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Information That Matters

To inform is to care, and we care about our clients’ business. That is why we make sure to keep them abreast of the latest regulatory updates from China and Hong Kong that may affect their companies.

Through our Flash Newsletter we provide monthly the most relevant news around  Finance and Accounting, Tax, Customs, Corporate/Legal,  HR, Treasury/Foreign Exchange.

Our Special Topic Newsletter focus instead on a particular news, providing deeper insights on hot topics relevant for your business.

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New Deadlines for China Work Permits Renewals

New Deadlines for China Work Permits Renewals

According to the Announcement of the State Administration of Foreign Experts Affairs (SAFEA), all foreigners are required to submit their application for Chinese work permit renewal 30 days ahead of the expiration of their permits. Those who fail to comply will be denied renewal and must start a new application for a work permit.

The Announcement was issued by the SAFEA, not the regional Foreign Experts Bureau, so it applies to any city in China. Under the new regulation, every applicant should clearly know how many days one should prepare for work permit renewal before the current permit expires. Persons applying only a few days before their expiration date for a work permit renewal will absolutely be unable to work.

Applicants should leave sufficient time for the work permit renewal (2-3 months are recommended). Also, preparing documents in advance is recommended. For work permit renewals, proof of non-criminal record and supportive documentation for working experience in an overseas country are not needed; others requirement are the same as for first-time applications.

According to the Announcement of the State Administration of Foreign Experts Affairs (SAFEA), all foreigners are required to submit their application for Chinese work permit renewal...

China Lifts Foreign Investment Bans in Chinese FTZ

China Lifts Foreign Investment Bans in Chinese FTZ

According to the recently published regulation, certain restrictions have been lifted in the free trade zones in China and, among others, there are major developments in the entertainment sector.

We list some below for your reference (from the Appendix  - Catalogue of Certain Provisions of the Relevant Administrative Regulations, Documents of the State Council and Departmental Rules Approved by the State Council that the State Council Decides to Temporarily Adjust within Pilot Free Trade Zones):

2. Regulations on the Administration of Printing Industry

Allow the establishment of enterprises with foreign investment engaged in the operations of printing other printed matters with the relevant administrative measures to be formulated by the competent department of press and publication under the State Council. 

5. Regulations on the Administration of Entertainment Places

Suspend the implementation of the related contents and allow the establishment of solely foreign-funded entertainment places which may provide services in pilot free trade zones, with the relevant administrative measures to be formulated by the competent culture department under the State Council. 

7. Regulations on Travel Agencies

Suspend the implementation of the related contents and allow qualified Sino-foreign equity travel agencies registered within pilot free trade zones to engage in providing outbound tourism (other than to Taiwan) business services to Chinese mainland residents, with the relevant administrative measures to be formulated by the competent travel department under the State Council.  

12. Catalogue for the Guidance of Foreign Investment Industries (Revised in 2017) 

Suspend the implementation of the related contents and allow foreign investors to engage in the design, manufacturing and maintenance of general aircraft at the level of 6 ton with no more than nine seats by means of wholly foreign investment; cancel the restriction on proportion of investment in the design and manufacturing of civil helicopters at the level of 3 ton or more 

15. Administrative Regulations of the People's Republic of China on Foreign-Invested Banks 

Suspend the implementation of the related contents and cancel the restriction, in terms of the number of years of business starting, for business institution of a foreign-invested bank to conduct any Renminbi business. 

16. Suspend the implementation of the related contents and cancel the restriction, in terms of the number of years of business starting, for business institution of a foreign-invested bank to conduct any Renminbi business

Suspend the implementation of the related contents and allow foreign investor and investors from Taiwan to establish solely-funded performance brokerage institutions to serve provinces and municipalities directly under the Central Government where pilot free trade zones have been set up, with the relevant administrative measures to be formulated by the competent culture department under the State Council.

The relevant government authorities will formulate implementation rules to guide the practice in the free trade zones.

According to the recently published regulation, certain restrictions have been lifted in the free trade zones in China and, among others, there are major developments in the entertainment sector...

Profits to Overseas Investors Used for Direct Investment now Free from Withholding Tax

Profits to Overseas Investors Used for Direct Investment now Free from Withholding Tax

The Circular states that, where profits distributed by a resident enterprise within the territory of China to an overseas investor are used by such investor for direct investment into the encouraged-category of investment projects in the PRC, the tax deferral policy shall apply, without the collection of the withdrawing tax on a temporary basis, if relevant requirements are fulfilled.

Overseas investors temporarily not subject to the withholding tax must meet four requirements, whereby it is also specified the relevant "profits obtained by the overseas investor are returns of equity investment, such as dividends and bonus, generated from retained income that has been actually distributed by the Chinese resident enterprise to the investor".

Furthermore, the Circular states that, if an overseas investor is eligible for but does not enjoy such preferential policy in fact, it could file an application for enjoying the policy within three years from the date the relevant tax payment is made in practice, and the amount of tax paid will be refunded.

The Circular states that, where profits distributed by a resident enterprise within the territory of China to an overseas investor are used by such investor for direct investment into the...

Expansion of Tax Incentive for Advanced Technology Service Enterprises Nationwide

Expansion of Tax Incentive for Advanced Technology Service Enterprises Nationwide

To further stimulate the growth of foreign capital and create a higher level of open environment for foreign investors, in August 2017 the Circular of the State Council on Several Measures to Boost the Growth of Foreign Investment (Guo Fa [2017] No.39) addressed 22 Measures, setting forth a series of objectives for formulating fiscal and tax incentives, including: extending the Corporate Income Tax (CIT) incentives for Technological Advanced Service Enterprises (TASEs) in China.

The Circular Cai Shui [2017] n.79 has been recently released as a further step, to extend this CIT incentive nationwide effective retroactively from 1 January 2017, it will allow more high-tech and high value-added service enterprises to enjoy the preferential tax policies.

The incentive includes the following:

·         Advanced technology service enterprises are subject to enterprise income tax (EIT) at a rate of 15% (the statutory rate being 25%); and

·         A deduction applies to employees’ education expenditure (up to 8% of the total salary and wages), provided that certain requirements are met.

The services that are eligible for the incentive include:

·         Information technology outsourcing (ITO): software development, information technology development services, information systems operation and maintenance;

·         Technical business process outsourcing (BPO): business process design services, business operations management, operation services, supply chain management services; and

·         Knowledge process outsourcing (KPO): research on intellectual property, research and development and testing of pharmaceutical and biotechnological products, product research and

          development, industrial design, analytics and data mining, design and development of animation and online games, education development course, engineering design, etc.

Previously, the tax incentive was applicable only to certain designated cities, such as Beijing, Tianjin, Dalian, Harbin, Daqing, Shanghai, Nanjing, Suzhou, Wuxi, Hangzhou, Hefei, Nanchang, Xiamen, Jinan, Wuhan, Changsha, Guangzhou, Shenzhen, Chongqing, Chengdu and Xian.

To further stimulate the growth of foreign capital and create a higher level of open environment for foreign investors, in August 2017 the ...

Paperless Applications for Tax Reliefs in Nationwide Customs Offices from December 15

Paperless Applications for Tax Reliefs in Nationwide Customs Offices from December 15

With the Announcement No. 58, GAC decided to promote the paperless applications for tax reduction and exemption in nationwide customs offices and simultaneously abolish the record-filing regime for tax reduction and exemption, as of December 15, 2017.

According to the Announcement a tax reduction or exemption applicant or its agent can submit the application form for this purpose together with the electronic data about the accompanying documents through the tax reduction or exemption declaration system for QP pre-entry clients of China electronic ports, instead of submitting any written materials. In the meantime, it is made clear in the announcement that the applicant may provide materials concerning the subject qualification, project qualification, quota (quantity) of tax-free imports and other information to the customs at the same time when it initially handles formalities for tax reliefs for imported goods, but does not need to file a record for a policy-oriented project with the customs in advance.

With the Announcement No. 58, GAC decided to promote the paperless applications for tax reduction and exemption in nationwide customs offices and simultaneously abolish the record-filing regime...

SAT Provides Clarity on the Collection Scope of R&D Expenses for the Super Pre-tax Deduction Purpose

SAT Provides Clarity on the Collection Scope of R&D Expenses for the Super Pre-tax Deduction Purpose

The Announcement No. 40 applies to the annual final settlement from 2017 and thereafter, it centers on the collection scope of R&D expenses, and improves and specifies criteria to get information about some R&D expenses. Respective standards for the labor expenses paid to workers, expenses of direct input, depreciation expenses, and amortization of intangible assets are described in detail, and those for the design costs for new products, expenses incurred for the formulation of rules for new techniques, expenses of clinical trials conducted for new drugs at the R&D stage, and expenses of on-spot tests for exploration and development technologies are also clarified; furthermore, the standards for other relevant expenses are refined and other relevant policies are made clear as well.

The Announcement provides that requirements specified in the Announcement [2015] No.97 regarding identifying the scope of personnel directly engaged in R&D activities and accurately collecting the labor expenses of personnel who are involved in multiple types of activities remain valid, and brings new provisions on the labor dispatching and equity incentives, stating that the scope of external R&D personnel could be broadened appropriately and the equity incentives awarded to R&D personnel are eligible for the super deduction.

The Announcement No. 40 applies to the annual final settlement from 2017 and thereafter, it centers on the collection scope of R&D expenses, and improves and specifies criteria to get...

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Focus

Shanghai Issues New Establishment Policies to Attract Multinational Companies

In this Special Topic Newsletter, we look at Policy Amendments that are encouraging multinational companies to establish regional headquarters in Shanghai.As China becomes more and more active in the global market, Shanghai Municipal People’s Government recognizes that Shanghai plays a leading role in China’s opening-up reform. Through amending the policy framework for encouraging multinational companies (MNCs) to set up regional headquarters (Regional HQ) in Shanghai, with the Circular No. 9, Shanghai government relaxes the business scope and the assessment criteria for regional headquarters. Consequently, Regional HQs will now have more autonomy in prioritizing their business activities in order to align with the group’s overall strategy.C&A Advisors pride ourselves on keeping our clients informed and prepared about the constant evolution of Chinese marketplace, please download and read our Special Topic Newsletter to better understand the new policy amendments. 

Q&A

No Q&A available at this time.

On This Monthly Issue

New Deadlines for China Work Permits Renewals

New Deadlines for China Work Permits Renewals

According to the Announcement of the State Administration of Foreign Experts Affairs (SAFEA), all foreigners are required to submit their application for Chinese work permit renewal 30 days ahead of the expiration of their permits. Those who fail to comply will be denied renewal and must start a new application for a work permit.

The Announcement was issued by the SAFEA, not the regional Foreign Experts Bureau, so it applies to any city in China. Under the new regulation, every applicant should clearly know how many days one should prepare for work permit renewal before the current permit expires. Persons applying only a few days before their expiration date for a work permit renewal will absolutely be unable to work.

Applicants should leave sufficient time for the work permit renewal (2-3 months are recommended). Also, preparing documents in advance is recommended. For work permit renewals, proof of non-criminal record and supportive documentation for working experience in an overseas country are not needed; others requirement are the same as for first-time applications.

According to the Announcement of the State Administration of Foreign Experts Affairs (SAFEA), all foreigners...

4578
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New Deadlines for China Work Permits Renewals

According to the Announcement of the State Administration of Foreign Experts Affairs (SAFEA), all foreigners are required to submit their application for Chinese work permit renewal 30 days ahead of the expiration of their permits. Those who fail to comply will be denied renewal and must start a new application for a work permit.

The Announcement was issued by the SAFEA, not the regional Foreign Experts Bureau, so it applies to any city in China. Under the new regulation, every applicant should clearly know how many days one should prepare for work permit renewal before the current permit expires. Persons applying only a few days before their expiration date for a work permit renewal will absolutely be unable to work.

Applicants should leave sufficient time for the work permit renewal (2-3 months are recommended). Also, preparing documents in advance is recommended. For work permit renewals, proof of non-criminal record and supportive documentation for working experience in an overseas country are not needed; others requirement are the same as for first-time applications.

http://ca-advisors.net/sites/default/files/newsletters/ca_advisors_monthly_newsletter_issue_no.2_-_february_2018.pdf
0
China Lifts Foreign Investment Bans in Chinese FTZ

China Lifts Foreign Investment Bans in Chinese FTZ

According to the recently published regulation, certain restrictions have been lifted in the free trade zones in China and, among others, there are major developments in the entertainment sector.

We list some below for your reference (from the Appendix  - Catalogue of Certain Provisions of the Relevant Administrative Regulations, Documents of the State Council and Departmental Rules Approved by the State Council that the State Council Decides to Temporarily Adjust within Pilot Free Trade Zones):

2. Regulations on the Administration of Printing Industry

Allow the establishment of enterprises with foreign investment engaged in the operations of printing other printed matters with the relevant administrative measures to be formulated by the competent department of press and publication under the State Council. 

5. Regulations on the Administration of Entertainment Places

Suspend the implementation of the related contents and allow the establishment of solely foreign-funded entertainment places which may provide services in pilot free trade zones, with the relevant administrative measures to be formulated by the competent culture department under the State Council. 

7. Regulations on Travel Agencies

Suspend the implementation of the related contents and allow qualified Sino-foreign equity travel agencies registered within pilot free trade zones to engage in providing outbound tourism (other than to Taiwan) business services to Chinese mainland residents, with the relevant administrative measures to be formulated by the competent travel department under the State Council.  

12. Catalogue for the Guidance of Foreign Investment Industries (Revised in 2017) 

Suspend the implementation of the related contents and allow foreign investors to engage in the design, manufacturing and maintenance of general aircraft at the level of 6 ton with no more than nine seats by means of wholly foreign investment; cancel the restriction on proportion of investment in the design and manufacturing of civil helicopters at the level of 3 ton or more 

15. Administrative Regulations of the People's Republic of China on Foreign-Invested Banks 

Suspend the implementation of the related contents and cancel the restriction, in terms of the number of years of business starting, for business institution of a foreign-invested bank to conduct any Renminbi business. 

16. Suspend the implementation of the related contents and cancel the restriction, in terms of the number of years of business starting, for business institution of a foreign-invested bank to conduct any Renminbi business

Suspend the implementation of the related contents and allow foreign investor and investors from Taiwan to establish solely-funded performance brokerage institutions to serve provinces and municipalities directly under the Central Government where pilot free trade zones have been set up, with the relevant administrative measures to be formulated by the competent culture department under the State Council.

The relevant government authorities will formulate implementation rules to guide the practice in the free trade zones.

According to the recently published regulation, certain restrictions have been lifted in the free trade zones in Chin...

4529
0

China Lifts Foreign Investment Bans in Chinese FTZ

According to the recently published regulation, certain restrictions have been lifted in the free trade zones in China and, among others, there are major developments in the entertainment sector.

We list some below for your reference (from the Appendix  - Catalogue of Certain Provisions of the Relevant Administrative Regulations, Documents of the State Council and Departmental Rules Approved by the State Council that the State Council Decides to Temporarily Adjust within Pilot Free Trade Zones):

2. Regulations on the Administration of Printing Industry

Allow the establishment of enterprises with foreign investment engaged in the operations of printing other printed matters with the relevant administrative measures to be formulated by the competent department of press and publication under the State Council. 

5. Regulations on the Administration of Entertainment Places

Suspend the implementation of the related contents and allow the establishment of solely foreign-funded entertainment places which may provide services in pilot free trade zones, with the relevant administrative measures to be formulated by the competent culture department under the State Council. 

7. Regulations on Travel Agencies

Suspend the implementation of the related contents and allow qualified Sino-foreign equity travel agencies registered within pilot free trade zones to engage in providing outbound tourism (other than to Taiwan) business services to Chinese mainland residents, with the relevant administrative measures to be formulated by the competent travel department under the State Council.  

12. Catalogue for the Guidance of Foreign Investment Industries (Revised in 2017) 

Suspend the implementation of the related contents and allow foreign investors to engage in the design, manufacturing and maintenance of general aircraft at the level of 6 ton with no more than nine seats by means of wholly foreign investment; cancel the restriction on proportion of investment in the design and manufacturing of civil helicopters at the level of 3 ton or more 

15. Administrative Regulations of the People's Republic of China on Foreign-Invested Banks 

Suspend the implementation of the related contents and cancel the restriction, in terms of the number of years of business starting, for business institution of a foreign-invested bank to conduct any Renminbi business. 

16. Suspend the implementation of the related contents and cancel the restriction, in terms of the number of years of business starting, for business institution of a foreign-invested bank to conduct any Renminbi business

Suspend the implementation of the related contents and allow foreign investor and investors from Taiwan to establish solely-funded performance brokerage institutions to serve provinces and municipalities directly under the Central Government where pilot free trade zones have been set up, with the relevant administrative measures to be formulated by the competent culture department under the State Council.

The relevant government authorities will formulate implementation rules to guide the practice in the free trade zones.

http://ca-advisors.net/sites/default/files/newsletters/ca_advisors_monthly_newsletter_issue_no.2_-_february_2018.pdf
0
Profits to Overseas Investors Used for Direct Investment now Free from...

Profits to Overseas Investors Used for Direct Investment now Free from...

The Circular states that, where profits distributed by a resident enterprise within the territory of China to an overseas investor are used by such investor for direct investment into the encouraged-category of investment projects in the PRC, the tax deferral policy shall apply, without the collection of the withdrawing tax on a temporary basis, if relevant requirements are fulfilled.

Overseas investors temporarily not subject to the withholding tax must meet four requirements, whereby it is also specified the relevant "profits obtained by the overseas investor are returns of equity investment, such as dividends and bonus, generated from retained income that has been actually distributed by the Chinese resident enterprise to the investor".

Furthermore, the Circular states that, if an overseas investor is eligible for but does not enjoy such preferential policy in fact, it could file an application for enjoying the policy within three years from the date the relevant tax payment is made in practice, and the amount of tax paid will be refunded.

The Circular states that, where profits distributed by a resident enterprise within the territory of China to an over...

36454
0

Profits to Overseas Investors Used for Direct Investment now Free from...

The Circular states that, where profits distributed by a resident enterprise within the territory of China to an overseas investor are used by such investor for direct investment into the encouraged-category of investment projects in the PRC, the tax deferral policy shall apply, without the collection of the withdrawing tax on a temporary basis, if relevant requirements are fulfilled.

Overseas investors temporarily not subject to the withholding tax must meet four requirements, whereby it is also specified the relevant "profits obtained by the overseas investor are returns of equity investment, such as dividends and bonus, generated from retained income that has been actually distributed by the Chinese resident enterprise to the investor".

Furthermore, the Circular states that, if an overseas investor is eligible for but does not enjoy such preferential policy in fact, it could file an application for enjoying the policy within three years from the date the relevant tax payment is made in practice, and the amount of tax paid will be refunded.

http://ca-advisors.net/sites/default/files/newsletters/ca_advisors_monthly_newsletter_issue_no.2_-_february_2018.pdf
0
Expansion of Tax Incentive for Advanced Technology Service Enterprises...

Expansion of Tax Incentive for Advanced Technology Service Enterprises...

To further stimulate the growth of foreign capital and create a higher level of open environment for foreign investors, in August 2017 the Circular of the State Council on Several Measures to Boost the Growth of Foreign Investment (Guo Fa [2017] No.39) addressed 22 Measures, setting forth a series of objectives for formulating fiscal and tax incentives, including: extending the Corporate Income Tax (CIT) incentives for Technological Advanced Service Enterprises (TASEs) in China.

The Circular Cai Shui [2017] n.79 has been recently released as a further step, to extend this CIT incentive nationwide effective retroactively from 1 January 2017, it will allow more high-tech and high value-added service enterprises to enjoy the preferential tax policies.

The incentive includes the following:

·         Advanced technology service enterprises are subject to enterprise income tax (EIT) at a rate of 15% (the statutory rate being 25%); and

·         A deduction applies to employees’ education expenditure (up to 8% of the total salary and wages), provided that certain requirements are met.

The services that are eligible for the incentive include:

·         Information technology outsourcing (ITO): software development, information technology development services, information systems operation and maintenance;

·         Technical business process outsourcing (BPO): business process design services, business operations management, operation services, supply chain management services; and

·         Knowledge process outsourcing (KPO): research on intellectual property, research and development and testing of pharmaceutical and biotechnological products, product research and

          development, industrial design, analytics and data mining, design and development of animation and online games, education development course, engineering design, etc.

Previously, the tax incentive was applicable only to certain designated cities, such as Beijing, Tianjin, Dalian, Harbin, Daqing, Shanghai, Nanjing, Suzhou, Wuxi, Hangzhou, Hefei, Nanchang, Xiamen, Jinan, Wuhan, Changsha, Guangzhou, Shenzhen, Chongqing, Chengdu and Xian.

To further stimulate the growth of foreign capital and create a higher level of op...

36449
0

Expansion of Tax Incentive for Advanced Technology Service Enterprises...

To further stimulate the growth of foreign capital and create a higher level of open environment for foreign investors, in August 2017 the Circular of the State Council on Several Measures to Boost the Growth of Foreign Investment (Guo Fa [2017] No.39) addressed 22 Measures, setting forth a series of objectives for formulating fiscal and tax incentives, including: extending the Corporate Income Tax (CIT) incentives for Technological Advanced Service Enterprises (TASEs) in China.

The Circular Cai Shui [2017] n.79 has been recently released as a further step, to extend this CIT incentive nationwide effective retroactively from 1 January 2017, it will allow more high-tech and high value-added service enterprises to enjoy the preferential tax policies.

The incentive includes the following:

·         Advanced technology service enterprises are subject to enterprise income tax (EIT) at a rate of 15% (the statutory rate being 25%); and

·         A deduction applies to employees’ education expenditure (up to 8% of the total salary and wages), provided that certain requirements are met.

The services that are eligible for the incentive include:

·         Information technology outsourcing (ITO): software development, information technology development services, information systems operation and maintenance;

·         Technical business process outsourcing (BPO): business process design services, business operations management, operation services, supply chain management services; and

·         Knowledge process outsourcing (KPO): research on intellectual property, research and development and testing of pharmaceutical and biotechnological products, product research and

          development, industrial design, analytics and data mining, design and development of animation and online games, education development course, engineering design, etc.

Previously, the tax incentive was applicable only to certain designated cities, such as Beijing, Tianjin, Dalian, Harbin, Daqing, Shanghai, Nanjing, Suzhou, Wuxi, Hangzhou, Hefei, Nanchang, Xiamen, Jinan, Wuhan, Changsha, Guangzhou, Shenzhen, Chongqing, Chengdu and Xian.

http://ca-advisors.net/sites/default/files/newsletters/ca_advisors_monthly_newsletter_issue_no.2_-_february_2018.pdf
0
Paperless Applications for Tax Reliefs in Nationwide Customs Offices from...

Paperless Applications for Tax Reliefs in Nationwide Customs Offices from...

With the Announcement No. 58, GAC decided to promote the paperless applications for tax reduction and exemption in nationwide customs offices and simultaneously abolish the record-filing regime for tax reduction and exemption, as of December 15, 2017.

According to the Announcement a tax reduction or exemption applicant or its agent can submit the application form for this purpose together with the electronic data about the accompanying documents through the tax reduction or exemption declaration system for QP pre-entry clients of China electronic ports, instead of submitting any written materials. In the meantime, it is made clear in the announcement that the applicant may provide materials concerning the subject qualification, project qualification, quota (quantity) of tax-free imports and other information to the customs at the same time when it initially handles formalities for tax reliefs for imported goods, but does not need to file a record for a policy-oriented project with the customs in advance.

With the Announcement No. 58, GAC decided to promote the paperless applications for tax reduction and exemption in na...

6464
0

Paperless Applications for Tax Reliefs in Nationwide Customs Offices from...

With the Announcement No. 58, GAC decided to promote the paperless applications for tax reduction and exemption in nationwide customs offices and simultaneously abolish the record-filing regime for tax reduction and exemption, as of December 15, 2017.

According to the Announcement a tax reduction or exemption applicant or its agent can submit the application form for this purpose together with the electronic data about the accompanying documents through the tax reduction or exemption declaration system for QP pre-entry clients of China electronic ports, instead of submitting any written materials. In the meantime, it is made clear in the announcement that the applicant may provide materials concerning the subject qualification, project qualification, quota (quantity) of tax-free imports and other information to the customs at the same time when it initially handles formalities for tax reliefs for imported goods, but does not need to file a record for a policy-oriented project with the customs in advance.

http://ca-advisors.net/sites/default/files/newsletters/ca_advisors_monthly_newsletter_issue_no.1_-_january_2018.pdf
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