Interim Provisions of the Shenzhen Economic Special Zone on Control of Gold and Sliver Markets

(Originally adopted according to No. 16 Decree of Shenzhen Municipal Government on October 21, 1993, firstly revised according to No. 82 Decree of Shenzhen Municipal Government on January 16, 1999, and as secondly revised according to No.118 Decree of Shenzhen Municipal Government on July 23, 2002 )

Chapter I General Provisions

Article 1  In order to establish a formal order of gold and silver market and to combine acceleration with control in the operation and business of gold and silver, taking into account of the specific conditions of Shenzhen Special Economic Zone (hereinafter referred to as the Special Zone), these Provisions are hereby formulated in accordance with the Regulations of the PRC on Control of Gold and Silver, the Implementation Rules of the PRC on Control of Gold and Silver and the Administration Measures for the Import and Export of Gold and Silver.

Article 2  The State pursues a unified control with regard to gold and silver. The competent agency of Shenzhen Municipality responsible for gold and silver is the Central Branch Bank of Shenzhen Municipality of the People' s Bank of China (hereinafter referred to as "Shenzhen People' s Bank" ). Shenzhen People' s Bank implements the following duties: to purchase, allocate and sell gold and silver; to control purchasing, allocating and selling prices of gold and silver in conjunction with the competent agency responsible for commodity prices in the Special Zone; to examine and approve, in conjunction with the Economic and Trade Department of Municipal Government, the Administrative Department for Industry and Commerce of Municipal Government, the units which operate (including which process and retail) gold and silver articles and chemical products containing gold and silver and the units which recover gold and silver from residual, liquid and solid wastes containing them; to control and inspect the gold and silver market and the factories producing and processing gold and silver; and to supervise the implementation of these Provisions.

Chapter Two  Control of Business Units and Individual Silversmiths

Article 3  All units and individuals that engage in producing, selling and processing gold and silver articles(including chemical products containing gold and silver and the gold and sliver jewelry), that change their profession to repair gold and silver articles and that recover gold and silver from "three wastes" containing gold and silver in the Shenzhen Municipality must declare to the Shezhen People' s Bank and obtain the "Business License of Gold and Silver" upon examination and approval by the Shenzhen People' s Bank in conjunction with the Economic and Trade Department of Municipality and must obtain the operating license upon examination, approval and registration by the administrative department for industry and commerce before they begin operation.

Article 4  The business units that has registered with the administrative department for industry and commerce upon approval of the Shenzhen People' s Bank must conduct their business within the approved location and scope.

Article 5  Retail units of gold and silver articles must purchase their goods, in accordance with the relevant  provisions, from the units that are authorized by China People' s Bank to wholesale gold and silver articles. No retail units shall be permitted to do wholesale business (The channels of purchase concerning the sales shops of gold articles which are located in the Shatoujiao Township or owned by the free duty enterprises or companies are regulated separately.)

   All inland banks which come to purchase gold and silver articles for the purpose of the preservation for awards shall hold the letter of introduction issued by the branch banks of the People' s Bank of China at province, municipality or autonomous region levels, be subject to the examination and approval of the Shenzhen People' s Bank, and go to purchase gold and silver articles at the appointed units that are authorized to wholesale. 

Article 6  The enterprises that, upon the approval, use the raw materials of gold and silver imported from Hong Kong or Macao regions to process gold and silver articles or products in Shenzhen Special Zone and sell all of these articles or products outside the frontier must be subject to the following provisions:

1.going through declaration formalities of importing the raw materials of gold and silver at the Customs based on the relevant approval documents issued by the Shenzhen Municipal Government and the Shenzhen People' s Bank, and on the contract of processing on order;

2.letting the Customs seal up the raw materials while importing them, and going through identification formalities of registering heavy, percentage and uses with the Shenzhen People' s Bank before begin using them;

3.as to the processed gold and silver products for export, whatever the gold and silver content of them, the heavy and percentage of gold and silver must be inspected, the contract shall be checked, and the "Import License of Gold and Silver Products" shall be filled in and issued by the Shenzhen People' s Bank;

4.The Customs inspect and release gold and silver products according to the "Import License of Gold and Silver Products" and the relevant declaration documents.

Article 7  The units operating and processing gold, silver and articles or products thereof must report the situation of operation and procession according to the requirements of the Shenzhen People' s Bank, and must accept the supervision and examination of the Shenzhen People' s Bank and the relevant  departments.

Article 8  Silversmiths may engage in processing and repairing gold and silver articles for clients upon the approval.

Chapter III  Control of Gold and Silver Purchases

Article 9  The units operating and using gold and silver (including hospitals and photo studios) shall positively recover gold and silver from "three wastes" ( residual, liquid and solid wastes) containing gold and silver. The units which are unable to recover gold and silver may sell "three wastes" containing sold and silver to the recovery units which are approved by the Shenzhen People' s Bank so as to recover gold and silver.

Article 10  All gold and silver extracted or refined as a by-product from gold, silver and ore products imported through unified handle of the head bank of the People' s Bank of China must be sold to the Shenzhen People' s Bank, except for the gold and silver kept with the permission of the People' s Bank of China or those for re-export following processing of the imported materials in accordance with the relevant  provisions.

Article 11  All gold and silver confiscated by the public security, judicial, Customs, industry and commerce administration, taxation and other State organs according to law must be sold to the Shenzhen People' s Bank.

Chapter V  Control of Allocation and Sale of Gold and Silver

Article 12  The units requiring gold and silver as raw materials for productive use must submit an application plan and the Shenzhen People' s Bank shall pass on the plan to the People' s Bank of China for examination and approval. According to the approved quantity, the Shenzhen People' s Bank shall supply gold and silver in turn taking into account of the productive progress.

Article 13  Foreign-capital enterprise, Chinese foreign equity joint ventures and foreign businessmen in the Special Zone ordering and purchasing gold and silver articles or processing the goods containing gold and silver thus wishing to acquire gold and silver supplies shall purchase gold and silver by foreign exchange within the approved quantity upon the examination and approval by the head bank of the People' s Bank of China following they make the applications to the Shenzhen People' s Bank for examination and check and the application are passed on to the head bank of the People' s Bank of China.

Article 14  Units using gold and silver must establish their registration systems of utilization, comply strictly with the earmarked utilization, and return any unused portion.

Chapter VI  Rewards and Penalties

Article 15  Units and individuals who make one of the following circumstances shall be commended or given material rewards by the Shenzhen People' s Bank:

1.those who have made success in impeaching or disclosing illegal production and procession of gold, silver and articles thereof;

2.those who have had outstanding performance in impeaching or disclosing illegal sale, allocation, keeping or transfer of gold, silver and articles thereof;

3.those who have made a contribution to the State in the protection of gold and silver for the State and in the struggle against violation of law and criminal acts such as smuggling and speculation;

4.those units handling cases who have sold gold and silver to the Shenzhen People' s Bank shall be indemnified the fee of handling case by the Shenzhen People' s Bank according to the provisions of No.106 [1988] Document of the People' s Bank of China.

Article 16  The acts in violation of the Regulations of the PRC on Control of Gold and Silver, the Implementation Rules on the Regulations of the PRC on Control of Gold and Silver, the Administration Measures for Import and Export and these Provisions, shall be subject to a penalty imposed by the Shenzhen People' s Bank, the administrative department for industry and commerce, the public security or the Customs in accordance with the severity of the case:

1. For such acts, without authorization, as illegally dealing in gold and silver, purchasing, buying and selling and processing gold, silver and articles thereof in violation of Article 3 and Article 8 of these Provisions, the Shenzhen People' s Bank or the administrative department for industry and commerce shall impose a fine less than 50% of the gold and silver value;

2. If gold and silver have been purchased, sold, exchanged or retained without authorization in violation of Article 10 of these Provisions, the Shenzhen People' s Bank shall resort to compulsory purchase or devalued purchase. In cases of a serious violation, a fine less than 50% of the gold and silver value shall be imposed in addition.

3.For the selling units which alter the approved business scope, straddle, peculate or embezzle gold and silver, and stock up goods from illegal channel in violation of Article 5 of these Provisions, and for the wholesale units which violate the wholesale provisions of gold and silver, the Shenzhen People' s Bank or the administrative department for industry and commerce shall resort to devalued purchase against gold and silver in violation, and in cases of a serious violation may impose a fine less than 20% of the gold and silver value in addition.

4.For such acts as not reporting the operating situation of gold and silver to the Shenzhen People' s Bank and not submitting the report form within continuous three months or making a falsification in violation of Article 7 of these Provisions, the Shenzhen People' s Bank shall impose a punishment of warning.

5.If forfeited gold and silver have been handled without authorization in violation of Article 7 of these Provisions, the Shenzhen People' s Bank shall resort to compulsory purchase and impose a fine less than 10% of the gold and silver value in addition.

6. For such acts as altering uses or transferring the raw materials of gold and silver without approval, the Shenzhen People' s Bank shall give a punishment of warning or recall gold and silver that have been allocated and sold, and for the the raw materials of gold and silver that have been transferred at a high price, a fine from 10% to 50% of such a high value shall be imposed or even the supplies of the raw materials of gold and silver shall be stopped

  7. For such acts as smuggling gold and silver in violation of the provisions of the State on import and export, the Customs shall impose a fine less than the gold and silver value according to Article 11 of the Rules for the Implementation Administrative Punishments under the Customs Law of the PRC, and shall levy the customs duty in addition; for such acts as dealing gold and silver in the illicit market, the Shenzhen People' s Bank, the administrative department for industry and commerce or the public security shall impose a fine equal to 100% of the gold and silver value.

8. For such acts as rejecting the supervision and inspection by the Shenzhen People' s Bank and other relevant departments, making a falsification in the process of processing gold and silver, or accepting the internal processing and selling tasks without approval, the Shenzhen People' s Bank has the power to order suspending business operation and accepting inspection, and to revoke business operation of processing gold and silver in cases of serious violation.

Article 17  If violations of these Provisions constitute crimes, the judicial organs shall investigate the criminal responsibilities according to law.

Chapter VII  Supplementary Provisions

Article 18  All fines imposed according to these Provisions shall be turned over to the Shenzhen Municipal Finance.

Article 19  The power to interpret  these Provisions is vested to the Central Branch Bank of Shenzhen Municipality of the People' s Bank of China.

Article 20  These Provisions shall come into force as of the date of promulgation.