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Original Title: Typical “Flexible” Legislation: Full Text of Hainan Free Trade Ports Law Unveiled
The National People’s Congress of China recently announced the full text of the “Hainan Free Trade Ports Law (Draft)” (hereinafter the “Draft”) and requested public opinions.
Legislation is of great importance to the construction of the Hainan Free Trade Port. The project conforms to high-level international trade and economic standards and focuses on trade and investment liberalization and facilitation. There are 8 chapters and 56 articles, especially the “list of prohibited and restricted import and export goods and articles” and “foreign businessmen”. Systems such as the “Negative Investment Access List” and other systems are fully liberalized and are free to enter and exit the list.
It should be noted that Article 10 of the draft stipulates that the Hainan Provincial People’s Assembly and its Standing Committee may, in accordance with this law, combine the specific conditions and actual needs of the construction of the Hainan Free Trade Port and follow the principles basic principles of the Constitution and the laws and administrative regulations. Formulate regulations on trade, investment and related management activities (hereinafter Hainan Free Trade Port Regulations) and implement them within the scope of the Hainan Free Trade Port.
The draft also clearly stipulates that Hainan Free Trade Port regulations can “make modifications” to existing laws or administrative regulations after being declared in the registry.
“This is typical flexible legislation. It is different from the pilot legislation represented by the Shenzhen Special Economic Zone several decades ago. It can be adapted to current laws and regulations on trade, investment and related management activities, thus ensuring Coordination of reform and the rule of law, “Zhu Jingwen, a professor at the Renmin University of China Law School, told reporters.
Balance between reform and the rule of law
The reform requires progress, but it must also follow the rule of law. How to balance?
The draft proposes that the Hainan Free Trade Port regulations be submitted to the Standing Committee of the National People’s Congress and the Council of State for the record; If there are changes to laws or administrative regulations, the changes must be explained.
The draft also proposes that the Hainan Free Trade Port regulations involving matters to be formulated by the National People’s Congress and its Standing Committee or administrative regulations by the State Council should be reported to the Standing Committee of the National People’s Congress. or to the Council of State for approval before they go into effect.
“In order to coordinate reforms and the rule of law, the Shenzhen Special Economic Zone allowed him to experiment with legislation at the beginning of its establishment, that is, in areas where there are gaps in national laws and regulations, local legislation will be introduced first and then promoted in the form of national legislation when it is mature. In Hainan Free Trade Port, the various aspects of our country’s legislation are relatively mature. At this time, flexible local legislation is needed, such as temporarily failing to implement relevant provisions in current laws and regulations, “Zhu Jingwen told the 21st Century Business Herald.
For this reason, a special article was added when the Legislative Law was revised in 2015: The National People’s Assembly and its Permanent Commission may, according to reform and development needs, decide to authorize specific matters in administrative management and other areas for temporarily adjust or temporarily stop the application within a specified time. Some provisions of the law.
However, the legislative law has already stipulated that the special economic zone has special legislative power after authorization. Why is it necessary to pass the special authorization of Hainan Free Trade Port Law?
Zhu Jingwen introduced that this is because the legislature of the special economic zone does not authorize the special economic zone to make flexible legislation. The legislative law only stipulates: “The popular assemblies and their permanent commissions of the provinces and cities where the special economic zones are located shall, in accordance with the authorization and decisions of the National People’s Assembly, formulate regulations and execute them within the scope of the special economic zones “.
Provide complete support deployment rules
In September 2020, Wang Chen, a member of the Political Bureau of the CPC Central Committee and Vice Chairman of the Standing Committee of the National People’s Congress, pointed out that in Hainan’s investigation on the formulation of the Hainan Free Trade Ports Law, it is It is necessary to strengthen communication and simultaneously formulate local regulations to become a free trade port. The build provides a comprehensive set of implementation rules to better ensure and provide a higher level of openness to the outside world.
At present, a series of institutional systems designed with the future Hainan Free Trade Ports Law as a high-level design have been initiated.
For example, key parks have the important task of piloting the free trade port policy first, and are the pilot areas for the construction of free trade ports. In 2019, the Standing Committee of the Hainan Provincial People’s Congress formulated the minimum approval regulations for key parks and took steps to replace project approval with planning, replace individual project evaluation with regional evaluation, implement access lists and inform the commitment management, etc., to minimize approval issues.
In 2019 and 2020, decisions will be made in batches and phases to approve the application of special minimalist approvals in 9 key parks, including Sanya Yazhou Bay Science and Technology City and Haikou Jiangdong New District. In 2020, a decision will be made on the management system of key parks, such as the Economic Development Zone of the Hainan Free Trade Port, Yangpu, and statutory institutional reforms will be implemented in some key parks to give key parks greater autonomy.
Separate regulations are also being issued for the key parks of the Free Port, one after another. The Boao Lecheng International Medical Tourism Pilot Zone Regulations will be promulgated and implemented first in 2020. On January 1, 2021, the Sanya Yazhou Bay Science and Technology City Regulations and the Sanya Yazhou Bay Regulations were also implemented. Haikou Jiangdong New District.
Another example, regarding the opening of the commercial and service industries, in 2018, the Standing Committee of the Hainan Provincial People’s Assembly formulated the regulation on the management of the commercial registry and took the initiative in the implementation of five innovative systems in the country. The commercial registry achieved the “universal operation of the island” and the “universal operation of the Internet.” , Explore the direct registration system for foreign companies.
In 2019, Hainan formulated Interim Regulations for the Registration and Administration of Foreign Companies Involved in Service Business Operations, allowing foreign companies to directly engage in service business operations in Hainan.
Provide legal protection for integrated innovation
On June 1, 2020, the Central Committee of the Communist Party of China and the State Council issued the “General Plan for the Construction of Hainan Free Trade Port”, which specifically designed the freedom of trade and convenience, freedom and investment convenience and tax systems. The draft will give legal effect to the relevant key systems.
Chi Fulin, president of the China Reform and Development Research Institute (Hainan), believes that the Hainan Free Trade Ports Law aims to achieve things that other regions of the country do not have the conditions to do through authorization. legal “package”, and is the Hainan Free Trade Port system. Integrated innovation provides legal protection.
Regarding freedom of trade and facilitation, the draft proposes that the state implement inventory management of goods and items entering and leaving the Hainan Free Trade Port from other countries and regions outside the People’s Republic of China. Goods and items not listed may be freely imported and exported, and will be supervised by Customs in accordance with the law.
In terms of investment freedom and convenience, the draft proposes that the Hainan Free Trade Port will fully liberalize access to investment, except in areas involving national security, social stability, ecological protection red lines, and important public interests, and other areas where countries implement access management. For foreign investment, national treatment prior to access will be implemented, plus a negative list management system.
In terms of the tax system, the draft proposes that the Hainan Free Trade Port will gradually promote simplification according to the principles of a simple and scientific tax structure, fully optimized elements of the tax system, significantly reduced tax burden, clear attribution of income and basically balanced tax revenues and expenditures, combined with the direction of national tax reform. Tax system and establish a tax system that meets the needs of the Hainan Free Trade Port.
Since July 1, 2020, Hainan’s duty-free shopping quota has been increased to 100,000 yuan per person per year and unlimited hours, and the number of duty-free products has been expanded to 45. In that month, Hainan visitors made 384,000 purchases and spent 2.49 million yuan, an increase of 54.1% and 2.3 times, respectively, over the same period in 2019.
The “General Plan for the Construction of the Hainan Free Trade Port” proposes to gradually establish a tax system compatible with a high-level free trade port in accordance with the principles of zero tariffs, low tax rates, simplified taxes, a strong state of law and phases.
A questionnaire conducted by the Haikou Center branch of the People’s Bank of China to 721 companies in Hainan Province shows that, with this tax policy, 30.59% of companies believe that investment can be promoted effectively, 28.71% of companies believe that it can promote trade and 15.03% of companies believe that it is beneficial. Promote Hainan duty-free shopping and consumption.
In addition to directly reducing tax burdens, preferential tax policies are also believed to improve the cooperative trust relationship between tax companies and increase satisfaction of the tax service. The above survey shows that 24.01% and 58.38% of companies believe that preferential free trade port tax policies will have a very obvious and evident effect on improving the tax business environment.
(Author: Wang Feng Editor: Lin Hong)
