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2002

PROMOTING THE TRANSFORMATION OF SCIENTIFIC AND TECHNOLOGICAL ACHIEVEMENTS LAW

Law of the PRC of china on Promoting the Transformation of Scientific and Technological Achievements

     CHAPTER I GENERAL PROVISIONS CHAPTER II ARRANGEMENTS FOR IMPLEMENTATION CHAPTER III GUARANTEE MEASURES CHAPTER IV TECHNOLOGICAL RIGHTS
AND INTERESTS CHAPTER V LEGAL RESPONSIBILITY CHAPTER VI SUPPLEMENTARY PROVISIONS

   Article 1 This law is enacted for the purpose of promoting the transformation of scientific and technological achievements into real productive
forces, standardizing such transformation, hastening scientific and technological progress and facilitating economic and social development.

   Article 2 The phrase “transformation of scientific and technological achievements” as used in this Law means the entire process of the follow-up
tests, development, application and widespread use of the applicable scientific and technological achievements, made as a result
of scientific research and technological development, through to the final creation of new products, new techniques, new materials
and new industries — all for the purpose of enhancing the productive forces.

   Article 3 Transformation of scientific and technological achievements shall be instrumental to increasing economic and social results and protecting
the environment and natural resources, as well as to promoting economic and social development and strengthening national defense.

In transforming scientific and technological achievements, the persons concerned shall abide by the principles of voluntariness, mutual
benefit, fairness and good faith and shall, in accordance with law or contractual agreement, enjoy interests and bear risks. Intellectual
property involved in transformation of scientific and technological achievements shall be protected by law.

In transformation of scientific and technological achievements, laws shall be observed and State interests safeguarded, and no public
interests shall be damaged.

   Article 4 The administrative department for science and technology, the planning department, the administrative department for comprehensive
economic and trade affairs and other relevant administrative departments under the State Council shall, within their functions and
responsibilities as prescribed by the State Council, administer, guide and coordinate efforts for the transformation of scientific
and technological achievements.

The local people’s governments at various levels shall be responsible for administering, guiding and coordinating efforts for the
transformation of scientific and technological achievements within their respective administrative regions.

CHAPTER II ARRANGEMENTS FOR IMPLEMENTATION

   Article 5 The State Council and the local people’s governments at various levels shall incorporate the transformation of scientific and technological
achievements in their notional economic and social development plans and make arrangements and coordinate efforts for the transformation
of scientific and technological achievements.

   Article 6 The relevant departments under the State Council and the people’s governments of provinces, autonomous regions and municipalities
directly under the Central Government shall, at regular intervals, publish catalogues of scientific and technological achievements
and handbooks of major projects for transformation of scientific and technological achievements and shall give first priority and
assistance to the following:

(1) projects that will noticeably help raise the industrial and technical level and increase economic results;

(2) projects of an industrial scale that can compete among the economies of the world;

(3) projects that can help rationally develop and utilize the natural resources, conserve energy, reduce material consumption and
prevent and control environmental pollution;

(4) projects that can facilitate high-yield, high-quality and high- efficiency farming and promote economic development in the countryside;
and

(5) projects that can help accelerate the social and economic development in areas inhabited by minority nationalities and outlying
and poverty-stricken areas.

   Article 7 The State, by adopting appropriate policies and measures, promotes and encourages the use of advanced technology, techniques and
equipment and continued improvement, restricted use and elimination of backward technology, techniques and equipment.

   Article 8 When making arrangements for transformation of major scientific and technological achievements, the people’s governments at various
levels may have relevant departments to arrange for the transformation through public bidding. These departments shall provide the
successful tender with the funds and other conditions that they decided to offer when making the bidding.

   Article 9 Holders of scientific and technological achievements may have their achievements transformed in the following ways:

(1) investing in the transformation themselves;

(2) transferring their achievements to another;

(3) allowing another to use their achievements;

(4) working together with another for the transformation with their achievements as the conditions for cooperation; and

(5) investing with their achievements as trade-in, as converted shares or as proportions of contribution to the investment.

   Article 10 An enterprise may, for the purpose of adopting new technology, new techniques and new materials and manufacturing new products, publish
information on its own or entrust an intermediate institution engaged in trade of technology to solicit the scientific and technological
achievements that it needs or to find collaborators for the transformation of scientific and technological achievements.

   Article 11 An enterprise shall, according to law, have the right to conduct transformation of scientific and technological achievements independently
or jointly with domestic or foreign enterprises or institutions or other collaborators.

An enterprise may, through fair competition, undertake the projects, arranged by the government, for scientific and technological
research and development or for the transformation of scientific and technological achievements independently or jointly with another.

   Article 12 The State encourages research and development institutions, colleges and universities and other institutions to join efforts with
manufacturers for the transformation of scientific and technological achievements.

Research and development institutions, colleges and universities and other institutions may participate in the bidding or tendering
conducted by relevant departments of the government or enterprises for transformation of scientific and technological achievements.

   Article 13 The State encourages agricultural research institutions and agricultural experiment and demonstration stations to transform scientific
and technological achievements independently or in cooperation with another.

Agricultural research institutions may, for the purpose of advancing the transformation of their scientific and technological achievements
and in accordance with law, deal in the fine strains which they breed through their own research or in cooperation with another and
which are approved after examination.

   Article 14 With regard to scientific and technological achievements worth applying that are made by persons while holding positions in the research
and development institutions set up by the State or in colleges and universities, if the units concerned fail to make timely transformation
of the achievements, the persons who made the achievements and the participants may, on condition that ownership of the achievements
remains unchanged and in accordance with the agreement they reached with the units they belong to, transform the achievements, and
they shall enjoy the rights and interests as stipulated in the agreement. And the units concerned should assist in the transformation
of the scientific and technological achievements mentioned above.

Persons who made the scientific and technological achievements or leading members of a research project may not obstruct transformation
of the scientific and technological achievements they made while holding positions in the units or take into their own possession
such achievements or thus encroach upon the lawful rights and interests of the units they belong to.

   Article 15 Units that made scientific and technological achievements, units that conduct transformation of the achievements and units that invest
in such transformation shall sign a contract if they intend to cooperate in the follow-up tests, development and application of the
achievements as well as their putting into production and operation, in which to stipulate the rights to be enjoyed and the risks
to be borne by each party.

   Article 16 In testing and evaluating scientific and technological achievements in the course of their transformation, the principles of impartiality
and objectiveness shall be adhered to; it is not allowed to provide false testing results or evaluation certificates.

When research and development institutions that are set up by the State, colleges and universities or State-owned enterprises work
together with enterprises, other organizations or individuals from outside China in transforming scientific and technological achievements,
they must evaluate the achievements in accordance with relevant regulations of the State.

Where State secrets are involved in transforming scientific and technological achievements with the cooperation of other countries,
prior approval must be obtained through the procedures stipulated by law.

   Article 17 In places or agencies set up according to law for the exchange of technology, the following activities to promote transformation
of scientific and technological achievements may be conducted:

(1) introducing or recommending scientific and technological achievements that are advanced, matured and applicable;

(2) providing economic, technological, environmental and other information needed for transformation of scientific and technological
achievements;

(3) trading in technologies; and

(4) providing other advisory services for transformation of scientific and technological achievements.

   Article 18 Intermediate institutions acting as agent or intermediaries or providing other paid services in the exchange of technologies must
obtain business licenses as required by relevant State regulations. Brokers of these institutions must have qualification certificates
as required by relevant State regulations.

   Article 19 The State encourages enterprises and institutions and economic cooperative organizations engaged in scientific and technological
activities in the countryside to conduct intermediate and industrial experiments, agricultural experiments and demonstrations and
other technological innovations and to provide technical services.

The following activities may be engaged in the bases for conducting intermediate and industrial experiments, agricultural experiments
and demonstrations for the purpose of transforming scientific and technological achievements and in other institutions that are engaged
in technical innovations or provide technical services:

(1) conducting intermediate and industrial experiments with regard to new products and new techniques;

(2) engaging in ancillary development and technical innovation for the systematization and engineering of scientific and technological
achievements in different areas or trades to serve the community;

(3) providing technology or technical services to small and mediumsized enterprises, township enterprises, and economic cooperative
organizations engaged in scientific and technological activities in the countryside; and

(4) providing all-round services in support of transforming high- technology achievements and establishing enterprises for the transformation.

Capital construction of the bases and institutions mentioned in the preceding paragraph shall have to be approved by the relevant
department under the State Council and the people’s governments of provinces, autonomous regions and municipalities directly under
the Central Government and shall be included in the relevant plans of the State or the local authorities.

   Article 20 Trial products from the transformation of scientific and technological achievements may be provided for test marketing within the
verified period for trial sale, in accordance with State regulations governing products for trial sale and after approval by the
relevant department. Trial manufacturing and test marketing of the products mentioned above shall meet the technical, quality, safety,
health and other standards prescribed by the State.

   Article 21 Of the funds the government allocates to scientific and technological undertakings, to investment in fixed assets and to technological
updating, a certain proportion shall be used for transforming scientific and technological achievements. This proportion of government
funds shall be chiefly used as initiation funds, discount loans, subsidy funds, risk investment and other funds for promoting transformation
of scientific and technological achievements.

   Article 22 The State adopts a preferential tax policy regarding transformation of scientific and technological achievements. Specific measures
shall be formulated by the State Council.

   Article 23 State banking institutions shall support transformation of scientific and technological achievements in matters of loans and gradually
increase the amount of loans extended for such transformation.

   Article 24 The State encourages establishment of funds or risk funds for transformation of scientific and technological achievements, such funds
shall be raised by the State, local authorities, enterprises, institutions and other organizations and individuals and shall be used
to aid transformation of such scientific and technological achievements as need substantial investment, involve considerable risks
and promise high yields and to accelerate the application of major scientific and technological achievements in industrial production.

Funds and risk funds for transformation of scientific and technological achievements shall be established and used in accordance with
relevant regulations of the State.

   Article 25 The State promotes the establishment and expansion of scientific and technological information networks and the establishment of
a data bank of scientific and technological achievements, both of which shall provide information services regarding such achievements
throughout the country.

CHAPTER IV TECHNOLOGICAL RIGHTS AND INTERESTS

   Article 26 When a unit that made scientific and technological achievements and another unit join efforts to transform the achievements, the
ownership of rights and interests related to the achievements shall be stipulated in a contract in accordance with law. What is not
stipulated in the contract shall be handled according to the following principles:

(1) Where no invention or creation ensures from transformation of a scientific or technological achievement, the rights and interests
related to the scientific or technological achievement shall belong to the unit that made the achievement;

(2) Where inventions or creations ensue from collaborated transformation of a scientific or technological achievement, the rights
and interests related to the inventions or creations shall belong to both parties in collaboration; and

(3) As to the scientific and technological achievements made through collaborated transformation, both parties shall have the right
to put into practice the achievements thus made; consent shall have to be obtained from both parties in collaboration for transfer
of the said achievements.

   Article 27 When a unit, that made scientific and technological achievements, and another unit collaborate to transform the achievements, both
parties shall reach an agreement on protection of the technical know-how; the parties may not, running counter to the agreement or
the request of the obligee for keeping the technical know-how, disclose or let another use the technical know-how.

Agencies of technological exchange and intermediate institutions shall be obligated to keep secret the technical know-how of the parties
concerned, which they come to know while serving as an agent or an intermediary.

   Article 28 Enterprises and institutions shall establish a system for protection of the technical know-how and keep improving it, in order to
guard the technical know-how of their own. Employees shall adhere to the system of their own units for protection of the technical
know-how.

Enterprises and institutions may sign an agreement on protection of their technical know-how with the employees who participate in
the transformation of scientific and technological achievements during the period when they remain in employment or within a specified
period of time after they leave office or retire; the said employees may not, in violation of what is agreed on, disclose the technical
know-how of their own units or engage in transforming the same scientific or technological achievement as that of their own units.

No employees may transfer, without authorization, the scientific or technological achievements they made while holding positions in
their units or do so in disguised form.

   Article 29 When transferring a scientific or technological achievement made by employees while holding positions in a unit, the unit shall take
not less than 20 percent of the net income, obtained from transfer of the achievement, to award persons who made important contributions
to the scientific or technological achievement or to its transformation.

   Article 30 If a scientific or technological achievement, that is made through the independent research and development of an enterprise or institution
or through research and development of the enterprise or institution with the collaboration of another unit, is transformed successfully
and is adopted in production, the unit or units shall take, for three to five years running, not less than five percent of the added
profits from adoption of the achievement, that they are enpost_titled to retain, to award persons who made important contributions to
the scientific or technological achievement or to its transformation.

In respect of the remunerations or rewards given to persons who made important contributions to research and development of scientific
and technological achievements or their transformation, joint stock enterprises may convert them into shares or proportions of contribution
to investment in accordance with relevant regulations of the State. The persons, as shareholders, shall draw proceeds on the strength
of the shares they hold or their proportions of contribution to investment.

   Article 31 Anyone who, in violation of the provisions of this Law, resorts to deception in transformation of scientific or technological achievements
and thus gets an award or honorary post_title, fraudulent money or illegal profits, shall be ordered to put it right, the award and honorary
post_title shall be annulled, the illegal gains confiscated, and a fine also imposed on him. If he causes economic losses to another,
he shall bear civil liability for compensation in accordance with law. If a crime is constituted, criminal responsibility shall be
investigated according to law.

   Article 32 Anyone who, in violation of the provisions of this Law, deliberately provides a false testing result or evaluation certificate after
testing or evaluating a scientific or technological achievement shall be ordered to put it right and given a disciplinary warning,
his illegal gains shall be confiscated, and the institution that arranged for the testing and the evaluation institution shall each
be imposed with a fine. If the case is serious, the business license and qualification certificate shall be revoked. If economic
losses are caused to another, civil liability for compensation shall be borne in accordance with law.

   Article 33 Employees of administrative departments for science and technology and other relevant departments of the people’s governments at
various levels who neglect their duties or practise irregularities for personal gain shall be given administrative sanctions; if
the case constitutes a crime, criminal responsibility shall be investigated in accordance with law.

   Article 34 Whoever, in violation of the provisions of this Law, usurps another’s scientific or technological achievement by means of instigation,
luring or coercion and thus encroaches upon the rights and interests of that person shall bear civil liability for compensation in
accordance with law and may be imposed with a fine. If the case constitutes a crime, criminal responsibility shall be investigated
in accordance with law.

   Article 35 If, in violation of the provisions of this Law, an employee who, without permission of his unit, discloses the technical know-how
of the unit or, without authorization, transfers or does so in disguised form the scientific or technological achievement made while
holding a position in the unit, or if a person who took part in the transformation of a scientific or technological achievement,
running counter to the agreement reached with his unit, engages in transforming the same scientific or technological achievement
as that of his unit during the agreed period of time after leaving office or retiring shall bear legal responsibility in accordance
with relevant regulations.

   Article 36 If in the exchange of technologies the intermediate institution that serves as an agent or provides intermediary services or the
broker deceives the client or colludes with one party to deceive another party, it or he shall be ordered to put it right, given
a disciplinary warning and, in addition to bearing civil liability for compensation in accordance with law, the illegal gains shall
be confiscated and a fine imposed. If the case is serious, the business license and qualification certificate shall be revoked in
accordance with law. If the case constitutes a crime, criminal responsibility shall be investigated in accordance with law.

CHAPTER VI SUPPLEMENTARY PROVISIONS

   Article 37 This Law shall be put into force as of October 1,1996.

    





CIRCULAR OF THE MINISTRY OF FOREIGN TRADE AND ECONOMIC COOPERATION (MOFTEC), THE PRESS AND PUBLICATION ADMINISTRATION AND THE GENERAL ADMINISTRATION OF CUSTOMS ON IMPORT ADMINISTRATION OF MANUFACTURING EQUIPMENT FOR COMPACT DISKS (CDS)

The Ministry of Foreign Trade and Economic Cooperation, the Press and Publication Administration, the General Administration of Customs

Circular of the Ministry of Foreign Trade and Economic Cooperation (MOFTEC), the Press and Publication Administration and the General
Administration of Customs on Import Administration of Manufacturing Equipment for Compact Disks (CDs)

WaiJingMaoFaFa [1996] No.400

June 11, 1996

Ministries, commissions and directly subordinate institutions of the State Council, commissions (departments, bureaus) of foreign
trade and economic cooperation, press and publication administrations and administrative departments of audiovisual products in all
provinces, autonomous regions, municipalities directly under the Central Government and municipalities separately listed on the State
plan, Guangdong Branch and all directly subordinate customs of the General Administration of Customs:

In accordance with the Circular for Further Strengthening the Administration of the Duplication of Compact Disks (CDs) jointly published
and distributed by the Publicity Department of the CCCPC, the Press and Publication Administration, the State Development Planning
Commission, the Ministry of Foreign Trade and Economic Cooperation, the General Administration of Customs, the State Administration
for Industry and Commerce and the National Copyright Administration, related issues on the import administration of manufacturing
equipment for compact discs (CDs) are hereby notified as follows:

1.

The manufacturing equipment for CDs in this circular refers to the manufacturing and processing equipment for writing of source CDs
and duplication of destination CDs including CD-DA, CD-V, V-CD, CD-ROM, CD-I, CD-G, PHOTO-CD, CD-R, CD-MO, DVD and LD etc. The tax
lines of specific equipment are as follows:

Name of Commodities, version: 96 Serial Number: HS

Metal source CD manufacturing equipment: 8520.9000.01/ 8521.9000.01/ 8479.8990.01

LD supporting bonder for CD production 8479.8990.02

High-precision injection molder for CD production 8477.1010.91

Special molder for CD production 8480.7100.01

Vacuum metal sputter-plating machine for CD production 8479.8990.03

Protective layer coating machine for CD production 8479.8990.04

Surface printing machine, used for CD production 8443.5900.01

AID automatic testing machine for CD production 9031.4900.01

2.

Enterprises importing the above-mentioned equipment by means of general trade and processing trade should first apply to the Press
and Publication Administration. Against the approval documentation from the Press and Publication Administration and the Registration
Form for the Import of Mechanical and Electronic Products signed and issued by competent examination and approval authorities for
mechanical and electronic products, enterprises may apply to the Quota and Licensing Bureau of the Ministry of Foreign Trade and
Economic Cooperation for the import license. All customs administrations should conduct inspection and let pass against the import
license.

3.

CD manufacturing enterprises with foreign investment should apply to the Quota and Licensing Bureau of the Ministry of Foreign Trade
and Economic Cooperation for the import license against the Operating License for the Duplication of Audiovisual Products issued
by the Press and Publication Administration, the Approval Certificate issued by MOFTEC and the detailed list of the imported equipment
approved by MOFTEC. All customs administrations should conduct inspection and let pass against the import license.

4.

Those that illegally import the above-mentioned CD production equipment in violation of this Circular should be affixed due liability
and penalty by customs administrations in accordance with the Customs Law.

5.

The Circular shall enter into force as of the date of promulgation.



 
The Ministry of Foreign Trade and Economic Cooperation, the Press and Publication Administration, the General Administration
of Customs
1996-06-11

 






PROVISIONAL REGULATIONS ON LICENSE CONTROL OF SECURITIES AND FUTURES-RELATED BUSINESS CARRIED OUT BY CERTIFIED PUBLIC ACCOUNTANTS

Provisional Regulations on License Control of Securities and Futures- Related Business Carried out by Certified Public Accountants

     CHAPTER ONE GENERAL PROVISIONS CHAPTER TWO REQUIREMENTS FOR LICENSE APPLICATION CHAPTER THREE EXAMINATION AND APPROVAL OF LICENSE
APPLICATIONS CHAPTER FOUR ADMINISTRATION OF LICENSES CHAPTER FIVE PENALTY PROVISIONS CHAPTER SIX SUPPLEMENTARY PROVISIONS

   Article 1 This set of regulations has been formulated in accordance with the Law of the People’s Republic of China on Certified Public Accountants
and provisions of laws and regulations on securities and futures, with a view to giving a better use of certified public accountants
as an intermediary in securities and futures market so as to give a better protection to the public interests and the lawful rights
and interests of investors, and prompt the standardization of the securities and futures markets.

   Article 2 The Ministry of Finance and China Securities Regulatory Commission (hereinafter referred to as the CSRC) shall institute a license
control system on certified public accountants, public accounting firms and public auditing firms (hereinafter referred to as the
firms) in their control of securities and futures-related business.

To be engaged in securities and futures-related services, certified public accountants and firms should acquire licenses for such
kind of services (hereinafter referred to as licenses).

   Article 3 The securities and futures-related business cited in this set of regulations refer to such operations as auditing of accounting statements,
verification of net assets, attestation of paid-in capital (capital stock), and checking of profit forecasts for institutions related
to securities and futures.

Institutions related to securities and futures cited in this set of regulations refer to companies that publicly issue shares for
transaction on the stock markets, institutions dedicated to or concurrently engaged in securities and futures transactions, and venues
for such transactions and etc.

Securities cited in this set of regulations include shares and transferable bonds, investment fund and other securities with properties
and functions of stocks.

Futures cited in this set of regulations include commodity futures and financial futures.

   Article 4 No restrictions shall be placed on administrative regions or trades for legal securities and futures-related business of certified
public accountants and firms. No units or individuals are allowed to interfere in such a respect.

Securities and futures-related institutions have the right to independently choose among licenses firms for their business.

CHAPTER TWO REQUIREMENTS FOR LICENSE APPLICATION

   Article 5 A certified public accountant should meet the following requirements when applying for a license concerned:

1. The firm with which the accountant works should have already acquired a license, or met the requirements as set under Article 6
of this set of regulations;

2. The accountant concerned has acquired qualification certificates for securities and futures-related business;

3. The accountant concerned has more than three years of experience in performing auditing works independently;

4. The accountant concerned should not be over 60 years of age;

5. The accountant concerned has not been acting in violation of any laws, regulations or the professional code or rules and has passed
annual inspections.

Procedures for qualification tests of certified public accountants in securities and futures-related business shall be formulated
separately by the Ministry of Finance.

   Article 6 A firm applying for licenses should meet the following requirements:

1. The firm has been separated from its affiliated units;

2. The firm has been legally established for more than three years with a sound control on its own affaires and has not been acting
in violation of laws, regulations or professional codes or rules within the past three years;

3. The firm has more than eight certified public accountants who have acquired qualification certificates for securities and futures-related
business, or who have already acquired licenses (not including the certified public accountants in affiliated institutions);

4. The firm has at least 40 full-time employees (not including those in affiliated institutions) and among them, at least 30 are under
the age of 60;

5. The sum of the registered capital, venture capital and business development fund of the firm should be more than RMB3 million.

The above paragraph may not be applied to the accountant firms which are initiated and set up by certified public accountants, among
which six have acquired licenses for securities and futures-related business and have been engaged in such business for more than
three years.

CHAPTER THREE EXAMINATION AND APPROVAL OF LICENSE APPLICATIONS

   Article 7 Whereas the requirements as set in Articles 5 and 6 have been met, certified public accountants and firms may file applications with
the Ministry of Finance and the CSRC to apply for engagement in securities and futures-related business within the specified time
for such applications.

   Article 8 Certified public accountants who apply for engaging in securities and futures-related business should fill out Application Form for
Securities and Futures-Related Business License for Certified Public Accountants as stipulated.

   Article 9 A firm applying for engagement in securities and futures- related business should submit the following documents:

1. A written report on engagement in securities and futures-related business by the firm and Application Form for Securities and Futures-
Related Business License for Firms;

2. Application Form for Securities and Futures-Related Business License for Certified Public Accountants filled out by certified public
accountants, or duplicates of licenses;

3. List of Certified Public Accountants of the Firm, List of Business Assistants, and List of Experts and Other Technical Personnel
Engaged by the Firm filled out by the firm;

4. Annual accounting statements of the past three years, and a statement on calculation, appropriation and use of business development
fund and venture capital;

5. Other documents that should be presented as required by the Ministry of Finance and the CSRC.

A firm that conforms to provisions as set in Section 2, Article 6 of this set of regulations should also submit duplicates of reports,
furnished by certified public accountants with licenses, on the auditing of fiscal statements of listed companies during the three
years before the first public issue, and on annual audits of the listed companies, as well as business summaries.

   Article 10 Application documents of certified public accountants and firms should first of all be sent to certified public accountants at the
provincial level for examination and then together with opinions conveyed therefrom to be sent to the relevant department of the
Chinese Institute of Certified Public Accountants and the CSRC.

The relevant departments of the Chinese Institute of Certified Public Accountants and the CSRC shall examine and verify the application
documents of certified public accountants and firms, and conduct random inspection on the business of these certified public accountants
and firms.

   Article 11 Certified public accountants and firms which are deemed qualified after the examination and verification shall be approved jointly
by the Ministry of Finance and the CSRC with the approvals to be announced publicly. Procedures for the issuance of licenses shall
be handled by the Chinese Institute of Certified Public Accountants.

CHAPTER FOUR ADMINISTRATION OF LICENSES

   Article 12 Change of license should be made whenever a transfer of a certified public accountant who has already got a license to another firms
that has got a license.

For the change, the certified public accountant concerned should file a written application to the association of certified public
accountants at the provincial level through the firm that the accountant concerned assumingly transfers to. The provincial association
of certified public accountants shall examine application for the change and report to the Chinese Association of Certified Public
Accountants and related departments of the CSRC for examination and verification. A new license is issued after the approval of the
Ministry of Finance and the CSRC.

   Article 13 Upon leaving a firm to turn to other jobs or to join another firm that has not acquired a license a certified public accountant who
has already got a license from the original firm should hand back the original license to the association of certified public accountants
at the provincial level, and then the license concerned should be sent to the Chinese Association of Certified Public Accountants.
The Chinese Association of Certified Public Accountants shall promptly report to the Ministry of Finance and the CSRC for the change.

After going through the procedures as stated in the previous paragraph, a certified public accountant may apply for a reinstatement
of license within three years since the turning in of the license over to the higher authorities upon joining a firm which has acquired
a license. When the time lapsed is more than three years, he/she shall re-apply for a new license in accordance with this set of
regulations.

   Article 14 A name change of a firm that has got a license should be promptly reported through the association of certified public accountants
at the provincial level to the Ministry of Finance and the CSRC. Whereas the change is in comformance with Article 6 of this set
of regulations, the Ministry of Finance and the CSRC shall promptly complete the procedures for the change.

A merge or separation of a firm that have got a license should be promptly reported to the Ministry of Finance and the CSRC through
the association of certified public accountants at the provincial level. The Ministry of Finance and the CSRC shall, in accordance
with actual circumstances, retain, recall or make alterations to the original license.

   Article 15 A firm that has got a license should submit annual report on its securities and futures-related business activities to the related
departments of the Chinese Association of Certified Public Accountants and the CSRC. An annual report should include the following
items:

1. The names and types of business of securities and futures-related institutions that the firm served during the past year and the
signatory certified public accountants;

2. Information on the training of certified public accountants with licenses in securities and futures-related businesses;

3. Changes in the roster of the certified public accountants with licenses and the firm’s other employees;

4. Changes in the firm’s registered capital, business development fund and venture capital;

5. Other items that need to be reported as required by the Ministry of Finance and the CSRC.

   Article 16 The firm’s license shall remain valid unless suspended or rescinded.

   Article 17 Licenses for certified public accountants should undergo annual registrations.

Associations of certified public accountants at the provincial level shall send in annual registration requests en masse to the Chinese
Association of Certified Public Accountants in July of every year.

Anyone who is more than 65 years of age, or fails to pass the annual inspection of certified public accountants, or has left a licensed
firm, must not apply for annual registration.

   Article 18 The Chinese Association of Certified Public Accountants shall be responsible for the annual registration of the certified public
accountants’ licenses and for alterations and issuance of licenses to qualified persons.

   Article 19 Whereas the number of certified public accountants with licenses in a firm is less than adaquate, the firm should stop its securities
and futures-related business and its certified public accountants’ licenses shall be suspended from renewal in annual registration.
The term of suspension shall not exceed one year at most. If the required number of certified public accountants with licenses is
not reached at the end of the suspension term, the firm’s license shall be revoked.

   Article 20 The Chinese Institute of Certified Public Accountants shall, within one month of its completion of the annual registration process,
report related information to the Ministry of Finance and the CSRC.

The Ministry of Finance and the CSRC shall conduct regular or irregular inspections on securities and futures-related business activities
performed by certified public accountants and firms with licenses.

   Article 21 In carrying out securities and futures-related business, the certified public accountants and firms should not lower its service
standard or offer improperly low prices to solicit business.

   Article 22 Whereas committing any of the following circumstances, a certified Public accountant shall, in accordance with the seriousness of
the offense, be meted out one or several of the following punishments: a warning, imposition of a fine, suspending him/her from securities
and futures-related business, or permanent banishment from carrying out securities and futures-related business:

1. Violation of Law of the People’s Republic of China on Certified Public Accountants, Company Law of the People’s Republic of China,
securities and futures-related laws and regulations, and the professional code or rules;

2. Unauthorized engagement in securities and futures-related business without a license or during the period when he/she is suspended
from carrying out securities and futures-related services.

   Article 23 Whereas committing any of the following circumstances, a firm should in accordance with the seriousness of the offense, be meted
out one or several of the following punishments: a warning, confiscation of illegal earnings, imposition of a fine, suspension from
securities and futures-related business, or revocation of licenses:

1. Violation of Law of the People’s Republic of China on Certified Public Accountants, Company Law of the People’s Republic of China,
securities and futures-related laws and regulations, and the professional code or rules;

2. Acquisition of a license through fraudulence or other illicit means;

3. Unauthorized engagement in securities and futures-related business without a license or during the period when the firm is suspended
from carrying out securities and futures-related services;

4. Lowering service standard and offering improperly low prices to solicit business in violation of related provisions;

5. Failure to submit annual summaries as required in Article 15 of this set of regulations.

CHAPTER SIX SUPPLEMENTARY PROVISIONS

   Article 24 The terms “more than” in this set of regulations should be understood as “more than (and including)”.

   Article 25 Overseas-based accounting companies (accounting firms), when practicing within Chinese territory should abide by related provisions
as set in Ministry of Finance Document MOF-AC 119 [1993], CSRC Document CSRC-AC 12 [1994] and Ministry of Finance Document MOF-AC
81 [1994].

   Article 26 This set of regulations shall be interpreted jointly by the Ministry of Finance and the CSRC.

   Article 27 This set of regulations enters into force as of the date of its promulgation. The Provisional Procedures on License Control of Securties,
Futures-Related Business Carried Out by Public Accounting Firms and Certified Public Accountants promulgated by the Ministry of Finance
and the CSRC on February 15, 1996 (MOF-AC 11 [1996]) shall accordingly be annualled.

    





REPLY OF THE STATE COUNCIL APPROVING THE TABLE OF CHEMICALS SUBJECT TO SUPERVISION AND CONTROL

Category  INDUSTRY Organ of Promulgation  The State Council Status of Effect  In Force
Date of Promulgation  1996-04-24 Effective Date  1996-04-24  


Reply of the State Council Approving the Table of Chemicals Subject to Supervision and Control


Appendix: A Table of Chemicals Subject to Supervision and Control

(April 24, 1996)

    Ministry of Chemical Industry:

    Having received the Report for Examination and Approval of A Table of
Chemicals Subject to Supervision and Control submitted by your ministry on
February 26, 1996, the State Council approves the Table of Chemicals Subject
to Supervision and Control submitted by your ministry. Said table shall be
promulgated by your ministry.

    Appendix: A Table of Chemicals Subject to Supervision and Control

Appendix: A Table of Chemicals Subject to Supervision and Control

Category I  Chemicals Which Can Be Used as Chemical Weapons



A.                                                      
(CAS Registry Number)

(1) O-Alkyl (    (Me, Et, n-Pr or i-Pr)-phosphonofluoridates

    e.g. Sarin: O-Isopropyl methylphosphonofluoridate     (107-44-8)

         Soman: O-Pinacolyl methylphosphonofluoridate     (96-64-0)

(2) O-Alkyl (    (Me, Et, n-Pr, or i-Pr) phosphoramidocyanidates

    e.g. Tabun: O-Ethyl N,N-dimethyl

                phosphoramidocyanidate                    
(77-81-6)

(3) O-Alkyl (H or     (Me, Et, n-Pr, or i-Pr)-aminoethyl alkyl

    (Me, Et, n-Pr or i-Pr) phosphonothiolates and

    corresponding alkylated and protonated salts

    e.g. VX: O-Ethyl S-2-diisopropylaminoethyl

             methyl phosphonothiolate                      (50782-69-9)

(4) Sulphur mustards:

    2-Chloroethylchloromethylsulphide                      (2625-76-5)

    Mustard gas (H): Bis(2-chloroethyl)sulphide            (505-60-2)

    Bis(2-chloroethylthio)methane                          (63869-13-6)

    Sesquimustard (Q): 1,2-Bis(2-chloroethylthio)ethane    (3563-36-8)

    1,3-Bis(2-chloroethylthio)-n-propane                  
(63905-10-2)

    1,4-Bis(2-chloroethylthio)-n-butane                    (142868-93-7)

    1,5-Bis(2-chloroethylthio)-n-pentane                  
(142868-94-8)

    Bis(2-chloroethylthiomethyl)ether                      (63918-90-1)

    O-Mustard (T): Bis(2-chloroethylthioethyl)ether        (63918-89-8)

(5) Lewisites:

    Lewisite 1: 2-chlorovinyldichloroarsine                (541-25-3)

    Lewisite 2: Bis(2-chlorovinyl)chloroarsine            
(40334-69-8)

    Lewisite 3: Tris(2-chlorovinyl)arsine                  (40334-70-1)

(6) Nitrogen mustards:

    HN1: Bis(2-chloroethyl)ethylamine                      (538-07-8)

    HN2: Bis(2-chloroethyl)methylamine                    
(51-75-2)

    HN3: Tris(2-chloroethyl)amine                          (555-77-1)

(7) Saxitoxin                                              (35523-89-8)

(8) Ricin                                                  (9009-86-3)

B.

(9) Alkyl (Me, Et, n-Pr or i-Pr) phosphonyldifluorides

    e.g. DF: Methylphosphonyldifluoride                    (676-99-3)

(10) O-Alkyl (H or     (Me, Et, n-Pr or i-Pr)-aminoethyl

    alkyl (Me, Et, n-Pr or i-Pr) phosphonites and

    corresponding alkylated and protonated salts

    e.g. QL: O-Ethyl 0-2-diisopropylaminoethyl

             methylphosphonite                            
(57856-11-8)

(11) Chlorosarin: O-Isopropyl methylphosphonochloridate    (1445-76-7)

(12) Chlorosoman: O-Pinacolyl methylphosphonochloridate    (7040-57-5)



Category II  Chemicals Which Can Be Used as Precursors

             for the Production of Chemical Weapons



A.

(1) Amiton: O,O-Diethyl S-[2-(diethylamino)ethyl]

    phosphorothiolate                                      (78-53-5)

    and corresponding alkylated and protonated salts

(2) PFIB: 1,1,3,3,3-Pentafluoro-2-(trifluoromethyl)-

    1-propene                                              (382-21-8)

(3) BZ: 3-Quinuclidinyl benzilate (*)                      (6581-06-2)

B.

(4) Chemicals, except for those listed in Category I,

    containing a phosphorus atom to which is bonded

    one methyl, ethyl or propyl (normal or iso) group

    but not further carbon atoms

    e.g. Methylphosphonyl dichloride                      
(676-97-1)

         dimethyl methylphosphonate                        (765-79-6)

    Exemption: Fonofos: O-Ethyl S-phenyl

               ethylphosphono-thiolothionate              
(944-22-9)

(5) N,N-Dialkyl (Me, Et, n-Pr or i-Pr) phosphoramidic

    dihalides

(6) Dialkyl (Me, Et, n-Pr or i-Pr) N,N-dialkyl

    (Me, Et, n-Pr or i-Pr)-phosphoramidates

(7) Arsenic trichloride                                    (7784-34-1)

(8) 2,2-Diphenyl-2-hydroxyacetic acid                      (76-93-7)

(9) Quinuclidine-3-ol                                      (1619-34-7)

(10) N,N-Dialkyl (Me, Et, n-Pr or i-Pr)

     aminoethyl-2-chlorides and corresponding

     protonated salts

(11) N, N-Dialkyl (Me, Et, n-Pr or i-Pr)

     aminoethane-2-ols and corresponding protonated

     salts

     Exemptions: N,N-Dimethylaminoethanol                  (108-01-0)

                 and corresponding protonated salts

                 N,N-Diethylaminoethanol                  
(100-37-8)

                 and corresponding protonated salts

(12) N,N-Dialkyl (Me, Et, n-Pr or i-Pr)

     aminoethane-2-thiols and corresponding protonated

     salts

(13) Thiodiglycol: Bis(2-hydroxyethyl)sulphide             (111-48-8)

(14) Pinacolyl alcohol: 3,3-Dimethylbutane-2-ol            (464-07-3)



Category III  Chemicals Which Can Be Used as Main Raw

              Materials for the Production of Chemical

              Weapons



A.

(1) Phosgene: Carbonyl dichloride                          (75-44-5)

(2) Cyanogen chloride                                      (506-77-4)

(3) Hydrogen cyanide                                      
(74-09-8)

(4) Chloropicrin: Trichloronitromethane                    (76-06-2)

B.

(5) Phosphorus oxychloride                                
(10025-87-3)

(6) Phosphorus trichloride                                
(7719-12-2)

(7) Phosphorus pentachloride                              
(10026-13-8)

(8) Trimethyl phosphite                                    (121-45-9)

(9) Triethyl phosphite                                    
(122-52-1)

(10) Dimethyl phosphite                                    (868-85-9)

(11) Diethyl phosphite                                    
(762-04-9)

(12) Sulphur monochloride                                  (10025-67-9)

(13) Sulphur dichloride                                    (10545-99-0)

(14) Thionyl chloride                                      (7719-09-7)

(15) Ethyldiethanolamine                                  
(139-87-7)

(16) Methyldiethanolamine                                  (105-59-9)

(17) Triethanolamine                                      
(102-71-6)



Category IV  Specific Organic Chemicals Excepting Explosives and Pure
Hydrocarbons

    “Specific organic chemicals” refers to any chemical that may be
distinguished with its name, structural formula (if already known) and CAS
registry number (if any) and that belongs to the clan of chemical compounds
composed of any compound of carbon except oxides of carbon, sulphides of
carbon and metallic carbonate.





REGULATIONS GOVERNING LABOR COOPERATION WITH HONG KONG REGION

Regulations Governing Labor Cooperation With HK Region

     (Effective Date 1996.09.05 )

CHAPTER ONE GENERAL PROVISIONS

CHAPTER TWO SIGNING OF CONTRACT AND CHARGES

CHAPTER THREE SELECTION OF LABOURERS DISPATCHED

CHAPTER FOUR IMPLEMENTATION OF CONTRACTS

CHAPTER FIVE PUNISHMENT

CHAPTER SIX APPENDIX

   Article 1 This set of regulations are formulated with a view to helping improve the labour cooperation between the inland areas
of the motherland and the Hong Kong region and the implementation of the policy of “one country, two systems” for maintaining
Hong Kong’s prosperity and stability.

   Article 2 Labour cooperation with Hong Kong region should follow the unified State policies and regulations, submit to unified coordination
and management and follow the principle of fair competition. Force down prices between operating firms and involvements of
middle dealers are forbidden.

   Article 3 Labour cooperation with the Hong Kong region should be carried out in accordance with the need of economic development in Hong
Kong and requirements of employers, and the dispatch of labourers to Hong Kong can only be made after getting the entry
permission of the HK government.

   Article 4 Labour cooperation with the Hong Kong region must strictly abide by the local laws and regulations of Hong Kong.

   Article 5 Authorized by the State, the Ministry of Foreign Trade and Economic Cooperation (MOFTEC) shall exercise unified administration
over the labour cooperation with the Hong Kong region and the Hong Kong and Macao Affairs Office of the State Council
(HKMAO) provide policy guidance.

   Article 6 MOFTEC shall decide through consultation with HKMAC in irregular time the names of the companies which undertake
labour cooperation with the Hong Kong region in accordance with scale of import of labourers by Hong Kong and the business
conditions of the companies of the inland areas. Unauthorized companies are all banned to carry out labour cooperation with
the Hong Kong region.

   Article 7 Companies which carry out labour cooperation with Hong Kong region should get registered in Hong Kong and obtain business licenses
in line with relevant Hong Kong laws and regulations.

   Article 8 Labour cooperation with the Hong Kong region can only be carried out after examination and approval by competent department
and the operating companies should go through the exit formalities for the labourers by presenting the document of approval
by MOFTEC (Cooperation Department).

CHAPTER TWO SIGNING OF CONTRACT AND CHARGES

   Article 9 The operating companies should directly sign labour cooperation contracts with employers which have been approved to
import labour by the Hong Kong Government.

   Article 10 The operating companies should also sign contracts with the labourers clearly defining the rights and duties of both parties.
The articles of the contracts concerned should not in contradicted with those in the contract between the operating companies
and employees of the labourers.

   Article 11 Labourers should sign employment contracts with the employers in line with “Contracts for Employing Outside Labourers” issued
by the Hong Kong Government. Operating companies should explain the content of the contracts to the labourers and answer their
questions.

   Article 12 Operating companies should collect service charges from the labourers according to the unified State regulations. Monthly
service charges collected by an operating company from the labourers recruited from the society should not surpass 12.5%
of a labourer’s monthly payment decided by the Hong Kong Government; the labourer’s original unit which reserves the
post for the labourer may also collect a monthly additional charge which is not more than 12.5% of a labourer’s monthly payment.
The two kinds of service charges should be collected at one time by an operating company and a labourer’s original unit respectively
prior to the labourer is sent to Hong Kong in forms of cash, guarantee, mortgage or loans.

   Article 13 The fees for passport and visa of the labourers to Hong Kong should be covered by the employers in Hong Kong and the operating
companies should not collect them from the labourers.

CHAPTER THREE SELECTION OF LABOURERS DISPATCHED

   Article 14 An operating company should select the labourers concerned under the principle of good quality, healthy, technically qualified
and competent for the job to work in Hong Kong.

   Article 15 The recruitment of labourers to go to Hong Kong should be conducted solely by the operating companies and Hong Kong employers
and middle dealers are strictly forbidden to come to the inland areas to recruit themselves.

   Article 16 The recruitment of labourers to Hong Kong should follow the principle of being open and fair and operating companies must
not collect any other extra charges from the recruited people except those in line with the items and standards approved
by the competent foreign trade and economic cooperation departments.

   Article 17 The operating companies should not in principle recruit labourers from across provinces (autonomous regions and municipalities)
when there are needs to recruit such labourers from across provinces (autonomous regions and municipalities) under
special reasons, applications with suitable explanation should be submitted to competent departments for approval and
go proper formalities should be gone through with the competent foreign trade and economic cooperation departments
of the localities where the labour personnel belong to upon presentation of the approval documents.

   Article 18 Operating companies should be responsible for training the Hong Kong-bound labourers in accordance with the “Regulations Governing
the Training of Overseas Labourers” of the State and the labourers can only be sent to Hong Kong after they pass the examination
and are issued the “Training Certificate of Overseas Labourers”.

CHAPTER FOUR IMPLEMENTATION OF CONTRACTS

   Article 19 The operating company must strictly implement the contracts they sign with the employers and the labourers and urge and supervise
the latters in seriously honouring of the contracts.

   Article 20 The Hong Kong-bound labourers must abide by local laws and regulations in Hong Kong and must not change employers and jobs set
in the contracts concerned, when the contracts expire, they must timely return to their original resident areas and must
not stay in Hong Kong without any reason.

   Article 21 Operating companies should protect the legal rights and interests of the labourers sent to Hong Kong and represent the labourers
to take up matters when the employers fail to honour the contracts or when labour disputes arise. They must timely deal with
major problems upon their occurrence and report the matters to the higher competent departments.

   Article 22 Operating companies should timely keep an eye at the working and living conditions of the labourers and cooperate with the employers
to seriously strengthen the management of the labourers.

   Article 23 Operating companies will be revoked of their right to conduct labour cooperation with the Hong Kong region if they violate Articles
2 and 8 of this set of regulations, and they will be criticized through circulated notices.

   Article 24 Operating companies may be revoked of their right to conduct labour cooperation with the Hong Kong region and be criticized
through circulated notices apart from being ordered to return the overcharges if they violate Articles 12 and 16 of this set
of regulations.

   Article 25 Operating companies which violate other articles of this set of the regulations will be given punishments such as warning or
serious warning according to the seriousness of the cases. The operating companies will be revoked of their right
to conducting labour cooperation with the Hong Kong region and be criticized through circulated notices if they
have been given a total of two warnings in a period of two years.

   Article 26 Labourers concerned will be dealt with according to local laws and regulations if they commit law-breaking actions in Hong
Kong; they will be dealt with in accordance with regulations in the inland areas if they violate the contracts they
signed with operating companies.

   Article 27 The Ministry of Foreign Trade and Economic Cooperation is enpost_titled to interpret this set of regulations.

   Article 28 This set of regulations will be promulgated as of the date of inssuance.

    





AUCTION LAW

Category  OBLIGATORY RIGHT Organ of Promulgation  The Standing Committee of the National People’s Congress Status of Effect  In Force
Date of Promulgation  1996-07-05 Effective Date  1997-01-01  


Auction Law of the People’s Republic of China

Contents
Chapter I  General Provisions
Chapter II  Subject of Auction
Chapter III  Parties to Auction
Chapter IV  Auction Procedures
Chapter V  Legal Responsibility
Chapter VI  Supplementary Provisions

(Adopted at the 20th Meeting of the Standing Committee of the Eighth

National People’s Congress on July 5, 1996, promulgated by Order No.70 of the
President of the People’s Republic of China on July 5, 1996)
Contents
Chapter I    General Provisions
Chapter II   Subject of Auction
Chapter III  Parties to Auction

           Section 1  Auction Broker

           Section 2  Consignor

           Section 3  Bidder

           Section 4  Auction Vendee
Chapter IV   Auction Procedures

           Section 1  Entrustment of Auction

           Section 2  Auction Announcement and Exhibition

           Section 3  The Performance of Auction

           Section 4  Commission
Chapter V    Legal Responsibility
Chapter VI   Supplementary Provisions
Chapter I  General Provisions

    Article 1  This Law is enacted for the purposes of standardizing auction
activities, maintaining auction orders and protecting the legitimate rights
and interests of all parties to auction activities.

    Article 2  This Law shall apply to auction activities taken by auction
companies within the territory of the People’s Republic of China.

    Article 3  “Auction” refers to a form of sale under which, specific goods
or property rights are transferred to the bidder who makes the highest bid
in public bidding.

    Article 4  Auction activities shall abide by relevant laws and
regulations, and conform to the principles of openness, fairness,
impartiality and good faith.

    Article 5  The department in charge of auction trade under the State
Council shall conduct supervision and administration on the auction trade
throughout the country.

    The department in charge of auction trade under the people’s government
of provinces, autonomous regions, municipalities directly under the central
government and districted cities shall conduct supervision and administration
on the auction trade within their respective regions.

    The public security organ shall take the auction trade as a special
trade and exercise public security administration on it.
Chapter II  Subject of Auction

    Article 6  A subject of auction shall be goods or property rights which
the auction consignor owns or may dispose of according to law.

    Article 7  Goods or property rights which are prohibited from selling
and buying by laws or regulations shall not be subjects of auction.

    Article 8  In the case of goods or property rights the transfer of which
needs prior examination and approval according to laws or provisions of the
State Council, the examination and approval formalities must be completed
in accordance with the law before the auction.

    In the case of entrustment for auction of cultural relics, an appraisal
and permit shall be obtained, before auction, from the administrative
department for relics at the place of residence of the auction broker.

    Article 9  Goods confiscated by the state’s administrative organs in
accordance with the law or goods seized for covering taxes or penalties or
other goods, which should be auctioned according to provisions of the State
Council, shall be auctioned by an auction company appointed by the people’s
government of the province, autonomous region, municipality directly under
the central government or the districted city at the place where the goods
are located.

    Auction of goods confiscated, or seized for covering fines or penalties,
by the people’s court in accordance with the law, or goods which are
recovered by the people’s court but cannot be returned, shall apply the
provisions of the preceding paragraph.
Chapter III  Parties to Auction

    Section 1  Auction Broker

    Article 10  “Auction Broker” means incorporated companies established in
accordance with this Law and the Company Law of the People’s Republic of
China, to engage in auction business.

    Article 11  Auction companies may be established in districted cities.
The establishment of auction companies must go through the examination and
approval formalities with the department in charge of the auction trade
under the people’s government of the province, autonomous region or
municipalities directly under the central government, and the company
established shall apply for registration to, and draw a business license from
the administrative department for industry and commerce.

    Article 12  For establishing an auction company, the following
requirements must be satisfied:

    (1) have a registered capital of at least one million yuan;

    (2) have its own name, organization, residence and articles of
association;

    (3) have certified auctioneers and other personnel suited to the auction
business they are to engage;

    (4) have auction service regulations in conformity with the provisions of
this Law and other relevant laws or regulations;

    (5) have a license for special trade issued by the public security organ;

    (6) conform to the provisions of the State Council concerning the
development of the auction trade; and

    (7) other requirements prescribed by laws and regulations.

    Article 13  Auction companies engaging in relics auction business shall
have a registered capital of at least 10 million yuan and personnel with
professional knowledge of relics auction.

    Article 14  Auctions shall be presided over by a certified auctioneer.

    Article 15  An auctioneer shall meet the following conditions:

    (1) graduate experience of a junior college or higher, in addition to
specialized knowledge in auction;

    (2) work experience of at least two years at an auction company; and

    (3) having good conduct.

    Those who have been discharged from public employment or revoked of the
auctioneer certificate shall not be an auctioneer within five years of the
penalty, nor may those who have been punished for an intentional crime be an
auctioneer.

    Article 16  Qualification examinations for certified auctioneers shall be
unifiedly organized by the auction trade association, which shall issue an
auctioneer certificate to those who have passed the examination.

    Article 17  As a self-disciplinary organization of the auction trade, the
auction trade association shall be an incorporated social organization
established in accordance with the law. The auction trade association shall,
in accordance with this Law and its articles of association, exercise
supervision over auction companies and auctioneers.

    Article 18  The auction broker shall have the right to require the
consignor to state the source and defects of the subject of auction.

    The auction broker shall state the defects of the subject of auction to
bidders.

    Article 19  The auction broker shall be responsible for the care of
goods consigned by the consignor for auction.

    Article 20  Without the permission of the consignor, the auction broker
having accepted the consignment shall not re-consign it to another broker.

    Article 21  When the consignor or auction vendee requires, the auction
broker shall maintain confidentiality in respect of identities of the
consignor or auction vendee.

    Article 22  Auction companies and their personnel may not take part as
bidders in auctions conducted by themselves, nor may they designate others to
make a bid for them.

    Article 23  Auction brokers may not auction their own goods or property
rights during auction activities conducted by themselves.

    Article 24  After the bargain has been struck, the auction broker shall,
in accordance with the engagement, pay the amount of the subject of auction
to the consignor and, in accordance with the engagement, transfer the
subject of auction to the auction vendee.

    Section 2  Consignor

    Article 25  “Consignor” means citizens, legal persons or other
organizations who consign their goods or property rights for auction to an
auction broker.

    Article 26  Consignors shall go through formalities of consignment for
auction either by themselves or by their agents.

    Article 27  Consignors shall state to the auction broker the sources and
defects of the subjects of auction.

    Article 28  Consignors shall have the right to set the reserve price of
a subject of auction and require the auction broker to maintain it
confidential.

    In the case of auction of state assets which need assessment according to
laws or provisions of the State Council, an assessment shall be conducted by
an assessment institution established in accordance with the law and,
according to the assessment results, a reserve price shall be set for the
subject of auction.

    Article 29  Consignors may withdraw the subjects of auction before the
auction starts. Consignors withdrawing subjects of auction shall pay the
auction broker the agreed charge or, in the absence of an agreed charge,
reasonable expenses.

    Article 30  Consignors may not take part in bidding, nor designate others
to do so.

    Article 31  In the case of agreement under which the subject of auction
shall be transferred by the consignor, the consignor shall, after the bargain
has been struck, transfer the subject of auction to the auction vendee.

    Section 3  Bidder

    Article 32  “Bidder” means citizens, legal persons or other organizations
who bid for subjects of auction.

    Article 33  Where laws or regulations stipulate special conditions for
the sale of the subject of auction, the bidders shall meet those conditions.

    Article 34  Bidders may make bidding either by themselves or by their
agents.

    Article 35  Bidders shall have the right to find out defects of the
subjects of auction, examine the subjects of auction and consult relevant
auction materials.

    Article 36  A bid may not be withdrawn by the bidder once it has been
made, but it shall lose binding force as soon as a higher bid has been made
by another bidder.

    Article 37  It is forbidden that bidders or bidders and auction brokers
conclude with each other to harm the interests of other people.

    Section 4  Auction Vendee

    Article 38  “Auction Vendee” means a bidder who purchases the subject of
auction by making the highest bid.

    Article 39  The auction vendee shall pay the amount of the subject of
auction in accordance with the engagement, or if he fails to do so, he shall
bear the responsibility for breach of contract, or the subject of auction
may be re-auctioned after the auction broker has obtained approval from the
consignor.

    When a subject of auction is reauctioned, the original auction vendee
shall pay the commissions which should be paid by the consignor and himself
for the first auction. If the amount from the re-auction is less than that
from the original one, the original auction vendee shall make up the
balance.

    Article 40  Auction vendees who cannot acquire the subject of auction in
accordance with the engagement shall have the right to demand the auction
broker or consignor to assume the responsibility for breach of contract.

    Auction vendees who fail to accept the subject of auction shall pay the
keeping expenses arising therefrom.
Chapter IV  Auction Procedures

    Section 1  Entrustment of Auction

    Article 41  Consignors consigning goods or property rights for auction
shall provide their identity certificates and documents of post_title to the
subject of auction or the proof of the right to dispose of the subject of
auction in accordance with law and other documents demanded by the auction
broker.

    Article 42  The auction broker shall verify the documents and materials
provided by the consignor. If the auction broker accepts the entrustment, it
shall conclude a written contract with the consignor for the entrustment of
auction.

    Article 43  Subjects of auction may be appraised if the auction broker
thinks it necessary.

    If there is any discrepancy between the appraisal conclusion and the
statement concerning the subject of auction in the contract for the
entrustment of auction, the auction broker shall have the right to require
the contract to be modified or terminated.

    Article 44  The following particulars shall be clearly stated in a
contract for entrustment of auction:

    (1) the name and address of the consignor and auction broker;

    (2) the name, specification, quantity and quality of the subject of
auction;

    (3) the reserve price given by the consignor;

    (4) the time and place when and where the auction will be held;

    (5) the time and method when and thereby the subject of auction shall be
delivered or transferred;

    (6) the commission and the method by which the commission shall be paid
and the time limit for the payment;

    (7) the method by which the amount of the subject of auction shall be
paid and the time limit for the payment;

    (8) the responsibility for breach of contract; and

    (9) other particulars agreed by the two parties.

    Section 2  Auction Announcement and Exhibition

    Article 45  The auction broker shall publish an auction announcement
seven days before the auction day.

    Article 46  The following particulars shall be clearly stated in the
auction announcement:

    (1) the time and place when and where the auction will be held;

    (2) the subjects of auction;

    (3) the time and place when and where the subjects of auction will be
exhibited;

    (4) formalities required to be gone through for taking part in bidding;
and

    (5) other particulars needed to be announced.

    Article 47  Auction announcements shall be published in a newspaper or by
other news media.

    Article 48  The auction broker shall exhibit the subjects of auction
before the auction, and provide relevant materials and conditions for
examining the subjects of auction.

    The exhibition of the subjects of auction shall last at least for two
days.

    Section 3  The Performance of Auction

    Article 49  The auctioneer shall, before the auction, announce the
auction rules and points for attention.

    Article 50  If there is no reserve price for a subject of auction, the
auctioneer shall give the facts before the auction.

    In the case of a reserve price, if the highest bid fails to reach the
reserve price, that bid shall have no effect and the auctioneer shall cease
the auction of the relevant subject.

    Article 51  A bargain is made once the auctioneer has struck hammer on
the highest bid or the bid has been publicly confirmed in other forms as
making a bargain.

    Article 52  After a bargain has been struck, the auction vendee and the
auction broker shall sign a sales confirmation.

    Article 53  When performing auction, the auction broker shall make
written auction records. Auction records shall be signed by the auctioneer
and the notetaker, and the vendee, if any.

    Article 54  Auction brokers shall properly keep the complete account
books concerning their auction business activities, the written auction
records and other relevant materials.

    The account books, auction records and other relevant materials mentioned
in the preceding paragraph shall be kept at least for five years, accounting
from date on which the contract for auction entrustment terminates.

    Article 55  In the case of a subject of auction, the transfer of which
involves formalities for change of certificates or licenses or for post_title
transfer according to law, the consignor and auction vendee shall go through
said formalities with relevant administrative departments by presenting the
sales certification issued by the auction broker and other relevant materials.

    Section 4  Commission

    Article 56  Consignors and auction vendees may make an agreement with the
auction broker on the brokerage proportion.

    Where the consignor or auction vendee fails to make an agreement with the
auction broker on the brokerage proportion, the auction broker may charge
the consignor and auction broker respectively a commission not more than five
per cent of the transaction price of the subject of auction, if the auction
results in a transaction. The brokerage proportion shall be determined on the
principle of being inversely proportional to the transaction price of the
subject of auction.

    If the auction does not result in a transaction, the auction broker may
charge the consignor according to the prior engagement; in the absence of an
engagement, the auction broker may charge the consignor the reasonable
expenses expended for the auction.

    Article 57  In the case of auction and transaction of goods mentioned in
Article 9 of this Law, the auction broker may charge the auction vendee a
commission not more than five per cent of the transaction price of the
subject of auction. The brokerage proportion shall be determined on the
principle of being inversely proportional to the transaction price of the
subject of auction.

    The provisions of Paragraph 3, Article 56 of this Law shall apply if
the auction does not result in a transaction.
Chapter V  Legal Responsibility

    Article 58  Consignors shall bear the responsibility if they, in
violation of the provisions of Article 6 of this Law, consign for auction
goods or property rights to which they have no post_title or which they may not
dispose of according to law. If the auction broker accepts the consignment
knowing well that the consignor has no post_title to, or according to law, may not
dispose of the goods or property rights, he shall bear a joint liability.

    Article 59  If any state organ, in violation of the provisions of
Article 9 of this Law, dispose of without authorization the goods which
according to law should be auctioned by an auction company designated by the
people’s government of the province, autonomous region, municipality directly
under the central government or the districted city where said goods are
located, the person in charge directly responsible and other persons directly
responsible shall be given a disciplinary sanction and, if any losses have
been caused to the state, be liable for compensation.

    Article 60  Auction companies established in violation of the provisions
of Article 11 of this Law and without approval and registration shall be
banned by the administrative department for industry and commerce with the
illegal earnings confiscated and a fine ranging from one to five times the
illegal earnings may be imposed concurrently.

    Article 61  If the auction broker or consignor, in violation of the
provisions of Paragraph 2, Article 18 and Article 27 of this Law, fails to
state the defects of the subject of auction and thus causes damage to the
auction vendee, the latter shall have the right to claim compensation against
the auction broker; if it is the consignor who should assume the
responsibility, the auction broker shall have the right to claim recovery
against the consignor.

    Where the auction broker and consignor declare before the auction that
they cannot assure the genuineness or quality of the subject of auction, they
shall not be liable for assurance against defects.

    The limitation of legal proceedings for claiming compensation in the case
of failure to state the defects of the subject of auction shall be one year,
accounting from the date on which the party concerned knows or has reason to
know that his right has been infringed upon.

    In the case of personal injury or property damage due to the defects of
the subject of auction, the limitation of legal proceedings for claiming
compensation shall apply the relevant provisions of the Law of the People’s
Republic of China on Product Quality and other laws.

    Article 62  If an auction company or its personnel, in violation of the
provisions of Article 22 of this Law, take part in the bidding or designate
others to make a bid for them, the administrative department for industry and
commerce shall give it a warning and may impose a fine ranging from one to
five times the auction commission and, if the circumstances are serious,
revoke its business license.

    Article 63  If an auction broker, in violation of the provisions of
Article 23 of this Law, auctions its own goods or property rights during
auction activities conducted by itself, the income from the auction shall be
confiscated by the administrative department for industry and commerce.

    Article 64  If a consignor, in violation of the provisions of Article 30
of this Law, takes part in the bidding or designates others to make a bid for
him, the administrative department for industry and commerce shall impose on
the consignor a fine not exceeding 30 per cent of the auction transaction
price.

    Article 65  Where bidders or bidders and auction brokers, in violation of
the provisions of Article 37 of this Law, conclude with each other and
cause damages to other people, they shall be liable for compensation and the
auction shall be deemed void. The administrative department for industry and
commerce shall impose on the bidders in conclusion a fine ranging from 10 to
30 per cent of the highest bid and a fine ranging from 10 to 50 per cent of
the highest bid on the auction broker in conclusion.

    Article 66  Auction brokers who charge commissions in violation of the
provisions of Section 4, Chapter IV of this Law concerning the brokerage
proportion shall return the overcharged amount to the consignor or auction
vendee. The price control authority may impose on the auction broker a fine
ranging from one to five times the auction commission.
Chapter VI  Supplementary Provisions

    Article 67  Foreigners, foreign enterprises and organizations’
consignment for auction and taking part in bidding shall apply this Law.

    Article 68   Auction companies which are established before the
implementation of this Law and fail to satisfy the requirements demanded by
this Law shall come up to the requirements within a specified time limit; for
those failing to come up to the requirements demanded by this Law within the
specified time limit, the administrative department for industry and commerce
shall cancel their registration and revoke their business licenses. The
concrete implementation measures shall be formulated separately by the State
Council.

    Article 69  This Law shall enter into force on January 1, 1997.





PROMOTING THE TRANSFORMATION OF SCIENTIFIC AND TECHNOLOGICAL ACHIEVEMENTS

Law of the PRC on Promoting the Transformation of Scientific and Technological Achievements

    

CHAPTER I GENERAL PROVISIONS

CHAPTER II ARRANGEMENTS FOR IMPLEMENTATION

CHAPTER III GUARANTEE MEASURES

CHAPTER IV TECHNOLOGICAL RIGHTS AND INTERESTS

CHAPTER V LEGAL RESPONSIBILITY

CHAPTER VI SUPPLEMENTARY PROVISIONS

   Article 1 This law is enacted for the purpose of promoting the transformation of scientific and technological achievements into
real productive forces, standardizing such transformation, hastening scientific and technological progress and facilitating
economic and social development.

   Article 2 The phrase “transformation of scientific and technological achievements” as used in this Law means the entire process of
the follow-up tests, development, application and widespread use of the applicable scientific and technological achievements,
made as a result of scientific research and technological development, through to the final creation of new products, new
techniques, new materials and new industries — all for the purpose of enhancing the productive forces.

   Article 3 Transformation of scientific and technological achievements shall be instrumental to increasing economic and social results
and protecting the environment and natural resources, as well as to promoting economic and social development and
strengthening national defense.

In transforming scientific and technological achievements, the persons concerned shall abide by the principles of voluntariness,
mutual benefit, fairness and good faith and shall, in accordance with law or contractual agreement, enjoy interests and
bear risks. Intellectual property involved in transformation of scientific and technological achievements shall be protected
by law.

In transformation of scientific and technological achievements, laws shall be observed and State interests safeguarded,
and no public interests shall be damaged.

   Article 4 The administrative department for science and technology, the planning department, the administrative department for comprehensive
economic and trade affairs and other relevant administrative departments under the State Council shall, within their
functions and responsibilities as prescribed by the State Council, administer, guide and coordinate efforts for the
transformation of scientific and technological achievements.

The local people’s governments at various levels shall be responsible for administering, guiding and coordinating efforts
for the transformation of scientific and technological achievements within their respective administrative regions.

CHAPTER II ARRANGEMENTS FOR IMPLEMENTATION

   Article 5 The State Council and the local people’s governments at various levels shall incorporate the transformation of scientific
and technological achievements in their notional economic and social development plans and make arrangements and coordinate
efforts for the transformation of scientific and technological achievements.

   Article 6 The relevant departments under the State Council and the people’s governments of provinces, autonomous regions and municipalities
directly under the Central Government shall, at regular intervals, publish catalogues of scientific and technological
achievements and handbooks of major projects for transformation of scientific and technological achievements and shall
give first priority and assistance to the following:

(1) projects that will noticeably help raise the industrial and technical level and increase economic results;

(2) projects of an industrial scale that can compete among the economies of the world;

(3) projects that can help rationally develop and utilize the natural resources, conserve energy, reduce material consumption
and prevent and control environmental pollution;

(4) projects that can facilitate high-yield, high-quality and high- efficiency farming and promote economic development in the
countryside; and

(5) projects that can help accelerate the social and economic development in areas inhabited by minority nationalities
and outlying and poverty-stricken areas.

   Article 7 The State, by adopting appropriate policies and measures, promotes and encourages the use of advanced technology, techniques
and equipment and continued improvement, restricted use and elimination of backward technology, techniques and equipment.

   Article 8 When making arrangements for transformation of major scientific and technological achievements, the people’s governments
at various levels may have relevant departments to arrange for the transformation through public bidding. These departments
shall provide the successful tender with the funds and other conditions that they decided to offer when making the bidding.

   Article 9 Holders of scientific and technological achievements may have their achievements transformed in the following ways:

(1) investing in the transformation themselves;

(2) transferring their achievements to another;

(3) allowing another to use their achievements;

(4) working together with another for the transformation with their achievements as the conditions for cooperation; and

(5) investing with their achievements as trade-in, as converted shares or as proportions of contribution to the investment.

   Article 10 An enterprise may, for the purpose of adopting new technology, new techniques and new materials and manufacturing
new products, publish information on its own or entrust an intermediate institution engaged in trade of technology to solicit
the scientific and technological achievements that it needs or to find collaborators for the transformation of scientific
and technological achievements.

   Article 11 An enterprise shall, according to law, have the right to conduct transformation of scientific and technological achievements
independently or jointly with domestic or foreign enterprises or institutions or other collaborators.

An enterprise may, through fair competition, undertake the projects, arranged by the government, for scientific and technological
research and development or for the transformation of scientific and technological achievements independently or
jointly with another.

   Article 12 The State encourages research and development institutions, colleges and universities and other institutions to join efforts
with manufacturers for the transformation of scientific and technological achievements.

Research and development institutions, colleges and universities and other institutions may participate in the bidding or tendering
conducted by relevant departments of the government or enterprises for transformation of scientific and technological
achievements.

   Article 13 The State encourages agricultural research institutions and agricultural experiment and demonstration stations to transform
scientific and technological achievements independently or in cooperation with another.

Agricultural research institutions may, for the purpose of advancing the transformation of their scientific and technological achievements
and in accordance with law, deal in the fine strains which they breed through their own research or in cooperation with another
and which are approved after examination.

   Article 14 With regard to scientific and technological achievements worth applying that are made by persons while holding positions in
the research and development institutions set up by the State or in colleges and universities, if the units concerned
fail to make timely transformation of the achievements, the persons who made the achievements and the participants
may, on condition that ownership of the achievements remains unchanged and in accordance with the agreement they reached with
the units they belong to, transform the achievements, and they shall enjoy the rights and interests as stipulated in the
agreement. And the units concerned should assist in the transformation of the scientific and technological achievements mentioned
above.

Persons who made the scientific and technological achievements or leading members of a research project may not obstruct
transformation of the scientific and technological achievements they made while holding positions in the units or take
into their own possession such achievements or thus encroach upon the lawful rights and interests of the units they
belong to.

   Article 15 Units that made scientific and technological achievements, units that conduct transformation of the achievements and units
that invest in such transformation shall sign a contract if they intend to cooperate in the follow-up tests, development
and application of the achievements as well as their putting into production and operation, in which to stipulate the rights
to be enjoyed and the risks to be borne by each party.

   Article 16 In testing and evaluating scientific and technological achievements in the course of their transformation, the principles
of impartiality and objectiveness shall be adhered to; it is not allowed to provide false testing results or evaluation certificates.

When research and development institutions that are set up by the State, colleges and universities or State-owned enterprises work
together with enterprises, other organizations or individuals from outside China in transforming scientific and technological
achievements, they must evaluate the achievements in accordance with relevant regulations of the State.

Where State secrets are involved in transforming scientific and technological achievements with the cooperation of
other countries, prior approval must be obtained through the procedures stipulated by law.

   Article 17 In places or agencies set up according to law for the exchange of technology, the following activities to promote
transformation of scientific and technological achievements may be conducted:

(1) introducing or recommending scientific and technological achievements that are advanced, matured and applicable;

(2) providing economic, technological, environmental and other information needed for transformation of scientific and
technological achievements;

(3) trading in technologies; and

(4) providing other advisory services for transformation of scientific and technological achievements.

   Article 18 Intermediate institutions acting as agent or intermediaries or providing other paid services in the exchange of technologies
must obtain business licenses as required by relevant State regulations. Brokers of these institutions must have qualification
certificates as required by relevant State regulations.

   Article 19 The State encourages enterprises and institutions and economic cooperative organizations engaged in scientific
and technological activities in the countryside to conduct intermediate and industrial experiments, agricultural experiments
and demonstrations and other technological innovations and to provide technical services.

The following activities may be engaged in the bases for conducting intermediate and industrial experiments, agricultural
experiments and demonstrations for the purpose of transforming scientific and technological achievements and in
other institutions that are engaged in technical innovations or provide technical services:

(1) conducting intermediate and industrial experiments with regard to new products and new techniques;

(2) engaging in ancillary development and technical innovation for the systematization and engineering of scientific and
technological achievements in different areas or trades to serve the community;

(3) providing technology or technical services to small and mediumsized enterprises, township enterprises, and economic
cooperative organizations engaged in scientific and technological activities in the countryside; and

(4) providing all-round services in support of transforming high- technology achievements and establishing enterprises
for the transformation.

Capital construction of the bases and institutions mentioned in the preceding paragraph shall have to be approved by the relevant
department under the State Council and the people’s governments of provinces, autonomous regions and municipalities
directly under the Central Government and shall be included in the relevant plans of the State or the local authorities.

   Article 20 Trial products from the transformation of scientific and technological achievements may be provided for test marketing within
the verified period for trial sale, in accordance with State regulations governing products for trial sale and after approval
by the relevant department. Trial manufacturing and test marketing of the products mentioned above shall meet the technical,
quality, safety, health and other standards prescribed by the State.

   Article 21 Of the funds the government allocates to scientific and technological undertakings, to investment in fixed assets and
to technological updating, a certain proportion shall be used for transforming scientific and technological achievements.
This proportion of government funds shall be chiefly used as initiation funds, discount loans, subsidy funds, risk investment
and other funds for promoting transformation of scientific and technological achievements.

   Article 22 The State adopts a preferential tax policy regarding transformation of scientific and technological achievements. Specific
measures shall be formulated by the State Council.

   Article 23 State banking institutions shall support transformation of scientific and technological achievements in matters of loans
and gradually increase the amount of loans extended for such transformation.

   Article 24 The State encourages establishment of funds or risk funds for transformation of scientific and technological achievements, such
funds shall be raised by the State, local authorities, enterprises, institutions and other organizations and individuals
and shall be used to aid transformation of such scientific and technological achievements as need substantial investment,
involve considerable risks and promise high yields and to accelerate the application of major scientific and technological
achievements in industrial production.

Funds and risk funds for transformation of scientific and technological achievements shall be established and used in accordance
with relevant regulations of the State.

   Article 25 The State promotes the establishment and expansion of scientific and technological information networks and the establishment
of a data bank of scientific and technological achievements, both of which shall provide information services regarding
such achievements throughout the country.

CHAPTER IV TECHNOLOGICAL RIGHTS AND INTERESTS

   Article 26 When a unit that made scientific and technological achievements and another unit join efforts to transform
the achievements, the ownership of rights and interests related to the achievements shall be stipulated in a contract
in accordance with law. What is not stipulated in the contract shall be handled according to the following principles:

(1) Where no invention or creation ensures from transformation of a scientific or technological achievement, the rights
and interests related to the scientific or technological achievement shall belong to the unit that made the achievement;

(2) Where inventions or creations ensue from collaborated transformation of a scientific or technological achievement, the rights
and interests related to the inventions or creations shall belong to both parties in collaboration; and

(3) As to the scientific and technological achievements made through collaborated transformation, both parties shall have the
right to put into practice the achievements thus made; consent shall have to be obtained from both parties in collaboration
for transfer of the said achievements.

   Article 27 When a unit, that made scientific and technological achievements, and another unit collaborate to transform
the achievements, both parties shall reach an agreement on protection of the technical know-how; the parties may not,
running counter to the agreement or the request of the obligee for keeping the technical know-how, disclose or let
another use the technical know-how.

Agencies of technological exchange and intermediate institutions shall be obligated to keep secret the technical know-how
of the parties concerned, which they come to know while serving as an agent or an intermediary.

   Article 28 Enterprises and institutions shall establish a system for protection of the technical know-how and keep improving it, in order
to guard the technical know-how of their own. Employees shall adhere to the system of their own units for protection of the
technical know-how.

Enterprises and institutions may sign an agreement on protection of their technical know-how with the employees who participate
in the transformation of scientific and technological achievements during the period when they remain in employment or within
a specified period of time after they leave office or retire; the said employees may not, in violation of what is agreed
on, disclose the technical know-how of their own units or engage in transforming the same scientific or technological achievement
as that of their own units.

No employees may transfer, without authorization, the scientific or technological achievements they made while holding positions
in their units or do so in disguised form.

   Article 29 When transferring a scientific or technological achievement made by employees while holding positions in a unit, the unit shall
take not less than 20 percent of the net income, obtained from transfer of the achievement, to award persons who made important
contributions to the scientific or technological achievement or to its transformation.

   Article 30 If a scientific or technological achievement, that is made through the independent research and development of an enterprise
or institution or through research and development of the enterprise or institution with the collaboration of another
unit, is transformed successfully and is adopted in production, the unit or units shall take, for three to five years running,
not less than five percent of the added profits from adoption of the achievement, that they are enpost_titled to retain, to
award persons who made important contributions to the scientific or technological achievement or to its transformation.

In respect of the remunerations or rewards given to persons who made important contributions to research and development of
scientific and technological achievements or their transformation, joint stock enterprises may convert them into shares
or proportions of contribution to investment in accordance with relevant regulations of the State. The persons, as shareholders,
shall draw proceeds on the strength of the shares they hold or their proportions of contribution to investment.

   Article 31 Anyone who, in violation of the provisions of this Law, resorts to deception in transformation of scientific or technological
achievements and thus gets an award or honorary post_title, fraudulent money or illegal profits, shall be ordered to put it right,
the award and honorary post_title shall be annulled, the illegal gains confiscated, and a fine also imposed on him. If he causes
economic losses to another, he shall bear civil liability for compensation in accordance with law. If a crime is constituted,
criminal responsibility shall be investigated according to law.

   Article 32 Anyone who, in violation of the provisions of this Law, deliberately provides a false testing result or evaluation certificate
after testing or evaluating a scientific or technological achievement shall be ordered to put it right and given a disciplinary
warning, his illegal gains shall be confiscated, and the institution that arranged for the testing and the evaluation institution
shall each be imposed with a fine. If the case is serious, the business license and qualification certificate
shall be revoked. If economic losses are caused to another, civil liability for compensation shall be borne in accordance
with law.

   Article 33 Employees of administrative departments for science and technology and other relevant departments of the people’s governments
at various levels who neglect their duties or practise irregularities for personal gain shall be given administrative sanctions;
if the case constitutes a crime, criminal responsibility shall be investigated in accordance with law.

   Article 34 Whoever, in violation of the provisions of this Law, usurps another’s scientific or technological achievement by means
of instigation, luring or coercion and thus encroaches upon the rights and interests of that person shall bear civil liability
for compensation in accordance with law and may be imposed with a fine. If the case constitutes a crime, criminal
responsibility shall be investigated in accordance with law.

   Article 35 If, in violation of the provisions of this Law, an employee who, without permission of his unit, discloses the technical know-how
of the unit or, without authorization, transfers or does so in disguised form the scientific or technological achievement
made while holding a position in the unit, or if a person who took part in the transformation of a scientific or technological
achievement, running counter to the agreement reached with his unit, engages in transforming the same scientific or
technological achievement as that of his unit during the agreed period of time after leaving office or retiring shall bear legal
responsibility in accordance with relevant regulations.

   Article 36 If in the exchange of technologies the intermediate institution that serves as an agent or provides intermediary services
or the broker deceives the client or colludes with one party to deceive another party, it or he shall be ordered to put
it right, given a disciplinary warning and, in addition to bearing civil liability for compensation in accordance
with law, the illegal gains shall be confiscated and a fine imposed. If the case is serious, the business license
and qualification certificate shall be revoked in accordance with law. If the case constitutes a crime, criminal responsibility
shall be investigated in accordance with law.

CHAPTER VI SUPPLEMENTARY PROVISIONS

   Article 37 This Law shall be put into force as of October 1,1996.

    





REGULATIONS ON SUPPLY AND UTILIZATION OF ELECTRICITY

Category  GEOLOGY, MINERAL RESOURCES AND ENERGY INDUSTRY Organ of Promulgation  The State Council Status of Effect  In Force
Date of Promulgation  1996-04-17 Effective Date  1996-09-01  


Regulations on Supply and Utilization of Electricity

Chapter I  General Provisions
Chapter II  Electricity Supply Areas
Chapter III  Electricity Supply Facilities
Chapter IV  Supply of Electricity
Chapter V  Utilization of Electricity
Chapter VI  Electricity Supply and Demand Contracts
Chapter VII  Supervision and Administration
Chapter IX  Legal Responsibility
Chapter IX  Supplementary Provisions

(Promulgated by Decree No.196 of the State Council of the People’s

Republic of China on April 17, 1996)
Chapter I  General Provisions

    Article 1  These Regulations are formulated according to the Electric
Power Law of the People’s Republic of China for the purposes of strengthening
the administration of electricity supply and utilization, protecting the
legitimate rights and interests of electricity supplying and demanding
parties, maintaining the order of electricity supply and utilization and
realizing a safe, economical and rational supply and utilization of
electricity.

    Article 2  Within the territory of the People’s Republic of China, all
enterprises supplying electricity (hereinafter referred to as electricity
supply enterprises), users of electricity (hereinafter referred to as users)
and other organizations and persons involving in electricity supply and
utilization shall observe these Regulations.

    Article 3  The administrative department of electric power of the State
Council shall be in charge of the supervision and administration of
electricity supply and utilization throughout the country.

    The administrative departments of electric power of the people’s
governments at county level and above shall be responsible for the
supervision and administration of electricity supply and utilization within
their respective administrative regions.

    Article 4  Electric network operating enterprises shall handle the
electricity supply and utilization business within their own supply areas in
accordance with law and be subject to the supervision of the administrative
department of electric power.

    Article 5  The state adopts the principle of safe, economical and planned
use in the administration of electricity supply and utilization.

    Electricity supply enterprises and users shall abide by relevant state
regulations and adopt effective measures to pursue a safe, economical and
planned utilization of electricity.

    Article 6  Electricity supply enterprises and users shall sign electricity
supply and demand contracts on the basis of equality, voluntariness and
negotiation.

    Article 7  Administrative departments of electric power shall strengthen
the supervision and administration of electricity supply and utilization,
coordinate the relations between the electricity supplying and demanding
parties and forbid any act that threaten the safety of electricity supply
and utilization and any act of illegally seizing electric energy.
Chapter II  Electricity Supply Areas

    Article 8  An electricity supply enterprise shall supply electricity to
users within its authorized supply area.

    For the division of supply areas, such factors as the structure of
electric networks and rationality of electricity supply shall be taken into
consideration. Every supply area shall have only one supply agency.

    Article 9  For establishment or change of an electricity supply area
within a province, autonomous region or municipality directly under the
central government, the electricity supply enterprise shall submit an
application; after examined and approved by the administrative department of
electric power of people’s government of the province, autonomous region
or municipality directly under the central government in conjunction with
other relevant departments at the same level, a Permit for Electricity Supply
shall be issued to the applicant by the said administrative department of
electric power. The establishment or change of a supply area involving tow or
more provinces, autonomous regions or municipalities directly under the
central government shall be examined by the administrative department of
electric power of the State Council, which, if approving, shall issue a
Permit for Electricity Supply to the applicant. The electricity supply agency
shall, on the strength of the Permit for Electricity Supply, apply for and
obtain a business license from the administrative department for industry and
commerce before it may start the supply of electricity.

    Electric network operating enterprises shall, in accordance with the
structure of electric networks and the principle of nationality of
electricity supply, assist the administrative department of electric power in
the division of electricity supply areas.

    Measures for division and administration of electricity supply areas
shall be formulated by the administrative department of electric power of the
State Council.

    Article 10  The electric power delivered to a hookup network by
electricity production enterprises under hookup agreements shall be unifiedly
managed and sold by the electricity supply agency.

    Article 11  If a user demand an electricity capacity beyond the ability
of the supply enterprise of the supply area to which the user belongs, the
administrative department of electric power at provincial level or above
shall designate another supply enterprise for the user.
Chapter III  Electricity Supply Facilities

    Article 12  People’s governments at county level and above shall
incorporate the planning for construction and renovation of urban and rural
electric networks in the general plan for the urban and rural construction.
Administrative departments of electric power at various levels shall, in
conjunction with other relevant administrative departments and electric
network operating enterprises, make proper planning for the construction and
renovation of urban and rural electric networks. Electricity supply
enterprises shall arrange the construction of electricity supply facilities
and manage the operation in accordance with said planning.

    Article 13  Local people’s governments at various levels shall, in
accordance with the general planning for urban and rural construction, make
an overall arrangement for land needed for urban and rural electricity
supply line corridors, electric cable channels, regional transformation and
distribution stations and service agencies.

    Electricity supply enterprises may, in accordance with relevant state
regulations, set up lines, lay cables and construct public electricity supply
facilities on the land planned for line corridors, cable channels, regional
transformation and distribution stations and service agencies.

    Article 14  People’s governments of townships, nationality townships, and
towns or relevant departments of local people’s governments at county level
or above shall be in charge of the construction, operation and maintenance of
street lamps and pay the electricity fee, or they may also entrust, with
compensation, an electricity supply enterprise with the work of design,
construction, maintenance and management.

    Article 15  The design, construction, test and operation of electricity
supply and receipt facilities shall be consistent with the national or
industrial standards of the electric power.

    Article 16  When electricity supply enterprises or users construct or
maintain electricity supply or receipt facilities, the relevant organizations
and persons in the operation areas shall provide assistance and convenience.
If any damage is caused to buildings or crops in operations, restorations
shall be made or proper compensation be given in accordance with provisions
of relevant laws and administrative regulations.

    Article 17  Public electricity supply facilities which have been
completed and put into operations shall be unifiedly maintained and managed
by the electricity supply unit. With an approval of the administrative
department of electric power, the electricity supply enterprise may use,
renovate and extend the electricity supply facilities.

    Owners of joint electricity supply facilities shall consult and make
determination upon the maintenance and management of said facilities. The
owners may either carry out the maintenance and management by themselves or
entrust them to an electricity supply enterprise.

    Electricity supply facilities for a special user which have been
completed and put into operations shall be maintained and managed by said
user, or the user may entrust them to an electricity supply enterprise.

    Article 18  If there is a need for any construction to remove, renovate
or take protective measures to any completed electricity supply facilities,
the construction unit shall consult with the facilities managing unit in
advance. The expenses needed therefor shall be borne by the construction
unit.
Chapter IV  Supply of Electricity

    Article 19  The quality of electricity at the users’ end shall conform to
the national or industrial standards of electric power.

    Article 20  The form of electricity supply shall be determined through
consultation by the parties to the electricity supply and demand under the
principles of safety, reliability, economy, rationality and being easy to
manage and according to relevant state regulations, the electric network
planning, electricity demand and the local electricity supply conditions and
other relevant conditions.

    For an area which public electricity supply facilities can not reach,
the electricity supply enterprise may entrust the supply to a nearby unit
which has the ability. No unit may supply electricity to others except with
the entrustment of an electricity supply enterprise.

    Article 21  When a rescue or relief operation needs an urgent supply of
electricity, the electricity supply enterprise must arrange the electricity
supply as quick as possible. The costs on the supply project needed and
electricity fees payable shall be borne by the relevant department of the
relevant local people’s government from the relief funds, with the exception
of electricity fees for drought relief which shall be borne by users.

    Article 22  If a user has special requirements on the quality of
electricity supply, the electricity supply enterprise shall, according to its
necessity and the probability of the electric network, supply electricity
accordingly.

    Article 23  Applications for new use, temporary use or additional
capacity, change or termination of electricity utilization shall all
accomplish the procedures with the local electricity supply enterprise and
fees shall be paid therefor in accordance with relevant state regulations.
The electricity supply enterprise may not refuse to supply electricity except
with some justified reasons. Every electricity supply enterprise shall, at
its place of business, make public the procedures, rules and charge standards
on the utilization of electricity.

    Article 24  Electricity supply enterprises shall, in accordance with
the national or industrial standards of electric power, participate in the
verification of designs of users’ electricity receipt and transmission
facilities, conduct supervision over the construction of the covered parts of
users’ electricity receipt and transmission facilities and inspect said
facilities after they are completed. Only those having passed the inspection
may be put in operations.

    Article 25  Electricity supply enterprises shall, in accordance with
relevant state regulations, adopt the system of charging electricity fees on
the basis of classification of electricity utilization and division of time
period when electricity is used.

    Article 26  Users shall install metering apparatus on electricity
consumption. The amount of electricity consumed by a user shall be the
amount indicated by such apparatus certified by the metrological inspection
authorities. A metering apparatus shall be installed on the dividing line of
the ownership of the electricity supply facilities and receipt facilities.

    A user shall be responsible for the protection of its electricity
metering apparatus which is installed outside.

    Article 27  Electricity supply enterprises shall compute and collect
electricity fees from users according to the electricity price approved by
the state and the records indicated by the electricity metering apparatus.

    Users shall pay electricity fees according to the price approved by the
state and the specified form and time limits or in a way agreed upon in
contracts.

    Article 28  Except otherwise stipulated in these Regulations, under
normal operation of the electricity generating and supply systems, the
electricity supply enterprise shall supply electricity to users continuingly.
When there is a need to interrupt the supply due to some reasons, the
electricity supply enterprise shall, in accordance with the following
provisions, notify the users or give public notice in advance:

    (1) When there is a need to interrupt the electricity supply due to a
planned check and inspection of the supply facilities, the electricity
supply enterprise shall notify users or give public notice seven days before;

    (2) When there is a need to interrupt the electricity supply due to an
emergency check and inspection of the supply facilities, the electricity
supply enterprise shall notify the major users 24 hours before; and

    (3) When there is a need to interrupt or restrict the electricity supply
due to the breakdown of the generating or supply system, the electricity
supply enterprise shall interrupt or restrict the supply according to the
electricity restriction order which has been determined beforehand. After the
reason causing the interruption or restriction of electricity supply has been
removed, the electricity supply enterprise shall resume the supply as quick
as possible.
Chapter V  Utilization of Electricity

    Article 29  The administrative departments of electric power of people’s
governments at county level and above shall make proper planning for the
utilization of electricity in accordance with the state’s industrial policies
and on the principles of overall arrangement, guaranteed supply to major
users and supply on the basis of competitive selection.

    Electricity supply enterprises and users shall work out plans for
economizing electricity, spread and employ new technology, materials,
techniques and equipment which can be used for electricity economization and
reduce the electricity consumption.

    Electricity supply enterprises and users shall employ advanced technology
and scientific management measures to ensure the safe supply and utilization
of electricity, avoid accidents and maintain public security.

    Article 30  Users may not commit the following acts that threaten the
safety of electricity supply and utilization and disturb the normal order of
electricity supply and utilization:

    (1) change the category of electricity utilization without authorization;

    (2) without authorization, use electricity beyond the capacity as agreed
upon in the contract;

    (3) without authorization, use electricity beyond the quota allotted by
plan;

    (4) without authorization, use the electric equipment the use of which
has been suspended with certain formalities with the electricity supply
enterprise, or use the electric equipment which has been sealed up by the
electricity supply enterprise;

    (5) without authorization, remove, change or operate the electricity
metering apparatus, load control facilities or supply facilities of the
electricity supply enterprise or the user’s electricity receipt equipment
which shall be managed by the electricity supply enterprise as agreed; and

    (6) without the permit of the electricity supply enterprise, take in or
give out electric source or hook up its self-supply electric source with the
network.

    Article 31  It shall be forbidden to steal electricity. The following
acts shall be deemed as stealing electricity:

    (1) without authorization, connect wires with and use electricity from
the supply facilities of the electricity supply enterprise;

    (2) use electricity by evading the electricity metering apparatus of the
electricity supply enterprise;

    (3) use electricity by forging or opening seals on the electricity
metering apparatus put by the metrological inspection authorities or its
authorized organization;

    (4) intentionally damage the electricity metering apparatus of the
electricity supply enterprise;

    (5) intentionally cause the inaccuracy of the electricity metering
apparatus of the electricity supply enterprise or make the apparatus lose
efficiency; and

    (6) steal electricity by other means.
Chapter VI  Electricity Supply and Demand Contracts

    Article 32  The electricity supply enterprise and the user shall, before
the supply of electricity, sign an electricity supply and demand contract
according to the user’s demand and the supply ability of the electricity
supply enterprise.

    Article 33  An electricity supply and demand contract shall contain the
following items:

    (1) the form, quality and time of electricity supply;

    (2) the capacity, location and nature of the utilization of electricity;

    (3) the electricity metering and calculation form, the electricity price
and the form of settlement of electricity fees;

    (4) the responsibility for maintaining the electricity supply and
utilization facilities;

    (5) the period of validity of the contract;

    (6) liabilities for breach of contract; and

    (7) other items the two parties consider necessary to contain.

    Article 34  The electricity supply enterprise shall, in accordance with
the quantity, quality, time and form of the electricity supply as agreed upon
in the contract, make rational management and a safe supply of electricity.

    The user shall use electricity in accordance with the quantity and
conditions as agreed upon in the contract and pay electricity fee and other
fees stipulated by the state.

    Article 35  The modification and rescission of an electricity supply and
demand contract shall be handled in accordance with the provisions of
relevant laws, administrative regulations and these Regulations.
Chapter VII  Supervision and Administration

    Article 36  Administrative departments of electric power shall strengthen
the supervision and administration of electricity supply and utilization.
Supervisors and inspectors of electricity supply and utilization must meet
relevant requirements and, when performing their duties, shall produce
relevant certificate.

    The concrete measures for supervision, inspection and administration of
electricity supply and utilization shall be separately formulated by the
administrative department of electric power of the State Council.

    Article 37  Before going on duty, electricians who are to conduct
operations on users’ electricity receipt and transmission facilities must
pass the examination by the administrative department of electric power and
obtain an Electrician’s License for Operation on Networks issued by the
administrative department of electric power.

    Before applying for a business license to the administrative department
for industry and commerce, units who wish to engage in the installation,
maintenance and test of electricity supply and receipt facilities must pass
the examination by the administrative department of electric power and obtain
a Permit for Engaging in Installation (Maintenance) of Electric Facilities
from the administrative department of electric power.
Chapter IX  Legal Responsibility

    Article 38  Anyone who, in violation of the provisions of these
Regulations, commits any of the following acts shall be ordered to make
correction by the administrative department of electric power with its
illegal income, if any, confiscated and a fine not more than five times the
illegal income may be imposed concurrently:

    (1) engage in electricity supply without obtaining, in accordance with
regulations, the Permit for Electricity Supply;

    (2) supply electricity into a supply area or beyond its own supply area
without authorization; or

    (3) re-supply electricity to others without authorization.

    Article 39  If a user, in violation of the provisions of Article 27 of
these Regulations, fail to pay electricity fee within the time limit, the
electricity supply enterprise may charge, in addition to the electricity fee,
a penalty for breach of contract equivalent to 0.1%-0.3% of the total
electricity fee payable for each day overdue. The exact ratio shall be
stipulated by both parties to the electricity supply and demand in the
contract. If the electricity fee is more than 30 days overdue and it remains
unpaid after pressed, the electricity supply enterprise may cease to supply
electricity according to the procedures stipulated by the state.

    Article 40  If anyone illegally use electricity in violation of the
provisions of Article 30 of these Regulations, the electricity enterprise
may, according to the violation facts and the consequences, demand the
electricity fee and, pursuant to relevant regulations of the administrative
department of electric power of the State Council, charge extra electricity
fees and other fees stipulated by the state. When the circumstances are
serious, the electricity supply enterprise may cease to supply electricity
according to the procedures stipulated by the state.

    Article 41  Anyone who steal electricity in violation of the provisions
of Article 31 of these Regulations shall be ordered to cease the illegal act
by the administrative department of electric power with the electricity fee
demanded and a fine not more than five times the electricity fee payable
imposed. If a crime is constituted, the criminal responsibility shall be
investigated according to law.

    Article 42  The electricity supply enterprise or user which breaches the
electricity supply and demand contract and causes a loss to the other party
shall be liable for it according to law.

    Article 43  The electricity supply enterprise shall be liable, according
to law, for the loss or damage caused to a user or a third party by electric
power operation faults.

    A user or a third party shall be liable, according to law, for the loss
or damage caused by its fault to the electricity supply enterprise or other
users.

    Article 44  If a staff member or worker of the electricity supply
enterprise violates rules and regulations and thus causes a electricity
supply accident, or abuses his or her power or uses his or her power for
personal gains, a disciplinary sanction shall be given or, if a crime is
constituted, the criminal responsibility shall be investigated.
Chapter IX  Supplementary Provisions

    Article 45  These Regulations shall enter into force on September 1, 1996.





REPLY OF THE STATE ADMINISTRATION FOR INDUSTRY AND COMMERCE ON THE ISSUE WHETHER ENTERPRISES WITH FOREIGN INVESTMENT MAY CONTRACT AND OPERATE DOMESTIC-FUNDED COMMERCIAL ENTERPRISES

The State Administration for Industry and Commerce

Reply of the State Administration for Industry and Commerce on the Issue Whether Enterprises with Foreign Investment May Contract
and Operate Domestic-funded Commercial Enterprises

GongShangQiZi [1996] No.245

July 8, 1996

Beijing Bureau for Industry and Commerce:

We have studied your Request for Instructions on Whether Enterprises with Foreign Investment May Contract and Operate Domestic-funded
Commercial Enterprises (JingGongShangWenZi [1996] No.103) and now reply as follows:

I.

Registered enterprises with foreign investment should perform their duty of capital appropriation requirement and operate in accordance
with the laws and regulations. Therefore, Beijing Jiachuang Business Administration Consulting Co., Ltd. (hereinafter referred to
as Jiachuang) should appropriate investment fund in compliance with the above-mentioned principle and operate within the scope of
business approved by the competent registration authority.

II.

The country does not provide legal reference for enterprises with foreign investment to contract domestic-funded enterprises. Therefore
enterprises with foreign investment lack in sufficient legal and regulatory reference to contract domestic-funded enterprises. Before
the country prescribes any clear provisions, enterprises with foreign investment contracting to operate industries where foreign
investment is restricted or banned by the state, should seek approval from authorized examination and approval authorities and register
with their initial registration authorities in reference to such provisions as “Interim Provisions on Guiding Direction of Foreign
Investment” and “Guiding List of Industries with Foreing Investment”. In the case of Jiangchuang, which contracted domestic-funded
enterprises and engaged itself in commercial retailing and wholesaling activities without the approval of and registration with competent
authorities, your Administration is therefore requested to order for the termination of the contract and submit a self-criticism
in writing.

III.

As regards the issue of “commercial property management” in Jiachuang’s scope of business, the content of commercial property management
should be specific management of commercial facilities (such as renting, maintenance and security protection of commercial facilities
and other relevant items) and thus does not cover commercial retailing and wholesaling.

Your administration is requested to work together with Beijing Development Planning Commission and Beijing Foreign Trade and Economic
Commission and jointly order Jiangchuang to revise the inappropriate description of its scope of business in its articles of association
and contract and to report the revision results to the State Administration for Industry and Commerce.



 
The State Administration for Industry and Commerce
1996-07-08

 






CIRCULAR OF THE GENERAL OFFICE OF THE STATE COUNCIL REGARDING SOME PROBLEMS WHICH NEED TO BE CLARIFIED FOR THE IMPLEMENTATION OF THE ARBITRATION LAW

Category  ARBITRATION Organ of Promulgation  The State Council Status of Effect  In Force
Date of Promulgation  1996-06-08 Effective Date  1996-06-08  


Circular of the General Office of the State Council Regarding Some Problems Which Need to Be Clarified for the Implementation of
the Arbitration Law of the People’s Republic of China



(June 8, 1996)

    With the consent of the State Council, several problems with regard to
the implementation of the Arbitration Law of the People’s Republic of China
(hereinafter referred to as the Arbitration Law) are hereby clarified with a
view to ensuring the correct implementation of the Arbitration Law,
guaranteeing the continuity of the work of arbitration, protecting the
legitimate rights and interests of parties to economic disputes and
maintaining the economic order.

    1. The provisions in the Plan for the Reorganization of Arbitration
Organs (Guobanfa No.[1995] 44) issued on August 1, 1995 by the General Office
of the State Council concerning the merger of newly established arbitration
commissions and the original arbitration organs with regard to acceptance of
cases shall be amended as: Arbitration agreements concluded according to law
by parities concerned before the implementation of the Arbitration Law shall
remain valid; cases to be arbitrated by the original arbitration organs at
various levels in municipalities directly under the central government,
capital cities of provinces and autonomous regions or other districted cities
according to the original arbitration agreements or the state’s provisions
concerning arbitration which were in force before the implementation of the
Arbitration Law shall be respectively handled by the arbitration commissions
newly established in the aforesaid cities where the original arbitration
organs are located; if, in areas where the original arbitration organs are
located, no arbitration commission may be established according to law or no
arbitration commission is established though it may be established according
to law, the cases shall be handled by arbitration commissions newly
established in the capital cities of the provinces or autonomous regions.
Where parties concerned form a new arbitration agreement and thereby choose
another newly established arbitration commission, the arbitration shall be
conducted by the newly established arbitration commission chosen by the
parties; where parties concerned agree to abandon arbitration and resort to
legal proceedings, the case shall be handled by the people’s court.

    2. Where any party to a domestic arbitral case applies for economic
preservative measures in accordance with Article 28 the Arbitration Law, the
arbitration commission shall, in accordance with relevant provisions of the
Civil Procedure Law of the People’s Republic of China, refer the application
to the basic people’s court at the place where the party has his residence or
where the property related is located.

    3. The functions and duties of newly established arbitration commissions
are mainly to arbitrate domestic disputes; they may accept foreign-related
cases if the parties concerned make such choice. Newly established
arbitration commissions shall adopt identical charging standards for
arbitration of either domestic or foreign-related disputes.

    4. Relevant administrative departments shall, within two months after the
issuance of this Circular and in accordance with the provisions of the
Arbitration Law, revise the clause for treatment of contractual disputes in
their standard (form) contracts or model texts of contracts made before the
implementation of the Arbitration Law. The revised form shall be: The method
for settlement of contractual disputes shall be any one chosen from the two
following methods by the parties concerned through contract:

    (1) Disputes arising from the performance of this contract shall be
settled through compromise between the parties or, if it fails to be settled
through compromise, be submitted to ____ Arbitration Commissions for
arbitration;

    (2) Disputes arising from the performance of this contract shall be
settled through compromise between the parties or, if it fails to be settled
through compromise, a lawsuit may be instituted with the people’s court.

    The Supreme People’s Court consents to issue another document with regard
to the problems within the scope of functions and powers of people’s courts
which are involved in this Circular.





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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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