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the Standing Committee of the National People’s Congress Order of the President of the People’s Republic of China No.49 The Negotiable Instruments Law of the People’s Republic of China which has been adopted at the 13rd meeting of the Standing Committee President of the People’s Republic of China: Jiang Zemin May 10, 1995 Negotiable Instruments Law of the People’s Republic of China ContentsChapter I General Provisions Chapter II Bills of Exchange Section 1 Issue Section 2 Endorsement Section 3 Acceptance Section 4 Guaranty Section 5 Payment Section 6 Right of Recourse Chapter III Promissory Notes Chapter IV Cheques Chapter V The Applicable Laws Pertaining Negotiable Instruments in Cases Involving Foreign Elements Chapter VI Legal Responsibility Chapter VII Supplementary Provisions Chapter I General Provisions Article 1 This Law is formulated for the purpose of standardizing actions concerning negotiable instruments, protecting the legal rights of Article 2 This Law applies to all transactions concerning negotiable instruments within the territory of the People’s Republic of China. The term “negotiable instrument” as used in this Law denotes “bill of exchange”, “promissory note” and “cheque”. Article 3 Activities concerning instruments shall abide by the laws and administrative regulations and shall not harm public interests. Article 4 When creating an instrument, the issuing party shall endorse it according to statutory conditions and bear liability for the instrument When exercising his rights with regard to an instrument, the bearer shall endorse the instrument and present it according to statutory Other debtors endorsing the instrument shall bear liability for the instrument according to the items specified therein. The instrument right as referred to in this Law denotes the right of the bearer to claim the specified amount in payment from the Liability for negotiable instruments as referred to in this Law denotes the obligation of the debtor to pay the sum specified in the Article 5 A party to an instrument may authorize an agent to endorse the instrument but must specify the principal-agent relationship on the A person without power of agency who endorses an instrument in the capacity of agent shall bear liability for the instrument; an agent Article 6 The endorsement of an instrument by a person with no capacity for civil conduct or with limited capacity for civil conduct is invalid, Article 7 The endorsement of an instrument shall be by signature, seal or both signature and seal. The endorsement of an instrument by a legal person or other organization which makes use of instruments shall be the official seal The signature on an instrument must be the name of the party concerned. Article 8 The sum of money on an instrument shall be specified in both Chinese characters and Arabic numerals; the two figures must be the same, Article 9 Items specified in an instrument must conform to the provisions of this Law. The sum, date and payee recorded in an instrument must not be altered. Instruments which have been altered are invalid. Other items in an instrument may be altered by the person who originally wrote them, as proof alterations must be endorsed by the Article 10 The issue, acquisition and transfer of an instrument shall be made in good faith and shall constitute a real transaction and reflect An instrument can only be acquired in consideration of payment, the corresponding value of which must be agreed by the two parties Article 11 Acquisition of an instrument through taxation, inheritance or legacy which may be realized in accordance with law without payment, Prior parties refers to other debtors of an instrument who endorsed it prior to its endorsement by a specific signatory or bearer. Article 12 In cases where an instrument was acquired through fraudulence, theft or coercion, or in cases where the bearer acquired an instrument In cases where the bearer through gross negligence acquires an instrument which does not comply with the provisions of this Law, then Article 13 A debtor of an instrument shall not oppose the bearer on the basis of a dispute between the issuer and the debtor himself or between A debtor of an instrument may oppose a bearer who had a direct credit-debit relationship with him and did not perform the stipulated Opposition as referred to in this Law denotes the act whereby the debtor of an instrument refuses to carry out his obligations to Article 14 Items specified in an instrument must be genuine and cannot be forged or altered. Those who forge or alter the endorsement or other Endorsements on an instrument which have been forged or altered shall have no impact on the other genuine endorsements thereon. Where other items in the instrument have been altered, persons who endorsed the instrument before it was altered shall be liable for Article 15 Where an instrument has been lost, the person who has lost the instrument may promptly notify the payer of the instrument to suspend The payer shall temporarily cancel payment when he receives notification of the loss of the instrument. The person losing the instrument shall in accordance with the law apply to the people’s court for the publication of a public notice Article 16 The procedure by which the bearer of the instrument exercises his rights or preserves his rights against the debtor shall be carried Article 17 Rights to an instrument shall cease to be valid if not exercised within the following time limits: 1. The rights of the bearer of the instrument over the issuer and the acceptor of the instrument cease to be valid two years after the 2. The rights of the bearer of a cheque over the issuer cease to be valid six months after the date of issue; 3. The bearer’s right of recourse over prior parties ceases to be valid six months after the date of non-acceptance or non-payment; 4. The bearer’s right of re-recourse over prior parties ceases to be valid three months after the date of settlement or the commencement The date of issue and the date of maturity of an instrument shall be set in accordance with the law by the parties to the instrument. Article 18 A bearer who has lost his rights on instrument because of the expiration of his rights or because the items recorded in the instrument Chapter II Bills of Exchange Section 1 Issue Article 19 A bill of exchange is an instrument signed by the issuer, authorizing the payer to unconditionally pay a certain sum of money to the Bills can be classified into bankers’ bills and commercial bills. Article 20 Issue refers to the act of the issuer signing and issuing the instrument and delivering it to the payee. Article 21 The issuer of the bill must have an authentic relationship with the payer authorizing payment and must possess reliable funds with Bills without consideration shall not be signed or issued to defraud money from banks or other parties of an instrument. Article 22 A bill must specify the following items: 1. The word “bill”; 2. Authorization of unconditional payment; 3. A fixed sum; 4. The name of the payer; 5. The name of the payee; 6. The date of issue; 7. The endorsement of the issuer. A bill shall be null and void if any of the above-mentioned items are not specified therein. Article 23 The date of payment, place of payment and place of issue, if specified on the bill, shall be legible and unambiguous. A bill is payable on sight if the date of payment is not specified. The place of payment, if not specified on a bill, shall be the business premises, domicile or habitual residence of the payer. The place of issue, if not specified on a bill, shall be the business premises, domicile or habitual residence of the issuer. Article 24 Items relating to the issue of a bill other than those stipulated by this Law may be specified on a bill, but such items shall have Article 25 The date of payment may be specified in either one of the following forms: 1. Payable on sight; 2. Payable on a fixed date; 3. Payable during a fixed period after the date of issue; 4. Payable during a fixed period after the date of receipt. The date of payment as specified in the preceding paragraph shall be the date of maturity of the bill. Article 26 The issuer who signs and issues the bill shall bear liability for its acceptance and payment. In the event of non-acceptance or non-payment of the bill, the bearer shall be reimbursed the sum and expenses as stipulated in Articles Section 2 Endorsement Article 27 The bearer may transfer his rights to the bill to other persons or authorize other persons to exercise some of his rights to the bill. When the issuer writes the term “non-transferable” on the bill, then it cannot be transferred. The bearer must endorse and hand over the bill when exercising his rights as stipulated in the first paragraph of this article. Endorsement refers to the act of putting relevant items in writing and endorsing the back of the bill or an allonge. Article 28 The person endorsing the bill may use an allonge and attach it to the bill if there is not enough space in the bill for the items. The first person to write on the allonge shall endorse the conjuncture of the bill and the allonge. Article 29 An endorsement shall be signed by the person making it and the date of endorsement shall be specified. An undated endorsement shall be deemed to have been added to the bill before its date of maturity. Article 30 The name of the person endorsing the bill must be specified when the bill is endorsed so that the rights to the bill are transferred Article 31 There shall be an uninterrupted series of endorsement in a bill which is transferred by means of endorsement. The bearer must prove “An uninterrupted series of endorsement” as referred to in the preceding paragraph denotes that, in the course of the transfer of Article 32 When the bill is transferred by means of endorsement, the subsequent party shall be liable for the authenticity of the endorsement “The subsequent party” denotes other debtors of an instrument who endorse it after its endorsement by a specific party. Article 33 No conditions can be attached to endorsements. Any conditions attached to endorsements shall have no effect on the bill. Any endorsements purporting to transfer a part of the amount payable, or to transfer the bill to two or more people separately, shall Article 34 When the endorser writes the term “non-transferable” on the bill and his subsequent party reendorses and transfers it, the original Article 35 Where an endorsement contains the word “by procuration”, the endorsee shall be enpost_titled to exercise mandated rights to the bill on A bill may be pledged; when the bill is pledged, the endorsement shall contain the term “value in pledge”. The endorsee may exercise Article 36 A bill cannot be transferred by means of endorsement when acceptance or payment has been refused or when the time limit for presentation Article 37 After the bill has been endorsed and transferred, the endorser shall be liable for guaranteeing the acceptance and payment of the Section 3 Acceptance Article 38 Acceptance denotes the act whereby payer of the bill promises to pay the sum of money in the bill at its maturity. Article 39 Where a bill is payable on a fixed date or within a fixed period after the date of issue, the bearer shall present the bill to the Presenting the bill for acceptance denotes the act whereby the bearer presents the bill to the payer and demands a promise of payment Article 40 Where a bill is payable during a fixed period after presentation, the bearer shall present the bill to the payer for acceptance within Where a bill has not been presented for acceptance within the prescribed period, the bearer shall lose the right of recourse against Where a bill is payable on sight, it does not need to be presented for acceptance. Article 41 The payer shall accept or refuse the bill within three days of receiving the bill as presented for acceptance. On receiving of a bill presented for acceptance by the bearer, the payer shall make out a receipt to the bearer. The receipt shall Article 42 When accepting a bill, the payer shall write the word “accepted” and the date of acceptance on the front of the bill and sign it; Where the date of acceptance is not specified on the bill, it shall be the last day of the period prescribed by the first paragraph Article 43 When accepting a bill, the payer shall accept it unconditionally; if conditions have been added, this is deemed to be a refusal. Article 44 When the payer has accepted the bill, he shall bear the liability of paying it at maturity. Section 4 Guaranty Article 45 The responsibility of guaranteeing the payment of a bill shall be borne by the guarantor. The guarantor shall be someone other than the debtor of the bill. Article 46 The guarantor must specify the following items on the bill itself or on an allonge: 1. The word “guaranteed”; 2. The name and address of the guarantor; 3. The name of the person to whom the guaranty is given; 4. The date of guaranty; 5. The endorsement of the guarantor. Article 47 When the guarantor has not specified Item 3 of the preceding article on the bill itself or on an allonge, in cases where the bill When the guarantor has not specified Item 4 of the preceding article on the bill itself or on an allonge, the date of guaranty shall Article 48 No conditions can be attached to the guaranty; if there should be any conditions attached, these will not affect the liability of Article 49 The guarantor shall be responsible for guaranteeing the bearers’ rights to the bill when the bearer has acquired the bill legitimately. Article 50 Where a bill is guaranteed, the guarantor and the person to whom the guaranty is given shall undertake joint liability to the bearer. Article 51 In cases where there are two or more guarantors, they shall undertake joint liability. Article 52 After the guarantor has paid the debt as stipulated in the bill, the guarantor may exercise his right of recourse as enjoyed by the Section 5 Payment Article 53 The bearer shall present the bill for payment within the following time limits: 1. A bill payable on sight should be presented to the payer within one month of the date of issue; 2. A bill payable on a fixed date, within a fixed period after the date of issue or within a fixed period after being seen shall be presented In cases where the bearer has not presented the bill for payment within the prescribed period as stipulated in the preceding paragraph, Presentation for payment made to the payer by an authorized bank or clearing system for instruments shall be deemed as presentation Article 54 The payer must pay the bill in full on the day when the bearer presents the bill for payment in accordance with the provisions of Article 55 The bearer shall sign the bill and give it to the payer after receiving payment. In cases where the bearer authorizes a bank to receive Article 56 The bank authorized by the bearer to receive payment shall be liable only for crediting the sum on the bill to the bearer’s account The bank authorized by the payer to make payment shall be liable only for paying the sum on the bill from the payer’s account according Article 57 When paying a bill, the payer or his agent shall check the continuity of the series of endorsement, as well as checking the legitimacy In cases where the payer or his agent make a payment out of malice or with gross negligence, they alone shall bear liability. Article 58 In cases where the payer pays a bill before maturity which is payable on a fixed day or on sight within a fixed period, he alone shall Article 59 When the sum on a bill is expressed in a foreign currency, the sum payable shall be paid in Renminbi according to the market rate Where parties to a bill have stipulated the currency in which the bill is to be paid, the latter agreement shall be followed. Article 60 Once the payer pays the bill in full, all debtors shall be discharged from liability. Section 6 Right of Recourse Article 61 When the payment of a bill has been refused at its date of maturity, the bearer may exercise the right of recourse against the endorsers, Before the maturity of a bill, the bearer may also exercise the right of recourse under any of the following circumstances: 1. In cases when the payment of the bill has been refused; 2. In cases when the acceptor or the payer dies or flees; 3. In cases when the acceptor or the payer has been declared bankrupt according to the law or has been ordered to cease business activities Article 62 When exercising the right of recourse, the bearer shall be able to provide proof that acceptance or payment was refused. In cases when the bearer’s presentation of the bill for acceptance or payment has been refused, the acceptor or the payer must provide Article 63 In cases when the bearer is unable to obtain proof of refusal to accept or pay the bill because of the death or flight of the acceptor Article 64 In cases when the acceptor or the payer has been declared legally bankrupt by the people’s court, relevant judicial documents from In cases when the acceptor or the payer has been ordered to cease business activities because of his violations of the law, the punitive Article 65 When the bearer cannot provide proof of refusal to accept or pay the bill or a statement noting reasons for non-payment or any other Article 66 The bearer shall give written notice of the refusal to accept or pay to his prior party within three days of receiving relevant certification In cases when the bearer has failed to provide written notice in accordance with the time specifications noted in the preceding paragraph, If the notice has been posted to the legal address or to an agreed address within the prescribed period, then the notice is deemed Article 67 The written notice, made out according to the first paragraph of the preceding article, shall specify the main items written on the Article 68 The issuer, endorser, acceptor and guarantor of a bill are jointly liable to the bearer. The bearer may exercise the right of recourse against any one or all of the persons mentioned in the preceding paragraph without being The bearer who has exercised the right of recourse against one or more of the debtors of the bill, may still exercise these rights Article 69 In cases when the bearer is the issuer, he shall have no right of recourse against the bearer’s prior parties. In cases when the bearer Article 70 When exercising the right of recourse, the bearer may recover the following expenses from the person against whom he is exercising 1. The amount of the unpaid bill; 2. Interest on this sum at the rate stipulated by the People’s Bank of China from the date of maturity of the bill or the date upon which 3. The expenses for the relevant proof of non-payment or non-acceptance and the expenses incurred by issuing notices. When the person against whom the right of recourse is exercised has settled the debt, the bearer shall hand over the bill and the Article 71 When the person against whom the right of recourse is exercised has settled the debt in accordance with the provisions of the preceding 1. The entire sum paid; 2. Interest on the said sum at the rate prescribed by the People’s Bank of China from the day when the payment was made to the day of 3. The expenses incurred by issuing notices. When the person exercising the right of re-recourse has been reimbursed, he shall hand over the bill and the relevant proof of non-payment Article 72 When a person against whom the right of recourse is being exercised has settled the debt according to the stipulations of the two Chapter III Promissory Notes Article 73 A promissory note is an instrument issued and signed by the issuer promising to unconditionally pay the payee or bearer a set sum A promissory note as referred to in this Law denotes a banker’s promissory note. Article 74 The issuer of a note must possess reliable financial sources to pay the sum of money in the note and to guarantee payment. Article 75 The credentials of the note’s issuer shall be examined and approved by the People’s Bank of China, who shall also stipulate specific Article 76 A note must specify the following items: 1. The word “promissory note”; 2. A promise of unconditional payment; 3. A set sum; 4. The name of the payee; 5. The date of issue; 6. The endorsement of the issuer. A note shall be null and void if any one of the above-mentioned items is not specified therein. Article 77 The place of payment and place of issue, if specified on the note, shall be legible and unambiguous. The place of payment, if not specified on the note, shall be the business premises of the issuer. The place of issue, if not specified on the note, shall be the business premises of the issuer. Article 78 The issuer of a note must bear liability for payment when the bearer presents the note. Article 79 The time limit for the payment of a note shall not exceed two months from the date of issue. Article 80 In cases when the bearer of a note fails to present the note for payment within the prescribed period, he shall lose the right of Article 81 In addition to the provisions of this chapter, the provisions of Chapter II of this Law pertaining to bills apply to the endorsement, In addition to the provisions of this chapter, the provisions of Article 24 of this Law pertaining to bills apply to the act of issuing Chapter IV Cheques Article 82 A cheque is an instrument issued and signed by the issuer authorizing any bank or any other financial institution whose scope of business Article 83 When opening an account in which cheques can be deposited with a bank, the applicant must use his real name and must submit legitimate When opening an account in which cheques can be deposited with a bank and asking for a cheque book, the applicant must enjoy financial When opening an account in which cheques can be deposited with a bank, the applicant shall leave a specimen si 
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