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CIRCULAR OF CHINA SECURITIES REGULATORY COMMISSION ON REPEALING THE INTERIM MEASURES FOR THE ADMINISTRATION OF CONVERTIBLE CORPORATE BONDS

China Securities Regulatory Commission

Circular of China Securities Regulatory Commission on Repealing the Interim Measures for the Administration of Convertible Corporate
Bonds

No. 42 [2006] of China Securities Regulatory Commission

Upon the approval of the State Council, the Interim Measures for the Administration of Convertible Corporate Bonds, which were permitted
by the State Council on March 8, 1997 and promulgated by the Securities Commission of the State Council on March 25, 1997, shall
be repealed on May 8, 2006.

China Securities Regulatory Commission

May 6th, 2006



 
China Securities Regulatory Commission
2006-05-06

 






ANNOUNCEMENT NO. 32, 2006 OF MINISTRY OF COMMERCE ON FINAL ARBITRATION OF ANTI-DUMPING INVESTIGATION ON PYROCATECHOL ORIGINATING FROM THE UNITED STATES AND JAPAN

Ministry of Commerce

Announcement No. 32, 2006 of Ministry of Commerce on Final Arbitration of Anti-dumping Investigation on Pyrocatechol Originating from
the United States and Japan

[2006] No. 32

In accordance with Anti-dumping Regulations of the People’s Republic of China, Ministry of Commerce released announcement on May 31,
2005, deciding to carry out anti-dumping investigation on pyrocatechol (hereinafter referred to as “investigated commodity”) originating
from the United States and Japan.

In line with investigation, Ministry of Commerce finally verdicts dumping of the investigated commodity, injures the domestic pyrocatechol
industry, and the existence of causality between dumping of the investigated commodity and the injury of domestic industry.

In accordance with related regulations of Anti-dumping Regulations of the People’s Republic of China, Tariff Committee of the State
Council decides to impose anti-dumping duties on pyrocatechol originating from the United States and t Japan as from May 22, 2006.

The tariff code of the investigated commodity is 29072910.

Rate of Anti-dumping Duties on Different Companies:

American companies:

RHODIA INC 4%;

Other American companies 46.81%

Companies in Japan 42.86%

In case importers cannot provide certificate of origin and the Customs cannot confirm the origin of the imported pyrocatechol either,
a maximum anti-dumping duties among the effective anti-dumping measures will be imposed on the imported investigated commodity.

As from May 22, 2006, importers should pay relevant anti-dumping duties for import of pyrocatechol originating from the United States
and Japan. The formula for counting of anti-dumping duties:

Amount of anti-dumping duty= duty-paying value * rate of anti-dumping duty

The duration of the anti-dumping duties on pyrocatechol originating from the United States and Japan is 5 years as from May 22, 2006.

Appendix: Ministry of Commerce’s Final Arbitration on Anti-dumping Investigation on Pyrocatechol Originating from the United States
and Japan(Omitted)

Ministry of Commerce

May 22, 2006



 
Ministry of Commerce
2006-05-22

 






CIRCULAR OF THE PEOPLE’S BANK OF CHINA ON RELATIVE ISSUES CONCERNING THE ADJUSTMENT OF HOUSING CREDIT POLICIES

Circular of the People’s Bank of China on Relative Issues concerning the Adjustment of Housing Credit Policies Yin Fa [2006] No.184

All the state-owned commercial banks, joint stock commercial banks, the Shanghai headquarters of the People’s Bank of China and all
branches and business management departments of the People’s Bank of China, the central sub-branches of the People’s Bank of China
in all provincial capital cities, and the central sub-branches of the People’s Bank of China in all vice-provincial cities,

It is specified in the Circular of the General Office of the State Council on Transferring the Opinions of the Ministry of Construction
and Other Departments on Adjusting House Supply Structure and Stabilizing House Price (Guo Ban Fa [2006] No.37, hereinafter referred
to as the Circular) that: From June 1, 2006, the proportion of the down payment of the mortgage loans for individual houses shall
be no less than 30%. But the provisions on the proportion of the down payment of 20% for houses purchased for living with less than
90 square meters in the dwelling size shall still be followed. For the purpose of implementing the spirit of the Circular, the following
Circular on the relative matters is hereby made: I. Each commercial bank shall pay close attention to and seriously implement the decisions and plans of the Central Government concerning
strengthening the adjustment and control on real estate market, and formulate implementation measures strictly according to the requirements
of the Circular and in combination with the reality to carry out the new housing credit policy. II. When accepting applications for housing loans, each commercial bank shall require the applicants to specify the use for buying houses
in light of the facts, and determine the minimum down payment of the housing loans strictly according to the provisions of the Circular,
and input information on housing mortgage loans into the basic database for personal credit information of the People’s Bank of China
in light of relative provisions in time. III. Each branch of the People’s Bank of China shall pay close attention to the change of the real estate market, strengthen monitoring
and analysis, and reinforce the “Window Guidance”, and urge commercial banks to carry out the aforesaid provisions, and report the
relative information in time.

The Shanghai headquarters of the People’s Bank of China and each branch and business management department of the People’s Bank of
China shall forward this Circular to each urban commercial bank and urban and rural credit cooperatives within areas under their
jurisdiction. People’s Bank of China May 31, 2006



 
People’s Bank of China
2006-05-31

 






ANNOUNCEMENT NO. 47, 2006 OF MINISTRY OF COMMERCE, ON COMPETITIVE BIDDING OF NATIONAL RESERVE OF SUGAR PROCESSING

Announcement No. 47, 2006 of Ministry of Commerce, on Competitive Bidding of National Reserve of Sugar Processing

[2006] No. 47

In accordance with the requirement of Announcement 26, 2006 of National Development and Reform Commission, Ministry of Commerce and
Ministry of Finance, part of national reserve of sugar shall be processed through competitive bidding. Matters of Concern are listed
as follows:

1.

Organization and Management:

Assessment Group shall be established so as to confirm the processing enterprises, processing amount and expenses. Assessment Group
shall also be in charge of the competitive bidding and the management of processing.

China Merchandise Reserve Management Center shall in charge of the tasks of organization and implementation.

2.

Processing Amount, Location out of Warehouse and Project Phases Division of Raw Sugar:

The processing total is 200,000 tons, which were put into storage from 2004 to 2005. See Appendix 1 for details.

Processing of raw sugar shall be conducted with competitive bidding after being divided into shares and coded. Each share is 5000
tons.

3.

Processing sort and Sugar Recovery:

The raw sugar is white granulated sugar. Sugar recovery shall be more than 92%.

4.

Product Sugar Quality, Package and Specification Requirement:

The quality of white granulated sugar shall be Grade one or above of National Standard GB317-1998. The Package quality of white granulated
sugar shall meet the national standard. Net Content of each bag is 50 kg.

5.

Requirement on Allocate and Transport, Processing Schedule and Putting Product Sugar in Storage:

After being chosen, the processing enterprises shall be prepared promptly. Then, after receiving the notice on starting operation,
the processing work shall be started in accordance with the required time. The product sugar shall be reserved in time into the warehousing
storage. Taking delivery of goods shall be conducted directly at the product sugar depot of the processing enterprise.

6.

Competitive bidding of processing price is between 240-280 yuan per ton. Vicious competitive bidding on price shall be prohibited.

7.

Earnest Money for Bidding

Earnest money shall be submitted before 17: 00 pm of June 18, 2006.

8.

Qualification Requirements on Processing Enterprises:

The daily processing capacity of processing enterprises shall be no less than 500 tons and the storage capacity shall be no less than
20,000 tons. The processing enterprises shall be close to the storage location. The enterprises shall be creditworthy, with high
credit grade and no negative records. (See Appendix for details)

Specific competitive bidding measures and points for attention shall be notified later.

Ministry of Commerce

June 15, 2006



 
Ministry of Commerce
2006-06-15

 






THE PROVISIONS ON THE ADMINISTRATION OF INTERNATIONAL VERIFICATION ON THE IMPORT AND EXPORT OF CHEMICALS LIABLE TO PRODUCING NARCOTIC DRUGS






Decree of the Ministry of Commerce and the Ministry of Public Security

No.8

The Provisions on the Administration of International Verification on the Import and Export of Chemicals Liable to Producing Narcotic
Drugs, which were deliberated and adopted at the 5th ministerial meeting of the Ministry of Commerce on May 17th, 2006, are hereby
promulgated upon the approval of the Ministry of Public Security, and shall come into force 30 days later as of the date of promulgation.

Bo Xilai, the Minister of Commerce

Zhou Yongkang, the Minister of Public Security

September 7, 2006

The Provisions on the Administration of International Verification on the Import and Export of Chemicals Liable to Producing Narcotic
Drugs

Article 1

With a view to preventing chemicals liable to producing narcotic drugs from flowing into illegal channels and regulating the international
verification on the import and export of chemicals liable to producing narcotic drugs, the present Measures are formulated according
to the Regulations on the Administration of Chemicals Liable to Producing Narcotic Drugs.

Article 2

The import and export of chemicals liable to producing narcotic drugs (hereinafter referred to as chemicals subject to verification)
as listed in the Attachment of the present Provisions, namely, the Catalogue for the Administration of International Verification
upon the Import and Export of Chemicals Liable to Producing Narcotic Drugs (hereinafter referred to as Catalogue), shall adopt the
administrative system of international verification.

The Ministry of Commerce shall, in conjunction with the Ministry of Public Security, adjust the Catalogue in accordance with the actual
situations, and shall publish it in the form of announcement.

Article 3

The Ministry of Commerce and the Ministry of Public Security shall jointly take charge of the administration of international verification
upon the import and export of chemicals liable to producing narcotic drugs throughout the country.

Article 4

When importing and exporting the chemicals subject to verification, the operator of the import and export of the chemicals liable
to producing narcotic drugs (hereinafter referred to as operator) shall apply for permit according to the related provisions of the
Provisions on the Administration of the Import and Export of Chemicals Liable to Producing Narcotic Drugs.

Article 5

In case an operator applies for exporting chemicals subject to verification, the Ministry of Commerce shall examine it within 5 days
as of the receipt of the related digital data and written materials; if it complies with the related provisions, the Ministry of
Commerce shall transfer the digital data to the Ministry of Public Security for international verification.

Article 6

The Ministry of Commerce shall examine it within 3 days as of the receipt of the digital data transferred by the Ministry of Commerce;
if the application complies with the related provisions, it shall send it to the competent governmental department of the importing
country or region for examination and request it to give a reply within 10 days.

During the process of examination of the digital data, the Ministry of Commerce may, under the request of the Ministry of Public Security,
provide related written materials.

Article 7

As regards an application that has been confirmed and replied by the competent governmental department of the importing country or
region, the Ministry of Public Security shall notify the Ministry of Commerce within 3 days as of the receipt of the reply on the
verification confirmation.

In case the competent governmental department of the importing country or region fails to reply upon the expiration of the time limit,
the Ministry of Public Security may, pursuant to the international practices and in light of the specific products and the different
countries and regions, analyze and bring forward suggestions on whether or not to permit the export and notify the Ministry of Commerce
in written form.

Article 8

As regards the export of the samples of chemicals subject to verification, it is not necessary to conduct international verification
on those of 100g or less in quantity; the Ministry of Commerce shall handle it according to the Provisions on the Administration
of the Import and Export of Chemicals Liable to Producing Narcotic Drugs, and shall notify the results to the Ministry of Public
Security.

Article 9

When importing chemicals liable to producing narcotic drugs by an operator, where the competent governmental department of the importing
country or region requests our country to conduct international verification, the Ministry of Public Security shall, within 5 days
as of the receipt of the request, transfer the related materials to the Ministry of Commerce for confirmation.

The Ministry of Commerce shall verify the authenticity and qualification of the operator and the rationality of the purposes of the
importing chemicals liable to producing narcotic drugs. When it is necessary, the Ministry of Commerce may entrust a competent department
of commerce at the provincial level to verify them, which shall report the verification results within 10 days as of the date of
being entrusted by the Ministry of Commerce. The Ministry of Commerce shall timely feedback the verification results to the Ministry
of Public Security.

Where it is necessary to verify the actual purposes and doses of the importing chemicals liable to producing narcotic drugs of an
operator, the Ministry of Public Security may entrust a local public security organ to verify them, which shall report the verification
results within 10 days as of the date being entrusted by the Ministry of Public Security. The Ministry of Public Security shall notify
the Ministry of Commerce in a timely manner.

The Ministry of Public Security shall timely notify the competent governmental department of the importing country or region after
receiving the verification results from the Ministry of Commerce or a local public security organ.

Article 10

The operator of chemicals subject to verification shall strengthen its internal administration, establish and improve the archive
administration of the import and export of the chemicals subject to verification, keep the archives for at least two years for future
reference, and shall appoint special personnel to take charge of the related work of examining the import and export of the chemicals
subject to verification.

The operator of chemicals subject to verification shall actively cooperate with the Ministry of Commerce and the public security organs
during the process of verification.

Article 11

In case it is found that the planned import or export chemicals subject to verification are possible to flow into illegal channels,
the Ministry of Commerce may cancel the related licenses it has already issued.

Article 12

The Ministry of Commerce and the Ministry of Public Securities may publish the results of international verification and the violations
of regulations by operators on a regular or irregular basis.

Article 13

In case an operator of the chemicals subject to verification violates the provision of Article 10 , the Ministry of Commerce shall
give him a warning; if the circumstance is serious, it may impose a fine not more than 30,000 Yuan; if there is any violation against
the public security administration, the public security organ may impose punishments of public security administration upon him;
if a crime is constituted, the criminal liabilities shall be investigated according to law.

Article 14

The present Measures shall come into force 30 days after the date of promulgation. The Provisions of the former Ministry of Foreign
Trade and Economic Cooperation and the Ministry of Public Security on the Administration of International Verification on the Import
and Export of Chemicals Liable to Producing Narcotic Drugs (Wai Jing Mao Mao Fa [2002] No. 147) shall be repealed concurrently.

Attachment:￿￿Catalogue for the Administration of International Verification on the Import and Export of Chemicals Liable to Producing
Narcotic Drugs


Attachment

￿￿

Attachment:

Catalogue for the Administration of International Verification on the Import and Export of Chemicals Liable to Producing Narcotic Drugs

￿￿

Serial No.

Commodity Name

Commodity Code

Category I

1

Ephedrine (Ephedrine, Ephedrine Hydrochloride)

2939410010

2

Ephedrine Sulfate

2939410020

3

DL-Ephedrine Hydrochloric

2939410030

4

Ephedrine Oxalic

2939410040

5

Pseudoephedrine (Pseudoephedrine, Pseudoephedrine Hydrochloride)

2939420010

6

Pseudoephedrine Sulfate

2939420020

7

Methyl Ephedrine Hydrochloride

2939490010

8

D,L-Methylephedrine Hydrochloric

2939490020

9

Norephedrine and its Salt

2939490030

10

Ephedrine Extract Powder Used for Producing Pesticides

1302199011

11

Ephedrine Extract Used for Producing Pesticides

1302199012

12

Ephedrine Extract Powder Used for Producing Medicine

1302199091

13

Ephedrine Extract Used for Producing Medicine

1302199092

14

Other Ephedrine Extract Powder

1302199093

15

Other Ephedrine Extract

1302199094

16

Ephedrine Herbal Powder Used as Medicinal Materials

1211903910

17

Ephedrine Herbal Powder Used as Perfume Spices

1211905010

18

Ephedrine Herbal Powder for Other Uses

1211909910

19

Ephedrine Single Preparation ((Pseudo) Ephedrine Hydrochloric Tablets, Ephedrine Hydrochloric Injection, Ephedrine Hydrochloric Tablets, Ephedrine Tablets Sulfate)

3004409010

20

Piperonal (Heliotrope Aldehyde, 3, 4-Dioxamethyl Methanal, Heliotropine)

2932930000

21

l-Phenyl-2-Acetone (Phenylpropyl Acetone)

2914310000

22

3,4-Methylenedioxyphenyl-2-Propanone

2932920000

23

Safrole (4-allyl -1,2- Dioxamethyl Benzene)

2932940000

24

Iso-Safrole (4-Propenyl-1, 2- Dioxamethyl Benzene)

2932910000

25

Sassafras Oil

3301299010

26

N-Acetyl O-Amino Benzoic Acid(N-Acetyl Anthranilic Acid, 2-Acetyl AminoBenzene Acid )

2924230010

27

Ergometrine

2939610010

28

Ergotamine

2939620010

29

Lysergic Acid

2939630010

Category II

30

Phenyl Acetic Acid

2916340010

31

Acetic Anhydride Oxide (Acetic Anhydride)

2915240000

32

Potassium Permanganate

2841610000

33

O-Amino Benzoic Acid (Anthranilic Aacid)

2922431000

CIRCULAR OF THE MINISTRY OF FINANCE AND THE STATE ADMINISTRATION OF TAXATION ON ADJUSTING THE STANDARD OF THE TAXABLE AMOUNT OF COAL RESOURCE TAX OF HEBEI PROVINCE

Circular of the Ministry of Finance and the State Administration of Taxation on Adjusting the Standard of the Taxable Amount of Coal
Resource Tax of Hebei Province

Cai Shui [2006] NO.137

The public finance department and the local taxation bureau of Hebei Province:

It is decided upon deliberation that the standard of the coal resource tax amount to be paid in your province will be increased to
3 yuan each ton as from September 1, 2006.

Please abide hereby.

Ministry of Finance

State Administration of Taxation

September 15, 2006

 
Ministry of Finance, State Administration of Taxation
2006-09-15

 



MEASURES FOR PUBLIC FINANCE EXAMINATION WORK

Ministry of Finance

Order of the Ministry of Finance

No. 32

The Measures for Public Finance Examination Work, which were adopted at the executive meeting of the Ministry of Finance on January
10, 2006 upon deliberation, are hereby promulgated and shall enter into effect as of the day of March 1, 2006.

Minister of the Ministry of Finance, Jin Renqing

January 26, 2006

Measures for Public Finance Examination Work

Article 1

The present Measures are formulated in accordance with the laws of the Budget Law of the People’s Republic of China and the Regulation
on Penalties and Sanctions against Illegal Fiscal Acts and other administrative regulations for the purpose of regulating the public
finance examination work, guaranteeing and supervising the effective implementation of finance examination conducted by the department
of finance and protecting the legitimate rights and interests of citizens, legal persons and other organizations.

Article 2

The present Measures shall be applied to any finance examination implemented in accordance with the law by the departments of finance
of the people’s governments at or above the county level and the offices dispatched by the departments of finance of the people’s
governments at or above the provincial level (hereinafter uniformly referred to as the finance department).

Article 3

The term “public finance examination” as mentioned in the present Measures refers to an act that the finance department carries out
an examination on the implementation of regulations on finance and taxes and the matters of administration on fiscal, finance and
accounting etc. by entities and individuals for the purpose of executing its duties and functions of supervision over public finance,
rectifying any illegal fiscal act and maintaining the fiscal and economic order of the state.

Article 4

When implementing any public finance examination, the finance department shall follow the principles of legality, objectivity, fairness
and openness.

Article 5

The finance department shall, in accordance with the provisions of laws, regulations, rules as well as the present Measures, implement
public finance examination within the scope of its prescribed powers and functions, and draw a relevant conclusion on examination
or decision on treatment or punishment in accordance with law.

Any dispute on the jurisdiction of public finance examination shall be reported to the same superior finance department to designate
the jurisdiction.

Article 6

The finance department shall establish an annual plan of public finance examination and organize and implement relevant public finance
examination in accordance with the plan, or organize and carry out the relevant public finance examination in accordance with the
requirements of daily fiscal administration.

Article 7

Where the finance department implements any public finance examination, an examination team shall be set up and a team leader shall
be designated as well. Examination teams shall adopt a leader responsibility system.

Article 8

The examiners of an examination team shall consist of functionaries of the finance department, who shall be qualified as follows:

(1)

Being familiar with the relevant laws, regulations, rules and policies;

(2)

Mastering the relevant professional knowledge; and

(3)

Having the capability of investigation and research, comprehensive analysis and literal expression.

Article 9

In accordance with the requirements, the finance department may invite special institutions or personnel with specialized knowledge
to assist the relevant examiners to implement the finance examination.

Article 10

Any examiner who has any direct interest with any entity or individual under examination (hereinafter uniformly referred to as the
examinee) shall withdraw. Where any examinee believes that any examiner has any interest with him, he may require the withdrawal
of the examiner.

The principal of the finance department shall be responsible for making decision on the withdrawal of any examiner.

Article 11

The examiners shall comply with the relevant provisions of the state on confidentiality and shall not reveal any state secret or commercial
secret learned from the examination or use any data as learned from the examination for any matter impertinent to the examination.

Article 12

Before the implementation of any finance examination, the examination team shall be familiar with the relevant laws, regulations,
rules and policies concerning the examined items, find out the essential information of the relevant examinee and formulate a work
plan for public finance examination.

Article 13

Where the finance department implements any public finance examination, it shall send a Notice on Public Finance Examination to the
examinee 3 workdays before the relevant examination.

Where the finance department considers that the sending of a Notice on Public Finance Examination 3 workdays before the relevant examination
will cause any negative impact on the examination, it may, with the approval of the principal of the finance department, the Notice
on Public Finance Examination may be sent at a proper time before implementing the public finance examination.

The contents in a Notice on Public Finance Examination shall be as follows:

(1)

The name of the examinee;

(2)

The basis, scope, contents, means and time of the examination;

(3)

The specific requirement to the relevant examinee on cooperating with the work of examination;

(4)

A name list of the leader and examiners of the examination team and their contact ways; and

(5)

The seal of the finance department and the date of issuance.

Article 14

Where any public finance examination is implemented, there shall be not less than 2 examiners, who shall show the relevant examinee
their certificates.

The examiners may inquire of the relevant examinee about the relevant information, wherein the relevant examinee shall cooperate with
them by replying to the inquiries and reflecting the circs faithfully. A transcript shall be formulated for an inquiry, which shall
bear the signature or seal of the examinee.

Article 15

Where any public finance examination is implemented, the examiners may require the relevant examinee to provide relevant materials,
which may be photocopied thereof.

Where any material as provided is written in a foreign language or in any language of a minority ethnical group, the examinee shall
translate the said material into Chinese.

Article 16

Where any public finance examination is implemented, such methods as account check, inventory check, inquiry and letter-confirmation,
calculation and analytical check may be adopted by the examiners.

Article 17

Where any public finance examination is implemented, with the approval of the principal of the department of finance, the relevant
examiners may inquire the relevant entity that has any economic and business relation with the examinee about the relevant information
and may also inquire the relevant financial institution about the deposit of the examinee under examination according to law.

Any examiner shall, when inquiring about the relevant deposit, hold the Notice on Deposit Inquiry as issued by the finance department
and perform the obligation of confidentiality.

Article 18

Where any public finance examination is implemented, and under any circumstance that the relevant evidence may be destroyed or lost
or hard to obtain later, the said evidence may be registered for preservation in advance upon the approval of the principal of the
finance department and a decision of treatment shall be made within 7 workdays timely. During this period, the relevant examinee
or relevant personnel shall not destroy by melting or burning or transfer the evidence.

Article 19

The certification materials as obtained by any examiner in an examination shall bear the signature or seal of the relevant provider.

For any material that doesn’t bear the signature or seal of the relevant provider, the examiner shall give a note of the reasons.

Article 20

Where any public finance examination is implemented, the relevant examiner shall make records and extracts on the contents and matters
under examination, and formulate a draft on public finance examination, which shall bear the signature or seal of the examinee.

Article 21

The leader of an examination team shall conduct supervision over the work quality of other examiners in the team and shall conduct
necessary examination and review on the relevant matters.

Article 22

When meeting with any serious problem during the implementation of examination, the examination team shall report it to the finance
department for instructions in time.

Article 23

Before any examination is concluded, an examination team shall solicit the opinions of the relevant examinee on such matters as the
fundamental state of implementation on the examination as well as the subsistent problem of the examinee in written form. The relevant
examinee shall, within 5 workdays as of the day when he receives a letter of opinion solicitation in written form, bring up written
opinions or explanations. Where the relevant examinee fails to refer any written opinion or statement within the prescribed time
limit, it shall be considered to have no different objection.

Article 24

An examination team shall, within 10 workdays as of the day when the relevant examination comes to an end, submit to the finance department
a written report on public finance examination. Under any special circumstance, the time limit to submit a report on public finance
examination may be prolonged upon approval, which shall be not more than 30 days at the most.

An examination team shall, when handing in a report on public finance examination, simultaneously hand in such materials as administrative
treatment, suggestion on penalties or suggestion on transfer for treatment as well as a draft on public finance examination.

Article 25

A report on public finance examination shall include such contents as follows:

(1)

The brief introduction of the examinee;

(2)

The scope, contents, means and time of the examination;

(3)

The implementation of regulations on finance and taxes by the examinee as well as the essential information on such administrative
matters as fiscal, finance and accounting;

(4)

The basic facts of fiscal illegal act of the examinee as well as the basis and evidence for confirmation;

(5)

The opinions or statement of the examinee;

(6)

Any other matter that shall be submitted to the finance department; and

(7)

The signature of the leader of the examination team as well as the date when the report on public finance examination is filed.

Article 26

The finance department shall establish and perfect a check system of public finance examination, authorize the relevant internal functionary
department or special personnel to have a check on the report of public finance examination as well as other relevant materials as
handed in by the examination team.

Where any functionary in charge of a check has any direct interest with the relevant examinee or examiner, he shall withdraw.

Article 27

The relevant functionary department or special personnel in charge of a check shall conduct the check to the report on public finance
examination and other relevant materials from the following aspects:

(1)

Whether or not the facts as confirmed in the examination are clear;

(2)

Whether or not the evidence as obtained is true and ample;

(3)

Whether or not the procedures of examination are legal;

(4)

Whether or not the legal basis for confirming any illegal fiscal act is proper;

(5)

Whether or not the administrative treatment, suggestion on punishment or suggestion on transfer for treatment is appropriate; and

(6)

Any other matter that shall be checked.

The relevant functionary department or special personnel shall, after a check on the report of the public finance examination, put
forward relevant check opinions.

Article 28

The finance department shall, after conducting an examination on a report of public finance examination and relevant opinions on check,
make the following treatment in accordance with the different circumstances:

(1)

Drawing a conclusion on examination for an examinee without illegal fiscal act;

(2)

Drawing a decision on administrative treatment or punishment to any examinee with illegal fiscal act in accordance with law; or

(3)

Transferring any matter that doesn’t belong to the power limit of this department.

In the case of any great difference between the report on public finance examination and the relevant opinions on check, the finance
department shall order the examination team to make further verification as well as supplement and correct of the relevant information
or materials. Where necessary, another examination team shall be sent to implement renew a public finance examination.

Article 29

The finance department shall, when drawing any decision on administrative treatment or punishment, formulate a decision letter on
administrative treatment or punishment. A Decision Letter on Administrative Treatment or Punishment shall indicate the matters as
follows:

(1)

The name or post_title and address of the party involved;

(2)

The facts in violation of any law, regulation or rule and the relevant evidence;

(3)

The categories and basis of administrative treatment or punishment;

(4)

The means and time limit for the performance of administrative treatment or punishment;

(5)

In the case of dissatisfaction with the relevant administrative treatment or punishment, the means and time limit to apply for an
administrative reconsideration or lodge an administrative litigation; and

(6)

The name of the finance department that has made a decision on administrative treatment or punishment as well as the date when the
decision is made. The Decision Letter on Administrative Treatment or Punishment shall be affixed with the seal of the finance department
that has made the decision.

Article 30

The finance department shall, before making any decision on administrative punishment, notify the party involved of the facts, reasons
and basis for the administrative punishment, and notify the party involved of the rights that he may enjoy in accordance with law.

Any party involved has the right to make statement and defense. The finance department shall fully solicit the opinions of the party
involved and verify the facts, reasons and evidence as brought up by the party involved. Where the relevant facts, reasons and evidence
as brought up by the parties involved are reasonable, the finance department shall adopt them.

Article 31

The finance department shall, before making any decision on administrative punishment where about the right to hold a hearing shall
be notified, inform the party involved of his right to require a hearing. Where any party involved requires a hearing, the finance
department shall organize it.

When the finance department holds a hearing, it shall implement the hearing in accordance with the provisions of the Measures for
Implementing a Hearing on Administrative Punishment by Public Finance Organ (Order of the Ministry of Finance, No.23).

Article 32

The finance department shall, after making a decision on administrative treatment or punishment, send a Decision Letter on Administrative
Treatment or Punishment to the party involved.

The Decision Letter on Administrative Treatment or Punishment shall become effective as of the day of sending.

Article 33

Any party involved who is dissatisfied with any administrative treatment or punishment may apply for an administrative check or lodge
an administrative litigation in accordance with the provisions of the Administrative Review Law of the People’s Republic of China
and the Administrative Litigation Law of the People’s Republic of China.

During the period of any administrative check or administrative litigation, the implementation of the relevant administrative treatment
or punishment shall not be stopped except as otherwise herein provided by law.

Article 34

The finance department shall conduct supervision and examination over the implementation of the relevant administrative treatment
or punishment in accordance with law.

Article 35

Where any examinee has any illegal fiscal act, the finance department may proclaim the illegal fiscal act thereof as well as the relevant
decision on administrative treatment, punishment or sanction.

Article 36

Where any public finance examination is concluded, the finance department shall do a good job in filing for records of the relevant
materials pertinent to public finance examination.

Article 37

Where any functionary of the finance department abuses his power, neglects his duty or misconduct for self-seeking in any public finance
examination, an administrative sanction shall adopted to him in accordance with law. Where any crime is constituted, the offender
shall be subject to relevant criminal liabilities in accordance with law.

Article 38

The finance department shall, when finding any serious problem that may influence the implementation of policies for finance and taxes
or budget, report it to the people’s government at the same level or the finance department at a higher level in a timely manner.

Article 39

Any accounting examination as implemented by the finance department shall be applicable to the present Measures as well as the Measures
for the Implementation of Accounting Supervision by the Public Finance Department (Order of the Ministry of Finance, No.10)

Article 40

The present Measures shall go into effect as of March 1, 2006. The Rules on the Public Finance Examination (Cai Jian Zi [1998] No.223)
as promulgated by the Ministry of Finance on October 8, 1998 shall be abolished simultaneously.



 
Ministry of Finance
2006-01-26

 






NOTICE OF THE MINISTRY OF COMMERCE ON ISSUES CONCERNING ENTRUSTING STATE-LEVEL ECONOMIC AND TECHNOLOGICAL DEVELOPMENT TO EXAMINE AND APPROVE FOREIGN INVESTMENT COMMERCIAL ENTERPRISES AND AGENT ENTERPRISES OF INTERNATIONAL FREIGHT FORWARDING

The Ministry of Commerce

Notice of the Ministry of Commerce on Issues concerning Entrusting State-level Economic and Technological Development to Examine and
Approve Foreign Investment Commercial Enterprises and Agent Enterprises of International Freight Forwarding

Shang Zi Han [2005] No.102

February 9, 2006

To the departments responsible for commerce of all provinces, autonomous region, municipalities under the central government, cities
directly under State planning and Xinjiang Production and Construction Corps, all state-level economic and technological development
zones, Xiamen Haicang Taiwanese Investment. Zone, Shanghai Jinqiao Export Processing Zone, Hainan Yangpu Economic Development Zone,
Ningbo Daxie Development Zone, Suzhou Industrial Park:

In order to implement Notice of the General Office of the State Council on Forwarding the Opinions on Promoting the Further Development
of State-level Economic and Development Zones (Guo Ban Fa [2005] No.15), to further promote the effective absorption of foreign capital
by state-level economic and technological development zone, to further streamline the approval procedure and improve its efficiency
in line with the requirement of the State Council on streamlining executive approval, in accordance with the relevant spirit of Circular
of the Ministry of Commerce of the People’s Republic of China, on Issues of Relegating the Department Concerned Examining and Approving
of Foreign-funded Commercial Enterprises to Local Government(Shang Zi Han[2005]No.94) and Decree No. 19, 2005 of the Ministry of
Commerce of the People’s Republic of China, Promulgating the Revised Measures for Administration of Foreign-funded International
Forwarding Agent, the notice concerning Entrusting State-level Economic and Technological Development to Examine and Approve Foreign
Investment Commercial Enterprises and Agent Enterprises of International Freight Forwarding is, after research and decision, hereby
given as follows:

First, the management committee state-level economic and technological development zone shall, in accordance with the requirement
in Circular of the Ministry of Commerce of the People’s Republic of China, on Issues of Relegating the Department Concerned Examining
and Approving of Foreign-funded Commercial Enterprises to Local Government as well as relevant laws, regulations, and rules concerning
foreign investment, be entrusted to examine and approve the establishment and alteration of foreign enterprises, issue approval certificates
and submit them the Ministry of Commerce for record and submit the copies hereof to provincial commercial departments for record.
The management committee of state-level economic and technological development zone shall, as for the commercial enterprise website
beyond its examination and approval, solicit the relevant commercial departments where the website locates for their opinion upon
the examination and approval of the website programming.

Second, the international agent enterprises of international express delivery operated by foreign investors shall be subject to the
examination, approval and administration of the Ministry of Commerce. The establishment, alteration, issuing of approval certificate
of otherwise international freight agent enterprises operated by foreign investors shall be entrusted to the management committee
of state-level economic and technological development zone to be responsible for its examination, approval and submit to the Ministry
of Commerce for record in accordance with the relevant requirement of Decree No. 19, 2005 of the Ministry of Commerce of the People’s
Republic of China, Promulgating the Revised Measures for Administration of Foreign-funded International Forwarding Agent, as well
as laws, regulations and rules concerning foreign investment.

Third, the other businesses of aforesaid industries shall, except those subject to entrustment of the Ministry of Commerce for examination
and approval, be conducted in accordance with Measures for the Administration on Foreign Investment in Commercial Fields, and Measures
for the Administration of Foreign-funded International Freight Forwarding Enterprises.

Fourth, the management committee of state-level economic and technological development zone shall, entrusted by the Ministry of Commerce
to be engaged in foreign investment commerce, international freight forwarding agent enterprises, meet the following conditions:

(1)

It shall implement streamlined and efficient administrative system in accordance with Notice of the General Office of the State Council
on Forwarding the Opinions on Promoting the Further Development of State-level Economic and Development Zones (Guo Ban Fa [2005]
No.15).

(2)

It shall link its website with that of the Ministry of Commerce to issue approval certificate for foreign-funded enterprises via foreign
investment statistics system and inform promptly the Ministry of Commerce its implementation of examination and approval of foreign
investment commerce, international freight forwarding agent enterprise via Internet.

Fifth, after state-level economic and technological development zone has completed management system record, personnel training and
approved its qualification after acceptance via internet, the Ministry of Commerce shall separately undertake the corresponding entrustment
procedures in batches



 
The Ministry of Commerce
2006-02-09

 






ACCOUNTING STANDARDS FOR BUSINESS ENTERPRISES NO.1 – INVENTORIES

Ministry of Finance

Accounting Standards for Business Enterprises No.1 – Inventories

Cai Kuai [2006] No.3

February 15, 2006

Chapter I General Provisions

Article 1

These Standards are formulated in accordance with the Accounting Standards for Enterprises – Basic Standards for the purpose of regulating
the recognition of the inventories, measurement and disclosure of related information. .

Article 2

Other relevant accounting standards shall apply to such items as follows:

(1)

The Accounting Standard for Business Enterprises No. 5 – Biological Assets shall apply to the consumptive biological assets.

(2)

The Accounting Standard for Business Enterprises No. 15 – Construction Contracts shall apply to the costs of the inventories together
through construction contracts.

Chapter II Recognition

Article 3

The term “inventories” refers to finished products or merchandise possessed by an enterprise for sale in the daily of business, or
work in progress in the process of production, or materials and supplies to be consumed in the process of production or offering
labor service.

Article 4

The inventories shall not be recognized unless they satisfy such conditions simultaneously as follows:

(1)

The economic benefits pertinent to the inventories are likely to flow into the enterprise; and

(2)

The cost of the inventories can be measured reliably.

Chapter III Measurement

Article 5

The inventories shall be initially measured in light of their cost. The cost of inventory consists of purchase costs, processing costs
and other costs.

Article 6

The purchase costs of inventories consists of the purchase price, relevant taxes, transport fees, loading and unloading fees, insurance
premiums and other expenses that may be relegated to the purchase costs of inventories.

Article 7

The processing costs of inventories consist of the direct labor and production overheads allocated according to a particular method.

The “production overheads” refers to all indirect expenses happened in the process of manufacturing products and providing labor services
by an enterprise. An enterprise shall, according to the nature of the production overheads, choose the reasonable method for the
allocation of production overheads.

If two or more kinds of products are manufactured in the same production process, and the processing cost for each product is unable
to be separated from that of others directly, the processing costs shall be allocated among the products in a reasonable way.

Article 8

“Other costs of inventories” refers to those costs, other than purchase costs and processing costs, happened in bringing the inventories
to their present location and condition.

Article 9

The following expenses shall be recognized as current profits and losses as they are happened, which shall not be included in the
cost of inventories:

(1)

The direct materials, direct labor and production overheads that are abnormally consumed;

(2)

The storage expenses (excluding the expenses which are necessary in the production process for reach the next production stage); and

(3)

Other expenses that cannot be included in the costs happened in bringing the inventories to their present location and condition.

Article 10

The borrowing costs, which shall be included in the cost of inventories, shall be disposed in accordance with the Accounting Standard
for Enterprises No. 17 – Borrowing costs.

Article 11

The cost of inventories invested by an investor shall be ascertained in accordance with the value as stipulated in the investment
contract or agreement, unless it is not stipulated fair in the contract or agreement.

Article 12

The cost of agricultural products in the harvest, and the cost of inventories obtained by the exchange of non-monetary assets, recombination
of liabilities and merger of enterprises shall be ascertained in accordance with the Accounting Standard for Business Enterprises
No. 5 – Biological Assets, Accounting Standard for Business Enterprises No. 7 – Exchange of Non-monetary Assets, Accounting Standard
for Business Enterprises No. 12 – Debt Restructurings and Accounting Standard for Business Enterprises No. 20 -Business Combinations,
respectively.

Article 13

Where an enterprise provides labor service, the direct labor expenses, other direct expenses as well as the indirect expenses included
thereto shall be included in the cost of inventories.

Article 14

An enterprise shall confirm the actual cost of sending out inventories by employing the first-in-first-out method, the weighted average
method or the specific identification method.

The cost of sending out inventories of items with similar nature and purpose shall be confirmed by employing the same cost calculation
method.

Generally, the cost of non-substitutable inventories, and goods purchased and produced as well as the labor services offered for specific
projects, the cost of sending out shall be confirmed by employing the specific identification method.

As to the inventories, which have been already sold, their costs shall be carried forward as the current profits and losses and the
relevant provision for the loss on decline in value of inventories shall also be carried forward.

Article 15

On the date of balance sheet, the inventories shall be measured whichever is lower in accordance with the cost and the net realizable
value.

If the cost of inventories is higher than the net realizable value, the provision for the loss on decline in value of inventories
shall be made and be included in the current profits and losses.

The net realizable value refers to in the daily business activity the amount after deducting the estimated cost of completion, estimated
sale expense and relevant taxes from the estimated sale price of inventories.

Article 16

An enterprise shall confirm the net realizable value of inventories on the ground of reliable evidence obtained, taking into consideration
of the purpose for holding inventories and the effects of events occurring after the date of the balance sheet.

The materials held for production shall be measured at cost if the net realizable value of the finished products is higher than the
cost. If a decline of the value of materials shows that the net realizable value of the finished products is lower than the cost,
the materials shall be measured at the net realizable value.

Article 17

The net realizable value of inventories held for the execution of sales contracts or labor contracts shall be calculated on the ground
of the contract price.

If an enterprise holds more inventories than the quantities subscribed in the sales contract, the net realizable value of the excessive
part of the inventories shall be calculated on the ground of the general sales price.

Article 18

Ordinarily an enterprise shall make provision for loss on decline in value of inventories on the ground of each item of inventories.

For inventories with large quantity and relatively low unit prices, the provision for loss on decline in value of inventories shall
be made on the ground of the categories of inventories.

For the inventories related to the series of products manufactured and sold in the same area, and of which the final use or purpose
is identical or similar thereto, and if it is difficult to measure them by separating them from other items, the provision for loss
on decline in value of inventories shall be made on a combination basis.

Article 19

An enterprise shall confirm the net realizable value of inventories on the balance sheet date. If the factors causing any write-down
of the inventories have disappeared, the amount of write-down shall be resumed and be reversed from the provision for the loss on
decline in value of inventories that has been made. The reversed amount shall be included in the current profits and losses.

Article 20

An enterprise shall amortize the easily consumed products of low value and packing articles and supplies by employing the one-off
write-off method or equal-split amortization method and bring it in the cost of the relevant assets or in the current profits and
losses.

Article 21

For any damage to the inventories of an enterprise, the enterprise shall include the amount after deducting the book value and relevant
taxes from the disposal income in the current profits and losses. The book value of inventories shall refer to the amount after deducting
the accumulative provision for loss on decline in value of inventories from the cost of inventories.

The loss of inventories shall be included in the current profits and losses.

Chapter IV Disclosure

Article 22

An enterprise shall, in the notes, disclose the information concerning to inventories as follows:

(1)

The book value of all inventories at the beginning and end of the period;

(2)

The methods to confirm the cost of sending out inventories;

(3)

The basis for confirming the net realizable value of inventories, the methods to make provision for the loss on decline in value of
inventories, the amount of the provision for loss on decline in value of inventories to be reversed in the current period, as well
as the relevant information about the making and reversion of the provision for loss on decline in value of inventories.

(4)

The book value of inventories used for a guaranty.



 
Ministry of Finance
2006-02-15

 






ACCOUNTING STANDARDS FOR ENTERPRISES NO. 25 – ORIGINAL INSURANCE CONTRACTS

the Ministry of Finance

Accounting Standards for Enterprises No. 25 – Original Insurance Contracts

No. [2006] of the Ministry of Finance

February 15, 2006

Chapter I General Provisions

Article 1

With a view to regulating the recognition, measurement of the original insurance contracts concluded by insurants and the presentation
of relevant information, the present Standards are formulated according to the Accounting Standards for Enterprises – Basic Standards.

Article 2

The term “insurance contract” refers to an agreement under which the insurer and the insured stipulate the insurance rights and obligations
and the insurer undertakes the insurance risks sourced from the insured. Insurance contracts are classified into original insurance
contracts and re-insurance contracts.

The term “original insurance contract” refers to an insurance contract under which the insurer charges the insurance premium and undertakes
the liability to pay the insurance money for the property losses resulted from the prescribed possible accident(s), or undertakes
the liability to pay the insurance money when the insured dies, or is injured, disabled or sick, or attains to the stipulated age
or time period.

Article 3

The following items shall be subject to other relevant accounting standards:

(1)

The impairment of assets such as the post-loss goods produced by an original insurance contract issued by an insurer shall be subject
to the Accounting Standards for Enterprises No. 1- Inventories.

(2)

A contract issued by an insurer to the insured on a risk other than the insurance risks shall be subject to the Accounting Standards
for Enterprises No. 22 – Recognition and Measurement of Financial Instruments and the Accounting Standards for Enterprises No. 37
– Presentation of Financial Instruments.

(3)

A reinsurance contract issued or held by an insurer shall be subject to the Accounting Standard for Enterprises – Reinsurance Contracts.

Chapter II Determination of Original Insurance Contracts

Article 4

No matter whether a contract concluded by an insurer and an insured is an original insurance contract or not, that whether or not
the insurer has undertaken the insurance risks shall, on the basis of a single-item contract, be judged according to the contract
terms.

Where the occurrence of an insurance accident is likely to cause the insurer to undertake the liability to pay the insurance money,
it shall be determined that the insurer has undertaken the insurance risks.

The term “insurance accident” refers to accidents which are prescribed in an insurance contract and fall within the scope of insurance
liabilities.

Article 5

Where a contract concluded by an insurer and an insured puts the insurer in a position of not only undertaking the insurance risks
but also other risks, it shall be respectively treated according to the following circumstances:

(1)

Where the insurance risks can be distinguished from other risks and can be measured separately, the insurance risks may be separated
from other risks. The part of insurance risks shall be determined as an original insurance contract. And the part of other risks
may not be determined as an original insurance contract.

(2)

Where the insurance risks cannot be distinguished from other risks, or where the insurance risks can be distinguished from other risks
but can not be measured separately, the entire contract shall be determined as an original insurance contract.

Article 6

The insurer shall, in light of whether or not it undertakes the liability to pay the insurance money during the extension period of
the original insurance contracts, classify the original insurance contracts into original life insurance contracts and original non-life
insurance contracts.

Where the insurer undertakes the liability to pay the insurance money during the extension period of an original insurance contract,
it shall determine it as an original life insurance contract. Where it does not undertake the liability to pay insurance money during
the extension period of an original insurance contract, it shall determine it as an original non-life insurance contract.

The “extension period of an original insurance contract” refers to the period during which the insured does not pay premium from the
maturity date of the previous period, but the insurer still undertake the liability to pay the insurance money.

Chapter III The Income from Original Insurance Contracts

Article 7

The premium income, which can meet the following requirements simultaneously, may be recognized:

(1)

An original insurance contract has been established and corresponding insurance liabilities have been undertaken;

(2)

The economic benefits related to the original insurance contract are highly probable to flow in;

(3)

The income related to the original insurance contract can be measured reliably.

Article 8

An insurer shall, according to the following provisions, calculate and determine the amount of insurance income:

(1)

As for an original non-life insurance contract, the amount of insurance income shall be determined according to the total premium
as stipulated in the original insurance contract.

(2)

As for an original life insurance contract, if the insurance premium as charged by installments, the amount of insurance income shall
be the premium charged in the current period. If the premium is charged in a lump sum, the insurance income shall be determined according
to the premium which shall be charged in a lump sum.

Article 9

Where an original insurance is cancelled prior to the expiration date, the insurer shall, according to the stipulations of the original
insurance contract, calculate and determine the refund to the insured as the refund premium, and record it in the profits and losses
of the current period.

Chapter IV Reserves for Original Insurance Contracts

Article 10

The reserves for original insurance contracts shall include unearned premium reserves, reserves for outstanding claims, reserves for
life insurance liabilities and reserves for long-term health insurance liabilities.

The term “unearned premium reserves” refers to the reserves drawn by an insurer for unexpired non-life insurance liabilities.

The term “reserve for outstanding claims” refers the reserves drawn by an insurer for the non-life insurance accidents which have
already occurred but have not been settled.

The term “reserves for life insurance liabilities” refers to the reserves drawn by an insurer for unexpired life insurance liabilities.

The term “reserves for long-term health insurance liabilities” refers to the reserves calculated and drawn by an insurer for unexpired
long-term health insurance liabilities.

Article 11

An insurer shall, in the current period of recognition of the income from non-life insurances, calculate and draw unearned premium
reserve as an adjustment to the premium income of the current period in light of the actuarial amount, and recognize the unearned
premium reserves as a liability.

An insurer shall, on the balance sheet date, recalculate the balance between the recognized amount of the unearned premium reserves
and the drawn amount of the unearned premium reserves in light of the actuarial amount, and shall make an adjustment to the unearned
premium reserves.

Article 12

An insurer shall, in the current period when the non-life insurance accident happens, draw the reserve for outstanding claims in light
of the actuarial amount, and shall recognize the reserve for outstanding claims as a liability.

The reserve for outstanding claims includes the reserve for outstanding claims that are incurred and reported, the reserve for outstanding
claims that are incurred but not reported as well as the reserve for the expenses of settlement of claims.

The “reserve for outstanding claims that are incurred and reported” refers to the reserve made by an insurer for the compensation
cases, in which non-life insurance accidents have occurred and claims are made to the insurer, but are not settled yet.

The “reserve for outstanding claims that are incurred but not reported” refers to the reserve made by an insurer for the compensation
cases, in which non-life insurance accidents have occurred but no claim is made to the insurer yet.

The “reserve for the expenses of settlement of claims” refers to the reserve made by an insurer for the attorney fees, litigation
fees, loss inspection fees, wages and salaries of the personnel for the settlement of claims and other expenses which are likely
to incur in compensation cases, in which non-life insurance accidents have occurred but which have not been settled yet.

Article 13

An insurer shall, in the current period of recognition of life insurance premiums, draw reserves for life insurance liabilities and
long-term health insurance liabilities in light of the actuarial amounts, and shall recognize the reserves for life insurance liabilities
and those for long-term health insurance liabilities as liabilities.

Article 14

An insurer shall, at least by the end of each year, test the abundance of the reserves for outstanding claims, life insurance liabilities,
and long-term health insurance liabilities.

Where the amount of relevant reserves which are recalculated and determined by the insurer in light of the actuarial amount exceeds
the drawn amount of the relevant reserves on the abundance test date, the relevant reserves shall be replenished on the basis of
the difference. If the amount of relevant reserves which are recalculated and determined by the insurer in light of the actuarial
amount is less than the residual amount of the relevant reserves on the abundance test date, no adjustment shall be made to the relevant
reserves.

Article 15

Where an original insurance contract is cancelled prior to its expiration date, the insurer shall write off the residue amounts of
the relevant reserves for unearned premiums, life insurance liabilities and long-term health insurance liabilities, and recorded
them into the profits and losses of the current period.

Chapter V Cost of Original Insurance Contracts

Article 16

The cost of an original insurance contract refers to the total outflow of economic benefits, which is incurred by the original insurance
contract, will result in the decrease of the owner￿￿s equities and is irrelevant to the distribution of profits to the owners.

The cost of an original insurance contract mainly includes the handling charges or commission, compensation cost, as well as the reserves
for outstanding claims, life insurance liabilities and long-term health insurance liabilities.

The compensation cost includes the indemnity or payment made by the insurer, and the expenses for the attorney fees, litigation fees,
loss inspection fees, wages and salaries of the personnel for the settlement of claims which are incurred during the settlement of
the claims.

Article 17

The handling fees and commissions, which are incurred to the insurer during the course of obtaining the original insurance contracts,
shall be recorded into the profits and losses of the current period.

Article 18

The reserves for outstanding claims, life insurance liabilities, and long-term health insurance liabilities, which are drawn by an
insurer in light of the actuarial amounts shall be recorded into the profits and losses of the current period.

An insurer shall, in the current period of determination of the amount of compensation, record into the profits and losses of the
current period the amount of compensation determined to make. Meanwhile, it shall offset the residual amount of the corresponding
reserves for outstanding claims, reserves for life insurance liabilities or for long-term health insurance liabilities.

Article 19

The reserves for outstanding claims, life insurance liabilities or long-term health insurance liabilities, which are replenished by
an insurer according to the abundance test, shall be recorded into the profits and losses of the current period.

Article 20

Any post-loss goods obtained by an insurer due to undertaking the liability to pay the insurance money shall be recognized as an asset
calculated at the market price of the same class of or similar asset, and shall be used to offset the compensation cost of the current
period.

When disposing of any post-loss goods, the insurer shall adjust the compensation cost of the current period according to the balance
between the amount received and the carrying amount of the post-loss goods.

Article 21

Where the subrogation recourse fee to be charged by an insurer for undertaking the liability to pay the insurance money meets the
following requirements simultaneously, it shall be recognized as the receivable subrogation recourse fee and shall be used to offset
the compensation cost of the current period:

(1)

The economic benefits related to this subrogation recourse fee is likely to flow in; and

(2)

The amount of the subrogation recourse fee can be measured reliably.

When an insurer receives the receivable subrogation recourse fee, it shall, pursuant to the balance between the received amount and
the carrying amount of the relevant receivable subrogation recourse fee, adjust the compensation cot of the current period.

Chapter VI Presentation

Article 22

An insurer shall, in the balance sheet, separately present the following items related to the original insurance contract:

(1)

the unearned premium reserve;

(2)

the reserve for outstanding claims;

(3)

the reserve for life insurance liabilities; and

(4)

the reserve for long-term health insurance liabilities.

Article 23

An insurer shall, in the profit statement, present separately the following items related to the original insurance contract:

(1)

the income from premiums;

(2)

the refunded premiums;

(3)

the drawing of unearned premium reserve;

(4)

the premiums earned;

(5)

the disbursement of handling fee;

(6)

the compensation cost;

(7)

the reserve for outstanding claims;

(8)

the reserve for life insurance liabilities; and

(9)

the reserve for long-term health insurance liabilities.

Article 24

An insurer shall, in its annotations, disclose the following information related to the original insurance contract:

(1)

the relevant information on the subrogation recourse fee;

(2)

the relevant information on the post-loss goods;

(3)

the increase and decrease of each reserve; and

(4)

the main actuarial assumptions and methods for drawing these reserves and testing the abundance of the reserves.



 
the Ministry of Finance
2006-02-15

 






1...212223...25Page 22 of 25

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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