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PROVISIONS FOR THE ADMINISTRATION OF CIVIL AIR TRANSPORT SALES AGENCIES

Category  CIVIL AVIATION Organ of Promulgation  The State Council Status of Effect  In Force
Date of Promulgation  1993-08-03 Effective Date  1993-08-03  

Provisions for the Administration of Civil Air Transport Sales Agencies



Chapter I  General Provisions
Chapter II  Conditions for Establishment
Chapter III  Examination, approval and Registration Procedures
Chapter IV  Control of Operation
Chapter V  Penalty
Chapter VI  Supplementary Provisions

(Approved by the State Council on July 5, 1993 and promulgated in

Directive No.37 by the General Administration of Civil Aviation of China on
August 3, 1993)
Chapter I  General Provisions

    Article 1  These Provisions are formulated in order to maintain the market
order of civil air transport and safeguard the lawful rights and interests of
the public, civil air transport enterprises and civil air transport sales
agencies.

    Article 2  These Provisions are applicable to civil air transport sales
agencies engaged in the sale of passenger and cargo transport on behalf of
civil air transport enterprises in the territory of the People's Republic of
China.

    Article 3  In these Provisions,

    (1) Civil air transport sales agency (hereinafter referred to as 'air
transport sales agency') refers to a profit-making undertaking appointed by a
civil air transport enterprise to be engaged in the sale of air passenger and
cargo transport and related business operations for and on behalf of the
principal within the agreed scope of authority;

    (2) Civil air transport enterprise refers to an enterprise engaged in the
carriage of passengers, baggages, cargo and mail with civil aircraft;

    (3) Civil air transport sales agent (hereinafter referred to as 'sales
agent') refers to an enterprise engaged in air transport sales agency;

    (4) Competent administrative organ of civil air transport of the People's
Republic of China (hereinafter referred to as 'civil aviation competent
administrative organ') refers to the General Administration of Civil Aviation
of China;

    (5) Regional administrative organ of civil air transport of the People's
Republic of China (hereinafter referred to as 'civil aviation regional
administrative organ') refers to the regional administration of civil aviation
of China.

    Article 4  Air transport sales agencies are divided into the following two
categories in accordance with the scope of agency service:

    (1) Category-I air transport sales agency, engaged in the sales agency
service of civil air transport on international routes or regional routes
leading to Hongkong, Macao and Taiwan;

    (2) Category-II air transport sales agency, engaged in the sales agency
service of civil air transport on domestic routes excluding regional routes
leading to Hongkong, Macao and Taiwan.

    Article 5  Air transport sales agencies are administered in accordance
with the following principles:

    (1) Meeting social demand, making things convenient for the public and
distributing the network of sales agencies rationally;

    (2) Protecting just competition and promoting service quality.

    Article 6  Sales agents must observe the laws and regulations of China and
subject themselves to the supervision and administration of civil aviation
competent administrative organ or civil aviation regional administrative
organ, as appropriate.
Chapter II  Conditions for Establishment

    Article 7  A sales agent shall obtain the corporate capacity of an
enterprise of the People's Republic of China according to law.

    Article 8  The amount of registered capital of a sales agent shall conform
to the following requirements:

    (1) The registered capital of a category-I air transport sales agent shall
not be less than RMB 1,500,000 yuan;

    (2) The registered capital of a category-II air transport sales agent
shall not be less than RMB 500,000 yuan.

    The registered capital of a sales agent shall be increased by RMB 500,000
yuan for the addition of every branch office or business point.

    For a sales agent concurrently engaged in the sale of air transport, its
capital used specifically for such sale shall meet the above requirements.

    Article 9  A sales agent shall have available the following conditions for
business operation:

    (1) fixed independent business location;

    (2) telecommunications facilities and other necessary business facilities;

    (3) civil air transport regulations and material corresponding to its
sales agency service;

    (4) at least three people possessing appropriate qualification
certificates of air transport sales personnel.

    Article 10  A foreign legal person or a foreigner, who has set up a
Chinese-foreign joint venture or a Chinese-foreign cooperative enterprise in
accordance with the relevant laws of the People's Republic of China and is
qualified for the conditions stipulated in these Provisions, may be engaged in
category-I air transport sales agency in the territory of the People's
Republic of China after being approved by the civil aviation competent
administrative organ; and may be engaged in the cargo sales of category-II air
transport sales agency in the territory of the People's Republic of China
after being approved by the civil aviation regional administrative organ.
Chapter III  Examination, approval and Registration Procedures

    Article 11  An air transport sales agency shall be applied for in
accordance with the following procedures:

    (1) For category-I air transport sales agency, a written application shall
be submitted to the civil aviation competent administrative organ;

    (2) For category-II air transport sales agency, a written application
shall be submitted to the civil aviation regional administrative organ of the
place where the business location of the applicant is situated.

    Article 12  In applying for air transport sales agency, the following
documents and materials shall be submitted:

    (1) application in writing;

    (2) articles of association of the enterprise;

    (3) name, post and resume of the principal person in charge and the
namelist of sales personnel;

    (4) business facilities and telecommunications equipment available;

    (5) capital credit certificate;

    (6) proof of financial guarantee;

    (7) photocopy of the appropriate qualification certificates of air
transport sales personnel;

    (8) intention letter of agency appointment issued by a civil air transport
enterprise;

    (9) other documents and material for submission as required.

    An applicant applying for category-I air transport sales agency to be
engaged in cargo sales shall also submit a photocopy of 'Confirmation of
International Cargo Transport Agency of the People's Republic of China'.

    Article 13  The civil aviation competent administrative organ or civil
aviation regional administrative organ shall make a decision of approval or
disapproval in accordance with these Provisions within 30 days beginning from
the day of accepting the application.

    The civil aviation competent administrative organ or civil aviation
regional administrative organ shall verify and issue appropriate certificate
of approval for the operation of air transport sales agency to applicants
conforming to the conditions for engaging in such agency.

    The period of validity of the certificate of approval for the operation of
air transport sales agency is three years.

    Article 14  The sales agent shall apply for registration with the
administration of industry and commerce at the place of its business location
against the certificate of approval for the operation of air transport sales
agency issued by the civil aviation competent administrative organ or civil
aviation regional administrative organ.

    Article 15  A sales agent operating an air transport sales agency may
apply for setting up branch offices or business points in case its annual sales
volume was more than double the minimum level prescribed in Article 28 of
these Provisions for two consecutive years, and it was not subject to the
penalty of fine or suspension of business for rectification during these two
years.

    Article 16  A sales agent to set up branch offices or business points to
operate air transport sales agency shall apply for separate certificates of
approval for the operation of air transport sales agency for its branch
offices or business points in accordance with these Provisions.

    A sales agent shall be responsible for the business behavior of its branch
offices or business points.

    Article 17  The civil aviation competent administrative organ may decide
to suspend the acceptance of applications for air transport sales agency
within prescribed period in the light of the macro supply and demand of civil
air transport market.

    The decision made by the civil aviation competent administrative organ in
accordance with the preceding paragraph shall be announced.
Chapter IV  Control of Operation

    Article 18  In the appointment and operation of agency the civil air
transport enterprise and sales agent shall comply with the regulations of the
civil aviation competent administrative organ, prevent error in business and
man-made accident in transport, and safeguard public interest.

    Article 19  A sales agent shall perform civil air transport sales agency
within the scope of approved agency category.

    Article 20  A sales agent may sign air transport sales agency agreement
with any civil air transport enterprise having the right of operation in the
territory of the People's Republic of China within the scope of approved
agency category so as to perform civil air transport sales agency.

    In the appointment and operation of agency the civil air transport
enterprise or sales agent must not practise any unjust act of competition.

    Article 21  The sales agent and civil air transport enterprise shall
determine through consultation the standard of air transport sales agent
commission in accordance with the principle of equality and mutual benefit,
except the legal standard prescribed by the civil aviation competent
administrative organ and competent price department.

    The sales agent shall publish the standard of business charges at its
business location and submit such charges to the civil aviation competent
administrative organ or civil aviation regional administrative organ which
issued the certificate of approval for the operation of air transport sales
agency for file.

    Article 22  The sales agent and civil air transport enterprise shall
strictly carry out the air transport sales agency agreement signed between the
two parties.

    The sales agent shall submit the air transport sales agency agreement to
the civil aviation competent administrative organ or civil aviation regional
administrative organ which issued the certificate of approval for the
operation of air transport sales agency for file.

    Article 23  The sales agent shall use special invoices for air transport
sales agency while carrying out passenger sales of category-I air transport
sales agency.

    Article 24  The sales agent shall submit an annual report of its operation
to the civil aviation competent administrative organ or civil aviation
regional administrative organ which issued the certificate of approval for the
operation of air transport sales agency for file.

    A sales agent concurrently engaged in air transport sales agency shall
maintain separate account numbers and account books for the revenue and
expenditure accrued in the operation of air transport sales agency.

    Article 25  The sales agent must observe the regulations concerning air
transport price and air transport sales agency service charges of China.

    Article 26  The sales agent must not transfer air transport documents to
others for sale, or complete air transport documents at a business location
not registered.

    Article 27  A sales agent who continues the operation of sales agency
after the expiration of its certificate of approval for the operation of air
transport sales agency shall apply in writing for renewing the certificate to
civil aviation competent administrative organ or civil aviation regional
administrative organ one month before the expiration of such certificate.

    In case a sales agent fails to apply for the renewal of the certificate of
approval for operation in accordance with the provision in the preceding
paragraph, it shall automatically forfeit its qualification for air transport
sales agency at the time of expiration of such certificate.

    Article 28  The certificate of approval for the operation of air transport
sales agency shall not be renewed if the annual average sales volume of a
sales agent fails to reach the following minimum standard:

    (1) For a category-I air transport sales agent, the sale of transportation
of 2,000 passengers or 100 tons of cargo;

    (2) For a category-II air transport sales agent, the sale of
transportation of 5,000 passengers or 200 tons of cargo.

    The provision of the preceding paragraph shall not apply if in the opinion
of the civil aviation competent administrative organ or civil aviation
regional administrative organ it is still necessary to maintain a sales agent
because the sales agent is the sole sales agent in the area where such agent
is situated and the service quality of such agent is good.

    Article 29  A civil air transport enterprise must not sign an air
transport sales agency agreement with a unit or an individual under one of the
following circumstances:

    (1) a unit or an individual not in possession of a certificate of approval
for the operation of air transport sales agency;

    (2) the business scope of the business license of the unit or individual
does not include air transport sales agency.

    Article 30  In case the certificate of approval for the operation of air
transport sales agency of a sales agent is withdrawn or expires, the civil air
transport enterprise shall immediately terminate its performance of the air
transport sales agency agreement signed with such agent.
Chapter V  Penalty

    Article 31  A sales agent in violation of these Provisions shall be
penalized by the civil aviation competent administrative organ or civil
aviation regional administrative organ as follows:

    (1) Violation of Article 21, paragraph 2 of Article 22 and Article 24 of
these Provisions shall be penalized by warning and instruction to correct
within prescribed time; failure to correct within the prescribed time or a
second violation within six months shall be penalized by suspension of
operation for rectification for 3 to 15 days.

    (2) Violation of Article 19 and Article 23 shall be penalized by
instruction to correct within prescribed time and imposition of a fine of over
RMB 1,000 yuan but below 10,000 yuan; failure to correct within prescribed
time or a second violation within six months shall be penalized by suspension
of operation for rectification for 7 to 30 days.

    (3) Violation of Article 18, paragraph 2 of Article 20, Article 25 and
Article 26, shall be penalized by the imposition of a fine of over RMB 3,000
yuan but below 30,000 yuan or the suspension of operation for rectification
for 15 to 90 days at the same time in addition to instructing the sales agent
to indemnify the victim for economic loss; serious cases resulting in adverse
influence or the recurrence of same violation for three times within two years
shall be penalized by the withdrawal of the certificate of approval for the
operation of air transport sales agency.

    Article 32  In case the certificate of approval for the operation of air
transport sales agency of a sales agent is withdrawn, the civil aviation
competent administrative organ or civil aviation regional administrative organ
shall suggest that the administration of industry and commerce revoke or
change the business license of the sales agent.

    Article 33  In the case of unlawful operation of civil air transport sales
agency without the certificate of approval for the operation of air transport
sales agency, the civil aviation competent administrative organ or civil
aviation regional administrative organ, as appropriate, shall ban the unlawful
operation of such sales agent, confiscate its unlawful earnings and impose a
fine to the amount of over RMB 30,000 yuan but below 100,000 yuan.

    Article 34  In the case of violation of Article 18, the second paragraph
of Article 20, Article 29 and Article 30 by a civil air transport enterprise,
the civil aviation competent administrative organ or civil aviation regional
administrative organ, as appropriate, shall instruct the enterprise to correct
immediately and impose a fine of over RMB 10,000 yuan but below 100,000 yuan.

    Article 35  In the case of gross violation of these Provisions
constituting a crime, criminal responsibility shall be investigated and
affixed in accordance with the law.

    Article 36  If a party refuses to comply with the specific administrative
act performed by the civil aviation competent administrative organ or civil
aviation regional administrative organ in accordance with these Provisions, it
may apply for reconsideration of the case to the civil aviation competent
administrative organ and may also initiate administrative proceedings directly
to the people's court within 15 days beginning from the day on which the
specific administrative act comes to its knowledge.
Chapter VI  Supplementary Provisions

    Article 37  Rules for the implementation of these Provisions shall be
formulated by the General Administration of Civil Aviation of China.

    Article 38  The General Administration of Civil Aviation of China shall be
responsible for the interpretation of these Provisions.

    Article 39  These Provisions shall go into effect on the day of their
promulgation.



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