· Document Number：Order of the State Council and the Central Military Commission of the People's Republic of China

· Area of Law： Military

· Level of Authority： Military Regulations

· Date issued：03-06-2008

· Effective Date：04-01-2008

· Status： Effective

· Issuing Authority： State Council Central Military Commission

Order of the State Council of the People's Republic of China and the Central Military Commission of the People's Republic of China
(No. 521)
The Regulation on Licensing Administration of Scientific Research and Production of Arms and Equipment is hereby promulgated and shall come into force as of April 1, 2008.
Premier of the State Council Wen Jiabao
Chairman of the Central Military Commission Hu Jintao
March 6, 2008
Regulation on Licensing Administration of Scientific Research and Production of Arms and Equipment
Chapter I General Provisions
Article 1 This Regulation is formulated in order to maintain the order of scientific research and production of arms and equipment, intensify the administration of scientific research, production, safety and confidentiality of arms and equipment, ensure the compliance and stability of quality of arms and equipment and satisfy the needs of national defense.
Article 2 The activities of scientific research and production of arms and equipment in the state's licensing list of scientific research and production of arms and equipment (hereinafter refers to the licensing list) shall be subject to licensing administration, however, special scientific research of arms and equipment shall be excluded.
The licensing list shall be formulated by the administrative department of science, technology and industry for national defense under the State Council jointly with the General Armament Department of the People's Liberation Army of China (hereinafter referred to as the GAD) and the administrative department of military electronic industry and shall be adjusted in a timely manner. The opinions of the relevant departments of the State Council and opinions of the army shall be solicited in formulating and adjusting the licensing list.
The licensing of scientific research and production of arms and equipment shall be subject to classified administration within the scope as determined in the licensing list.
Article 3 No entity may, without license for scientific research and production of arms and equipment, engage in scientific research and production of arms and equipment listed in the licensing list, however, those approved by the State Council and Central Military Commission are excluded.
Article 4 The licensing administration of scientific research and production of arms and equipment shall observe the principle of making overall plans and taking all factors into consideration, making reasonable arrangements, encouraging competition and being safe and confidential.
Article 5 The administrative department of science, technology and industry for national defense under the State Council shall, under this Regulation, supervise and administer the licensing for scientific research and production of arms and equipment throughout the country.
The GAD shall help the administrative department of science, technology and industry for national defense under the State Council to supervise and administer the licensing for scientific research and production of arms and equipment throughout the country.
The administrative department of science, technology and industry for national defense under the people's government of a province, autonomous region or municipality directly under the Central Government shall, under this Regulation, supervise and administer the licensing for scientific research and production of arms and equipment within its administrative area.
Article 6 An entity that has obtained a license for scientific research and production of arms and equipment shall carry out scientific research and production of arms and equipment within the licensed scope and shall provide qualified scientific achievements, arms and equipment under the requirements of the state or under the contractual stipulations.
Chapter II Licensing Procedures
Article 7 To apply for a license for scientific research and production of arms and equipment, an entity shall satisfy the following conditions:
(1)Having a legal person status;
(2)Having professional technicians who can meet the needs of scientific research and production of arms and equipment;
(3)Having scientific research and production capabilities and inspection, testing and experiment means that can meet the needs of scientific research and production of arms and equipment;
(4)Having technologies and techniques that can meet the needs of scientific research and production of arms and equipment;
(5)Having a qualified quality management system upon evaluation;
(6)Having safe production capabilities that can meet the scientific research and production of arms and equipment; and
(7)Having the confidentiality qualifications that match the scientific research and production of arms and equipment.
Article 8 To apply for a license for scientific research and production of arms and equipment, an entity shall file an application with the local administrative department of science, technology and industry for national defense under the people's government of a province, autonomous region or municipality directly under the Central Government.
Where the licensing list requires an applicant to file the application with the administrative department of science, technology and industry for national defense under the State Council for a license for scientific research and production of arms and equipment, the applicant shall directly file the application with the administrative department of science, technology and industry for national defense under the State Council and shall simultaneously submit the application materials to the GAD.
Article 9 After the administrative department of science, technology and industry for national defense under the State Council or the administrative department of science, technology and industry for national defense under the people's government of a province, autonomous region or municipality directly under the Central Government receives an application, it shall handle it in accordance with the Administrative License Law of the People's Republic of China.
Article 10 The administrative department of science, technology and industry for national defense under the people's government of a province, autonomous region or municipality directly under the Central Government shall consult the opinions of the military representative institution dispatched by the People's Liberation Army (hereinafter referred to as the MRI) in reviewing the applicant, shall finish the review within 30 days from the day when it receives the application and shall submit the review opinions and all the application materials to the administrative department of science, technology and industry for national defense under the State Council and simultaneously to the GAD.
Article 11 After the administrative department of science, technology and industry for national defense under the State Council receives an application, it shall review it and shall make a decision within 60 days from the day when it receives the application or within 30 days from the day when it receives the review opinions and all the application materials submitted by the administrative department of science, technology and industry for national defense under the people's government of a province, autonomous region or municipality directly under the Central Government. If it makes a decision of approval, it shall, within 10 days as of the date of decision, issue to the applicant a license for scientific research and production of arms and equipment. If it makes a decision of disapproval, it shall give the applicant a written notice and make an explanation.
Before the administrative department of science, technology and industry for national defense under the State Council makes a decision, it shall consult in writing the opinions of the GAD, the GAD shall make a reply within 10 days.
Article 12 The administrative department of science, technology and industry for national defense under the State Council may, according to the state's requirements for distribution of capabilities of scientific research and production of arms and equipment and the actual needs of scientific research and production of arms and equipment, restrict the number of licenses for the scientific research and production of arms and equipment with special requirements after it consults the opinions of the GAD.
Article 13 A license for scientific research and production of arms and equipment shall specify the entity's name, legal representative, licensing specialty or product name, certificate sequence number, certificate issuance date, valid period and other relevant contents.
The format of licenses for scientific research and production of arms and equipment shall be provided by the administrative department of science, technology and industry for national defense under the State Council.
Article 14 An entity that has obtained a license for scientific research and production of arms and equipment shall properly preserve the aforesaid license, strictly keep it confidential and shall not divulge the relevant contents indicated in the aforesaid license.
Article 15 An entity that has obtained a license for scientific research and production of arms and equipment shall indicate the sequence number of its license for scientific research and production of arms and equipment in its arms and equipment scientific research and production contracts and in its product ex-factory certificates.
Article 16 No entity or individual may forge or alter the license for scientific research and production of arms and equipment. No entity that has obtained a license for scientific research and production of arms and equipment may rent out, lend or transfer its license by other means.
Article 17 The administrative department of science, technology and industry for national defense under the State Council and the administrative department of science, technology and industry for national defense under the people's government of each province, autonomous region or municipality directly under the Central Government shall timely put the materials relevant to licensing of scientific research and production of arms and equipment, which they have handled, into archives, properly preserve them and strictly keep them confidential.
Article 18 An entity, which has obtained a license for scientific research and production of arms and equipment and is shouldering tasks of scientific research and production of arms and equipment, shall accept the supervision of the military representative institution.
Chapter III Confidentiality Administration
Article 19 An entity, which has obtained a license for scientific research and production of arms and equipment, shall abide by the confidentiality laws, regulations and relevant provisions of the state, shall establish a sound confidentiality administration system, and shall, according to the principle of active prevention, underlined emphases, strict criterions and definite responsibilities, regularly or irregularly inspect the implementation of confidentiality administration system so as to timely study and solve the problems arising in the confidentiality work.
Article 20 An entity, which has obtained a license for scientific research and production of arms and equipment, shall establish a confidentiality administration leader responsibility system. Its major person-in-charge shall intensify the organization and leadership of the confidentiality work of this entity so as to earnestly perform the confidentiality duties and obligations.
Article 21 An entity, which has obtained a license for scientific research and production of arms and equipment, shall establish a confidentiality work institution and equip it with confidentiality administrators.
A confidentiality administrator shall be familiar with the confidentiality laws, regulations and relevant provisions of the state, have the confidentiality administration capabilities, have grasped the basic knowledge of confidentiality technologies and have passed necessary training and examination.
Article 22 An entity, which has obtained a license for scientific research and production of arms and equipment, shall sign a position-related confidentiality responsibility agreement with the persons, who undertake the tasks of scientific research and production of arms and equipment and who have the access to state secrets, so as to clarify the position-related confidentiality responsibilities and offer them frequent confidentiality education and training.
A person who has the access to state secrets shall acquaint himself with the confidentiality laws, regulations and relevant provisions and shall perform the confidentiality obligations in strict accordance with the position-related confidentiality responsibility agreement.
Article 23 An entity, which has obtained a license for scientific research and production of arms and equipment, shall, under the confidentiality laws, regulations and relevant provisions of the state, formulate, receive, distribute, pass, use, copy, preserve and destroy carriers of state secrets and strictly control the range of persons who have the access to the carriers of state secrets.
Article 24 An entity, which has obtained a license for scientific research and production of arms and equipment, shall take measures to install safe and reliable confidentiality facilities in the key departments and locations involving state secrets.
Article 25 An entity, which has obtained a license for scientific research and production of arms and equipment, shall, under the confidentiality laws, regulations and relevant provisions of the state, take safety and confidentiality measures for computers and information systems involving state secrets and shall not use any equipment, which can not ensure the safety and confidentiality of state secrets, to process, transmit or store the secret information of the state.
Article 26 Where an entity, which has obtained a license for scientific research and production of arms and equipment, holds an important conference or carries out an activity involving state secrets, it shall set forth a special confidentiality work plan and arrange special persons to take charge of the confidentially work. The conference involving state secrets shall be held at a place with safety and confidentiality guarantee measures and the range of attendees shall be strictly controlled.
Article 27 An entity, which has obtained a license for scientific research and production of arms and equipment, shall keep the state secrets confidential during overseas exchange, cooperation and negotiation. It shall, under the prescribed procedures, be subject to an approval before it provides relevant documents, materials and physical samples to the overseas parties.
Article 28 An entity, which has obtained a license for scientific research and production of arms and equipment, shall, under the confidentiality laws, regulations and relevant provisions of the state, establish a confidential archives system, record the information about administration of persons who have access to state secrets, punishments to accidents of divulgence of state secrets, timely put the said information into archives and effectively administrate the archives involving state secrets.
Chapter IV Legal Liabilities
Article 29 Where an entity, which fails to obtain a license for scientific research and production of arms and equipment under this Regulation, illegally carries out scientific research and production of arms and equipment in the scope of licensing list, it shall be ordered to stop the violation, have its illegally manufactured products confiscated, and be fined not less than 1 time but not more than three times the value of the products. If it has any illegal gains, its illegal gains shall be confiscated.
Article 30 Where an entity, which has obtained a license for scientific research and production of arms and equipment, rent out, lend or transfer its license by other means, it shall be fined 100, 000 yuan. If the circumstance is serious, its license shall be revoked. If it illegally accepts and uses the license for scientific research and production of arms and equipment, which is provided by others, it shall be ordered to stop the production of arms and equipment, have its illegal products confiscated and be fined not less than one time but not more than three times the value of the illegal products. If there are any illegal gains, the illegal gains shall be confiscated.
Article 31 Any entity that forges or alters a license for scientific research and production of arms and equipment shall be ordered to stop the violation and be fined 100, 000 yuan. If there are any illegal gains, the illegal gains shall be confiscated.
Article 32 Any entity, which has obtained a license for scientific research and production of arms and equipment by fraudulence or bribery or other unjustifiable means, shall be fined not less than 50, 000 yuan but not more than 200, 000 yuan and shall be punished in accordance withthe Administrative License Law of the People's Republic of China.
Article 33 Where the administrative department of science, technology and industry for national defense under the State Council or the administrative department of science, technology and industry for national defense under the people's government of any province, autonomous region or municipality directly under the Central Government or any of its functionaries violates this Regulation, if it (he) is under any of the following circumstances, it (he) shall be ordered to make a correction by the supervision organ at the same level; if the circumstance is serious, the direct person-in-charge and other directly liable persons shall be given a sanction:
(1) Failing to accept any application that satisfies the conditions as prescribed in this Regulation; or
(2) Failing to make an explanation about the disapproval of license.
Article 34 Where the administrative department of science, technology and industry for national defense under the State Council or the administrative department of science, technology and industry for national defense under the people's government of any province, autonomous region or municipality directly under the Central Government is under any of the circumstances, it shall be ordered to make a correction by the supervision organ at the same level and the direct person-in-charge and other directly liable persons shall be given a sanction:
(1)Approving the license to any applicant who does not meet the requirements as prescribed in this Regulation or making a license approval decision by exceeding its statutory power;
(2)Disapproving the license to any applicant who meets the requirements as prescribed in this Regulation or failing to make a license approval decision to such an applicant within the statutory time limit; or
(3) Finding any illegal activities of scientific research and production of arms and equipment in the licensing list without license for scientific research and production of arms and equipment, but failing to timely investigate and punish such activities.
Article 35 Where an entity, which has obtained a license for scientific research and production of arms and equipment, violates Article 19, 20, 21, 22 or 28, it shall be ordered to make a correction. If it fails to make a correction within the time limit, it shall be fined not less than 50, 000 yuan but not more than 200, 000 yuan. The directly person-in-charge and other directly liable persons shall be given a sanction.
Article 36 Where an entity, which has obtained a license for scientific research and production of arms and equipment, violates Article 23, 24, 25, 26 or 27, it shall be ordered to make a correction and be fined not less than 50, 000 yuan but not more than 200, 000 yuan. The directly person-in-charge and other directly liable persons shall be given a sanction. If the circumstance is serious, it shall be ordered to stop business for rectification or even to have its license for scientific research and production of arms and equipment revoked.
Article 37 Where an entity, which has obtained a license for scientific research and production of arms and equipment, violates this Regulation, and its license for scientific research and production of arms and equipment is revoked, it shall not apply for a new one within 3 years.
Article 38 The administrative punishments as prescribed in this Regulation shall be imposed by the administrative department of science, technology and industry for national defense under the State Council.
Article 39 For anyone who violates this Regulation, and any crime is constituted, he shall be subject to criminal liabilities.
Chapter V Supplementary Provisions
Article 40 No fee may be charged for licensing of scientific research and production of arms and equipment under this Regulation.
Article 41 An entity, which has already been engaging in scientific research and production of arms and equipment before this Regulation comes into effect, shall, from the day when this Regulation comes into effect, apply for a license for scientific research and production of arms and equipment under this Regulation within the time period as prescribed by the administrative department of science, technology and industry for national defense under the State Council.
Article 42 The administration of licensing of scientific research and production in the military electronic industry shall, by analogy to this Regulation, be exercised by the relevant administrative department.
Article 43 This Regulation shall come into force as of April 1, 2008.