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ANNOUNCEMENT NO. 43, 2007 OF MINISTRY OF COMMERCE AND GENERAL ADMINISTRATION OF CUSTOMS

Announcement No. 43, 2007 of Ministry of Commerce and General Administration of Customs

[2007] No. 43

In accordance with the Measures on the Administration of Automatic Import Licenses of Goods, Ministry of Commerce made the following
adjustment to the List of Administration of Automatic Import Licenses on Goods, 32 items of the Administration of Automatic Import
Licenses are eliminated. The list of the eliminated items is now promulgated and shall be put into effect as from June 10, 2007.

Appendix: The Eliminated List of Administration of Automatic Import Licenses on Goods(omitted)

Ministry of Commerce

General Administration of Customs

May 20, 2007



 
Ministry of Commerce, General Administration of Customs
2007-05-20

 






MEASURES FOR THE ADMINISTRATION OF FOREIGN STOCK EXCHANGES’ REPRESENTATIVE OFFICES IN CHINA

Order No. 44 of China Securities Regulatory Commission

No. 44

The Measures for the Administration of Foreign Stock Exchanges’ Representative Offices in China have been deliberated and adopted
at the 203rd chairmen’s executive meeting of China Securities Regulatory Commission on April 3, 2007. They are hereby promulgated
and shall enter into force as of July 1, 2007.

Chairman of China Securities Regulatory Commission, Shang Fulin

May 20, 2007

Measures for the Administration of Foreign Stock Exchanges’ Representative Offices in China
Chapter I General Rules

Article 1

For the purpose of regulating the establishment of foreign stock exchanges’ representative offices in China and their business operations
these Measures are constituted under the Securities Law of the People’s Republic of China and the related regulations.

Article 2

The “foreign stock exchanges” as mentioned in these Measures means the stock exchanges, securities automated quotation or electronic
trading systems or markets established abroad. The “foreign stock exchanges’ representative offices in China” (hereinafter referred
to as representative offices) as mentioned in these Measures means the permanent representative offices established by foreign stock
exchanges inside the territory of China under the approval of engaging in liaison, market promotions, investigations and other similar
non-business activities. The person in-charge of a representative office is the chief representative.

Article 3

A representative office shall conform to the laws, regulations of China and the related provisions of China Securities Regulatory
Commission (hereinafter referred to as CSRC). The legitimate rights and interests of representative offices shall be protected by
Chinese law.

Article 4

The CSRC shall examine, approve and supervise the representative offices subject to the principle of prudent supervision.

Chapter II Application and Establishment

Article 5

A foreign stock exchange applying for establishment of a representative office (hereinafter referred to as the applicant) shall be
subject to the requirements as follows:

(1)

The country or region where the applicant is located has perfect laws and regulations on financial supervision;

(2)

The financial supervision authority in the country or region where the applicant is located has concluded a memorandum of understanding
on supervisory cooperation with CSRC, and keeps a good cooperation with CSRC;

(3)

The applicant is a financial institution established under the approval or ratification of the financial supervision authority of
the country or region where it is located;

(4)

The applicant has been established for more than 20 years, it has a stable operation and, standardization and its financial situation
is well; and

(5)

Other prudential conditions put forward by the CSRC.

Article 6

An applicant can only apply for establishing one representative office, and at the time of application, shall submit the materials
as follows to the CSRC:

(1)

an application letter as signed by the board chairman (director-general) or the general manager to the CSRC;

(2)

a written opinion or any other related document issued by the financial supervision authority of the country or region where the applicant
is located on approval of establishing such a representative office by the applicant;

(3)

a copy of the business license or of the attestation on lawfully opening business as issued upon verification by the related competent
authority of the country or region where the applicant is located, notarized and certified by a competent notary public or certification
institution in the country or region where the applicant is located, and certified by the Chinese embassy or consulate accredited
to that country;

(4)

articles of association and main business rules of the applicant;

(5)

a name list of board of directors (board of governors) and the management personnel;

(6)

the annual reports for the latest 3 years;

(7)

a scheme on establishing the representative office, including, but not limited to, the purposes, necessity of the establishment, working
plan, set-up of internal organs and personnel arrangement, management systems and office site, etc.;

(8)

a power of attorney as signed by the board chairman (governor-general) or general manager on appointing the chief representative;

(9)

a declaration that the applicant published, which the chief representative to-be has no record of penalty due to any serious violation
of law or regulation, and which shall be notarized by a notary public institution in the country or region where the applicant is
located;

(10)

the identity certificate, academic credentials and resume of the chief representative to-be; and

(11)

other documents required to be filed by the CSRC.

Article 7

The CSRC will accept and examine the application materials for establishment as filed by applicants. Where the CSRC decides to approve
an application, it shall produce an approval document.

Article 8

Within 90 days upon approval of the CSRC, a representative office shall handle the procedures for industrial and commercial registration
as well as taxation registration upon the approval document, move into a fixed office, and report the matters as follows to the CSRC
in written form:

(1)

certificates on industrial and commercial registration and taxation registration;

(2)

a certificate for the lawful right to use the office;

(3)

the telephone number, fax number and post address of the office; and

(4)

the mobile phone number and email address of the chief representative.

In case the representative office, within the time limit provided above, fails to file a written report with the CSRC, the original
approval document shall be automatically abated.

Article 9

The name of a representative office shall be composed of the following contents in an order as: “the name of the country or region
where the foreign stock exchange is located”, “the name of the foreign stock exchange”, “the name of the local city” and ” the representative
office”.

Article 10

Other main staff members of a representative office shall be referred to as “representatives” or “deputy representatives” except
for the chief representative.

Article 11

The qualification for the chief representative of a representative office to hold the post shall acquire the approval of the CSRC.
A chief representative shall satisfy the requirements as follows:

(1)

Being known well with the finance laws and regulations of China;

(2)

Having a bachelor’s degree or above, 10 years or more of experiences in finance or economy, and 3 years or more of experiences in
undertaking Chinese-related business in the latest 5 years; and

(3)

Having a good character and no record of criminal or administrative penalty.

Article 12

To appoint a representative or deputy representative, within 5 working days as of the date of appointment, a representative office
shall report the name list, identity certificates and resumes of that person to the CSRC for archival purpose.

Chapter III Alteration and Cancellation

Article 13

Where a representative office changes its name, it shall submit an application to the CSRC, and file an application letter signed
by the board chairman (governor-general) or general manager of its stock exchange as well as other documents as required by the CSRC.

Article 14

Where a representative office changes its chief representative, it shall submit an application to the CSRC, and file an application
letter signed by the board chairman (governor-general) or general manager of its stock exchange as well as the related materials
provided in Items (8) up to (11) of Article 6 of these Measures.

Article 15

The CSRC will accept and examine the application materials for changing the name or chief representative submitted by the applicants.
It shall reissue an approval document if the CSRC decides to approve an application.

Article 16

Where a representative office changes, adds or reduces a representative or deputy representative, it shall report the name, identity
certificate and resume of the person to the CSRC for archival purpose within 5 working days as of the alteration.

Article 17

A representative office can change its office only inside the city where it is located. Within 5 working days as of the alteration,
the representative office shall report the matters as follows to the CSRC in written form:

(1)

a certificate for the lawful right to use the new office; and

(2)

the telephone number, fax number and post address of the new office.

The “change of office” as mentioned in this Article means the relocation, enlargement or reduction of the former office.

Article 18

The cancellation of a representative office shall, ahead of 20 working days, be reported to the CSRC, and handle the formalities
for deregistration at the administrative organ for industry and commerce upon the pertinent confirmation document issued by the CSRC
on approval of the cancellation. The pertinent deregistration certificate shall, within 5 working days, be submitted to the CSRC
after a representative office is deregistered.

Article 19

The unsettled matters shall be responsible for by its stock exchange after a representative office is cancelled.

Chapter IV Supervision and Administration

Article 20

A representative office shall have an independent and fixed office of its own, employ a reasonable amount of staff members, of which,
the proportion of domestic residents shall not be lower than 50%. The foreign staff members of a representative office shall handle
the formalities for residence under the pertinent laws upon entry.

Article 21

Any chief representative may not concurrently hold a post in the head office or a regional head office, nor may he concurrently hold
a post in any other commercial institution inside the territory of China. A chief representative shall stay in the representative
office to take charge of the daily routine. Where a chief representative goes abroad for 30 consecutive days, he shall file a report
with the CSRC and designate a special person to carry out the duties on his behalf. Where a chief representative concurrently holds
a post in any other institution or goes abroad for more than 30 consecutive days without reporting, the CSRC may require the stock
exchange to replace the chief representative.

Article 22

Any representative office and any of its staff members may not conduct any commercial activities or do so in a disguised form, it
or he may not conclude an agreement or contract with any legal person or natural person that may bring about incomes to the representative
office or the stock exchange.

Article 23

Any representative office and any of its staff members may not conduct publicity in any form, it or he may not hold any market promotion
activity oriented to individuals in any form.

Article 24

Where a representative office and its staff members organize and hold a large-scale market promotion activity oriented to enterprises,
they shall report a related scheme to the CSRC in advance, and if the CSRC does not present any objection within 10 working days,
it can hold such promotion activity.

Article 25

Any representative office and any of its staff members may not hold any false market promotion activity in any form, and it or he
may not conduct unfair competition in any form or seek for interests for any other institution in any form.

Article 26

A representative office shall submit a work report of the previous year to the CSRC within two months upon conclusion of each year.

Article 27

A representative office shall file the information about Chinese companies whose stocks are listed and traded in its stock exchange
in the previous year as well as the information about Chinese-funded members within two months upon conclusion of each year.

Article 28

A representative office shall file the annual report on its stock exchange for the previous year within four months upon conclusion
of each accounting year of its stock exchange.

Article 29

Where a foreign stock exchange gives any major punishment to any Chinese company whose stocks are listed and traded in it or any
Chinese-funded member thereof, the representative office shall timely render a notice to the CSRC, and submit a written report to
the CSRC within 10 working days as of the date of punishment.

Article 30

If a foreign stock exchange is under any of the following circumstances, the representative office shall, within 10 days after the
event occurs, file a written report with the CSRC:

(1)

Its articles of association, registered capital or registered address alters;

(2)

The stock exchange is split up, consolidated or implements any other major merger;

(3)

Its board chairman (governor-general) or general manger changes;

(4)

It is operating at a heavy loss or with serious financial difficulties;

(5)

The competent supervisory authority of the country or region where the stoke exchange is located takes major supervisory measures
against the stock exchange; or

(6)

Other events that severely affect the foreign stock exchange’s business.

Article 31

The CSRC will implement regular or irregular on-site or off-site inspections of a representative office from, but not limited to,
the aspects as follows:

(1)

Whether the representative office conducts commercial activities or does so in a disguised form;

(2)

Whether the representative office engages in publicity or holds any market promotion activity oriented to individuals;

(3)

Whether the representative office organizes and holds any large-scale market promotion activity oriented to enterprises without reporting
in advance;

(4)

Whether the application materials filed by the representative office are truthful or accurate;

(5)

Whether the representative office goes through complete formalities for any alteration thereof;

(6)

Whether the representative office goes through complete formalities for employment or alteration of any of its staff member; or

(7)

Other matters to be inspected by the CSRC.

Article 32

The CSRC may take such regulatory measure as ordering its chief representative or any other person in-charge to make correction,
arranging a supervisory interview and issuing a letter of warning where a representative office violates these Measures. In case
of serious circumstances, the CSRC may take the measure of prohibiting its chief representative or any other person in-charge from
entry into the securities market.

Chapter V Legal Liabilities

Article 33

Where a foreign stock exchange, without approval, illegally establishes a representative office or conduct activities in the name
of any representative office or in any other form, the CSRC shall ban such representative office or activities under law. Where the
foreign stock exchange violates the criminal law, it shall assume criminal liabilities.

Article 34

Where a representative office conducts commercial activities or does so in a disguised form, the CSRC shall give it a warning, confiscate
its illegal gains, or even revoke it, etc.

Article 35

Where a representative office implements publicity or holds any market promotion activity oriented to individuals, the CSRC shall
give it a warning, or even revoke it, etc.

Article 36

Where a representative office organizes and holds a large-scale market promotion activity oriented to enterprises without reporting
in advance, the CSRC shall impose upon it a warning, or a fine, or even revoke it, etc.

Article 37

Where a representative office implements false publicity or unfair competition, the CSRC shall give it a warning, a fine, or even
revoke it, etc.

Chapter VI Supplementary Rules

Article 38

The establishment of a representative office within the territory of China by a stock exchange of Hong Kong Special Administrative
Region, Macao Special Administrative Region or Taiwan Area shall be implemented by reference to these Measures.

Article 39

The documents as required to be submitted by an applicant under these Measures shall be in Chinese. For the articles of association,
main business rules or annual reports of a foreign stock exchange, Chinese abstracts thereof may be provided together with the original
texts.

Article 40

These Measures shall enter into force as of July 1, 2007.



 
China Securities Regulatory Commission
2007-05-20

 






CIRCULAR OF THE MINISTRY OF COMMERCE AND THE STATE ADMINISTRATION OF FOREIGN EXCHANGE CONCERNING FURTHER STRENGTHENING AND STANDARDIZING THE EXAMINATION AND APPROVAL OF FOREIGN DIRECT INVESTMENT IN REAL ESTATE INDUSTRY

Circular of the Ministry of Commerce and the State Administration of Foreign Exchange concerning Further Strengthening and Standardizing
the Examination and Approval of Foreign Direct Investment in Real Estate Industry

Shang Zi Han [2007] No.50

The authorities responsible for commerce and foreign exchange in all provinces, autonomous region, municipalities, and cities specifically
designated in the state plan, and Xinjiang Production and Construction Corps:

Six departments of the State Council (namely, Ministry of Construction, Ministry of Commerce, National Development and Reform Commission,
People’s Bank of China, State Administration for Industry of Commerce and State Administration of Foreign Exchange) jointly issued
Opinions on Regulating the Access to and Administration of Foreign Investment in the Real Estate Market (Jian Zhu Fang [2006] No.
171, hereinafter referred to as the Opinions) for the purpose of standardizing foreign fund access to and administration of real
estate market. The local authorities strictly implemented the prescriptions and requirements in the Opinions and made some substantial
achievement. However, some problems still remain in some regions. In accordance with the laws and regulations of foreign investment
and the relevant prescriptions in the Opinions, the relevant particulars concerning further strengthening and standardizing the examination,
approval, record for file and supervision of foreign investment in real estate are hereby notified as follows:

1.

The local commerce authorities shall strictly implement the Opinions and the Circular of the General Office of the Ministry of Commerce
concerning Implementing Circular concerning Standardizing Foreign Fund Access to and Administration of Real Estate Market (Shang
Zi Zi [2006] No. 192), strengthen the examination, approval and supervision of foreign-funded real estate enterprises, and strictly
control foreign investment in top grade real estate.

2.

Foreign-funded investment in the development and operation of real estate market shall observe the principle of project company.

(1)

In the case of applying for opening a real estate company, the right of land use and ownership of real estate building, or the booking
sale/purchase of land use or real estate right signed with land administration authority, land developer/ the owner of real estate
building. The examination and approval authority may not approve it if the aforesaid requirements are not met.

(2)

Should such enterprises as have established new-added real estate or business of foreign-funded enterprises, and as are engaged in
the development and operation of new real estate project, the enterprises hereof shall, in light of the relevant laws and rules,
apply to the examination and approval authority for the relevant procedures concerning increasing business scope or extending business
scale.

3.

The merge and acquisition or investment in domestic real estate enterprises by means of return investment (including the same actual
manipulator) shall be strictly controlled. Foreign investor may not alter the means of actual manipulator of domestic real estate
enterprises, evade the examination and approval upon foreign-funded real estate. Should the foreign exchange authority discovers
the foreign-funded real estate enterprises established by such means as deliberate evasion and false statement, the authority hereof
shall investigate it for remitting capital and the additive yield of its own accord to evade foreign exchange responsibility.

4.

Foreign investor engaged in domestic real estate development or operation shall abide by the principle of business existence, lawfully
apply for establishing foreign-funded enterprises in real estate and engage in the relevant business in accordance with the approved
business scope. The Chinese and foreign parties to the foreign-funded real estate enterprise shall not conclude the clauses guaranteeing
fixed return or the fixed return in disguised form of any party by any means.

5.

The local authority responsible for examining and approving the establishment of foreign investment shall record for file in the Ministry
of Commerce.

6.

The authority responsible for foreign exchange administration and designated foreign exchange bank shall not handle procedure of settlement,
sale, and remittance of capital exchange for such foreign-invested real estate enterprises as have not completed the procedure of
record for file in the Ministry of Commerce or have not passed the joint annual inspection upon foreign-funded enterprises.

7.

With regard to the foreign-funded real estate enterprises examined and approved by local authority hereof against the law, the Ministry
of Commerce shall investigate and rectify it, the authority of foreign exchange administration shall not handle such procedures as
foreign exchange registration hereto.

Ministry of Commerce

State Administration of Foreign Exchange

May 23, 2007



 
Ministry of Commerce, State Administration of Foreign Exchange
2007-05-23

 






CIRCULAR OF THE STATE ADMINISTRATION OF TAXATION ABOUT MATTERS REGARDING THE PAYMENT OF ENTERPRISE INCOME TAX BY FOREIGN-INVESTED ENTERPRISES CONDUCTING COMMUNICATIONS SERVICES

Circular of the State Administration of Taxation about Matters Regarding the Payment of Enterprise Income Tax by Foreign-invested
Enterprises Conducting Communications Services

Guo Shui Han [2007] No. 610

The state taxation bureaus of all provinces, autonomous regions, municipalities directly under the Central Government and cities specifically
designated in the state plan, the local taxation bureaus of Guangdong Province, Hainan Province and Shenzhen Municipality:

The related matters regarding the payment of enterprise income tax by foreign-invested enterprises conducting communication services
are notified as follows subject to the related provisions of the Detailed Rules for the Implementation of the Income Tax Law of the
People’s Republic of China for Foreign-invested Enterprises and Foreign Enterprises (hereinafter referred to as Detailed Rules):

1.

Depreciation life of some fixed assets

(1)

Issues concerning the depreciation of pylons, pipelines, simple houses, mobile houses and other fixed assets. The comprehensive communication
pylons that are used by communications enterprises for receiving and sending signals, the pipelines that are used for storing communications
optical cable facilities and the simple houses that are used for storing the facilities of communications stations, as well as other
fixed assets, etc are absolute component parts of the communications equipments, and shall be uniformly included into the scope of
fixed assets of the communications equipments, the depreciation of which shall be calculated based on the period of 10 years in accordance
with the provisions in Article 35 of the Detailed Rules.

(2)

Issues concerning the depreciation life of communications equipments and computer system equipments. Due to equipment renewal, replacement,
upgrading and transformation and other reasons, a communications enterprise may change the 7-year depreciation life of 2G communications
equipments and computer system equipments of supporting net into 5 years, the shortest as prescribed in Article 35 of the Detailed
Rules according to the equipment renewal condition. In the remaining years after the adjustment, depreciation shall be calculated
on the basis of the book balance of each fixed asset by the straight-line method. The aforesaid adjustment shall be reported to the
competent taxation authorities for archival filing.

2.

Deduction of personnel cost

When prepaying the enterprise income tax of each season, any communications enterprise that implements the management mode of pegging
labor cost to performance evaluation with respect to personnel cost (including wages and welfare expenses, etc.) may temporarily
list the planned amount of personnel cost as the actual personnel cost in accordance with the principle of accounting on the accrual
basis as prescribed in Article 11 of the Detailed Rules,. When making annual declaration of enterprise income tax, it shall adjust
this amount on the basis of the amount actually occurred.

3.

Deduction of expenses for plan of accumulated points

Communications enterprises will develop the plan of accumulated points to reward the clients, which contains giving accumulated points
to clients with certain consuming capacity and rewarding them real objects or services in light of the accumulated points. The expenses
incurred to the real objects or services rewarded to clients may be listed under the cost of the current period by communications
enterprises, while those spent for other purposes may not be listed under the cost.

4.

Accounting unit of entertainment expenses

The entertainment expenses of each branch of a communications enterprise shall be calculated on the basis of branch unit independently.
When paying enterprise income tax on a consolidated basis, a communications enterprise shall calculate the amount concerning the
entertainment expenses actually incurred by the enterprise as a whole (including those incurred by the head office) on a consolidated
basis in light of the proportion as prescribed in Article 22 of the Detailed Rules for the Implementation of the Tax Law.

The present Circular shall enter into force as of the tax year of 2006.

State Administration of Taxation

May 30, 2007



 
State Administration of Taxation
2007-05-30

 






OFFICIAL REPLY OF THE STATE ADMINISTRATION OF TAXATION ABOUT HOW TO DEAL WITH THE TAX ISSUES CONCERNING THE INCOMES OBTAINED BY FOREIGN-FUNDED ENTERPRISES ENGAGING IN REAL ESTATE DEVELOPMENT FROM LEASEBACK BUSINESS

Official Reply of the State Administration of Taxation about How to Deal With the Tax Issues Concerning the Incomes Obtained by Foreign-funded
Enterprises Engaging in Real Estate Development from Leaseback Business

Guo Shui Han [2007] No.603

The State Taxation Bureau of Hunan Province:

We have received your Request for Instructions on Tax Issues Concerning the Incomes Obtained by Enterprises Engaging in Real Estate
Development and Operation from Leaseback Business (Xiang Guo Shui Fa [2006] No.106). We hereby make a reply as follows:

1.

In case any foreign-funded enterprise that engages in real estate development and operation transfers any estate such as premise or
building, etc, as built and developed by itself by means of distribution, and then leases back the estate from the buyer, it shall
split the leaseback business into distributing business and leasing business, and handle the tax affairs of each business respectively
whatever leasing mode it takes. The balance between the income as obtained by the enterprise from distributing or transferring the
post_title to the estate and the related cost and expenses on the post_title to the transferred estate shall be counted into the taxable amount
of income in the current period as the business profits and losses in the current period.

2.

In case any enterprise transfers one or more of the following rights and interests or risks of assets via leaseback business, it shall
be regarded as that the enterprise has transferred part or whole post_title to the estate no matter whether the formalities for the alteration
of legal ownership of the estate (such as estate rights registration or ownership transfer) has been handled:

(1)

rights and interests to obtaining the income from the appreciation of fixed assets;

(2)

assuming the losses as incurred from various kinds of damage (including physical damage and depreciation);

(3)

rights and interests to the possession of assets;

(4)

rights and interests to using assets during the period of continued existence of the assets in the future;

(5)

rights and interests to disposing the assets.

3.

With respect to any leaseback transactions of estate between an enterprise and any of its affiliated parties, the provisions of this
Reply, as well as related taxation administrative provisions on business contact between affiliated enterprises shall be applicable.

4.

Where overdue tax or tax refund is involved when handling tax affairs under the provisions of this Reply, it shall be handled pursuant
to the related provisions of the Law of the People’s Republic of China on the Administration of Tax Collection and the Detailed Rules
for its implementation.

State Administration of Taxation

May 31, 2007



 
State Administration of Taxation
2007-05-31

 






OFFICIAL REPLY OF THE STATE ADMINISTRATION OF TAXATION ABOUT LEVY OF URBAN LAND USE TAX OF FOREIGN-INVESTED ENTERPRISES AND FOREIGN ENTERPRISES

Official Reply of the State Administration of Taxation about Levy of Urban Land Use Tax of Foreign-invested Enterprises and Foreign
Enterprises

Guo Shui Han [2007] No. 596

Local Taxation Bureau of Xiamen,

We have received your Request for Establishment of Transitional Period for the Levy of Land Use Tax of foreign-funded enterprises
(Xia Di Shui Fa [2007] No.50). Upon study, we hereby render a reply as follows:

“Decision of the State Council on the Modification of ‘Interim Regulations of the People’s Republic of China Governing Land Use Tax
in Cities and Towns'”, which brings foreign-invested enterprises and foreign enterprises into the levy scope of urban land use tax,
is an important measure of the country to strengthen administration of land, is conducive to give full play to taxation as an economic
leverage, guide enterprises of all types to utilize land reasonably and economically, protect land resources, and make tax burden
fair. All localities should levy urban land use tax on enterprises of all types, including foreign-invested enterprises and foreign
enterprises in strict accordance with the decision of the State Council and relevant provisions of the revised “Interim Regulations
of the People’s Republic of China Governing Land Use Tax in Cities and Towns”.

State Administration of Taxation

June 1, 2007



 
State Administration of Taxation
2007-06-01

 






CIRCULAR OF THE STATE ADMINISTRATION OF TAXATION ON ENTRY INTO FORCE AND ENFORCEMENT OF THE AGREEMENT BETWEEN THE GOVERNMENT OF PEOPLE’S REPUBLIC OF CHINA AND THE GOVERNMENT OF BRUNEI DARUSSALAM FOR THE AVOIDANCE OF DOUBLE TAXATION AND PREVENTION OF FISCAL EVASION WITH RESPECT TO TAXES ON INCOME

Circular of the State Administration of Taxation on Entry into Force and Enforcement of the Agreement between the Government of People’s
Republic of China and the Government of Brunei Darussalam for the Avoidance of Double Taxation and Prevention of Fiscal Evasion with
respect to Taxes on Income

Guo Shui Fa [2007] No.64

The state taxation bureaus and local taxation bureaus of all provinces, autonomous regions, municipalities directly under the Central
Government and the cities specifically designated in the state plan,

The Government of People’s Republic of China and the Government of Brunei Darussalam have officially signed the Agreement for the
Avoidance of Double Taxation and Prevention of Fiscal Evasion with respect to Taxes on Income (hereinafter referred to as the Agreement)
on September 21, 2004. The foreign affairs departments of both governments have exchanged notes with each other on February 25th,
2005 and November 29th, 2006, respectively, confirming that the necessary legal procedures for entry into force have been accomplished.
Subject to the provision of Article 28 of the Agreement, the Agreement shall enter into force as of January 1, 2007. The State Administration
of Taxation has printed and distributed the text of the aforesaid Agreement to you in the “Guo Shui Han [2006] No. 1103” on October
8th, 2004. Please comply with and enforce it accordingly.

State Administration of Taxation

June 5, 2007



 
State Administration of Taxation
2007-06-05

 






CIRCULAR OF CHINA BANKING REGULATORY COMMISSION CONCERNING WHOLLY FOREIGN-FUNDED BANKS AND CHINESE-FOREIGN EQUITY JOINT BANKS TO CONDUCT THE BANK CARD BUSINESS

Circular of China Banking Regulatory Commission concerning Wholly foreign-funded Banks and Chinese-foreign Equity Joint Banks to Conduct
the Bank Card Business

Yin Jian Fa [2007] No. 49

All branches of China Banking Regulatory Commission,

In order to regulate the administration of bank card business of wholly foreign-funded banks and Chinese-foreign equity joint banks
and prevent the risks of bank card business, pursuant to the Regulations of the People’s Republic of China on the Administration
of Foreign-funded Banks, the Detailed Rules on the Implementation of the Regulations of the People’s Republic of China on the Administration
of Foreign-funded Banks and Measures for the Administration of the Bank Card Business, you’re hereby notified of the following issues
on wholly foreign-funded banks and Chinese-foreign equity joint banks to conduct the bank card business:

1.

Wholly foreign-funded banks and Chinese-foreign equity joint banks may apply for conducting the bank card business as of the day when
the present Circular is printed and distributed.

2.

The term “bank cards” as mentioned in the present Circular is classified into RMB cards and foreign currency cards as per different
currencies, including debit cards, quasi-credit cards and credit cards.

Quasi-credit cards and credit cards are referred to as credit cards in general.

3.

Wholly foreign-funded banks and Chinese-foreign equity joint banks may, upon approval of China Banking Regulatory Commission (hereinafter
referred to as the CBRC), conduct the bank card business within the scope of its clients. An applicant shall satisfy the following
requirements:

(1)

Its capital adequacy ratio, asset quality and other main supervisory indicators are in conformity with the related provisions of the
CBRC;

(2)

It has management rules and risk management measures commensurate with its needs of conduction of bank card business;

(3)

It has established a computer system in conformity with the related business and technical standards and has the technical capability
to ensure the safety of the banking information within the territory of China;

(4)

It has technicians, managerial personnel and corresponding management institutions which can satisfying the needs of conduction of
bank card business; and

(5)

Other prudent conditions as requested by the CBRC.

If a wholly foreign-funded bank or Chinese-foreign equity joint bank plans to issue foreign currency cards, it shall have the qualifications
as approved by the foreign exchange administrative department of the State Council for conducting settlement of foreign exchange
and sale of foreign currencies.

4.

A wholly foreign-funded bank or Chinese-foreign equity joint bank which plans to issue bank cards shall abide by the bank card business
and technical standards as formulated by the People’s Bank of China and meet the general requirements for the network of bank cards.

5.

A wholly foreign-funded bank or Chinese-foreign equity joint bank which plans to conduct the bank card business shall apply to the
branch of the CBRC of the place where its headquarters is located by analogy to the application materials as stipulated in the Measures
for the Administration of Bank Card Business.

6.

The branch of the CBRC of the place where the headquarters of the wholly foreign-funded bank or Chinese-foreign equity joint bank
is located shall submit the application materials together with the examination opinions to the CBRC within 20 days as of the date
of receiving a complete set of application materials.

The CBRC shall, within 3 months after receiving the compete set of application materials submitted by the wholly foreign-funded bank
or Chinese-foreign equity joint bank to conduct bank card business, make a decision of approval or disapproval. In case it makes
a decision of disapproval, it shall give a written notification to the applicant and make an explanation.

7.

If a wholly foreign-funded bank or Chinese-foreign equity joint bank, after getting the approval to conduct the bank card business,
needs to conduct the business of such new types of bank cards as quasi-credit cards or credit cards, it shall make application for
approval under the present Circular.

8.

A wholly foreign-funded bank or Chinese-foreign equity joint bank shall, after getting the approval to conduct the bank card business,
report to the local institution dispatched by the CBRC the types of bank cards which it plans to conduct.

If a branch of a wholly foreign-funded bank or Chinese-foreign equity joint bank plans to conduct the bank card business upon authorization
of its headquarters, it shall, before conducting such business, report to the local institution dispatched by the CBRC the types
of bank cards which it plans to conduct upon the strength of the pertinent approval documents and the authorization of its headquarters.

9.

The supervision and administration over the bank card business of wholly foreign-funded banks and Chinese-foreign equity joint banks
shall be subject to the related provisions on the administration of bank card business.

All related branches of the CBRC should promptly transmit the present Circular to your sub-branches and the foreign-funded institutions
of foreign-funded banks under your respective jurisdiction.

China Banking Regulatory Commission

June 6, 2007



 
China Banking Regulatory Commission
2007-06-06

 






INTERIM MEASURES FOR THE ADMINISTRATION OF THE ISSUANCE OF RMB BONDS IN HONG KONG SPECIAL ADMINISTRATIVE REGION BY FINANCIAL INSTITUTIONS WITHIN THE TERRITORY OF CHINA

Announcement No. 12, 2007 of the People’s Bank of China and the National Development and Reform Commission

The Interim Measures for the Administration of the Issuance of RMB Bonds in Hong Kong Special Administrative Region by Financial Institutions
Within the Territory of China have been formulated jointly by the People’s Bank of China and the National Development and Reform
Commission. They are hereby promulgated for entry into force.

People’s Bank of China

National Development and Reform Commission

June 8, 2007

Interim Measures for the Administration of the Issuance of RMB Bonds in Hong Kong Special Administrative Region by Financial Institutions
Within the Territory of China

Article 1

In order to further promote the development of RMB business in Hong Kong Special Administrative Region (hereinafter referred to as
Hong Kong) and regulate the issuance of RMB bonds in Hong Kong by financial institutions within the territory of China, the present
Interim Measures are formulated in accordance with the Law of the People’s Republic of China on the People’s Bank of China and other
relevant laws and administrative regulations.

Article 2

Financial institutions within the territory of China herein means the policy banks and commercial banks that are established within
the territory of the People’s Republic of China (excluding those in Hong Kong SAR, Macao SAR or Taiwan Area) according to relevant
laws.

Article 3

RMB bonds herein means the securities that are issued in Hong Kong by financial institutions within the territory of China, valued
by RMB, have a term of one year or more, and for which the principal and interests are repaid according to stipulation. The detailed
term for bond issuance may be determined in light of the macro economic and financial status of the Mainland and the convertibility
process of capital accounts.

Article 4

In the case of issuing RMB bonds in Hong Kong, a financial institution within the territory of China shall submit application materials
to the People’s Bank of China (PBC), and transmit a photocopy thereof to the National Development and Reform Commission (NDRC) as
well. The PBC shall, jointly with the NDRC, verify the qualification and scale of RMB bonds to be issued by financial institutions
within the territory of China in Hong Kong, and report the decision to the State Council.

Article 5

The State Administration of Foreign Exchange (SAFE) shall make registration and statistical monitoring upon the RMB bonds that are
issued in Hong Kong by financial institutions within the territory of China, check and ratify the repayment of principal and interests
by financial institutions within the territory of China as well.

Article 6

In the case of issuing RMB bonds in Hong Kong, a commercial bank shall satisfy the requirements as follows:

1.

It has a sound corporate governance mechanism;

2.

With adequacy ratio of the core capital not less than 4 percent;

3.

It has had continuous profits for the last three years;

4.

It has adequate reserves for loan losses;

5.

Its risk surveillant indicator is consistent with the relevant provisions of the regulatory organ;

6.

It has committed no major illegal or law-breaking act in the last three years; and

7.

Other requirements as prescribed by the PBC.

As for the issuance of RMB bonds in Hong Kong by a policy bank, it shall be handled by referring to the requirements for commercial
banks.

Article 7

The application materials for the issuance of RMB bonds by a financial institution shall include:

1.

an application report concerning the issuance of RMB bonds;

2.

the resolution of the board of directors on the approval of the issuance of RMB bonds or documents with equal legal force;

3.

the scale and term of the bonds to be issued;

4.

the introduction for collecting RMB bonds (with an attachment of issuance scheme);

5.

financial statements of the financial institution within the territory of China for the last three years as audited by certified public
accountants, and the full text of audit opinions in written form;

6.

legal opinions in written form as issued by attorneys;

7.

the (duplicate) photocopy of the Enterprise Legal Person Business License, and the (duplicate) photocopy of the Financial Permit;
and

8.

other documents as required by the PBC.

Article 8

The PBC shall, jointly with the NDRC, make a decision of approval or disapproval to the application for the issuance of RMB bonds
by a financial institution within the territory of China within the time limit as provided in the Administrative License Law of the
People’s Republic of China. The NDRC shall give a reply on the scale of RMB bonds at the same time if approved.

Article 9

A financial institution within the territory of China shall initiate the issuance of RMB bonds in Hong Kong within 60 workdays as
of the approval of the PBC on issuance of RMB bonds, and complete the issuance within the time limit as prescribed. Where a financial
institution within the territory of China fails to complete the issuance within the time limit as prescribed, the document relating
to approving the issuance of RMB bonds shall be invalid automatically, and this issuance of bonds shall not be continued; if it is
necessary to issue such bonds, a new application shall be separately submitted in accordance with the present Interim Measures. The
standards for the completion of issuance within the time limit as prescribed shall be determined in accordance with the legal provisions
of Hong Kong on the administration of the financial market.

Article 10

The financial institution within the territory of China and the underwriting institution shall determine the interest rate or price
for the issuance of RMB bonds through negotiations.

Article 11

A financial institution within the territory of China shall report the circumstances concerning the issuance of RMB bonds to the
PBC, the NDRC and the SAFE within 10 workdays after conclusion of the issuance of RMB bonds, and apply for the registration of bond
funds to the local SAFE branch office subject to the relevant provisions.

Article 12

The funds involving the return of money raised through issuance of RMB bonds by financial institutions within the territory of China
as well as the repayment of principal and interests of bonds shall be transferred through the clearing bank for RMB business in Hong
Kong.

Article 13

A financial institution within the territory of China shall transfer back the money as deducted by relevant issuance expenses to
the Mainland within 30 workdays after the money raised through issuance of RMB bonds is in place, and such money shall be used in
strict accordance with the purposes as disclosed in the introduction.

Article 14

The principal and interests of RMB bonds shall be repaid in RMB. In the case of paying the principal and interests of RMB bonds,
a financial institution within the territory of China shall submit an application to the local SAFE branch office prior to five workdays.
The bank shall go through the formalities for overseas repayment of the principal and interests of RMB bonds for the financial institution
within the territory of China upon an approval document as issued by the local SAFE branch office.

Article 15

With respect to the return of the money as raised through issuance of RMB bonds and the follow-up funds as well as the repayment
of the principal and interests, a financial institution within the territory of China shall make a report on the international balance
of payments in accordance with the Operational Rules for the Overseas Assets, Liabilities, Losses and Proceeds of Financial Institutions
(Hui Guo Fa Zi [1996] No. 13).

Article 16

The sales, trading, registration, trusteeship, settlement of and information disclosure regarding RMB bonds in Hong Kong shall be
subject to the relevant provisions as prescribed by Hong Kong.

Article 17

The present Interim Measures are subject to the interpretation of the PBC.

Article 18

The present Interim Measures shall enter into force as of the promulgation date.



 
People’s Bank of China, National Development and Reform Commission
2007-06-08

 






MEASURES FOR THE ADMINISTRATION OF FINANCIAL INSTITUTIONS’ REPORT OF TRANSACTIONS SUSPICIOUS OF FINANCING FOR TERRORIST PURPOSES

Decree No.1, 2007 of the People’s Bank of China

[2007]No.1

Under the Anti-Money Laundering Law of the People’s Republic of China, the Law of the People’s Republic of China on the People’s Bank
of China and other laws and regulations, the People’s Bank of China constituted the Measures for the Administration of Financial
Institutions’ Report of Transactions Suspicious of Financing for Terrorist Purposes have been adopted at the 13th executive meeting
on June 8th, 2007. They are hereby promulgated and shall enter into force as of the promulgation date.

President Zhou Xiaochuan

June 11, 2007

Measures for the Administration of Financial Institutions’ Report of Transactions Suspicious of Financing for Terrorist Purposes

Article 1

In order to monitor the activities of financing for terrorist purposes, prevent terrorism-oriented financing by means of financial
institutions and regulate financial institutions’ report of transactions suspicious of financing for terrorist purposes, the present
Measures are constituted under the Anti-Money Laundering Law of the People’s Republic of China, the Law of the People’s Republic
of China on the People’s Bank of China and other laws and regulations.

Article 2

The term “financing for terrorist purposes” as mentioned in the present Measures refers to the following behaviors:

1.

to raise, possess or use funds or other forms of property by terrorist organizations or terrorists;

2.

to assist terrorist organizations, terrorists, terrorism or terrorist criminal activities with funds or other forms of property;

3.

to possess, use or raise funds or other forms of property for terrorist purposes or terrorist criminal activities;

4.

to possess, use or raise funds or other forms of property for terrorist organizations or terrorists.

Article 3

The present Measures are applicable to the following financial institutions established within the territory of the People’s Republic
of China under law:

1.

policy banks, commercial banks, rural cooperative banks, urban credit cooperatives and rural credit cooperatives;

2.

securities companies, futures companies and fund management companies;

3.

insurance companies and insurance assets management companies;

4.

trust and investment companies, financial assets management companies, finance companies, financial lease companies, auto finance
companies and currency brokerage companies;

5.

other financial institutions as determined and announced by the People’s Bank of China.

The present Measures are applicable to the report of transactions suspicious of financing for terrorist purposes by institutions conducting
remittance, payment and clearing business, fund sale business and insurance brokerage.

Article 4

The People’s Bank of China and the branches thereof shall conduct supervision and check over financial institutions’ report of transactions
suspicious of financing for terrorist purposes.

Article 5

The anti-money laundering monitoring and analysis center set up by the People’s Bank of China takes charge of accepting and analyzing
the report of transactions suspicious of financing for terrorist purposes.

If the anti-money laundering monitoring and analysis center finds out that the report of transactions suspicious of financing for
terrorist purposes submitted by a financial institution is incomplete or erroneous, it may send a notice of supplement or correction
to the financial institution, which shall make a supplement or correction within five workdays after accepting the notice.

Article 6

The report of transactions suspicious of financing for terrorist purposes sent by financial institutions their working personnel
for the purpose of fulfilling the obligation of combating financing for terrorist purposes and under law shall be protected by law.

Article 7

A financial institution shall submit to its headquarters the report of transactions suspicious of terrorist-oriented financing, which
shall submit the electronic form of the report to the anti-money laundering monitoring and analysis center within 10 days upon the
occurrence of the related incident or appoint another institution to do so. If a financial institution has no headquarters or it
is impossible for it to report suspicious transactions to the anti-money laundering monitoring and analysis center via its headquarters
or any other institution appointed by its headquarters, the reporting method shall be separately determined by the People’s Bank
of China.

Article 8

In suspicion of any client, fund, transaction or potential transaction involved in any terrorism, terrorist criminal activities,
terrorist organization, or of any person conducting financing activities for terrorist purposes, a financial institution shall submit
a report of transactions suspicious of financing for terrorist purposes, irrespective of whether the amount of funds or the value
of the property involved is huge. A report of suspicious transactions shall be submitted under, but not limited to, any of circumstances
as follows:

1.

any client suspicious of raising or attempting to raise funds or property of other forms for any terrorist organization, terrorist
or crime of terrorist activities;

2.

any client suspicious of providing or attempting to provide funds or other forms of property for any terrorist organization, terrorist,
person conducting financing activities for terrorist purposes or terrorist criminal activities;

3.

any client suspicious of preserving, managing, operating funds or other forms of property for any terrorist organization or terrorists,
or attempting to do so;

4.

any client or his/its trading counterpart suspicious of being a terrorist organization, terrorist or person conducting financing activities
for terrorist purposes;

5.

any fund or any other form of property suspicious of being sourced from or being about to source from any terrorist organization,
terrorist or person conducting financing activities for terrorist purposes;

6.

any fund or property of other forms suspicious of being used or being about to be used for financing for terrorist purposes, crime
of terrorist activities or any other terrorist purposes, or being used by any terrorist organization, terrorist or person conducting
financing activities for terrorist purposes;

7.

other circumstances under which the financial institution and its working personnel have good reasons to suspect that any fund, property
of other forms, transaction or client is involved in terrorism, terrorist criminal activities, terrorist organization, terrorist
or personnel conducting financing activities for terrorist purposes.

Article 9

If any financial institution discovers or has good reasons to suspect that any client or his/its trading counterpart is in relation
to any of the following lists, it shall promptly file a report of suspicious transactions with China Anti-money Laundering Monitoring
and Analysis Center and the local branch of the People’s Bank of China, and take measures under law as required by the related competent
department:

1.

list of terrorist organizations or terrorists as announced by the related department or institution of the State Council;

2.

list of terrorist organizations or terrorists as announced by judicial authorities;

3.

list of terrorist organizations or terrorists as listed in any decision of the Security Council of the United Nations; or

4.

list of other terrorist organization suspects or terrorist suspects that must be paid attention to as required by the People’s Bank
of China.

If there is any other provision on the monitoring of above-mentioned lists in any law or administrative regulations, such provision
shall prevail.

Article 10

Financial institutions may refer to the Measures for the Administration of the Financial Institutions’ Report of Large-sum Transactions
and Suspicious Transactions (Decree No.2, 2006 of the People’s Bank of China) and other related provisions for the specific report
elements, report form and requirements for filling in such reports.

Article 11

If any financial institution violates the present Measures, it shall be imposed upon a punishment by the People’s Bank of China under
the provisions of Article 31 and Article 32 of the Anti-Money Laundering Law of the People’s Republic of China. And the People’s
Bank of China shall make suggestions to China Banking Regulatory Commission, China Securities Regulatory Commission or China Insurance
Regulatory Commission to take any of the following measures in light of different circumstances:

1.

to order the financial institution to stop its business for internal rectification or revoking its business license;

2.

to disqualify the directly liable directors, senior managers and other persons of the financial institution from their posts or to
forbid them to work in the financial industry;

3.

to order the financial institution to impose disciplinary punishment upon the directly liable directors, senior managers and other
persons.

If any branch of the People’s Bank of China at the county (municipal) level finds out any financial institution in violation of the
present Measures, it shall report to the branch of the People’s Bank of China at the next higher level, which shall give a punishment
or make a suggestion under the provision of the preceding paragraph.

Article 12

The Provisions of the People’s Bank of China on the Procedure of Administrative Punishment (Decree No.3, 2001 of the People’s Bank
of China) shall be abided by the People’s Bank of China or any of its branches at or above the county (municipal) level when imposing
any administrative punishment upon any financial institution.

Article 13

When implementing work of preventing and combating financing for terrorist purposes and fulfilling such obligations as establishing
and perfecting inner control system, identifying clients’ identity, keeping clients’ identity-related materials and confidentiality,
etc., financial institutions shall be governed by the related provisions on anti-money laundering

Article 14

The present Measures shall enter into force as of the promulgation date.



 
People’s Bank of China
2007-06-11

 






12Page 1 of 2

CONSTITUTION ACT, 1982 – page 22

NOTES (1) The enacting clause was repealed by the Statute Law Revision Act, 1893, 56-57 Vict., c. 14 (U.K.). It read as...

CONSTITUTION ACT, 1982 – page 21

CONSTITUTION ACT, 1982 – page 20

CONSTITUTION ACT, 1982 – page 19

CONSTITUTION ACT, 1982 – page 18

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