Guidelines on the Due Diligence of Commercial Banks in the work of Credit Granting to Small-scale Enterprises (for Trial Implementation) October 9, 2006 Chapter I General Rules Article 1 The present Guidelines are formulated in order to improve the mechanism for the work of credit granting to small-scale enterprises
of commercial banks, regulate the management of credit granting to small-scale enterprises, clarify the requirements for due diligence
in the work of credit granting, and promote the sustainable development of the business of credit granting to small-scale enterprises,
and according to related laws, regulations and provisions including the Law of the People’s Republic of China on Commercial Banks,
Banking Supervision Law of the People’s Republic of China, Guiding Opinions on the Small-scale Enterprise Loan Business of Banks. Article 2 The phrase “due diligence in the work of credit granting to small-scale enterprises” refers to that the commercial banks’ staffs in
charge of investigating the business of credit granting to small-scale enterprises, reviewing credits, examining and approving credits,
managing post-credit activity of small-scale enterprises and other activities concerning the business of credit granting, have fulfilled
the most fundamental requirements for due diligence as stipulated in the present Guidelines. In case of a mini-enterprise, a commercial
bank may simplify the aforesaid credit granting links and properly grant more power to the customer managers according to the actual
circumstances. Article 3 Policies on credit granting to small enterprises shall be formulated, a decision-making mechanism, information management system,
and operating procedures shall be established and timely evaluated and perfected by a commercial bank. Article 4 The policies on credit granting to small-scale enterprises as formulated by a commercial bank shall embody the operating rules of
small-scale enterprises the risk features of the business of credit granting to small-scale enterprises, and the discriminatory management
of the business of credit granting shall be employed. A commercial bank shall (1) place stress on the on-site investigation and the information collection, learn and grasp information about the business operation
and credit standing of customers; (2) on the premise of controlling the risks, reasonably set the power to the examination and approval of the credit granting to small-scale
enterprises, simplify the procedures and improve the efficiency of the examination and approval; (3) set up a risk-based pricing mechanism, conduct discriminatory pricing to different enterprises or for different credits, and adjust
the prices in a timely manner along with the changes of risks; (4) account separately for the business of credit granting to small-scale enterprises; (5) set up an incentive and restraint mechanism to link up the income of the loan staffs for the small-scale enterprise with their workload,
loan risks, loan yields and other indicators. (6) develop products innovation actively, and provide credit products and financial services that can satisfy the small-scale enterprises’
needs. (7) set up a customer-orientated, flexible and practical credit granting mechanism so as to meet the needs of small-scale enterprises
of flexible and diversified credits in credit amount, interest rate, term and other aspects. Article 5 A commercial bank shall set up a management department and a professional team for the credit granting to small-scale enterprises.
The credit granting business to small-scale enterprises shall be on the basis of customer manager system and the related business
investigations shall be carried out by two persons. Article 6 A commercial bank shall, in the communities that it provides services, encourage customer managers to establish a wide and regular
relationship with the local communities, so as to collect information, improve the efficiency and supervise the use of loans. Article 7 A commercial bank shall strengthen the training of the staffs in charge of the credit granting to small-scale enterprises so as to
update their minds, help them grasp the features and the methods of risk control of the credit granting business to small-scale enterprises,
improve their capability of marketing and capabilities of collecting, arranging, analyzing both the financial and non-financial information,
be familiar with the duties and the requirements for due diligence of credit granting to small-scale enterprises and form a good
credit culture of small-scale enterprise gradually. Article 8 The commercial bank’s staffs in charge of the credit granting to small-scale enterprises and the staffs in charge of the due diligence
evaluation of the work of credit granting shall observe the principles of objectiveness, impartiality and good faith, perform their
duties independently as well as not be disturbed by any intentional external factor. The staffs in charge of credit granting to small-scale
enterprises shall declare whether or not they are the credit applicants’ interested parties in the activities of credit granting
business. Article 9 A commercial bank shall strengthen the archive management of credit granting to small-scale enterprises. The rights, obligations,
stipulations and contacts in various forms between it and small-scale enterprises, as well as the remedies for breach of contract
shall be recorded objectively and completely, and shall be preserved as archives. Article 10 A commercial bank shall set up an evaluation system of due diligence for the credit granting work to small-scale enterprises and corresponding
system of responsibility and exoneration. It shall clarify the credit granting departments and posts’ duties and due diligence requirements,
determine the liabilities for the credit risks caused by violating law or regulation, and punish the related persons who should bear
the liabilities in accordance with the pertinent provisions. Chapter II Due Diligence in Credit Investigation Article 11 A commercial bank shall segment the market, study the business operational rules and the risk features of various target groups, and
clarify the basic entry conditions for customers based on its development strategy and the features of small-scale enterprises business. Article 12 A customer manager shall collect the customers’ basic information according to the credit categories, including the identity certificate,
principal credit qualification, financial information, etc. Please see the Reminder of the Basic Information of Customers of the
Annex for details. Article 13 A customer manager shall focus on and gather the customers’ non-financial information, including the personal information and the
family’s credit standing of the owner or main shareholders of the customer enterprise, enterprise business management, technologies,
status quo of the industrial sector concerned, and market prospect, etc. Please see the Reminder of Non-financial Information of
the Annex for details. Article 14 A customer manager shall verify the legality and genuineness of the materials provided by customers and of the information collected,
and shall record the verification process and results. The verification shall be conducted mainly in forms of on-site investigations.
The information collection and verification may be simultaneously conducted. Article 15 A customer manager shall prepare balance sheets and cash flow statements on the related small-scale enterprises or their owners or
main shareholders according to the information verified upon investigation as the main basis for the analysis of the customers’ financial
status and repayment capacity. Article 16 A customer manager shall, according to the verification and analysis results, issue written investigation reports. In an investigation
report, an analysis of the reason for borrowing money, repayment capacity, cash flow and information about personal credit standing
of the owner or main shareholders of the enterprise’s shall be conducted, and suggestions on the credit type, amount, purpose, interest
rate, service fee, time limit, repayment form, guaranty conditions, etc shall be put forward.
The investigation information about the related small-scale enterprise and its owners or main shareholders, which is available in
the credit system of the China Banking Regulatory Commission (CBRC), shall also be included in the investigation report.
An investigation report shall be written practically, concisely and standardly. In case of granting several credits to a same customer
within 90 days, the original investigation report shall remain valid if it is confirmed that the customer’s credit standing has no
substantial change after the supplementation of the related information.
A customer manager shall bear the responsibility for the genuineness of the information contained in the investigation report, as
well as bear the responsibility for the conclusion of the investigation. Article 17 A commercial bank may grant certain credit granting power to customer managers. After the investigation and verification of credit,
two customer managers may, within their power limit, determine whether or not to grant a credit and both shall affix their signatures.
In case of a small-sum credit to a mini-enterprise, the customer managers may regard the information about the customer’s repayment
of the production and business operation loans, payment of various taxes and costs, records of good faith and other basic information
reflecting its capacity and intention of repayment as the main basis for determining whether or not to grant a credit. Article 18 If any important event influencing a customer’s capability of fulfilling contracts occurs, the commercial bank shall conduct an on-site
investigation and verification and shall keep a record in the archives. At the same time, the staffs in charge of credit granting
shall strengthen communications so as to ensure that all parties involved can grasp the related information in time. The important
events influencing a customer’s capability of fulfilling contracts include: (1) significant changes of the external policies and economic environment; (2) overcapacity external guaranties provided by the owner, main shareholders of the customer enterprise or related party enterprises,
or the great changes of the value of the mortgaged (pledged) properties; (3) significant changes to the financial status of the owner, main shareholders or connected enterprises of customer enterprise; (4) lawsuits in which the owner, main shareholders or connected enterprises of customer enterprise are involved; (5) serious breach of contract committed by the owner or any main shareholders or related party enterprises of customer enterprise; (6) changes to the owner or main shareholders, or key managers, or technicians of customer enterprise; (7) the occurrence of merger, restructuring or change of property right of the customer; and (8) other events. Chapter III Due Diligence Requirements for the Review of Credits Article 19 A commercial bank shall, on the basis of different customers and the risk features of different credits, formulate requirements for
the credit review.
Small-scale enterprises with a good credit standing may got corresponding credit incentives, and their credit amount may be increased
gradually, their credit term may be extended or credit preferential conditions may be provided to them. Article 20 The staffs in charge of credit examination shall check the regulation-compliance, validity and completeness of the credit materials.
The investigation or review of credit may be simultaneously conducted by different staffs. Article 21 The staffs in charge of credit examination shall analyze and evaluate the major factors influencing the customer’s financial status
based on the assets, liabilities and cash flow of a customer, its owner or main shareholders. Where necessary, a new balance sheet
and cash flow statement for the customer may be formulated. Article 22 The staffs in charge of credit examination shall, check or verify the reasonableness of the amount, term and purpose of a credit in
accordance with the status of business operation credit standing, mortgaged (pledged) properties or guarantees, and other non-financial
information of a customer. Article 23 The staffs in charge of credit examination shall, in accordance with the result of check and analysis, issue written opinions of review.
In case of a credit that passes the examination, the opinions of review shall expressly specify the credit type, amount, purpose,
interest rate, service fee, term, repayment form, guaranty conditions and credit granting conditions as well as give a warning of
the potential credit risks.
The staffs in charge of credit examination shall be responsible for the review opinions. Article 24 Certain credit granting power may be granted to the staffs in charge of credit examination by a commercial bank. After the investigation
and review of credit, the staffs in charge of credit examination and the customer manager may decide whether or not to grant a credit
within authorization and shall both affix their signatures. Article 25 When any important event influencing a customer’s capacity to fulfill contracts occurs, a new credit review shall be conducted by
the commercial bank in a timely manner. Chapter IV Due Diligence in the Credit Examination and Approval Article 26 On the premise of controllable risks, a commercial bank shall formulate a discriminatory system for credit granting and credit authorization
to small-scale enterprises. The credit examination and approval shall be conducted within rather than exceeding the scope of authorization. Article 27 A commercial bank shall formulate explicit procedures for the credit examination and approval to small-scale enterprises. The credit
examination and approval shall be conducted in accordance with the related procedures. Article 28 Any credit granted to a small-scale enterprise by a commercial bank shall not be used in any industry, project or product that is
banned or restricted by any state policy, law or regulation. Article 29 In case of a credit applied by the interested party, the related staffs in charge of the credit examination and approval shall apply
for disqualifying themselves. Article 30 The staffs in charge of the credit examination and approval shall issue examination and approval opinions. In case of a credit upon
examination and approval, the examination and approval opinions shall specify the credit type, amount, purpose, interest rate, service
fee, term, repayment form, guaranty conditions and credit conditions.
The staffs who conduct the credit examination and approval shall be responsible for the examination and approval opinions. Article 31 A commercial bank shall grant credits in accordance with the examination and approval opinions. If the credit conditions change, the
commercial bank shall conduct a new examination and approval or change the related credit in a timely manner. If the credit conditions
are not met, or if a new examination and approval isn’t conducted after the change of the credit conditions, any credit shall not
be granted by the commercial bank. Article 32 When granting a credit, a commercial bank shall sign the related legal documents and shall ensure the documents’ law-compliance, regulation-compliance,
validity and feasibility. Chapter V Due Diligence in the Post-credit Management Article 33 A commercial bank shall establish a special system for the post-credit management and monitoring of credits granted to small-scale
enterprises and shall, by combining with the credit repayment form, conduct effective post-credit management. When any significant
event influencing a customer’s capability to fulfill a contract occurs, it shall issue a written report in a timely manner. Article 34 A commercial bank shall classify the risks of the credits already granted into different categories in strict compliance with the
supervisory requirements of the regulatory departments as well as its own risk control rules. Article 35 A commercial bank shall conduct dynamic monitoring so as to timely discover the credit customers’ potential risks and remind them
of the risks. Please see the Reminder of Signals of Risks in the Annex for details. Article 36 A commercial bank shall take measures on the basis of the result of the post-credit monitoring and the riskstatus, adjust the risk
classification result, and determine whether or not to adjust the credit according to the actual circumstance, including extending
the term, reducing the credit, demanding the borrower to repay the loan before the due date, terminating the credit, etc. Article 37 A commercial bank shall set a scientific and reasonable bad debt tolerance limit to small-scale enterprises. It shall check the repayment
and dispose of the overdue credits or credits with outstanding interests in a timely manner. In case of a credit of which it is necessary
to take legal measures to demand for the repayment, special persons shall be designated to manage the credits. Article 38 A commercial bank shall formulate a reasonable mechanism to verify and write off the non-performing loans to small-scale enterprises.
When granting a credit to losses that have been written off, the principle of “writing off the accounts, keeping the cases and reserving
the rights” shall be adhered to. Article 39 A commercial bank shall, in a timely manner, input the information about the customers’ breach of contract into the system of the
credit management information of this bank or circulate a notice among its internal departments, and report to the banking regulatory
departments regularly. It shall circulate a notice about, expose and take joint sanction measures against any small-scale enterprise
that dodges its debt owing to the bank maliciously via the banking association and news media. Chapter VI Due Diligence in the Evaluation of the Credit Granting Work Article 40 A commercial bank shall set up a system for the evaluation of due diligence in the credit granting work. It shall, provide corresponding
staffs in accordance with development of the credit granting business to small-scale enterprises. The staffs in charge of the evaluation
of due diligence shall have necessary professional knowledge of credit granting. Article 41 A commercial bank shall conduct evaluation of the due diligence in various links of the business of credit granting, shall evaluate
whether or not the staffs in charge of credit granting have performed their duties duteously and determine whether or not to exempt
them from liabilities. The evaluation may be conducted on the spot or otherwise.
If any of the staffs in charge of credit granting is found to have seriously violated any regulation, it shall be immediately reported.
After the evaluation is finished, a report about the evaluation of the due diligence in the credit granting work shall be immediately
issued. Article 42 As to any problem found by the staffs in charge of the evaluation of the due diligence, the commercial bank shall, upon confirmation,
order the related departments or staffs of credit granting to timely correct it. Article 43 A commercial bank shall, in accordance with the evaluation result of the staffs in charge of the evaluation of due diligence in the
work of credit granting, and in light of law and regulation, investigate and punish the staffs in charge of credit granting who are
under any of the following circumstances: (1) Making false records or misleading statements, or omitting any major information; (2) Failing to verify the information about the customer or failing to carry out further investigation on any abnormal information; (3) Concealing the true situations, especially his relationship with the borrower, or concealing the records of bad credit of the borrower,
guarantor and its owner; (4) Failing to make an on-site check and verification on the mortgaged (pledged) property; (5) Going beyond the scope of his authority or violating the related procedures during the decision making process of the credit granting; (6) Failing to conduct post-credit management and failing to prevent and control the credit risks in a timely manner; (7) Failing to timely report, conduct an on-site investigation, and take necessary measures when any significant change or emergency happens
to the credit customer; (8) Failing to make a report to the CBRC the information about any customer’s breach of contract in a timely manner; (9) Failing to show cooperation with the staffs in charge of the due diligence evaluation in the work of credit granting or providing
any false information, or failing to correct any problem found in the due diligence evaluation in the work of credit granting within
the time limit; or (10) Other circumstances. Article 44 Upon inspection, supervision and liability determination by the commercial bank, if there are sufficient proofs showing that the departments
and staffs in charge of the work of credit granting have performed their duties diligently in accordance with the related laws, regulations,
rules, the present Guidelines, as well as the pertinent management bylaws of the commercial bank, they shall be exempted from the
regulation-compliance liabilities by the commercial bank when any credit risk occurs. Chapter VII Supplementary Rules Article 45 The business of credit granting to small-scale enterprises and individual industrial and commercial households, which is conducted
by commercial banks established lawfully within the territory of China shall be governed by the present guidelines. Other financial
institutions in the banking sector may do business with reference to it. Article 46 Detailed rules for the implementation of the present Guidelines shall be formulated by commercial banks and be reported to the CBRC
or its dispatched institutions. Article 47 The CBRC shall be responsible for interpreting the present Guidelines. Article 48 The present Guidelines shall enter into force as of the promulgation date. Annex 1. Reminder of the Basic Information of Customers (1) the business license and organizational code certificate (duplicate and photocopy) as well as the certification of annual inspection; (2) loan card and information about the opening of bank accounts; (3) the identity certificate of the customer enterprise’s ownersand main shareholders and the necessary personal information about them; (4) the basic information which is available for preparing the balance sheet, income statement and cash flow statement of the latest 2
years or of the current period, or financial statements which have been formulated; (5) the deposits and loans of the reporting period of the owner or main shareholders of the customer enterprises, as well as its external
guaranties; (6) the tax registration certificate which has passed the annual inspections conducted by tax departments and photocopies of the tax payment
certifications for the past year issued by tax departments; (7) the contracts or articles of association (original and photocopy); (8) name list of the members of the board of directors, major persons in charge of business operation, finance, and technology, and specimens
of their signatures; (9) for a limited liability customer, equity joint customer, partnership customer or contractor or lease customer, the resolution or document
of the board of directors or the contract issuing party on the approval of the business of credit granting, or documents or certification
which are equally authentic; (10) a power of attorney issued by the customer’s legal representative if it entrusts any agent to apply for the credit granting (original);
and (11) other necessary materials (such as the related documents issued by a customs office or other department).
In case of a medium and long-term credit, there must be various qualified and effective approval documents, information about the
expected fund sources and the purposes thereof, information about the expected assets and liabilities, the information about profits
and losses, the progress of project construction and operation plan. 2. Reminder of Non-financial Information (1) the information about the personal professional history, educational background, conduct, health state of the key staffs of the customer,
such as the decision-making staffs, main executive staffs and technical staffs; (2) the information about other investments, assets and liabilities or contingent liabilities of the customer enterprise’s owner or of
the main shareholders of the customer enterprise or their families; (3) the information about the family members of the customer enterprise’s owner or of its main shareholders, dwelling place, marriage,
and family income and expenses; (4) the personal credit standing of the customer enterprise’s owner or of the main shareholders thereof, and his or their information
in the system of credit register consultation and in the system of personal credit, as well as the customer’s records in the department
for industry and commerce, tax organs and customs offices; (5) checklist of the water and electricity fees and expenses on other public utilities in the past year; (6) the customer’s equipment operating ratio of the past year and the technolog
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Notice of the General Office of the National Development and Reform Commission and the General Office of the Ministry of Finance on
the Print and Distribution of the Work Rules for the Preliminary Administration of Loan Projects of Foreign Governments (for Trial
Implementation)
The development and reform commissions and the public finance departments (bureaus) of each province, autonomous region, municipality
directly under the Central Government, city specifically designated in the state plan and Xinjiang Production and Construction Group,
each relevant department of the General Office of the State Council, each relevant enterprise directly under the central authorities
and each enterprise group specifically designated in the state plan:
For the purpose of intensifying the administration of loan projects of foreign governments (except for the loan projects of the Japanese
Government) and regulating the relevant management work procedures, the Work Rules for the Preliminary Administration of Loan Projects
of Foreign Governments (for Trial Implementation) are formulated jointly by the National Development and Reform Commission and the
Ministry of Finance and are hereby printed and distributed to you for implementation.
Appendix: Work Rules for the Preliminary Administration of Foreign Government Loan Projects (for Trial Implementation)
General Office of the State Development and Reform Office of the State Council
General Office of the Ministry of Finance
October 9, 2006
Appendix:
Work Rules for the Preliminary Administration of Foreign Government Loan Projects (for Trial Implementation)
Article 1
For the purpose of further regulating the administration of loan projects of foreign governments and elevating the benefits from
the utilization of loans of foreign governments, and in accordance with the related rules and bylaws of the National Development
and Reform Commission and the Ministry of Finance on the administration of loans of foreign governments and in combination of the
related policies for foreign governments to offer the related aids for development, these Work Rules are formulated.
Article 2
The related preliminary administration of loan projects of foreign governments (except for the loan projects of the Japanese Government)
shall be governed by these Rules.
Article 3
The Ministry of Finance shall be responsible for timely announcing the information about loans of foreign governments, publicizing
such information as the scale, field, loan conditions, procurement conditions of the official loans for development provided to China
by foreign governments. As to any particular requirement of a foreign party, the Ministry of Finance shall timely inform the related
department.
Article 4
A project entity that plans to use any loan of the foreign government shall apply for being incorporated into the project planning
prepared for loans of foreign governments to the provincial department of development and reform through the local department of
development and reform where the project is located, and a copy shall be reported to the local department of public finance as well.
The related departments of the State Council, enterprises directly under the central authorities and enterprise groups specifically
designated in the state plan (hereinafter referred to as the “central project entities”) may directly apply to the National development
and Reform Commission for the incorporation into the project planning prepared for loans of foreign governments, and a copy shall
be made to the Ministry of Finance as well.
Article 5
Where the provincial administrative department of development and reform receives a project entity’s application, it shall solicit
for the opinion of the provincial administrative department of public finance. After the application passes the preliminary examination
conducted by both of the above-mentioned departments on the basis of their respective functions and duties, the provincial administrative
department of development and reform shall apply for the incorporation into the project planning prepared for foreign governments’
loans to the National Development and Reform Commission, and a copy shall be made and submitted to the provincial administrative
department of finance as well.
Article 6
The National Development and Reform Commission shall carry out an examination on the project planning s prepared for loans of foreign
governments reported by the provincial administrative department of development and reform and central project entities, distribute,
on a quarterly basis, the project planning prepared for loans of foreign governments to the provincial administrative department
of development and reform and related central project entities, set the external debt scale and make a copy for the Ministry of Finance.
The provincial administrative department of development and reform shall inform the project entities and the related provincial administrative
department of finance of the project planning prepared for loans of foreign governments. The valid term of the projects that have
been included in the project planning prepared for loans of foreign governments’ is 1 year as of the day of distribution. In case
any project fails to get the incorporation into a checklist of projects prepared for loans of foreign governments (hereinafter referred
to as the “checklist of prepared projects”), the project shall be deleted from the project planning prepared for loans of foreign
governments automatically.
Article 7
where a project has been incorporated into the prepared project planning, the local project entity shall apply for the utilization
of loans of foreign governments through the local administrative department of public finance, and a copy shall be made and submitted
to the local administrative department of development and reform as well. The provincial administrative department of public finance
shall carry out an appraisal on the project application. If a project has passed the appraisal, the provincial administrative department
of public finance shall report the application for the utilization of loans of foreign governments to the Ministry of Finance, which
shall be simultaneously submitted to the administrative department of development and reform as well. A central project entity may
directly file an application with the Ministry of Finance for the utilization of loans of foreign governments to the Ministry of
Finance, which shall be submitted to the National Development and Reform Commission concurrently as well.
Article 8
After receiving an application from the provincial administrative department of finance and a central project entity, the Ministry
of Finance shall carry out an examination on the basis of the requirements for the project field of the loan country as well as applicable
quota of the loan, and incorporate the projects that meet all the requirements into the checklist of prepared projects. The Ministry
of Finance shall, on a quarterly basis, distribute a checklist of prepared projects to the provincial administrative departments
of finance, central project entities and re-loaning banks, and submit the checklist of prepared projects to the National Development
and Reform Commission The provincial administrative department of public finance shall, at the same time, submit the checklist of
prepared projects to the provincial administrative department of development. The valid term of any project that has been incorporated
into the checklist of prepared projects, is 1 year as of the day of distribution. The project shall be deleted from the checklist
of prepared projects automatically if the formalities for examination and approval, verification or archival filing of any project
fail to be concluded within 1 year.
Article 9
After receiving the checklist of prepared projects from the Ministry of Finance, the provincial administrative department of finance
and central project entities shall organize, guide or supervise the borrower in its designating the related purchasing agent company,
and re-loaning bank to carry out the preliminary re-loaning work. in light with the relevant provisions of the Ministry of Finance
on the bidding of procurement proxy companies of loan projects of foreign governments
Article 10
In case a project has been incorporated into the checklist of prepared projects, the related project entity shall handle the formalities
for examination and approval, verification and archival files with the state or provincial administrative department of development
and reform in light of the related procedures. The provincial administrative department of development and reform shall, submit the
project approval documents to the Financial Department of the Ministry of Finance and the provincial administrative department of
public finance. The National Development and Reform Commission shall submit the project approval documents to the Ministry of Finance.
Article 11
In case a project has been incorporated into the checklist of prepared projects and has concluded the formalities for examination
and approval, verification and archival filing with the department of development and reform, the Ministry of Finance shall submit
it to the related foreign government and loaning institution at an appropriate time and shall inform the provincial administrative
department of public finance and the related central project entity of the feedback opinions of examination or appraisal on the related
project, which shall be simultaneously submitted to the National Development and Reform Commission as well. The provincial administrative
department of public finance shall submit the related opinions to the provincial administrative department of development and reform
at the same time.
Article 12
In case a project that the Ministry of Finance has raised to a foreign government and if the foreign government has no different
opinion, the local project entity shall report to the National Development and Reform Commission about the application for project
funds through the provincial administrative department of development and reform. An application report on project funds shall be
submitted to the National Development and Reform Commission by a central project entity.
Where the State Council or the National Development and Reform Commission carries out examination and approval on the feasibility
report of projects, the related application for project funds need not be examined and approved separately.
Article 13
After an application report on project funds has been examined and approved, The National Development and Reform Commission shall
make a reply to it and submit it to the Ministry of Finance, for which the provincial administrative department of development and
reform shall circulate it to the provincial administrative department of public finance. The valid term of an application report
of project funds shall be 2 years as of the day of approval. The approval document shall be invalidated automatically if no re-loaning
agreement is signed within 2 years.
Article 14
After the approval of an application report on project funds or any feasibility research report that has been examined and approved
by the State Council or the National Development and Reform Commission, the project entity or purchasing agent company shall, in
accordance with the approval contents as well as the specific requirements put forward by the foreign government in the project appraisal,
carry out related bidding and purchase procurement in accordance with the related rules, bylaws and work procedures of loans of foreign
governments. The re-loaning bank shall conclude the loan agreement and sign a re-loaning agreement with the borrower in accordance
with the related provisions. In case any project for which the provincial administrative department of public finance makes repayment
or offers a guaranty, the related formalities for the re-loaning agreement shall be handled upon the confirmation of the debts or
guaranty liabilities by the provincial administrative department of public finance.
Article 15
Before a re-loaning agreement enters into force, in the case of any project alteration, the relevant formalities shall be handled
respectively under the following circumstances:
(1)
In case a project entity is split up, merged or acquired or the project is carried out by any other entity, the reply documents related
to the project that has been listed into the project planning prepared for loans of foreign governments shall be invalidated automatically.
The project entity shall, upon alteration and under the provisions of these Work Rules, handle the related formalities again.
(2)
In case a project has been listed into the project planning prepared for loans of foreign governments, the adjustment plan shall be
reported to the National Development and Reform Commission for approval where the scale of external debts is expanded or the purpose
of use of capital is adjusted. As to any project that has been listed into the project planning prepared for loans of foreign governments,
where the project category , the loaning country, re-loaning bank or the loan amount is adjusted, it shall be examined and approved
by the provincial administrative department of public finance and thereafter, the adjustment plan shall be submitted to the Ministry
of Finance for approval;
(3)
In case an application report of project funds is approved yet if the loaning country is changed, any expansion of the external debt
or any alteration of the purpose of capital use, the adjustment plan shall be reported to the National Development and Reform Commission
for approval under the procedures as prescribed herein and shall be reported to the Ministry of Finance through the provincial administrative
department of finance and the related formalities shall be handled after being approved by the Ministry of Finance.
In case a central project entity goes through any of the above-mentioned alteration, it shall file an application with the National
Development and Reform Commission and the Ministry of Finance for handling the related formalities.
Article 16
These Work Rules shall be carried out as of November 9, 2006.
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