RULES FOR ANTI-MONEY LAUNDERING BY FINANCIAL INSTITUTIONS

No.1

In accordance with the Law of the People’s Republic of China on the People’s Bank of China and other laws and regulations , the Rules
for Anti-money Laundering by Financial Institutions has been adopted at the 7th executive meeting on September 17, 2002, and is hereby
promulgated for implementation as of March 1, 2003.
President of the People’s Bank of China Zhou Xiaochuan

January 3, 2003

Rules for Anti-money Laundering by Financial Institutions

Article 1

These rules are formulated in line with the Law of the People’s Republic of China on the People’s Bank of China and other relevant
laws, administrative rules and regulations to combat money laundering by criminals so as to safeguard the healthy operation of the
financial industry.

Article 2

These rules are applicable to all financial institutions involved in combating money laundering. Financial institutions hereunder
refer to institutions legally established and engaged in financial business within the territory of the People’s Republic of China,
including policy banks, commercial banks, credit cooperatives, postal savings institutions, finance companies, trust and investment
companies, financial leasing companies and foreign-funded financial institutions etc.

Article 3

Money laundering in these rules refers to any action that legalize the ill-gotten income and yields generated from criminal activities
like drug trafficking, gang violence, terrorist act, smuggling or other crimes through various means in which the source and origin
of such income and yields are disguised.

Article 4

Financial institutions and their employees shall abide by these rules to fulfill their due obligation to combat money laundering
activities in real earnest and identify suspicious transactions on a prudent basis, and shall not engage in any unfair competition
that may run counter to their anti-money laundering obligations.

Article 5

Financial institutions and their employees shall abide by relevant rules and regulations to and refrain from disclosing any information
on anti-money laundering activities to their customers and/or other personnel.

Article 6

Financial institutions shall assist the judiciary and/or law enforcement departments including the customs and taxation authorities
in combating money laundering in accordance to relevant laws and regulations through making inquiry of, freezing or suspending the
transfer of suspicious customers’ deposits. Overseas branch offices of the Chinese financial institutions shall abide by anti-money
laundering laws and regulations of their host countries or regions and provide assistance to departments involved in anti-money laundering
operation in these countries or regions.

Article 7

The People’s Bank of China is the supervisory authority for anti-money laundering operation by financial institutions.

The People’s Bank of China shall establish a leading group supervising the work of anti-money laundering by the financial institutions,
which shall perform the following responsibilities:

(1)

Supervising and coordinating anti-money laundering activities of financial institutions;

(2)

Conducting research and formulating strategies, working plans and policies on anti-money laundering for financial institutions, establishing
working mechanisms for anti-money laundering operation and reporting system for large-value and/or suspicious renminbi fund transactions;

(3)

Establishing a monitoring system to scrutinize payment transactions;

(4)

Working out proper solutions to major difficulties encountered by financial institutions in combating money laundering;

(5)

Participating in international anti-money laundering cooperation and providing guidance for international exchange in the areas of
anti-money laundering by financial institutions; and

(6)

Other anti-money laundering functions of the People’s Bank of China.

The Sate Administration of Foreign Exchange is responsible for supervising reporting of large-value and/or suspicious foreign exchange
transactions and shall establish a reporting arrangement to monitor such transactions.

Article 8

Financial institutions shall establish and improve their internal anti-money laundering mechanisms and report such mechanisms to
the People’s Bank of China for record as required by the People’s Bank of China.

Article 9

Financial institutions shall establish or designate relevant internal departments to specialize in anti-money laundering efforts
and equip these departments with managers and working staff as needed.

Pursuant to concrete needs, financial institutions shall establish relevant departments or designate certain personnel in their branch
offices to specialize in anti-money laundering activities, and shall conduct supervision over implementation of these rules and establishment
of internal anti-money laundering mechanisms in their branch offices. Effective anti-money laundering measures shall be made when
new financial institutions are incorporated or financial institutions set up new branch offices.

Article 10

Financial institutions shall establish a customers’ identity registry system to verify the identities of customers who process financial
business including deposits and settlement with them.

Financial institutions shall not be allowed to open anonymous accounts or accounts in obviously fictitious names for their customers,
and/or provide financial services including deposits and settlement for customers whose identities are yet to be clarified.

Article 11

When opening deposit accounts or providing settlement service for individual customers, financial institutions shall verify the customers’
IDs and record the names and ID numbers. If a customer is represented by another person to open personal deposit account with a financial
institution, the financial institution shall verify both the representative’s and principal’s IDs and record the names and ID numbers
thereof.

Financial institutions shall not open deposit accounts for customers who decline to show IDs or do not use names appeared in their
IDs.

Article 12

When opening accounts or providing financial services including deposits and settlement for institutional customers, financial institutions
shall abide by relevant rules of the People’s Bank of China and ask the customers to show valid documents for verification and recording.

Financial institutions shall not provide financial services including deposits and settlement for institutional customers who fail
to show valid documents as required by relevant rules.

Article 13

Financial institutions shall abide by relevant rules and report to the People’s Bank of China and/or the State Administration of
Foreign Exchange of any large-value transactions detected in the process of providing financial services to customers.

Classification of large-value transactions shall be determined in line with relevant rules made by the People’s Bank of China and
the State Administration of Foreign Exchange on reporting of fund transactions.

Article 14

Financial institutions shall abide by relevant rules and report to the People’s Bank of China and/or the State Administration of
Foreign Exchange of any suspicious transactions detected in the process of providing financial services to customers.

Reporting of suspicious transactions shall be determined in line with relevant rules made by the People’s Bank of China and the State
Administration of Foreign Exchange on reporting of fund transactions.

Article 15

Branch offices of financial institutions shall report large-value and/or suspicious transactions to the local branch offices of the
People’s Bank of China or the State Administration of Foreign Exchange in line with relevant rules made by the People’s Bank of China
and the State Administration of Foreign Exchange on procedures of reporting of fund transactions, and at the same time keep their
superior units informed of such transactions.

Article 16

Financial institutions shall carry out examination and analysis on large-value and/or suspicious transactions, and shall report to
the local public security departments if criminal activities are detected.

Article 17

Financial institutions shall keep records on account information and transaction records of the customers in accordance with the
following prescription:

(1)

Records of account information shall be kept for five years at minimum from the date of closing the account;

(2)

Transaction records shall be kept for five years at minimum from the date of booking the transaction.

Transaction records in item (2) include information on the ownership of the account, amount of deposit or withdrawal effected through
the account, time of transaction, source and destination of funds and the means of fund transfer etc. Account information and transaction
records shall be kept in line with relevant state rules on management of accounting files.

Article 18

The People’s Bank of China or the State Administration of Foreign Exchange shall hand over the report and other related materials
on large-value and/or suspicious transactions submitted by financial institutions to the judiciary departments in accordance with
procedures laid by the Rules for Administrative Departments in Transferring Suspected Criminal Cases if criminal activities are suspected
after conducting review of such report and related materials, and shall not disclose contents of the report to the customers of the
financial institutions and other people.

Article 19

The People’s Bank of China shall provide guidance and organize training activities on the subject of anti-money laundering for financial
institutions.

Financial institutions shall launch anti-money laundering publicity among their customers and provide training for their staff on
anti-money laundering so as to familiarize them with laws, administrative rule and regulations on anti-money laundering and strengthen
their competence in combating money laundering activities.

Article 20

The People’s Bank of China shall issue a warning to and order a financial institution committing any of the following irregularities
in violation of these rules to take remedial actions within a specified period of time, and if the financial institution fails to
make corrections within the specified period of time, a fine of no more than RMB30,000 yuan may be imposed and its senior executives
immediately accountable for such misconduct may be disqualified from holding any positions in the financial industry if the circumstances
are serious:

(1)

failing to establish an internal anti-money laundering mechanism as required;

(2)

failing to establish or designate relevant departments to specialize in anti-money laundering efforts as required;

(3)

failing to ask institutional customers to show valid documents and other related materials for verification and recording as required;

(4)

failing to keep account information and transaction records of customers as required;

(5)

leaking anti-money laundering information to customers and other people in violation of rules; or

(6)

failing to report to the authorities of large-value and/or suspicious transactions as required.

Article 21

When a financial institution engaged in foreign exchange operation fails to report on a timely basis to authorities of abnormal foreign
exchange transactions such as purchase of foreign exchange in large value and/or high frequency and move of large amount of foreign
currency cash in and out of account, it shall be penalized in line with Article 25 of the Rules on Penalizing Financial Irregularities.

Article 22

Where a financial institution, in violation of relevant laws and administrative rules and regulations, engages in unfair competition
which hampers the fulfillment of its anti-money laundering obligation, it shall be penalized in line with relevant provisions of
the Rules on Penalizing Financial Irregularities. A disciplinary warning shall be issued for its staff held immediately accountable
for such misconduct and the senior executives directly responsible for the misconduct shall be disqualified from holding any positions
in the financial industry if the circumstances are serious.

Article 23

Where a financial institution opens accounts for customers who have declined to show their personal IDs or use the names appeared
in the personal IDs in opening bank accounts, the People’s Bank of China shall give it a warning and impose concurrently a fine of
not less than RMB1000 yuan but not more than RMB5000 yuan. If the circumstances are serious, its senior executives held immediately
accountable for such misconduct shall be disqualified from holding any positions in the financial industry.

Article 24

The China’s Association of Banks, China’s Association of Finance Companies and other self-regulatory organizations in the financial
industry may formulate their own anti-money laundering work guidance in line with these rules.

Article 25

These rules shall enter into force on March 1, 2003.