(Adopted at the 43rd Executive Meeting of the State Council on July 26, 2001, promulgated by Decree No.314 of the State Council of the People's Republic of China on August 3, 2001, and effective as of the date of promulgation)

Chapter I General Provisions

Article 1These Regulations are formulated for the purposes of strengthening supervision and administration of cotton quality, ensuring the order of cotton market and protecting the legitimate rights and interests of all parties in the cotton trade.

Article 2Cotton business operators (including cotton purchasers, processors, sellers and warehouse operators, the same below) who engage in cotton business activities and cotton quality supervision organizations which exercise the cotton quality supervision and administration must comply with these Regulations.

Article 3Cotton business operators who engage in such cotton business activities as purchase, processing, sale or storage shall obtain approval for their respective business qualifications according to the relevant provisions of the State.

Cotton business operators shall establish and perfect their internal cotton quality management system and strictly implement the post-based quality specifications, quality responsibilities and relevant assessment methods.

Article 4The quality supervision, inspection and quarantine department of the State Council shall take full charge of the cotton quality supervision work throughout the country, and its subordinate unit, the China fiber inspection institution, shall be responsible to organize the implementation.

Quality supervision departments of people's governments of provinces, autonomous regions and municipalities directly under the Central Government shall be responsible for the cotton quality supervision work within their respective administrative areas. Where specialized fiber inspection institutions have been established, they shall exercise the cotton quality supervision within the areas under their jurisdiction. Where specialized fiber inspection institutions have not been established, the quality supervision departments shall exercise the supervision of cotton quality within the areas under their jurisdiction (when the specialized fiber inspection institution and the local quality supervision department are used concurrently, they shall be collectively referred to as the cotton quality supervision organization).

Article 5Local people's governments at various levels and their staff members may not shelter or connive at illegal cotton quality acts within their respective areas or obstruct or interfere with cotton quality supervision organizations which, according to law, investigate into and deal with the acts of infringing the provisions of these Regulations in cotton purchase, processing, sale and storage.

Article 6All units and individuals shall be entitled to report illegal cotton quality acts.

Chapter II Cotton Quality Obligations

Article 7Cotton business operators who engage in cotton purchase shall establish and perfect their respective cotton quality inspection and acceptance system and have the quality grading standards in kind and necessary equipment and tools for the cotton quality inspection.

Cotton business operators who purchase cotton shall identify the class, grade and quantity of the cotton they purchased according to national standards and technical specifications after they remove heterogeneous fibers and other harmful substances therefrom. If the moisture of the cotton they purchased exceeds the level specified by the State, they shall make such technical treatments as sunning and stoving in order to assure the cotton quality.

Cotton business operators shall stockpile the purchased cotton by classes and grades.

Article 8Cotton business operators who process cotton must meet the following requirements:

(1) to clean up and remove heterogeneous fibers and other harmful substances from the cotton to be processed according to national standards;

(2) to process cotton by grades according to national standards and to bale and mark the cotton they processed, and to guarantee that the marking shall be consistent with the cotton quality; and

(3) to stockpile the processed cotton by bales, lots and batches according to national standards.

Cotton business operators who process cotton may not use lap rollers, cotton gins, baling machinery and other cotton processing equipment that are expressly prohibited by the State.

Article 9Cotton business operators who sell cotton must meet the following requirements:

(1) to attach the quality certificate to every batch of the cotton to be sold;

(2) to guarantee that the packing and marking for the cotton to be sold shall conform to national standards;

(3) to guarantee that the class, grade and weight of the cotton to be sold shall be consistent with the quality certificate and mark; and

(4) to attach the testing certificate to the cotton to be sold which has been tested and certified, and to stick the testing sign on the national reserve cotton.

Article 10Cotton business operators who store the national reserve cotton shall establish and perfect the incoming and outgoing cotton quality inspection and acceptance system, and guarantee that the class, grade and quantity of the incoming and outgoing national reserve cotton shall be consistent with the testing certificate and sign.

Cotton business operators who store the national reserve cotton shall maintain and keep the storage facilities according to the provisions of the State, and guarantee that the national reserve cotton quality may not be varied due to artificial factors.

Cotton business operators may not take the cotton whose quality has not been tested and certified into or out of warehouses as the national reserve cotton.

Governmental organs and their staff members may not force cotton business operators to take the cotton whose quality has not been tested and certified into or out of warehouses as the national reserve cotton.

Article 11Cotton business operators who purchase, process, sell or store cotton may not forge, alter or counterfeit the cotton quality certificate or mark or the testing certificate or sign.

Article 12Cotton business operators shall, in their cotton business activities such as purchase, processing, sale and storage, be strictly prohibited to make any adulteration, to take the poor as the good or to mix the spurious with the genuine.

Chapter III Cotton Quality Supervision

Article 13The State shall implement the cotton quality testing and certification system.

Cotton quality testing and certification mentioned in the proceeding paragraph means the activities of specialized fiber inspection institutions to inspect the cotton quality and quantity and to issue the testing certificate according to national standards and technical specifications.

Article 14After the cotton business operator sells cotton to the cotton-using enterprise, either of them may, before the closing of their cotton transaction, request the specialized fiber inspection institution to test and certify the cotton they transacted. After such testing and certification, the specialized fiber inspection institution shall issue the testing certificate of cotton quality that shall serve as the cotton quality and quantity criteria.

Article 15National reserve cotton must, when entering into or leaving from warehouses, be subject to the cotton quality testing and certification. After testing and certification, the specialized fiber inspection institution shall issue the testing certificate of cotton quality that shall serve as the criteria for allocating the storage cost for the national reserve cotton by the fiscal department of the State.

After the national reserve cotton is tested and certified, the specialized fiber inspection institution shall stick the testing sign specified by the China fiber inspection institution thereon.

Article 16Specialized fiber inspection institutions must, in testing and certifying the cotton quality, implement national standards as well as their testing methods, technical specifications and time requirements, and guarantee objectiveness, fairness and timeliness. The testing certificate of cotton quality issued by the specialized fiber inspection institution shall, truly and objectively, indicate the cotton quality and quantity.

The testing certificate of cotton quality shall contain the followings: product name, applicant (requestor) unit, lot and batch numbers, quantity of bales, testing criteria, testing result, testing unit, tester and others.

The quality supervision, inspection and quarantine department of the State Council shall provide the pattern of the testing certificate of cotton quality.

Article 17Specialized fiber inspection institutions may not collect any fees for testing and certifying cotton quality. The necessary expenses therefor shall be itemized and paid according to the relevant provisions of the State.

Article 18The quality supervision, inspection and quarantine department of the State Council shall organize the supervision and sampling inspection over the cotton whose quality is tested and certified throughout the country. Quality supervision departments of people's governments of provinces, autonomous regions and municipalities directly under the Central Government shall organize the supervision and sampling inspection over the cotton whose quality is tested and certified within their respective administrative areas.

Such supervision and sampling inspection shall include the followings: whether or not the testing certificate and sign of cotton quality are consistent with the real object; and whether or not the cotton quality testing and certification by the specialized fiber inspection institution are objective, fair and timely.

Samples needed in such supervision and sampling inspection shall be taken randomly from the samples left after the cotton quality testing and certification, and the inspection conclusion shall be made within 10 days from the date of taking samples.

Article 19Cotton quality supervision organizations may, at the cotton purchasing, processing, selling or storing site, exercise the supervision and inspection over the cotton other than those whose quality is tested and certified.

Such supervision and inspection shall include the followings: whether or not the cotton quality, quantity and packing conform to national standards; whether or not the cotton marking and quality certificate are consistent with the real object.

Article 20Cotton quality supervision organizations may perform the following functions and powers in the course of exercising the supervision and inspection over the cotton quality when they, upon evidences and reports, investigate into and deal with the acts suspected of infringing the provisions of these Regulations:

(1) to perform the on-spot inspection over the site of the cotton business activity suspected of infringing the provisions of these Regulations;

(2) to investigate and inquire the persons concerned of the cotton business operation units for information in connection with the cotton business activity suspected of infringing the provisions of these Regulations;

(3) to consult and copy the contracts, documents, books and other materials in connection with the cotton business operation; and

(4) to seal up or seize the cotton suspected of making adulteration, taking the poor as the good, mixing the spurious with the genuine or having other serious quality problems, and the equipment and tools used for producing the above-mentioned cotton.

Article 21According to the need of supervision and inspection, cotton quality supervision organizations may inspect the cotton quality. The samples needed in such inspection shall be taken randomly from the cotton purchased, processed, sold or reserved according to relevant national standards, and the inspection conclusion shall be made within three days from the date of taking samples.

No fees may be collected in the inspection performed according to the provisions of the preceding paragraph. The inspection expenses shall be itemized and paid according to the relevant provisions of the State.

Article 22The cotton business operator or cotton-using enterprise may, if disagreeing with the inspection conclusion in the cotton quality testing and certification or the cotton quality supervision and inspection performed according to these Regulations, apply for a re-inspection to the cotton quality supervision organization of the province, autonomous region or municipality directly under the Central Government or the China fiber inspection institution within five days from the date of receiving the inspection conclusion. The cotton quality supervision organization of the province, autonomous region or municipality directly under the Central Government or the China fiber inspection institution shall make the re-inspection conclusion and notify the applicant within seven days from the date of receiving the application. The cotton business operator or cotton-using enterprise may, if disagreeing with the re-inspection conclusion, initiate the action before the people's court according to law.

Article 23Other fiber inspection institutions acknowledged by the quality supervision, inspection and quarantine department of the State Council may engage in cotton quality inspection services upon authorization. Concrete measures therefor are to be provided by the quality supervision, inspection and quarantine department of the State Council jointly with relevant departments of the State Council.

Chapter IV Penalty Provisions

Article 24Where the cotton business operator who purchases cotton, in violation of the provisions of Paragraph 2 or 3 of Article 7 of these Regulations, fails to identify the class, grade or quantity of the purchased cotton after removing heterogeneous fibers and other harmful substances according to national standards and technical specifications, or fails to make technical treatments for the purchased cotton whose moisture exceeds the level specified by the State, or fails to stockpile the purchased cotton by classes and grades, the cotton quality supervision organization shall order him to make corrections and may impose a fine of less than 30,000 yuan thereon; if the circumstances are serious, the original qualification-approving authority shall revoke his business qualification for cotton purchase.

Article 25Where the cotton business operator who processes cotton, in violation of the provisions of Paragraph 1 of Article 8 of these Regulations, fails to clean up and remove heterogeneous fibers and other harmful substances according to national standards, or fails to process, bale or mark the cotton by grades according to national standards, or fails to stockpile cotton by bales, batches and lots according to national standards, the cotton quality supervision organization shall order him to make corrections and may, depending on the seriousness of the circumstances, impose a fine of less than 100,000 yuan thereon; if the circumstances are serious, the original qualification-approving authority shall revoke his business qualification for cotton processing.

Where the cotton business operator who processes cotton, in violation of the provisions of Paragraph 2 of Article 8 of these Regulations, uses the cotton processing equipment that is prohibited by the State, the cotton quality supervision organization shall confiscate and supervise to destroy the cotton processing equipment prohibited and concurrently, impose a fine of more than two times but less than ten times the actual value of that equipment; if the circumstances are serious, the original qualification-approving authority shall revoke his business qualification for cotton processing.

Article 26Where the cotton business operator who sells cotton, in violation of the provisions of Article 9 of these Regulations, fails to attach the quality certificate to the cotton to be sold, or fails to bale or mark the cotton according to the national standard, or fails to guarantee that the quality certificate or mark is consistent with the real object, or fails to attach the testing certificate to the cotton tested and certified, or fails to stick the testing sign on the national reserve cotton, the cotton quality supervision organization shall order him to make corrections and may, depending on the seriousness of the circumstances, impose a fine of less than 100,000 yuan thereon.

Article 27Where the cotton business operator who stores the national reserve cotton, in violation of the provisions of Paragraph 1, 2 or 3 of Article 10 of these Regulations, fails to establish the incoming and outgoing cotton quality inspection and acceptance system, or fails to guarantee that the testing certificate or sign is consistent with the real object of the incoming or outgoing national reserve cotton, or fails to maintain and keep the storage facilities according to the provisions of the State, thus causing a quality variance of the national reserve cotton, or takes the cotton not being tested and certified into or out of warehouse as the national reserve cotton, the cotton quality supervision organization shall order him to make corrections and may impose a fine of less than 100,000 yuan thereon; if a serious loss is caused, disciplinary sanctions above demotion shall be given to the principal person responsible and other persons directly responsible therefor; if a crime is constituted, criminal responsibility shall be investigated according to law.

Article 28Where the cotton business operator hides, shifts or destroys the goods or articles sealed up or seized by the cotton quality supervision organization, the cotton quality supervision organization shall impose a fine of more than two times but less than five times the value of the goods or articles so hidden, shifted or destroyed; if a crime is constituted, criminal responsibility shall be investigated according to law.

Article 29Where the cotton business operator, in violation of the provisions of Article 11 of these Regulations, forges, alters or counterfeits the cotton quality certificate or mark, or the testing certificate or sign, the cotton quality supervision organization shall impose a fine of more than 50,000 but less than 100,000 yuan; if the circumstances are serious, the case shall be transferred to the administrative department for industry and commerce for the revocation of his business licence; if a crime is constituted, criminal responsibility shall be investigated according to law.

Article 30The cotton business operator who, in violation of the provisions of Article 12 of these Regulations, makes an adulteration, takes the poor as the good or mixes the spurious as the genuine, thus constituting a crime, shall be investigated for criminal responsibility according to law; if no crime is constituted, the cotton quality supervision organization shall confiscate the above-mentioned cotton and ill-gotten revenues therefrom, impose a fine of more than two time but less than five times the value of the illegal goods; and transfer the case to the administrative department for industry and commerce for the revocation of his business license according to law.

Article 31Where the specialized fiber inspection institution, in violation of the provisions of Article 16 of these Regulations, fails to implement the national standard, testing method, technical specification or time requirement, or fails to issue the authentic and objective testing certificate of cotton quality, the quality supervision, inspection and quarantine department of the State Council or the local quality supervision department shall order it to make corrections; and give administrative sanctions of demotion or dismissal from posts to the principal person responsible and other persons directly responsible according to law.

Article 32Where the specialized fiber inspection institution, in violation of the provisions of Article 17 of these Regulations, collects a fee for testing and certification, the quality supervision, inspection and quarantine department of the State Council or the local quality supervision department shall order it to return back the amount collected; and give administrative sanctions of major demerit or demotion to the principal person responsible and other persons directly responsible according to the law.

Article 33Where the specialized fiber inspection institution fails to perform the testing and certification but falsifies and issues the testing certificate or sticks the testing sign, thus practicing fraud, the quality supervision, inspection and quarantine department of the State Council or the local quality supervision department shall give administrative sanctions of demotion or dismissal from posts to the principal person responsible and other persons directly responsible according to law; if a crime is constituted, criminal responsibility shall be investigated according to law.

Article 34Where the governmental organ and its staff members, in violation of the provisions of Paragraph 4 of Article 10 of these Regulations, force to take the cotton not tested and certified into or out of warehouse as the national reserve cotton, administrative sanctions of demotion and dismissal from posts shall be given to its principal person responsible and other persons directly responsible according to law.

Article 35Where the governmental organ and its staff members shelter or connive at the illegal cotton quality act within its area, or obstruct or interfere with the cotton quality supervision organization which, according to law, investigates and deals with the act of infringing the provisions of these Regulations, administrative sanctions of demotion or dismissal from posts shall be given thereto according to law; if a crime is constituted, criminal responsibility shall be investigated according to law.

Article 36The value of the cotton specified in Article 28 or 30 of these Regulations shall be calculated according to the quotation or document of settlement of the cotton illegally purchased, processed or sold; if no quotation or document of settlement is available, it shall be calculated according to the market price of the same kind of cotton.

Article 37In respect of administrative penalties of fines imposed according to the provisions of these Regulations, the decision-making and collection of fines shall be separated in accordance with the provisions of the relevant laws and administrative regulations, and all fines collected must be turned over to the State Treasury.

Chapter V Supplementary Provisions

Article 38Quality supervision and administration of wool, velvet, and natural silk and hemp-type fibers shall be governed by applying mutatis mutandis these Regulations.

Article 39These Regulations shall be effective as of the date of promulgation.