(Adopted at the 21st Meeting of the Standing Committee of the Eighth National People’s Congress on August 29, 1996, promulgated by
Order No. 75 of the President of the People’s Republic of China on August 29, 1996, and effective as of December 1, 1996)
CHAPTER I GENERAL PROVISIONS
Article 1 This Law is enacted with a view to rationally developing, utilizing and protecting the coal resources, standardizing the production
and marketing of coal, and promoting and ensuring the development of the coal industry.
Article 2 This Law shall be applied to the production and marketing of coal within the territory of the People’s Republic of China and in the
sea areas under its jurisdiction.
Article 3 The coal resources are owned by the State. The State ownership of the coal resources, either on the surface or underground, shall
not change with the ownership or right to use of the land which the coal resources are attached to.
Article 4 With regard to the development of the coal resources, the State shall apply the principle of unified planning, rational geographical
distribution and comprehensive utilization.
Article 5 The State shall protect the coal resources according to law and forbid any indiscriminate mining which is destructive to the coal
resources.
Article 6 The State shall protect the lawful rights and interests of the persons who invest in the exploitation of the coal resources according
to law.
The State shall protect the sound development of State-owned coal mines.
With regard to township coal mines, the State shall adopt the policies of support, transformation, rectification, merging and upgrading,
so that they shall exploit the resources in a regular and rational manner and in good order.
Article 7 Coal mining enterprises must abide by the principle of safety in production, putting safety and prevention first, and establish and
improve the responsibility system for safety in production and the system of prevention and control by the masses.
Article 8 The people’s governments at all levels and the relevant departments thereof and the coal mining enterprises must take measures to
strengthen occupational protection so as to guarantee the safety and health of coal mine workers and staff members.
The State shall take special protective measures for miners working in underground coal mines.
Article 9 The State shall encourage and support the adoption of advanced science and technology and managerial methods in the exploitation
and utilization of coal resources.
Coal mining enterprises shall strengthen and improve their operation and management and increase their productivity and economic results.
Article 10 The State shall maintain order in production and other work in coal mine areas and protect the facilities of coal mining enterprises.
Article 11 Anyone who exploits or utilizes coal resources shall abide by the laws and regulations governing environmental protection, prevent
and control pollution and other public hazards, and protect the ecological environment.
Article 12 The department in charge of the coal industry under the State Council shall be responsible for supervision and administration of
the coal industry throughout the country according to law. The relevant departments under the State Council shall be responsible
for supervision and administration of the coal industry within the limits of their respective functions and responsibilities.
The departments in charge of the coal industry and other relevant departments under the local people’s governments at or above the
county level shall be responsible for supervision and administration of the coal industry in their own administrative regions according
to law.
Article 13 The coal mining administrations are State-owned coal mining enterprises each with the status of an independent legal entity.
The coal mining administrations and other coal mining and trading enterprises with the status of independent legal entities shall,
according to law, make their own decisions regarding their operations, be responsible for their own losses and profits and be capable
of expanding or contracting themselves.
CHAPTER II PLANS FOR COAL PRODUCTION AND DEVELOPMENT AND CONSTRUCTION OF COAL MINES
Article 14 The department in charge of the coal industry under the State Council shall, according to the national plan for exploring the mineral
resources, work out the national plan for exploring the coal resources.
Article 15 The department in charge of the coal industry under the State Council shall, according to the coal resources designated in the national
plan of the mineral resources arrange for the drawing up and execution of a plan for coal production and development.
The departments in charge of the coal industry under the people’s governments of the provinces, autonomous regions, and municipalities
directly under the Central Government shall, according to the coal resources designated in the national plan of the mineral resources
arrange for the drawing up and execution of plans for local coal production and development and submit the plans to the department
in charge of the coal industry under the State Council for the record.
Article 16 Plans for coal production and development shall be worked out in light of the needs of the national economic and social development
and shall be incorporated into the plan for national economic and social development.
Article 17 The State shall formulate preferential policies to support the development of the coal industry and promote the construction of coal
mines.
Coal mine construction projects shall conform with the plans for coal production and development and the policies for the coal industry.
Article 18 To establish a coal mining enterprise, the following requirements shall be met:
(1) having a feasibility study report on or mining plan for coal mine construction project;
(2) having a planned mining area, the limits of mining and a plan for comprehensive utilization of the resources;
(3) having geological, survey and hydrogeological data and other information needed for mining;
(4) having a mining design which meets the requirements of safety in coal mine production and of environmental protection;
(5) having a ratinal scale of coal mine production and the funds, equipment and technicians commensurate with such scale; and
(6) other requirements prescribed by laws and administrative rules and regulations.
Article 19 For establishing a coal mining enterprise, an application must be submitted to the department in charge of the coal industry according
to law; the application shall be examined for approval in light of the requirements provided for in this Law and by the administrative
department at the corresponding level with the authorization of the State Council.
Before examining and approving the application for establishing a coal mining enterprise, it is necessary for the department in charge
of geology and mineral resources to verify the proposed limits of mining and the plan for comprehensive utilization of the resources
and write down its comments with signature.
The coal mining enterprise that has obtained approval for establishment shall, by virtue of the document of approval, be issued the
mining license by the department in charge of geology and mineral resources.
Article 20 To use land for construction of a coal mine, the coal mining enterprise shall go through the formalities in accordance with the relevant
laws and administrative rules and regulations. Where it is necessary to requisition land, the enterprise shall, according to law,
pay compensation for the land and for the evacuees and help the evacuees to settle down.
In construction of coal mines the principle of protecting the cultivated land and utilizing the land rationally shall be adhered to.
Local people’s governments shall give support and assistance to the enterprise that uses land and has to have the residents move to
another place in accordance with law for the construction of coal mine.
Article 21 In coal mines, coal exploitation and environmental control shall be sychronized. The facilities for environmental protection of a
coal mine construction project must be designed, constructed, checked and accepted, and put into use simultaneously with the main
project.
CHAPTER III PRODUCTION OF COAL AND SAFETY OF COAL MINES
Article 22 Before a coal mine is put into production, the coal mining enterprise shall, in accordance with the provisions of this Law, submit
an application to the department in charge of the coal industry for coal production license. The said department shall examine its
actual production and safety conditions before issuing to it the coal production license if the requirements prescribed in this Law
are met.
Anyone who has not obtained the coal production license shall be forbidden to engage in coal production.
Article 23 The following requirements must be met for obtaining the coal production license:
(1) having the legally obtained mining license;
(2) having a mine production system that conforms to the mine safety rules formulated by the State;
(3) having mine managers who have received training according to law and obtained the mine manager qualification certificates;
(4) having specially skilled workers who have received training according to law and obtained the operation qualification certificates;
(5) having a good communications system for dispatch on the surface, underground, within and out of the coal mine;
(6) having an actually measured surface and underground engineering comparison drawing, a mining and excavation plan and a ventilation
system drawing;
(7) having the facilities to guarantee coal mine safety in production and environmental protection facilities, which have been proved
up to the standard through the acceptance test conducted upon completion of the project; and
(8) other requirements prescribed by laws and administrative rules and regulations.
Article 24 The department in charge of the coal industry under the State Council shall be responsible for the administration of the issue of
coal production licenses to the following coal mining enterprises:
(1) coal mining enterprises that are examined and approved for establishment by the State Council and those that are, in accordance
with law, subject to examination and approval for establishment by the department in charge of the coal industry under the State
Council; and
(2) coal mining enterprises that are established in trans-administrative regions of provinces, autonomous regions and municipalities
directly under the Central Government.
The departments in charge of the coal industry under the people’s governments of the provinces, autonomous regions and municipalities
directly under the Central Government shall be responsible for the administration of the issue of coal production licenses to the
coal mining enterprises other than those mentioned in the preceding paragraph.
The departments in charge of the coal industry under the people’s governments of the provinces, autonomous regions and municipalities
directly under the central Government may authorize the departments in charge of the coal industry of the cities divided into districts
and autonomous prefectures to be responsible for the administration of the issue of coal production licenses.
Article 25 The government departments in charge of the administration of the issue of coal production licenses shall be responsible for supervision
over and administration of coal production licenses.
Coal mining enterprises may not transfer or lease to another person the coal production licenses they have legally obtained.
Article 26 No duplicate coal production license shall be issued for mining in the same area.
Where the validity period of a coal production license expires or the coal resources within the limits of an approved mining area
are exhausted, the license-issuing authority shall revoke the license and make it known to the public.
Where the production and safety conditions of a coal mining enterprise have changed and through examination have been proved not meeting
the requirements prescribed by this Law, the license-issuing authority shall revoke its coal production license and make it known
to the public.
Article 27 The measures for administration of coal production license shall be formulated by the State Council according to this Law.
The standing committees of the people’s congresses of the provinces, autonomous regions and municipalities directly under the Central
Government may according to this Law and the regulations of the State Council, formulate local measures for administration of coal
production licenses.
Article 28 The State shall ensure protective mining for the special or rare types of coal which are of important value to the national economy.
Article 29 In the exploitation of coal resources, coal mining regulations must be complied with, the rational mining sequence followed and the
rate of extraction set for exploiting coal resources achieved.
The rate of extraction for coal resources shall be determined by the department in charge of the coal industry under the State Council
in light of the different resources and mining conditions.
The State shall encourage coal mining enterprises to carry out second mining or extract residual coal at the margins of mining areas
and very thin coal seams.
Article 30 Coal mining enterprises shall exercise strict supervision, inspection and control of coal product quality. Such quality shall be
graded according to the national or trade standards.
Article 31 Coal production shall be carried out within the approved limits of mining areas according to law. Mining beyond the approved limits
of mining areas or seams shall be forbidden.
No safety pillars shall be mined without authorization and no dangerous methods, such as water bursting, blasting and breaking through
roadways, which may threaten the production safety of adjacent coal mines shall be adopted.
Article 32 Coal mining enterprises shall be responsible for reclaiming the land, which is covered by coal or which subsides or is destroyed
due to mining, to the state that it can be utilized; any losses caused to another person shall be compensated according to law.
Article 33 Coal mines shall be closed or abandoned in accordance with the relevant laws and regulations as well as the rules of the department
in charge of the coal industry under the State Council.
Article 34 The State shall establish the system of accumulating funds by coal mining enterprises for changing the line of production during
the declining period of coal mines.
The State shall encourage and support coal mining enterprises to develop a diversified economy.
Article 35 The State shall encourage and support coal mining enterprises and other enterprises to produce both coal and electricity, coking
coal, coal chemicals and building materials made of coal and engage in deep and fine processing of coal.
The State shall encourage coal mining enterprises to develop coal washing and processing as well as comprehensive exploitation and
utilization of coalbed methane, gangue, coal slime, stone coal and peat.
Article 36 The State shall develop and disseminate clean coal technology.
The State shall adopt measures to ban coke making by indigenous methods. The construction of kilns for making coke with indigenous
methods shall be forbidden, and the existing kilns for making coke with indigenous methods shall be renovated within a time limit.
Article 37 The people’s governments at or above the county level and the departments in charge of the coal industry under such governments and
other departments concerned shall exercise strict supervision and control over coal mine safety in production.
Article 38 To ensure safety in production, the system under which the directors of coal mine administrations and the managers of coal mines
assume full responsibility shall be instituted in coal mining enterprises.
Article 39 Directors of coal mine administrations, managers of coal mines and other chief leading members of coal mining enterprises must abide
by the laws and regulations governing safety of mines and the safety rules and regulations for the coal industry, tighten their control
over coal mines safety in production, implement the responsibility system for safety in production and adopt effective measures to
prevent the occurrence of injury, death and other accidents in production.
Article 40 Coal mining enterprises shall conduct education and training in safety in production among their employees. No one who has not received
education and training in safety shall be permitted to work in a coal mine.
Employees of coal mining enterprises must abide by the laws and regulations governing safety in production, rules and regulations
for the coal industry and rules of coal mining enterprises.
Article 41 When an irresistible emergency occurs which may endanger the
lives and safety of the miners who are working underground in coal mines, the person in charge on the spot or other persons in charge
of safety shall immediately help the miners to leave the dangerous site and report the matter to the leading members concerned without
delay.
Article 42 When members of the trade unions of coal mining enterprises find that administrators of the enterprises give directions against
regulations and order miners to work at risks or when they scent hidden danger of obviously serious accident which may threaten the
lives and safety of workers, they shall have the right to make proposals for tackling the problem, and the administrative body of
the coal mining enterprise must make prompt decision to deal with it. If the said body refuses to deal with it, the trade union shall
have the right to criticism, accusation and complaint.
Article 43 Coal mining enterprises must provide the workers with the necessary articles to guarantee safety in production.
Article 44 Coal mining enterprises must provide accidental injury insurance for miners working underground and pay premiums.
Article 45 All equipment, facilities, explosives and safety instruments used by coal mining enterprises must meet the national or trade standards.
CHAPTER IV MARKETING OF COAL
Article 46 Coal mining enterprises which have legally obtained coal production licenses shall have the right to sell the coal they themselves
produce.
Article 47 To establish a coal trading enterprise, the following requirements shall be met:
(1) havingregistered capital commensurate with its marketing capacity;
(2) having fixed premises for operation;
(3) having the necessary facilities and coal stockyard;
(4) having the standard measuring and quality inspection devices;
(5) complying with the State requirements on the rational layout of coal trading enterprises; and
(6) meeting the other requirements prescribed by laws and administrative rules and regulations.
Article 48 For establishment of a coal trading enterprise, an application must be submitted to the department designated by the State Council
or by the people’s government of a province, autonomous region or municipality directly under the Central Government, which shall
conduct qualification examination in accordance with the provisions of Article 47 of this Law and within the limits of its power,
as authorized by the State Council to different levels of administration and grant the application if the requirements are met. By
virtue of the document of approval, the applicant shall apply for a business license and may start coal trading business only after
he obtains the license from the administrative department for industry and commerce.
Article 49 In the marketing of coal, coal trading enterprises shall abide by the relevant laws and regulations, improve services and ensure
supply. Any illegal marketing activities shall be forbidden.
Article 50 For the marketing of coal, the intermediate links shall be reduced and unreasonable intermediate links shall be removed, and, where
conditions permit, direct sale by coal mining enterprises shall be encouraged.
Customers and coal trading enterprises in coal marketing areas shall have the right to buy coal directly from coal mining enterprises.
In coal production areas, coal marketing and transport service agencies may be set up to provide marketing and transport services
for medium-sized and small coal mines.
Administrative departments shall be forbidden to set up intermediate agencies for coal supply and charge extra fees in violation of
State regulations and without authorization.
Article 51 Railway station and port authorities engaged in coal transportation and other transport enterprises may not take advantage of the
transportation capacity in their hands to take part in coal marketing business and seek improper interests.
Article 52 The price administration department under the State Council, together with the department in charge of the coal industry under the
State Council and other relevant departments, shall exercise supervision and control over the price of coal.
Article 53 The quality of coal supplied to customers by coal mining and coal trading enterprises shall meet the national or trade standards.
The quality of a specific type of coal shall match its grade and price. Where customers have special requirements for coal quality,
they shall have to reach an agreement with the seller in a purchase and sale contract.
Coal mining enterprises and coal trading enterprises may not adulterate coal and sell inferior coal as quality coal.
Article 54 If the quality of coal supplied by coal mining enterprises and coal trading enterprises to customers does not meet the national or
trade standards or the requirements agreed upon in a contract, or the quality does not match the grade or the price, thus causing
losses to customers, compensation shall be made according to law.
Article 55 Coal mining enterprises, coal trading enterprises, transport enterprises and customers shall supply, transport, and accept and unload
coal according to law, the relevant regulations of the State Council or the agreement in contracts.
Transport enterprises shall put coal of different quality to be transported into different packages or stock piles.
Article 56 Unified control shall be maintained over the import and export of coal in accordance with the relevant regulations of the State Council.
After the department in charge of foreign economic relations and trade under the State Council gives its approval, large coal mining
enterprises that meet the necessary conditions shall have the right to export coal.
Article 57 Measures for control of coal marketing shall be formulated by the State Council in accordance with this Law.
CHAPTER V PROTECTION OF COAL MINING AREAS
Article 58 No units or individuals may damage the installations of electric power and communications, the sources of water, the means of transportation
and other production facilities in coal mine areas.
All units and individuals shall be forbidden to disrupt the order of production and other work in coal mine areas.
Article 59 Any units and individuals shall have the right to inform against or accuse persons who steal or damage the facilities and equipment
in coal mine areas or commit other acts that threaten the security in coal mine areas.
Article 60 Without consent of coal mining enterprises, no units or individuals may grow plants or crops or breed animals, take soil or put
up buildings or other structures on the land during the validity period for use of the land legally obtained by coal mining enterprises.
Article 61 Without consent of coal mining enterprises, no units or
individuals may occupy the railways, roads, navigation channels, wharves, power lines and water supply pipes specially used by coal
mining enterprises.
Article 62 Any units or individuals that wish to conduct operations within coal mining areas that may threaten safety of the coal mines must
first obtain consent of the coal mining enterprises, report to the department in charge of the coal industry for approval and take
safety measures.
If public utilities or other projects need to be constructed in a coal mine area, the unit concerned shall consult the coal mining
enterprise and reach an agreement before it may start construction.
CHAPTER VI SUPERVISION AND INSPECTION
Article 63 The departments in charge of the coal industry and other relevant departments shall, in accordance with law, exercise supervision
over and inspection of the implementation of the laws and regulations governing the coal industry by coal mining enterprises and
coal trading enterprises.
Article 64 Supervisors and inspectors of the departments in charge of the coal industry and other relevant departments shall have adequate knowledge
of the laws and regulations governing the coal industry, be proficient in the relevant technology, be fair and honest and enforce
the law impartially.
Article 65 During supervision and inspection, the supervisors and inspectors of the departments in charge of the coal industry and other relevant
departments shall have the right to inquire of coal mining enterprises, coal trading enterprises or the customers how they implement
the laws and regulations governing the coal industry and look up relevant material and they shall have the right to enter a place
for inspection.
The coal mining enterprises, coal trading enterprises and customers shall provide convenience to the supervisors and inspectors of
the departments in charge of the coal industry and other relevant departments who are carrying out supervision and inspection according
to law.
Article 66 The supervisors and inspectors of the departments in charge of the coal industry and other relevant departments shall have the right
to ask the coal mining enterprises or coal trading enterprises that violate the laws and regulations governing the coal industry
to make rectification according to law.
The supervisors and inspectors of the departments in charge of the coal industry and other relevant departments shall show their papers
before they carry out supervision and inspection.
CHAPTER VII LEGAL LIABILITY
Article 67 If a person, in violation of the provisions of Article 22 of this Law, engages in coal production without coal production license,
the department in charge of the coal industry shall order him to stop production, confiscate his unlawful proceeds and it may also
impose on him a fine of not less than one time and not more than five times his unlawful proceeds; if he refuses to stop production,
local people’s government at or above the county level shall compel him to do so.
Article 68 If a person, in violation of the provisions of Article 25 of this Law, transfers or leases his coal production license, the department
in charge of the coal industry shall revoke his coal production license, confiscate his unlawful proceeds and impose on him a fine
of not less than one time and not more than five times his unlawful proceeds.
Article 69 If an enterprise, in violation of the provisions of Article 29 of this Law, fails to achieve the rate of extraction set by the department
in charge of the coal industry under the State Council for exploiting coal resources, the said department shall order it to make
rectification within a time limit and if it still cannot reach the rate upon expiration of the time limit, its coal production license
shall be revoked.
Article 70 If an enterprise, in violation of the provisions of Article 31 of this Law and without authorization, mines safety pillars or adopts
dangerous mining methods which threaten production safety of an adjacent coal mine, the labor administration department, together
with the department in charge of the coal industry, shall order it to stop mining, and the department in charge of the coal industry
shall confiscate its unlawful proceeds, impose on it a fine of not less than one time and not more than five times the unlawful proceeds,
and revoke its coal production license; if the violation constitutes a crime, the judicial organ shall investigate its criminal responsibility;
if it causes losses, it shall bear liability for compensation according to law.
Article 71 If an enterprise, in violation of the provisions of Article 48 of this Law, deals in coal without undergoing examination for approval,
the department in charge of examination and approval shall order it to stop such activity, confiscate its unlawful proceeds and may
also impose on it a fine of not less than one time and not more than five times its unlawful proceeds.
Article 72 If an enterprise, in violation of the provisions of Article 53 of this Law, adulterates coal and sells inferior coal as quality coal,
it shall be ordered to stop selling coal, its unlawful proceeds shall be confiscated and it shall be imposed with a fine of not less
than one time and not more than five times its unlawful proceeds, and its coal production license may be revoked or it may be disqualified
from dealing in coal in accordance with law; if the violation constitutes a crime, the judicial organ shall investigate its criminal
responsibility.
Article 73 If any units or individuals, in violation of the provisions of Article 60 of this Law and without consent of the coal mining enterprise
concerned, put up buildings or other structures on the land during the validity period for use of the land legally obatained by the
coal mining enterprise, the local people’s government shall persuade
them to pull down the buildings or other structures; if they refuse to do so, they shall be ordered to pull them down.
Article 74 If any units or indi
Category |
FOREIGN ECONOMIC RELATIONS AND TECHNOLOGICAL COOPERATION |
Organ of Promulgation |
The State Council |
Status of Effect |
In Force |
Date of Promulgation |
1996-07-09 |
Effective Date |
1996-07-09 |
|
|
Measures for Liquidation of Foreign Investment Enterprises |
Contents
Chapter I General Provisions
Chapter II Ordinary Liquidation
Chapter III Special Liquidation
Chapter IV Legal Liabilities
Chapter V Supplementary Provisions
(Approved by the State Council on June 15, 1996 and promulgated by
Decree No.2 of the Ministry of Foreign Trade and Economic Cooperation
on July 9, 1996)
Contents
Chapter I General Provisions
Chapter II Ordinary Liquidation
Section 1 Term of Liquidation
Section 2 Liquidation Organization
Section 3 Notice and Announcement
Section 4 Claims, Debts and Clearing
Section 5 Assessment and Disposition of Assets Subject to Liquidation
Section 6 The Closing of Liquidation
Chapter III Special Liquidation
Chapter IV Legal Liabilities
Chapter V Supplementary Provisions
Chapter I General Provisions
Article 1 These Measures are formulated, according to provisions of
relevant laws, for the purposes of guaranteeing the smooth conduction of
liquidation of foreign investment enterprises, protecting the legitimate
rights and interests of creditors and investors and maintaining the social
economic order.
Article 2 These Measures shall apply to liquidation of Chinese-foreign
equity joint ventures, Chinese-foreign contractual joint ventures and
foreign-capital enterprises established in accordance with the law within the
territory of the People’s Republic of China (hereinafter referred to as
enterprises).
Enterprises declared bankruptcy in accordance with the law shall be
handled in accordance with laws and regulations concerning bankruptcy and
liquidation.
Article 3 Enterprises that can form a liquidation committee to conduct
liquidation by themselves shall handle things in accordance with provisions
of these Measures regarding ordinary liquidation.
Where an enterprise cannot form a liquidation committee to conduct
liquidation by itself or the liquidation conducted in accordance with
provisions concerning ordinary liquidation has run into serious obstacles,
the organ of power of the enterprise such as the board of directors or the
joint management committee (hereinafter referred to as the organ of power of
the enterprise), the investors or the creditors may apply to the examination
and approval authorities of the enterprise for a special liquidation. With
the approval of the examination and approval authorities of the enterprise,
the liquidation shall be conducted in accordance with provisions of these
Measures regarding special liquidation.
Where an enterprise is ordered to be closed down and so is dissolved, the
liquidation shall be conducted in accordance with provisions of these
Measures regarding special liquidation.
Article 4 Liquidation of enterprises shall be conducted in accordance
with provisions of relevant laws and regulations of the state, on the basis
of the approved contract and articles of association of the enterprise and on
the principle of fairness, reasonableness and protection of enterprises,
investors and creditors.
Chapter II Ordinary Liquidation
Section 1 Term of Liquidation
Article 5 The date on which the period of operations of the enterprise
expires or the examination and approval authorities of the enterprise
approves the dissolution of the enterprise or the people’s court or an
arbitral authority makes a judgment or award to terminate the contract of
the enterprise shall be considered as the starting date of the liquidation.
Article 6 The term of liquidation of an enterprise shall be 180 days,
counting from the starting date of the liquidation to date on which the
liquidation report is submitted to the examination and approval authorities
of the enterprise.
When there is a need to extend the term of liquidation due to some
special reasons, the liquidation committee shall, 15 days before the
expiration of the term of liquidation, submit an application for the
extension to the examination and approval authorities of the enterprise. 90
days shall be the limit for extension.
Article 7 In its term of liquidation, an enterprise may not develop new
business operations.
Section 2 Liquidation Organization
Article 8 The organ of power of the enterprise shall organize and
establish a liquidation committee for the liquidation of the enterprise. The
liquidation committee shall be established within 15 days from the starting
date of the liquidation.
Article 9 The liquidation committee shall be composed of at least three
persons, who shall be selected among members of the organ of power of the
enterprise or engaged from relevant professional personnel by the organ of
power of the enterprise.
The liquidation committee shall have a chairman, which shall be appointed
by the organ of power of the enterprise. With the approval of the organ of
power of the enterprise, the liquidation committee may engage persons for
handling daily routine.
Article 10 If any of the following circumstances occurs in duration of
liquidation, the relevant member of the liquidation committee shall be
replaced:
(1) The member of the liquidation committee has committed illegal
activities;
(2) Any creditor requests with justified reasons the member of the
liquidation committee be replaced; or
(3) The member of the liquidation committee has died or has lost
capacity.
Article 11 During liquidation, the liquidation committee shall exercise
the following powers and functions:
(1) Liquidate the assets of the enterprise, work out a balance sheet and
a detailed inventory of assets of the enterprise, and formulate a scheme of
liquidation;
(2) Inform unknown creditors by announcement and notify the known
creditors in writing;
(3) Dispose of and liquidate relevant unfinished business of the
enterprise;
(4) Give the basis for valuing and calculating the assets;
(5) Pay off taxes owed by the enterprise;
(6) Clear up claims and debts;
(7) Dispose of, after paying off the debts of the enterprise, its
remaining assets; and
(8) Participating in civil lawsuits on behalf of the enterprise.
Article 12 The balance sheet and detailed inventory of assets worked out
by the liquidation committee, the basis given by the liquidation committee
for valuing and calculating the assets and the scheme of liquidation
formulated by the liquidation committee shall be submitted to the examination
and approval authorities of the enterprise for filing after being confirmed
by the organ of power of the enterprise.
Article 13 After the liquidation committee has been formed, relevant
personnel of the enterprise shall, within the time limit prescribed by the
liquidation committee, submit to the liquidation committee the accounting
statements, account books, list of property, list of creditors and debtors
and other liquidation-related information of the enterprise.
Article 14 The liquidation committee shall perform the liquidation
obligations in accordance with the law and handle liquidation affairs on the
principle of consultation.
Members of the liquidation committee shall be devoted to their duties and
may not accept bribes or seek for illegal income by taking advantage of their
position and power, or embezzle any assets of the enterprise.
Article 15 During liquidation, the examination and approval authorities
of the enterprise and other relevant competent authorities may send
attendants to conferences concerning liquidation of the enterprise, so as to
conduct supervision over the liquidation work of the enterprise.
Section 3 Notice and Announcement
Article 16 The enterprise shall, within seven days from the starting
date of the liquidation, notify in writing the name and address of the
enterprise, the reason for the liquidation and the starting date of the
liquidation to the examination and approval authorities and the department in
charge of the enterprise, the customs, the authorities for foreign exchange
control, the registration authorities, tax authorities and the bank with
which the enterprise has its account, etc., and to the administrative
department for state property if the enterprise holds state property.
Article 17 The liquidation committee shall, within 10 days of its
establishment, notify in writing the known creditors to lodge claims and,
within 60 days of its establishment, make announcement at least twice in a
newspaper of national circulation and a local provincial or municipal
newspaper. The first announcement shall be made within 10 days of the
establishment of the liquidation committee.
The liquidation announcement shall state the name and address of the
enterprise, the reason for liquidation, the starting date of liquidation, the
address of the liquidation committee, the list of members of the liquidation
committee and the contact person.
Article 18 Creditors shall, within 30 days of the receipt of the notice,
or within 90 days of the first announcement if no notice has been received,
lodge claims with the liquidation committee.
Article 19 Creditors shall lodge claims within the specified time limit
and submit documents supporting the amount of claim and other certificates
related to the claim.
In case a creditor fails to lodge claims within the specified time limit,
the following provisions shall be applied:
(1) Claims of known creditors shall be included in the liquidation; and
(2) Unknown creditors may lodge claims anytime before the distribution of
the remaining assets of the enterprise is brought to an end; the failure to
do so shall be deemed as abandonment of claims.
Section 4 Claims, Debts and Clearing
Article 20 The liquidation committee shall make registration of claims
lodged by creditors and, after verifying the claims, notify the creditors in
writing of the verification results.
Article 21 Creditors who call in question the verification result given
by the liquidation committee on claims may, within 15 days after the receipt
of the written notice, apply to the liquidation committee for
re-verification. Creditors who call in question the result of re-verification
may, within 15 days after the receipt of the written notice regarding the
re-verification result, bring a lawsuit with the people’s court in the place
of the domicile of the enterprise; in case of an arbitration agreement
concluded between the enterprise and the creditor, the creditor shall apply
for arbitration in accordance with the law.
During proceedings or arbitration, no assets under disputes may be
distributed by the liquidation committee.
Article 22 The liquidation committee shall state reasons in writing and
give proof to the organ of power of the enterprise for the inventory profits,
inventory losses, disposal of property, insolvent obligations or non-
recoverable claims, and income or losses incurred during the liquidation
period, and count them into liquidation profits and losses.
Article 23 The following liquidation expenses shall be covered as the
first priority with the assets subject to liquidation:
(1) expenses needed for the administration, disposal and distribution of
the assets subject to liquidation of the enterprise;
(2) costs of announcement, litigation and arbitration; and
(3) other expenses needed to pay during the liquidation.
Article 24 With respect to secured claims established before the
starting date of liquidation, the creditor shall have priority in getting
payment with the collateral.
Where the amount of a secured claim exceeds the amount obtained through
the disposal of the collateral, the unpaid part of the claim shall be paid
in the order stipulated in Article 25 of these Measures.
Article 25 After the prior deduction of liquidation expenses from the
assets subject to liquidation, payment shall be made in the following
order:
(1) wages and labor insurance premiums of the staff and workers;
(2) taxes; and
(3) other debts.
Article 26 No assets of the enterprise may be distributed before
the liquidation expenses have been covered and the debts of the enterprise
have been paid off.
Subject to other stipulations by laws, regulations or contracts or
articles of association of the enterprise, the remaining assets of the
enterprise after paying off the liquidation expenses and all the debts shall
be distributed in proportion to the actual investments by the investors.
Article 27 If the liquidation committee finds during the liquidation
that the assets of the enterprise are insufficient to pay off its debts, it
shall apply to the people’s court for a declaration of bankruptcy of the
enterprise; the enterprise having been declared bankruptcy in accordance with
the law shall be treated in accordance with laws and regulations concerning
bankruptcy liquidation.
Article 28 The following acts committed by the enterprise within 180
days before the starting date of the liquidation shall be null and void:
(1) voluntarily convey assets of the enterprise;
(2) abnormally undersell property of the enterprise;
(3) give property security for debts on which there was no property
security;
(4) pay off debts that has not become due; and
(5) waive claims of the enterprise.
From the starting date of the liquidation to the closing of the
liquidation, neither Chinese nor foreign investors may dispose of the
property of the enterprise.
Section 5 Assessment and Disposition of Assets Subject to Liquidation
Article 29 The assessment of assets subject to liquidation shall be
conducted in accordance with the following provisions:
(1) Where there are stipulations in the contract or articles of
association of the enterprise, such stipulations shall be observed;
(2) Where no stipulations have been made in the contract or articles of
association of the enterprise, the decision shall be made through
consultation by the Chinese and foreign investors and submitted to the
examination and approval authorities of the enterprise for approval;
(3) Where no stipulations have been made in the contract or articles of
association of the enterprise, nor agreement can be reached through
consultation by the Chinese and foreign investors, the liquidation committee
shall make the determination in accordance with relevant provisions of the
state and with reference to the opinions given by an assets assessing
institute and submit it to the examination and approval authorities of the
enterprise for approval; and
(4) Where the people’s court judges or an arbitration organ awards an
termination of the contract of the enterprise and specifies the measures for
assessing the assets subject to liquidation, such measures shall be applied.
Article 30 When assets subject to liquidation are sold off, the
investors of the enterprise shall have priority in making purchase and the
assets shall be sold to whoever makes the highest offers.
Section 6 The Closing of Liquidation
Article 31 The liquidation committee shall, after finishing the work
defined by the scheme of liquidation, work out a liquidation report, which
shall include the following contents:
(1) reasons for liquidation and term and process of the liquidation;
(2) the outcome of disposition of claims and debts; and
(3) the outcome of disposition of assets subject to liquidation.
Article 32 The liquidation report shall, after confirmed by the organ of
power of the enterprise, be submitted to the examination and approval
authorities of the enterprise for filing.
Article 33 The liquidation committee shall, within 10 days from the date
on which the liquidation report is submitted to the examination and approval
authorities of the enterprise, go through the cancellation formalities with
the tax authorities and the customs.
The liquidation committee shall, within 10 days after the formalities
prescribed by the preceding paragraph are completed, go through the
cancellation formalities with, and hand in the business license to the
registration authorities of the enterprise by submitting the liquidation
report together with the cancellation certificates issued by tax authorities
and the customs, and be responsible for making announcement of the
termination of the enterprise on a newspaper of national circulation and a
local provincial or municipal newspaper.
Article 34 After closing the liquidation and before going through the
cancellation formalities, the enterprise shall, in accordance with the
following provisions, turn over various accounting vouchers, account books,
accounting statements and so on it keeps:
(1) In the case of a Chinese-foreign equity joint venture or a Chinese-
foreign contractual joint venture, the Chinese investor shall be responsible
for the custody; where there are more than one Chinese investor, the
department in charge of the enterprise shall designate one of them to take
charge of the custody; or
(2) In the case of a foreign-capital enterprise, the examination and
approval authorities of the enterprise shall designate a unit to take charge
of the custody.
Chapter III Special Liquidation
Article 35 The date on which the examination and approval authorities of
the enterprise approves the special liquidation or the date on which the
enterprise is ordered to close down shall be considered as the starting date
of the liquidation.
Article 36 For special liquidation of an enterprise, the examination and
approval authorities of the enterprise or a department entrusted thereby
shall organize Chinese and foreign investors, representatives from relevant
departments and relevant professional personnel to form a liquidation
committee.
Article 37 The liquidation committee shall have a chairman, which shall
be nominated by the examination and approval authorities of the enterprise or
the department entrusted thereby. During the special liquidation, the
chairman of the liquidation committee shall exercise the functions and powers
of the legal representative of the enterprise, and the liquidation committee
shall exercise the functions and powers of the organ of power of the
enterprise.
The liquidation committee shall handle liquidation affairs and is
accountable to the examination and approval authorities of the enterprise.
Article 38 The liquidation committee may convene conferences of the
organ of power of the enterprise and conferences of creditors to discuss
specific matters related to liquidation.
Article 39 All creditors are members of the conference of creditors.
Members of the conference of creditors shall have voting power, but creditors
who have claims secured by property and have not waived the priority in
getting repayment shall not.
The chairman of the conference of creditors shall be nominated by the
examination and approval authorities of the enterprise or the department
entrusted thereby from among the creditors having voting power.
Article 40 The conference of creditors shall be convened by the
liquidation committee. The liquidation committee shall, within 15 days before
the conference, notify creditors in writing. A creditor who cannot attend the
conference of creditors shall entrust another person by written authorization
as his agent to attend the conference.
Article 41 The conference of creditors shall exercise the following
functions and powers:
(1) Examine supporting materials given by creditors for their claims, and
the amount and guarantee situation of claims; and
(2) Find out about the situation of the clearing of debts and convey to
the liquidation committee the opinions of creditors with respect to the
scheme of liquidation and the situation of the clearing of debts.
Article 42 The scheme of liquidation and liquidation report worked out
by the liquidation committee must be confirmed by the examination and
approval authorities of the enterprise.
Article 43 Matters which are not covered by this chapter concerning
special liquidation shall be handled by applying provisions of Chapter II of
these Measures.
Chapter IV Legal Liabilities
Article 44 If an enterprise develops new business activities during the
period of liquidation, the registration authorities of the enterprise shall
order the enterprise to make corrections and may impose a fine between 10,000
and 100,000 yuan.
Article 45 Where an enterprise fails to notify creditors or make
announcement in accordance with the provisions of Article 17 of these
Measures, the registration authorities of the enterprise shall order the
enterprise to make corrections and may impose a fine between 10,000 and
100,000 yuan.
Article 46 If a Chinese or foreign investor, in violation of the
provisions of Paragraph 2, Article 28 of these Measures, dispose of the
property of the enterprise in the period of liquidation, the examination and
approval authorities of the enterprise shall order a restoration to the
original state or order the investor to return the disposed property to the
enterprise; where any damage is caused, the investor shall bear the
compensation responsibility.
Article 47 Where a liquidation committee fails to submit the liquidation
report for filing to the examination and approval authorities of the
enterprise or fails to submit the liquidation report to the registration
authorities of the enterprise in accordance with the provisions of Article 32
or 33 of these Measures, or conceals important facts or omits major matters
when submitting the liquidation report, the examination and approval
authorities and the registration authorities of the enterprise shall order
the liquidation committee to make corrections.
If the liquidation committee fails to go through the cancellation
formalities for the enterprise in accordance with the provisions of
Article 33 of these Measures, the registration authorities of the enterprise
shall revoke its business license and make announcement.
Article 48 Where an enterprise under liquidation conceals assets,
makes false balance sheet or false inventory of assets or distributes the
assets of the enterprise before the payment of liquidation expenses and the
debts of the enterprise, the examination and approval authorities and the
registration authorities of the enterprise shall order the enterprise to make
corrections and the registration authorities of the enterprise shall impose a
fine between one and five percent of the amount of assets concealed or the
amount of the assets distributed before all debts of the enterprise are paid
off; the person in charge directly responsible and other person directly
responsible shall be imposed a fine between 10,000 and 100,000 yuan.
Article 49 If a member of a liquidation committee takes advantage of his
position and power to play favoritism and commit irregularities, seek for
illegal earnings or embezzle the assets of the enterprise, the examination
approval authorities and the registration authorities of the enterprise shall
order the person to return the embezzled assets and the registration
authorities of the enterprise shall confiscate the illegal earnings and may
impose a fine between one and five times the illegal earnings.
Article 50 Those violating provisions of these Measures and committing
a crime shall be investigated for criminal responsibility.
Chapter V Supplementary Provisions
Article 51 These Measures shall go into effect as of the date of
promulgation.