(Promulgated by Decree No. 52 of the Shanghai Municipal People’s Government on October 17, 2005)

Article 1 (Purposes and Basis)

For the purposes of safeguarding the safety of people’s life and State property, maintaining public and economic order, normalizing the activities of purchasing old and scrap metals, and preventing illegal or criminal acts, these Provisions are formulated on the basis of relevant laws and regulations.

Article 2 (Application Scope)

These Provisions apply to the business activities involving productive or non-productive old and scrap metals and those generated from used materials in municipal works, and administrative activities related to these business activities. .

Article 3 (Definitions)

The productive old and scrap metals as mentioned in these Provisions refer to the scrap iron and steel, as well as nonferrous metal scraps generated in productive and business activities, scrapped old electromechanical equipment, and scrapped vessels and their components and spare parts.

The non-productive old and scrap metals as mentioned in these Provisions refer to various kinds of old and scrap metals generated by the residents in their daily lives.

The old and scrap metals generated from used materials in municipal works as mentioned in these Provisions refer to public facilities, equipment, instruments, sculptures and other materials used in municipal works that contain metal and are damaged due to natural or human factors.

Article 4 (Duties of Administrative Departments)

The Shanghai Municipal Economic Commission takes charge of the planning of the business distribution, overall coordination and trade administration of the purchasing of old and scrap metals in this Municipality.

The Shanghai Municipal Bureau of Public Security and its district/county branches (hereinafter jointly referred to as public security departments) take charge of public security concerning the purchasing of old and scrap metals, and investigate and handle, in accordance with law, cases involving activities of purchasing without permit productive old and scrap metals, or purchasing, disposing of, and transporting old and scrap metals generated from used materials in municipal works, in violation of relevant provisions.

The Shanghai Municipal Administration of Industry and Commerce and its district/county branches (hereinafter jointly referred to as administrative departments of industry and commerce) take charge of the registration of enterprises and self-employed businessmen engaged in the purchasing of old and scrap metals, and investigate and handle, in accordance with law, cases involving activities of purchasing, without a license, old and scrap metals in fixed places or engaging in operations beyond the prescribed scope.

The Shanghai Urban Administration Enforcement Bureau and its district/county comprehensive enforcement departments (hereinafter jointly referred to as urban administration enforcement departments) take charge of investigating and handling, in accordance with law, cases involving activities of purchasing old and scrap metals without licenses on a mobile basis.

The administrative departments of construction, communication, planning, housing, land and resources, quality and technical supervision, environment protection, city appearance and sanitation of this Municipality shall, according to their respective duties, do a good job in the administrative work on the purchasing of old and scrap metals.

Article 5 (Duties of District/County People’s Governments)

The district/county people’s governments shall incorporate the purchasing of old and scrap metals into the comprehensive administration of the community, and organize and coordinate relevant administrative departments and subdistrict offices, as well as town/township people’s governments in doing a good job of routine administration work on the purchasing of old and scrap metals in their respective jurisdiction areas.

Article 6 (Business Distribution Planning and Technical Norms)

The Shanghai Municipal Economic Commission shall, jointly with relevant functional departments and relevant trade associations and in accordance with the Overall Urban Planning of this Municipality, draw up a business distribution plan for the purchasing of productive old and scrap metals and set up technical norms for the establishment of purchasing enterprises, and make these public in accordance with the law.

The district/county people’s governments shall, in accordance with the business distribution planning drawn up by the Shanghai Municipal Economic Commission, determine the location(s) of fixed establishments for purchasing productive old and scrap metals.

Article 7 (Registration)

Enterprises or self-employed businessmen engaged in purchasing old and scrap metals shall go through the formalities of industry and commerce registration in accordance with law, and shall have the words:“purchasing of productive old and scrap metals”or“purchasing of non-productive old and scrap metals”clearly marked in their scope of operation. The enterprises engaging in the purchasing of productive old and scrap metals shall get approval from the public security departments prior to its obtaining permission to include in its scope of operation the purchasing of productive old and scrap metals.

The registered place of business of enterprises or self-employed businessmen engaged in purchasing the old and scrap metals shall be the same as their actual place of business operation. In case the enterprise sets up a new place for business operation other than the registered place, it shall go through branch office registration formalities, and in case it engages in the purchase of productive old and scrap metals, the enterprise shall also get approval from the public security departments in advance.

Article 8 (Requirements for Application)

Those who apply for setting up an enterprise purchasing productive old and scrap metals shall meet the following requirements:

1. The applicant shall comply with the distribution plan for the business of purchasing productive scrap metals and the technical norms for the establishment of such enterprises;

2. The applicant shall comply with the rules and regulations of public security, fire control, housing, land and resources, environment protection, city appearance and sanitation, etc.;

3. The legal representative (person-in-charge) is the citizen of this Municipality or holds a residence permit of this Municipality, and has a fixed residential place;

4. The legal representative (person-in-charge) does not have bad records for the last five years;

5. The place of operation shall be 500 meters or above from the railway lines, airport, port, metal smelting and processing enterprises, and restricted military zones.

Article 9 (Permit and the Issuance)

The public security departments shall, within 20 days from the date of receiving the application for permission to purchase productive old and scrap metals, make a decision of approval or denial. In case of approval after examination, a permit for purchasing productive old and scrap metals shall be issued; in case of denial, the applicant shall be notified in writing and the reasons for denial shall be stated.

The uniform pattern of the permit for purchasing productive old and scrap metals shall be provided by the Shanghai Municipal Bureau of Public Security.

Article 10 (Set-up of Accounts and Registration of Purchase)

The enterprises engaged in purchasing the old and scrap metals shall set up an inventory of purchase, and this inventory shall be kept for not less than two years.

When purchasing productive old and scrap metals, the enterprises engaged in such purchase shall check the certificates and detailed lists of articles for sale issued by the selling units, and make truthful registration. The contents of registration include the name of the selling unit, the name and ID number of the person who handles the transaction, and the name, quantity, specification, and degree of wear of the stuff.

Article 11 (Disposal)

The enterprises shall deliver the old and scrap metals generated in the process of production to enterprises purchasing such stuff for disposal, except for those delivered to other enterprises for recycling purposes.

Article 12 (Designated Disposal)

The old and scrap metals generated in public municipal works shall be purchased at the owners’premises for uniform disposal by designated enterprises for purchase of productive old and scrap metals (hereinafter referred to as designated disposal enterprises).

The designated disposal enterprises shall be chosen from the enterprises purchasing productive old and scrap metals by the Shanghai Municipal Economic Commission jointly with the Shanghai Municipal Bureau of Public Security and relevant trade associations, and be made public.

The designated disposal enterprises shall sign a contract of entrusted disposal with the public utilities enterprises of municipal works and their affiliated units engaged in construction and maintenance of municipal works.

Article 13 (Catalogue)

The Shanghai Municipal Construction and Communication Commission shall, jointly with the Shanghai Municipal Economic Commission, Shanghai Municipal Bureau of Public Security and other relevant departments, formulate the“Catalogue of Old and Scrap Metals Generated from Used Materials in Municipal Works”, specify the types of such materials and notify in writing all enterprises purchasing waste materials in this Municipality.

Article 14 (Administration on Transportation)

When transporting or entrusting other enterprises to transport old and scrap metals generated from used materials in municipal works, the designated disposal enterprises shall sign a certificate. The certificate shall list, in clear terms, the type, quantity, destination of transport, and other matters concerning the materials being transported. The public security departments shall check, in accordance with law, the vehicles and vessels carrying old and scrap metals generated from used materials in municipal works.

In case the administration departments of land, water, and railway transportation of this Municipality find that the carrier of old and scrap metals generated from used materials in municipal work fails to provide relevant certificates, the said departments shall notify, in time, the public security departments in the locality.

Article 15 (Prohibited Acts)

Self-employed businessmen or the enterprises that have failed to obtain a permit for purchasing productive old and scrap metals shall not engage in the acts of purchasing productive old and scrap metals.

The enterprises purchasing productive old and scrap metals shall not purchase materials of this type whose sources can not be identified.

Except for the designated disposal enterprises, no units or individual persons shall be allowed to purchase or dispose of old and scrap metals generated from used materials in municipal works.

Article 16 (Report)

In case of finding productive old and scrap metals that are suspected as stolen goods or old and scrap metals generated from used materials in municipal work whose sources can not be identified, the enterprises purchasing productive old and scrap metals shall report to the public security departments in their locality in time.

In case of finding illegal purchase or disposal of productive old and scrap metals, or old and scrap metals generated from used materials in municipal work, all units and individual persons shall report such illegal activities to the public security departments and the administrative departments of industry and commerce in time.

Article 17 (Legal Liabilities of Illegal Operation)

For acts of engaging in the activities of purchasing productive old and scrap metals without a permit for purchasing such stuff shall be subject to administrative punishment by the public security departments in accordance with relevant laws and regulations concerning State public security administration and imposition of punishment. In serious cases, the administrative departments of industry and commerce shall revoke the business license of the wrongdoer in accordance with law.

For acts of purchasing productive old and scrap metals of productive properties whose sources can not be identified, the enterprises purchasing such stuff shall be penalized by the public security departments with a fine of not less than 10,000 yuan and not more than 30,000 yuan and revocation of its permit for purchasing productive old and scrap metals. The public security department shall also notify the administrative departments of industry and commerce to cancel in its scope of operation“the purchase of productive old and scrap metals”.

For acts of illegally purchasing old and scrap metals generated from used materials in municipal work, the wrongdoer shall be subject to administrative punishment by the public security departments, in accordance with relevant laws and regulations concerning State public security administration and imposition of punishment. In case the wrongdoer is an enterprise engaged in purchasing productive old and scrap metals, the public security departments shall revoke its permit for purchasing productive old and scrap metals, and notify the administrative departments of industry and commerce to cancel in its scope of operation“the purchase of productive scrap metals”. In serious cases, the administrative departments of industry and commerce shall revoke the business license of the wrongdoer in accordance with law.

In case an enterprise engaged in purchasing productive scrap metals fails to set up an inventory of purchase and make truthful registration of purchased stuff, the enterprise shall be penalized by the public security departments with a fine of not less than 2000 yuan and not more than 5000 yuan, and be ordered to make rectification within the prescribed time period; in serious cases, the public security departments shall revoke its permit for purchasing productive old and scrap metals and notify the administrative departments of industry and commerce to cancel in its scope of operation“the purchase of productive scrap metals”.

In case public utilities enterprises of municipal works or their affiliated units engaged in construction and maintenance of municipal works illegally dispose of scrap metals generated from used materials in municipal works, the person in charge and the person(s) directly responsible shall be dealt with by their superior competent administrative department. In case the act constitutes a crime, the wrongdoer shall be prosecuted for criminal liabilities.

Article 18 (Legal Liabilities of Operation Without License)

For the act of engaging in the activities of purchasing productive old and scrap metals without license, the administrative departments of industry and commerce or the urban administration enforcement departments shall, in accordance with their respective functions and Article 14 of the“Procedures on the Investigation and Ban of Operation Without License”, impose administrative punishment on the wrongdoer.

Those who provide operation places, transportation, safekeeping, storage, and other facilities for business activities of purchasing productive old and scrap metals without license and who know or ought to know the truth, shall be subject to administrative punishment by the administrative departments of industry and commerce in accordance with Article 15 of the“Procedures on the Investigation and Ban of Operation Without License”.

Article 19 (Going-through of Formalities and Exchange for New License)

The enterprises that engaged in the purchasing of productive old and scrap metals of productive properties before the implementation of these Provisions shall, within the prescribed time period, go to the public security departments for the permit for purchasing productive old and scrap metals. The Shanghai Municipal Bureau of Public Security shall separately formulate detailed implementation provisions for handling the formalities.

The enterprises that engaged in purchasing productive old and scrap metals of productive properties before the implementation of these Provisions shall, within the prescribed time period, go to the administrative department of industry and commerce for the formalities of exchanging for new business licenses. The Shanghai Municipal Administration of Industry and Commerce shall separately formulate the detailed implementation provisions for handling the formalities.

Article 20 (Effective Date)

These Provisions shall become effective on the date of promulgation.