Laws of the People's Republic of China

The State Council

Measures for the Administration of the State Council on Participation of Foreign Firms in the Salvage of Sunken Ships and Objects in the Chinese Coastal Waters

Decree [1992] No.102 of the State Council

July 12, 1992

Article 1

These Measures are formulated in order to strengthen the control of the participation of foreign firms in the activities salvaging sunken ships and objects in the Chinese coastal waters and to ensure the lawful rights and interests of the parties concerned.

Article 2

These Measures shall apply to the participation of foreign firms in the activities salvaging sunken ships and objects with commercial value in the Chinese coastal waters.

These Measures shall not apply to the cases where the owners of the sunken ships and objects engage in the salvage themselves or invite salvage agencies to undertake the salvage in the Chinese coastal waters.

Article 3

For the purpose of these Measures, the following terms shall have the meanings respectively defined hereunder:

(1)

"Foreign firm" means enterprises or other economic organizations or individuals of foreign countries.

(2)

"Coastal waters" means the internal seas and territorial seas of the People's Republic of China as well as all the other sea areas under its jurisdiction.

(3)

"Sunken ships and objects" means all kinds of vessels and objects which have sunken under the surface of water or have been buried beneath the mud surface at seabed in the Chinese coastal waters, which include the main bodies of the sunken ships or objects and their equipments, and all of the cargoes or other sundries loaded thereon.

Sunken warships and weaponry with important military value and sunken ships and objects confirmed as cultural relics are not covered in the scope of salvage by the participation of foreign firms.

(4)

"Salvage operation" means all kinds of operational activities for salvaging sunken ships and objects according to a joint salvage contract or a contract for a Chinese-foreign salvage cooperative enterprise, including the implementation of survey, identification, salvage and other activities related thereto.

(5)

"Operator of salvage" means any unit or individual that actually operates the salvage.

Article 4

The Chinese Government shall protect, in accordance with the law, the gains and other lawful rights and interests due to the Chinese and foreign parties who participate in the salvage of sunken ships and objects in the Chinese coastal waters (hereinafter referred to as "Chinese and foreign parties participating in the salvage").

All the activities of Chinese and foreign parties participating in the salvage shall comply with the related laws, rules and regulations of the People's Republic of China, and be subjected to the control and supervision of the competent authorities of the Chinese Government.

Article 5

The Ministry of Communications of the People's Republic of China is in charge of the affairs regarding the participation of foreign firms in the salvage of sunken ships and objects in the Chinese coastal waters.

Article 6

Foreign firms may participate in the salvage of sunken ships and objects in the Chinese coastal waters in either of the following modes:

(1)

To sign a joint salvage contract with a Chinese operator of salvage and undertake the salvage activities in accordance with the rights and duties of each party as stipulated in the contract;

(2)

To establish a Chinese-foreign salvage cooperative enterprise with a Chinese operator of salvage and undertake the salvage activities.

Article 7

Any Chinese operator of salvage shall be a professional salvage agency with the qualification of undertaking salvage, and such qualification shall be examined and approved by the Ministry of Communications of the People's Republic of China pursuant to the state-formulated requirements of the professional salvage agency.

Article 8

Definite salvage targets must be expressly fixed in either a joint salvage contract or a contract for a Chinese-foreign salvage cooperative enterprise. Any sunken ships or objects other than those fixed in the contracts found during the salvage operation may not be salvaged by either Chinese or foreign party participating in the salvage without authorization.

Article 9

The Ministry of Communications of the People's Republic of China shall be responsible for uniformly organizing negotiations with foreign firms on affairs concerning the salvage of sunken ships and objects in the Chinese coastal waters, determining salvage projects and organizing Chinese operators of salvage to sign joint salvage contracts or contracts for Chinese-foreign salvage cooperative enterprises with foreign firms in accordance with the law.

Article 10

The joint salvage contract signed between a foreign firm and a Chinese operator of salvage shall accord with the related stipulations of the Law of the People's Republic of China on Economic Contracts Involving Foreign-related Matters and be subject to the approval by the Ministry of Communications of the People's Republic of China.

The Chinese-foreign salvage cooperative enterprise formed by a foreign firm and a Chinese operator of salvage shall go through the formalities of examination and approval as well as registration in accordance with the stipulations of the Law of the People's Republic of China on Chinese-foreign Contractual Joint Ventures.

Article 11

While a joint salvage contract or a contract for a Chinese-foreign salvage cooperative enterprise is submitted to the authorities for examination and approval, the relevant documents of the implementing salvage plan approved by the harbor superintendency establishments of the People's Republic of China (hereinafter referred to as harbor superintendency) shall be presented; where an area of fishing port is involved, the relevant documents approved by the fishery administrative authorities and fishing harbor superintendency establishments shall be presented; where a military forbidden area or district is involved, the relevant documents approved by the competent military authorities shall be presented.

The examination and approval authorities shall, within 45 days after receiving the application for examination and approval of the above-mentioned contract, decide whether to approve or disapprove.

Article 12

After the approval of the joint salvage contract, the foreign firm shall apply for business registration to the State Administration for Industry and Commerce of the People's Republic of China within 30 days after its receipt of the document of approval and obtain a business license; it shall register with the local tax authorities within 30 days after obtaining the business license.

Article 13

A foreign firm participating in the salvage of sunken ships and objects within the internal seas and territorial seas of the People's Republic of China shall bear all the costs and expenses as well as the financial risks during the salvage operation. The Chinese operator of salvage is responsible for the coordination with the relevant authorities, the fulfillment of the necessary formalities and the guardianship during the salvage operation.

A foreign firm participating in the salvage of sunken ships and objects beyond the internal seas and territorial seas of the People's Republic of China and within other sea areas under its jurisdiction shall bear all the costs and expenses as well as the financial risks in the phase of survey and identification. The Chinese and foreign parties shall implement the salvage operation according to the stipulations of the contract where the salvage is necessary.

Article 14

The vessels, equipments and labor services needed by the foreign firm in implementing the joint salvage contract shall first be leased and employed from the Chinese operator of salvage, if the conditions are the same.

Article 15

The objects recovered from the salvage of sunken ships and objects in the Chinese coastal waters with the participation of a foreign firm (hereinafter referred to as "recovered objects") shall be disposed of in the following ways:

(1)

The ownership of the sunken ships and objects recovered within the internal seas and territorial seas of the People's Republic of China resides in the People's Republic of China. The foreign firm shall obtain its gains from the recovered objects or the sum evaluated in terms of money in accordance with the stipulations of the joint salvage contract or the contract for the Chinese-foreign salvage cooperative enterprise.

The Chinese operator of salvage shall obtain its gains from the recovered objects or the sum evaluated in terms of money in accordance with the relative stipulations of the State or those of the contract for the Chinese-foreign salvage cooperative enterprise.

(2)

The sunken ships and objects recovered from beyond the internal seas and territorial seas of the People's Republic of China but within other sea areas under its jurisdiction shall be distributed to Chinese and foreign parties participating in the salvage according to the proportions stipulated in the contract, in form of the recovered objects or the sum evaluated in terms of money.

(3)

Any cultural relics found in the recovered objects or during the salvage operation shall be reported to the local administrative department for cultural relics without delay. The department for cultural relics shall dispose of them in accordance with the law and regulations of the People's Republic of China concerning cultural relics protection and give appropriate rewards to the personnel concerned.

Article 16

The recovered objects obtained by the foreign firms according to law can be purchased by the relevant authorities of Chinese Government at the price of international market or transported abroad by the foreign firms after being taxed and going through the Customs formalities pursuant to the Chinese Law. Foreign currency of other gains obtained by the foreign firms can be remitted abroad after being taxed according to Law.

Article 17

Before the salvage operation, the operators of salvage shall apply for the issuance of a navigation warning in accordance with the relevant stipulations of the Maritime Traffic Safety Law of the People's Republic of China.

The Ministry of Communications of the People's Republic of China shall circulate the related data such as the commencement and termination time of the salvage operation and its geographical position to the State Bureau of Oceanography and other relevant authorities.

The operators of salvage shall engage in their salvage operation within the operational area approved by the harbor superintendency and report the progress of the salvage activities according to the requirements of the harbor superintendency. Any methods detrimental to marine resources, marine environment, underwater facilities, marine military installations and other interests of the People's Republic of China may not be used in salvage operation.

Article 18

The relevant personnel from Chinese and foreign parties participating in the salvage shall, from the beginning to the end, take part in the salvage operation and are jointly responsible for the work of registering and storing the recovered objects.

Article 19

All the recovered objects shall receive the inspection by the relevant authorities at the place assigned by the competent authorities of the Chinese Government.

Article 20

Anyone who has violated these Measures to salvage sunken ships and objects in the Chinese coastal waters shall be ordered to stop the salvage operation and be warned or fined by harbor superintendency. The violator who has already caused losses to the State or other individuals shall bear the liability of compensation.

The amount of fine shall be appraised and decided according to the related penalty provisions of the State marine traffic administration.

Article 21

The participation of any enterprise or individual or other economic organization from Hong Kong, Macao or Taiwan in the salvage of sunken ships and objects in the Chinese coastal waters shall be handled with reference to these Measures.

Article 22

The Ministry of Communications of the People's Republic of China shall be responsible for the interpretation of these Measures.

Article 23

These Measures shall enter into force as of the date of promulgation.