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1993

CIRCULAR OF THE SUPREME PEOPLE’S COURT ON TRANSMITTING CERTAIN ISSUES OF THE MOFTEC IN CONNECTION WITH THE IMPLEMENTATION OF UNITED NATIONS CONVENTION ON CONTRACTS FOR THE INTERNATIONAL SALE OF GOODS

The Supreme People’s Court

Circular of the Supreme People’s Court on Transmitting Certain Issues of the MOFTEC in Connection with the Implementation of United
Nations Convention on Contracts for the International Sale of Goods

Fa (Jing) Fa [1987] No. 34

December 10, 1987

All the high people’s courts and the intermediate people’s courts in the provinces, autonomous regions, and the municipalities directly
under the Central Government, all the railway transportation intermediate courts and the maritime courts:

Whereas, United Nations Convention on Contracts for the International Sale of Goods will be effective on China as of January 1, 1988,
we hereby transmit Certain Issues of the Ministry of Foreign Trade and Economic Cooperation in Connection with the Implementation
of United Nations Convention on Contracts for the International Sale of Goods. Please organize relevant person to study in order
to correctly implement the Convention in the work of foreign-related economic trial. Any question encountered in the implementation,
please report to us in time. Appendix:Certain Issues of the Ministry of Foreign Trade and Economic Cooperation in Connection with the Implementation of United Nations Convention
on Contracts for the International Sale of Goods

Wai Jing Mao Fa Zi [1987] No. 22

December 4, 1987

The departments (commissions, bureaus) of economic and trade, foreign trade bureaus (head offices) in all the provinces, autonomous
regions, municipalities directly under the Central Government, cities specifically designated in the state plan and prefectures,
all the head offices, the industry and trade companies:

Chinese government has officially approved United Nations Convention on Contracts for the International Sale of Goods (hereinafter
referred to as the Convention) on December 11, 1986. Whereas, the number of the states that joined in the Convention is beyond 10
and the Convention will be effective on January 1, 1988, we hereby notify certain issues which should be paid attention to for the
convenience of the foreign economic and trade companies to correctly implement the Convention as follows:

1.

So far the states which have already joined in the Convention, except China, are America, Italy, Zambia, Yugoslavia, Argentina, Hungary,
Egypt, Syria, France, and Lesotho and so on. In 1986, our total amount of import and export trade with the aforementioned 10 countries
has reached USD 9.23 billion, and the amount of trade contracts is tremendous. Since our government has already signed the Convention,
it should assume the commitments on the implementation of the Convention. Therefore, according to the provision of Article (1) of
the Convention, from January 1, 1988, the contracts for sale of goods reached between the Chinese companies and the companies in
the aforementioned countries (except Hungary) will automatically apply to the provisions of the Convention and the disputes or litigations
arisen should be also settled under the Convention, unless otherwise agreed. Therefore, regarding general contracts for sales of
goods, the companies should consider the application of the Convention, however, the companies may also reach with the foreign companies
the contract clauses which are not in accordance with the Convention or explicitly exclude the application of the Convention in the
contract and make the choice of the local law of some country as the applicable law of the contract based on the nature of the transaction,
the characteristics of the products, the nationality and other specific elements.

2.

The Convention only applies to the sale of goods. The Convention stipulates the range of the goods by using the means of excluding
(see Article 2 and 3 of the Convention). All the goods that are not in the excluding range of Article 2 and 3 of the Convention
belong to the application range of the Convention.

3.

The Convention does not stipulate all the laws which settle the disputes of the contract. Chinese trade companies should explicitly
agree the issues, which the Convention does not regulate, in the contract or select the local law of some country to govern the contract
based on the specific transaction circumstances.

4.

Although the agreement on trade between China and Hungary belongs to sales of goods, however, it does not apply to the Convention
so far, but still apply to the “Common Conditions for the delivery of the goods” reached by China and Hungary in 1962.

5.

The Convention stipulates the procedures of the formation of the contract and the rights and obligations of the seller and buyer.
Those provisions have many inconsistencies with current Chinese laws and the customary practices of the companies, which should be
paid attention to by the companies.

Departments (committees, bureaus) of economic and trade of the provinces, the foreign trade head offices and the industry and trade
companies should organize the leaders of foreign economic and trade to study the Convention in time. Any question existing in the
study, please consult with relevant departments to solve or directly report to Department of Treaty and Law of the Ministry of Foreign
Trade and Economic Cooperation.

In order to assist in the understanding of the Convention, one book, named Interpretation of United Nations Convention on Contracts
for the International Sale of Goods, which will be published by Liaoning People’s Publishing House can be used for reference.



 
The Supreme People’s Court
1987-12-10

 






MEASURES RELATING TO THE IMPORT SUBSTITUTION BY PRODUCTS MANUFACTURED BY CHINESE-FOREIGN EQUITY JOINT VENTURES AND CHINESE-FOREIGN COOPERATIVE VENTUERS

IMPLEMENTATION MEASURES OF THE MINISTRY OF FOREIGN ECONOMIC RELATIONS AND TRADE CONCERNING THE APPLICATION FOR IMPORT AND EXPORT LICENSES BY ENTERPRISES WITH FOREIGN INVESTMENT

INTERIM REGULATIONS ON ADMINISTRATION OF ENTERPRISE BONDS

Interim Regulations on Administration of Enterprise Bonds

     (Effective Date 1987.03.27)

CONTENTS

CHAPTER I GENERAL PROVISIONS

CHAPTER II ENTERPRISE BONDS

CHAPTER III ADMINISTRATION OF ENTERPRISE BONDS

CHAPTER IV LEGAL OBLIGATIONS

CHAPTER V SUPPLEMENTARY PROVISIONS

CHAPTER I GENERAL PROVISIONS

   Article 1. These regulations are hereby formulated to strengthen the administration of enterprise bonds, provide guidance
conducive to the rational flow of capital, make effective use of idle capital of society, ensure the capital
raised is invested in the county’s priority projects, and to protect the lawful rights and interests of the parties concerned.

   Article 2. These regulations are applicable to bonds issued by State-owned enterprises which have a legal person status in China.

   Article 3. Subscription and purchase of enterprise bonds shall follow the principles of voluntary participation, respecting the
mutual benefits of the parties involved and the bonds to be issued shall be secured bonds.

Arbitrary allocation of subscription quotas of enterprise bonds is prohibited.

   Article 4. The People’s Bank of China is the administrative authority in charge of the issuance of enterprise bonds. All enterprise
bond issues are subject to approval by the People’s Bank of China.

CHAPTER II ENTERPRISE BONDS

   Article 5. An enterprise bond is a negotiable security issued according to the legal procedures by an enterprise which has entered
into an agreement with the bondholder to repay him/her the principal plus interest on the bond he/she possesses within
the stipulated time limit.

   Article 6. Bond certificate (coupon) shall state clearly the following items:

(1) The name and address of the bond-issuing enterprise;

(2) The face value of the bond;

(3) The coupon rate offered;

(4) The maturity date and the methods of redemption of the bond to be issued;

(5) The form of interest payment;

(6) The date of issue and the serial number of the bond to be issued;

(7) The logo of the bond-issuing enterprise and the signature of a legal representative from the bond-issuing enterprise, and

(8) The document number and the date of issue of the certificate issued by the approval authority concerning the bond issue.

   Article 7. Format of the bond certificate is subject to approval by the People’s Bank of China.

   Article 8. Bondholders are enpost_titled to receive repayment of the principal plus interest of the bonds on maturity. However, bondholders
to an enterprise are not allowed to engage in the operation and management of the said enterprise.

   Article 9. Bondholders are not liable to the management of the enterprise that issues the bond.

   Article 10. Enterprise bond is transferable acceptable as collateral for mortgage and can be inherited.

   Article 11. Subject to approval by the authorities, an enterprise may, taking into consideration of the particulars of its investment
project(s) and the market demand situation, issue enterprise bonds which promise to repay the bondholders
with products manufactured by the enterprise at a value equivalent to the principal plus interest of the bonds to be issued.

CHAPTER III ADMINISTRATION OF ENTERPRISE BONDS

   Article 12. The People’s Bank of China shall, in cooperation with such government departments as the State Planning office and the finance
office, work out the annual bond-issuing quotas (targets) for the country as a whole. They shall inform all provinces,
autonomous regions, municipalities under the central government and special cities under provincial governments
of their decisions for implementation.

   Article 13. The People’s Bank of China shall exercise unified control over the issuance of enterprise bonds. Bond issue applications
for enterprises at different levels shall be subject to the examination and approval by the bank or its branches at
the respective levels.

   Article 14. Any enterprises, which seek public issue of enterprise bonds, shall prepare a memorandum to be issued to the public.

The memorandum shall include the following items: a brief introduction to the business and management of
the bond-issuing enterprise, the net value of the enterprise’s assets, the purpose of the bond issue, a forecast on
the enterprise’s future result, the total face value of the bonds to be issued and the forms of repayment of the principal
plus interest and the risk liability.

   Article 15. The following documents shall be submitted to the People’s Bank of China or its branches by the enterprise which applies
to the bank for approval to issue enterprise bonds:

(1) An application for the bond issue;

(2) Business license;

(3) Certificate showing the approval from the superior department in charge for the bond issue;

(4) Approval documents for the fixed assets investment of the enterprise from the planning departments concerned;

(5) Memorandum for the bond issue;

(6) Financial and accounting reports of the enterprise for the two fiscal years and the three-month period prior to
the application which (reports) have been certified by the superior department in charge of the enterprise or by an accounting
office, and

(7) Any other information as requested by the People’s Bank of China.

   Article 16. The total face value of the bonds to be issued by an enterprise shall not exceed the net value of its assets.

   Article 17. An enterprise can issue enterprise bonds to raise capital for its fixed asset investment, provided its investment items
have been examined and approved by the relevant departments in charge and included in the State-controlled fixed assets
investment plan.

   Article 18. The coupon rate offered for any enterprise bonds shall not be higher than 40% of the prevailing interest rate paid to
fixed savings deposits of the same maturity period by individuals.

   Article 19. To purchase enterprise bonds, a State-owned enterprise can only use its self-generated or allocated funds, the
autonomy over the disposal of which is allowed by the State authorities.

To purchase enterprise bonds, a public institution can only use that part of its funds, the autonomy over the disposal
of which is allowed by the State authorities.

   Article 20. Institutional units and individuals shall pay tax on interest income earned from their enterprise bonds according
to the relevant laws of the State.

   Article 21. An enterprise may issue enterprise bonds with or without banks or other financial institutions to act as its agents.

An organization that acts as an agent for an enterprise in the issue of the latter’s bonds shall be paid a commission equal
to a certain percentage of the total face value of the bonds issued.

Organization that acts as an agent for an enterprise in the sale of its bonds is not liable for the business operations
of the said enterprise.

   Article 22. Subject to approval by the People’s Bank of China, all specialized banks and other financial organizations may handle
the transfer business of enterprise bonds.

   Article 23. Non-financial institutions and individuals are not allowed to engage in the business of either the transfer or sale of the
enterprise bonds in the capacity of agents.

   Article 24. The People’s Bank of China has the right to examine and supervise the use of the capital of enterprises and public
institutions which have issued or purchased enterprise bonds.

CHAPTER IV LEGAL OBLIGATIONS

   Article 25. The People’s Bank of China and its branches have the right to punish the bond-issuing enterprises which are found to have
violated the second clause of Article 3, Article 4, Article 7, Article 11, Article 15 or Article 17 of these regulations in the
following ways:

(1) To order the bond-issuing enterprise to stop its illegal activities and refund the capital thus raised;

(2) To freeze the capital raised through the bond issue;

(3) To inform the financial institution to which the bond-issuing enterprise has opened an account to stop
providing loans to the enterprise; and

(4) To impose a fine on the bond-issuing enterprise, the ceiling of which shall be 50% of the amount of the capital
the enterprise raised from the bond issue.

The above punishments can be executed simultaneously.

   Article 26. The People’s Bank of China and its branches have the right to punish the financial institutions, non-financial
institutions or individuals which/who are found to have violated Article 22 and Article 23 of these regulations in the following
ways:

(1) To order them to stop their illegal business undertakings;

(2) To confiscate the income which is collected through their illegal business undertakings, and

(3) To impose a fine,the ceiling of which shall be 5% of the amount of funds involved in their illegal business undertakings.

The above punishments can be executed simultaneously.

   Article 27. The responsible person(s) of the units which are punished according to Article 25 or Article 26 of these regulations shall
be held responsible for his/her administrative and economic obligations.

   Article 28. Personnel of units that are in charge of a bond issue who are found to have violated the stipulations of these regulations
because of dereliction of duties or graft or deception shall be given administrative disciplinary punishments and they may
be fined.

CHAPTER V SUPPLEMENTARY PROVISIONS

   Article 29. The right of interpreting these regulations is vested with the People’s Bank of China, which shall be responsible for
the drafting of the detailed rules for implementing these regulations.

   Article 30. These regulations shall enter into force on the date of promulgation.

    

Source:MOFTEC





REGULATIONS ON CONTROL OF ADVERTISEMENT

Regulations on Control of Advertisement

     (Promulgated by the State Council on October 26, 1987)

   Article 1. These Regulations are formulated for the purpose of strengthening the administration of advertisement, promoting
the development of advertisement undertakings and utilizing advertisement as an effective medium to serve socialist
construction.

   Article 2. These Regulations shall apply to any advertisements published, broadcast, installed or posted in the People’s
Republic of China through such media or in such forms as the press, broadcasting, television, films, street nameplates, shop
windows, printed matters, neon lights, etc.

   Article 3. The content of an advertisement must be true to facts, sound, clear and easy to understand and must not cheat users and
consumers in any way.

   ARticle 4. Monopoly and unfair competition shall be prohibited in advertising operations.

   Article 5. The administrative organs controlling advertisements shall be the State Administration for Industry and Commerce
and local administrative departments for industry and commerce at various levels.

   Article 6. Units and self-employed industrialists or businessmen wishing to engage in advertising businesses (hereinafter
referred to as advertising operators) shall submit applications to administrative departments for industry
and commerce in accordance with these Regulations and the provisions of other relevant laws and regulations and go
through, according to different circumstances, such formalities as examination, approval or registration:

(1) For enterprises specializing in advertising business, Business Licences for Enterprises as Legal Persons shall be issued;

(2) For institutions concurrently engaged in advertising business, Licences for Advertising Operation shall be issued;

(3) For self-employed industrialists or businessmen capable of running advertising businesses, Business Licences shall
be issued;

(4) For enterprises concurrently engaged in advertising business, applications shall be filed with
the relevant departments for change of business scope registration.

   Article 7. The content of an advertisement to the published, broadcast, installed or posted shall be kept within the advertiser’s business
scope or the scope permitted by the State.

   Article 8. An advertisement that contains any of the following contents may not be published, broadcast, installed or posted:

(1) That violates the laws and regulations of the State;

(2) That impairs the national dignity of the State;

(3) That involves designs of the national flag, national emblem or national anthem or the music of the national
anthem of the People’s Republic of China;

(4) That is reactionary, obscene, superstitious or absurd;

(5) That is fraudulent;

(6) That depreciates products of the same kind.

   Article 9. News media shall provide clear indications for the advertisement they publish or broadcast. News media may not
publish or broadcast advertisements in the form of news reports nor collect fees for these reports. Journalists may
not solicit advertisements in the name of news coverage.

   Article 10. It shall be forbidden to advertise cigarettes through broadcast, television, newspapers or periodicals.

After approval by administrative departments for industry and commerce, it may be allowed to advertise famous wines
and liquors of good quality which have won prizes at the national, ministerial or provincial level.

   Article 11. Due certificates shall be presented in applying for publishing, broadcasting, installing or posting advertisements
in the following cases:

(1) For the commodity advertisements concerning standards of quality, certificates issued by administrative
departments in charge of standardization or by quality inspection agencies, authenticated to the qualified by
metrological verification, above the provincial municipality level shall be presented;

(2) For the advertisements which indicate commodities as prize-winners, certificates of award for the current
session or year or for successive sessions or years shall be presented and classes of prizes and prize-awarding
departments shall also be clearly indicated in the advertisements;

(3) For the advertisements which indicate post_titles of high quality commodities, certificates of high-quality products
issued-by the relevant departments shall be presented and clear indications shall also be made in the advertisements
as to when and by which departments the post_titles were conferred on;

(4) For the advertisements which indicate patent rights of commodities, patent licences shall be presented;

(5) For the advertisements which indicate registered trademarks of commodities, certificates of trademark
registration shall be presented;

(6) For the advertisements of the products which require production permits, production permits shall be presented;

(7) For the advertisements concerning culture, education and public health, certificates issued by the higher competent authorities
shall be presented;

(8) for the other advertisements which require due certification, papers issued by relevant government departments
or agencies authorized by them shall be presented.

   Article 12. Advertising operators shall check papers or certificates and examine the contents of advertisements while undertaking
advertising business or acting as advertising agents. They may not publish, broadcast, install or post any advertisements
which violate the provisions of these Regulations.

   Article 13. For the installation and posting of outdoor advertisements, local people’s governments shall organize the administrative
departments respectively in charge of industry and commerce, urban construction, environmental protection and public
security in jointly drawing up the plans, which shall be implemented under the supervision of the
administrative departments for industry and commerce.

Advertisements may not be installed or posted in controlled areas near government organs or cultural relics
under special protection, nor in areas where installation and posting of advertisements are prohibited by local
people’s governments.

   Article 14. Rates of charges for advertisements shall be fixed by advertising operators and reported to local administrative departments
for industry and commerce and to those in charge of price control for the record.

   Article 15. Rates of fees to be charged for acting as agents in advertising business shall be fixed by state administrative departments
for industry and commerce and those in charge of price control.

Rates of fees to be charged for the use of places and buildings for outdoor advertisements shall be fixed through consultations
by local administrative departments for industry and commerce with those in charge of price control and urban construction
and reported to local people’s governments for approval.

   Article 16. Advertising operators must, according to the relevant prescriptions of the State, set up bookkeeping records, pay taxes
according to law and subject themselves to the control and inspection by the administrative departments respectively
in charge of finance, auditing and industry and commerce.

   Article 17. In undertaking or acting as agents in advertising business, advertising operators shall sign with advertisers or those
who have entrusted them with the business written contracts that shall stipulate explicitly each party’s responsibilities.

   Article 18. Advertisers or advertising operators who have violated the provisions of these Regulations shall be given the following
penalties by administrative departments for industry and commerce according to the seriousness of the cases:

(1) Stopping advertising;

(2) Making public corrections as ordered;

(3) Circulating a notice of criticism;

(4) Confiscation of the illegal gains;

(5) Fines;

(6) Suspending business for consolidation;

(7) Revocation of the business licences or the licences for advertising operation.

If the violations of the provisions of these Regulations are so serious as to constitute crimes, criminal responsibilities
shall be investigated by judicial organs according to law.

   Article 19. If advertisers or advertising operators disagree with the penalties decided upon by administrative departments for industry
and commerce, they may apply for a reconsideration to the next higher administrative departments for industry
and commerce within 15 days after receiving penalty notices. If they still disagree with the decisions made after
reconsideration, they may bring a suit in a people’s court within 30 days after receiving the reconsideration decisions.

   Article 20. Advertisers or advertising operators who, in violation of the provisions of these Regulations, have caused losses
on the part of their users and consumers or committed other acts of infringement shall bear the responsibility for compensation.

With respect to claims for damages, the claimant may request the administrative departments for industry
and commerce above the county level for handling. If the parties concerned disagree with the decisions made by
administrative departments for industry and commerce, they may bring a suit in a people’s court. The claimant may also
directly bring a suit in a people’s court.

   Article 21. These Regulations shall be interpreted by the State Administration for Industry and Commerce. The rules for implementation
shall be formulated by the State Administration for Industry and Commerce.

   Article 22. These Regulations shall go into effect as of December 1, 1987. The Interim Regulations on Control of Advertisement
promulgated by the State Council on February 6, 1982 shall be abrogated as of the same date.

    

Source:MOFTEC





PROVISIONAL REGULATIONS ON THE PROVISION OF POLITICAL IDEOLOGICAL ACTIVITIES FOR CHINESE EMPLOYEES OF SINO-FOREIGN EQUITY AND CONTRACTUAL JOINT VENTURES

MEASURES OF THE BANK OF CHINA CONCERNING THE GRANTING OF LOANS TO ENTERPRISES WITH FOREIGN INVESTMENT

Category  BANKING Organ of Promulgation  The State Council Status of Effect  In Force
Date of Promulgation  1987-04-24 Effective Date  1987-04-24  


Measures of the Bank of China Concerning the Granting of Loans to Enterprises With Foreign Investment



(Approved by the State Council on April 7, 1987 and promulgated by the

Bank of China on April 24. 1987)

    Article 1  These Measures are formulated for the purpose of supporting
the production and business activities of enterprises with foreign investment,
expanding the economic and technological co-operation with foreign countries,
and facilitating and promoting the development of national economy.

    Article 2  The Bank of China shall, in accordance with the State policies
and on the basis of the principles of ensuring safety and benefit and providing
services, grant loans to enterprises with foreign investment that need funds
for their construction projects and production and business operations, with
the priority to those product-for-export enterprises and advanced technology
enterprises which enjoy good economic returns.

    Article 3  Enterprises with foreign investment, i.e. Chinese-foreign
equity joint ventures and Chinese-foreign contractual joint ventures, and
foreign-capital enterprises (hereinafter referred to as “enterprises”) that
qualify for obtaining loans as prescribed in Article 7 of these Measures may
apply to the Bank of China for loans.

    Article 4  The Bank of China must, when providing loans, sign a loan
agreement with the borrower and strengthen the management of its loans.

    Article 5  The Bank of China shall grant the following loans to the
enterprises:

    1. Fixed assets loans to be used for covering the expenses for the
construction, the purchase of technology and equipment, and the installation
of the equipment incurred by capital construction projects and technical
innovation projects. The loans shall be divided into the following forms:

    (1) medium and short-term loans;

    (2) buyer’s credit;

    (3) syndicate loans;

    (4) project loans.

    2. Working capital loans to be used as funds needed in the enterprises’
production and circulation of commodities and in their normal business
operations. The loan shall be devided into the following forms:

    (1) production reserves and operating loans;

    (2) incidental loans;

    (3) current deposit overdraft.

    3. Loans on spot exchange mortgage to be granted by the Bank of China in
accordance with the provisions of the Interim Measures Concerning the Renminbi
with Foreign Investment promulgated by the People’s Bank of China.

    4. Stand-by loans to be granted by the Bank of China upon examination
and approval of the application submitted by an enterprise, and be put by and
used for future special purposes as specified in the application.

    Article 6  The currencies in respect of loans shall be divided into
domestic currency and foreign currencies. The domestic currency refers to
Renminbi and foreign currencies shall include U.S. Dollars, British Sterling
Pounds, Japanese Yens, Hong Kong Dollars, Federal German Marks, and other
convertible currencies accepted by the Bank of China.

    Article 7  Any enterprise with foreign investment that applies for loans
shall satisfy the following precondition:

    1. The applying enterprise has obtained a business licence issued by a
Chinese administrative department for industry and commerce and has opened
an account with the Bank of China.

    2. The registered capital of the applying enterprise has been fully paid
in within the prescribed period of time and has been increased in accordance
with the law.

    3. The board of directors of the applying enterprise has made the decision
on the borrowing and has issued the letter of authorization.

    4. The programme of investment in fixed assets of the applying enterprise
has been approved by a planning department.

    5. The applying enterprise has the ability to repay the loan and has
provided the reliable guarantee for repaying the principal and interest.

    Article 8  The term of a loan shall commence from the day on which the
loan contract goes into effect and terminate on the day on which the
principal, the interest, and all other relevant fees have been paid in full
as stipulated by the contract.

    Article 9  The term for a fixed assets loan shall not exceed 7 years. The
term of a loan for a particular project of a special type may, subject to the
approval of the Bank of China, be properly extended, but such extension shall
not exceed the time which is one year prior to the termination of business of
the enterprise as prescribed by the business licence of the enterprise.

    Article 10  The term of a working capital loan shall not exceed 12 months.

    Article 11  The interest rates of loans in Renminbi shall be calculated
in accordance with the interest rates of loans granted to State-owned
enterprises as determined by the People’s Bank of China.

    The interest rates of loans in foreign currencies shall be calculated in
accordance with the integrated interest rates set by the Head Office of the
Bank of China; it may also be determined through consultation between the
lender and the borrower in the light of the interest rates in the
international market. The interest rates with respect to foreign buyer’s
credit and other credits shall be determined on the basis of the agreed rates
plus a certain margin.

    Article 12  The period and method for calculating interest with respect
to loans in Renminbi shall be those prescribed by the People’s Bank of China;
the period and method for calculating interest with respect to loans in
foreign currencies shall be those perscribed in loan contracts.

    Article 13  Any enterprise that applies to the Bank of China for a loan
shall go through the following procedures:

    1. The enterprise shall submit an application, together with the
corresponding certifications and materials in the light of the specific
details of the requirement for the loan;

    2. The Bank of China shall examine and assess the application and the
certifications and materials submitted, and upon verification and approval,
the lender and the borrower shall sign a loan contract through negotiation.

    Article 14  The enterprise shall use the loan in accordance with the
schedule, amount and scope for use as stipulated in the loan contract.

    Article 15  In case where the Bank of China deems it necessary for the
enterprise applying for loans to provide a guarantee, the enterprise must
provide one that is acceptable to the Bank.

    Article 16  The enterprise may submit to the Bank of China the following
guarantees:

    1. Credit guarantee. The enterprise may submit to the Bank of China an
irrevocable letter of guarantee for the repayment of the principal and interest
of the loan issued by a financial institution, or an enterprise, or any
other unit that enjoys creditworthiness and has the capability to repay the
debt.

    2. Mortgage guarantee. The enterprise may mortgage its property and
rights and interests to the Bank of China as guarantee for the repayment of
the principal and interest the loan granted by the Bank of China. The
following items may be mortgaged:

    (1) building property, machinery and equipment;

    (2) marketable goods in stock;

    (3) deposits or deposit certificates in foreign currencies;

    (4) negotiable securities and instruments;

    (5) stock equities or other transferable rights and interests.

    Article 17  An enterprise that is to obtain a loan secured by mortgage
shall sign a mortgage document with the Bank of China, which shall be
notarized by a Chinese notary office. The collateral security shall be insured
with the People’s Insurance Company of China in its full value. The
enterprise shall provide both credit guarantee and mortgage guarantee when
the Bank of China deems it necessary.

    Article 18  The enterprise shall, in accordance with the loan contract,
repay the loan and pay the interest and other relevant fees in full and on
schedule.

    Article 19  The after-tax net cash income of the enterprise shall first
be used to repay the fixed assets loan.

    Article 20  With respect to an enterprise that fails to comply with the
provisions of the loan contract, the Bank of China shall have the right to
adopt the following measures to safeguard its rights and interests in
accordance with the loan contract and in the light of the seriousness of the
breach:

    1. setting a deadline for the rectification of the breach;

    2. suspending the loan;

    3. recalling the loan ahead of schedule;

    4. notifying the guarantor to perform its guarantee responsibility.

    Article 21  If the enterprise fails to repay the principal of the loan
and pay the interest, in the case of a loan in credit guarantee, the guarantor
enterprise (or unit) shall be liable for repaying the defaulted principal of
the loan and paying the defaulted interest and relevant fees thereon and, in
the case of a loan on mortgage guarantee, the Bank of China shall, in
accordance with the provisions of the law, have the right and priority to
have the principal of the loan repaid and have the defaulted interest and
other fees thereon paid with the collateral security duly commuted or with
the money derived from selling the collateral security.

    With respect to a loan which the enterprise fails to repay on schedule,
the Bank of China shall impose as a penalty an additional interest at a rate
ranging from 20 percent to 50 percent above its original rate starting from
the day repayment is overdue.

    Article 22  The Bank of China shall have the right to examine the
situation as to how the enterprise is using the loan. The enterprise shall
periodically report to the Bank of China the progress of the construction of
the project concerned, the plans for its production, sales and finance, and
submit the statements and materials of implementation thereof until the loan
is fully repaid. If the owner of the enterprise is represented by another
legal person, the owner shall, when the Bank of China deems it necessary,
submit to the Bank of China its annual financial statement.

    When the Bank of China is conducting inspection of credit, the enterprise
shall report the actual situation and provide convenience for the work.

    Article 23  Before the Joan is fully repaid, the enterprise shall, unless
otherwise approved by the Bank of China, handle all the financial matters
in its business operations through the account it has opened with the Bank
of China and may not transfer its funds to other banks or financial
institutions without authorization. When the Bank of China deems it necessary,
it shall have the right to require the enterprise to open a custody account.

    Article 24  The enterprise shall notify in due time the Bank of China
of any major resolutions or decisions made by its board of directors or by
its owner on financial affairs as well as of any change of personnel in the
board. The enterprise shall solicit the opinions of the Bank of China in
advance with respect to any major amendments and supplements to its joint
venture contract or cooperative contract and its articles of association,
if such amendments and supplements will affect the creditor’s rights of the
Bank of China.

    Article 25  Unless otherwise approved by the Bank of China, the valid
language used in the legal documents such as the loan contract signed by the
enterprise and the Bank of China and the annexes thereto shall be the Chinese
language and the applicable law shall be the law of the People’s Republic
of China.

    Article 26  The rules for the implementation of these Measures shall be
formulated by the Head Office of the Bank of China. The Bank of China in a
special economic zone may, in the light of its actual business situation,
draw up detailed rules for the implementation thereof, which shall be
submitted to the Head Office of the Bank of China for approval before they
are enforced.

    Article 27  These Measures shall go into effect as of the date of
promulgation. The Interim Measures of the Bank of China for Granting Loans to
Chinese-Foreign Equity Joint Ventures approved by the State Council and
promulgated by the Bank of China on March 3, 1981 shall be simultaneously
annulled.

    With respect to the loan contracts signed by the Bank of China and
enterprises before the entry into force of these Measures, such loan contracts
shall continue to be valid.





REGULATIONS CONCERNING THE ADMINISTRATION OF TRAFFIC SAFETY ON INLAND WATERS

Regulations of the PRC Concerning the Administration of Traffic Safety on Inland Waters

    

CONTENTS

CHAPTER I GENERAL PROVISIONS

CHAPTER II VESSELS, RAFTS, INSTALLATIONS AND PERSONNEL

CHAPTER III OWNERS AND OPERATORS

CHAPTER IV NAVIGATION, BERTHING AND OPERATIONS

CHAPTER V CONTROL OF DANGEROUS GOODS

CHAPTER VI ADMINISTRATION OF FERRIES

CHAPTER VII GUARANTEE FOR SAFETY

CHAPTER VII ASSISTANCE AND RESCUE

CHAPTER IX INVESTIGATION AND HANDLING OF TRAFFIC ACCIDENTS

CHAPTER X AWARDS AND PENALTIES

CHAPTER XI SUPPLEMENTARY PROVISIONS

CHAPTER I GENERAL PROVISIONS

   Article 1. These Regulations are formulated to improve the administration of traffic safety on inland waters, ensure
the safety of vessels, rafts, installations, human lives and property and thus facilitate the development of socialist construction.

   Article 2. These Regulations shall apply to all vessels, rafts, installations and personnel, and to the owners and operators of
vessels, rafts and installations (hereafter shortened to “owners” and “operators”) that navigate, berth, or operate
on the inland navigable waters of the People’s Republic of China.

The inland navigable waters mentioned in the previous paragraph shall also cover the waters under Chinese jurisdiction
in border rivers. However, if agreements have been concluded between the Chinese government and the governments
of other countries, the agreements shall prevail.

   Article 3. The harbour superintendencies set up by the communications departments at various levels shall be the competent
authorities responsible for exercising the unified supervision and control of traffic safety on inland waters.

CHAPTER II VESSELS, RAFTS, INSTALLATIONS AND PERSONNEL

   Article 4. Vessels must meet the following requirements before they are allowed to navigate:

(1) Holding technical certificates or documents verified as qualified by the vessel inspection departments after
the inspection whereon;

(2) Holding vessel nationality certificates, or vessel registration certificates or vessel licences;

(3) Holding insurance policies or insurance certificates as is required of vessels which must take out vessel
insurance according to the relevant stipulations of the State;

(4) Being manned with, according to the relevant State stipulations, crew members in charge of technical work, chief crewmen,
ferrymen and other crew members who are holding valid certificates of job qualification.

   Article 5. The captains, chief engineers, pilots, engineers and radio and telephone operators of power-driven vessels shall pass
examinations and hold valid certificates of job qualification.

The chief crewmen and ferrymen of non-motorized vessels shall pass examinations and hold qualification documents.

All other crew members must go through safety instructions and specialized technical training.

   Article 6. Bamboo and wooden rafts shall be fitted out with necessary equipment for safe navigation, lifesaving appliance and rafters
qualified for safe navigation. The fixed number of rafters to be provided shall stipulated by the competent department
in charge of forestry. Chief rafters shall have received special training by the department in charge of
forestry and hold qualification documents.

The administration of rafters for tourist rafts shall be stipulated by the competent authorities in conjunction with relevant
departments.

   Article 7. Installations shall be fitted out with safety equipment and personnel according to stipulations of the State.

   Article 8. Vessels shall, in accordance with stipulations of the State, pay harbour dues to the competent authorities.

CHAPTER III OWNERS AND OPERATORS

   Article 9. Owners and operators must abide by these Regulations and the stipulations of the State concerning traffic safety.

   Article 10. Owners and operators must be responsible for the safety of the vessels, rafts and installations they own or operate and
shall perform the following obligations:

(1) Administration of vessels, rafts and installations shall be strengthened in terms of safety and technology
to keep them in good shape for navigation or good technical conditions;

(2) the relevant State stipulations must be accorded with in employing crew members, rafters or other personnel.
It is forbidden to employ captains, chief engineers, pilots, engineers, radio operators, telephone operators, chief
crewmen, ferrymen and rafters who do not hold valid certificates of job qualification or qualification documents;

(3) Technical training and safety instructions shall be strengthened for crew members, rafters and other
personnel; the employees may not be forced to operate against regulations;

(4) Vessels shall be properly dispatched according to the technical functions of vessels, the qualifications
of crew members, the conditions of the assigned navigation areas and also the hydrological and meteorological conditions;

(5) They shall be subject to the supervision, examination and administration of the competent organs.

CHAPTER IV NAVIGATION, BERTHING AND OPERATIONS

   Article 11. In navigation, berthing and operations, vessels, rafts and installations must abide by the relevant laws, regulations and
other rules and regulations concerning harbour navigation of the People’s Republic of China.

   Article 12. Vessels of foreign nationality entering and leaving the inland harbours of the People’s Republic of China that are
open to foreign vessels must obtain the approval of the competent authorities and apply to be navigated by a Chinese
pilot in advance. While they are entering and leaving the harbours or navigating in inland rivers, foreign vessels
must be subject to the examination and supervision of the competent authorities.

   Article 13. Vessels of Chinese nationality entering and leaving inland harbours shall get port entry and departure visas or accept inspection.

   Article 14. When entering or leaving the harbours or passing through traffic control areas, crowded navigable areas and regions with
limited navigational capacities, vessels must observe the special provisions promulgated by the Ministry of Communications
of the People’s Republic of China or the competent authorities.

   Article 15. Except as specially permitted by the competent authorities, vessels and rafts are prohibited from entering or cutting across
restricted navigation zones.

   Article 16. Vessels shall not engage in transportation with overload. Vessels not equipped for carrying passengers are prohibited from
taking on passengers without permission.

   Article 17. Vessels engaged in towing navigation shall observe the relevant stipulations.

   Article 18. Vessels shall navigate in the approved navigation areas at a speed which is fast enough to ensure their own safety but not
so fast as to endanger the safety of other vessels, rafts and installations. Vessels shall navigate at the prescribed
speed in the areas where speed is restricted and during periods of high water levels in flood seasons.

   Article 19. The berthing of vessels and rafts shall not obstruct other vessels and rafts from navigating normally or endanger
the safety of installations and dykes.

Except for unmanned tug boats, there must be adequate number of crew members on duty on board the vessels lying at
anchor to ensure the vessels’ safety.

   Article 20. Manned or towed bamboo and wooden rafts in navigable rivers shall observe the relevant stipulations formulated by the
competent authorities in conjunction with the competent department in charge of forestry.

   Article 21. The competent authorities shall have the right to forbid a vessel, raft or installation from leaving the harbour, or order
it to stop navigation, cease operations or sail to the designated sport, under any one of the following circumstances:

(1) It has violated relevant laws, regulations or other rules and regulations of the People’s Republic of China;

(2) It is in a condition not suitable for navigation or towing;

(3) It is involved in a traffic accident and the formalities have not been completed;

(4) It has not paid the fees that are due, nor has it submitted a suitable guarantee therefor, to the competent authorities
or relevant department; or

(5) It will in any may jeopardize traffic safety.

   Article 22. When vessels, rafts and installations are involved in accidents that jeopardize or may jeopardize traffic safety,
the competent authorities has the right to handle the matter by adopting compulsory measures.

CHAPTER V CONTROL OF DANGEROUS GOODS

   Article 23. When vessels, rafts and installations store, load, unload and transport dangerous goods, they must abide by the provisions
of the State concerning the control of dangerous goods and their transport.

   Article 24. When vessels load and unload dangerous goods at harbours or carry them into or out of harbours, they shall report
to the local competent authorities for approval in advance according to the relevant provisions of the State.

CHAPTER VI ADMINISTRATION OF FERRIES

   Article 25. The setting-up or removal of urban ferries shall be approved by the organs designated by local people’s governments.
The setting-up or removal of other ferries shall be approved by the people’s governments at the county level
or above. It is forbidden to set up or remove ferries or ferry passengers before the approval is obtained.

   Article 26. Departments of ferry administration shall strengthen safety control of ferries. The competent authorities shall strengthen supervision
and direction for this purpose.

CHAPTER VII GUARANTEE FOR SAFETY

   Article 27. Administrative departments for navigation channels and navigational aids shall strengthen administration and
maintenance of navigational channels and navigational aids, keep channels unblockcked and navigational aids distinct and
effective.

   Article 28. No objects adversely affecting the efficacy of navigational aids may be erected around them. Strong lights that hinder
navigational safety or any lights that may mix up with navigational aids on both sides of navigational lanes,
shall be properly screened.

   Article 29. Without the approval of the competent authorities or administrative departments for navigation lanes, no units
or individuals may remove navigational aids. If navigational aids have been removed or damaged, it must be immediately
reported to the competent authorities or administrative departments for navigational lanes.

   Article 30. Applications annexed by illustrations shall be made to the harbour superintendencies for approval before the coastlines of the
harbour areas may be used. Without the examination and approval of the competent authorities, no installations may be constructed
on the coastlines of the harbour areas.

   Article 31. Approval shall be sought from the competent authorities and navigational warnings or notices be issued before
restricted navigation-zones may be set up and surface or underwater construction, sports competitions and other
activities affecting traffic safety may be carried out.

Before a restricted military navigation zone is designated, agreement shall be reached through consultation with the competent
authorities, which shall then issue navigational warnings or notices.

   Article 32. The designation and adjustment of traffic control zones, anchorages and berthing areas must be submitted, with the consent
of the local people’s governments, by the competent authorities, to organs at higher levels for approval.

   Article 33. It is forbidden to set up fixed fishing nets and fishing nets cutting across rivers or to grow water plants in habitual navigational
lances. The competent authorities shall order the owners of these unauthorized fishing nets and water plants
to eliminate them or have them eliminated by coercion.

   Article 34. It is forbidden to dump gravel and trash into navigational lances.

   Article 35. If vessels, installations or objects which obstruct safe navigation sink in navigable waters, the owners or operators
must set up marks according to the relevant provisions and report to the competent authorities.

   Article 36. Sunken and drifting objects that may affect the safety of navigation and constitute potential threats shall be gotten
away with by the owners or operators before a deadline set by the competent authorities. If these objects are not duly cleared
away, the competent authorities shall have the right to take coercive measures to that end, and all the costs thereof
shall be born by the owners or operators of the sunken or drifting objects.

The provisions of the previous paragraph of this Article shall not affect the rights of owners and operators of sunken
or drifting objects to demand compensation from third parties.

   Article 37. Without the approval of the competent authorities, sunken ships and objects in the navigable waters may not be salvaged or dismantled.

   Article 38. After installations are moved or scrapped, sunken ships and objects salvaged or cleared away, and the rounding-off work of
the surface or underwater construction handled, no objects may be left to hinder the safety of navigation, berthing and operations.

   Article 39. Vessels, rafts, installations and personnel shall promptly report to the competent authorities if they discover any of the
following situations:

(1) If navigational lanes change;

(2) If there are objects hindering safe navigation;

(3) If navigational aids are damaged or abnormal, moved or lost;

(4) If there is any other situation hindering safe navigation.

   Article 40. The competent authorities shall be responsible for uniformly issuing and administering inland water navigational
warnings and navigational notices.

CHAPTER VIII ASSISTANCE AND RESCUE

   Article 41. Vessels, rafts and installations that are in distress shall adopt all effective measures to organize self-help and
promptly report to the nearest competent authorities as well as their owners or operators the time and scene of the
accident, the extent of damage, the assistance required and the cause of the accident.

   Article 42. Vessels, rafts, installations or personnel in the vicinity of the scene of an accident that have received distress signals,
shall do their best to rescue the personnel and report promptly to the nearest competent authorities the situation
at the scene.

   Article 43. The vessels, rafts and installations involved in a collision shall, under circumstances where there is no danger to
their own safety, do their best to offer assistance and may not leave the scene of the accident without authorization.

   Article 44. Upon receipt of a report calling for rescue, the competent authorities must immediately organize a rescue operation.
Departments concerned and vessels, rafts, installations and personnel in the vicinity of the scene of the accident
shall follow the unified directions of the competent authorities.

CHAPTER IX INVESTIGATION AND HANDLING OF TRAFFIC ACCIDENTS

   Article 45. Vessels, rafts and installations involved in traffic accidents shall present accident reports and related materials
to the competent authorities and subject themselves to investigations and handling of the matter.

Traffic accidents involving bamboo and wooden rafts shall be investigated and handled by the competent
authorities in conjunction with the departments in charge of forestry.

   Article 46. The competent authorities shall, upon receipt of accident reports, organize investigations. The parties involved in the accidents
and persons concerned must, during investigation by the competent authorities, provide truthful information relating
to the accidents.

   Article 47. If a traffic accident gives rise to a civil dispute, the parties involved may apply to the competent authorities for
conciliation. If the parties do not apply for conciliation or conciliation is not successful, they may bring a suit
before the people’s court. Parties to a case involving foreign interests may also, based on a written agreement,
submit the case to an arbitration institution concerning foreign related matters for arbitration.

CHAPTER X AWARDS AND PENALTIES

   Article 48. Those units or individuals that have done remarkably in ensuring traffic safety by preventing or reducing personnel
casualties and by preventing or reducing property losses shall be commended or awarded by the competent authorities or by
their units.

   Article 49. With respect to the persons who have violated the provisions of these Regulations or who are held liable
for traffic accidents, the competent authorities may impose one or a number of the following penalties:

(1) a warning;

(2) withholding or revoking the licences or certificates;

(3) a fine.

   Article 50. If a party does not accept the penalty (penalties) imposed by the competent authorities, he may within 15 days from
the date of receiving the notice of the penalty (penalties), bring a suit before the people’s court; failure to bring
a suit or comply with the penalty (penalties) within this period shall lead to petition by the competent authorities
to the people’s court for compulsory enforcement.

   Article 51. Those punishable according to the relevant provisions concerning public security administration for violations
of these Regulations shall be dealt with by public security organs; as for those criminally liable, the judicial
organs shall in accordance with the law pursue their criminal liabilities.

CHAPTER XI SUPPLEMENTARY PROVISIONS

   Article 52. The following terms as used in these Regulations are defined as follows:

“Inland navigable waters” refers to the navigable waters in the rivers, lakes, reservoirs and canals as well as
harbours within the People’s Republic of China.

“Vessels” refers to all types of displacement or non-displacement ships, boats and mobile platforms.

“Installations” refers to all types of structures, installations, pipelines and electric cables, on the surface or underwater,
fixed or floating, and fixed platforms as well.

“Operations” refers to loading and unloading, exploration, exploitation, survey, construction, dredging, demolition,
salvage, rescue, fishing, aquatic breeding, diving, scientific experimentation and other surface or
underwater construction carried out in navigable waters and their shorelines.

“Traffic accidents” refers to collision, running aground, running on rocks, damage through contact, damage by waves,
windstorm, fire and other accidents happening to vessels, rafts and installations.

   Article 53. Vessels of foreign nationality entering and leaving the inland rivers shall observe, in addition to these Regulations,
the relevant provisions of the People’s Republic of China concerning administration of vessels of foreign nationality.

   Article 54. The internal administration of zones under military control and military vessels as well as public security vessels shall be
separately prescribed by the relevant departments of the State according to these Regulations.

   Article 55. The internal administration such as registration and inspection of fishing vessels, examination and issuing
of certificates for crew members of fishing vessels and investigation and handling of traffic accidents among fishing
vessels shall be separately prescribed according to these Regulations by the State fisheries administration and fishing
ports superintendency departments in conjunction with the competent authorities.

   Article 56. The traffic safety control of the waters at urban scenic spots and gardens and of the waters exclusively used by factories,
mines and other enterprises as approved by the people’s governments of the provinces, autonomous regions
and municipalities directly under the Central Government shall be separately prescribed according to these Regulations
by the competent departments or the factories, mines and enterprises concerned.

   Article 57. These Regulations shall be interpreted by the Ministry of Communications, which shall also formulate the rules for the
implementation.

   Article 58. These Regulations shall become effective as of January 1, 1987.

    





SUPPLEMENTARY PROVISIONS ON ACCOUNTING FOR FOREIGN CURRENCY TRANSACTIONS BY JOINT VENTURES USING CHINESE AND FOREIGN INVESTMENT

REGULATIONS CONCERNING CUSTOMS SUPERVISION AND CONTROL OF GOODS BEING PROCESSED

CONSTITUTION ACT, 1982 – page 21

CONSTITUTION ACT, 1982 – page 20

CONSTITUTION ACT, 1982 – page 19

CONSTITUTION ACT, 1982 – page 18

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