract or the contract for the Chinese-foreign cooperative salvage enterprise.
(5) Salvage operators refer to the agencies or individuals actually engaged in salvage operations.
Article 4 The Chinese government protects by law the legitimate income and other lawful rights and interests of the Chinese and foreign parties to the undertaking of salvaging sunken ships and sunken articles in China's coastal waters (hereinafter referred to as Sino-foreign salvage parties).
Sino-foreign salvage parties in all their activities must abide by PRC's relevant laws, regulations and rules and accept control and supervision of Chinese government departments in charge.
Article 5 The Ministry of Communications of PRC is in charge of matters related to the participation of foreign businesses in the salvaging of sunken ships and sunken articles in China's coastal waters.
Article 6 Participation of foreign businesses in the salvaging of sunken ships and sunken articles in China's coastal waters can take the following forms:
(1) Foreign businesses can conclude with the Chinese party a joint salvage contract which stipulates their mutual rights and obligations in their salvage operations;
(2) Foreign businesses can set up with the Chinese party a Chinese-foreign cooperative salvage enterprise.
Article 7 The objects for salvage must be clearly stated in the joint salvage contract and the contract for the cooperative salvage enterprise. Chinese and foreign salvage parties shall not decide on their own to salvage sunken ships and sunken articles that are found in their operations but are not included in the contracted objects for salvage.
Article 8 The Ministry of Transport of the People's Republic of China is responsible for uniformly organizing negotiations with foreign investors on salvaging sunken vessels and objects in coastal waters of China, deciding salvaging projects, and arranging for Chinese salvage operators and foreign investors to enter into joint salvage contracts or contracts on Chinese-foreign contractual salvage enterprises according to the law. Salvage operations involving military restricted zones and military administrative zones shall comply with the relevant provisions of the Law of the People's Republic of China on the Protection of Military Installations.
Article 9 Foreign investors and Chinese salvage operators shall enter into joint salvage contracts in accordance with the relevant provisions of the Contract Law of the People's Republic of China. After signing joint salvage contracts, foreign investors shall apply to the administrative departments for industry and commerce for business registration as legally required and handle tax registration formalities with local tax authorities.
Foreign businesses and Chinese salvage operators in forming cooperative salvage enterprises should perform the procedures for approval and registration in accordance with stipulations of the Law of PRC on Chinese-Foreign Contractual Joint Ventures.
Article 10 In the case of foreign businesses taking part in salvaging sunken ships and sunken articles in the inland sea or territorial sea of PRC, the foreign businesses should bear all the coasts and economic risks involving throughout the period of salvage operations. Chinese salvage operators are responsible for coordination work with the departments concerned, attend to the performance of necessary procedures and exercise supervision and protection of salvage operations.
In the case of foreign businesses taking part in salvaging sunken ships and sunken articles in sea areas outside PRC inland or territorial sea but under PRC jurisdiction, the foreign businesses should bear all costs and economic risks involved in scanning, measuring, surveying and probing operations. If a decision is taken to carry out a salvage operation, the Chinese and foreign operators will proceed with the operations in accordance with their contracts.
Article 11 With conditions being equal, foreign businesses should give preference to Chinese salvage operators from whom to rent ships and equipment and hire labor services needed in the implementation of the joint salvage contract.
Article 12 The objects retrieved through salvage operations with the participation of the foreign businesses on sunken ships and sunken articles in China's coastal waters (hereinafter referred to as retrieved objects) should be disposed of in the following manners:
(1) Sunken ships and sunken articles raised in PRC inland sea or territorial sea belong to PRC, and foreign businesses will share the benefits from the retrieved objects or their value in price in accordance with relevant stipulations in the joint salvage or cooperative salvage enterprise contracts.
Chinese salvage operators will share the benefits from the retrieved objects or their value in price in accordance with State regulations or the cooperative salvage enterprise contract.
(2) Sunken ships and sunken articles retrieved from sea areas under PRC jurisdiction outside its inland or territorial sea, their value in price will be shared by the Chinese and foreign salvage operators in proportions as stipulated in the contract.
(3) The finding of cultural relics among retrieved objects or discoveries of new cultural relics in the process of salvage operations should immediately be reported to local departments in charge of cultural relics administration which will handle the matter in accordance with PRC laws and regulations on the protection of cultural relics, and reward the personnel concerned.
Article 13 The retrieved objects legitimately obtained by foreign business can be purchased by Chinese government departments concerned at international market prices or shipped out of the country by foreign business after fulfilling taxation and customs procedures.
Foreign exchange receipts or other income of foreign business can be remitted out of the country after tax payments.
Article 14 Before the start of their salvage operations, the operators should request the issue of the warning signal for navigation in accordance with relevant stipulations in the Law of PRC on Sea Navigation Safety.
The Ministry of Communications should inform the National Bureau of Oceanography and other departments concerned of the time of beginning and ending the salvage operations and their geographic position.
Salvage operators must restrict their salvage operations within the operational areas permitted by the port authority, and report their related activities as required by the port authority. The salvage operators shall not in their operations use methods which would damage marine resources, maritime environment, undersea installations and naval installations or harm the interests of PRC.
Article 15 Chinese and foreign salvage operators should together take part in the salvage operations throughout the process from beginning to end, and together take charge of the registration and preservation of retrieved objects.
Article 16 All retrieved objects should be inspected by departments concerned at places designated by Chinese government departments in charge.
Article 17 Port authority has the right to call a halt to salvage operations on sunken ships and sunken articles carried out in China's coastal waters in violation of these Procedures, and mete out punishments of a warning or fines. Those who have caused damage to the country and others have the responsibility for paying compensations.
The amount of compensation is to be determined in accordance with rules on punishments contained in sea navigation administrative regulations.
Article 18 Participation of enterprises, other economic organizations or individuals from Hong Kong, Macao and Taiwan in the salvage of sunken ships and sunken articles in China's coastal waters can proceed with reference to these Procedures.
Article 19 The Ministry of Communications is responsible for explanations of these Procedures.
Article 20 These Procedures will take effect as of the date of promulgation.