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2002

PROCEDURES CONCERNING TAXATION ON THE TRANSPORTATION REVENUE OF VESSELS OF FOREIGN COMPANIES

Category  TAXATION Organ of Promulgation  The State Council Status of Effect  In Force
Date of Promulgation  1996-10-24 Effective Date  1996-10-24  


Procedures Concerning Taxation on the Transportation Revenue of Vessels of Foreign Companies



(Approved by the State Council on September 18, 1996, promulgated by the

Ministry of Finance and the State Taxation Administration on October 24, 1996)

    Article 1  These Procedures are formulated in accordance with the
provisions of the “Income Tax Law of the People’s Republic of China for
Enterprises with Foreign Investment and Foreign Enterprises”, “Law of the
People’s Republic of China on the Administration of Tax Collection” and the
“Interim Regulations of the People’s Republic of China for Sales Tax” with a
view to strengthen the administration of tax collection on the transportation
revenue accrued from China by foreign companies engaged in international
shipping operations employing vessels.

    Article 2  Sales tax and enterprise income tax shall be paid by foreign
companies from their transportation revenue and income by carrying and
transporting passengers, goods and mail out of the country from Chinese ports
employing vessels in accordance with these Procedures.

    Article 3  A carrier that gains transportation revenue of a foreign
company which carries and transports passengers, goods and mail out of the
country from Chinese ports employing vessels shall be the taxpayer. Taxpayers
shall include:

    (1) in the case of time charter by a buyer, the foreign ship chartering
company shall be the taxpayer;

    (2) in the case of voyage charter, the foreign shipowner shall be the
taxpayer;

    (3) a ship of foreign nationality chartered by China subchartered to a
foreign company in time charter, the foreign company shall be the taxpayer;

    (4) a ship of Chinese nationality time chartered by a foreign company,
the foreign company shall be the taxpayer;

    (5) in the case of other ships of foreign nationalities, the ship company
shall be the taxpayer.

    Companies approved according to law to operate foreign ship agency
business(hereinafter referred to as foreign ship agents) shall be the
withholding agents of the tax payable.

    Article 4  The amount of tax payable by the taxpayer shall, in accordance
with the total amount of revenue gained by the taxpayer each time it carries
and transports passengers, goods or mail out of the country from a Chinese
port, be calculated and taxed according to the aggregate rate of calculation
and taxation of 4.65%, among which 3% is sales tax and enterprise income tax
is 1.65%.

    Article 5  The total amount of revenue referred to in Article 4 of these
Procedures shall mean the aggregate of the revenue of passenger
transportation and the revenue of shipping of goods each time a ship operated
by the taxpayer carries and transports passengers, goods or mail starting
from a Chinese port to its destination, and no charges or expenditures shall
be deducted therefrom. The revenue of passenger transportation shall include
the revenue of the ship tickets and excess baggage charges, charges for
meals, insurance premiums, service charges and entertainment fees etc. The
revenue of shipping of goods shall include those of the basic shipping
charges and other additional charges.

    Article 6  A foreign company which carries and transports passengers,
goods or mail out of the country from a Chinese port employing a ship shall
notify its ship agent its shipping rate while informing the ship agent of the
address of the carrier, the national flag the ship flies, the state of
passenger transportation, the types and amount of goods carried and the
expected time of arrival at the port.   

    Article 7  A foreign company which carries and transports passengers,
goods or mail out of the country from a Chinese port employing a ship
entrusts a foreign ship agent to calculate and withhold shipping charges, the
foreign ship agent shall, upon receipt of the shipping charges, withhold the
amount of tax payable directly from the total amount of revenue of the
taxpayer in accordance with the aggregate rate of calculation and taxation as
prescribed in Article 4 of these Procedures.

    Article 8  A foreign company which carries and transports passengers,
goods or mail out of the country from a Chinese port does not entrust a
foreign ship agent to withhold shipping charges, the foreign ship agent shall
calculate the estimated amount of tax according to the aggregate rate of
calculation and taxation as prescribed in Article 4 of these Procedures and
notify the taxpayer to remit the estimated amount of tax together with the
reserve fund for port charges and the amount of tax shall be withheld by the
foreign ship agent.

    Upon departure of a ship of a foreign company carrying and transporting
passengers, goods or mail from the country, its foreign ship agent shall
notify the taxpayer to report to the tax authorities its total amount of
transportation revenue, the amount of tax payable enclosed with vouchers of
shipping charge settlement, while inform the taxpayer telegraphically of the
actual number of passengers and amount of goods or mail carried and
transported by the ship. The taxpayer shall report to the tax authorities and
pay the amount of tax within the time period not exceeding 60 days commencing
from the date of departure of the ship from the port.

    Article 9  Foreign ship agents shall withhold and collect tax payments as
prescribed in Articles 7 and 8 of these Procedures and deposit the amount of
tax payment actually collected in the State Treasury within ten days
commencing from the date of withholding and collection, and submit to the tax
authorities of the port where the agent is located summary of foreign ship
agency business operations, statistical report of shipping charge settlement,
“tax declaration of foreign ship transportation revenue withheld and remitted
or collected and remitted” and other required information before the
fifteenth of the following month.

    Article 10  Where a taxpayer is unable to provide complete and precise
information as prescribed in Articles 6 and 8 of these Procedures and to
correctly calculate the total amount of revenue, the foreign ship agent shall
report the case timely to the tax authorities of the port. The tax
authorities of the port may, in conjunction with the foreign ship agent,
verify and determine  the total amount of revenue of the taxpayer with
reference to the normal price of shipping passengers or goods in the world
under same or similar circumstances or according to the shipping rate fixed
by the relevant department of China and collect the tax on those basis.

    Article 11  A foreign company employing the same ship carrying and
transporting passengers, goods or mail out of the country from a number of
Chinese ports shall, in accordance with the transportation revenue from
shipping passengers, goods or mail at those ports, separate taxation shall be
paid at the ports of shipment. However, the same voyage chartered ship
shipping goods or mail out of the country successively from a number of
Chinese ports whose transportation revenue follows the contractual lump-sum
method of calculation, taxation on the total transportation revenue shall be
levied at the first port of shipment of goods or mail; for ships adopting
contractual lump sum shipping charge in addition to surcharge of additional
ports, taxation on the contractual lump sum transportation revenue shall be
levied at the first port of shipment of the goods or mail and taxation on
revenue of surcharge of additional ports shall be levied at the port of
shipment of the goods or mail separately.

    Article 12  For a ship carrying and transporting passengers, goods or
mail out of the country from a Chinese port for transit shipment to its
destination via another country or region, the sales tax shall be calculated
and collected in accordance with the balance of the entire voyage shipping
charge after deducting the shipping charge paid to the successive carrier,
the enterprise income tax shall be calculated and collected in accordance
with the total amount of transportation revenue of the entire voyage
according to the bills of lading.

    Article 13  Where a foreign ship agent withholds or collects tax in
accordance with these Procedures, the tax authorities shall pay handling fees
to the withholding agent for withholding or collecting tax in accordance with
relevant provisions.

    Article 14  For failure to fulfill the obligations in compliance with
these Procedures on the part of a taxpayer or a withholding agent, penalty
shall be meted out in accordance with the provisions of the “Law of the
People’s Republic of China on the Administration of Tax Collection” and the
Rules for the Implementation of this Law.

    Article 15  The “Declaration Form of Transportation Revenue Tax Withheld
and Remitted or Collected and Remitted” to be filled out and submitted by
foreign ship agents shall be uniformly printed by the State Taxation
Administration.

    Article 16  For companies of Hongkong, Macao and Taiwan carrying and
transporting passengers, goods or mail out of the country from ports in the
country employing vessels, taxation on their transportation revenue and
income shall be levied with reference to these Procedures, unless otherwise
provided for.

    Article 17  Tax reduction or tax exemption shall be implemented in
accordance with the provisions of the relevant agreements concluded between
the People’s Republic of China and foreign countries.

    The agreements referred to in the preceding paragraph shall mean the
agreements on the avoidance of double taxation on income(and property) and on
tax evasion, agreements on mutual exemption of taxation on transport business
revenue of shipping enterprises, shipping agreements as well as other
relevant agreements or exchanges of letters.

    Article 18  Foreign companies carrying and transporting passengers, goods
or mail out of the country employing vessels from Chinese ports whose
transportation revenue and income may enjoy tax reduction or tax exemption in
accordance with the agreements as prescribed in Article 17 of these
Procedures shall provide relevant information in compliance with the
provisions of Article 6 of these Procedures. The tax authorities shall
examine and verify the following certifications:

    (1) for taxation on ship transportation revenue and income to be levied
by the concluding country wherein the actual managing organization or the
headquarters of the enterprise is located or for tax reduction or tax
exemption by the revenue originating country on the revenue and income gained
from operating international shipping business by resident companies of the
other party of the concluding countries, such foreign companies shall provide
certificates of the actual managing organizations or their headquarters or
the resident companies of the place wherein they are located issued by the
tax authorities of the concluding country of the relevant agreements;

    (2) for tax reduction or tax exemption by the revenue originating
country on transportation revenue and income gained by merchant ships
flying the national flag of the other party of the concluding countries or by
merchant ships flying the national flag of a third country operated by the
shipping enterprise of the other party of the concluding countries of the
relevant agreements, such foreign companies shall provide certificates issued
by the department in charge of shipping of the other party of the concluding
countries.

    Those failing to provide relevant certificates shall not enjoy the
treatment of tax reduction or tax exemption.

    Article 19  These Procedures shall go into effect as of the date of
promulgation. “Provisions for the Taxation of Transportation Revenue by
Vessels of Foreign Nationalities” approved by the State Council and
promulgated by the Ministry of Finance in June 1974 is annulled as of the
same date.





PROVISIONAL MEASURES ON THE ESTABLISHMENT OF SINO-FOREIGN JOINT-VENTURE TRADING COMPANIES ON A PILOT BASIS

Provisional Measures on the Establishment of Sino-Foreign Joint-Venture Trading Companies on a Pilot Basis

    

Decree No 3, 1996

Ministry of Foreign Trade and Economic Co-operation of the People’s Republic of China

Minister Wu Yi

(September 30, 1996)

The Provisional Measures on the Establishment of Sino-Foreign Joint-Venture Trading Companies on a Pilot Basis are hereby enacted,
effective on the date of their approval by the State Council on September 2, 1996

   Article 1 With a view to further expanding opening up to the outside world and promoting the development of China’s foreign trade, these Measures
are hereby formulated in accordance with the Foreign Trade Law of the People’s Republic of China and the Law of the People’s Republic
of China on Joint Ventures Using Chinese and Foreign Investment.

   Article 2 These measures shall be applicable to Sine-foreign joint-venture trading companies (hereinafter referred to as “joint-venture trading
companies”) specialized in import and export trade which are established by foreign companies or enterprises (hereinafter referred
to as “foreign companies”) and Chinese companies or enterprises (herein after referred to as “Chinese companies”) within the territory
of China (the pilot places).

   Article 3 A joint-venture trading company shall be a company of limited liabilities. The shares of the Chinese company in the registered capital
of a joint-venture trading company shall be no less than 51 per cent, and that of the foreign company shall be at least 25 percent.
The legal representative shall be appointed by the Chinese company.

   Article 4 The establishment of a joint-venture trading company shall satisfy the following conditions upon its establishment:

1 The foreign company shall

(1) enjoy a turnover of over US$5 billion in the year prior to the application;

(2) enjoy an average annual trading volume of over US30 million with China in the three years prior to the application;

(3) have established a representative office within the territory of China for more than three years or have made an investment of
over US$30 million within the territory of China prior to the application.

2 The Chinese company shall

(1) enjoy foreign trade rights;

(2) enjoy an average annual foreign trade volume of over US$200 million, among which the export volume shall be no less than US$100
million in the three years prior to the application; and

(3) have established more than three branches, subsidiaries and joint ventures outside China, each with an average annual turnover
of over US$10 million in the three years prior to the application.

3 A joint-venture trading company shall

(l)have a registered capital of no less than 100 million yuan;

(2) have its own name and organization;

(3) have its own operational venue, professionals and other necessary physical conditions compatible with its foreign trade operations.

   Article 5 In applying for the establishment of a joint-venture trading company, the Chinese company shall submit through the local department
responsible for foreign trade and economic co-operation, the following documents for examination to the national authorities in charge
of foreign trade and economic co-operation:.

1 A project proposal a feasibility study report signed by both the Chinese and foreign parties, the relevant contract and articles
of association;

2 (Copies of ) Documents certifying the registrations of all Chinese and foreign parties, and documents certifying the credit worthiness
and the legal representatives of the Chinese and foreign parties;

3 (Conies of) Certificates of approval of the enterprises invested by the foreign company in China or (copies of) certificates of
approval of the representative office established in China, (copies of) business licenses and reports of registered capital verification
issued by accounting firms registered in China;

4 (Copies of) Certificates of the registration of the branches, subsidiaries and joint ventures established by the Chinese company
outside China;

5 Balance sheets of all Chinese and foreign parties in the recent three-years and certificates of confirmation issued by auditing
organizations;

6 Business scope of the proposed joint-venture trading company; and

7 Other documents required by the competent State authorities responsible for foreign trade and economic cooperation

An approving certificate shall be issued by national authorities responsible for foreign trade and economic co-operation to a joint-venture
trading company after the approval by the State Council following the examination by national authorities responsible for foreign
trade and economic cooperation.

   Article 6 Once an application for the establishment of a joint-venture trading company is approved by the State, the Chinese company shall
go through, upon presentation of the approval certificate, the registration procedures with administrative authorities for industry
and commerce within one month from the date of the approval, and shall go through the financial registration procedures with the
competent financial authorities within one month from the date of the business registration.

   Article 7 The foreign company shall make its contribution to the registered capital of the joint-venture trading company freely convertible
currencies while the Chinese company may contribute in renminbi – the Chinese currency, in kind, intangible assets or other property
rights. Partners in a joint-venture trading company shall pay up the full amount of their respective subscribed contributions within
one month from the date of the issuance of the business license .

   Article 8 A joint venture trading company shall undertake import and export of goods and technology either for for itself or on proxy within
the approved business scope and shall not undertake other business without approval.

   Article 9 A joint venture trading company which imports and exports commodities subject to State quota and licensing control shall file an
application with competent authorities concerned according relevant State provisions, and shall only undertake import or export of
such commodities upon approval of the application. A joint-venture trading company which imports and exports commodities subject
to quota tendering of the State shall participate in the tendering in line with rules on tender invitation and.bidding of import
and export commodities formulated by the competent authorities concerned.

   Article 10 A joint-venture trading company shall settle, purchase and transfer foreign exchange according to relevant provisions applicable
to State-owned foreign trading companies. A joint-venture trading company must maintain foreign exchange balance. Specific administrative
rules for this purpose shall be formulated by the People’s Bank of China in consultation with national authorities responsible for
foreign trade and economic co-operation

   Article 11 A joint-venture trading company shall pay taxes according to the State’s taxation laws and regulations, while the State shall refund
taxes for the exported products according to provisions on the export tax refund for State-owned foreign trading companies.

   Article 12 A joint-venture trading company shall submit financial, accounting and statistical statements and reports to the local competent
authorities in a timely fashion and in line with Chinese laws and regulations governing financial, accounting and statistical procedures.

   Article 13 A joint-venture trading company shall apply for membership in a chamber of commerce for importers and exporters or association of
enterprises with foreign investment and shall subordinate itself to the co-ordination of the chamber of commerce or association.

   Article 14 A joint-venture trading company shall abide by laws and regulations of the People’s Republic of China and subordinate itself to the
jurisdiction of Chinese laws and regulations, and shall have it’s legitimate rights and interests protected by Chinese laws and regulations.

A joint-venture trading company which has violated Chinese laws or regulations shall be dealt with according to relevant laws and
regulations, and a joint-venture trading company which has violated these Measures shall de dealt with by the competent authorities
administering foreign trade and economic co-operation.

   Article 15 Joint-venture foreign trading companies set up by companies or enterprises in Hong Kong, Macao and Taiwan regions and companies or
enterprises in the mainland of China shall be treated in reference to these Measures.

   Article 16 The places for the experimentation and the number of pilot companies shall be determined by the State Council. For the time being,
the pilot program shall be conducted only in the Pudong New Area in Shanghai and in the Shenzhen Special Economic Zone.

   Article 17 These Measures shall enter into force on the date of enactment, and the power of interpretation is vested in the national competent
authorities for foreign trade and economic co-operation.

(The English translation is for reference only)

    





COAL 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.75

The Coal Law of the People’s Republic of China which has been adopted at the 21st Meeting of the Standing Committee of the Eighth
National People’s Congress on August 29, 1996 is hereby promulgated, and shall enter into force as of December 1, 1996.

President of the People’s Republic of China Jiang Zemin

August 29, 1996

Coal Law of the People’s Republic of China ContentsChapter I General Provisions

Chapter II Planning for Coal Production and Exploitation and Construction of Coal Mine

Chapter III Coal Production and Safety in Coal Mine

Chapter IV Coal Management

Chapter V Protection of Coal Mining Area

Chapter VI Supervision and Inspection

Chapter VII Legal Responsibility

Chapter VIII Supplementary Provisions

Chapter I General Provisions

Article 1

This Law is formulated for the purposes of rationally exploiting, utilizing and protecting coal resources, standardizing coal production
and management activities and promoting and guaranteeing the development of coal industry.

Article 2

This Law shall apply to coal production and management activities within the territory of the People’s Republic of China and other
sea areas under the jurisdiction of the People’s Republic of China.

Article 3

Coal resources shall be owned by the state. The state ownership of coal resources, either near the earth’s surface or underground,
shall not change with the ownership or right to the use of the land which the coal resources are attached to.

Article 4

The state shall practice the policy of unified planning, rational distribution and comprehensive utilization in coal exploitation.

Article 5

The state shall protect coal resources in accordance with the law. Abusive or wasteful exploitation which is destructive to coal resources
shall be forbidden.

Article 6

The state shall protect the legitimate rights and interests of those investing to exploit coal resources in accordance with the law.

The state shall guarantee the healthy development of state-owned coal mines.

The state shall implement a policy of support, transformation, consolidation, combination and improvement with regard to township
coal mines in order to safeguard their standardized and rational exploitation and orderly development.

Article 7

Coal mining enterprises must adhere to the policy of “safety first and precaution foremost” for the safety in production, establish
and improve the safety production responsibility system and the system of mass precaution and control.

Article 8

The people’s governments at all levels and their departments and coal mining enterprises must take measures to strengthen labor protection
and safeguard the safety and health of coal miners.

The state shall adopt special protective measures for workers operating in the pit.

Article 9

The state shall encourage and support the adoption of advanced science and technology and management skills in coal exploitation and
utilization.

Coal mining enterprises shall strengthen and improve the operation and management, raise the labor productivity and economic results.

Article 10

The state shall safeguard the production and work order in coal mining areas, and protect facilities of coal mining enterprises.

Article 11

Exploitation and utilization of coal resources shall abide by laws and regulations concerning environmental protection, prevent and
control environmental pollution, and protect the ecological environment.

Article 12

The department of coal administration under the State Council shall be responsible for the supervision and control of nationwide coal
industry in accordance with the law. Other relevant departments under the State Council shall exercise supervision and control over
the coal industry according to their respective authorities.

The department of coal administration and other relevant departments under the local people’s governments at and above the county
level shall be responsible for the supervision and control of coal industry within their respective regions.

Article 13

Coal mining bureaus are state-owned coal mining enterprises with an independent legal person status.

Coal mining bureaus and other coal mining enterprises and coal management enterprises with an independent legal person status shall,
in accordance with the law, perform autonomous management, assume sole responsibility for profits and losses, and implement self-binding
and self-development.

Chapter II Planning for Coal Production and Exploitation and Construction of Coal Mine

Article 14

The department of coal administration under the State Council shall, in accordance with the national planning for mineral resources
exploration, work out a national planning for coal resources exploration.

Article 15

The department of coal administration under the State Council shall, in the light of coal resources set by the national planning for
mineral resources, organize drawing up and implementing a planning for coal production and exploitation.

The department of coal administration under the people’s governments of provinces, autonomous regions and municipalities directly
under the central government shall, in the light of coal resources set by the national planning for mineral resources, organize drawing
up and implementing a local planning for coal production and exploitation, and submit it for filing to the department of coal administration
under the State Council.

Article 16

Planning for coal production and exploitation shall be worked out in accordance with the needs of the national economy and social
development, and be incorporated in the plan of national economy and social development.

Article 17

The state shall formulate beneficial policies to support the development of coal industry and promote the construction of coal mines.

Coal mine construction projects shall conform to the planning for coal production and exploitation and the coal industrial policy.

Article 18

For establishing a coal mining enterprise, the following requirements shall be satisfied:

(1)

have a feasibility study report or mining plan for the coal mine construction project;

(2)

have definite scope of the mine and mining area, and a resources comprehensive utilization plan;

(3)

have geological, surveying and hydrological data and other relevant data needed for mining;

(4)

have a mine design conformable with the requirements for safety in production and environmental protection of coal mine;

(5)

have a rational production scale of coal shaft and funds, equipment and technical personnel suited to the production scale; and

(6)

other requirements specified by laws or regulations.

Article 19

For establishing a coal mining enterprise, an application must be submitted to the department of coal administration for examination
and approval in accordance with the requirements specified by this Law and the scope of authorities at different levels stipulated
by the State Council.

For examination and approval of a coal mining enterprise, a review and opinions on the scope of mining areas and the plan for comprehensive
utilization of resources shall be required from the administrative department of geology and mineral resources.

Coal mining enterprises approved to be established shall, by presenting the approval document, apply for a mining license from the
administrative department of geology and mineral resources.

Article 20

The use of land for the construction of coal mines shall be handled in accordance with relevant laws and regulations. In the case
of requisition of land, the land and settlement compensations shall be paid in accordance with the law, and the settlement work for
the removing residents shall be done properly.

The construction of coal mines shall adhere to the principle of protection of cultivated land and rational utilization of land.

Local people’s governments shall give support and assistance when there is a need to use land and remove relevant residents for the
construction of a coal mine in accordance with the law.

Article 21

In construction of coal mines, coal exploitation shall be conducted in step with the protection and control of the environment. Installations
for environmental protection at a coal mine construction project must be designed, built, inspected and brought into operation together
with the principal part of the project.

Chapter III Coal Production and Safety in Coal Mine

Article 22

Before starting production, a coal mining enterprise shall, in accordance with the provisions of this Law, apply for a coal production
license from the department of coal administration, and the latter shall conduct an examination on the enterprise’s actual production
and safety conditions and, where considering them conformable with the conditions prescribed by this Law, issue a coal production
license.

Those without a coal production license may not engage in coal production.

Article 23

For applying for a coal production license, the following requirements shall be satisfied:

(1)

have a mining license obtained in accordance with the law;

(2)

the production system of the mine shaft is conformable with the safety rules for coal mines stipulated by the state;

(3)

the mine director has received proper training in accordance with the law and obtained a credential for mine directors;

(4)

the workers of special operation have received proper training in accordance with the law and obtained an operation credential;

(5)

the communication of production management up or down the pit, inside or outside the mine is unblocked;

(6)

have field surveying up- against down-pit engineering drawings, plain figure for excavation and figure for ventilation system;

(7)

have installations which have been completed and have passed the inspection for safeguarding the safety in production in coal mine
and environmental protection; and

(8)

other requirements specified by laws or regulations.

Article 24

The department of coal administration under the State Council shall take in charge of the following coal mining enterprises in respect
of the issuance and control of coal production licenses:

(1)

coal mining enterprises which have been examined and approved to establish by the State Council or the establishment of which should
be examined and approved by the department of coal administration under the State Council according to law; and

(2)

coal mining enterprises involving areas of more than one provinces, autonomous regions or municipalities directly under the central
government.

The department of coal administration under the people’s governments of provinces, autonomous regions and municipalities directly
under the central government shall be in charge of coal mining enterprises other than those mentioned in the preceding paragraph
in respect of the issuance and control of coal production licenses.

The department of coal administration under the people’s governments of provinces, autonomous regions and municipalities directly
under the central government may authorize the department of coal administration under the people’s governments of districted cities
or autonomous prefectures to be responsible for the issuance and control of coal production licenses.

Article 25

The departments for issuance and control of coal production licenses shall be responsible for the supervision of coal production licenses.

Coal mining enterprises having obtained a coal production license may not transfer or hire out the license to others.

Article 26

No coal production license may be issued with regard to a mining area for which a coal production license has already been issued.

When the term of validity of a coal production license expires or the coal resources in the relevant approved mining area have been
exhausted, the department issuing the coal production license shall cancel the license and make an announcement accordingly.

If there have been any changes to the production and safety conditions of a coal mining enterprise, and after being verified, the
changed production and safety conditions are considered no longer to conform to the stipulations of this Law, the coal production
license of the enterprise shall be revoked by the issuing department with an announcement made accordingly.

Article 27

Measures for the control of coal production licenses shall be formulated by the State Council in accordance with this Law.

The standing committee of the people’s congress of provinces, autonomous regions and municipalities directly under the central government
may, in accordance with this Law and relevant provisions of the State Council, formulate measures for the control of coal production
licenses for implementing within their respective regions.

Article 28

The state shall conduct protective exploitation with regard to those special or scare kinds of coal which bear importance to the national
economy.

Article 29

The exploitation of coal resources must accord with the coal mining rules, abide by the rational mining order and reach the specified
recovery rate of coal resources.

The recovery rates shall be determined by the department of coal administration under the State Council in the light of different
resources and mining conditions.

The state encourages coal mining enterprises to do reexploitation and mine remnants of old pits or extremely poor coal.

Article 30

Coal mining enterprises shall strengthen the supervision, examination and management of the quality of coal products. The quality
of coal products shall be classified according to the national or industrial standards.

Article 31

Coal production shall be conducted within the approved mining areas in accordance with the law. No exploitation beyond the approved
boundary or layer shall be allowed.

In mining operation, it is forbidden to mine protective coal columns without authorization or adopt dangerous methods such as breaking
dikes, demolition or making tunnels through that may endanger the safety in production of the neighboring coal mines.

Article 32

If any activities of coal exploitation cause occupation of areas of land or subsidence of, or damages to, land surface, the exploiter
shall be responsible for its reclamation and restoration to the useful status; compensation shall be given if any losses have been
made to others.

Article 33

Closure of mines and scraping of pits shall be handled in accordance with relevant laws and regulations as well as relevant provisions
of the department of coal administration under the State Council.

Article 34

The state shall establish a system under which coal mining enterprises shall accumulate funds for shifting the line of production
when the coal mine comes to its senile stage.

The state encourages and supports coal mining enterprises to develop diversified economy.

Article 35

The state encourages and supports coal mining enterprises and other enterprises to develop combined production of coal and electricity,
coking, coal chemical industry and coal building materials, etc. through developing deep and fine processing of coal.

The state encourages coal mining enterprises to develop coal dressing processing, comprehensively exploit and utilize seam gas, gangue,
coal mire, bone coal and peat.

Article 36

The state shall develop and promote coal cleaning technology.

The state shall take measures to ban coking with local methods. It is forbidden to newly establish coke ovens of local method; the
existing ones shall be transformed within a specified time limit.

Article 37

People’s governments at and above county level and their department of coal administration and other relevant departments shall strengthen
the supervision and control over the work of safety in production of coal mines.

Article 38

The system of mining bureau director’s and mine director’s responsibility shall be adopted for the control of safety in production
of coal mining enterprises.

Article 39

Mining bureau directors, mine directors and other chief persons-in-charge of the coal mining enterprises must abide by laws and regulations
concerning safety in mines and safety rules and regulations of coal industry, strengthen the control over the work of safety in production
of coal mines, implement the responsibility system for safety in production and adopt effective measures to prevent the occurrence
of casualties and other safety accidents in production.

Article 40

Coal mining enterprises shall give their staff and workers counseling and training on safety in production; those having not received
such counseling or training may not go to the operation.

Staff and workers of coal mining enterprises shall abide by laws and regulations concerning safety in production, rules and regulations
of coal industry and of the enterprise.

Article 41

During underground operation in coal mines, in the case of emergencies which endanger the lives and safety of the workers and cannot
be removed, the person in charge or the safety manager at the operation site shall promptly organize the workers to evacuate the
scene of danger and give report to relevant person in charge without delay.

Article 42

The labor union of a coal mining enterprise shall, when discovering that the management of the enterprise gives a command contrary
to the established rules and compels workers to operate under unsafe conditions, or finding in the course of production major hidden
dangers of accidents which may endanger lives and safety of the workers, have the right to put forward proposals for a solution,
and the management of the coal mining enterprise must make a decision without delay. If the management of the enterprise refuses
to take any action, the labor union shall have the right to give criticism, inform the relevant authorities or file charges.

Article 43

Coal mining enterprises must provide their staff and workers with labor protection articles necessary for the guarantee of safety
in production.

Article 44

Coal mining enterprises must effect accident insurance and pay the insurance expenses for the staff and workers who conduct underpit
operation.

Article 45

Equipment, materials, fire products and safety instruments used by coal mining enterprises must meet the national or industrial standards.

Chapter IV Coal Management

Article 46

Coal mining enterprises having obtained a coal production license in accordance with the law shall be enpost_titled to sell the coal produced
by the enterprise itself.

Article 47

For establishing a coal managing enterprise, the following requirements must be satisfied:

(1)

have a registered capital compatible with the management scale;

(2)

have fixed premises;

(3)

have necessary installations and sites for coal storing;

(4)

have up-to-standard metrological and quality inspection equipment;

(5)

conform to the rational distribution of coal managing enterprises demanded by the state; and

(6)

other requirements specified by laws or regulations.

Article 48

For establishing a coal managing enterprise, an application must be submitted to a department designated by the State Council or by
the people’s government of the province, autonomous region or municipality directly under the central government; the latter shall
conduct a qualification examination in accordance with the requirements specified in Article 47 of this Law and the scope of authorities
at different levels stipulated by the State Council; those satisfying the requirements shall be given an approval. Only after having
applied for and obtained a business license from the administrative department for industry and commerce by presenting the approval
document may the applicant engage in coal management.

Article 49

In coal managing activities, coal managing enterprises shall abide by the provisions of relevant laws and regulations, improve service
quality and ensure supplying. All illegal managing activities shall be forbidden.

Article 50

Intermediate links shall be reduced and irrational intermediate links shall be liquidated in coal management. It is advocated that
coal mining enterprises with suitable conditions conduct direct sales of coal.

Coal users and coal managing enterprises in coal sales territories shall be enpost_titled to purchase coal directly from coal mining enterprises.
In coal production territories, coal sales and transport service agencies may be organized to handle selling and transporting business
for small and medium-sized coal mines.

No administrative departments may violate the state’s provisions and establish intermediate links in the course of coal supply and
charge extra expenses.

Article 51

Stations, ports and other transportation enterprises engaging in coal transportation may not involve themselves in coal management
and seek for illicit earnings by taking advantage of the transportation power they possess.

Article 52

The administrative department for commodity prices under the State Council shall, in conjunction with the department of coal administration
and other relevant departments under the State Council, conduct supervision and control over the market prices of coal.

Article 53

The quality of coal supplied to users by coal mining enterprises and coal managing enterprises shall meet the national or industrial
standards with the called grade and demanded price compatible with the actual quality. Where the user has special quality requirements,
the two parties of supply and demand shall include the requirements in the contract for purchase and sale of coal.

Coal mining enterprises and coal managing enterprises may not adulterate coal or mix up coal of different grades or pass inferior
coal off as quality one.

Article 54

Coal mining enterprises and coal managing enterprises shall give compensation in accordance with the law if the quality of coal supplied
to users by them fails to meet the national or industrial standards or fails to conform to stipulations in the contract, or the called
grade or demanded price is not compatible with the actual quality and that has caused damages to users.

Article 55

Coal mining enterprises, coal managing enterprises, transportation enterprises and coal users shall supply, transport and accept and
unload coal in accordance with laws, relevant provisions of the State Council or stipulations in contracts.

Transportation enterprises shall separately load and stack coal they have accepted for carriage according to different quality of
the coal.

Article 56

The import and export of coal shall be unifiedly managed in accordance with provisions of the State Council.

Large-scale coal mining enterprises with suitable conditions may engage in coal export after licensed by the administrative department
for foreign trade and economic cooperation under the State Council in accordance with the law.

Article 57

Measures for administration of coal management shall be formulated by the State Council in accordance with this Law.

Chapter V Protection of Coal Mining Area

Article 58

No unit or individual may endanger power, communication, water sources, transportation or other production facilities in coal mining
areas.

All units and individuals are forbidden to disrupt order in production and other work of coal mining areas.

Article 59

Any unit and individual shall have the right to inform the relevant authorities of or file charges against acts of stealing or destroying
installations or equipment of coal mining areas or other acts endangering the safety in coal mining areas.

Article 60

Without permission of the coal mining enterprise, no unit or individual may make planting, breeding or earth-gathering or construct
any buildings or structures within the validity period of the right to use land obtained by the coal mining enterprise in accordance
with the law on the land concerned.

Article 61

Without permission of the coal mining enterprise, no unit or individual may occupy the rail line, road, waterway, wharf, power lines
or water-supply pipes for special use of the enterprise.

Article 62

When there is a need to conduct operation in the mining area of a coal mine and the operation may endanger the safety in the coal
mine, only after having obtained permission from the coal mining enterprise and the approval of the department of coal administration
and taken proper safety measures may relevant unit or individual start the operation.

When there is a need to conduct public engineering or other engineering within a coal mining area, only after having consulted and
reached agreement with the coal mining enterprise may the relevant unit start the operation.

Chapter VI Supervision and Inspection

Article 63

The department of coal administration and other relevant departments shall, in accordance with the law, conduct supervision and inspection
on coal mining enterprises and coal managing enterprises with respect to their implementing of coal laws and regulations.

Article 64

Supervisors and inspectors from the department of coal administration and other relevant departments shall familiarize themselves
with coal laws and regulations, grasp the specialized technology in the field of coal, conduct themselves fairly and honestly and
enforce the law justly.

Article 65

When performing supervision and inspection, supervisors and inspectors from the department of coal administration and other relevant
departments shall have the power to inquire the situation about the implementation of coal laws and regulations of coal mining enterprises,
coal managing enterprises and users, consult relevant data and enter the field to make on-the-spot inspection.

Coal mining enterprises, coal managing enterprises and users shall provide facilities to the supervisors and inspectors from the department
of coal administration and other relevant departments in performing their duties of supervision and inspection.

Article 66

Supervisors and inspectors from the department of coal administration and other relevant departments shall have the power to order
the coal mining enterprise or coal managing enterprise to correct their acts violating coal laws or regulations.

Supervisors and inspectors from the department of coal administration and other relevant departments shall produce their certifications
when performing supervision and inspection.

Chapter VII Legal Responsibility

Article 67

If anyone violates the provisions of Article 22 of this Law and engages in coal production without a coal production license, the
department of coal administration shall order it to halt the production, confiscate the illegal earnings and may impose a fine ranging
from one to five times the illegal earnings; if the offender refuses to halt the production, the local people’s government at or
above the county level shall make an order to cut off its power supply.

Article 68

If anyone violates the provisions of Article 25 of this Law and transfers or hires out its coal production license, the department
of coal administration shall revoke its coal production license, confiscate the illegal earnings and impose a fine ranging from one
to five times the illegal earnings.

Article 69

If anyone violates the provisions of Article 29 of this Law and mines coal resources without reaching the coal resources recovery
rate stipulated by the department of coal administration under the State Council, the department of coal administration shall order
the offender to make corrections within a specified time limit; those failing to reach the specified recovery rate within the specified
time limit shall be revoked of their coal production license.

Article 70

If anyone violates the provisions of Article 31 of this Law and mines the protective coal columns or adopts dangerous methods which
may endanger the safety in production of the neighboring coal mine, the department of labor administration shall, in conduction with
the department of coal administration, order the offender to halt the operation; the department of coal administration shall confiscate
the illegal earnings, impose a fine ranging from one to five times the illegal earnings and revoke the coal production license; if
a crime is constituted, the judicial organ shall make an investigation for criminal responsibility in accordance with the law; if
any losses have been caused, the offender shall be responsible for compensation in accordance with the law.

Article 71

If anyone violates the provisions of Article 48 of this Law and engages in coal managing activities without examination and approval,
the department responsible for the examination and approval shall order the offender to halt the business, confiscate the illegal
earnings and may impose a fine ranging from one to five times the illegal earnings.

Article 72

If anyone violates the provisions of Article 53 of this Law and adulterates coal or mixes up coal of different grades or passes inferior
coal as quality one, it shall be ordered to halt the sales with the illegal earnings confiscated and a fine ranging from one to five
times the illegal earnings imposed and it may be revoked of its coal production license or disqualified from coal management; if
a crime is constituted, the judicial organ shall make an investigation for criminal responsibility in accordance with the law.

Article 73

If anyone violates the provisions of Article 60 of this Law and, without the permission of the coal mining enterprise, constructs
buildings or structures within the validity period of the right to use land obtained by the coal mining enterprise in accordance
with the law on the land concerned, the local people’s government shall mobilize the offender to demolish the building or structure;
in the case of refusal to demolish it, the offender shall be ordered to do so.

Article 74

If anyone violates the provisions of Article 61 of this Law and, without permission of the coal mining enterprise, occupies rail
line, road, waterway, wharf, power lines or water-supply pipes for special use of the coal mining enterprise, the local people’s
government at or above the county level shall order it to make corrections within a specified time limit; those failing to make corrections
within the specified time limit shall be compelled to remove; if any losses have been caused, the offender shall be responsible for
compensation in accordance with the law.

Article 75

If anyone violates the provisions of Article 62 of this Law and, without obtaining approval or taking proper safety measures, conducts
operation in the mining area of a coal mine that may endanger the safety in the coal mine, the department of coal administration
shall order the offender to halt the operation and impose a fine up to 50,000 yuan; if any losses have been caused, the offender
shall be responsible for compensation in accordance with the law.

Article 76

Anyone committing any of the following acts shall be punished by the public security organ in accordance with relevant provisions
of the regulations on administrative penalties for public security or, if a crime is constituted, be investigated for criminal responsibility
by t

PROCEDURES OF SHANGHAI MUNICIPALITY ON THE ADMINISTRATION OF LAND USE BY FFES

Procedures of ShangHai Municipality on the Administration of Land Use by FFES

     (Effective Date:1996.07.01–Ineffective Date:)

   Article 1 Objectives and Basis

These procedures are formulated with a view to improving the administration of the land use by FFEs and paid land use system of the
municipality on the basis of relevant laws and regulations such as “Rules of the People’s Republic of China on the Implementation
of the Sino-Foreign Joint Equity Ventures”, “Detailed Rules of the People’s Republic of China On the Implementation of the Sino-Foreign
Joint Contractual Ventures”, “Detailed Rules of the People’s Republic of China on the Implementation of the Law of the Sino-Foreign
Joint Ventures”, and “Procedures of the Shanghai Municipality on the Implementation of the ‘Law of the People’s Republic of China
on the Administration of Land Use'”.

   Article 2 Scope of Application

These procedures shall apply to all FFEs which use State-owned or collectively-owned land in Shanghai municipality except those which
obtain the right of using State owned land through the way of transfer.

   Article 3 Administrative Departments

The Shanghai Municipal Real Estate and Land Administration (hereinafter referred to as SMURELA) is the competent department for the
administration of land used by FFEs.

The Pudong New Area and district and county land administrative departments are in charge of the actual administrative work with regard
to the land use in their respective areas in accordance with these procedures and the city’s relevant regulations on the use of land
by construction projects.

   Article 4 Form of Land Use

In addition to land use rights obtained from the way of transfer according to law, FFEs may also obtain the land use right through
the following ways:

(1) Land use rights allocated by people’s government at or above the county level for the use of requisited collectively or State
owned land;

(2) The Chinese partner of a Sino-overseas joint equity venture put in its use right of the collectively or the State owned land as
its part of capital;

(3) The Chinese partner of a Sino-overseas joint contractual venture uses its State- or collectively-owned land use right as a condition
of cooperation;

(4) Use rights of lands annexed to the houses acquired by FFEs from original State- or collectively-owned through sale or other means
of transfer; and

(5) Land use rights obtained through other ways as stipulated by laws and regulations.

FFEs may use the land through leasing the real estate or the site on the land.

   Article 5 Restrictions on Use of Collectively-Owned Land

In one of the following cases collectively-owned land shall be requisited according to the relevant stipulations on the administration
of the city’s land for construction:

(1) In establishing Sino-overseas joint equity or contractual ventures with overseas counterparts, the rural collective economic entities
concerned may use the collectively-owned land which has been covered by the city’s urbanization program; and

(2) When FFEs obtain the ownership of a real estate through sale or other means of transfer and then acquire the right of using the
collectively-owned land occupied by the real estate.

Shares of rural collective economic entities in Sino-overseas joint equity or contractual ventures through the putting in by the entities
of collectively-owned land not covered by the city’s urbanization program are not allowed to be transferred.

   Article 6 Appraisal of Prices of the Land Use Right

In one of the following cases, prices of the land use right should be appraised by qualified real estate appraising agencies:

(1) When the Chinese partner of a Sino-overseas joint equity venture puts in its right of using the State- and collectively-owned
land as shares; and

(2) When the Chinese partner of a Sino-overseas contractual joint venture uses the right of using the State-owned and collectively-owned
land as a condition of cooperation.

   Article 7 Land Use Application and Approval

Except leasing of houses or sites for the use of State- or collectively- owned land in Shanghai by FFEs, the overseas investors, or
the Chinese partners should apply to the land administration departments for land use according to the city’s regulations or construction
use of land upon the presentation of certificates of approval for the project and the licenses for construction use of land.

Upon approval after examinations, the people’s government at or above the county level shall issue a certificate of approval for construction
use of land to the FFE concerned.

   Article 8 Appraisal of Land Use Fee

After an approval to the use of land, the FFE concerned should handle the registration of the land use right with the real estate
registration agencies within 30 days beginning from the date of obtaining the enterprise legal person business license, and handle
the formalities of land use fee appraisal in line with the following stipulations:

(1) handle the formalities with SMURELA when using the State-owned land and with the Pudong New Area Land Administrative Department
if the land is in the area; and

(2) handle the formalities with local county, district or the Pudong New Area land administrative departments when using the collectively-owned
land.

In the cases of leasing real estates or sites, FFEs should get registered for record with the real estate registration agencies upon
the presentation of the leasing contracts, and go through the appraisal formalities of paying land use fees with land administrative
departments as stipulated in the preceding section.

   Article 9 Payers of the Land Use Fee

The approved FFEs should pay the land use fee to the land administrative departments through which they have performed the appraisals
of land use fee payments. But when the land use fee should be paid by the Chinese partners, which enter their shares in the FFEs
with their right of using State- or collectively-owned land and in the case of Sino-overseas joint contractual ventures, the fee
may be paid by payers as agreed in the contracts.

   Article 10 The Beginning Date for Paying the Land Use Fee

Beginning dates for paying the land use fee are set as the following:

(1) The approved FFEs should begin to pay the fee from the date of obtaining the business licenses as the enterprise legal persons;
and

(2) FFEs which lease real estate or sites should begin to pay the fee from the date when the leasing contracts go into effect.

For the first year, a FFE may be exempted from paying the land use fee if its use time in that year is less than six months and pay
a six-month fee if the use time is more than six months in the year.

   Article 11 Deadlines for Paying the Land Use Fee

Land use fees should be paid in two installments every year:

(1) The first installment should be paid before June 30; and

(2) The second installment should be paid before December 31.

   Article 12 Rates of Land Use Fees

Rates of land use fees should be decided in categories and grades on the basis of the nature of the planned use and geographical and
environment conditions of the land.

The rates shall be set and adjusted by the SMURELA and city pricing and financial departments according to the actual situations and
then reported to the approval of the Municipal People’s Government for implementation.

Readjustments of the rates should be made at most once every three years and the one time readjustment should not be greater than
30% of the original.

   Article 13 Scope of the Application of the Rates

FFEs may pay the land use fee at the rates of first year in a period of five years beginning from the first year and, beginning from
the sixth year, pay the rate of the year.

In one of the following cases, FFEs may pay the land use fee at rates set for the first year during the entire term of operation.

(1) The Chinese partner of a Sino-overseas joint equity venture pays its share of capital with its right of using the State- or the
collectively- owned land; and

(2) The Chinese partner of a Sino-overseas joint contractual venture uses its right of using the State- or collectively-owned land
as a cooperation condition, and the Chinese partner pays the land use fee as agreed in the contract.

   Article 14 Land Use Fees for Two Categories of Businesses

Export-oriented and advance technology businesses outside the downtown areas of Shanghai (hereinafter referred as two categories of
businesses) are exempted from paying land use fees in three years beginning from the date of their establishment, and beginning from
the fourth year, pay the land use fee according to the preferential rates set for the two categories of businesses, except what is
listed in the second section of Article 13.

The two categories of businesses shall make up for the land use fee for the year according to the rates set for ordinary FFEs should
they fail to pass the yearly appraisals or be rovoked their certificates of such kind of businesses.

The area of Shanghai’s downtown shall be decided by the SMURELA and the city planning administrative department and be reported to
the Municipal People’s Government for approval.

   Article 15 Delayed, Reduced and Exempted Payments of Land Use Fees

FFEs approved by land administrative departments as stipulated in Article 8 of these procedures may pay 50% of the due land use fee
when they begin operations or prior to operations, except what is listed in the second section of Article 13.

In one of the following cases, FFEs may make delayed, reduced or exempted payment of their land use fees:

(1) because of difficulties to pay the land use fee caused by force majeure upon approvals by land administrative departments and
financial departments of the same level as stipulated in Article 8 of these measures;

(2) because of land used for urban infrastructure construction upon approvals by the Municipal People’s Government; and

(3) other cases as stipulated by the Municipal People’s Government.

   Article 16 Conditions for Land Use

When approved to use land, the FFE concerned should abide by laws and regulations governing land administration, and are not allowed
to sell or buy or illegally transfer the land use right through other means.

   Article 17 Changes of Land Use

FFEs should report to the original approving planning department and land administrative department for approval when there is the
need to change the nature or area of the land use during its operational term. When approved, it should register the change with
the real estate registration agency and go through again formalities of appraisal of paying the land use fee in accordance with the
stipulations in Article 8 of these procedures.

When changes of leased real estate, in area and use or other kind, during the operational term, the FFE concerned should report to
the real estate registration agency for record upon the presentation of the contract about the change of lease or the new lease contract,
and go over again the formalities of appraisal of paying the land use fee in accordance with the stipulations in Article 8 of these
procedures.

   Article 18 Termination of Land Use

Upon the expiration of the business term or other reasons to terminate the use of land, the FFE concerned should cancell the registration
of the land use right or the leasing contract upon the presentation of the certificate issued by the administration for industry
and commerce or other certificates, and pay the land use fee to the land administrative department as stipulated in Article 8 of
these procedures in accordance with the time of land use (it is calculated as one month if the land use time is less than one month).

   Article 19 Uses of Land Use Fees

The land administrative department shall hand over the land use fees it takes in to the financial department of the same administrative
level to be uniquely used for the purposes of urban and rural infrastructure construction.

   Article 20 Penalties on Illegal Land Use

FFEs shall be punished by the land administrative department in line with the relevant regulations on the construction use of land
for its use of land without approval or illegal transfer of land use right.

FFEs shall be penalized by the land planning department in line with relevant laws and regulations for its change of the planning
use of the land without approval.

   Article 21 Handling of Cases of Overdue Delayed Payment of Land Use Fees

Payers of the land use fee shall be ordered to make payments in a given period of time by the land administrative department if they
fail to meet the payment deadlines and should add 3% of the due amount as the delayed fund based on the days beginning from the date
of the due payment.

   Article 22 Reconsideration and Lawsuits

Persons concerned who disagree to the actions of the land administrative department or the land planning department may apply for
administrative reconsideration or bring a lawsuit to the court in line with “Regulations on Administrative Reconsideration” and the
“Administrative Procedural Law of the People’s Republic of China”.

Departments which take the actions may also apply to the people’s court to force the execution of the action in accordance with the
“Administrative Procedure Law of the People’s Republic of China” if the person concerned fails to apply for reconsideration, to bring
lawsuit or to perform the actual action.

   Article 23 Reference Applications of the Procedures

These procedures can also apply to the following businesses which use the State- or collectively-owned land within the city:

(1) businesses established by investors from Hong Kong, Macao and Taiwan regions; and

(2) limited-liability companies applying laws and regulations governing FFEs.

   Article 24 Meaning of the Land Use Fee

The land use fee as referred to in these procedures does not include expenses for the resettlement of the people having to remove
as their houses having to be pulled down because of land requisited, nor expenses for infrastructure construction.

   Article 25 Department Responsible for Interpretation of the Procedures

The SMURELA is enpost_titled to interpret these procedures with regard to their actual implementation.

   Article 26 Promulgation Date and Nullification

These procedures go into effect as of July 1, 1996, and the “Administrative Procedures of the Shanghai Municipality on the Land Use
by Sino_Overseas Eqiuty Joint Ventures” be annulled at the same time.

    





CIRCULAR OF THE GENERAL OFFICE OF THE STATE COUNCIL FOR TRANSMITTING THE REPORT SUBMITTED BY THE STATE METEOROLOGICAL ADMINISTRATION REQUESTING INSTRUCTIONS ON STRENGTHENING THE WORK OF ARTIFICIALLY AFFECTING THE WEATHER

Category  AGRICULTURE, FORESTRY AND METEOROLOGY Organ of Promulgation  The State Council Status of Effect  In Force
Date of Promulgation  1996-03-18 Effective Date  1996-03-18  


Circular of the General Office of the State Council for Transmitting the Report Submitted by the State Meteorological Administration
Requesting Instructions on Strengthening the Work of Artificially Affecting the Weather


A Report Requesting Instructions on Strengthening the Work of

(March 18, 1996)

    The Report Requesting Instructions on Strengthening the Work of
Artificially Affecting the Weather, submitted by the State Meteorological
Administration, has been approved by the State Council, and it hereby
transmitted to you. It is required you implement the Report conscientiously
in accordance with your local conditions.

A Report Requesting Instructions on Strengthening the Work of
Artificially Affecting the Weather

    As a scientific and technical means, by which man attains the goal of
increasing rain(snow), decreasing hailstorms and preventing frost injury,
etc., by using modern science and technology, artificially affecting the
weather has become an important measure for preventing and reducing natural
disasters, especially for protecting the agricultural production. Various
localities have developed the work in varying degrees, and obtained tangible
results. The main problems existing at present are: the managerial system is
not sound enough; the scientific and technological level and the overall
results of the operation demand prompt raising; the training of personnel
needs yet to be strengthened. With a view to bringing into full play the role
of the work of artificially affecting the weather, some proposals are hereby
put forward as follows:

    1. Guiding Principles and Objective

    (1) The guiding principles for the work of artificially affecting the
weather for the current period are: aiming at preventing and reducing natural
disasters, taking serving agriculture as the focal point, speeding up the
modernization of artificially affecting the weather, strengthening the talent
training and scientific research, and bringing about steady raising of the
scientific and technological level and the total results of the operation.

    (2) By the end of this century, the work of artificially affecting the
weather of this country shall preliminarily realize the standardized
management, basically establish a modern technical system and managerial
system with Chinese characteristics for artificially affecting the weather,
make the meteorological scientific and technological level and overall
results come up to the standards of middling developed countries and, in some
aspects, to the advanced international standards.

    2. Strengthening the Scientific Research

    There is much science in the work of artificially affecting the weather,
which must rely on scientific and technical advances with the strengthening
of the scientific research.

    (1) Taking vigorous action to adopt advanced technology and bringing
about steady raising of the technical level of operation. Various localities
shall rely on modern meteorological service network, make overall planning,
and progressively establish and improve the integrated technical system for
artificially affecting the weather. Attach great importance to tapping
potentialities and the transformation of the existing technical equipment,
strengthen the development, research, spread and application of new
technology.

    (2) Increasing the input to the scientific research of artificially
affecting the weather. The state-level scientific research shall lay emphasis
on major scientific and technical difficulties of generality; local
scientific research shall center on improving the operation programs and
raising the operation results. Various localities shall yearly appropriated a
certain portion from the funds for artificially affecting the weather, to
support the research of key technology.

    (3) Strengthening the technical cooperation and international exchanges.
Take vigorous action to extend domestic and international scientific and
technical exchanges, as well as mutual cooperation between civil and
military meteorological research strengths, try to establish, in the Ninth
Five-Year Plan period, one or two bases for the experiments of artificially
affecting the weather, which shall be jointly supported by central and local
governments and shall be responsible for key experiments and research, and,
in some localities with necessary conditions, other experiment and
demonstration bases may be established.

    (4) Establish a nationwide consultancy and appraisal system for science
and technology of artificially affecting the weather, develop the technical
consultancy and appraisal on the work of artificially affecting the weather
conducted by various localities, and progressively realize the
standardization of operation.

    3. Deepening the Reform and Strengthening the Management

    (1) Reforming and improving the input mechanism. Deepen the reform,
broaden the investment channel, especially the benefited units shall
progressively increase the input. The government at various levels shall,
in accordance with the needs of economic development and prevention and
reduction of natural disasters, increase necessary input; meteorological
departments shall actively develop special service and paid professional
service relating to the work of artificially affecting the weather.

    (2) Perfecting the rules and regulations and strengthening the training
of personnel. Tighten the safety control over the operation of artificially
affecting the weather, make perfect and strictly enforce the operation rules
and regulations, and establish a system under which the workers for the
operation of artificially affecting the weather must obtain certifications
before going to their posts. Pay attention to the talent training, strengthen
the technical training and the spread of new technologies, bring about steady
improvement in the overall quality of the contingent.

    (3) Developing the transregional work of artificially affecting the
weather. Take vigorous action to organize and develop the trans-county,
trans-city and trans-province(autonomous region, municipality directly under
the central government) cooperation and combination in the operation of
artificially affecting the weather, explore effective ways for realizing the
pooling of technical equipment and other resources, and seek proper
organizational forms for horizontal and vertical collaboration and
cooperation.

    4. Strengthening the Leadership and Enhancing the Coordination.

    The work of artificially affecting the weather is a complex system
engineering, which involves many disciplines, departments and lines and
requires well-conceived planning and scientific organization.

    (1) The government at various levels shall further strengthen and improve
the leadership over the work of artificially affecting the weather. The state
shall conduct coordination and organization for and give guidance to the work
of artificially affecting the weather throughout the country by adopting a
national coordination conference system; various localities shall
conscientiously implement the state’s guiding principles and policies
concerning the work of artificially affecting the weather and, in accordance
with local conditions, improve relevant organizations and system.

    (2) Various relevant departments shall strengthen the cooperation, and
progressively establish an effective cooperation system. Various localities
shall make their developing programs and plans for the work of artificially
affecting the weather, and incorporate them into the planning and annual plan
of the local national economy and social development.

    (3) Meteorological departments at various levels shall actively extend
their business scope of meteorological services, give full play to the
professional technical advantages, strengthen the modernization construction
in the work of artificially affecting the weather, and effectively accomplish
the organization, management, guidance and service in the work of artificially
affecting the weather.

    (4) Establishing a reporting system of significant matters concerning the
work of artificially affecting the weather. Various provinces(autonomous
regions, municipalities directly under the central government) and
departments shall submit timely reports to the State Meteorological
Administration and other relevant departments, on significant events, major
progress and other important matters in the work of artificially affecting
the weather, for necessary coordination and handling.





CIRCULAR OF THE STATE COUNCIL REGARDING RELEVANT ISSUES ON FRONTIER TRADE

Category  FOREIGN TRADE Organ of Promulgation  The State Council Status of Effect  In Force
Date of Promulgation  1996-01-03 Effective Date  1996-04-01  


Circular of the State Council Regarding Relevant Issues on Frontier Trade



(January 3, 1996)

    In order to encourage the border areas of our country to actively
develop frontier trade and economic cooperation with neighbouring
countries, the state has recently formulated a series of policies of
measures intended for supporting and promoting frontier trade and
external economic cooperation of border areas. Those policies of
measures have given a vigorous push to the economic development of the
border areas of our country and have played an active role in
strengthening unity between different nationalities, making the
borderland more prosperous and stable, reinforcing and developing the
friendly and neighbourly relations between adjacent countries and our
country. With the reform in our country going more deep and extensive,
those policies of measures need to be adjusted, standardized and
perfected in light of th overall requirement of the establishment of
a socialist market economy. The following issues are therefor notified:

    1. Administraive Forms for Frontier Trade

    In consideration of the actual circumstances of frontier trade
developed in our country and in light of international common practices,
administration of frontier trade in our country shall be performed in
the two forms as the following:

    1) Mutual trade among inhabitants of border area refers to exchange of
commodies which are conducted among border areas inhabitants at the
open zones authorized by the government or at the bizaars nominated by
the government within 20 kilometres behind the boundary and which are
controlled within the prescribed volume and quantity. The regulations
governing mutual trade among inhabitants of border areas shall be
jointly formulated by the ministry of external economy and trade and
the general office of the customs and be executed by the people’s
governments of border provinces and autonomous regions.

    2) Small volume frontier trade refers to trade activities conducted
with an enterprise or other organisation of a border area of a
neighbouring country at a land frontier port of state nomination by
an enterprise authorized to engage in small volume frontier trade and
located in a county (qi) or within the jurisdiction of a city on the
land boundary which are approved by the state to be open to the
outside world. All forms of trades developed in the border area except
mutual trade among inhabitants shall from now on be brought under the
administration of small volume frontier trade in accordance with
relevant policies regarding small volume frontier trade. Regulations
governing small volume frontier trade shall be formulated by the
ministry of external economy and trade after sonsultation with relevant
departments of the State Council.

    2. Issues Concerning Tariff and Procedural Taxation on Import in Frontier
Trade

    Inhabitants of the border area will be exempted from both tariff and
procedural taxation if the value of the commodities each inhabitant import
each day through the form of mutual trade is less than 1000 yuan. Taxation
will be executed upon the part of commodities that are beyong the value of
1000 yuan according to relevant provisions. The General Office of the Customs
shall make corresponding amendments to relevant supervisory rules in light of
the present regulations.

    Small volume frontier trade enterprise who imports commodities
originally produced in adjacent countries through a bourder port nominated by
the state during the first three years of the “nineth five-year” (ie from 1996
to 1998) shall be taxed by half of both the import tariff and import
procedural tax that should be levied according to law except for commodities
such as cigaretts, wine, cosmetics and other commodities on which taxation
should be executed according to law.

    Except for frontier trade, products that are imported through barter
or under agreement of economic and technological cooperation from the
former soviet union countries, eastern European countries and other
adjacent countries shall be taxed according to the nationally unified
policy on import taxation.

    3. Issues Concerning Administration of Import and Export in Small Volume
Frontier Trade

    The right of a small volume frontier trade enterprise to engage in
business shall be approved by the local province or autonomous region
after examination based on business qualification and conditions specified by
the ministry of external economy and trade and when the prescribed total
number of such enterprises have not been exceeded. The names of such small
volume frontier trade enterprises shall be reported to the ministry of
external economy and trade for review and confirmation and be submitted to
relevant departments of the State Council for record. Any enterprise who has
not been approved and recorded according to the above stipulations may not do
business of small volume frontier trade. In principle, development of small
volume frontiere trade may not be restricted in the form of trade or by the
division of business areas.

    Border province or border autonomous region is permited to designate
one or two small volume frontier trade enterprises to jointly engage in
export,through nominated border ports to countries that adjoin our
country on land, of commodities produced in the native border area with
companies nominated by the state; or to engage in import of commodies,
the import of which can only be conducted by companies that have been
examined and approved by the state. The name of such exterprises shall
be submitted to the ministry of external economy and trade for review
and confirmation.

    Small volume frontier trade enterprise when exporting commodities that
are subject to state export quota system or export license system
, shall be exempted from the restrictions of the quota or license but
shall be subject to the centralized admintration of the ministry of
external economy and trade and the state planning commission except
for commodities whose export requires nationally unified bidding or
joint efforts, chemicals that can be used for both military or civil
purposes and easily produced poisonous chemicals. The customs
shall, subject to the restriction of the quota divided and notified by
the ministry of external economy and trade, check and let pass such
exports according to the export contracts of the exterprise and
relevant documents issued by the department in charge of external
economy and trade of the border province or autonomous region.

    The state planning commission and the state economic and trade
commission (the state office for import and export of mechanical and
electric products) shall specifically assign certain amount of
import quota for small volume frontier trade to every border region in
light of the situation of small volume frontier trade in the previous
year and the situation of the supply and demands of the internal market.
Suject to the amount of quota already examined and approved, the
ministry of external economy and trade shall empower the department in
charge of external economy and trade of every border province and
autonomous region to issue license for import. When small volume
frontier trade enterprise imports commodities that are subject to state
quota system, the customs shall let pass such imports on the basis of
certificate in testimony of quota made out by the concerned border
province or autonomous region and the license of import. When
small volume frontier trade enterprise imports commodities that are
subject to special regulations and registration control, the relevant
procedures shall also be simplified. The simplified procedures shall be
formulated and made known by the state planning commission and the
state economic and trade commission (the state office for import and
export of mechanical and electric products) after consultation with
relevant departments respectively.

    4. Issues Concerning Import and Export of Commodities under Agreemen of
Economic and Technological Cooperation with Adjacent Countries

    When a border region enterprise which has been authorized by the
ministry of external economy and trade to conduct external economic and
technological cooperation (hereinafter referred to as border region
external business enterprise) imports commodities for the purpose of
the economic and technological cooperation, the business shall be
governed by policy of taxation on small volume frontier trade. Commodities
and materials that are exchanged under project contract and labour
cooperation contract may enter our country with the project and
may not subject to restrictions of business division. Equipments
to be brought out of our country with border region external business
enterprise for the purpose of labour cooperation or under project
contract with adjacent countries and the articles for daily use of the
labours are reasonably necessary and may not be subjected to
restrictions of quota system or business division and shall be exempted
from requirement for export license.

    When border region external business enterprise exports commodities
under agreement of economic and technological cooperation with adjacent
countries, the customs shall let them pass on the basis of document of
approval made out by department in charge of external economy and trade.
Detailed procedures shall be jointly formulated and made known by the
ministry of external economy and trade and the general office of customs.

    5. Issues on Strengthening Regulation in Regard to Frontier Trade

    The people’s governments of different provinces and autonomous regions
shall, according to the unified regulations of the State Council and
relevant departments, formulate concrete rules for implementation
thereof, designate departments in charge of frontier trade to
strenthen leadership and administration of frontier trade and economic
cooperation of the respective province and autonomous region so as to
promote the healthy development of frontier trade.

    Relevant departments of the State Council shall, according to the
present provisions, formulate sumplementary procedures of adminstration
as soon as possible, actively render support to frontier trade and the
development of external economic cooperation of border regions. The
ministry of external economy and trade shall, jointly with other
relevant departments, conduct research and formulate national policies
and macro- control measures regarding frontier trade and economic
cooperation. Customs while strengthening services shall reinforce its
role of supervision and regulation, rigorously crack down smuggling
activities so as to safeguard the implementation of state policies on
frontier trade.

    The present notice shall come into effect as of the date of April 1,
1996 and be taken as the criterion in case any relevant old regulations
or rules are inconsistent with the present provisions.





LAWYERS LAW

Category  JUDICIAL ADMINISTRATION Organ of Promulgation  The Standing Committee of the National People’s Congress Status of Effect  In Force
Date of Promulgation  1996-05-15 Effective Date  1997-01-01  


THE Law of the People’s Republic of China on Lawyers

Contents
Chapter I  General Provisions
Chapter II  Requirements for Practising Lawyers
Chapter III  Law Firms
Chapter IV  Business, Rights and Duties of Practising Lawyers
Chapter V  Lawyers’ Associations
Chapter VI  Legal Aids
Chapter VII  Legal Responsibility
Chapter VIII  Supplementary Provisions

(Adopted at the 19th Meeting of the Standing Committee of the Eighth

National People’s Congress on May 15, 1996, promulgated by Order No.67 of the
President of the People’s Republic of China on May 15, 1996)
Contents

    Chapter I  General Provisions

    Chapter II  Requirements for Practising Lawyers

    Chapter III  Law Firms

    Chapter IV  Business, Rights and Duties of Practising Lawyers

    Chapter V  Lawyers’ Associations

    Chapter VI  Legal Aids

    Chapter VII  Legal Responsibility

    Chapter VIII  Supplementary Provisions

Chapter I  General Provisions

    Article 1  This Law is enacted for the purposes of improving the lawyer
system, ensuring lawyers’ carrying out business according to law,
standardizing lawyers’ activities, safeguarding the legitimate rights and
interests of the interested parties, guaranteeing the correct implementation
of law and bringing into play the positive role of lawyers in the socialist
legal construction.

    Article 2  For the purpose of this Law, “lawyers” refer to legal
practitioners who have obtained a lawyer’s business license according to law
and provide legal service to the society.

    Article 3  Lawyers practising law must abide by the Constitution and
other law of the People’s Republic of China and strictly observe the
professional ethics and disciplines.

    In practising law, lawyers must base themselves on facts and take the law
as the criterion.

    Lawyers practising law shall be subjected to the supervision of the
state, society and the interested parties.

    Lawyers’ carrying out business according to law shall be protected by
law.

    Article 4  The judicial administrative department of the State Council
shall, in accordance with this Law, supervise and direct lawyers, law firms
and lawyers’ associations.
Chapter II  Requirements for Practising Lawyers

    Article 5  Those wishing to be practising lawyers shall acquire lawyer’s
credentials as well as business licenses.

    Article 6  The state shall adopt a system where unified national
examinations shall be taken for the conference of lawyer’s credentials.
Persons who have graduate experience of junior college majoring in law or
higher experience or have attained the same professional level, or those who
have graduate experience of college majoring in other speciaties than law or
higher experience, may, after passing the qualification examination for
lawyers, be conferred with lawyer’s credentials.

    Measures for unified national examinations of lawyers’ qualifications
shall be formulated by the judicial administrative department of the State
Council.

    Article 7  Persons having graduate or higher experience majoring in law,
engaging in legal research or legal education and having a senior
professional tittle or those having attained the same professional level, if
applying to practise law, may, after examined and approved in accordance with
the specified requirements by the judicial administrative department of the
State Council, be conferred with lawyer’s credentials.

    Article 8  Persons who support the Constitution of the People’s Republic
of China and meet the following conditions may apply for lawyer’s licenses:

    (1) Possession of a lawyer’s credential;

    (2) Have acted as an apprentice lawyer at a law firm for one year; and

    (3) Have good conduct.

    Article 9  Persons coming under any of the following categories shall
not be conferred with lawyer’s credentials:

    (1) Persons without capacity of civil conduct or persons with limited
capacity of civil conduct;

    (2) Persons who have records of criminal punishments for intentional
crimes; or

    (3) Persons who have been discharged from public employment or whose
lawyer’s licenses have been revoked.

    Article 10  Applicants for lawyer’s licenses shall present the following
documents:

    (1) The application;

    (2) Certification of lawyer’s credential;

    (3) written appraisal on the applicant offered by the law firm with which
the applicant has served as an apprentice lawyer; and

    (4) A copy of the applicant’s identification.

    Article 11  Applications for lawyer’s licenses shall be subject to the
examination of the judicial administrative departments of people’s
governments at the provincial level or above. A lawyer’s license shall be
issued within 30 days after the receipt of the application if the conditions
provided for in this Law are satisfied; if the conditions prescribed in this
Law are not satisfied, no lawyer’s license shall be issued and the applicant
shall be notified in writing within 30 days after the receipt of the
application.

    Article 12  A lawyer shall practise law at one but not two or more law
firms.

    There is no restriction on regions where lawyers carry out business.

    Article 13  Personnel presently attached to state organs may not act as
part-time practising lawyers.

    Lawyers may not practise law during their membership of the standing
committee of people’s congress at various levels.

    Article 14  Persons without a lawyer’s license may not act in the name of
lawyers, and they may not, for seeking economic interests, act as agents ad
litem or defenders.
Chapter III  Law Firms

    Article 15  A law firm is an organization with which lawyers practising
law.

    A law firm shall meet the following conditions:

    (1) Has its own name, domicile and constitution;

    (2) Possession of assets of not less than 100,000 yuan; and

    (3) Has lawyers who are qualified according to this Law;

    Article 16  Law firms established with funds provided by the state shall
be independent in their professional activities according to law, and the
debt of such a law firm shall be secured with its total assets.

    Article 17  Cooperative law firms may be established by lawyers and the
debt of such a law firm shall be secured with its total assets.

    Article 18  Partnership law firms may be established by lawyers, and the
partners shall undertake unlimited and joint liability for their
partnership’s debts.

    Article 19  Applications for establishing law firms shall be subject to
the examination of the judicial administrative departments of people’s
governments at the provincial level or above. A law firm’s business license
shall be issued within 30 days after the receipt of the application if the
conditions provided for in this Law are satisfied; if the conditions
prescribed in this Law are not satisfied, no license shall be issued and the
applicant shall be notified in writing within 30 days after the receipt of
the application.

    Article 20  Law firms may set up their branch offices. The establishment
of such a branch office shall be subject to the examination by the judicial
administrative department of the people’s government of the province,
autonomous region or municipality directly under the central government where
the branch office is to be set up. Said examination shall be conducted
according to the prescribed conditions.

    A law firm shall be liable for the debts of its branch offices.

    Article 21  In case there is any change in major matters such as the
name, domicile, constitution or partners of a law firm or in case of
disbandment of a law firm, the law firm shall submit it to the department
originally conducting the examination.

    Article 22  Law firms shall, in accordance with their constitutions,
organize lawyers to develop their business, study law and the state’s
policies and sum up and exchange work experiences.

    Article 23  The mandates for lawyers to handle cases shall be accepted
exclusively by the law firm with the mandate contracts concluded with the
mandators and service fees collected in accordance with the state’s
provisions and entered into the account book of the law firm.

    Law firms and lawyers shall pay taxes in accordance with law.

    Article 24  Law firms and lawyers may not canvass business by resorting
to unjust tactics such as slandering other lawyers or paying introduction
commission.
Chapter IV  Business, Rights and Duties of Practising Lawyers

    Article 25  Lawyers may conduct the following business:

    (1) Accept the mandate of citizens, legal persons and other organizations
to serve as their legal advisers;

    (2) Accept the mandate of a party to a civil or administrative action to
serve as his representative in litigation;

    (3) Accept the mandate of criminal suspects in criminal cases, provide
them with legal consultancy, act on their behalf to make petitions or
complaints, and apply for them for bailing out for summons; accept the
mandate of criminal suspects or the defendants or the assignment of the
people’s courts to serve as defenders; accept the mandate of prosecutors in
private prosecutions, victims in public prosecutions or their near relatives
to serve as their representatives in litigation;

    (4) Serve as a legal representative to make petition with regard to
various cases;

    (5) Accept the mandate of a party to serve as his representative in
mediation and arbitration;

    (6) Accept the mandate of a party in nonlitigious matter to provide him
with legal assistance; and

    (7) Give consultative advice on legal questions and draft documents in
connection with litigation or other legal matters.

    Article 26  A lawyer who is retained as a legal adviser shall have the
responsibility to give advice on legal questions to the client, draft and
examine legal documents for it, represent it in litigation, mediation or
arbitration, handle other legal affairs entrusted by the client and safeguard
its lawful rights and interests.

    Article 27  When acting as representatives in litigation and nonlitigious
matters, lawyers shall have the responsibility to safeguard the lawful rights
and interests of their clients within the scope of mandate.

    Article 28  When acting as defenders in criminal cases, lawyers shall,
on the basis of the facts and the law, advance materials and opinions proving
the innocence of the criminal suspect or the defendant, the pettiness of his
crime and the need for a mitigated punishment or exemption from criminal
responsibility, thus safeguarding the lawful rights and interests of the
criminal suspect or the defendant.

    Article 29  The party giving the mandate may refuse to have his attorney
at law continue to defend him or serve as his legal representative and may
retain another lawyer as his defender or legal representative.

    Without justifiable reasons, A lawyer having accepted a mandate shall not
refuse to give defense or serve as representative, provided that the lawyer
has right to refuse to serve as defenders or legal representatives if the
entrusted matters are illegal, the party giving the mandate commits illegal
acts by taking advantage of the legal assistance provided by lawyer, or the
party giving the mandate hold back the facts.

    Article 30  When participating in litigation, lawyers may, in accordance
with the provisions of the procedure law, collect and consult materials
relating to the current case, meet and correspond with persons in custody,
attend to the court and participate in the proceedings and have other rights
provided for by the procedure law.

    The right to debate or defense of lawyers who act as agents ad litem or
defenders in litigation shall be guaranteed according to law.

    Article 31  With the consent of relevant units or persons, lawyers
undertaking legal affairs may inquire matters of them.

    Article 32  The personal rights of lawyers shall not be infringed when
they carry out business.

    Article 33  Lawyers shall keep confidential state secrets and trade
secrets of their clients which they got to know in their business. They may
not divulge matters of personal privacy of their clients.

    Article 34  A lawyer may not serve as legal representatives for both
parties to a case.

    Article 35  When carrying out business, lawyers may not commit the
following acts:

    (1) Privately accept mandate and collect service fees or accept
money or goods from clients;

    (2) Take advantage of their business to seek interests under dispute of
the parties or accept money or goods from the other party;

    (3) Meet judges, public prosecutors or arbitrators in violation of
relevant provisions;

    (4) Give dinners, send gifts or offer bribes to judges, public
prosecutors, arbitrators or other relevant persons, or instigate or induce
their clients to resort to bribes;

    (5) Give false evidence, hold back the facts or threaten or lure others
by promise of gain to give false evidence, hold back the facts, or obstruct
the other party lawfully obtaining evidence; or

    (6) Disturb the court or arbitration orders and interfere with the
normal process of litigation or arbitration.

    Article 36  Within two years after leaving their posts from people’s
courts or people’s procuratorates, lawyers who were judges or public
procurators may not act as agents ad litem or defenders.
Chapter V  Lawyers’ Associations

    Article 37  Lawyers’ associations are social organizations with the
status of a legal person. they are self-disciplinary organizations of
lawyers.

    A national lawyers’ association by the name of All-China Lawyers’
Association shall be established. Provinces, autonomous regions and
municipalities directly under the central government shall have their local
lawyers’ associations. Districted cities may establish their local lawyers’
associations if necessary.

    Article 38  The Constitution of Lawyers’ Associations shall be formulated
by the national congress of members of lawyers’ associations and submitted to
the judicial administrative department of the State Council for filing.

    Article 39  Lawyers must join the local lawyers’ associations in the
place of their residence. Lawyers who have joined local lawyers’ associations
are naturally members of All-China Lawyers’ Association.

    Members of lawyers’ associations shall, in accordance with the
Constitution of Lawyers’ Associations, enjoy and perform the rights and
duties provided for in the Constitution.

    Article 40  Lawyers’ associations shall have the following duties:

    (1) Guarantee lawyers’ carrying out business according to law and
safeguard lawyers’ legitimate rights and interests;

    (2) Sum up and exchange lawyers’ work experiences;

    (3) Organize professional training for lawyers;

    (4) Carry out education on and conduct inspection and supervision over
lawyers’ professional ethics and disciplines;

    (5) Organize lawyers to develop foreign exchanges;

    (6) Conduct mediation over disputes arising from lawyers’ professional
activities; and

    (7) Other duties provided for by law.

    Lawyers’ associations may, in accordance with their Constitution, give
their lawyers rewards or disciplinary sanctions.
Chapter VI  Legal Aids

    Article 41  Where any citizen needs legal assistance with regard to
support, industrial injury, criminal action, claim for state indemnity and
claim for paying pension according to law, and so on, he may, if he cannot
afford to pay the service fee, obtain the legal aid in accordance with the
state’s provisions.

    Article 42  Lawyers must, in accordance with the state’s provisions,
undertake the duties on legal aids, do their duties conscientiously and
provide the recipient person with legal service.

    Article 43  The concrete measures for legal aids shall be formulated by
the judicial administrative department of the State Council and submitted to
the State Council for approval.
Chapter VII  Legal Responsibility

    Article 44  If any lawyer commits any of the following acts, the judicial
administrative department of the people’s government of the province,
autonomous region or municipality directly under the central government or
districted city shall give him a warning, or a punishment of business
suspension for a time period from three months to one year if the
circumstances are serious, and confiscate his illegal earnings, if any:

    (1) Serve as a practising lawyer with two or more law firms at the same
time;

    (2) Serve as legal representatives for both parties in a case;

    (3) Canvass business by resorting to unjust tactics such as slandering
other lawyers or paying introduction commission;

    (4) Without justifiable reasons, refuse to give defense or serve as a
representative after accepting the mandate;

    (5) Without justifiable reasons, fail to appear at court for the
proceedings or arbitration on time;

    (6) Divulge trade secrets or matters of personal privacy of their
clients;

    (7) Privately accept mandate and collect fees from clients, ask for or
accept money or goods from clients, take advantage of their business to seek
interests under dispute of the parties, or accept money or goods from the
other party;

    (8) Meet judges, public prosecutors or arbitrators in violation of
relevant provisions, or give dinners or send gifts to the judges, public
prosecutors, arbitrators or other relevant persons;

    (9) Obstruct the other party lawfully obtaining evidence;

    (10) Disturb the court or arbitration orders and interfere with the
normal process of the litigation or arbitration; and

    (11) Other acts deserving to be punished.

    Article 45  Lawyers committing any of the following acts shall be
revoked of their lawyer’s business licenses by the judicial administrative
department of the people’s government of province, autonomous region or
municipality directly under the central government, or, if a crime is
constituted, be investigated for criminal responsibility:

    (1) Divulge the state’s secrets;

    (2) Offer bribes to judges, public prosecutors, arbitrators or other
relevant persons, or instigate or induce their clients to resort to bribes;
or

    (3) Give false evidence, hold back important facts or threaten or lure
others by promise of gain to give false evidence or hold back important
facts.

    Lawyers subjected to criminal punishment for intentional crimes shall be
revoked of their lawyer’s business licenses.

    Article 46  If any person passes himself off as a lawyer and engages in
legal service, the public security organ shall order him to halt the illegal
business and confiscate his illegal earnings and may concurrently impose a
fine of not exceeding 5,000 yuan and a detention for a period of not
exceeding 15 days.

    If any person, without a lawyer’s business license, engages in the
business of agents ad litem or defenders for the purpose of economic
interests, the judicial administrative department of the county-level or
higher local people’s government in the place of the person’s residence shall
order him to halt the illegal business and confiscate his illegal earnings
and may concurrently impose a fine from one to five times the illegal
earnings.

    Article 47  If a law firm commits any act in violation of this Law, the
judicial administrative department of the province, autonomous region or
municipality directly under the central government shall order it to make
corrections and confiscate its illegal earnings and may concurrently impose a
fine from one to five times the illegal earnings or, if the circumstances are
serious, order it to suspend the business for rectification or revoke its
business license.

    Article 48  The party who refuses to accept the decision of
administrative punishment on him made by the judicial administrative
department may, within 15 days after receiving the decision, apply for
reconsideration to the judicial administrative department at the immediately
higher level; if he refuses to accept the reconsideration decision, he may,
within 15 days after receiving the reconsideration decision, institute a
lawsuit with the people’s court; or he may institute a lawsuit with the
people’s court directly.

    If the party subjected to a fine neither applies for reconsideration or
institute a law suit with the people’s court nor perform the decision on
fine, the judicial administrative department making the decision may apply to
the people’s court for compulsory enforcement.

    If the applicant applying for a lawyer’s credential under Article 11 of
this Law or applying for the establishment of a law firm under Article 19 of
this Law refuses to accept the decision on withholding of the lawyer’s
credential or business license, he may apply for reconsideration or institute
a lawsuit in accordance with the procedure stipulated in Paragraph 1.

    Article 49  If a lawyer causes damage to his client by carrying out
business in violation of law or due to his fault, the law firm which the
lawyer belongs to shall be liable for the compensation. The law firm having
given the compensation shall have recourse against the lawyer who has
willful misconduct or culpable negligence.

    Lawyers and law firms shall not exempt themselves from or restrict the
civil liability they should bear for carrying out business in violation of
law or for their faults.
Chapter VIII  Supplementary Provisions

    Article 50  This Law shall be applicable to military lawyers providing
legal service to the army with regard to the acquirement of lawyer’s
credentials, lawyers’ rights, duties and codes of conduct. The concrete
administrative measures for military lawyers shall be separately formulated
by the State Council and the Central Military Commission.

    Article 51  Administrative measures for institutions engaging in
prescribed legal service established in China by foreign law firms shall be
formulated by the State Council.

    Article 52  The measures for the collection of lawyers’ service fees
shall be formulated by the judicial administrative department of the State
Council and submitted to the State Council for approval.

    Article 53  This Law shall enter into force on January 1, 1997. The
Interim Regulations of the People’s Republic of China on Lawyers adopted on
August 26, 1980 by the 15th Meeting of the Standing Committee of the Fifth
National Congress shall cease to be in force thereupon.





INTERIM PROVISIONS ON PROCEDURES FOR CONTRACT WORKERS GOING ABROAD

Category  FOREIGN ECONOMIC RELATIONS AND TECHNOLOGICAL COOPERATION Organ of Promulgation  The State Council Status of Effect  In Force
Date of Promulgation  1996-12-22 Effective Date  1996-12-22  


Interim Provisions on Procedures for Contract Workers Going Abroad

Chapter I  General Provisions
Chapter II  Examination and Approval of Foreign Undertakings
Chapter III  Requirements and Examination and Approval Procedure for
Chapter IV  Transregional and Transdepartmental Selection
Chapter V  Application for and Administration of Passports
Chapter VI  Application for Visas
Chapter VII  Prohibitions and Penalties
Chapter VIII  Supplementary Provisions

(Approved by the State Council on October 22, 1996 and promulgated by the

Ministry of Foreign Trade and Economic Cooperation, the Ministry of Foreign
Affairs and the Ministry of Public Security on December 22, 1996)
Chapter I  General Provisions

    Article 1  These Provisions are formulated for the purpose of promoting
foreign contract engineering and labor cooperation abroad, simplifying the
procedures for examining and approving applications by contract workers to go
abroad and strengthening the control of contract workers sent abroad.

    Article 2  “Contract workers sent abroad” refers to the contract workers
of various specialities sent abroad to engage in economic and technologic
activities and social services, in accordance with contracts signed by the
sending units with foreign government agencies, societies, enterprises or
private employers, concerning contract engineering, labor services and designs
and consulting service, etc..

    Article 3  “Sending units” refers to enterprises which with the approval
of the Ministry of Foreign Trade and Economic Cooperation (hereinafter
referred to as the Moftec) are endowed with a franchise to undertake foreign
contract engineering, labor services and designs and consulting services
abroad.

    Article 4  To send contract workers abroad, the sending unit must hold a
“Permit for Sending Abroad Contract Workers” issued by the Moftec and the
contract signed with a foreign party.

    Article 5  Sending of contract workers to countries without diplomatic
relation with China or to Taiwan, Hongkong or Macau shall be handled in
accordance with relevant provisions.
Chapter II  Examination and Approval of Foreign Undertakings

    Article 6  For sending contract workers abroad, the sending unit which is
authorized to examine and approve the foreign contract undertakings may
conduct the examination and approval themselves and issue the “Application
Form for Sending Abroad Contract Workers”.

    Article 7  For sending contract workers abroad, local sending units which
are not authorized to examine and approve the foreign contract undertakings
shall fill in the “Application Form for Sending Abroad Contract Workers” and
submit it, together with the contracts concerned, to the foreign economic
relations and trade commission (department/bureau) of the province, autonomous
region or municipality directly under the central government, or the city
enjoying the provincial-level status in the state economic plan, special
economic zone or coastal open city where the sending unit is located, for
approval.

    Central sending units which are not authorized to examine and approve the
foreign contract undertakings shall, when sending abroad contract workers,
fill in the “Application Form for Sending Abroad Contract Workers” and submit
it, together with the contracts concerned, to the managing department or
bureau of the competent department of foreign economic relations and trade at
the higher level, or of the commission or ministry of the State Council or the
organization directly under the State Council to which the sending unit is
attached and which is authorized to examine and approve the foreign contract
undertakings, for approval.

    Article 8  For sending abroad seamen or fishermen, the item “Country and
Region to Go” in the “Application Form for Sending Abroad Contract Workers”
shall be filled in as “all countries and regions in the world”.
Chapter III  Requirements and Examination and Approval Procedure for
Contract Workers Sent Abroad

    Article 9  The sending unit must examine the potential contract workers
with regard to their political status, occupational situation and the state of
health. The items to be examined are as follows:

    1. Political status: The person to be sent abroad must love his socialist
motherland, appear healthy in politics and honest in behavior, observe
disciplines and meet the stipulations set in the Law of the People’s Republic
of China on the Control of the Exit and Entry of Citizens. Persons falling
under the following categories may not be sent abroad as contract workers:

    (1) the accused involved in a criminal case, and the criminal suspect
identified by public security organs or the people’s procuratorate or people’s
court;

    (2) the person involved in an unconcluded civil case who, as notified by
the people’s court, cannot leave the country;

    (3) convicted criminal who is serving a sentence;

    (4) the person now under re-education through labor; and

    (5) the person whose exit from the country will cause jeopardy to national
security or heavy losses to national interests.

    2. Occupational conditions: He is competent for fulfilling missions abroad
with professional skills as contracts require.

    3. Physical conditions: He is above the age of 18, healthy as certified by
a hospital above the county level, and competent for the mission assigned to
him, working abroad.

    Article 10  Among the contract workers, who leave the country with a
service passport, those of cadre status above the county level and those with
high-level professional post_titles shall go through formalities of examination and
approval, applicable to cadres, while others shall go through a two-level
system of examination and approval, namely, the working unit to which the
worker belongs, or the community office, or the local government of the town
or township where the worker lives, shall take up the responsibility to
examine the potential contract worker to be sent abroad and fill in the
Examination Form for Contract Workers Sent Abroad (hereinafter abbreviated to
Examination Form), and the sending unit shall take the responsibility for
examination and approval.

    Those who leave the country with a private common passport shall go
through the procedure of examination and approval in accordance with the Law
of the People’s Republic of China on the Control of Exit and Entry of Citizens
and the rules for its implementation.
Chapter IV  Transregional and Transdepartmental Selection

    Article 11  Generally, the sending unit shall select contract workers out
of personnel in local regions and local departments. When special need arises,
it is allowed, with approval by superior departments, to do transregional and
transdepartmental selection.

    Article 12  When the sending unit does transregional or transdepartmental
selection of contract workers, the working unit to which the contract worker
belongs, the community office or the local people’s government of the town or
township where he lives shall do the selection. Selection is illegal if done
through private relation or intermediary agencies.
Chapter V  Application for and Administration of Passports

    Article 13  The sending unit may apply for a service passport or a private
common passport on behalf of the contract worker sent abroad.

    Article 14  The contract workers as listed below shall apply for a service
passport:

    (1) contract workers who are sent abroad to enforce agreements and
arrangements signed by the Government departments with foreign countries, and
those who are sent abroad as authorized members directly under the management
of an institution; and

    (2) contract workers who are sent to the countries and regions which
require them to present service passports.

    Article 15  With the exception of those listed in Article 14, all other
contract workers sent abroad shall apply for private common passports.

    Article 16  For service passports, the sending unit shall apply to the
Ministry of Foreign Affairs and its authorized local agencies handling foreign
affairs located in the place where the contract worker has his personal
dossier or registered residence (hereinafter abbreviated to agencies handling
foreign affairs). For private common passports, the sending unit shall apply
to the public security organ in the place where the contract worker has
his registered residence (hereinafter abbreviated to the public security
organ).

    Article 17  For selected contract workers who have worked in a special
economic zone for more than one year, but have no permanent registered
residence there, their passports may be applied for in the special economic
zone, but materials produced for political examination shall be issued by
his original working unit, or community office in the place where he has
registered residence, or local people’s government of the town or township or
organizational department of the district or county.

    Article 18  When applying for service passports on behalf of contract
workers, the sending unit shall present to the agency handling foreign affairs
the following documents:

    (1) permit of the sending unit for sending abroad contract workers;

    (2) a list of items for applying for service passports;

    (3) an application form for sending abroad contract workers; and

    (4) an examination form of contract workers to be sent abroad.

    The agency handling foreign affairs may, if necessary, examine the ID card
and certificate of registered residence of the contract workers.

    Article 19  When applying for private common passports on behalf of
contract workers, the sending unit shall present to the public security organ
the following documents:

    (1) permit of the sending unit for sending abroad contract workers;

    (2) an application form for sending abroad contract workers (attached with
labor contracts signed with foreign parties);

    (3) an examination form of contract workers to be sent abroad; and

    (4) ID cards or certificates of registered residence of the contract
workers.

    Article 20  The Moftec shall set up and perfect an adaptive training
system designed for contract workers before they go abroad. The
passport-issuing agency may, if necessary, check their training qualification
certificates before issuing passports to them.

    Article 21  After the contract workers complete their services and return
home, the sending unit shall be responsible for collecting their service
passports, registering them and sending them back to the original
passport-issuing agency for safekeeping and disposal.
Chapter VI  Application for Visas

    Article 22  The sending unit shall apply for visas on behalf of the
contract workers with service passports in accordance with the relevant
provisions of the Ministry of Foreign Affairs.

    Article 23  The sending unit shall apply to foreign embassies and
consulates in China for visas on behalf of the contract workers with private
common passports.

    Article 24  When applying for visas on behalf of seamen and fishermen to
go abroad, the sending unit shall apply to the country and region where they
go on board the ships as indicated by the employers.
Chapter VII  Prohibitions and Penalties

    Article 25  The sending unit shall hold an honest aim and do legal
business. When signing contracts with foreign parties and selecting contract
workers, it shall take strict steps to ensure quality. It is strictly
prohibited to do illicit migration in the name of sending contract workers
abroad. It is strictly prohibited to send young women in various names to work
abroad in bars, dancing halls, night clubs and other public places of
entertainment.

    Article 26  Units and persons directly responsible for reporting false
information to defraud their superior approval departments by violating these
Provisions shall be criticized in a circular or given a penalty, economically
or administratively, according to seriousness of the case by the higher level
department responsible for the sending unit and the supervisory department.
The Moftec shall suspend its franchise for sending contract workers abroad
within a time limit or even permanently according to the seriousness of the
case. Agencies handling foreign affairs shall suspend issuing service
passports to the contract workers to be sent abroad by the sending unit or all
persons to go aboard on official business. Those who violate laws and
regulations on the control of entry and exit shall be punished by public
security organs according to law. If a crime has been constituted, judicial
organs shall investigate the offender for criminal responsibility according to
law.
Chapter VIII  Supplementary Provisions

    Article 27  These Provisions are applicable to researchers to be sent
aboard for labor service in nature.

    Article 28  These Provisions are not applicable to citizens who go through
formalities for seeking jobs abroad for themselves.

    Article 29  Where administrative regulations and other legal documents
concerning labor service abroad promulgated previously contradict these
Provisions, these Provisions shall prevail.

    Article 30  These Provisions shall come into force on the date of
promulgation.





CIRCULAR OF THE CHINA SECURITIES REGULATORY COMMISSION ON ISSUEING “INTERIM PROVISIONS ON THE ADMINISTRATION OF QUALIFICATIONS OF DOMESTIC AND OVERSEAS SECURITIES INSTITUTIONS DEALING IN SHARES FOR THE PURCHASE OF OVERSEAS INVESTORS”

The China Securities Regulatory Commission

Circular of the China Securities Regulatory Commission on Issueing “Interim Provisions on the Administration of Qualifications of
Domestic and Overseas Securities Institutions Dealing in Shares for the Purchase of Overseas Investors”

ZhengJian [1996] No.5

October 23, 1996

All the securities regulatory commissions of various provinces, autonomous regions, municipalities directly under the Central Government
and municipalities separately listed on the State plan:

With a view to standardizing the operation of domestic and overseas securities institutions in terms of shares specially for purchase
by overseas investors and protecting the legal rights and interests of investors of such shares in accordance with relevant State
laws and regulations, the China Securities Regulatory Commission drew the “Interim Provisions on the Administration of Qualifications
of Domestic and Overseas Securities Institutions Dealing in Shares for the Purchase of Overseas Investors” and is hereby promulgated.
Attachment:Interim Provisions on the Administration of Qualifications of Domestic and Overseas Securities Institutions Dealing in Shares for
the Purchase of Overseas Investors

Chapter I General Provisions

Article 1

This set of Provisions is formulated with a view to standardizing the operation of domestic and overseas securities institutions in
terms of shares specially for purchase by overseas investors (hereinafter referred to as shares for overseas investors) and protecting
the legal rights and interests of investors of such shares in accordance with relevant State laws and regulations.

Article 2

For dealing with shares for overseas investors, the domestic and overseas securities institutions should, in line with this set of
Provisions, acquire “The Qualifications Certificate in Dealing in Shares for Overseas Investors” (hereinafter referred to as the
QC) issued by the China Securities Regulatory Commission (hereinafter referred to as CSRC).

The shares for overseas investors referred to in the preceding clause include the shares listed both domestically and overseas specially
for purchases by overseas investors.

Article 3

The domestic securities institutions referred to in this set of Provisions are the securities firms and trust and investment companies
that are registered within Chinese territory and may deal in securities business with the approval of the competent departments according
to law and have the qualifications of an independent legal person.

The securities institutions referred to in this set of Provisions are the securities firms referred to in the preceding clause and
the concurrent securities institutions referred to in this set of Provisions are the trust and investment companies referred to in
the preceding clause.

Article 4

The overseas securities institutions referred to in this set of Provisions are the investment banks, securities firms and other financial
institutions that are registered outside of the Chinese territory and that may deal in securities business according to the law of
their localities and have the qualifications of an independent legal person.

Chapter II Conditions for Dealing in Shares for Overseas Investors

Article 5

Domestic securities institutions which apply for the qualifications of being stock brokerage for overseas investors should have the
following conditions:

(1)

Securities institutions should have a total net assets of no less than RMB50 million while trust and investment companies should have
an operation fund of no less than RMB50 million;

(2)

They have been authorized by the State Administrations of Foreign Exchange (SAFE) to engage in foreign exchange business;

(3)

They must have sufficient facilities such as communications, trading sites, and equipment to guarantee the normal operation of the
overseas related stock business;

(4)

They must have at least five special personnel of overseas stock trading;

(5)

They must abide by relevant State laws and regulations and have not been revoked of their qualifications certificates in the recent
two years;

(6)

Concurrent securities institutions must have separated the operation and account of the stock trading with that of other business
operations; and

(7)

They should have conditions as required by CSRC.

Article 6

Overseas securities institutions which apply for qualification of being brokerage for overseas investors in trading of stocks through
signing agency agreement with domestic securities institutions or other ways as stipulated by the stock exchange should have the
following conditions:

(1)

They are qualified to deal in stock brokerage business according to the laws of their localities;

(2)

They are under effective supervision of the local securities supervision departments;

(3)

They must have a net total assets of equivalent to no less than RMB50 million, or are qualified to provide guarantee according to
overseas laws and have the guarantee issued by an organ authorized by CSRC;

(4)

They should have the experience of trading in international stock business for more than two years;

(5)

Their financial indicators in the recent two years accord with the requirements for risk control set by local CSRCs;

(6)

They are accommodated with extensive grid points for business;

(7)

Executive directors and other senior management personnel should have more than five years’ experience in stock trading in addition
to good profession ethics;

(8)

They have not received any punishment by overseas securities supervision and regulatory agencies because of serious violations of
relevant laws or regulations in recent two years;

(9)

They abide by relevant laws and regulations of the People’s Republic of China;

(10)

They have at least two specialists who are familiar with China’s securities market and relevant policies and laws; and

(11)

Other conditions as required by CSRC.

Article 7

Domestic securities institutions which apply for underwriting of stocks for overseas investors should have the following conditions:

(1)

Securities institutions must have a net total assets of no less than RMB80 million, and concurrent securities institutions must have
an operation fund of no less than RMB80 million;

(2)

They have already acquired the qualifications for stock underwriting according to “The Measures on the Management of Stock Underwriting
by Securities Institutions”;

(3)

They have been authorized by the State Administrations of Foreign Exchange (SAFE) to do foreign exchange business;

(4)

They must have sufficient facilities, such as communications, business sites and equipment to guarantee the normal operations of overseas
stock business;

(5)

They must have at least 10 personnel who have the experience of securities underwriting, including at least one who is familiar with
each of the following: international financial business, accounting and corresponding laws;

(6)

They must have at least one year of experience in securities underwriting or joining in the underwriting of at least one stock; and

(7)

Other conditions as required by CSRC.

Article 8

Domestic securities institutions which apply to be chief underwriters of stocks for overseas investors or coordinators of domestic
affairs should have the following conditions apart from those set in the preceding article:

(1)

Securities institutions must have a net total assets of no less than RMB 120 million, and the concurrent securities institutions must
have an operation fund of no less than RMB 120 million;

(2)

They have acquired the qualifications for a chief underwriter according to “The Measures on the Management of Stock Underwriting by
Securities Institutions”;

(3)

They should have at least 20 specialists with underwriting experience, including at least two who are familiar with each of the following:
international financial business, accounting and corresponding laws;

(4)

They should have the experiences of taking part in the underwriting of stocks for overseas investors; and

(5)

Other conditions as required by CSRC.

Article 9

Overseas securities institutions which act as the chief underwriters and assistant chief underwriters of domestic B-shares for overseas
investors and act as coordinators of international affairs should have the following conditions apart from the conditions set in
Article 6 of this set of Provisions:

(1)

They are qualified to engage in stock underwriting business according to their local laws;

(2)

Their net total assets are of no less than an equivalent of RMB 120 million or, according to overseas laws, they may provide guarantee
and have guarantee provided by organs authorized by CSRC;

(3)

They have not suspended their stock underwriting at the international market in the recent two years before they file their applications;

(4)

They have at least three specialists who are familiar with China’s securities market and relevant policies and laws; and

(5)

Other conditions as required by CSRC.

Article 10

When an overseas securities institution acts as the chief underwriter of stocks for overseas investors listed overseas, it may appoint
a domestic securities institution as its coordinator of the domestic affairs.

Chapter III Application and Maintenance of Qualifications

Article 11

In applying for a qualifications certificate, a domestic securities institution should submit the following documents to CSRC:

(1)

“Application Form for Qualifications for Dealing in Shares for Overseas Investors” printed by CSRC;

(2)

“Monetary Business License (duplicate)” issued by competent department for approving the establishment of organs, and “Foreign Exchange
Business License (duplicate)” issued by the State Administrations of Foreign Exchange;

(3)

“Business License for Enterprise Legal Person (duplicate)” issued by administrations for industry and commerce;

(4)

Articles of Association of the company checked and approved by competent departments for approving the establishment of organs;

(5)

Balance sheets, profit and loss statements and statements of changes in financial position in the recent two years as audited by a
certified accountants’ firm qualified for trading stocks;

(6)

“Qualifications Certificate for Securities Business” or resumes and profession certificates of the legal representative, leading responsible
person and main business employees;

(7)

Statements about condition of securities business in the recent two years; and

(8)

Other documents as required by CSRC.

Article 12

In applying for a qualifications certificate, an overseas securities institution should submit the following documents to CSRC:

(1)

“Application Form for Qualifications for Dealing in Shares for Overseas Investors” printed by CSRC;

(2)

Business license issued by their local securities regulatory departments;

(3)

Articles of association of the company;

(4)

Academic credentials, qualifications certificates and other professional certificates of senior managerial personnel and main employees;

(5)

Capital certificates provided by certified accountants;

(6)

Financial statements in the recent two years as audited by certified accountants;

(7)

Briefings on the underwriting in the recent two years;

(8)

Statements about condition of securities business of the company in China; and

(9)

Other documents as required by CSRC.

CSRC may ask overseas securities institutions hand in relevant certificates provided by their local securities regulatory departments
if necessary.

Article 13

CSRC undertakes to examine all the application documents in line with this set of Provisions after it receives all the required documents.
A qualifications certificate shall be issued by CSRC if the documents submitted are found in accordance with the conditions set by
this set of Provisions, otherwise a certificate shall not be issued and applications of the same institution shall not be handled
within six months of the first application.

Article 14

A qualifications certificate is valid for two years beginning from the date of issuance by CSRC and becomes invalid automatically
afterwards. If the securities institutions need to maintain their qualifications to deal in shares for overseas investors, they should
send their applications to CSRC within three months before the qualifications certificate becomes invalid along with the recent two
years’ financial reports, statements of their business conditions and other documents as required by CSRC, and the certificate concerned
shall be extended should all documents pass the examinations.

Article 15

Domestic and overseas securities institutions which have obtained qualifications certificates must deal in relevant business in line
with what is set in the certificates concerned, institutions which have not obtained the qualifications certificates or their qualifications
certificates have become invalid must not deal in the shares for overseas investors as set in this set of Provisions.

Article 16

Domestic and overseas securities institutions which have obtained the qualifications certificates should submit a report to the CSRC
on the underwriting and brokerage for overseas investors in the preceding year before January 31 of every year.

Overseas securities institutions which engage in underwriting for overseas listed shares for overseas investors should send CSRC a
business report at the end of every underwriting business within 30 days.

Article 17

Domestic and overseas securities institutions which deal in shares for overseas investors should keep the original bills, vouchers,
trading records and relevant business documents, account books, report forms and other necessary materials for at least seven years.

Article 18

The CSRC may have regular or irregular examinations of the stock trading for overseas investors of the domestic and overseas securities
institutions, and may ask them for relevant business documents and materials whenever it deems necessary.

Chapter IV Penalty Provisions

Article 19

In one of the following cases, domestic and overseas securities institutions shall be imposed one or several of the punishments such
as warnings, confiscations of their illegal proceeds, fines, suspension of the stock trading for overseas investors for six months
or a year, and revoking of their qualifications certificates in accordance with the seriousness of the case; fines may be imposed
in line with “The Measures on the Management of Stock Underwriting by Securities Institutions”:

(1)

They obtained the qualifications certificates by cheating or other improper means;

(2)

They keep on deals in shares for overseas investors or do so in a disguised way before they obtain the qualifications certificates
or after their qualifications certificates have become invalid;

(3)

They fail to report their stock trading business for overseas investors according to regulations;

(4)

They refuse or do not cooperate with CSRC’s examinations; and

(5)

They have done other actions that violate relevant State laws and this set of Provisions.

Chapter V Supplementary Provisions

Article 20

Domestic securities institutions which are engaged in stock underwriting for overseas investors should also abide by the relevant
stipulations in “The Measures on the Management of Stock Underwriting by Securities Institutions” apart from this set of Provisions.

Article 21

The CSRC is enpost_titled to interpret this set of Provisions.

Article 22

This set of Provisions shall enter into force as of December 1, 1996.



 
The China Securities Regulatory Commission
1996-10-23

 






INTERIM PROCEDURES FOR THE EXPERIMENT IN THE ESTABLISHMENT OF CHINESE-FOREIGN JOINT VENTURE FOREIGN TRADE COMPANIES

Category  FOREIGN TRADE Organ of Promulgation  The State Council Status of Effect  In Force
Date of Promulgation  1996-09-30 Effective Date  1996-09-30  


Interim Procedures for the Experiment in the Establishment of Chinese-foreign Joint Venture Foreign Trade Companies



(Approved by the State Council of the People’s Republic of China on

September 2, 1996, promulgated by Decree No.3 of the Ministry of Foreign Trade
and Economic Cooperation on September 30, 1996)

    Article 1  These Procedures are formulated in accordance with “The
Foreign Trade Law of the People’s Republic of China”, “The Law of the
People’s Republic of China on Chinese-Foreign Equity Joint Ventures” as well
as other relevant laws and regulations with a view to further expanding the
scope of opening up to the outside world and promoting the growth of China’s
foreign trade.

    Article 2  These Procedures shall be applicable to Chinese-foreign joint
venture foreign trade companies(hereinafter referred to as “joint venture
foreign trade companies”) set up within the territory of China(experimental
areas) by foreign companies and enterprises(hereinafter referred to as
“foreign companies”) and Chinese companies and enterprises(hereinafter
referred to as “Chinese companies”) for the sole purpose of engaging in
import-export trade.

    Article 3  The joint venture foreign trade company shall be a limited
liability company. The percentage of the registered capital of Chinese
company in a joint venture foreign trade company shall not be less than 51%;
the percentage of a foreign company shall be more than 25%. The legal
representative shall be appointed by the Chinese company.

    Article 4  The following conditions shall be satisfied in the
establishment of a joint venture foreign company:

    (1) A foreign company shall have the following qualifications:

    a. A turnover of over US$ 5 billion in the year preceding the
application;

    b. An average annual trade volume of over US$ 30 million with China
during the three years preceding the application;

    c. A representative office has been set up within the territory of China
for more than three years prior to the application, or an investment of over
US$ 30 million within the territory of China.

    (2) A Chinese company shall have the following qualifications:

    a. Has authorization in foreign trade operations;

    b. An average annual import-export volume of over US$ 200 million during
the three years preceding the application, out of which the export amount
shall not be less than US$ 100 million;

    c. Has set up more than three branches, subsidiaries and joint ventures
outside the territory of China, with an average annual turnover of more than
US$ 10 million in the three years prior to the application.

    (3) A joint venture foreign trade company shall have the following
qualifications:

    a. Its registered capital shall not be less than RMB 100 million yuan;

    b. Has its own name and organization;

    c. Has necessary place, professional staff and other material conditions
suitable for foreign trade operations.

    Article 5  In applying for the establishment of a joint venture foreign
trade company, the Chinese company shall submit the following documents to
the department in charge of foreign trade and economic cooperation of the
state through the local department of foreign trade and economic cooperation
for examination:

    (1) Project proposal and the feasibility study, contract and constitution
signed by the Chinese and foreign parties;

    (2) Certificates of registration(copies) of the Chinese and foreign
parties, credibility certificates and legal representative certificates;

    (3) Certificate of approval of the foreign company’s invested enterprise
in China(copy), or approval paper for the establishment of representative
office in China(copy), business license(copy) and credibility report issued
by a Chinese registered accountant firm(copy);

    (4) Certificates of registration of the Chinese company’s branch,
subsidiary and joint venture outside the territory of China(copy);

    (5) Tables of assets and liabilities of the Chinese and foreign parties
in the past three years and the certificates of confirmation issued by the
auditing department;

    (6) Business scope of the proposed joint venture foreign trade company;

    (7) Other documents as required by the department in charge of foreign
trade and economic cooperation of the state.

    A certificate of approval for the joint venture foreign trade company
shall be issued by the department in charge of foreign trade and economic
cooperation of the state upon examination by the department in charge of
foreign trade and economic cooperation of the state and approval by the State
Council.

    Article 6  Upon approval by the state of the application for the
establishment of the joint venture foreign trade company, the Chinese company
shall, within one month starting from the date of approval, go through the
procedures of registration with the certificate of approval at the department
of industry and commerce administration, and complete financial registration
at the department of finance in charge within one month starting from
registration.

    Article 7  Funding by the foreign company for the registered capital of
the joint venture foreign trade company can be in convertible currency, and
funding by the Chinese company can be in RMB, in kind and invisible assets or
other property rights.

    Parties in the joint venture foreign trade company shall, within one
month starting from the date of issuance of the business license, complete
full payment of their respective confirmed amount of funds.

    Article 8  The joint venture foreign trade company shall engage in self-
operations or agency business operations of import and export of goods and
technologies with the approved business scope. It shall not engage in other
business operations without approval.

    Article 9  Import or export of commodities under quota and license
control by the state for import and export can be effected upon approval
after application to the department in charge concerned of the state in
accordance with relevant provisions of the state. The joint venture foreign
trade company shall, in accordance with the provisions of the department in
charge for tender and bidding of the commodities for import and export, take
part in bidding with regard to commodities for import and export under quota
tender by the state.

    Article 10  The joint venture foreign trade company shall handle foreign
exchange settlement, selling and payment in accordance with the relevant
provisions by the state for state-owned foreign trade companies. The joint
venture foreign trade company shall maintain foreign exchange balance.
Specific control measures shall be formulated by the People’s Bank of China
in consultation with the department in charge of foreign trade and economic
cooperation of the state.

    Article 11  The joint venture foreign trade company shall effect payment
of taxes in accordance with relevant taxation laws and regulations of the
state. The state shall effect refund of taxes on its export products in
accordance with the provisions for the refund of taxes on export by state-
owned foreign trade companies.

    Article 12  The joint venture foreign trade company shall, at regular
intervals, submit reports and tables of finance, accounting and statistics to
local departments in charge in accordance with the laws and regulations of
China concerning finance, accounting and statistics.

    Article 13  The joint venture foreign trade company shall apply to join
the chamber of commerce for import and export or the association enterprises
with foreign investment, and obey the coordination of either the chamber or
the association.

    Article 14  The joint venture foreign trade company shall abide by the
laws and regulations of China and put itself under the jurisdiction of the
laws and regulations of China. Its legitimate rights shall be protected by
the laws and regulations of China.

    Violation of laws and regulations of China on the part of the joint
venture foreign trade company shall be handled in accordance with relevant
laws and regulations. Violation of these Procedures by the joint venture
foreign trade company shall be handled by the department in charge of foreign
trade and economic cooperation.

    Article 15  Reference shall be made to these Procedures with regard to
the establishment of joint venture foreign trade companies by companies,
enterprises of Hongkong, Macao and Taiwan regions and inland companies and
enterprises.

    Article 16  The areas of experiment and number of companies for
experiment shall be determined by the State Council. For the present,
experiment shall be conducted only in the Pudong New Development Zone of
Shanghai and Shenzhen Special Economic Zone.

    Article 17  These Procedures shall enter into force as of the date of
promulgation. The department in charge of foreign trade and economic
cooperation of the state shall be responsible for the interpretation of these
Procedures.





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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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