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2000

PROCEDURES ON THE ADMINISTRATION OF ISSUANCE AND TRANSFER OF ENTERPRISE BONDS






Procedures on the Administration of Issuance and Transfer of Enterprise Bonds

     (Effective Date:1994.04.08–Ineffective Date:)

CHAPTER ONE GENERAL PROVISIONS CHAPTER TWO ISSUANCE CHAPTER THREE UNDERWRITERS AND MODES OF UNDERWRITING CHAPTER FOUR GUARANTIES CHAPTER
FIVE REGISTRATION AND TRUST CHAPTER SIX BONDS TRANSFER AND CHANGE OF NAMES CHAPTER SEVEN REVELATION OF INFORMATION CHAPTER EIGHT
PENALTIES CHAPTER NINE SUPPLEMENTARY PROVISIONS

   Article 1 This set of procedures has been formulated in accordance with laws and administrative decrees such as the Company Law, the Guarantee
Law and Regulations on Administration of Enterprise Bonds with the aim of strengthening the administration and standardizing the
issuance and transfer of enterprise bonds to guard against financial risks and protect the lawful rights and interests of creditors.

   Article 2 Enterprise bonds (hereinafter referred to as the bonds) as cited in this set of procedures shall be negotiable securities issued
by enterprises in accordance with legal procedures and with the approval of PBOC with their principals and interests to be repaid
within an agreed time limit.

   Article 3 In issuing bonds, enterprises should provide guarantees and warranties, except those that have been approved by PBOC to be exempted
from such guarantees and warranties.

   Article 4 Bond subscribers should be responsible for the risks of cashing of the bonds by themselves, and are enpost_titled to the following rights:

(1) The right to acquiring interests, recovering principals in accordance with the agreed time limit, or the exercise of related creditor’s
rights in case the bonds cannot be cashed on time;

(2) Transfer, hypothecation and inheritance of the bonds; and

(3) Requesting information on performance and financial standing of the bond issuers with the bonds’ underwriters and issuers.

   Article 5 In issuing and transferring bonds, laws and administrative decrees and regulations should be abided by and the principles of openness,
voluntarism and honesty should be observed, while related information should be fully disclosed and investment risks for the bonds
revealed.

   Article 6 Enterprise legal persons within the boundaries of the People’s Republic of China should abide by this set of procedures when engaging
in the issuance and transfer of the bonds and related activities inside the People’s Republic of China.

PBOC shall be in charge of issuance and transfer of the bonds, and responsible for the implementation of this set of procedures.

   Article 7 The meanings of the following terms are:

Issuer-An enterprise legal person that has been approved by PBOC to issue bonds.

Underwriter-A securities company, trust and investment company or enterprise legal person of financial company under an enterprise
group recognized by PBOC as qualified to engage in underwriting of the bonds.

Guarantor-An enterprise legal person that provides guarantee and warranties to issuers in accordance with provisions of the Guarantee
Law.

Trustee-A central national debt registration and settlement limited liability company (hereinafter referred to as the central registration
company) that handles the overall registration and trust of bonds and their claims in books; and an underwriter that handles registration
of such bonds and their claims and secondary trust.

Subscriber-A legal person, other organization or natural person with civil capacities that subscribes for the bonds.

   Article 8 For an issuance of bonds, an enterprise should first of all go to PBOC for an examination and approval which shall be made in accordance
with the bond issuance plan approved by the State Council and handed down jointly by the State Planning Commission, PBOC, the Ministry
of Finance and the Securities Committee under the State Council. For a central enterprise the examination and approval for bond issuance
should be sought jointly from PBOC and the State Planning Commission and for a local enterprise in the related province, the corresponding
examination and approval should be sought jointly from the corresponding PBOC branch, autonomous region, or municipality directly
under the State Council and the planning commissions of the same administrative level.

Without approval, issuances of enterprise bond whether in a straight format or any disguised form are not allowed.

   Article 9 The principal underwriter of enterprise bonds should assist the issuer in submission of an issuance required under the Standard Format
for Submission for Application by Enterprises to Issue Bonds including bond issuance charters, legal opinionaires to PBOC.

   Article 10 The bond issuance charter should comprise the following contents:

(1) The name, residence, scope of business, legal representative, telephone number for contact, and postal code of the issuer;

(2) The document number and date of the approval document issued by PBOC for the issuance of bonds;

(3) The name, time limit and interest rate of the bonds;

(4) The face value, issuance price and total volume of issuance of the bonds;

(5) The targeted subscribers, the time limit and ways of issuance;

(6) The starting and ending dates of interest payment, the time limit and ways of repayment of principal and interest;

(7) The objectives, uses and profit forecast of the bonds issued;

(8) Operational risks, cashing risks and preventative measures;

(9) Financial statement of the latest quarter;

(10) Major financial data and indicators of the recent three years;

(11) The enterprise’s production and business operation and other basic information concerning business development in the recent
three years;

(12) Basic information about the guarantors (approved by PBOC to be exempted from guarantee should be clearly indicated); and

(13) Other contents as required by PBOC.

   Article 11 The bonds should be issued through commissioned underwriters. The issuer is not allowed to make deals of the bonds.

   Article 12 With the approval of PBOC, enterprise bonds can either be issued as real-name book-entry bonds or as bearer bonds.

   Article 13 For those issued as real-name book-entry bonds, the issuance should be put under graduated trust by the trustees and the vouchers
for registration and trust of bonds should be unifiedly printed by the central registration company. Prior to printing, the central
registration company shall send the format for the vouchers for registration and trust of bonds to PBOC for reexamination.

   Article 14 For those issued as bearer bonds in kind, the bonds should carry the following contents:

(1) The name and residence of the issuer;

(2) The name, face value, time limit and interest rate of the bonds;

(3) The bonds’ starting and ending dates of interest payment;

(4) The time limit and method of principal and interest repayment;

(5) The issuance date and serial number of the bond;

(6) The issuer’s seal and the legal representative’s seal and signature;

(7) The name and residence of the guarantor;

(8) The number and date of the approval documents issued by the examination and approval authorities; and

(9) The name of the printers of the bonds.

On the surface cover of the bearer bonds the following statement shall appear: “This bond is the only effective and legal proof attesting
to the ownership of creditor’s rights and no vouchers on commissioned storage of bonds are valid.” Bearer bonds should be printed
at printing units designated by PBOC.

The principal underwriter of the bonds should submit samples of the bonds to the PBOC prior to issuance for examination.

   Article 15 When PBOC approves the issuance of the bonds, the issuer should put the bonds into public within three months since the date of the
approval. Otherwise the original approval documents will automatically be annulled; if the enterprise still needs to issue bonds,
formalities should be started anew for examination and approval.

   Article 16 An issuer is not allowed to issue bonds for a second time under one of the following circumstances:

(1) The bonds for the previous issuance have not been fully subscribed;

(2) There have been and still are violations of contract or delayed payment of principals and interests for bonds previously issued
or other debts.

CHAPTER THREE UNDERWRITERS AND MODES OF UNDERWRITING

   Article 17 Before actual underwriting of bonds issued, a securities institution should first of all be verified by PBOC its qualification for
such underwriting and without such a verification by PBOC, or qualifications for underwriting having become invalid, except acting
as a sub-underwriter or underwriting on a commissioned basis a securities institution is not allowed to engage in the work of underwriting.

   Article 18 An underwriter should be responsible for:

(1) Underwriting the bonds issued;

(2) Counciling upon guarantee of bonds;

(3) Registration, secondary trust and transfer of ownership of book- entry bonds;

(4) Bonds dealing for subscribers;

(5) Counciling upon information release for issuers; and

(6) Claiming payment for subscribers when the issuer or the guarantors fail to fulfill their obligations.

   Article 19 For a securities institution to apply for underwriting of bonds, the following conditions should be met:

(1) The net assets of the institution should be no less than RMB100 million;

(2) The proportion of circulating capital in net assets of the institution should not be lower than 50%;

(3) The ratio of net assets to total liabilities of the institution should not be lower than 10%;

(4) The senior managing staff of the institution should be available with necessary knowledge of securities, finance and legal matters
and have not been involved in any major violations of law or regulations in the past two years. Two-thirds or more of them should
have worked in securities-related business for over three years or in finance business for over five years;

(5) The institution has professional personnel who are familiar with related business codes and operating procedures;

(6) The institution is equipped with sound internal risk control and financial management systems;

(7) The institution has not committed any major violations of law or regulations in the past one year; and

(8) Other conditions as required by PBOC.

   Article 20 The securities institution that takes the lead in organizing an underwriting body, or acts as the sole underwriter of the bonds is
in fact the principal underwriter.

A securities institution to become a principal underwriter for the issuance of enterprise bonds, should also meet the following conditions
besides those listed under Article 19:

(1) Its net assets should not be less than RMB500 million;

(2) The number of full-time staff members engaged in bond business should not be less than five. It should also have professional
personnel well equipped with accounting and legal knowledge;

(3) It should have participated in at least three issuances of bonds, or have been engaged in the underwriting of bonds for over three
years; and

(4) There are no such record in the past one year that less than 30% of total bonds issued were sold when the institutions acted as
the principal underwriter.

   Article 21 For a securities institution that meets the conditions as stated in Article 19 and Article 20 of this set of procedures to be qualified
as a bond underwriter, the following documents should be presented to PBOC:

(1) Application for qualification for engagement in the business of bond underwriting;

(2) Duplicate of Permit for Operation in Financial Business;

(3) Duplicate of Business License of Legal Entities (carbon copy);

(4) Articles of association of the institution;

(5) Exposition on its internal risk and financial management system;

(6) Testimonials on the verified net assets at the end of the last quarter of the current fiscal year as presented by a certified
public accounting firm with qualifications in securities-related business;

(7) Assets and liabilities statement, profit and loss statement, and statement on changes in financial standing at the end of the
previous year as audited by a certified public accounting firm with qualifications in securities-related business;

(8) Statements, reports, and explanations on the volume of underwriting and cashing of bonds as organized in the past one year;

(9) Resumes and duplicates of professional certificates of the legal representative, key persons in charge and main professional personnel;
and

(10) Other documents as required by PBOC.

   Article 22 PBOC shall examine the application document for qualification as bond underwriters. If qualified, the approved bond underwriters
will be publicized by PBOC, and the list of the underwriters will be published through the media.

Qualifications for engagement in bond underwriting for securities institutions will be valid for one year as of the date of the publication
of PBOC’s notice and become invalid automatically after one year.

   Article 23 PBOC shall conduct reexamination of the underwriters’ qualification once every year. Securities institutions already acquired underwriters’
qualifications that need to keep the qualifications for the engagement in the business of enterprise bonds underwriting should, within
one month before the expiration of their bond underwriting qualifications, submit items listed in sections 7, 8 and 9 of Article
21 and other documents required by PBOC to PBOC. Otherwise, their qualifications for bond underwriting shall be automatically annulled.

   Article 24 Underwriters should undertake the examinations and checkings of the authenticity, accuracy and integrity of the charters, notice
and other related documents about the issuance issued by the issuers.

   Article 25 When a public issuance of bonds with the total face value of exceeding RMB50 million, the underwriters concerned should form an underwriting
body, which is to compose of more than two underwriting institutions.

The principal underwriter should sign an underwriting agreement with other underwriters.

   Article 26 The principal underwriter should sign an agreement on underwriting with the issuer.

The agreement on underwriting should include the following contents:

(1) The names, residences and names of their legal representatives of the interested parties;

(2) Modes of underwriting;

(3) Categories of bond issuance (as bearer bonds or as book-entry bonds);

(4) The categories and value of bonds underwritten;

(5) The quotas of bond underwriting for each member of the underwriting body;

(6) The time limit of underwriting and the starting and ending dates;

(7) Dates and ways of money transfer for bond funds;

(8) Computation, methods and dates of payment of underwriting expenses;

(9) The responsibilities for cashing the bonds when due and the ways of cremation of the cashed bonds;

(10) Matters pertaining to guarantee of the bonds;

(11) Liabilities for breach of contract; and

(12) Other items as required by PBOC.

   Article 27 In underwriting issuance of enterprises bonds, can such forms as sales on a commission basis, exclusive sale of balance outstanding
or fully exclusive sale can be taken.

For underwriting through sales on a commission basis, the underwriter has not to shoulder any issuance risks but only to transfer
bond funds at agreed dates within the time limit of issuance to the issuer and return all bonds not sold to the issuer at the end
of issuance.

For bonds underwriting through exclusive sales of balance outstanding, the underwriter has to shoulder part of the issuance risks
and purchase all bonds not sold at the end of the time limit of issuance.

For bonds underwriting through fully exclusive sales, the underwriter has to shoulder all risks for the issuance and no matter the
condition of the bond sales should purchase all bonds within an agreed period following the public issuance of the bonds and at the
same time transfer all bond funds to the issuer.

   Article 28 For underwriting through fully exclusive sales, amount committed by an underwriter for an issuance should be limited in value as:

(1) For underwriters whose net assets was more than RMB100 million (including RMB100 million) and less than (but not including) RMB200
million at the end of the previous year, the sum of exclusive sales should not exceed RMB50 million;

(2) For underwriters whose net assets was more than RMB200 million (including RMB200 million) and less than (but not including) RMB50
billion at the end of the previous year, the sum of exclusive sales should not exceed RMB100 million;

(3) For underwriters whose net assets was more than RMB500 million (including RMB500 million) and less than (but not including) RMB1
billion at the end of the previous year, the sum of exclusive sales should not exceed RMB200 million;

(4) For underwriters whose net assets was more than RMB1 billion (including RMB1 billion) and less than (but not including) RMB1.5
billion at the end of the previous year, the sum of exclusive sales should not exceed RMB500 million; and

(5) For underwriters whose net assets was more than RMB1.5 billion (including RMB1.5 billion) at the end of the previous year, the
sum of exclusive sales should not exceed RMB1 billion.

   Article 29 PBOC, in reference to State’s related laws and regulations and this set of procedures, may indicate objective to the underwriting
of certain issuance of bonds by the underwriters that are involved in infringements of regulations.

   Article 30 A securities institution is not allowed to underwrite more than five (including five) issuances of bonds at the same time.

“At the same time” in the previous paragraph refers to coincidence or overlapping of the underwriting periods as stipulated under
the underwriting agreements signed with different issuers.

   Article 31 Central bonds and local bonds of Grade A or higher creditability can be issued all around the country.

For local bonds issued across the provinces, autonomous regions and municipalities directly under the central government, the issuer
should timely report the condition of bond underwriting to the branch offices of PBOC where the bonds are issued for the record.

No localities or units are eligible to restrict the issuance of bonds that originate from other places but conform to conditions set
in this set of procedures. No localities or units are eligible to restrict the underwriting of local bonds by securities institutions
of other places that are qualified for bond underwriting.

   Article 32 The underwriting commission for underwriters should be computed on the basis of the total face value of bonds issued and collected
at the excess regressive rates. The specific standards are as follows:

Underwriting value Fee standards

Portions not exceeding 1.5%-3% 1.5%-2% RMB100 million Portions exceeding RMB100 1.5%-2% 1.2%-1.5% million but under RMB500 million
Portions exceeding RMB500 1.2%-1.5% 0.8%-1.2% million but under RMB1 billion Portions exceeding RMB1 0.8%-1.5% 0.5%-1.2% billion

   Article 33 When necessary an issuer may sell bonds in instalments. When filing application for such sales, the issuer should clearly indicate
the time of the instalment and volume of sales during each instalment. When changes in the mode and conditions of bond issuance occur,
the issuer should submit the issuance plan to PBOC for approval before the undertaking of the sales of each instalment.

The time limit of underwriting for each instalment of bonds should be no less than 10 days and no more than 60 days.

   Article 34 The issuer should, within 10 work days of the end of each issuance, provide verification certifying the bond funds are really in
place and final reports on underwriting expenses to the principal underwriter.

The principal underwriter should, within 15 work days of the end of each underwriting, submit to PBOC verification reports certifying
the bond funds are really in place, and reports on the work of underwriting, which should explain in detail the implementation of
the agreements on underwriting and on the underwriting body, as well as the final figures of underwriting expenses.

   Article 35 The branches of the PBOC at various levels should establish and perfect the statistical and reporting systems of enterprise bonds,
do a good job in the statistical analysis of enterprise bonds and, in accordance with regulations, provide various statistical reports
and analytical reports in time to reflect the problems existing in the enterprise bond market and conduct supervision and inspection
on the enterprises’ issuance of bonds and use of funds so raised.

   Article 36 Prior to the issuance of bonds, the issuer should provide guarantee and warranties, except that having been approved by PBOC for
exemption. Only when the work concerning guarantees has been approved by PBOC can the bond issuance be started.

   Article 37 The guarantor concerned should, in accordance with the provisions of the Guarantee Law, provide written letter of guarantee to bond
subscribers.

The guarantor may request the issuer to provide object of pledge or hypothecation for counter guarantee.

   Article 38 The principal underwriter should assist the issuer and the guarantor to handle matters pertaining to the guarantee and counter guarantee
of bonds.

   Article 39 The guarantor should be a legal entity that conforms to the provisions of the Guarantee Law and meets the following conditions:

(1) Its net assets should be no less than the principal and interest of the bonds to be issued by the guaranteed party;

(2) It enjoys profits in the past three consecutive years and commands excellent prospects in business;

(3) It is not involved in such affairs as restructuring and dissolution or in major litigation cases; and

(4) Other conditions as required by PBOC.

Announcement should be made in time when a guarantor should lose its capacity to guarantee as a result of dissolution, bankruptcy
or being canceled according to law.

   Article 40 The guarantor may charge guarantee fee on the guaranteed issuer under an amount agreed upon by both sides of the interested parties.

   Article 41 The letter of guarantee should include the following contents:

(1) The varieties and value of bonds being guaranteed;

(2) The time when the bonds mature;

(3) Way of guarantee;

(4) The scope of guarantee and warranties;

(5) The time limit of guarantee; and

(6) Other contents as required by PBOC.

A guarantor should adopt the mode of joint liability for guarantee with the scope of the guarantee comprising principal and interest
of the bonds, contractual fine, damage awards and expense for recovery of debts and time limit for the guarantee being two years
since the date of the bonds’ maturity.

   Article 42 Whereas a guarantor requests the issuer to provide objects as pledge (hypothecation) for counter guarantee, the guarantor and the
pledger (hypothecation) should sign an agreement on assets pledge (hypothecation) and go through corresponding registration formalities
in accordance with the Guarantee Law and other related regulations.

   Article 43 Change of guarantor(s) by an issuer should first of all acquire approval from PBOC.

After the change, the subscribers should accept the guarantee(s) provided by the new guarantor(s) as approved by PBOC.

CHAPTER FIVE REGISTRATION AND TRUST

   Article 44 A trustee shall be the registrant official of the creditor’s rights of book-entry bonds to be responsible for the management of creditor’s
rights, the custody of legal rights and commissioned cashing of bonds after bond issuance and provision of related information services
to subscribers.

   Article 45 Separated levels management shall be instituted for the registration and trust of book-entry bonds with the central registration
companies to assume the general registration office and trustee to directly handle the registration and trust of bonds subscribed
by financial securities institutions and funds; and the underwriters to assume branch registration offices and secondary trustees
to handle the registration and trust of bonds subscribed by other institutions and individuals.

Trutees at various levels are responsible for the authenticity and accuracy of the creditor’s rights for their own clients.

The central registration companies shall maintain supervision on the business operations of various secondary trustees.

   Article 46 A central registration company shall open self-operated bond accounts and secondary trustee general accounts for underwriters to
respectively record the total bonds held by the underwriters themselves and those held by secondary trustee clients and also be responsible
for the unified printing of the triplicate form of bond registration and trust vouchers (including primary and secondary vouchers)
for use in issuance, registration and trust business.

   Article 47 When issuing bonds, the underwriters shall present bond registration and trust vouchers for the subscribers.

Whereas the subscribers are securities institutions or funds, the primary vouchers shall be presented together with the vouchers’
registration slips and then handed over to the central registration company to register, verify and confirm creditor’s rights for
the subscribers and whereas the subscribers are other institutions or individuals, the underwriters should directly register creditor’s
rights, and present the secondary vouchers to them. Meanwhile, the vouchers’s audit slips shall be gathered and handed over to the
headquarters of the underwriter for an inspection by the latter of the standard of the distributed sales of the bonds. The central
registration company has the right to exercise supervision over the process.

The underwriters should submit to the central registration company reports certifying total sum of the underwriter’s bonds trusted
for the registration of the total sum of the underwriters’ bonds trusted under the various underwriters’ secondary trust general
accounts.

Excess or void vouchers should be handed over to the central registration company or the principal underwriter.

   Article 48 After an issuance of the bonds, only after certification by the central registration company and the issuer of the registered total
sum of bonds, the sum of funds actually received, and their consistency, can the creditor’s rights really come into force and then
the central registration company shall present letter of confirmation of creditor’s rights to the issuer.

   Article 49 The issuer should pay registration and trust fee, at the amount of 0.05% of total sum of bonds issued, to the trustee on a lump-
sum basis; this fee shall be collected on a commission basis by the underwriters, and be distributed reasonably among the various
trustees.

   Article 50 After an issuance of bonds, if the subscribers need to deal with the bonds at the stock exchanges, a transfer of trust should be
made in accordance with the related regulations of the central registration company and the stock exchanges. Meanwhile, the central
registration company should establish secondary trust general account for the securities registration companies of the stock exchanges.

   Article 51 For enterprise bonds issued publicly in the society, before the maturity and cashing of bonds, a notice on the methods of cashing
should be announced by the issuer of commissioned cashing institutions through radio, TV, newspapers and other mass media to investors
15 days before the date of cashing with the following main contents:

(1) The names of the issuer and the bonds to be cashed;

(2) The name and residence of the commissioned cashing institution;

(3) The starting and ending dates of the bond cashing;

(4) Settlement of bonds cashed after the designated time;

(5) The publishing unit and its seal of the notice on methods of cashing; and

(6) Other items that need to be publicized.

   Article 52 Three days before the bond’s due, an issuer of book-entry bonds should transfer funds for bond cashing to the accounts designated
by the central registration company and an issuer of bearer bonds should transfer funds for bond cashing to the accounts of the principal
underwriter. If the issuer fails to fulfil a debtor’s obligations, the principal underwriter should notify the guarantor to fulfil
the obligations as pledged in the letter of guarantee and pay the debts; if the guarantor also fails to fulfil corresponding obligation
of paying the debts, the principal underwriter should act on behalf of the subscribers to seek compensations from the issuer or guarantor
concerned.

Risks of direct or indirect losses of incapable of cashing the bonds due in turn should be bore by the subscribers themselves.

CHAPTER SIX BONDS TRANSFER AND CHANGE OF NAMES

   Article 53 For bonds having been transferred to the trust of stock exchanges, their transfer and change of names should be handled in accordance
with related business regulations of the stock exchanges; for those not yet do so or not be listed in the stock exchanges, their
transfer and change of names should be handled in accordance with Article 54 and Article 55 of this set of procedures.

   Article 54 Bearer bonds are transferred at counters of the securities institutions designated by the local office of PBOC and institutions concerned
should submit reports on a monthly basis on the transfer of bonds to the local office of PBOC, and timely make known the problems
arising in the transfer of bonds.

The securities institutions which are to handle the transfer of bond should have sufficient means to distinguish the counterfeit bonds.
They are not allowed to keep the bonds on a commission basis, nor to make or offer commissioned bond storage vouchers in any form
by themselves.

In handling the business of bond transfers, securities institutions should deal with counterfeit bonds, if any, in the following ways
according to different circumstances:

(1) Whereas securities institutions recognize counterfeit bonds in the process of purchase, the counterfeit bonds concerned should
be confiscated and posted with cancellation marks;

(2) Whereas the securities institutions discover counterfeit bonds among th

CATALOGUE OF FOREIGN-RELATED REGULATIONS ANNULLED FORMALLY FROM TO BY THE STATE COUNCIL

Category  CATALOGUE OF INVALIDATED LAWS AND ADMINISTRATIVE TEGULATIONS GOVERNING FOREIGN-RELATED MATTERS Organ of Promulgation  The State Council Status of Effect  In Force
Date of Promulgation  1998-12-31 Effective Date  1998-12-31  


A Catalogue of Foreign-Related Regulations Annulled Formally from 1994 to 1998 by the State Council



(December 31, 1998)

    INTERIM REGULATIONS ON SAFETY INSPECTIONS ON LEAVING AND ENTERING THE COUNTRY(approved by the Government Administration
Council of the Central People’s Government on July 29, 1952)

GENERAL RULES CONCERNING JOINT INSPECTION OF ENTRY OR EXIT SHIPS
(approved by the State Council on September 8, 1961, promulgated by the
Ministry of Communications, the Ministry of Foreign Economic Relations and
Trade, the Ministry of Public Security and the Ministry of Public Health on
October 24, 1961)

REGULATIONS ON BORDER INSPECTION
(promulgated by the State Council on April 30, 1965)

PROVISIONS ON THE USE OF ARMS AND POLICE ORDNANCE BY THE PEOPLE’S POLICE
(Approved by the State Council on July 5, 1980, promulgated by the Ministry
of Public Security on July 15, 1980)

INTERIM REGULATIONS ON FOREIGN EXCHANGE CONTROL OF THE PEOPLE’S REPUBLIC
OF CHINA
(Promulgated by the State Council on December 18, 1980)

RULES FOR THE IMPLEMENTATION OF FOREIGN EXCHANGE CONTROL RELATING TO
INDIVIDUALS
(Approved by the State Council on December 31, 1981, promulgated by the
State Administration of Foreign Exchange Control on December 31, 1981)

RULES FOR THE IMPLEMENTATION OF THE EXAMINATION AND APPROVAL OF APPLICATIONS
BY INDIVIDUALS FOR FOREIGN EXCHANGE
(Approved by the State Council on December 31, 1981, promulgated by the
State Administration of Foreign Exchange Control on December 31, 1981)

INTERIM PROVISIONS FOR THE ADMINISTRATION OF AUDIO-VISUAL PRODUCTS
(approved by the State Council on December 23, 1982, promulgated by the
Ministry of Broadcasting and Television)

RULES FOR THE IMPLEMENTATION OF FOREIGN EXCHANGE CONTROL REGULATIONS RELATING
TO ENTERPRISES WITH OVERSEAS CHINESE CAPITAL, FOREIGN-CAPITAL ENTERPRISES AND
CHINESE-FOREIGN EQUITY JOINT VENTURES
(Approved by the State Council on July 19, 1983, promulgated by the State
Administration of Foreign Exchange Control on August 1, 1983)

REGULATIONS ON THE PROTECTION OF SURVEYING MARKERS
(Promulgated by the State Council on January 7, 1984)

REGULATIONS OF THE PEOPLE’S REPUBLIC OF CHINA FOR THE ADMINISTRATION OF
FOREIGN BANKS AND CHINESE-FOREIGN JOINT BANKS IN THE SPECIAL ECONOMIC ZONES
(Promulgated by the State Council on April 2, 1985)

IMPLEMENTING RULES ON PUNISHMENT OF VIOLATION OF FOREIGN EXCHANGE CONTROL
(Approved by the State Council on March 25, 1985, promulgated by the State
Administration of Foreign Exchange Control on April 5, 1985)

INTERIM REGULATIONS ON THE ADMINISTRATION OF TOURIST AGENCIES
(Promulgated by the State Council on May 11, 1985)

INTERIM PROVISIONS OF THE STATE COUNCIL CONCERNING THE REDUCTION OF
INDIVIDUAL INCOME TAX ON INCOME FROM WAGES AND SALARIES OF FOREIGN NATIONALS
WHO COME TO WORK IN CHINA
(Promulgated by the State Council on August 8, 1987)

PROVISIONS CONCERNING FINANCIAL MANAGEMENT OF INSTITUTIONS
(Approved by the State Council on January 5, 1989, promulgated by the
Decree No.2 of the Ministry of Finance on January 26, 1989)

REGULATIONS OF THE PEOPLE’S REPUBLIC OF CHINA ON PREVENTION AND CURE OF
AMBIENT NOISE POLLUTION
(Adopted by the 47th Executive Meeting of the State Council on September 1,
1989, promulgated by Decree No.40 of the State Council of the People’s
Republic of China on September 26, 1989)

MEASURES FOR THE ADMINISTRATION OF FOREIGN-CAPITAL FINANCIAL INSTITUTIONS
AND CHINESE-FOREIGN EQUITY JOINT FINANCIAL INSTITUTIONS IN THE SHANGHAI
MUNICIPALITY
(Approved by the State Council on September 7, 1990, promulgated by Decree
No.2 of the People’s Bank of China on September 8, 1990)

MEASURES OF THE CUSTOMS OF THE PEOPLE’S REPUBLIC OF CHINA CONCERNING THE
ADMINISTRATION OF THE GOODS, MEANS OF TRANSPORT, AND ARTICLES CARRIED BY
INDIVIDUALS TO BE BROUGHT INTO OR OUT OF THE BONDED AREA OF OUTER GAOQIAO IN
SHANGHAI
(Approved by the State Council on September 8, 1990 and promulgated by
Decree No. 13 of the General Customs Administration on September 9, 1990)

Regulations for the Implementation of the Land Administration Law of the
People’s Republic of China (1991)
(Promulgated by Decree No.73 of the State Council of the People’s Republic
of China on January 4, 1991, effective on February 1, 1991)

Regulations on the Protection of Basic Farmland (1994)
(Adopted at the 22nd Executive Meeting of the State Council on July 4, 1994,
promulgated by Decree No.162 of the State Council on August 18, 1994, and
effective as of October 1, 1994)





CIRCULAR OF THE STATE ADMINISTRATION OF TAXATION ON THE ISSUE CONCERNING HOW ENTERPRISES WITH FOREIGN INVESTMENT WHICH CONCURRENTLY ENGAGE IN PRODUCTIVE AND NON-PRODUCTIVE BUSINESS ENJOY PREFERENTIAL TAX TREATMENT

The State Administration of Taxation

Circular of the State Administration of Taxation on the Issue Concerning How Enterprises with Foreign Investment which Concurrently
Engage in Productive and Non-productive Business Enjoy Preferential Tax Treatment

GuoShuiFa [1994] No.209

September 19, 1994

The state tax bureaus of various provinces, autonomous regions and municipalities directly under Central Government, the state tax
bureaus of various municipalities separately listed on the State plan, and various sub-bureaus of Offshore Oil Tax Administration:

In line with the related stipulations of the Income Tax Law of the People’s Republic of China on Enterprise with Foreign Investment
and Foreign Enterprises and the Rules for Its Implementation (hereinafter referred to as the Tax Law and Rules), we hereby notify
you of the following question concerning applicable preferential tax treatment to enterprise with foreign investment which engage
concurrently in productive and non-productive business (hereinafter referred to as enterprise with foreign investment engaging in
concurrent operations):

I.

If no productive business is included in the business scope prescribed in their business license, no enterprise with foreign investment
shall enjoy related preferential tax policies as granted to productive enterprises, no matter how large is the proportion of the
productive business is in their actual business activities.

II.

If the business scope prescribed in the business license of an enterprise with foreign investment covers both productive and non-
productive business, or if the business scope prescribed in the business license covers only productive business, but the enterprise
actually engages in non-productive business, the applicable preferential tax policy can be determined in accordance with the following
methods:

(1)

Within the period of tax reduction and exemption calculated from the profit-making year of an enterprise as specified in Article 8
of the Tax Law, an enterprise with foreign investment engaging in concurrent operations may, in the year when the enterprise’s productive
business income exceeds 50 percent of all its business income, file an application which, after being examined and approved by the
competent tax authorities, enjoy appropriate treatment of tax reduction and exemption in the year’ but if its productive business
income does not exceed 50 percent of all its business income in the year, the enterprise shall not enjoy the appropriate preferential
treatment of tax exemption and reduction in that year.

(2)

An enterprise with foreign investment engaging in concurrent operations which is set up in the area where tax is levied at a reduced
tax rate as specified in Article 7 of the Tax Law and by the State Council shall begin to enjoy related preferential treatment of
taxation at a reduced rate from the year when its productive business income exceeds for the first time 50 percent of all its business
income.

This Circular shall enter into force as of January 1, 1994.

 
The State Administration of Taxation
1994-09-19

 



REGULATIONS ON COMPANY REGISTRATION



Regulations of the People’s Republic of China on Company Registration

     (Effective Date:1994.07.01–Ineffective Date:)

CHAPTER ONE GENERAL PROVISIONS CHAPTER TWO JURISDICTION OF REGISTRATION CHAPTER THREE ITEMS FOR REGISTRATION CHAPTER FOUR REGISTRATION
OF ESTABLISHMENT CHAPTER FIVE ALTERATION REGISTRATION CHAPTER SIX CANCELLATION REGISTRATION CHAPTER SEVEN REGISTRATION OF BRANCH
COMPANIES CHAPTER EIGHT PROCEDURES OF REGISTRATION CHAPTER NINE ANNUAL CHECKING CHAPTER TEN MANAGEMENT OF LICENSES AND ARCHIVES CHAPTER
ELEVEN LEGAL RESPONSIBILITY CHAPTER TWELVE SUPPLEMENTARY PROVISIONS

   Article 1 This set of regulations has been formulated in pursuant to the Company Law of the People’s Republic of China (hereinafter referred
to as “company law”) in order to confirm the capacity of companies as legal enpost_titles and standardize the behaviour of company registration.

   Article 2 Limited liability companies and joint stock limited companies (hereinafter referred to as “companies”) shall go through company registration
procedures in their establishment, alteration or termination.

   Article 3 Only after the registration is approved by a company registration organ and the acquirement of a “Business License of Legal Entity”,
a company can acquire the capacity as a legal entity.

A company established after this set or regulations becoming effective shall not engage in any business activities in the name of
the company unless its registration has been approved by company registration organ.

   Article 4 Administrations for industry and commerce are the company registration organs.

The company registration organs at a lower level shall work under the leadership of company registration organs at a higher level.

Company registration organs shall perform their duties according to law, free from any unlawful interference.

   Article 5 The State Administration for Industry and Commerce shall administer the work of company registration in the whole country.

CHAPTER TWO JURISDICTION OF REGISTRATION

   Article 6 The State Administration for Industry and Commerce is responsible for the registration of the following companies:

1. Joint stock companies approved by departments authorized by the State Council;

2. Companies set up with investment authorized by the State Council;

3. Limited liability companies established solely or jointly by investment organizations authorized by the State Council;

4. Limited liability companies established by foreign investors;

5. Other companies that should be registered with the State Administration for Industry and Commerce according to the provisions of
relevant laws and regulations or according to the regulations promulgated by the State Council.

   Article 7 Administrations for industry and commerce of provinces, autonomous regions or centrally administered municipalities are responsible
for the registration of the following types of companies within their jurisdiction:

1. Joint stock limited companies established with the approval of the people’s governments of provinces, autonomous regions and centrally
administered municipalities;

2. Companies established with investment authorized by the people’s governments of provinces, autonomous regions and centrally administered
municipalities;

3. Limited liability companies established jointly by investment organizations or departments authorized by the State Council in cooperation
with other investors;

4. Limited liability companies established solely or jointly by investment or investment organizations or departments authorized by
the people’s governments of provinces, autonomous regions or centrally administered municipalities; and

5. Companies whose registration is entrusted by the State Administration for Industry and Commerce.

   Article 8 Administrations for industry and commerce of cities and counties are responsible for the registration of companies other than those
listed in Article 6 and Article 7 within its jurisdiction. Their jurisdiction of registration shall be determined by administrations
for industry and commerce of various provinces and autonomous regions.

CHAPTER THREE ITEMS FOR REGISTRATION

   Article 9 Items for company registration include: name, residence, legal representative, registered capital, type of enterprise, business scope,
term of operation and names of the shareholders of limited liability companies or names of promoters of joint stock limited companies.

   Article 10 The items for company registration shall conform to the provisions of laws and administrative decrees. Company registration organs
shall refuse to register companies whose items for registration do not conform to the provisions of laws and administrative decrees.

   Article 11 The naming of a company shall conform to the relevant provision of the State. A company shall use one name only. The name of a company
whose registration has been approved by a company registration organ shall be protected by law.

   Article 12 The residence of a company is the seat of major office of the company. There must be only one residence registered with the company
registration organ. The company residence should be within the jurisdiction of the company registration organ.

   Article 13 The registered capital of a company shall be expressed in Renminbi, except otherwise provided by laws and administrative decrees.

CHAPTER FOUR REGISTRATION OF ESTABLISHMENT

   Article 14 In establishing a company, an application shall be filed for the pre-approval of its name.

For companies whose establishment is subject to going through examination and approval procedures according to law or administrative
decrees, or there are items within their scopes of business are subject to going through examination and approval procedures as required
by laws or administrative decrees, an application shall be filed for the pre- approval of their names before they submit for examination
and approval in the name of the companies approved by the company registration organs.

   Article 15 In establishing a limited liability company, a representative designated by all the shareholders or an agent jointly entrusted shall
file an application for the pre-approval of its name with the company registration organ. In establishing a joint in stock limited
company, a representative designated by all the promoters or an agent jointly entrusted shall file an application for the pre-approval
of its name with the company registration organ.

In applying for the pre-approval of company name, the following documents shall be submitted:

1. An application for the pre-approval of the name of the company signed by all the shareholders of a limited liability company or
by all the promoters of a joint stock limited company;

2. The certificates for the capacities of the shareholders or promoters as legal enpost_titles or their identification certificates as
natural persons.

3. Other documents as required for submission by the company registration organ.

The company registration organ should make the decision of approval or refusal within ten days after the receipt of the above listed
documents. After the company registration organ has decided to approve the registration, it shall give a “Notice of Pre-Approval
of Company Names” to the company concerned.

   Article 16 A reservation period of six months is given to the pre- approved company name, within such a period, the pre-approved name shall
not be used for engaging in business operation or transferred.

   Article 17 In establishing a limited liability company, a representative designated by all the shareholders or an agent jointly commissioned
shall file an application for registration with the company registration organ. In establishing a company wholly owned by the State,
the investment organization or department authorized by the State Council shall act as an application and file an application for
registration. For limited liability companies which are stipulated by laws or administrative decrees to be subject to examination
and approval procedures, an application shall be filed for establishment registration within 90 days starting from the date of approval.
If the application for establishment registration is filed after the period expires, the applicant shall report to the examination
and approval organ for confirmation of the validity of the document of approval or submit for approval separately.

In applying for the establishment of a limited liability company, the following documents shall be submitted to the company registration
organ:

1. An application form for the establishment of the company signed by the chairman of the board of directors;

2. The certificate of the representative designated by all the shareholders or an agent jointly entrusted;

3. The articles of association; 4. The certificate of verification of investment produced by an investment verification organization
with statutory qualifications;

5. The certificates of the capacities of shareholders as legal persons or certificates of identification of the agent jointly commissioned;

6. The documents specifying the name and residences of the board of directors, supervisors and managers and the certificates for their
commission, election or appointment;

7. The document of appointment and certificate of identification of the legal representative of the company;

8. The notice of pre-approval of its name; and

9. The certificate of the residence of the company.

In cases where the establishment of a limited liability company is subject to examination and approval procedures as required by laws
or administrative decrees, the document of approval shall be submitted.

   Article 18 In establishing a limited joint stock company, the board of directors shall apply for registration with the company registration
organ within 30 days after the end of the inauguration of the board of directors.

In establishing a joint stock limited company, the following documents shall be submitted to the company registration organ:

1 An application form for the establishment of the company signed by the chairman of the board of directors;

2. The document of approval issued by the department authorized by the State Council or the people’s governments of provinces, autonomous
regions or centrally administered municipalities and the document of approval issued by the securities management department of the
State Council in the case of a stock limited company established by floating their shares;

3. Minutes of the founding meeting;

4. The articles of association;

5. The financial auditing report on the preparation for the establishment of the company;

6. The certificate of investment verification produced by an investment verification organization with the statutory qualifications;

7. The certificates of the capacities of promoters as legal persons or certificates of identification as natural persons;

8. The documents specifying names and residences of the board of directors, supervisors and managers and the certificates for their
commission, election or appointment;

9. The document of appointment and certificate of identification of the legal representative of the company;

10. The notice of pre-approval of its name; and

11. The certificate of the residence of the company.

   Article 19 If there are items within its scope of business for which examination and approval are required by the laws or administrative decrees,
the items shall be submitted for examination and approval to the relevant departments of the State before applying for registration
and the document of approval shall be submitted to the company registration organ.

   Article 20 If there are provisions in the article of association that violate the laws or administrative decrees, the company registration organ
has the right to demand correction.

   Article 21 The certificate of residence refers to the document that can certify the right of the company to use the residence.

   Article 22 A company is declared established after the company registration organ has approved the registration of establishment and issued
the “business license of legal entity”. The company shall have its seal made, open a bank account and apply for the registration
of tax payment by producing the business license of legal entity issued by the company registration organ.

CHAPTER FIVE ALTERATION REGISTRATION

   Article 23 In changing the entries of register, a company shall apply for registering the changes with the original company registration organ.

A company shall not alter the entries of register without approval.

   Article 24 In applying for registering alterations, a company shall submit the following documents to the company registration organ:

1. An application form for registering changes signed by the legal representative of the company;

2. The resolution or decision on the changes in compliance with its articles of association;

3. Other documents as required by the company registration organ.

If the changes of registration concern the revision of the articles of association, the revised version of the articles of association
or the amendment bill for the revision of the articles of association shall be submitted.

   Article 25 In altering the name of a company, an application for registering the change shall be filed within 30 days starting from the date
when the resolution or decision on the change is taken.

   Article 26 In altering the company residence, an application for registering the change shall be filed before it moves into the new residence
and submit the certificate for the use of the new residence.

If the change of residence concerns the jurisdiction of the company registration organs, the company shall file an application of
registering the change in residence with the company registration organ at its new place of residence. If the company registration
organ of the new place of residence accept the application, the original company registration organ shall transfer the files of company
registration to the company registration organ of the new place of residence.

   Article 27 If the legal representative of a company is changed, an application for registering the change shall be filed within 30 days starting
from the date when the resolution or decision on the change is made.

   Article 28 If a company changes its registered capital, it shall present the certification of capital verification produced by a capital verification
organization with the statutory qualifications.

If a company increases its registered capital, it shall apply for registering the change within 30 days starting from the date when
the additional capital is paid in full. If a joint stock limited company increases its registered capital, it shall present the document
of the people’s governments of provinces, autonomous regions or centrally administered municipalities. If the registered capital
is increased by way of floating shares, it should submit the document of approval issued by the securities management department
under the State Council.

In reducing registered capital, a company shall apply for registering the change within 90 days when the resolution or decision on
the change is taken, together with the certificate to certify that the company has published for at least three times the announcement
of the company on the reduction of its registered capital and an explanation on debt clearance or debt guarantee of the company.

   Article 29 In altering the scope of business, a company shall file an application for registering the change within 30 days starting from the
date when the resolution or decision on the change is taken. If the change in business scope concerns items that are required by
laws or administrative decrees for examination and approval, the application for registering the change shall be filed within 30
days starting from the date of approval by relevant State departments.

   Article 30 In altering the type of company, an application for registering the change shall be filed with the company registration organ within
the prescribed time limit according to the requirements of the type of company to be changed into and by presenting the documents
required.

   Article 31 If a limited liability company changes its shareholders, it shall file an application for registering the change within 30 days starting
from the date when the change took place and present the certifications for the capacities of the new shareholder as legal persons
or certificates of their capacities as natural persons.

If a limited liability company changes the personal names of shareholders or a joint stock limited company changes the names of its
promoters, it shall file an application for registering the change within 30 days starting from the date when the name or names are
changed.

   Article 32 If the articles of association of a company have been revised but the revision or revisions do not concern the entries of register,
the company shall submit the revised articles of association or the amendment bill for revising the articles of association to the
original company registration organ for the record.

   Article 33 If there are changes in directors, supervisors or managers of a company, the company shall submit the changes to the original company
registration organ for the record.

   Article 34 If the entries of register have been changed after a company continues to exist despite merger or separation, the company shall file
an application for registering the changes; for a company which is dissolved after merger or separation, it shall file an application
for cancellation. For a company established anew after merger or separation, it shall file an application for registration.

In the case of merger or separation concerning a company, the company shall file an application for registration within 90 days starting
from the date when the resolution or decision concerning the merger or separation is taken, submitting the merger agreement or the
resolution or decision concerning the merger or separation and the certificate to certify that the company has published in the press
for at least three times its announcement on merger or separation and an explanation of its debt clearance or debt guarantee. In
the case of a joint stock limited company, which is involved in the merger or separation, the document of approval issued by the
department authorized by the State Council or by the people’s government of a province, an autonomous region or a centrally administered
municipality shall be submitted.

   Article 35 If the changes in the entries of register concern the items specified in the business license, the company registration organ shall
replace the original business license.

CHAPTER SIX CANCELLATION REGISTRATION

   Article 36 The liquidation organization of a company shall apply for the cancellation of registration with the original company registration
organ within 30 days starting from the date when the liquidation ends if it belongs to one of the following cases:

1. The company is declared bankrupt according to law;

2. The term of operation prescribed in the articles of association has expired or other causes for the dissolution of the company
as prescribed in the articles of association have emerged;

3. The company is dissolved by the resolution of the meeting of shareholders;

4. The company is dissolved due to merger or separation;

5. The company is ordered to close according to law.

   Article 37 In registering cancellation of a company, the following documents shall be submitted:

1. An application form for cancellation signed by the leading member of the company’s liquidation organization;

2. The ruling of the court on the bankruptcy, the resolution or decision taken by the company according to the articles of association
or the document of the administration organ on ordering the closure of the company;

3. The liquidation report acknowledged by the meeting of the shareholders or by relevant organs;

4. The business license of legal entity of the company;

5. Other documents as required by laws or administrative decrees.

   Article 38 A company shall terminate its operation after the company registration organ approves the registration of cancellation.

CHAPTER SEVEN REGISTRATION OF BRANCH COMPANIES

   Article 39 A branch company refers to an organization established by a company to engage in business operations outside its place of residence.
A branch company shall not enjoy the status as a legal entity.

   Article 40 In establishing a branch or branches, a company shall apply for registration with the company registration organ(s) of the city (cities)
or county (counties) of the place of residence of the branch or branches. If the registration is approved, business license shall
be issued.

   Article 41 The items for registration of a branch or branches of a company shall include the name, business site, leading member and business
scope.

The naming of a branch company shall conform to the relevant provisions of the State.

The business scope of a branch company shall not exceed that of the mother company.

   Article 42 In establishing a branch, a company shall apply for registration with the company registration organ within 30 days starting from
the date when the decision is taken. If the examination and approval of relevant departments are required by laws or administrative
decrees, the application for registration shall be filed with the company registration organ within 30 days starting from the date
with the document of approval is received.

In applying for the establishment of a branch company, the following documents shall be presented:

1. An application form for the registration of a branch signed by the legal representative of the company;

2. The articles of association and a copy of the business license of legal entity affixed with the seal of the company registration
organ;

3. The certificate for the use of the business site; and

4. Other documents as required by the company registration organ.

   Article 43 If a branch of a company changes the entries of register, it shall apply for registering the changes with the company registration
organ.

In applying for registering changes, a branch company shall submit an application form for registering the changes signed by the legal
representative of the company. If the company has become a branch due to the change in its name, it shall submit copy of the business
license of legal entity. If the changes concern items that required by laws or administrative decrees for examination and approval,
the document of approval by the relevant department is required. If the business site is changed, a certificate for the use of the
new site is required.

If the company registration organ approves the application for registering changes, the business license shall be replaced.

   Article 44 If a company cancels its branch or branches, it shall apply for the registration of cancellation with the company registration organ
within 30 days starting from the date when the decision on the cancellation is taken. In applying for the registration of cancellation,
the company shall present the application for registering cancellation signed by the legal representative of the company and the
business license of the branch of breaches. If the company registration organ has approved the application for cancellation, it shall
recover the business license or licenses of the branch or branches.

CHAPTER EIGHT PROCEDURES OF REGISTRATION

   Article 45 After receiving all the documents required by the provisions of this set of regulations from an applicant, the company registration
organ shall issue a “notice of acceptance of the company registration”.

The company registration organ shall make the decision on approval or refusal within 30 days starting from the date when the “notice
of acceptance of the company registration” is issued.

If the company registration organ has approved the registration, it shall, within 15 days starting from the date when the approval
is given, notify the applicant of the decision, issue, replace or revoke the business license of an enterprise entity or business
license.

If a company registration organ refuses registration, it shall notify the application of the decision and issue the “notice of refusal
on company registration” within 15 days starting from the date when the decision is taken.

   Article 46 In going through the procedures of registering the establishment of a company or registering changes, a company shall pay a registration
fee to the company registration organ.

In obtaining the “business license of legal entity”, the registration fee shall be one per thousand of the total registered capital.
If the registered capital has exceeded RMB 10 million, a payment of 0.5 per thousand of the part in excess of RMB 10 million shall
be paid; if the registered capital has exceeded RMB 100 million, no more fees shall be collected on the part in excess of the RMB
100 million.

In obtaining a business license, the fees for registering the establishment shall be RMB 300.

In applying for registering changes, the registration fee is RMB 100.

   Article 47 The company registration organ shall record the registered items approved on the company registration book for the public to check
and copy. In checking or copying the registered items, a fee shall be paid.

   Article 48 A joint stock limited company shall announce its establishment, alteration or cancellation within 30 days starting from the date
when the establishment, alteration or cancellation is approved and submit the announcement to the company registration organ for
the record within 30 days starting from the date when the announcement is made. The contents of the announcement concerning the establishment,
alteration or cancellation shall be the same as those approved by the company registration organ. If inconformity is found, the company
registration organ has the right to demand correction.

The announcement of revoking the “business license of legal entity” or “business license” shall be issued by the company registration
organ.

   Article 49 The company registration organ shall carry out annual checking of the companies registered during the period from January 1 to April
30, every year.

   Article 50 A company shall accept annual checking within the prescribed period of time according to the requirements raised by the company registration
organ and submit an annual checking report, its annual statement of assets and liabilities and balance sheet and the copy of the
“business license of legal entity”.

If a company has a branch or branches, it should reflect the information about the branch or branches in the annual checkup materials
submitted and submit the copy of the “business license” of the branch or branches.

   Article 51 The company registration again shall cross-check the relevant information on the items registered contained in the annual check-up
report submitted by the company so as to conform the qualifications for continuing its operation.

   Article 52 A company shall pay a fee for annual checking to the company registration organ. The annual check-up fee is RMB 50.

CHAPTER TEN MANAGEMENT OF LICENSES AND ARCHIVES

   Article 53 The “Business License of Legal Entity” and “Business License” have the original and copies, which have equal binding force.

The original of the “Business License of Legal Entity” or the original “Business License” should be placed on an eye-catching position
of the residence of a company or its branch.

A company may, according to operational needs, apply for a number of copies of the business license with the company registration
organ.

   Article 54 No unit or individual is allowed to forge, alter, lease, lend or transfer business licenses.

If a business license is lost, the company shall declare its invalidity on the newspapers designated by the company registration organ
and apply for a reissue.

If a company needs to have the seal of the company registration organ affixed on the duplicates of its business license to be submitted
to relevant units according to relevant regulations of the State, the company registration organ may affix seal on the duplicates.

   Article 55 A company registration organ may hold the business licenses of a company if it deems it necessary to be authenticated and the period
of retention shall not exceed ten days.

   Article 56 The borrowing, copying, carrying or duplicating of the archived materials of a company shall be carried out within the prescribed
term of reference and procedures.

No unit or individual is allowed to modify, alter, adding notes to or damage the archive materials of a company.

   Article 57 The style of the original and copies of business license and the format or tables concerning the company registration shall be determined
by the State Administration for Industry and Commerce in an unified manner.

CHAPTER ELEVEN LEGAL RESPONSIBILITY

   Article 58 If the registration of a company is acquired through falsification of the registered capital, the company registration organ shall
order it to correct and impose a fine of anywhere from more than five percent to less than 10 percent of the registered capital falsified.
If the case is very serious, the company registration organ shall cancel the registration and revoke its business license. If the
case constitutes a crime, criminal responsibility shall be affixed.

   Article 59 If registration of a company is acquired through a false certificate or other deceptive means, the company registration organ shall
order it to correct and impose a fine of anywhere between more than RMB 10,000 and less than RMB 100,000. If the case is very serious,
it shall cancel its registration and revoke its business license. If the case constitutes a crime, criminal responsibility shall
be affixed.

   Article 60 If a promoter or shareholder of a company is found to have make phoney capital-failing to pay up the capital in cash or in kind or
by transfer of property, the company registration organ shall order him/her to

CIRCULAR OF THE GENERAL OFFICE OF THE STATE COUNCIL CONCERNING BANNING THE ILLEGAL USE OF THE DESIGNS OF RENMINBI AND STATE BONDS ON PUBLICITY MATERIALS, PUBLICATIONS AND OTHER COMMODITIES

Category  BANKING Organ of Promulgation  The State Council Status of Effect  In Force
Date of Promulgation  1994-04-05 Effective Date  1994-04-05  


Circular of the General Office of the State Council Concerning Banning the Illegal Use of the Designs of Renminbi and State Bonds
on Publicity Materials, Publications and Other Commodities



(April 5, 1994)

    In March 1991, the People’s Bank of China, the Ministry of Public
Security, State Administration of Industry and Commerce, Press and
Publication Administration of China and Ministry of Radio, Film and Television
jointly issued the Circular Regarding Banning the Illegal Use of Designs of
Renminbi, Foreign Currencies and State Bonds on Publicity Materials,
Publications and Related Commodities”. The document has since played a
positive role in strengthening the administration of Renminbi and state bonds.
However, a recent investigation uncovered the fact that various persons in
Fuding County, Fujian Province, had adopted deceptive means to duplicate
Renminbi for packaging small round candy which was then offered for public
consumption; and various persons in the Xinjiang Uygur Autonomous Region had
counterfeited small denominations of Renminbi which were used to purchase
commodities and even change was given when they were used to make payment.
Illegal acts involving the use of the various designs of Renminbi and state
bonds on publicity materials, publications and commodities have occasionally
surfaced and provided the opportunity for unscrupulous criminals to engage in
fraudulent activities leading to a disturbance in the financial order, and
creating certain difficulties in combating the counterfeiting of currency. In
order to safeguard the credit standing and dignity of Renminbi and state
bonds, this notice regarding related matters is hereby publicized with the
approval of the State Council:

    1. Without having received the approval of the People’s Bank of China, no
unit or individual shall in any manner imitate the designs of Renminbi when
printing tickets or coupons for internal use, or duplicate the designs of
Renminbi or state bonds (either in actual or reduced sizes) on publicity
materials, publications or other commodities.

    2. Supervision and administration shall be strengthened upon the business
of printing, publishing, film and television production, advertising and
other commodity production. Publicity materials, publications or other
commodities published or sold with designs of Renminbi or state bonds
printed thereon without the approval of the People’s Bank of China shall be
sealed up upon discovery and destroyed on the spot. The illegal proceeds of
sales occurring prior to discovery of the illegal act shall be confiscated,
a fine not exceeding the equivalent value of the proceeds of sales shall be
imposed, and the directly responsible personnel and personnel directly
handling the affairs of the involved units and the examination and approving
department shall be investigated for responsibilities.

    3. Various localities and departments shall conscientiously organize
inspections and investigations in accordance with the aforementioned
stipulations, media units shall do a good job with related publicity
activities, and departments concerned shall strengthen the work of supervision
and administration, with the combined effort designed to eliminate the
counterfeiting or otherwise illegal use of the designs of Renminbi and state
bonds.





CIRCULAR OF THE STATE COUNCIL ON SEVERAL PROBLEMS CONCERNING THE APPLICATION OF THE PROVISIONAL REGULATIONS ON VALUE-ADDED TAX, CONSUMPTION TAX, BUSINESS TAX, ETC., TO ENTERPRISES WITH FOREIGN INVESTMENT AND FOREIGN ENTERPRISES

Category  TAXATION Organ of Promulgation  The State Council Status of Effect  In Force
Date of Promulgation  1994-02-22 Effective Date  1994-01-01  


Circular of the State Council on Several Problems Concerning the Application of the Provisional Regulations on Value-added Tax, Consumption
Tax, Business Tax, Etc., to Enterprises With Foreign Investment and Foreign Enterprises



(February 22, 1994)

    According to “Decision of the Standing Committee of the National People’s
Congress on the Application of the Provisional Regulations on Value-Added Tax,
Consumption Tax, Business Tax, etc., to Enterprises with Foreign Investment
and Foreign Enterprises” (hereinafter referred to as “the Decision”) as
examined and approved at the Fifth Meeting of the Standing Committee of the
Eighth National People’s Congress, several problems such as the categories of
taxes applicable to enterprises with foreign investment and foreign
enterprises and so on are hereby notified as follows:

    1. Problems Concerning the Categories of Taxes Applicable to Enterprises
with Foreign Investment and Foreign Enterprises

    According to provisions of “the Decision”, the following provisional
regulations, in addition to “Provisional Regulations of the People’s Republic
of China on Value-Added Tax”, “Interim Regulations of the People’s Republic of
China on Consumption Tax”, “Interim Regulations of the People’s Republic of
China on Business Tax” and “Income Tax Law of the People’s Republic of China
for Enterprises with Foreign Investment and Foreign Enterprises”, shall be
applicable to enterprises with foreign investment and foreign enterprises:

    (1) “Provisional Regulations of the People’s Republic of China on Land
Appreciation Tax”, promulgated on December 13, 1993 by the State Council;

    (2) “Provisional Regulations of the People’s Republic of China on Resource
Tax”, promulgated on December 25, 1993 by the State Council;

    (3) “Interim Regulations of the People’s Republic of China on Stamp Tax”,
promulgated on August 6, 1988 by the State Council;

    (4) “Interim Regulations Concerning Tax on Slaughtering Animals”,
promulgated on December 19, 1950 by the Government Administration Council of
the Central People’s Government;

    (5) “Interim Regulations Concerning Urban Real Estate Tax”, promulgated on
August 8, 1951 by the Government Administration Council of the Central
People’s Government;

    (6) “Interim Regulations Concerning the Vehicle and Vessel Usage License
Plate Tax”, promulgated on September 13, 1951 by the Government Administration
Council of the Central People’s Government; and

    (7) “Interim Regulations Concerning Deed Tax”, promulgated on April 3,
1950 by the Government Administration Council of the Central People’s
Government.

    With the progress of taxation system reform, the State Council shall be
revising and making other provisional regulations on taxation, and enterprises
with foreign investment and foreign enterprises shall accordingly comply with
the provisions of the relevant regulations.

    2. Problems Concerning Handling of the Increased Tax Burden of Enterprises
with Foreign Investment Due to the Imposition of Value-Added Tax, Consumption
Tax and Business Tax

    (1) As to an enterprise with foreign investment approved to be established
before December 31, 1993, where its tax burden increases as a result of the
imposition of value-added tax, consumption tax and business tax, the
enterprise may, upon application to and with the approval of the tax
authorities, have a refund on the excess tax payment due to the increased tax
burden within the approved operation period, with a maximum limit of not
exceeding five years; if no operation period has been specified, the
enterprise may, upon application to and with the approval of the tax
authorities, have a refund on the excess tax payment as mentioned above within
a period of not exceeding five years.

    (2) Where an enterprise with foreign investment pays both value-added tax
and consumption tax, the payment exceeding the original tax burden shall,
according to the proportion of the paid value-added tax to the paid
consumption tax, be refunded respectively.

    (3) Where the products manufactured by an enterprise with foreign
investment are to be exported directly or through selling to an export
enterprise, that enterprise with foreign investment may, according to the
provisions of “Provisional Regulations of the People’s Republic of China on
Value-Added Tax”, handle the refundment affairs at one stop by producing the
export declaration form and the tax payment receipt.

    (4) The refundment of the excess tax payment applied for by an enterprise
with foreign investment shall, in principle, be conducted at one time after
the end of the year; where the tax burden increases are comparatively higher,
the enterprises concerned may apply for the refund quarterly in advance, and
the clearance shall be done after the end of the year.

    (5) The State Administration of Taxation and its affiliated establishments
shall be responsible for dealing with the refundment affairs relating to the
value-added tax and the consumption tax, and the state treasuries at all
levels shall conduct examination and verification seriously and make strict
checks. The computation of the refund, as well as the procedures of the
application for refund and the approval thereof, shall be prescribed by the
State Administration of Taxation separately.

    (6) The refundment affairs relating to the business tax shall be
prescribed by the people’s governments of the provinces, autonomous regions or
municipalities directly under the Central Government.

    3. Problems Concerning Taxation on Chinese-Foreign Cooperative
Exploitation of Petroleum Resources

    Crude oil and natural gas exploited by a Chinese-foreign cooperative oil
field shall be taxed of value-added tax in kind at a rate of 5%, and the
royalties shall be levied in accordance with the relevant provisions in
effect, with temporary exemption from the resource tax. The input tax shall
not balance the value-added tax payable. Where crude oil or natural gas is
exported, there shall be no refund of tax.

    Self-operative offshore oil field of China Offshore Petroleum Company
shall comply with the above provisions mutatis mutandis.

    This Circular shall go into effect as of January 1, 1994.





URGENT CIRCULAR CONCERNING FURTHER STRENGTHENING THE ADMINISTRATION OF MEDICINE

Category  PUBLIC HEALTH AND MEDICINE Organ of Promulgation  The State Council Status of Effect  In Force
Date of Promulgation  1994-09-29 Effective Date  1994-09-29  


Urgent Circular Concerning Further Strengthening the Administration of Medicine



(September 29, 1994)

    Medicine is a special kind of commodity that has considerable bearing on
the lives and health of the people. Therefore, strengthening medical
administration, guaranteeing the quality of medicine and ensuring people
convenient, timely, safe and effective application of medicine are important
tasks which safeguard the people’s health, maintain social stability and
ensure a successful progress of economic construction and the smooth conduct
of reform and opening. Since the reform and opening, the cause of China’s
medicine has undergone a rapid development. Nonetheless, in order to further
strengthen the administration of medicine, the state has enacted the “Law of
the People’s Republic of China on the Administration of Medicine” (hereinafter
referred to as the “Law on the Administration of Medicine”), formulated a
series of related administrative regulations and worked out a set of documents
having legislative character. And forces have, time and again, been organized
to wage concentrated crackdown on criminal activities in respect of the
manufacture and sale of false and inferior medicine, resulting in certain
effectiveness. We must be aware, however, that problems still persist
regarding the administration of medicine, some of which are rather serious.
The outstanding expression is the fact that criminal activities involving the
illegal manufacture and sale of false and inferior medicine has not been
eliminated despite repeated prohibitions thereof and in some areas numerous
kinds of false and inferior medicine are produced and sold on a large scale.
Such criminals have lost sight of social virtue because of their unscrupulous
commitment to illicit profits, thus bringing about serious consequences. Some
districts and departments, in an attempt to grab self-interest, have broken
the law on administration of medicine, and have competed for the establishment
of medicine-producing and selling enterprises as well as trade fair markets
for medicine. And as a result, disorder has arisen in respect of medicine
production and sales, and malpractices including bribery, demand for bribery
and illegal rebates have prevailed in the purchase and sales of medicine.
Moreover, advertisements of medicine in violation of law filled with
outrageous overstatements have gone unchecked, and development of new
medicines has not been sufficiently protected. Criminal activities in
producing and selling false and inferior medicine have seriously endangered
people’s lives and health, impaired the nation’s interests, disturbed the
economic order, corrupted social morality, produced adverse effect on social
stability and defamed the reputation of the Party and government, and to these
people from various circles have reacted strongly. Therefore, the time has
come when great efforts must be made to find a solution for them. Thus
following urgent circular on related matters is hereby publicized:

    1. The people’s governments and departments at various levels should raise
the level of understanding and practically strengthen leadership regarding the
administration of medicine.

    One of the important reasons that criminal activities in producing and
selling false and inferior medicine has not been eliminated despite repeated
prohibitions is the fact that some local governments and departments have not
understood the significance of medicine as a special kind of commodity in
relation to the people’s lives and health, under a mistaken idea that
administration of medicine may be slackened when the establishment of
socialist market economic system is under way. Some districts and departments
have, for their own partial and local interests, gone so far as to protect the
criminal activities in producing and selling false and inferior medicine.

    The people’s governments and related departments at various levels shall,
with a sense of high responsibility for the country and people and an overall
view of the situation, unify the understanding of the significance of
strengthening administration of medicine, adopt effective measures to
implement seriously laws and administrative regulations on administration of
medicine, strengthen supervision and administration as well as macro-control
by the state of medicine production and sales, so as to rectify and
standardize production and sales thereof and, in combination with the struggle
against corruption, to investigate and deal with cases involving violation of
laws and discipline, with a view to the establishment of a unified, open,
competitive and orderly system for medicine production and sales.

    The people’s governments at various levels should establish a system
whereby status of the targets set for the government leaders pertinent to the
administration of medicine within their terms of office can be evaluated. The
principal responsible comrades of the people’s governments at various levels
should practically bear the leadership’s responsibility for the administration
of medicine within their respective regions, and the leaders of the
governments and relevant departments of the areas where disorder exists in the
administration of medicine shall, in accordance with law, be investigated for
responsibility.

    2. Effective measures should be taken to significantly strengthen law
enforcement and administration of medicine production and sales.

    Presently, the people’s governments at various levels and relevant
departments should attach great importance to the performance of following
work:

    (1) Rectify and standardize the production and sales of medicine
enterprises and individual industry and commerce.

    In the light of the present situation which involves excessive medicine
producing and selling enterprises and disorder, the people`s governments at
various levels and the departments in charge of medicine production and sales,
the departments for the administration of health and the departments for the
administration of industry and commerce, shall, according to law, strictly
enforce procedures for examining the conditions and for the examination and
approval of the establishment of medicine producing and selling enterprises.
In case of failure to conform with the conditions for setting up or with the
procedures for examination and approval, the departments in charge of medicine
production and sales, the departments for administration of health and the
departments for administration of industry and commerce shall not grant the
approval for setting up. Those enterprises which are already operating but
have not satisfied the conditions for examination shall be banned according to
law.

    Health administration departments shall organize investigations into
various types of medicine produced by existing production enterprises, and
regarding medicine which are found to be producing unproven effectiveness,
giving adverse reactions or endangering the health of the people for other
reasons, the reference number for approval thereof shall be timely withdrawn.
The department in charge of medicine production and sales, when processing the
applications for establishing medicine-producing enterprises, shall devote
particular attention to ascertaining whether the types of medicine to be
produced are new medicines or the types of important medicine the country is
to develop, and shall grant no approval for such enterprises without the new
medicine being approved by the department for administration of health under
the State Council or whose medicine is not the type of important medicine the
country is to develop. With regard to the medicine which is reproduced at low
level, directives shall be given to the enterprises for them to make timely
adjustment of the structure of products. Enterprises engaged in wholesale
distribution of medicine shall be examined to determine whether they have the
ability to supply within 24 hours the types of medicine listed in the national
catalogue for basic medicine, and the ability to supply medicine to specially
designated regions or units appointed by the departments in charge of medicine
production and sales under the local people’s governments at the county level
or above. Wholesale of medicine enterprises which do not possess the ability
to supply the medicine referred to above shall be banned from engaging in the
wholesale business according to law.

    Individual industry and commerce may, according to law, apply for retail
business, but shall not engage in production and wholesale distribution
(except the wholesale of traditional Chinese herbs in the specialized markets
for traditional Chinese herbs approved according to law).

    All those engaged in medicine production must, according to the legal
procedures, obtain the “qualification certificate for medicine-producing
enterprise”, the “permit certificate for medicine-producing enterprise” and
the “business license”. All those engaged in the wholesale and retail sale of
medicine must, according to the legal procedures, obtain the “qualification
certificate for medicine-selling enterprise”, the “permit certificate for
medicine-selling enterprise” and the “business license”. All those already in
operation without the mandated certificates and licenses must be banned
according to the law.

    Applications for setting up medicine-producing enterprises or
medicine-selling enterprises for wholesale, must be examined and certified by
the departments in charge of the production and sale of medicine under the
people’s governments of the provinces, autonomous regions and municipalities
under the Central Government that issue the “qualification certificate for
medicine-producing enterprise” or the “qualification certificates for
medicine-selling enterprise”. Then they may apply to the department for the
administration of health at the same level for the “permit certificate for
medicine-producing enterprise” or the “permit certificate for the
medicine-selling enterprise”. Without the “qualification certificate for
medicine-producing enterprise”, or the “qualification certificate for
medicine-selling enterprise” issued by the department in charge of the
production and sale of medicine upon examination and agreement, the department
for the administration of health shall not accept the application. Without
obtaining the “qualification certificate for medicine-producing enterprise”,
the “permit certificate for medicine-producing enterprise” or the
“qualification certificate for medicine-selling enterprise”, the “permit
certificate for medicine-selling enterprise”, the department for the
administration of industry and commerce shall not check and issue the business
license.

    The applications for retail of medicine business by enterprises, or
individual industry and commerce, shall be examined by the departments in
charge of the production and sale of medicine under the people’s governments
of the autonomous prefectures, cities or counties, according to the needs for
medicine and the program for the retail of medicine network within their
regions, and if agreed upon examination, the “qualification certificate for
medicine-selling enterprise” shall be issued. The retail of medicine
enterprise, and the individual industry and commerce, shall take the
“qualification certificate for medicine-selling enterprise” to the departments
for the administration of health at the same level for application and, after
obtaining the “permit certificate for medicine-selling enterprise”, may apply
to the departments for the administration of industry and commerce for the
issuance of the business license.

    Certificates and licenses that have not been issued according to the
procedures for examination and approval referred to above by the departments
in charge of the production and sale of medicine, the departments for the
administration of health and the departments for the administration of
industry and commerce, become invalid, and the losses caused therefrom shall
be compensated by the issuing departments according to law, and the persons in
charge who are directly responsible and the persons directly responsible shall
be investigated for responsibility.

    (2) The order for medicine production and sale should be rectified and
standardized, and the administration of the sale of medicine shall be
strengthened according to law.

    Those who have not obtained, according to law, the “qualification
certificate for medicine-producing enterprise”, the “permit certificate for
medicine-producing enterprise” or the “qualification certificate for
medicine-selling enterprise”, the “permit certificate for medicine-selling
enterprise” and the business license, shall not be engaged in the production
and sale of medicine. The units and individuals engaged on their own decision
in the production and wholesale of medicine shall be resolutely banned.
Enterprises engaged in the production and wholesale distribution of medicine
shall not be contracted by individuals for business.

    Medical institutions and medicine-selling enterprises must purchase
medicine from enterprises that have obtained lawful qualifications for
medicine production and sales, and are strictly prohibited from purchasing
medicine from unlawful dealers.

    The supply of medicine to medical clinics in rural areas shall be the
responsibility of the medicine wholesalers and the township’s hospital
entrusted by the wholesalers jointly appointed by the departments in charge of
medicine production and sales and those for the administration of health under
the local people’s governments at the county level.

    The preparations manufactured by medical institutions are limited to those
needed for clinical purposes and scientific research conducted by the units
themselves, and which are not supplied or inadequately supplied in the
markets. The sale in a disguised manner of such products shall be strictly
prohibited. Medical institutions shall not, in any disguised manner, engage in
the wholesale business.

    Fair competition shall be practiced in the purchase and sale of medicine
between the production and management of medicine enterprises and medical
institutions, and in purchases and sales, malpractices such as rebates, or
bribery and requesting bribes are prohibited.

    Departments responsible for the administration of health shall strictly
examine the contents of publicity materials and advertisements and in
coordination with the relevant departments, shall, according to law, punish
illegal acts such as advertising medicine in violation of regulations,
unfounded propaganda regarding effectiveness and other acts which mislead
patients.

    (3) The specialized markets for the traditional Chinese herbs should be
rectified and standardized.

    The state prohibits the setting up of trade fair markets for medicine,
except specialized markets for traditional Chinese herbs, and prohibits in the
specialized markets for traditional Chinese herbs the sale of traditional
Chinese herbs and ready-made medicine, tablets of Chinese herbs, medicine of
chemical raw materials and its preparations, antibiotics, biochemical
medicine, radiate medicine, serum vaccine, blood products and diagnostic
medicine of which sales are restricted as stipulated by the state.

    The specialized markets for traditional Chinese herbs must be set up in
selected principal producing or distributing places of traditional Chinese
herbs according to overall plans drawn up by the department under the State
Council in charge of production and sales of medicine, and must also be
examined and approved by the department in charge of the production and sales
of medicine, the department for the administration of health and the
department for the administration of industry and commerce under the State
Council. The local people’s governments at various levels and the other
departments are not authorized to examine and approve the establishment of
specialized markets for traditional Chinese herbs.

    The existing specialized markets for traditional Chinese herbs shall be
rectified, and the criteria shall be formulated by the department in charge of
the production and sales of medicine, the department for the administration of
health and the department for the administration of industry and commerce
under the State Council. Specialized markets for traditional Chinese herbs
which have already been set up but are not in compliance with the criteria
shall be closed without exception. Any other trade fair markets for medicine
except specialized markets for traditional Chinese herbs that have been set up
without proper authorization shall be banned according to law by the local
people’s governments.

    Traditional Chinese herbs being sold in trade fair markets for
agricultural products shall be supervised strictly by the department for the
administration of health. Those who sell types of traditional Chinese herbs on
their own decision that are prohibited by the state from being sold and the
medicine other than the traditional Chinese herbs without certificate in trade
fair markets for agricultural products in violation of the “Law on the
Administration of Medicine” shall be investigated and punished by the relevant
departments according to the provisions of the “Law on the Administration of
Medicine”.

    (4) The protection for the intellectual property rights for medicine shall
be strengthened, and enterprises are encouraged to research in and develop new
medicine.

    The department for administration of health and the department in charge
of the production and sales of medicine under the State Council, shall develop
practical plans for encouraging enterprises, scientific research units,
universities and colleges to promote research and develop new medicine.

    The “Regulations on the Protection of the Types of Chinese Medicine”
issued by the State Council shall be further implemented in various places.
The types of Chinese medicine already listed for national protection shall not
be imitated and manufactured by enterprises without the protection
certificate. The relevant departments and examining and appraising organs
shall conscientiously do a good job to protect the types of Chinese medicine
in order to promote development of Chinese medicine.

    3. There should be an intensified crackdown on criminal activities
involving the production and sales of false and inferior medicine. In
addition, investigations should be conducted into cases involving violations
of law and discipline with regard to the production and sales of false and
inferior medicine. These activities shall be considered of great importance
with regard to combating corruption.

    In order to check resolutely law-breaking and criminal activities in
producing and selling false and inferior medicine, local people’s governments
at various levels and the relevant departments, shall carry on further blows
on the law-breaking and criminal activities in producing and selling false and
inferior medicine. In cracking severely the law-breaking and criminal
activities in producing and selling false and inferior medicine, they should
strictly enforce laws and intensify law enforcement regarding these issues.
The national and local coordinating institutions for “striking the false” at
various levels shall organize the relevant departments of health, medicine,
administration of industry and commerce, technical supervision and public
security in investigating into and dealing with the law-breaking and criminal
activities in producing and selling false and inferior medicine, which shall
be made an important task for “striking the false”. The criminal elements
producing and selling false and inferior medicine shall be resolutely punished
according to the “Decision of the Standing Committee of the National People’s
Congress on Punishments for Crimes in Producing and Selling False and Inferior
Commodities”. Influential and typical cases shall be singled out for exposure.

    The people’s governments at various levels shall treat cases of producing
and selling false and inferior medicine and other instances in violation of
law and discipline as important issues to be addressed in combating
corruption. Therefore, supervisory departments of the people’s governments at
various levels shall, according to the provisions of the “Regulations of the
People’s Republic of China on Administrative Supervision”, exercise
supervision over the implementation of law and administrative regulations by
staff workers of the departments for administration of health, the departments
in charge of the production and sales of medicine, the departments for the
administration of industry and commerce and the departments for technical
supervision. Those who have abused their power, been negligent in their
duties, acted illegally by deception for personal interests and acted in
violation of law and discipline through other means, must be dealt with
severely according to law. For those engaged in providing unjustifiable
protection and support for criminal activities in producing and selling false
and inferior medicine for the interests of their own districts or departments
and causing serious losses to the people, the leaders of the local governments
and the relevant departments as well as the persons in charge and the persons
directly responsible must be investigated for responsibility according to law.
And if the case is so serious as to constitute a crime, the offender must be
investigated for criminal responsibility according to law.

    4. The harmonious cooperation among the departments of the governments
shall be strengthened, and the administration of medicine shall be raised to a
higher level.

    The administration of medicine is a complicated and systematic project,
and the relevant departments of the people’s governments at various levels
must jointly do a good job in the administration of medicine according to the
division of duties, by shouldering their respective duties, and through mutual
support and full cooperation.

    The departments for the administration of health at various levels are the
government’s functional departments that exercise supervision and
administration of medicine. The people’s governments at various levels and the
relevant departments shall fully support and assist the departments for the
administration of health in exercising, according to law, its function with
respect to its responsibility to supervise and administer medicine.

    The offices of the State Administration of Medicine and the State
Administration of Traditional Chinese Medicine and Pharmacy are the
departments of the State Council in charge of medicine production and sales,
and the local departments in charge of medicine production and sales at
various levels shall, according to law, exercise the governmental function of
administration of medicine production and sales. The medicine-producing and
selling enterprises shall, except otherwise provided by the state, be taken
into the scope of the administration of the medicine industry, irrespective of
the forms of ownership and the subordinating relationship. The people’s
governments at various levels and the relevant departments thereof shall fully
support and assist the departments in charge of medicine production and sales
in the administration of medicine according to law.

    The administration of industry and commerce and the departments for
technical supervision and public security, shall strengthen the administration
of medicine markets according to their respective duties along with the
departments for the administration of health and the departments in charge of
medicine production and sales.

    In case of disorder in the administration of medicine caused by
quarreling, leaving duties and responsibility for others and undermining each
other’s work, the leaders of the relevant administrative departments shall be
investigated for responsibility according to law.

    The departments for the administration of health and the departments in
charge of medicine production and sales must, according to the provisions of
the Central Committee of the Communist Party of China and the State Council,
put into practice the separation of government from enterprises, and shall not
use administrative rights to interfere with the enterprises’ production and
sales. All malpractices applied in purchasing and selling medicine must be
resolutely stopped. Fairness and justice, honesty and authority in official
duties of the administrative justice departments and the departments in charge
of the industry shall be maintained.

    The State Council shall organize the relevant departments in the
performance of an in-depth study to revise and perfect the law and regulations
on the administration of medicine, further put in order the administrative
system for medicine, reform the administrative system for the price of
medicine, perfect the supervising system for the quality of the medicine,
further raise the country’s level for the administration of medicine and
promote continued, fast and healthy development of the country’s medicine.

    The people’s governments of the provinces, autonomous regions,
municipalities under the Central Government and relevant departments of the
State Council shall, according to the requirements of this Circular, take
practical measures to carry out an overall rectification in respect of the
present situation regarding the administration of medicine within their
regions and departments, and submit reports on the rectification to the State
Council before March 1, 1995.





AUDIT LAW

Category  FINANCE Organ of Promulgation  The Standing Committee of the National People’s Congress Status of Effect  In Force
Date of Promulgation  1994-08-31 Effective Date  1995-01-01  


Audit Law of the People’s Republic of China

Contents
Chapter I  General Provisions
Chapter II  Audit Institutions and Auditors
Chapter III  Functions and Responsibilities of Audit Institutions
Chapter IV  Limits of Authority of Audit Institutions
Chapter V  Audit Procedures
Chapter VI  Legal liability
Chapter VII  Supplementary Provisions

(Adopted at the Ninth Meeting of the Standing Committee of the Eighth

National People’s Congress on August 31, 1994, promulgated by Order No.32 of
the President of the People’s Republic of China on August 31, 1994 and
effective as of January 1, 1995)
Contents

    Chapter I  General Provisions

    Chapter II  Audit Institutions and Auditors

    Chapter III  Functions and Responsibilities of Audit Institutions

    Chapter IV  Limits of Authority of Audit Institutions

    Chapter V  Audit Procedures

    Chapter VI  Legal Liability

    Chapter VII  Supplementary Provisions
Chapter I  General Provisions

    Article 1  This Law is formulated in accordance with the Constitution,
with a view to strengthening the State supervision through auditing,
maintaining the financial and economic order of the country, promoting the
building of a clean government and ensuring the sound development of the
national economy.

    Article 2  The State shall practise a system of supervision through
auditing. The State Council and the local people’s governments at or above
the county level shall establish audit institutions.

    Budgetary revenues and expenditures of various departments of the State
Council, of the local people’s governments at various levels and their
departments, financial revenues and expenditures of State-owned monetary
organizations, enterprises and institutions, as well as other budgetary
revenues and expenbditures and financial revenues and expenditures subject
to auditing according to this Law, shall be supervised through auditing in
accordance with the provisions of this Law.

    Audit institutions shall, according to law, supervise through auditing
the authenticity, legality and beneficial results of the budgetary revenues
and expenditures or financial revenues and expenditures specified in the
preceding paragraph.

    Article 3  Audit institutions shall conduct supervision through auditing
in accordance with the functions and powers, as well as procedures prescribed
by law.

    Article 4  The State Council and the local people’s governments at or
above the county level shall annually present to the standing committees of
the people’s congresses at the corresponding levels the audit reports
prepared by audit institutions on budget implementation and other budgetary
revenues and expenditures.

    Article 5  Audit institutions shall independently exercise their power of
supervision through auditing in accordance with the law, and be free from
interference by any administrative organ, public organization or individual.

    Article 6  Audit institutions and auditors shall, in handling audit
matters, be objective and fair, practical and realistic, clean and honest,
and keep Secrets.
Chapter II  Audit Institutions and Auditors

    Article 7  The State Council shall establish the National Audit
Administration to take charge of the audit work throughout the country
under the leadership of the Premier of the State Council. The Auditor-General
shall be the administrative leader of the National Audit Administration.

    Article 8  Audit institutions of the people’s governments of provinces,
autonomous regions, municipalities directly under the Central Government,
cities divided into districts, autonomous prefectures, counties, autonomous
counties, cities not divided into districts and municipal districts shall be
in charge of the audit work within their respective administrative areas
under the respective leadership of governors of provinces, chairmen of
autonomous regions, mayors, prefectural heads, or heads of counties and
districts as well as under the leadership of audit institutions at the next
higher levels.

    Article 9  Local audit institutions at various levels shall be
responsible and report on their work to the people’s governments at the
corresponding levels and to the audit institutions at the next higher levels,
and their audit work shall be directed chiefly by the audit institutions at
the next higher levels.

    Article 10  Audit institutions may, as required by work, appoint resident
audit officers within areas under their jurisdiction.

    Resident audit officers shall, according to the authorization of audit
institutions, conduct audit work in accordance with the law.

    Article 11  Funds necessary for audit institutions to perform their
functions shall be included in the budgets of the governments and guaranteed
by the people’s governments at the corresponding levels.

    Article 12  Auditors shall possess the professional knowledge and ability
suitable to the audit work they engage in.

    Article l3  In handling audit matters, if auditors have an interest in
the auditees or the audit items, they shall withdraw.

    Article 14  Auditors shall have the obligation to guard State secrets and
the auditees’ business secrets they have come to know in performing their
functions.

    Article 15  Auditors shall be protected by law in performing their
functions in accordance with the law.

    No organization or individual may refuse or obstruct auditors’
performance of their functions in accordance with the law, or retaliate
against auditors.

    Persons in charge of audit institutions shall be appointed or removed in
accordance with legal procedures. None of them may be removed or replaced at
random unless they are found guilty of illegal acts, or negligent of duties
or no longer qualified for the post.
Chapter III  Functions and Responsibilities of Audit Institutions

    Article 16  Audit institutions shall exercise supervision through
auditing over the budget implementation, final accounts and management and
use of extra-budgetary funds of departments (including units directly
subordinate to them) at the corresponding levels and of the people’s
governments at lower levels.

    Article 17  The National Audit Administration shall, under the leadership
of the Premier of the State Council, exercise supervision through auditing
over the implementation of the central budget and submit audit reports
thereon to the Premier.

    Local audit institutions at various levels shall, under the respective
leadership of the governors of provinces, chairmen of autonomous regions,
mayors, prefectural heads and heads of counties or districts as well as under
the leadership of audit institutions at the next higher levels, exercise
supervision through auditing over the budget implementation at the
corresponding levels and submit audit reports to the people’s governments at
the corresponding levels and to the audit institutions at the next higher
levels.

    Article 18  The National Audit Administration shall exercise supervision
through auditing over the financial revenues and expenditures of the Central
Bank.

    Audit institutions shall exercise supervision through auditing over the
assets, liabilities, profits and losses of the State-owned monetary
organizations.

    Article 19  Audit institutions shall exercise supervision through
auditing over the financial revenues and expenditures of State institutions.

    Article 20  Audit institutions shall exercise supervision through
auditing over the assets, liabilities, profits and losses of the State-owned
enterprises.

    Article 2l  Audit institutions shall conduct audit in a regular and
planned way with regard to the State-owned enterprises that are vital to the
national economy and the people’s livelihood, or the State-owned enterprises
that heavily depend upon government subsidies, or have large amounts of
losses, and other State-owned enterprises designated by the State Council or
the people’s governments at the corresponding levels.

    Article 22  Supervision through auditing over the entcrprises wieh
State-owned assets controlling their shares or playing a leading role shall
be prescribed by the State Council.

    Ardcle 23  Audit institutions shall exercise supervision through auditing
over the budget implementation and final accounts of the State’s construction
projects.

    Article 24  Audic institutions shall exercise supervision through
auditing over the financial revenues and expenditures of the social security
funds, funds from public donations and other relevant funds and capital
managed by governmental departmenes or by public organizations authorizcd by
the governments.

    Article 25  Audit institutions shall exercise supervision through
auditing over the financial revenues and expenditures of projects with aids
or loans provided by international organizations or governments of other
countries.

    Article 26  In addition to the audit matters specified in this Law, audit
institutions shall, in accordance with the provisions of this Law as well as
relevant laws, or administrative rules and regulations, exercise supervision
through auditing over the matters that shall be audited by audit institutions
as stipulated by other laws, administrative rules and regulations.

    Article 27  With regard to particular matters relating to the State’s
budgetary revenues and expenditures, audit institutions shall have the power
to carry out special investigations through auditing among relevant
localities, departments and units and report the results there of to the
people’s governments at the corresponding levels and to the audit
institutions at the next higher levels.

    Article 28  Audit institutions shall determine their audit jurisdiction
on the basis of the auditees’ subordinate relations in budgetary and
financial affairs or the supervisory and managerial relations with respect to
the State-owned assets of the auditees.

    Where a dispute arises on audit jurisdiction between audit institutions,
the matter shall be determined by an audit institution superior to both
disputing parties.

    Audit institutions at higher levels may authorize audit institutions at
lower levels to audit the matters which are within the jurisdiction of the
former and specified in paragraph 2 of Article 18 to Article 25 in this Law.
Audit institutions at higher levels may directly audit the major matters
under the jurisdiction of audit institutions at lower levels. However,
unnecessary repetitive audits shall be avoided.

    Article 29  Departments of the State Council and of the local people’s
governments at various levels, State-owned monetary organizations,
enterprises and institutions shall establish and improve their internal
auditing systems in accordance with the relevant regulations of the State.
Such internal auditing shall be subject to the professional guidance and
supervision of audit institutions.

    Article 30  Public audit firms that independently conduct public audit
according to law shall be guided, supervised and managed in accordance with
relevant laws and regulations of the State Council.
Chapter IV  Limits of Authority of Audit Institutions

    Article 31  Audit institutions shall have the power to require auditees
to submit, in accordance with the relevant regulations, their budgets or
plans for financial revenues and expenditures, statemen about budget
implementation, final accounts and financial reports, audit reports produced
by public audit firms and other information relating to their budgetary
revenues and expenditures or financial revenues and expenditures. Auditees
shall not refuse to do so, or delay the submission or make false reports.

    Article 32  Audit institutions shall, in conducting audit, have the power
to examine the accounting documents, account books, accounting statements and
other information and assets relating to budgetary revenues and expenditures
or financial revenues and expenditures of the auditees, and the auditees
shall not refuse such examination.

    Article 33  Audit institutions shall, in conducting audit, have the power
to carry out investigations among units or individuals concerned of issues
relating to audit matters and obtain relevant testimonial material. The units
and individuals concerned shall support and assist the audit institutions in
their work by providing them with truthful information and relevant
testimonial material.

    Article 34  When audit iastitutions conduct audit, the auditees shall not
transfer, conceal, falsify or destroy their accounting documents, account
books, accounting statements or other information relating to their budgetary
revenues and expenditures or financial revenues and expenditures, and shall
not transfer or conceal the assets that are in their possession but obtained
in violation of the regulations of the State.

    Audit institutions shall have the power to stop the auditees’ ongoin acts
of budgetary revenues and expenditures or financial revenues and expenditures
violating the regulations of the State. If they fail in stopping such acts,
they shall, with the approval of the responsiblc persons of audit
institutions at or above the county level, notify the financial departments
and the competent authorities to suspend allocation of the funds directly
related to the acts of budgetary revenues and expenditures or financial
revenues and expenditures violating the regulations of the Seate or to
suspend the use of the funds already allocated. However, adoption of the
above-mentioned measures shall not hinder the lawful business activities,
production and operation of the auditees.

    Article 35  If audit institutions consider that the regulations of the
competent departments at higher levels on budgetary revenues and expenditures
or financial revenues and expenditures implemented by the auditees contravene
the law or the administrative rules and regulations, they shall suggest that
the competent departments concerned make rectifications. If the competent
departments concerned do not make rectifications, the audit institutions
shall refer the matter to the competent organs for disposition according
to law.

    Article 36  Audit institutions may issue circulars about their audit
results to the relevant governmental departments or publish such results to
the public.

    Audit institutions shall, in circulating or publishing audit results,
keep State secrets and business secrets of the auditees in accordance with
the law and observe the relevant regulations of the State Council.
Chapter V  Audit Procedures

    Article 37  Audit institutions shall form audit teams according to the
audit matters specified in the plans of the audit projects and shall serve
advices of audit on the auditees three days prior to the performance of
audit.

    The auditees shall cooperate with audit institutions in their work and
provide necessary working conditions.

    Article 38  Auditors shall conduct audit and obtain testimonial material
by means of examining accounting documents, account books, accounting
statements, and documents and data relating to the audit items, checking
cash, negotiable securities and other property, and making investigations
among units and individuals concerned.

    Auditors shall, in making investigations among units and individuals
concerned, produce their auditor’s certificates and copies of advices of
audit.

    Article 39  Audit teams shall, after the performance of audit, submit
audit reports to the audit institutions. However, prior to the submission,
they shall solicit opinions of the auditees. The auditees shall, within
ten days from the date of receiving the audit reports, send their comments
in writing to the audit teams or audit institutions.

    Article 40  Audit institutions shall, after examining the audit reports,
give evaluaeions of the audit matters and issue auditor’s opinions. They
shall, within the sphere of their statutory functions and powers, make audit
decisions on acts of budgetary revenues and expenditures or financial
revenues and expenditures violating the regulations of the State that must be
dealt with or punished according to law, or they shall make suggestions
concerning disposition or punishment to the competent authorities.

    Audit institutions shall, within 30 days from the date of receiving the
audit reports, serve auditor’s opinions and audit decisions on the auditees
and units concerned.

    Audit decisions shall enter into force from the date when they are duly
served.
Chapter VI  Legal liability

    Article 41  If an auditee, in violation of this Law, refuses or delays
provision of information relating to audit matters, refuses or hinders
examination, the audit iastitution concerned shall order a rectification and
may circulate a notice of criticism and issue a warning. Whoever refuses to
make rectification shall be investigated for responsibility in accordance
with the law.

    Article 42  When an audit institution discovers that an auditee, in
violation of the provisions of this Law, transfers, conceals, falsifies or
destroys accounting documents, account books, accounting statements or other
material relating to budgetary revenues and expenditures or financial
revenues and expenditures, the audit institution shall have the power to
stop such acts.

    If an auditee commits any of the acts specified in the preceding
paragragh, and if the audit institution considers that the persons in charge
and other persons who are held directly responsible should be given
administrative sanctions according to law, the audit institution shall put
forward suggestions to this effect. The auditee or its superior organ or the
supervisory organ shall make decisions without delay in accordance with the
law. If the case coastitutes a crime, it shall be investigated for criminal
responsibility by the judicial organ according to law.

    Article 43  If an auditee, in violation of this Law, transfers or
conceals assets gained unlawfully, the audit institution, the people’s
government or the competent authorities shall have the power to stop such
acts within the sphere of its statutory functions and powers or appeal to the
court for adoption of preservative measures.

    If an auditee commits any of the acts specified in the preceding
paragragh, and if the audit institution considers that the persons in charge
and other persons who are held directly responsible should be given
administrative sanctions according to law, the audit institution shall put
forward suggestions to this effect. The auditee or its superior organ or the
supervisory organ shall make a decision without delay in accordance with the
law. If the case constitutes a crime, it shall be investigated for criminal
responsibility by the judicial organ according to law.

    Article 44  With respect to the acts violating the budgets or other acts
of budgetary revenues and expenditures violating the regulations of the State
committed by departments (including units directly subordinate to them) at
the corresponding levels or by the governments at lower levels, audit
institutions, the people’s governments or the competent authorities shall
deal with them within the sphere of their statutory functions and powers and
in accordance with the laws and administrative rules and regulations.

    Article 45  With respect to the acts of financial revenues and
expenditures violating the regulations of the State committed by an auditee,
the audit institution, the people’s government or the competent authorities
shall, within the sphere of its statutory functions and powers and in
accordance with the laws and administrative rules and regulations, order the
auditee to turn over within a time limit the part of the revenues that should
be turned over, to return within a time limit the income gained unlawfully or
the State-owned assets seized illegally or take other rectifying measures,
and may impose punishment on the auditee according to law.

    Article 46  With respect to the persons in charge and other persons who
are held directly responsible for the acts of budgetary revenues and
expenditures or financial revenues and expenditures committed by the auditee
in violation of the regulations of the State, if the audit institution
considers that they should be given administrative sanctions according to
law, the audit institution shall put forward suggestions to this effect. The
auditee or its superior organ or the supervisory organ shall make a decision
without delay in accordance with the law.

    Article 47  If an auditee violates the provisions of relevant laws or
administrative rules and regulations governing budgetary revenues and
expenditures or financial revenues and expenditures and if the case
constitutes a crime, the auditee shall be investigated for criminal
responsibility according to law.

    Article 48  Where anyone retaliates or makes a false charge against
an auditor, if the case constitutes a crime, he shall be investigated for
criminal responsibility according to law; if the case does not constieute
a crime, he shall be given an administrative sanction.

    Article 49  Where an auditor abuses his functions and powers, engages in
malpractices for selfish ends, or neglects his duties, if the case
constitutes a crime, he shall be investigated for criminal responsibility;
if the case does not constitute a crime, he shall be given an administrative
sanction.
Chapter VII  Supplementary Provisions

    Article 50  Audit regulations for the Chinese People’s Liberation Army
shall be formulated by the Central Military Commission in accordance with
this Law.

    Article 51  This Law shall enter into force as of January 1, 1995.
The Audit Regulations of the People’s Republic of China promulgated by the
State Council on November 30, 1988 shall be annulled therefrom.





OFFICIAL REPLY OF THE STATE COUNCIL TO THE ANNOUNCEMENT CONCERNING DEALING SEVERELY WITH CIGARETTE SMUGGLING AND RECTIFYING THE CIGARETTE MARKET

Category  CUSTOMS Organ of Promulgation  The State Council Status of Effect  Invalidated
Date of Promulgation  1994-10-16 Effective Date  1994-10-16 Date of Invalidation  2000-02-12


Official Reply of the State Council to the Announcement Concerning Dealing Severely With Cigarette Smuggling and Rectifying the Cigarette
Market


ANNOUNCEMENT CONCERNING DEALING SEVERELY WITH CIGARETTE SMUGGLING AND


(Approved by the State Council on October 16, 1994) (Editor’s Note: This

Official Reply of the State Council to the Announcement Concerning Dealing
Severely with Cigarette Smuggling and Rectifying Cigarette Market has been
annulled by Official Reply of the State Council to the circular Concerning
Dealing Severely with Cigarette Smuggling and Reatifying Cigarette Market
Promulgated by Correspondence of the State Council No.[2000]13 of the State
Council Document on February 12, 2000)

    The State Tobacco Monopoly Bureau, the Ministry of Public Security,
the State Administration for Industry and Commerce and the General
Administration of Customs:  

    The State Council has approved the “Announcement Concerning Dealing
Severely With Cigarette Smuggling and Rectifying the Cigarette Market”. You
are hereby instructed to promulgate and implement said Announcement.
ANNOUNCEMENT CONCERNING DEALING SEVERELY WITH CIGARETTE SMUGGLING AND
RECTIFYING THE CIGARETTE MARKET (Promulgated on October 16, 1994, by the
State Tobacco Monopoly Bureau, the Ministry of Public Security, the State
Administration for Industry and Commerce and the General Administration
of Customs)

    The following Announcement is hereby issued for the purpose of safeguarding State and consumer interests,
dealing severely with illegal and
criminal activities related to cigarette smuggling, rectifying the cigarette
market and protecting the legal rights of the national cigarette industry and
related management.

    1. Enterprises, institutions and offices, organizations or individuals
engaged in illegal activities related to smuggling cigarettes, or otherwise
illegally purchasing, transporting, mailing, selling or storing smuggled
cigarette shall be severely punished in accordance with the related law and
regulations enacted by the State.

    2. Cases involving cigarette smuggling activities which constitute a
crime shall be bound over to judicial departments for investigation of
criminal responsibility in accordance with the law; Relevant executive
departments shall handle cases in which activities do constitute a crime by
confiscating smuggled goods and income earned from illegal transactions, and
offenders will be subject to a prescribed fine.

    3. Parties transporting imported cigarette across provinces (regions or
cities) inside the borders of China shall hold a Certificate of Transport
Permit issued by the State Tobacco Monopoly Bureau; Parties transporting
imported cigarettes within a province (region or city) shall have a
Certificate of Transport Permit issued by the Provincial Tobacco Monopoly
Bureau. Imported cigarettes, excluding tobacco products supervised and
administered by Customs, transported without a Certificate of Transport Permit
shall be confiscated by the relevant executive department, and all parties
involved shall be subject to a prescribed fine and all means of transport
shall be confiscated.

    4. Units responsible for the management of legally imported cigarettes
shall hold a special permit for management of tobacco sales issued by the
department responsible for tobacco monopoly; Units responsible for the
management of confiscated illegally imported cigarettes shall hold a license
as an “Enterprise Designated to Manage Confiscated Illegally Imported
Cigarette” approved and issued by the State Tobacco Monopoly Bureau, or a
similar license approved and issued by the Provincial Tobacco Monopoly Bureau
with the authorization of the State Tobacco Monopoly Bureau. Said units shall
replenish stocks via regulated channels. Units or individuals illegally
managing such activities without the prescribed permits shall be penalized,
all illegal goods shall be confiscated and those found in violation shall be
subject to a maximum fine equal to five times the value of the goods. In
serious cases, the relevant department of administration of industry and
commerce shall revoke management licenses in accordance with the law.

    5. Enterprises, institutions and offices, organizations or individuals
providing facilities for the storage, transport and mailing of smuggled
cigarettes, or eventual sale of smuggled cigarette shall be penalized. All
illegal income shall be confiscated by the executive department and violators
will subject to a maximum fine equal to twice the amount of illegal income;
Violators who have earned no illegal income shall be subject to a fine in
accordance with the seriousness of the case.

    6. Illegally imported cigarette confiscated by executive departments shall
be handed over to a tobacco auction company established or authorized by the
State Tobacco Monopoly Bureau. Said auction company will be permitted to sell
subject products to the units holding licenses as an “Enterprise Designated to
Manage Confiscated Illegally Imported Cigarette” (Wholesale); designated
enterprises (wholesale) are also permitted to wholesale subject products to
units holding licenses as an “Enterprises Designated to Manage Confiscated
Illegally Imported Cigarette” (Retail). Those found in violation of the
aforementioned regulations shall be penalized. Subject goods shall be
confiscated by the relevant executive department and violators shall be
subject to a maximum fine of three times the value of subject goods. The
management qualifications of companies involved in serious cases shall be
revoked. Small quantities of illegally imported cigarettes confiscated in
markets shall be handed over to fixed sales enterprises designated by the
local department for tobacco monopoly. Prior to any auction, or wholesale or
retail activities, the administrative department for tobacco monopoly shall
label all packages or cartons containing confiscated illegally imported
cigarettes as “Confiscated Smuggled Cigarettes.”

    7. In accordance with related regulations, rewards based on merit shall
be given to units or individuals who have reported, assisted in investigations
to prevent smuggling activities and sales of smuggled cigarettes. Those found
guilty of resisting, viciously attacking or otherwise threatening the
well-being of executive personnel during the process of checking and
preventing smuggling activities, or inspecting markets, shall, in accordance
with the seriousness of the case, be investigated for criminal responsibility
according to law, or be penalized in accordance with provisions outlined in
the “Regulations of the People’s Republic of China on Administrative Penalty
for Public Security”.

    8. This Announcement shall become effective on the date of promulgation.





ARBITRATION LAW OF THE PEOPLE’S REPUBLIC OF CHINA

The Standing Committee of the National People’s Congress

Order of the President of the People’s Republic of China

No.31

Arbitration Law of the People’s Republic of China adopted by the 9th Meeting of the Standing Committee of the eighth National People’s
Congress of the People’s Republic of China on August 31, 1994 are hereby promulgated and shall come into force as of the day of September
1,1995.

President of the People’s Republic of China, Jiang Zemin

August 31, 1994

Arbitration Law of the People’s Republic of China

Chapter I General Provisions

Article 1

The law is formulated with a view to ensure fair and timely arbitration of economic disputes, reliable protection to legitimate rights
and interests of parties concerned and a healthy development of the socialist market economy.

Article 2

Contractal disputes between citizens of equal status, legal persons and other economic organizations and disputes arising from property
rights may be put to arbitration.

Article 3

The following disputes cannot be put to arbitration:

1.

Disputes arising from marriage, adoption, guardianship, bringing up of children and inheritance.

2.

Disputes that have been stipulated by law to be settled by administrative organs.

Article 4

In settling disputes through arbitration, an agreement to engage in arbitration should first of all be reached by parties concerned
upon free will. Without such an agreement, the arbitration commission shall refuse to accept the application for arbitration by any
one single party.

Article 5

Whereas the parties concerned have reached an agreement for arbitration, the people’s court shall not accept the suit brought to the
court by any one single party involved, except in case where the agreement for arbitration is invalid.

Article 6

The members of the arbitration commission shall be chosen by the parties concerned.

Arbitration shall not be subject to the jurisdiction of administrative departments at any level and region.

Article 7

Arbitration shall be made based on true facts and relative laws to give out a fair and reasonable settlement for parties concerned.

Article 8

Arbitration shall be conducted independently according to law, free from interference of administrative organs, social groups or individuals.

Article 9

The arbitration award is final. After the award is given, the arbitration commission or the people’s court shall not accept the re-
application of the suit concerning the same dispute by any of the parties concerned.

Whereas the award cancelled or put in void under a rule by the people’s court, the parties concerned for the dispute may reach another
agreement for arbitration and apply for arbitration or bring a suit in the people’s court.

Chapter II Arbitration Commission and Arbitration Association

Article 10

An arbitration commission may be set up in the domicile of the people’s governments of municipalities directly under the Central Government
(hereinafter referred to as “municipalities”), provinces and autonomous regions or in other places according to needs. It shall not
be set up according to administrative levels.

An arbitration commission shall be set up by the relevant departments and chambers of commerce under the coordination of the people’s
governments of the cities prescribed in the preceding paragraph.

The establishment of an arbitration commission shall be registered with the judicial administrative departments of provinces, autonomous
regions and municipalities.

Article 11

An arbitration commission shall meet the following requirements:

1.

It shall have its own name, residence and statute.

2.

It shall have necessary property.

3.

It shall have its own members.

4.

It shall have appointed arbitrators.

The statute of an arbitration commission shall be formulated according to this law.

Article 12

An arbitration commission shall be composed of a chairman, two to four vice-chairmen and 7 to 11 members.

The chairman, vice-chairmen and members of an arbitration commission shall be experts in law and economy and trade with practical
work experience. Of the composition of an arbitration commission, experts in law, economy and trade shall be no less than two-thirds.

Article 13

Members of an arbitration commission shall be appointed from among the people who are fair and justice.

An arbitrator shall meet one of the following requirements:

1.

At least eight years of work experience in arbitration.

2.

At least eight years of experience as a lawyer.

3.

At least eight years of experience as a judge.

4.

Engaging in law research and teaching, with a senior academic post_title.

An arbitration commission shall prepare the list of arbitrators according to different specialties.

Article 14

An arbitration commission shall be independent of any administrative organ, without any subordinate relationship with administrative
organs. Neither would there be any subordinate relations thereof.

Article 15

The China Arbitration Association is an institutional legal person with all the separate arbitration commissions as its members. The
statute of the China Arbitration Association shall be formulated by the national congress of the association.

The China Arbitration Association is a self-disciplinary organization for arbitration commissions to supervise over the latters and
their members and arbitrators therein.

The China Arbitration Association shall formulate arbitration rules according to this law and the civil procedure law.

Chapter III Agreement for Arbitration

Article 16

An agreement for arbitration shall include the arbitration clauses stipulated in the contracts or other written agreements for arbitration
reached before or after a dispute occurs.

An arbitration agreement shall contain the following:

1.

The expression of application for arbitration.

2.

Matters for arbitration.

3.

The arbitration commission chosen.

Article 17

An agreement for arbitration shall be invalid in one of the following cases:

1.

The matters agreed for arbitration exceed the scope of arbitration provided by law.

2.

Agreements concluded by people being incapable or restricted in civil acts.

3.

An agreement forced upon a party by the other party by means of coercion.

Article 18

Whereas an agreement for arbitration fails to specify or specify clearly matters concerning arbitration or the choice of arbitration
commission, parties concerned may conclude a supplementary agreement. If a supplementary agreement cannot be reached, the agreement
for arbitration is invalid.

Article 19

The effect of an agreement for arbitration shall stand independently and shall not be affected by the alteration, dissolution, termination
or invalidity of a contract.

An arbitration tribunal has the right to establish the validity of a contract.

Article 20

Whereas parties concerned have doubt on the validity of an agreement for arbitration, a request can be made to the arbitration commission
for a decision or to the people’s court for a ruling. If one party requests the arbitration commission for a decision while the other
party requests the people’s court for a ruling, the people’s court shall pass a ruling.

A doubt to the effectiveness of an arbitration agreement should be raised before the first hearing at the arbitration tribunal.

Chapter IV Arbitration Procedure

Section I Application and Acceptance

Article 21

The parties concerned should meet the following requirements in applying for arbitration:

1.

There is an agreement for arbitration.

2.

There are specific requests for arbitration and facts and reasons.

3.

The matters to be pure to arbitration shall fall into the limits of the authority of the arbitration commission.

Article 22

In applying for arbitration, the parties concerned shall submit the agreement and the application for arbitration and their copies.

Article 23

The application for arbitration shall specify the following matters:

1.

Name, sex, age, profession, work unit and residence of parties concerned; the name, residence of legal persons or other organizations
and the name and position of the legal representatives or principal leading members.

2.

The claimants’ claim and the facts and evidence on which the claim is based.

3.

Evidence and sources of evidence and name and residence of witnesses.

Article 24

An arbitration commission shall accept the application within five days after the application is received if it deems the application
conforming to requirements and notify the parties concerned. If it deems the application unconformable to requirements, it shall
notify the parties concerned in writing and state the reasons.

Article 25

After an arbitration commission has accepted an arbitration application, it shall deliver the arbitration rules and the list of the
panel of arbitrators to the claimant within the time limit prescribed in the arbitration rules and send the copies of the arbitration
application and the arbitration rules and the list of the panel of arbitrators to the respondent.

After the respondent has received the copy of the application for arbitration, the aforesaid respondent shall file a counter-claim
with the arbitration commission. After the arbitration commission has received the counter-claim of the respondent, it shall deliver
the counter-claim to the claimant within the time limit set in the arbitration rules. If a respondent fails to submit a counter-claim,
it does not affect the arbitration proceedings.

Article 26

When parties concerned have reached an agreement for arbitration but one party brings a suit in the people’s court without notifying
the court that there is an agreement for arbitration and, after the people’s court has accepted the case, the other party submits
the agreement for arbitration before the opening of the arbitration tribunal, the people’s court shall reject the suit, except in
the case that the agreement for arbitration is invalid. If the other party fails to raise objection to the acceptance of the case
by the court before first hearing, it shall be regarded as having forfeited the agreement for arbitration and the people’s court
shall continue the hearing.

Article 27

A claimant may give up or alter its claims. The respondent may acknowledge or refute the claims and has the right to raise counter-
claims.

Article 28

Whereas due to the acts of the other party or other reasons, the arbitration award cannot be or is hard to be executed, the parties
concerned may apply for putting the property under custody.

Whereas a claimant has applied for custody to the property, the arbitration commission shall, according to the relevant provisions
of the Civil Procedure Law, submit the application of the claimant to the people’s court.

Whereas there are errors in the application, the claimant shall compensate to the respondent for the losses arising from the custody
to the property.

Article 29

The parties concerned or legal attorneys may entrust lawyers or other attorneys to handle matters relating to arbitration. In the
case where lawyers or other attorneys are entrusted with the handling of arbitration matters, the attorneys shall produce a power
of attorney to the arbitration commission.

Section II Composition of Arbitration Tribunal

Article 30

An arbitration tribunal may be composed of three arbitrators or one arbitrator. In the case of three arbitrators, there should be
a chief arbitrator.

Article 31

Whereas the parties concerned agree that the arbitration tribunal is composed of three arbitrators, each of them shall chose one arbitrator
or entrust the appointment to the chairman of the arbitration commission, with the third arbitrator jointly chosen by the parties
concerned or appointed by the chairman of the arbitration commission jointly entrusted by the two parties. The third arbitrator shall
be the chief arbitrator. Whereas the parties concerned agree to have the arbitration tribunal composed of one arbitrator, the two
parties shall jointly choose the arbitrator or entrust the choice of the arbitrator to the chairman of the arbitration commission.

Article 32

Whereas the parties concerned fail to decide on the composition of the arbitration tribunal or fail to choose arbitrators within the
time limit prescribed in the arbitration rules, the chairman of the arbitration commission shall make the decision.

Article 33

After the formation of an arbitration tribunal, the arbitration commission shall notify in writing the composition of the arbitration
tribunal matters.

Article 34

An arbitrator shall be withdrawn and the parties concerned have the right to request withdrawal, whereas:

1.

The arbitrator is a party involved in the case or a blood relation or relative of the parties concerned or their attorneys.

2.

the arbitrator has vital personal interests in the case.

3.

the arbitrator has other relations with the parties or their attorneys involved in the case that might effect the fair ruling of the
case.

4.

the arbitrator meets the parties concerned or their attorneys in private or has accepted gifts or attended banquets hosted by the
parties concerned or their attorneys.

Article 35

In requesting for withdrawal, the parties concerned shall state reasons before the first hearing of the tribunal. If the reasons are
known only after the first hearing, they may be stated before the end of the last hearing.

Article 36

The withdrawal of an arbitrator shall be decided upon by the chairman of the arbitration commission. Whereas the chairman of the arbitration
commission serves as an arbitrator, the withdrawal shall be decided upon collectively by the arbitration commission.

Article 37 Whereas an arbitrator is withdrawn or unable to perform his duty due to other reasons, another arbitrator shall be chosen
or appointed according to the relevant provisions of this law.

Whereas re-selection or re-appointment of an arbitrator is made due to withdrawal, the parties concerned may apply for the re-start
of the arbitration proceedings, but the final decision shall be made by the arbitration tribunal. The arbitration tribunal may also
make its own decision as to whether or not the arbitration proceedings will restart.

Article 38

Whereas a case provided for in 4. of Article 34 of this law is found with an arbitration and the case is very serious or a case provided
for in 6. of Article 58 of this law is found with an arbitrator, the arbitrator shall bear the legal responsibility according to
law and the arbitration commission shall remove him from the panel of arbitrators.

Section III Hearing and Ruling

Article 39

An arbitration tribunal shall hold oral hearings to hear a case. Whereas the parties concerned agree not to hold oral hearings, the
arbitration tribunal may give the award based on the arbitration application, claims and counter-claims and other documents.

Article 40

The arbitration tribunal may not hear a case in open sessions. But when parties concerned agree to have the case heard in open sessions,
the hearing may be held openly, except cases that involve State secrets.

Article 41

The arbitration commission shall notify the parties concerned the date of hearing within the time limit prescribed in the arbitration
rules. With justifiable reasons, a party concerned may request the postponement of the hearing within the time limit set in the arbitration
rules. Whether or not the hearing is postponed shall be decided upon by the arbitration tribunal.

Article 42

Whereas a claimant is absent from the hearing without justifiable reasons after receiving the written notice or withdraws from hearing
half way without the prior permission by the arbitration tribunal, it may be regarded as a withdrawal of claims.

Whereas a respondent is absent from the hearing without justifiable reasons after receiving the written notice or withdraws from hearing
half way without the prior permission by the arbitration tribunal, it may give the award by default.

Article 43

The parties concerned shall provide evidence to support their respective claims.

Whereas an arbitration tribunal deems it necessary to collect evidence, it may collect it on its own initiative.

Article 44

Whereas an arbitration tribunal deems it necessary to have the specialized issues appraised, it may submit them to the appraisal department
chosen by the parties concerned by agreement or to the appraisal department designated by the arbitration tribunal.

At the request of the parties concerned or of the arbitration tribunal, the appraisal department shall send appraisers to the hearing.
Parties concerned may, with the permission of the arbitration tribunal, raise questions to the appraisers.

Article 45

Evidence shall be produced during the course of hearing and the parties concerned may question or substantiate their evidence.

Article 46

Whereas evidences are vulnerable to be destroyed or missing and would be heard to be recovered, the parties concerned may apply to
put the evidences on custody: When a party applies for custody of evidences, the arbitration commission shall submit the evidences
of the party concerned to the people’s court at the place where the evidences are obtained.

Article 47

The parties concerned have the right to debate during the process of hearing. At the end of the debate, the chief arbitrator or the
sole arbitrator shall ask the parties concerned for the final statement.

Article 48

The arbitration tribunal shall record the hearings in writing. Whereas the parties concerned or other people involved in the arbitration
find something in their statements left out in the recording or misrecorded, they have the right to apply for correction. Whereas
corrections are not made, the application shall be recorded.

The written records of the hearings shall be signed or affixed with seals by the arbitrators, minute keepers, the parties concerned
and other people participating in the arbitration.

Article 49

After the parties have applied for arbitration, they may reach reconciliation on their own initiative. Whereas a reconciliation agreement
has been reached, a request may be made to the arbitration tribunal for an award based on the reconciliation agreement or the application
for arbitration may be withdrawn.

Article 50

Whereas the parties concerned have gone back on their word after they have reached a reconciliation agreement, they may apply for
arbitration according to the arbitration agreement.

Article 51

The arbitration tribunal may re-conciliate a case before passing the award. Whereas the parties concerned accept the reconciliation
effort of their own accord, the arbitration tribunal may conduct the reconciliation. Should the reconciliation fail, the arbitration
tribunal shall pass the ruling in time.

Whereas an agreement is reached through reconciliation, the arbitration tribunal shall compile the reconciliation document or make
an award based on the results of the agreement. The document of reconciliation and the arbitral award are equally binding legally.

Article 52

The document of reconciliation shall specify the arbitration claims and the result of the agreement between the parties concerned.
The document of reconciliation shall be signed by the arbitrator and affixed with the seal of the arbitration commission before being
delivered to the parties concerned.

The document of reconciliation becomes legally binding immediately upon received by parties concerned.

If any party concerned has gone back on his word after receiving the document of reconciliation, the arbitration tribunal shall make
a timely ruling.

Article 53

An arbitral award shall be decided by the majority of the arbitrators and the views of the minority can be written down in the record.
Whereas a majority vote cannot be reached, the award shall be decided based on the opinion of the chief arbitrator.

Article 54

The arbitral award shall specify the arbitration claims, facts in disputes, reasons for the award, result of the award, arbitration
expenses and date of the award given. Whereas parties concerned object to the specification of the facts in dispute and reasons for
the ruling, such specification and reasons may be omitted. The arbitral award shall be signed by arbitrators and affixed with the
seals of the arbitration commission. An arbitrator holding differences of views may sign or may not sign the award.

Article 55

In arbitrating disputes, the arbitration tribunal may pass the ruling on part of the facts that have already been made clear.

Article 56

An arbitration tribunal should correct the errors involving context or computation and add things that have been omitted in the rulings
in the arbitral award. The parties concerned may apply for correction with the arbitration tribunal within 30 days after the receipt
of the award.

Article 57

The arbitral award takes legal effect upon its issuing.

Chapter V Application for Canceling Arbitral Ruling

Article 58

If parties concerned have evidences to substantiate one of the following, they may apply for the cancellation of arbitral award with
the intermediate people’s court at the place where the arbitration commission resides.

1.

There is no agreement for arbitration.

2.

The matters ruled are out the scope of the agreement for arbitration or the limits of authority of an arbitration commission.

3.

The composition of the arbitration tribunal or the arbitration proceedings violate the legal proceedings.

4.

The evidences on which the ruling is based are forged.

5.

Things that have an impact on the impartiality of ruling have been discovered concealed by the opposite party.

6.

Arbitrators have accepted bribes, resorted to deception for personal gains or perverted the law in the ruling.

The people’s court shall form a collegial bench to verify the case. Whereas one of the aforesaid cases should be found, arbitral award
should be ordered to be cancelled by the court.

Whereas the people’s court establishes that an arbitral award goes against the public interests, the award should be cancelled by
the court.

Article 59

An application filed by the parties concerned for the cancellation of an arbitral award should be sent within six months starting
from the date of receipt of the award.

Article 60

The people’s court should rule to cancel the award or reject the application within two months after the application for cancellation
of an award is received.

Article 61

After the people’s court has accepted an application for the cancellation of an arbitral award and deems it necessary for the arbitration
tribunal to make a new award, it shall notify the arbitration tribunal for a new ruling within a certain limit of time and order
the termination of the cancellation procedure. In the case when the arbitration tribunal refuses a new ruling, the people’s court
shall rule that the cancellation procedure be restored.

Chapter VI Enforcement

Article 62

The parties concerned shall execute the arbitral award. If one of the parties refuses to execute the award, the other party may apply
for enforcement with the people’s court according to the relevant provisions of the Civil Procedure Law. The people’s court with
which the application is filed should enforce it.

Article 63

If the respondent has produced evidences to substantiate one of the following cases provided for in the second paragraph of Article
217 of the Civil Procedure Law, the award shall not be enforced after the verification by the collegiate bench of the people’s court.

Article 64

Whereas one party applies for an enforcement while the other applies for a cancellation of a award, the people’s court shall order
the termination of the performance of the award.

Whereas the people’s court has ordered the cancellation of an award, it should also order the termination of performance of the award.
Whereas an application for the cancellation of an award is rejected, the people’s court shall order the restoration of the performance
of the award.

Chapter VII Special Provision on Arbitration Involving Foreign Interests

Article 65

The provisions in this chapter apply to arbitration of disputes arising from foreign economic cooperation and trade, transportation
and maritime matters. Matters not covered by this chapter shall be handled according to other relevant provisions of this law.

Article 66

Foreign arbitration commissions may be formed by the China International Chamber of Commerce.

A foreign arbitration commission is composed of a chairman, a number of vice-chairmen and members.

The chairman, vice-chairmen and members of a foreign arbitration commission shall be appointed by the China International Chamber
of Commerce.

Article 67

Members of a foreign arbitration commission may appoint arbitrators from among foreign nationals with specialized knowledge in law,
economy and trade, science and technology.

Article 68

Whereas the parties involved in a foreign arbitration case apply for the custody of evidences, the foreign arbitration commission
shall submit the application to the intermediate people’s court at places where the evidences are produced.

Article 69

The foreign arbitration tribunal may write down its hearings on records or summary of records. The records shall be signed or affixed
with the seals of the parties concerned and other people participating in the arbitration.

Article 70

Whereas the claimant has produced evidences to substantiate one of the cases as provided for in the first paragraph of Article 260
of the Civil Procedure Law, the People’s court shall form a collegiate bench to verify the facts and order the cancellation of the
award.

Article 71

Whereas the respondent has produced evidences to substantiate one of the cases as provided for in the first paragraph of Article 260
of the Civil Procedure Law, the people’s court shall form a collegiate bench to verify the facts and order the non-performance of
the award.

Article 72

Whereas a party involved in a foreign arbitration case applies for the enforcement of the award that has taken legal effect, the party
shall apply directly with a foreign law court with the jurisdiction for recognition and enforcement if the party that should implement
the award or its property is not in the territory of the People’s Republic of China.

Article 73

The rules for foreign arbitration shall be formulated by the China International Chamber of Commerce according to this law and the
relevant provisions of the Civil Procedure Law.

Chapter VIII Supplementary Provisions

Article 74

Whereas there is a limited effective period for the arbitration stipulated in the law, the limit shall apply. Whereas there is not
a limited effective period for the arbitration stipulated by the law, the provisions about limits for proceedings shall apply.

Article 75

Before the China Arbitration Association has formulated arbitration rules, arbitration commissions may formulate interim rules for
arbitration according to this law and the relevant provisions of the Civil Procedure Law.

Article 76

Parties concerned shall pay arbitration fees according to provisions.

The schedule of arbitration fees shall be submitted for approval by the pricing administrative department.

Article 77

The arbitration of labor disputes and disputes arising from the farm work contract inside the collective agricultural organizations
shall be formulated separately.

Article 78

Whereas the relevant arbitration regulations formulated before the enforcement of this law come into conflict with the provisions
of this law, the provisions of this law shall prevail.

Article 79

The arbitration organization set up in cities where the people’s governments of the municipalities, provinces and autonomous regions
are located and other cities which have districts shall be reorganized according to the relevant provisions of this law. Those not
reorganized shall be terminated in one year’s time starting from the date of the implementation of this law.

Other arbitration organizations set up before the implementation of this law and are not in conformity to the provisions of this law
shall be terminated starting from the date of the implementation of this law.

Article 80

The law shall enter into force as of September 1, 1995.

Attachment:Relevant Provisions of the Civil Procedure Law

Article 217

Whereas the party against whom the application is made provides evidences which have proved that the arbitration award involves any
of the following circumstances, the people’s court shall, after examination and verification by a collegial panel, order not to perform
the arbitration award:

1.

The parties have not stipulated clauses on arbitration in the contracts, or have not subsequently reached a written agreement for
arbitration;

2.

Matters proposed for arbitration are out of scope of the agreement for arbitration or the limits of authority of the arbitration agency;

3.

The composition of the arbitration division or the procedure for arbitration is not in conformity with the legal procedure;

4.

The main evidences are not sufficient to substantiate the facts;

5.

There are errors in the cited law; or

6.

The arbitrators committed acts of malpractice for personal benefits and perverted the law in the arbitration of the case.

Article 260

Whereas the person against whom the application is made provides evidences which prove that the arbitration award made by the foreign
affairs arbitration agency of the People’s Republic of China involves any of the following circumstances, the people’s court shall,
after examination and verification by a collegial panel, order to stop the execution of the award:

1.

The parties concerned have not stipulated clauses on arbitration in the contract or have not subsequently reached a written agreement
for arbitration;

2.

The person against whom the application is made is not duly notified to appoint the arbitrator or to proceed with the arbitration,
or the said person fails to state its opinions due to reasons for which he is not held responsible;

3.

The composition of the arbitration division or the procedure for arbitration is not in conformity with the rules of arbitration; or

4.

Matters for arbitration are out of the scope of the agreement for arbitration or the limits of authority of the arbitration agency.

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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