Introduction:

 

On November 8th, the Ministry of Commerce released news about the total non-state trade crude import quota of 2018, the related application conditions and procedures. The total volume of non-state trade crude import quotas reached 142 million mt, up 62.6% from the 87.6 million mt in 2017.

 

    Independent refineries and other units’ crude import quotas were more than 87.6 million mt or even 100 million mt in 2017, as the import quotas were released by batches and there were additional adjustments.

 

    However, the new annual quota of 142.42 million mt still stimulated market sentiment, as it basically included all the granted and pending volume of appliers. According to JLC, the market paid great attention to the 2018 annual non-state trade crude import quotas recently, and the Ministry of Commerce had convened some meetings. The participants said that the related administration had conveyed two basic messages: firstly, the quotas would be released earlier in 2018 than that in 2017; secondly, the total quotas in 2018 may not change sharply. In such a climate, many independent refineries were worried about the quota decrease. However, the published document was quite a relief for related refineries and enterprises. Meanwhile, the crude import quotas released a month earlier in 2018 than that in 2017, which means that refineries are expected to get their quotas by mid-late December in 2017, and the total amount will not change too much.

 

Appendix

 

Ministry of Commerce of the People's Republic of China

 

Announcement No. 76 in 2017

 

2017-11-06

 

    According to People's Republic of China Goods Import & Export Control Regulation and China’s commitment to WTO, the Ministry of Commerce set 2018 Non-state Trade Crude Import Quota, Application Requirements and Application Procedures. Hereby, it is to be published.

 

Ministry of Commerce

 

November 6th, 2017

 

2018 Annual Non-state Trade Crude Import Quota, Application Requirement and Application Procedures

 

    I. 2018 Annual Non-state Trade Crude Permitted Import Quota

Non-state trade crude permitted import quota of 2018 is 142.42 million mt.

 

    II. Application Requirement

 

1)  Imported crude in the past two years or acquired qualifications of using imported crude approved by national industry departments.

2)  Possess usage right of crude water transport terminals not less than 50,000 mt capacity (or  railway ports with two million mt transfer capacity per year) and the usage right of crude oil storage tanks with reservoir capacity not less than 200,000 cubic meters;

 

3)  A foreign trader with bank credits not less than 20 million U.S. dollars (or 120 million Yuan);

 

4)  Possess professionals (at least 2) engaged in petroleum international trade;

 

5)  No record for enterprises of smuggling, tax evasion, foreign exchange evasion, foreign exchange arbitrage or administrative and criminal penalties punishment for illegal operation in the past two years.

 

6)  Other factors to be considered.

 

    III. Application materials

 

    Applicants must submit the following documents:

 

    1)  Application letter, including the company’s basic situation, explanation of qualifying, application reasons, and specific plans for purchasing, production, use and sale of crude oil, and the introduction of professionals in petroleum international trade.

 

    2)  A copy of Business License for Legal Person Duplicate, which was signed by the legal representative and passed annual examination; Registration Form for Foreign Trade Operators or Qualifications Certificate of an Import & Export Enterprise or Approval Certificate of a Foreign-funded Enterprise(or records and receipt according to Administrative Measures for the Establishment and Alteration of the Record of Foreign-invested Enterprises) with records and registration seals, a copy of Registration Certificate of Consignors and Consignees of Imports and Exports and a copy of Organization code certificate;

 

    3) Credit line certificate by banks. The original official documents issued by the head offices or direct branches of banks. Among them, the subsidiaries of the central enterprises can provide the collective credit of the head office;

 

    4) The original agreements on the use of facilities, such as crude terminals (or railway ports) and storage tanks, certificate photocopy of the loading & unloading capacity and storage capacity of the water terminal (railway port) issued by the investment department above the municipality level (or other departments such as the environmental protection department and the fire production department);

 

    5) Crude oil import performance certificates from January to October in 2016 and 2017 or qualification documents for imported crude oil replied by national industry departments. For self-run imports, customs declaration copies should be provided, and agreements or related service invoices are needed if imports are entrusted to agents.

 

    6) Documents of non-smuggling and non-violations records issued by local customs and relevant materials of proofing no escape of exchange arbitrage issued by local taxation and foreign exchange administrations in 2016-2017.

 

    Processors who were granted non-state trade crude import qualifications by Ministry of Commerce in 2017 are dispensed with (2),(3) ,(4) , (5), (6) materials, other enterprises should provide all materials above. All application enterprises are responsible for the authenticity of the materials mentioned above. Applicants should provide original copies to check the copies’ authenticity and signature of enterprise legal person’s to confirm the authenticity of application materials.

 

    IV. Allocation Principle

 

    1)  Batch release. The first batch of crude oil import quota in 2018 will be allocated according to the actual use of crude oil quota by qualified companies from January to October 2017.

  

    2)  Additional adjustment. According to enterprise’s actual import situation, operating requirement and application of newly added eligible processing companies, crude oil import quota will be adjusted.

 

    3)  Strict examination. Enterprise without import performances will not allowed to use imported crude oil quota. According to Regulations on Import and Export of Goods of the People's Republic of China, companies that failing to use the import quota shall return the uncompleted quota to the Ministry of Commerce via local business authority or central enterprise group before September 1st of the year.

 

    4)  Other factors.

 

    V. Declaration and Audit Procedure

 

    Local enterprises should issue applications to the local provincial commerce authority. Subsidiaries of central enterprises should apply through the group headquarters.

 

    After gathering the eligible company lists and application materials, the provincial commerce authority and central enterprises send applications and related materials to the administrative affairs service hall of the Ministry of Commerce through mail, express, face to face delivery and other ways before November 30, 2017. The applications will not be accepted after November 30th, 2017.

 

    Submit address: Li Youping, Window No. 18, Administrative Affairs Service Hall of the Ministry of Commerce, Commerce Department, No.2 East Changan Street, Beijing; Contact number: 010-65197862; Postcode: 100731. Envelopes or boxes with the application materials enclosed shall be noted “Item Number: 18010-001”.

 

    After auditing the application materials, the Ministry of Commerce distributes import quota to qualified enterprises before December 31st, 2017, and the outcomes will be assigned to provincial commerce authorities and central enterprises.

 

    VI. Concerned requirements

 

    The non-stated owned enterprises gaining crude oil import quota shall comply with relevant rules and regulations about secure production, run business legally and keep normal imports orders.  Any enterprises that  violating the relevant laws and regulations will be punished  according to Regulations on Import and Export of Goods of the People’s Republic of China  and Administration Methods on Automatic Import Permission of Cargoes.