(Promulgated on December 13, 2004 by Decree No. 40 of the Shanghai Municipal People’s Government)

Article 1 (Purpose and Basis)

With a view to normalizing administrative organs’supervision and inspection of the participation in the administrative license matters activities, timely correcting wrongful acts, maintaining social order and public interests, and safeguarding the legitimate rights and interests of citizens, legal entities or other organizations, these Provisions are formulated in accordance with the“Law of the People’s Republic of China on Administrative Licenses”(hereinafter referred to as the“Administrative Licenses Law”) and in the light of this Municipality’s actual circumstances.

Article 2 (Application Scope)

These Provisions apply to the activities of administrative organs and organizations in this Municipality’s administrative area which have functions of administering public affairs empowered by laws and regulations (hereinafter referred to jointly as the administrative organ) in exercising supervision, inspection and handling of administrative license matters activities in which citizens, legal entities or other organizations participate.

Article 3 (Principle of Supervision and Inspection)

The administrative organ shall, in exercising supervision and inspection of the administrative license matters activities in which citizens, legal entities or other organizations participate, observe the principle of legality and rationality, high-efficiency and convenience to the people, normal procedure, openness and transparency.

Article 4 (Modes of Supervision and Inspection)

The administrative organ may, through the following modes, exercise supervision and inspection over citizens, legal entities or other organizations engaged in administrative license matters activities:

(1) Making written inspections of relevant material reflecting the matters of the licensee participating in the administrative license matters activities;

(2) Making on-the-spot inspections of the licensee’s production and operation premises;

(3) Making regular inspections of major equipment and facilities that have a direct bearing on public security, personal health, life and property safety;

(4) Making sampling inspections, tests and checks of products the licensee produces and operates; and

(5) Other modes as may be provided by laws, rules and regulations.

Article 5 (Reading Inspections)

Where a reading inspection mode is adopted for the participation in the administrative license matter activity, the administrative organ shall, in written form or by public notice, notify in advance the licensee of the content and term of the reading inspection as well as written material to be submitted as required.

Where there are provisions governing the written material to be submitted set out in laws, rules and regulations, such provisions shall apply; where there are no provisions set out in laws, rules or regulations, the written material shall, based on the nature of the administrative license, reflect whether the licensee participates in the administrative license matter activity in compliance with law.

The administrative organ, upon receiving the written material, shall timely check whether the licensee participates in the particular activity in compliance with the licensed condition and scope. Where it passes the check, the administrative organ need not feed back the inspection results to the licensee; where something is found improper but not serious in the administrative license matter activity the licensee participates in, the administrative organ shall notify in writing the licensee and put forward a corresponding request for rectification.

When necessary, the administrative organ may take other modes of supervision and inspection to make further checks.

Article 6 (On-the-spot Inspections)

The administrative organ may, in accordance with law, make on-the-spot inspections of the licensee’s production and operation premises.

When making on-the-spot inspections, the administrative organ shall appoint two functionaries or more. Except for a clear report that the licensee participates in the administrative license activity in violation of law, or for the fact that prior notification may impede the availability of true matters in the course of inspection, the administrative organ shall, when making on-the-spot inspections, notify the licensee in advance.

For on-the-spot inspections, such methods as surveying the scene, consulting relevant material, inquiring relevant persons and hearing the statement of the party concerned may be adopted in accordance with law.

During on-the-spot inspections, the functionaries of the administrative organ shall produce to the licensee certificates showing their identification, and inform the licensee of his or her rights and duties. Where a wrongful act is found in the administrative license activity the licensee participates in, the administrative organ shall order the licensee to make correction immediately or within a time limit.

Article 7 (Regular Tests)

The administrative organ shall, on a regular basis as provided by laws and administrative regulations, test major equipment and facilities that have a direct bearing on public security, personal health and life and property safety.

When making tests on a regular basis, the administrative organ shall notify the licensee in advance of the specific test term, mode and requirement. Where the regular test time limit is explicitly provided for by laws and administrative regulations, the administrative organ shall complete the tests in the prescribed time limit; where there is no such explicit provision prescribed by laws and administrative regulations, the administrative organ shall, according to the need of safeguarding public security, personal health and life and property safety, and in line with actual conditions of the equipment and facilities, determine a rational time limit for the regular tests, and notify in advance the licensee, or give out a public notice.

In making supervision and inspection of administrative license matters other than those set out in Article 12 Item (4) of the“Administrative Licenses Law”, the administrative organ generally does not adopt the mode of making regular tests. But where there are provisions otherwise provided by laws and administrative regulations, such provisions shall apply.

Article 8 (Sampling Inspections, Tests and Checks)

The administrative organ may, in accordance with law, conduct sampling inspections, tests and checks of products the licensee produces and operates.

Sampling shall be done on a scientific basis; inspections, tests and checks shall be conducted in accordance with relevant technical norms and standards.

The results of sampling inspections, tests and checks shall be notified to the licensee within the statutory or agreed time limit. Samples that are still economically valuable after test shall be returned to the licensee.

Article 9 (Entrusting Specialized Technical Institutions to Do Sampling Inspections, Tests, and Checks)

Specialized technical institutions with legal qualification may be entrusted to conduct sampling inspections, tests and checks.

The entrusted specialized technical institution shall, in line with the technical rules or agreed time limit, issue reports on the result of inspection, test and check. The administrative organ shall make a conclusion of supervision and inspection based on the report.

Article 10 (Handling Decision)

Where, upon supervision and inspection, any wrongful act is found in the administrative license matter activity a citizen, legal entity or other organization participates in, the administrative organ shall make a handling decision in accordance with law.

Article 11 (Placing on File and Making Public the Supervision and Inspection Material)

The administrative organ shall keep the following supervision and inspection material on file:

(1) Written material submitted by the licensee;

(2) Written records of supervision and inspection signed by the persons making the supervision and inspection;

(3) Written records of handling results the administrative organ has made on the basis of the written records of supervision and inspection;

(4) Tip-off material; and

(5) Other material that shall be kept on file as provided by laws, rules and regulations.

The public has the right to request the administrative organ for access to the written records of results of supervision, inspection and handling conducted by the administrative organ. The administrative organ, when making public the written records of results of supervision, inspection and handling, shall follow the“Provisions of Shanghai Municipality on Open Government Information”.

Article 12 (Notification of Wrongful Acts and Sending Its Copies)

Where the decision on an administrative license matter is made by the administrative organ outside of this Municipality’s administrative area, and the licensee participates in the administrative license matter in violation of law within this Municipality’s administrative area, this Municipality’s administrative organ that makes the investigating and handling decision shall, within seven days after making the decision, in accordance with law, send written notification of the licensee’s wrongful act and handling results to the out-of-town administrative organ that made the decision on the administrative license.

Where the decision on an administrative license matter is made by this Municipality’s district, county or township administrative organ, and the licensee participates in the administrative license matter in violation of law within the administrative area of other district, county or township, this Municipality’s district, county or township administrative organ that makes the investigating and handling decision shall, upon making the decision, timely inform the district, county or township administrative organ that made the decision on the administrative license, through the interconnected and intershared network

Article 13 (Treatment of Tip-off)

The administrative organ, upon receiving tip-off of the wrongful participation in administrative license matter activity, shall forthwith take notes, promptly place a case on file, and appoint relevant law-enforcers to make an on-the-spot check.

Where, upon verification, the person involved in the tip-off has really committed a wrongful act, the administrative organ shall handle in accordance with law.

Article 14 (Licensee’s Duty to Cooperate)

In respect of on-the-spot inspections, regular tests and sampling inspections, tests and checks by the administrative organ, the licensee shall actively cooperate with the persons who make supervision and inspection in conducting on-site survey or sampling, furnish written materials as things really are, answer inquiries, make true statements and reflect related matters.

The licensee shall sign the records of supervision and inspection made by the persons who conducted the supervision and inspection, if such records are accurate.

Article 15 (Self-inspection System)

The units designing, building, installing and using the major equipment and facilities that have a direct bearing on public security, personal health, life and property safety shall establish a corresponding self-inspection system. They shall make a good record of the self-inspection matters and put such a record in safekeeping for the future check by the administrative organ.

Article 16 (Administrative License that May Be Revoked)

In respect of the case where an administrative license may be revoked under Article 69 Clause 1 of the“Administrative Licenses Law”, the administrative organ shall establish an internal procedure norm for investigation, verification, examination, approval and other work.

Where, in respect of the case where an administrative license may be revoked under Article 69 Clause 1 of the“Administrative Licenses Law”, the administrative organ that made a decision on the administrative license does not revoke the administrative license, its superior administrative organ, considering the administrative license subject to revocation, may revoke the administrative license.

Article 17 (Filing Bad Records)

Where a licensee who obtains by devious means such as fraud and bribing an administrative license for a matter which falls into those having a direct bearing on public security, personal health and life and personal safety as provided by law is not allowed to re-apply for the administrative license within three years after the revocation of the administrative license in accordance with law, the administrative organ shall put the licensee’s bad record on file and make such information shared through Internet for future reference by relevant administrative organs.

Article 18 (Simplifying Cancellation Formalities)

Where there is a case set out in Article 70 Item (4) of the“Administrative Licenses Law”, the administrative organ may simplify internal cancellation formalities of administrative license.

Article 19 (Notification of Revocation and Cancellation of Administrative License)

When revoking or canceling an administrative license, the administrative organ shall make a written decision, give reasons and notify the party concerned of the rights it enjoys to apply for administrative reconsideration and bring an administrative lawsuit in accordance with law.

Article 20 (Investigating and Handling Acts Without Administrative License)

In respect of an act of arbitrarily carrying out, without administrative license, an activity subject to administrative license in accordance with law, the administrative organ shall make a handling decision in writing, order the cessation of illegal activity and impose administrative punishment in accordance with law; if the wrongful act constitutes a crime, the wrongdoer shall be prosecuted for criminal liability as provided by law.

Article 21 (Effective Date)

These Provisions shall become effective on February 1, 2005.