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2002

CIRCULAR OF THE STATE COUNCIL REGARDING STRAIGHTENING OUT ACCOUNTING ACTIVITIES AND FURTHER ENHANCING THE QUALITY OF ACCOUNTING WORK

Category  FINANCE Organ of Promulgation  The State Council Status of Effect  In Force
Date of Promulgation  1996-04-19 Effective Date  1996-04-19  


Circular of the State Council Regarding Straightening out Accounting Activities and Further Enhancing the Quality of Accounting Work



(April 19, 1996)

    During the period of the Eighth Five-Year Plan, the accounting work of
the country has achieved a great deal either in the legal construction and
the transformation of accounting system model or in the development of
accountant undertakings. There are still, however, quite a few problems
existing in the accounting work, such as forging accounting documents,
charging arbitrary expenses to the cost, having “two account books”,
concealing incomes, evading taxes, transferring the state’s assets, setting
up one’s own “treasuries”, and other activities violating financial and
economic disciplines. Those activities have seriously obstructed the
development of the economy and the smooth progress of the reform, encouraged
the corruption, and so must be strictly rectified.

    Accounting work is a major foundation of economic management. It is very
important to put accounting activities in order, strictly implement business
accounting and strengthen accounting control, for the consolidation and
improvement of macro-control and the creation of favorable economic
environment and economic order. The rectification of accounting activities
shall be taken as a starting point of the work of putting economic activities
in order and enforcing financial and economic disciplines. With a view to
implementing the Accounting Law of the People’s Republic of China
(hereinafter referred to as the Accounting Law), further strengthening the
control over accounting activities and bringing the role of accounting work
into full play in maintaining the economic order and developing the socialist
market economy, this Circular is hereby issued with regard to several
problems concerning rectifying accounting activities and further enhancing
the quality of accounting work.

    1. Rectifying Accounting Activities Throughout the Country

    People’s governments at various levels and all departments concerned
shall immediately adopt measures to inspect all-sidedly the accounting work
of their own regions or departments, make rectification in the light of the
actual situation, supervise the units of their regions or under their
departments to conduct accounting work in accordance with law, and establish
a standard accounting order.

    The rectification of accounting work shall be carried out under the
direct leadership of people’s governments at various levels, with financial
departments at various levels responsible for the organization and
coordination. The work of rectification shall start with the issuance of this
Circular and be completed before the end of 1996. All enterprises,
administrative and institutional units, and social organizations shall make
their self-examination seriously and the coverage of the self-examination
must be 100%. Each region and department shall, on the basis of general
self-examination, transfer a group of professional key members to form an
inspection group for emphasis inspection. The coverage of emphasis inspection
may not be less than 20%. The role of social intermediary institutions, such
as accounting firms and auditing firms, shall be brought into full play in
the rectification work.

    The rectification of accounting work shall, on the basis of overall
inspection on the implementation of the state’s laws and regulations on
finance, taxation, financial affairs and accounting, etc., lay emphasis on
the following problems: (1) Fail to establish accounts which should be
established according to the state’s provisions, or accounts are in serious
confusion; (2) Play “two account books”, or forge accounting documents,
account books or accounting statements, concealing true financial situation
and management performance; (3) Violate financial and accounting rules,
arbitrarily cut down the cost and use the money for other purposes or charge
random expenses to the cost, reimburse expenses willfully, make random
understatement of profits or overstatement of losses, or arbitrarily eat up
part of the state capital funds; (4) Retain or transfer the state or the
unit’s revenue and set up one’s own “treasuries”; and (5) Other problems of
which a region or a department deems necessary to make an emphasis
rectification.

    Activities violating financial and economic disciplines discovered in the
inspection shall be seriously dealt with in accordance with relevant
financial and economic laws and regulations. If the violation is caused due
to the bad internal management, the unit shall be ordered to make
rectification and obtain real effect within a prescribed period; if it is
the unit’s leader who inspires, instigates or orders the accounting personnel
to fabricate or falsify accounting data, practice fraud and deception, and so
jeopardize the interests of the state and society, the leader shall be
dismissed from his post; if it is the local government or relevant department
that instigates or forces the unit to give false accounting statement, the
leader of the local government or of the department shall be investigated for
responsibility or even be dismissed from his post; in cases where the
accounting worker fails to report what they knows of the activities
violating law and disciplines or acts fraudulently in collusion, in addition
to the investigation of his responsibility, the accounting worker shall be
deprived of his professional qualification. If any of the above-mentioned
activities constitutes a crime, the criminal responsibility shall be
investigated. Each region and department shall choose major typical cases for
handling publicly.

    2. Strengthening the Supervision and Inspection, Establishing and
Improving the Accounting Control System

    Every region, department and unit shall carry out effective supervision
on accounting activities and, with the steady deepening of the reform,
establish and improve an accounting control system with the state
supervision, social supervision and a unit’s internal supervision
incorporated, and so guarantee the accounting work conducted in order under
the law.

    (1) Government departments shall strengthen according to law the
supervision over accounting work of basic units. Financial departments and
various responsible authorities shall tighten the control of accounting
statements, investigate and deal strictly with the acts of fabricating or
falsifying accounting statements and other acts of fraud and deception. Each
responsible authorities shall make a general examination of annual accounting
statements submitted by their subordinate units and, in addition, select 20%
of them for emphasis examination, ensuring that the annual accounting
statements tell the real financial situation and management performance of
the units. Auditing organs shall strengthen the supervision over the
financial revenue and expenditure of state-owned financial institutions,
industrial and commercial enterprises and institutional organizations.
Financial departments shall strengthen the control of invoices, progressively
implement an invoice trailing and auditing system and, in accordance with
law, deal strictly with the units and persons who violate the state’s
provisions in acquiring or filling in vouchers or in voucher reimbursement
and accounting. The departments for the administration of industry and
commerce shall strengthen the supervision over industrial and commercial
enterprises by combining it with the registration and annual examination,
ordering those enterprises who fail to have necessary accounting personnel in
accordance with stipulations or, according to affirmation of the financial
departments, whose accounting systems are not complete or whose accounts are
not in conformity with stipulations to make correction within a prescribed
period and, if no correction has been made within the period, refusing to
give registration or annual examination.

    (2) Strengthening the social accounting supervision and implementing
according to law an audit system for enterprises’ annual accounting
statements. With a view to effectively prohibiting and preventing fraud and
deception in accounting statements and enhancing the quality of accounting
statements, the audit system shall be implemented for enterprises’ annual
accounting statements according to law. In the light of the actual situation
of the development of China’s accountant undertakings, the audit system of
enterprises’ annual accounting statements shall be implemented in the
following stages: foreign investment enterprises and other limited liability
companies and joint stock limited companies which have not implemented the
audit system of enterprises’ annual accounting statements must institute the
system before the end of 1996; the state-owned large and medium-sized
enterprises which have not implemented the audit system of enterprises’
annual accounting statements must institute the system before the end of
1997; all enterprises which should implement the audit system of enterprises’
annual accounting statements must institute the system by 2000.

    The state’s competent authorities shall strengthen the supervision over
and inspection on accounting firms (auditing firms) and the quality of
registered accountants’ service, take a yearly selective examination on
audit reports on enterprises’ annual accounting statements, issued by
registered accountants, deal seriously according to law with those accounting
firms (auditing firms) and registered accountants who violate the Accounting
Law or the audit criteria or rules by withholding the actual situation
purposely or even participating in the fraud, and deprive the registered
accountants of their practice qualifications; if the circumstances are
serious, the department for the administration of industry and commerce
shall, in accordance with law, revoke the business license of the accounting
firm or auditing firm.

    The implementing measures for the audit system of enterprises’ annual
accounting statements shall be separately formulated by the Ministry of
Finance together with other relevant departments.

    (3) Strengthening the internal accounting control of various units. All
administrative units, enterprises, institutions and social organizations
shall carry out accounting work in strict accordance with the Accounting Law.
Leaders of various units shall conscientiously perform their functions and
duties entrusted by the Accounting Law, urge and supervise the accounting
organs to strengthen the construction of rules and regulations and the basic
management, improve the internal accounting control, and make it a key part
of the unit’s self-disciplining mechanism. Accounting offices and accounting
personnel shall perform their functions and powers according to law, make
accounting seriously, enforce the accounting control, so to help strengthen
the economic control and raise the economic efficiency.

    All units shall, in accordance with law and relevant provisions of the
state, accept the accounting supervision of the government departments. They
must provide accurate accounting documents, account books, accounting
statements and other accounting data, and may not refuse to provide, conceal
or falsely provide accounting data.

    3. Strengthening the Control and Further Enhancing the Quality of
Accounting Work

    (1) Strengthening the leadership on accounting work. Financial departments
at various levels shall, in accordance with the need of the establishment and
improvement of socialist market economic system, strengthen the control of
accounting activities over the whole society. Place the accounting control
on the agenda of the work of financial management, amplify necessary organs,
allocate and strengthen necessary cadres. Responsible authorities at various
levels shall formulate measures for strengthening the control of accounting
activities, direct their subordinate units to do accounting work well.

    (2) Further strengthening the accounting law. Continue to strengthen the
construction of accounting law and accounting system, bring about steady
improvement in the accounting law and accounting system, with the Accounting
Law as the core. Further deepen the reform of enterprises’ accounting system,
establish an accounting criteria system with Chinese characteristics,
including basic accounting criteria and specific accounting criteria, which
shall be implemented for trial from 1997 in some chosen enterprises with
comparatively good operating mechanisms and sound foundations. Effectively
publicize the Accounting Law and other financial and accounting laws and
regulations, enhance the sense of legality of leaders at various levels and
the mass of financial and accounting workers.

    (3) Enhancing political and professional qualities of accounting workers.
In accordance with the need of strengthening the economic control, try to
effectively accomplish on-the-job training of accounting workers and make
their knowledge enriched and updated uninterruptedly. On-the-job training of
accounting workers shall, under the general planning and control of the
financial departments, be conducted in a planned and organized way. The
professional training shall be combined with the education in legality,
ideological and political education and education in vocational ethics, so as
to promote the quality of accounting workers in an all-round way. All units
shall ensure certain time every year for vocational study to their accounting
personnel. The system of accounting professional qualification examinations,
the system of going to post with certifications and the system of citation
and rewards shall be continuously implemented, so as to arouse and give full
play of the initiative of the mass of accounting workers.

    (4) Strengthening the control over social accounting intermediary
institutions and enhancing the quality of registered accounts’ service. The
social auditing control shall be standardized under the principle of
“governing by law, supervision and control by the government, guidance by the
market and self-disciplining within the profession”. The state’s competent
authorities shall strengthen the construction of standardization of
registered accountants’ professional practice and the supervision system of
the service quality, guarantee a steady enhancement of the social auditing
level. Institute and improve the registered accountant examination system and
follow-up education system, build a contingent of registered accountants
having high professional quality, being fair-mined and objective, strictly
abiding by the vocational ethics and service standards and having good social
credit. Progressively reform the management system of accounting firms
(auditing firms), establish an operational mechanism for management by self-
disciplining within the profession.

    All localities and departments shall conscientiously implement the
preceding provisions, and submit a timely report on the planning for the
rectification of accounting activities and the situation of the
implementation to the State Council, with a copy of it sent to the Ministry
of Finance.





PROPOSALS SUBMITTED BY THE STATE TAXATION ADMINISTRATION ON ADJUSTING THE SCOPES OF ADMINISTRATION OF TAX COLLECTION BETWEEN THE STATE AND LOCAL TAX AUTHORITIES

Category  TAXATION Organ of Promulgation  The State Council Status of Effect  In Force
Date of Promulgation  1996-01-24 Effective Date  1996-01-24  


Proposals Submitted by the State Taxation Administration on Adjusting the Scopes of Administration of Tax Collection Between the
State and Local Tax Authorities



(Approved by the State Council on January 24, 1996)

    In 1994, the departments of taxation in the whole country were reorganized
into two sets of tax authorities, the state and local tax authorities, between
which the scopes of administration of tax collection were clearly divided up
in accordance with the provisions of the Circular of the General Office of the
State Council on the Transmission of the Proposals Submitted by the State
Taxation Administration Concerning the Establishment of Its Subordinate Tax
Authorities in Each Locality and the Local Tax Authorities promulgated by
No.[1993]87 of the General Office of the State Council. After the split of
institutions, the two sets of tax authorities function in a basically steady
way and have played an important role in ensuring the reform in the systems of
finance and taxation to be made smoothly. Upon the summary of working practice
for over one year, an adjustment is intended to make in the scopes of
administration of tax collection between the state and local tax authorities.
Proposals are detailed in the following:

    1. Taxation on trade fair markets and individual businesses

    Taxes on individual businesses shall be collected and controlled by the
state and local tax authorities respectively according to the scopes of
administration divided up under the principle of income distribution. That is,
the value-added tax and the consumption tax shall be collected and controlled
by the state tax authorities and the business tax, the individual income tax
and other types of taxes by the local tax authorities.

    For the purposes of strengthening the administration of tax collection,
lowering the cost of tax collection, avoiding overlapped working scopes and
making individual businesses convenient for payment of taxes, the state and
local tax authorities may, upon an agreement through consultation, commission
one another with collection of taxes within their respective scopes of
administration and the commission of collection shall be free from service
charges.

    The preceding provisions shall also apply to individual businesses in
trade fair markets.

    2. Taxation related to foreign interests

    The value-added tax, the consumption tax and the income tax on foreign
investment enterprises and foreign enterprises shall be collected and
controlled by the state tax authorities and the business tax, the individual
income tax and other types of local taxes by the local tax authorities. The
local tax authorities may commission the collection of taxes to the state tax
authorities.

    3. Income tax on joint venture enterprises or joint stock enterprises

    The state tax authorities shall collect and control income taxes on those
joint venture enterprises or joint stock enterprises which are incorporated by
central and local enterprises or institutions.

    4. Tax on securities trading

    The state tax authorities shall collect and control the securities trading
tax (prior to its levy, the stamp tax on securities trading, instead).

    5. Surcharge for education

    The local tax authorities shall collect and control the surcharge for
education with the exception of that paid by railway enterprises, head offices
of banks and insurance companies. To simplify collection procedures, the
collection of the surcharge for education attached to the value-added tax and
the consumption tax may be commissioned to the state tax authorities.

    The scopes of administration of collecting other types of industrial and
commercial taxes shall be determined in accordance with the No.[1993]87
document promulgated by the General Office of the State Council.

    Our Administration shall separately formulate specified measures to
implement the proposals on adjusting the scopes of administration of tax
collection.

    Staff members and property in each of tax authorities shall no longer be
rearranged after the adjustment in the scopes of administration of tax
collection. If it is really necessary to transfer a few number of personnel,
the state tax authorities in the locality and the local tax authorities shall
reach an agreement through consultation.

    The adjustment in the scopes of administration of tax collection shall be
implemented as from February 1, 1996.





PROVISIONAL REGULATIONS ON THE ADMINISTRATION OF INSURANCE

Provisional Regulations on the Administration of Insurance

    

(Effective Date 1996.08.16)

CHAPTER ONE GENERAL PROVISIONS

CHAPTER TWO ESTABLISHMENT, CHANGE AND TERMINATION OF BUSINESS

OF INSURANCE AGENCIES

CHAPTER THREE BUSINESS SCOPES OF INSURANCE COMPANIES

CHAPTER FOUR ADMINISTRATION AND USE OF INSURANCE FUNDS

CHAPTER FIVE LICENSE ADMINISTRATION

CHAPTER SIX ADMINISTRATION OF INSURANCE CLAUSES AND INSURANCE

PREMIUM RATES

CHAPTER SEVEN ADMINISTRATION OF THE REPAYMENT ABILITY OF INSURANCE

COMPANY

CHAPTER EIGHT ADMINISTRATION OF INSURANCE BUSINESS

CHAPTER NINE SUPERVISION AND ADMINISTRATION

CHAPTER TEN PENALTY PROVISIONS

CHAPTER ELEVEN APPENDIX

   Article 1 This set of regulations are formulated with a view to strengthening the supervision and administration of the insurance
business to promote its healthy development in accordance with the “Insurance Law of the People’s Republic of China” (hereinafter
referred to as the “Insurance Law”).

   Article 2 As the supervision and administrative department of financial affairs for the State, the People’s Bank of China is responsible
for supervising the insurance business under the leadership of the State Council in the following aspects:

(1) Examine, approve and administer the establishment, change and termination of business of insurance agencies;

(2) Formulate and revise rules and premium rates for major kinds of insurance; and

(3) Supervise, administer and examine various insurance businesses and audit their accounts; check and prohibit the unauthorized
insurance agencies and illegal or disguised insurance businesses.

Insurance companies carry out their insurance business according to law shall be free from any interference of local governments,
government departments at all levels, social organizations and individuals.

   Article 3 The insurance companies as referred to in this set of regulations are those set up with the approval of the People’s Bank
of China including legally registered property, personal, re-insurance and other kinds of insurance companies.

The subdivisions of insurance companies as referred to in this set of regulations are branch companies, liaison offices, business
departments and representative offices of insurance companies. Such subdivisions must not be set up in any other forms unless
otherwise authorized by the State.

The insurance agencies as referred to in this set of regulations are insurance companies and their subdivisions and other agencies
engaged in insurance business, under the approval by the People’s Bank of China.

CHAPTER TWO ESTABLISHMENT, CHANGE AND TERMINATION OF BUSINESS OF INSURANCE AGENCIES

   Article 4 An insurance company should be established fully in line with the following principles:

(1) Conforms to the need of the development of the national economy;

(2) Separation of property from personal insurance;

(3) Rational distribution and fair competition; and

(4) Stresses of economic performance.

   Article 5 When applying to establish an insurance company and its subdivisions, the applicant should have the following conditions:

(1) An insurance company which conducts insurance business nationwide should have a paid in cash capital of not less than
RMB500 million; an insurance company which conducts insurance business within a designated area should have a
paid in cash capital of not less than RMB200 million; an insurance company which is set up in the location of a provincial,
an autonomous regional, a municipal or a city which enjoys the provincial status in planning, government should have
a total operation fund of not less than RMB50 million.

(2) Chairman, vice-chairman, president and vice-president of an insurance company, president and vice-president of a
branch company, chief and deputy chief of a liaison office and business department (hereinafter referred to
as leading responsible persons) should acquire qualifications set by the People’s Bank of China.

(3) More than 60% of the employees of the insurance company should have engaged in insurance business and graduated from insurance
or relevant departments of universities or colleges. An insurance company which engages in life insurance business should
have at least one actuary recognized by the People’s Bank of China.

(4) An insurance company should have a definite business site and office facilities which can well accommodate its business and
staff members.

(5) Shareholders of an insurance stock company of limited-liability should acquire shares of the company in accordance with
the regulations of the People’s Bank of China in respect to investment to financial institutions.

(6) For applying for establishment of a branch company, the insurance company should have been operational for more than one
year with good performance, with an appropriate repayment ability, a complete internal management system, and without any
record of serious legal violations and major prosecutions.

(7) Other conditions as required by the People’s Bank of China.

   Article 6 An insurance company may apply for the establishment of subdivisions in accordance with the increased amount of insurance
premium proceeds.

One branch company can be applied for establishment in the area of its business activities whenever its premium proceeds increase
by RMB100 million.

A branch company may apply for the establishment of one subdivision within the area of its jurisdiction whenever its insurance
premium proceeds increase by RMB50 million.

A branch company or subdivision may apply for the establishment of one liaison office within the area under its jurisdiction
whenever its insurance premium proceeds increase by RMB20 million.

An insurance company can only establish one branch company in one city.

   Article 7 Subdivisions of insurance companies may apply for changing their names provided that their business performance is good.
A subdivision of a branch company may apply for changing its name into a branch company once its premium proceeds reach
RMB40 million; and a liaison office may apply for changing its name into a subdivision of a branch company once its premium
proceeds reach RMB10 million.

   Article 8 The People’s Bank of China exercises two-level examination and approval for the establishment and the change of name of the insurance
companies and its subdivisions.

(1) The Head Office of the People’s Bank of China may examine and approve the establishment and the change of names of
the following agencies:

1. Establishment of insurance companies;

2. Establishment of the branch companies of insurance companies, and changes of the name of a subdivision of a branch company
into a branch company;

3. Establishment of representative offices of insurance companies; and

4. Establishment of pilot insurance agencies.

(2) Branch offices of the People’s Bank of China in provinces, autonomous regions, municipalities or cities enjoying provincial
status in planning may examine and approve the establishment and the changes of the name of the following agencies:

1. Establishment of subdivisions of branch companies of insurance companies;

2. Establishment of liaison offices and the changes of their names into subdivisions of branch companies; and

3. Establishment of business departments and the changes of their names into subdivisions of branch companies.

Before approvals to the establishment of a subdivision or change of name of a liaison office into a subdivision the matter should
be reported to the Head Office of the People’s Bank of China for the record. It shall be regarded as approved if the People’s
Bank of China does not raise any objections within 30 days beginning from the date of receiving the documents for the record.

   Article 9 The establishment of an insurance company should go through stages of preparation and starting business.

   Article 10 An applicant should submit the following materials in applying for the establishment of an insurance agency:

(1) Application report for the establishment of the insurance agency;

(2) Feasibility study report on the establishment of the insurance agency;

(3) The establishment plan and the background of the investors, including the time for the establishment, examining
and approving department, legal person representative, registered capital, and the financial situation of the applicant
in the latest three years;

(4) Resumes of the leading responsible persons for the establishment; and

(5) Other materials as required to be submitted by the People’s Bank of China.

   Article 11 The time the People’s Bank of China needs to approve the application for the establishment of an insurance company is
three months, and if the People’s Bank of China does not approve after three months, the applicant should not submit the same
application within six months

   Article 12 After approval by the People’s Bank of China, the establishment of an insurance company should be completed within
six months; if it is not completed, the original documents approving its establishment shall become invalid automatically.
In special cases, the establishing time may be extended appropriately with the approval of the People’s Bank of China, but
the time for the extension should not be longer than one year. An insurance company should not conduct any insurance
business during the time of establishment.

   Article 13 In applying for starting business, an insurance company should submit to the People’s Bank of China five copies of each of
the following materials:

(1) Application report for starting the business;

(2) Certificate for capital verification issued by a capital verification agency which is approved by the People’s Bank
of China, and duplicated copies of the original vouchers of the capital funds or operation funds entering into the account
book;

(3) Resumes of the would-be leading responsible persons of the insurance company and the basic setup of the company staff members;

(4) Certificate of the ownership or the use right of the business site;

(5) Company’s articles of association which should confirm to the regulations of “The Insurance Law of the People’s Republic
of China” and “The Company Law of the People’s Republic of China”. The content of the articles of association should include
name of the agency, registered capital, business site, nature of the agency, business aims, business lines, organization
form, management, termination, liquidation and other items;

(6) Reinsurance plan; and

(7) Other materials as required to be submitted by the People’s Bank of China.

   Article 14 An insurance company which has been approved to start business by the People’s Bank of China should start its business
after it goes through the formalities of registration and obtaining the business license with the administrative department
for industry and commerce on the strength of the certificate of approval and the insurance business license

   Article 15 The People’s Bank of China shall check on the qualifications of the would-be leading responsible persons of an insurance company
as stipulated in the second clause of Article 5 of this set of regulations; those who have not been checked by the People’s
Bank of China or are not qualified cannot be appointed. This also applies to the change of the responsible persons.

The qualifications for the leading responsible persons of an insurance company shall be worked out separately by the People’s
Bank of China.

   Article 16 The standard name of a subdivision of an insurance company should include;

(1) For a branch company: insurance company + name of the place + branch company;

(2) For a subdivision company of a branch company: insurance company + name of the place + subdivision company; and

(3) For a liaison office: insurance company + name of the place + subdivision company + liaison office or business department.

   Article 17 An insurance company which has not a subdivision can only carry out business where it is registered.

Other insurance agencies can only carry out businesses in areas approved by the People’s Bank of China.

   Article 18 Changes of the following items of an insurance agency should report to the People’s Bank of China for approval in advance;

(1) Increase and decrease of registered capital funds and adjustment of the structure of stock rights;

(2) Change of the organizational form of the agency;

(3) Adjust the business scope;

(4) Change of the name of the agency;

(5) Division and merge of the agency;

(6) Revise the articles of association;

(7) Change of business address; and

(8) Other changes as deemed necessary to be approved by the People’s Bank of China.

For reporting procedures and examining and approving authority of the above items, please see stipulations of Article 8
of this set of regulations.

   Article 19 The termination of business of an insurance agency in accordance with the “Insurance Law” should be reported to the People’s
Bank of China for approval.

CHAPTER THREE BUSINESS SCOPES OF INSURANCE COMPANIES

   Article 20 An insurance company is not allowed to both undertake personal insurance and property insurance business.

   Article 21 The business scope of a property insurance company is limited to the following.

(1) Property loss insurance, liability insurance, credibility insurance and agricultural insurance; and

(2) The re-insurance of the above insurances.

   Article 22 The business scope of a personal insurance company is limited to the following:

(1) Life insurance, accidental injury insurance and health insurance; and

(2) The re-insurance of the above insurances.

   Article 23 The business scope of a re-insurance company is limited to the following:

(1) Accept the re-insurances of the original insurance companies in Articles 21 and 22 of this set of regulations;

(2) Accept the legal re-insurance of the domestic insurance companies with the approval of the People’s Bank of China;

(3) Handles the transfer of the re-insurance business; and

(4) Undertake international re-insurance business with the approval of the People’s Bank of China.

CHAPTER FOUR ADMINISTRATION AND USE OF INSURANCE FUNDS

   Article 24 Insurance funds refer to the capital fund, guarantee fund, operational fund, various reserve funds, accumulation fund,
public welfare fund, undistributed surplus fund, insurance guarantee fund and other State authorized funds.

   Article 25 The total amount of the operational fund an insurance company allocates to its branch company should not exceed 60% of its
capital plus accumulation fund.

   Article 26 An insurance company which undertakes business nationwide should deposit an amount of guarantee fund at the Head Office of
the People’s Bank of China. Insurance companies which undertake business in specially designated areas should deposit guarantee
fund at the branch offices of the People’s Bank of China in provinces, autonomous regions, municipalities and cities that enjoy
the provincial status in planning, where they register.

An insurance company is not allowed to use the guarantee fund without the approval of the People’s Bank of China.

   Article 27 Insurance companies which undertake insurance businesses other than life insurance should draw premature liability reserve
fund from the premiums retained by itself for the year; the amount retained and carried over should not be less than 50%
of the premium by itself in the year.

An insurance company with life insurance operations should draw the premature liability reserve fund according to the entire
net value of the valid life insurance policies.

The premature liability reserve fund of an insurance company should be true and adequate.

   Article 28 An insurance company should draw reserve for outstanding losses according to the insurance indemnities or payment claimed
or thought the insurance indemnities or payment not yet claimed but the insured incidents have already occurred.

   Article 29 Before distributing the after-tax profits in the year, an insurance company should draw 10% of the profits as legal accumulation
fund, and draw 5 -10% of the profits as public welfare fund. No accumulation fund should be drawn if the company’s
aggregated legal accumulation fund tops 50% of the company’s registered capital.

After drawing legal accumulation fund from the after-tax profits, the insurance company may draw arbitrary accumulation fund
according to the resolution adopted at the meeting of shareholders.

   Article 30 Accumulation fund of an insurance company is used to make up for the loss of the company, expand the company’s business scope,
or to be turned into the company’s capital fund.

When a limited-liability insurance company turns the accumulation fund into its capital according to the resolution of the
meeting of the shareholders, the amount of the share of the shareholder is increased according to its original ratio of
shares. But when legal accumulation fund is turned into capital fund, the retained accumulation fund shall not be less than
25% of the company’s registered capital.

The legal public welfare fund is used for the collective welfare of the company’s employees.

   Article 31 Apart from the guarantee fund, an insurance company should only deposit its savings in a big commercial bank with good capital
credibility.

   Article 32 An insurance company should draw 1% of the insurance premium proceeds of the year as its insurance guarantee fund and the
drawn should be stopped whenever the guarantee fund has topped 10% of the total assets of the insurance company.

The insurance guarantee fund should be drawn separately and be deposited at a special account in the People’s Bank of China or
any commercial bank designated by the People’s Bank of China.

   Article 33 The use of the insurance fund is limited to the following:

(1) Bank savings;

(2) Buy and sell government securities;

(3) Buy and sell financial securities; and

(4) Other uses as stipulated by the State Council.

CHAPTER FIVE LICENSE ADMINISTRATION

   Article 34 An insurance business license, a legal person license or an insurance business license, is a legal certificate of an insurance
agency to undertake legal business.

   Article 35 The People’s Bank of China is enpost_titled to design, print, issue, confiscate and revoke the insurance business licenses. Any
other units or individuals are not allowed to design, print, issue, confiscate and detain the licenses.

   Article 36 An insurance business license should have an original and a duplicate to record the name of the insurance agency, its serial number,
nature and form of organization, the amount of the registered capital or the operational funds, names of the legal representative
and leading responsible person, business scope, date of issue and the term of validity.

   Article 37 An insurance agency should put the original of the insurance business license at a prominent place and take good care
of the duplicate for examination. It is forbidden to forge, alter, lease, lend, transfer and sell the license.

   Article 38 A license shall be changed every three years and when lost during the term, the insurance agency concerned should announce
its invalidity at a newspaper designated by the People’s Bank of China or by its branch offices within 15 days beginning from
the date of discovery of the loss, and re-apply to the original issuing department for a new one upon the presentation
of a written self-criticism and the announcement.

   Article 39 The People’s Bank of China shall charge the insurance agency which gets or changes its license a certain amount of fee according
to stipulations.

CHAPTER SIX ADMINISTRATION OF INSURANCE CLAUSES AND INSURANCE PREMIUM RATES

   Article 40 The insurance clauses and insurance premium rates and other documents of an insurance agency should be printed in Chinese, and
it may have an appendix in a foreign language when in need in business operations. Should there be any contradictions
between the Chinese version and the foreign language version, the Chinese version shall dominate.

   Article 41 Major insurance varieties refer to those confirmed by the People’s Bank of China, which has the right to readjust the
major insurance varieties according to the market situation.

The basic clauses and insurance premium rates for the major varieties are worked out by the Head Office of the People’s Bank
of China.

   Article 42 Insurance clauses and insurance premium rates of other insurance varieties worked out by an individual insurance company
should be reported to the Head Office of the People’s Bank of China for the record.

Insurance clauses and insurance premium rates of other insurance varieties formulated by the branch company of an insurance
company should be reported to the branch offices of the People’s Bank of China in provinces, municipalities, autonomous
regions or cities enjoying provincial status in planning for the record; insurance clauses and insurance premium rates
reported to the People’s Bank of China for the record shall be deemed as confirmed if the bank does not raise any different
opinions within 30 days beginning from the date of receiving the reports.

Subdivisions of the branch company of an insurance company and its liaison offices should not formulate insurance clauses
and insurance premium rates.

   Article 43 In reporting the property insurance clauses and insurance premium rates, insurance companies should submit the following
documents:

(1) Five copies of the insurance clauses and insurance premium rates;

(2) Market forecast of the insured products, materials about the loss of the objects of insurance in the latest three years
and the planned insurance compensation rates, various administrative expenses and interest rates;

(3) The calculating formula and method; and

(4) Other materials as required to be submitted to the People’s Bank of China.

   Article 44 In reporting life insurance clauses and insurance premium rates, the insurance company should submit the following documents:

(1) Five copies of the insurance clauses and the insurance premium rates;

(2) Market forecast of the insured products, the planned interest rates, expenses rates and profits rates and the life table used;

(3) The formula and method of calculating insurance premium rates, insurance liability reserve funds, and insurance withdrawal
funds; and

(4) Other materials as required to be submitted to the People’s Bank of China.

   Article 45 While reporting the insurance clauses and premium rates of a new insurance to the People’s Bank of China for the record, insurance
companies may apply for a six-month protection period of the new insurance, and other insurance companies should not
undertake the same kind of insurance.

   Article 46 Within the same province, autonomous region or municipality, various insurance companies should use a unified package of insurance
clauses, insurance premium rates and premium floating ranges of a same kind of insurance. The floating ceiling for the premium
is 30%, and the actual floating range shall be worked out by the branch offices of the People’s Bank of China in the province,
autonomous region or the municipality according to the local actual conditions.

   Article 47 Records of annual compensation rates, premium rates, and profit rates of insurance companies and subdivisions should be well
kept for at least 10 years.

CHAPTER SEVEN ADMINISTRATION OF THE REPAYMENT ABILITY OF INSURANCE COMPANY

   Article 48 Insurance company should have a lowest repayment ability in compatible to its business scope.

   Article 49 The lowest repayment ability of an insurance company is the balance of its actual assets after deducting the actual debts
as stipulated by the People’s Bank of China.

The actual assets of an insurance company are the balance of its total assets after deducting the following items:

(1) Various advance payments except advance repayments;

(2) Deferred assets;

(3) Intangible assets;

(4) Low value and fast depreciated articles;

(5) Actual bad receivables;

(6) Cost of securities in exceed of current market price;

(7) Bad accounts in funds;

(8) One-tenth of the immovable property and fixed assets; and

(9) Other assets which cannot be changed into cash or may suffer losses in the course of changing as considered by the People’s
Bank of China.

The actual debts of an insurance company are the total assets after deducting the actually received capital fund, public accumulation
fund, public welfare fund and the balance of the undistributed profits.

   Article 50 The lowest repayment ability of a property insurance company should be:

(1) not lower than RMB100 million when the self retained net premium proceeds in the preceding year being less than or
equal to RMB200 million;

(2) not lower than RMB100 million or one-third of the self retained premium expenses, which is higher, when the self retained
net premium proceeds are more than RMB200 million in the preceding year and less than or equal to RMB3 billion; and

(3) not lower than RMB1 billion or one-fourth of the self retained net premium expense, which is higher, when the self retained
net premium proceeds are higher than RMB3 billion in the preceding year.

   Article 51 The lowest repayment ability of a life insurance company should be:

(1) not lower than RMB100 million when the actual debt is less than or equal to RMB300 million;

(2) not lower than RMB100 million or one-fourth of the actual debt, which is higher, when the actual debt is more than RMB300
million and less than or equal to RMB1 billion;

(3) not lower than RMB250 million or one-sixth of the actual debt, which is higher, when the actual debt is more than RMB1 billion
and is less than or equal to RMB3 billion; and

(4) not lower than RMB500 million or one-eighth of the actual debt, which is higher, when the actual debt is more than RMB3
billion.

   Article 52 Should the repayment ability of an insurance company is lower than the standard set above in this set of regulations, the insurance
company should:

(1) immediately undertake re-insurance, business transfer or readjust the asset debt structure in 30 days in a way recognized
by the People’s Bank of China till it reaches the standard for the lowest repayment ability if the balance is less than
5% of the lowest repayment ability;

(2) immediately stop insurance business from the date of discovering the situation, hand in a report of self-criticism, a remedial
plan and a plan to deal with the direct responsible person to the People’s Bank of China within 10 days and undertake re-insurance
and business transfer, and ask the shareholders to add urgent capital or make up for the balance in other ways recognized
by the People’s Bank of China within 30 days if the balance is more than 5% and less than 20% of the lowest repayment ability.

(3) do the following upon decision of the People’s Bank of China if the balance is more than 20% and less than 40% of the
lowest repayment ability:

1. Overhaul and consolidate the company within a set period of time;

2. Stop part of its business;

3. Shut down; and

4. Other measures.

(4) apply to the people’s court for announcing its bankruptcy when the balance is more than 40% of the lowest repayment ability.

CHAPTER EIGHT ADMINISTRATION OF INSURANCE BUSINESS

   Article 53 Insurance companies should adhere to the principles of fairness, justice reasonableness and competition in carrying out
its business activities.

   Article 54 Insurance companies should not entrust insurance agents unauthorized by the People’s Bank of China to carry out its business
activities, nor accept the insurance businesses introduced by the insurance brokers unauthorized by the People’s Bank
of China.

   Article 55 Insurance companies and their employees should not provide insurers, insureds and the beneficiaries with premium discounts or
other interests not stipulated in the insurance contracts.

   Article 56 Written promotional materials of the insurance companies should have names of insurance companies.

   Article 57 Written promotional materials should not comprise profit or dividend forecasts of insurance companies.

   Article 58 Insurance personnel should not carry out business activities in areas unauthorized by the People’s Bank of China.

   Article 59 After receiving claims for compensation or payment from insureds or

ADMINISTRATIVE PUNISHMENTS LAW

Category  GENERAL Organ of Promulgation  The National People’s Congress Status of Effect  In Force
Date of Promulgation  1996-03-17 Effective Date  1996-10-01  


THE Law of the People’s Republic of China on Administrative Punishments

CONTENTS
Chapter I  General Provisions
Chapter II  Classification and Establishment of Administrative Punishments
Chapter III  The Organs for Implementing Administrative Punishments
Chapter IV  Jurisdiction and Application of Administrative Punishments
Chapter V  Decision on Administrative Punishments
Chapter VI  Execution of Administrative Punishment
Chapter VII  Legal Responsibility
Chapter VIII  Supplementary Provisions
Appendix:  Relevant Article of the Criminal Law

(Adopted at the Fourth Session of the Eighth National People’s Congress

on March 17, 1996, promulgated by Order N0.63 of the President of the
People’s Republic of China on March 17, 1996)
CONTENTS
Chapter I     General Provisions
Chapter II    Classification and Establishment of Administrative Punishments
Chapter III   Organs for Implementing Administrative Punishments
Chapter IV    Jurisdiction and Application of Administrative Punishments
Chapter V     Decision on Administrative Punishments

   Section 1  Summary Procedure

   Section 2  General Procedure

   Section 3  Hearing Procedure
Chapter VI    Execution of Administrative Punishments
Chapter VII   Legal Responsibility
Chapter VIII  Supplementary Provisions

Chapter I  General Provisions

    Article 1  This Law is enacted in pursuance of the Constitution to
regulate the establishment and implementation of administrative punishments,
to ensure and supervise the effective exercise of administration by the
administrative organs, to safeguard public interests and social order, to
protect lawful rights and interests of the citizens, legal persons or other
organizations.

    Article 2  This Law applies to the establishment and implementation of
administrative punishments.

    Article 3  Administrative punishments which shall be imposed on citizens,
legal persons or other organizations for the acts committed in violation of
administrative order shall be stipulated by laws, regulations or rules in
accordance with this law, and shall be implemented by administrative organs
in accordance with the procedure stipulated by this Law.

    Administrative punishments shall be null and void, if they are inflicted
without legal basis or without the observation of the legal procedure.

    Article 4  Administrative punishments shall abide by the principles of
being fair and just and open to the public.

    The establishment and implementation of administrative punishments must
take facts as the base and correspond to the facts, nature and seriousness of
the illegal acts as well as to the extent of the harm thereby caused to the
society.

    Stipulations on imposing administrative punishments for illegal acts must
be promulgated and if not, shall not serve as the legal basis for
administrative punishments.

    Article 5  Implementing administrative punishments and checking illegal
acts shall adhere to the combination of punishments and education, in order
to educate citizens, legal persons or other organizations to observe the law
of their own accord.

    Article 6  Citizens, legal persons or other organizations have the right
to state their cases and defend themselves in respect of the administrative
punishments imposed on them , and if they refuse to accept the administrative
punishments, shall have the right, according to law, to apply for
administrative reconsideration or institute an administrative law suit.

    Citizens, legal persons or other organizations who have sustained damage
on account of administrative punishments imposed on them in violation of law,
have the right to lodge their claims.

    Article 7  Citizens, legal persons or other organizations, being imposed
on administrative punishments for illegal acts, who have thereby caused
damage to other people, shall bear civil responsibility according to law.

    In case illegal act has constituted a crime, criminal responsibility
shall be investigated according to law, and criminal punishment shall not be
substituted by administrative punishments.
Chapter II  Classification and Establishment of Administrative Punishments

    Article 8  Classification of Administrative Punishments:

    (1) Warning;

    (2) Fine;

    (3) Forfeiture of illegal earnings, forfeiture of illegal property;

    (4) Order to stop production and business;

    (5) Suspension or withdrawal of permits, suspension or withdrawal of
licenses;

    (6) Administrative detention; and

    (7) Other administrative punishments as stipulated by law or
administrative regulations.

    Article 9  Various administrative punishments can be established by law.

    Administrative punishment which restrains personal liberty can only be
established by law.

    Article 10  Administrative regulations can establish whatever
administrative punishments except those restraining personal liberty.

    Where stipulations are already formulated by law on administrative
punishments for illegal acts, specific stipulations to be formulated by
administrative regulations must come within the scope of acts, classification
and extent stipulated by law for imposing administrative punishments.

    Article 11  Local regulations can establish administrative punishments
except those restraining personal liberty and withdrawing enterprises’
business licenses.

    Where stipulations are already formulated by law or administrative
regulations on administrative punishments for illegal acts, specific
stipulations to be formulated by local regulations must come within the scope
of acts, classification and extent stipulated by law or administrative
regulations on imposing administrative punishments.

    Article 12  Rules formulated by Ministries and Commissions under the
State Council may incorporate specific stipulations on administrative
punishments within the scope of acts, classification and extent stipulated by
law or administrative regulations.

    Where law and administrative regulations have not been formulated, the
rules formulated by the Ministries and Commissions under the State Council
referred to in the preceding paragraph, may establish administrative
punishments as warning and fine for acts violating administrative order. And
the limits of fines shall be stipulated by the State Council.

    The State Council may authorize the organs directly under the State
Council charged with the right to inflict administrative punishments to
stipulate administrative punishments in accordance with the stipulations of
the preceding paragraphs 1 and 2 of this Article.

    Article 13  Rules formulated by the people’s governments of provinces,
autonomous regions and municipalities directly under the central government,
the people’s governments of the cities where the people’s governments of
provinces and autonomous regions are seated, and the people’s governments of
large cities approved by the State Council, can incorporate specific
stipulations on administrative punishments within the scope of acts,
classification and extent stipulated by law or regulations.

    Where law and regulations have not been formulated, the rules formulated
by the people’s governments referred to in the preceding paragraph may
establish administrative punishments as warning and fine for acts violating
administrative order. And the limits for fines shall be stipulated by the
standing committees of the People’s Congress of the provinces, autonomous
regions and municipalities directly under the central government.

    Article 14  Any other documents of a regulative character other than
those provided in Articles 9, 10, 11, 12 and 13 shall not establish
administrative punishments.
Chapter III  The Organs for Implementing Administrative Punishments

    Article 15  Administrative punishments shall be implemented by the
authorized administrative organs within the scope of their functions and
powers.

    Article 16  The State Council or the people’s governments of provinces,
autonomous regions and municipalities directly under the central government
authorized by the State Council may determine whether an administrative organ
has the right to exercise relevant administrative punishments, but the right
to exercise administrative punishments restraining personal liberty can only
be performed by the public security organs.

    Article 17  Functional organizations empowered by law or regulations in
charge of the administration over public affairs may implement administrative
punishments within the scope of the lawful authorization.

    Article 18  Administrative organs may, according to law, regulations and
rules and within their lawful authorization, entrust the organizations
qualified for the conditions stipulated in Article 19 of this Law to
implement administrative punishments, and the administrative organs shall not
entrust another organization or person to implement the administrative
punishments.

    The entrusting administrative organ shall be responsible for the
supervision over the acts of the entrusted organization to implement the
administrative punishments, and shall bear legal responsibilities consequent
upon such acts.

    The entrusted organization shall, within its authorization, implement
administrative punishments in the name of the entrusting administrative organ,
and shall not entrust another organization or person to implement same
administrative punishments.

    Article 19  The entrusted organization must be qualified for the
following conditions:

    (1) Organizations formed according to law and in charge of public
affairs;

    (2) Manned with personnels well-informed of related law, regulations,
rules and business; and

    (3) Where technical tests or technical appraisal are required, shall have
the means to conduct such tests and appraisal.
Chapter IV  Jurisdiction and Application of Administrative Punishments

    Article 20  Administrative punishments come under the jurisdiction of the
administrative organs with the right to make administrative punishments of
the people’s governments at county level and above in the place where illegal
acts have taken place, unless otherwise provided by law or administrative
regulations.

    Article 21  Dispute over jurisdiction shall be referred to an
administrative organ common to the disputing organs at a higher level which
will determine the jurisdiction.

    Article 22  Where the illegal acts constitute crimes, the administrative
organs must transfer the case to judicial organs for investigation of
criminal responsibility according to law.

    Article 23  Administrative organs, when implementing administrative
punishments, shall order the parties to make, or within a specified period of
time to make corrections to their illegal acts.

    Article 24  A party shall be subjected to no more than one fine for the
same illegal act as administrative punishment.  

    Article 25  Persons under the age of 14, having committed illegal acts,
shall not be imposed on administrative punishments, but their guardians shall
be ordered to discipline them; persons at the age of 14 but under 18
committing illegal acts shall be imposed on either light or mitigated
administrative punishments.

    Article 26  Mental patients committing illegal acts when unable to
determine or control their acts, shall not be imposed on administrative
punishments, but the guardians shall be ordered to look after them. Patients
suffering intermittent mental disorder committing illegal acts when in normal
mental order, shall be imposed on administrative punishments.

    Article 27  Parties shall be imposed on administrative punishments,
either light or mitigated, subject to one of the following instances:

    (1) Take initiative in removing or minimizing the consequential damage;

    (2) Commit illegal acts on account of being coerced by others;

    (3) Contribute in cooperation with administrative organs to investigation
into and handling with illegal acts; or

    (4) Any other instances for which administrative punishments can be light
or mitigated according to law.

    No administrative punishment shall be imposed for trifle illegal acts
which have been timely checked without causing consequent damage.

    Article 28  Where the illegal acts constitute an offense for which
criminal detention or fixed-term imprisonment has been rendered by the
people’s court, the administrative detention imposed on the party by the
administrative organ shall, according to law, be deducted from the period of
criminal detention or imprisonment.

    Where the illegal acts constitute an offense for which fine is imposed by
the people’s court, the fine inflicted on the party by the administrative
organ shall be set off.

    Article 29  No administrative punishment shall be given for illegal acts
which have not been discovered within two years, unless otherwise provided by
law.

    The time limit in the preceding paragraph shall be computed from the day
of the occurrence of the illegal acts, or from the day of the termination of
continuous or consecutive illegal acts.
Chapter V  Decision on Administrative Punishments

    Article 30  Where citizens, legal persons or other organizations shall
according to law be given administrative punishments for acts violating
administrative order, the administrative organ must ascertain the facts; no
administrative punishments shall be imposed if facts about the illegal acts
remain unclear.

    Article 31  Administrative organs, before making a decision on
administrative punishments, shall inform the party of the facts, causes and
legal basis for making such a decision, and advise the party of the rights
which the law confers on him.

    Article 32  The party has the right to state the case and defend himself.
The administrative organ must hear in full the party’s opinions, and shall
review and examine the facts, causes and evidence submitted by the party. The
administrative organ shall adopt the facts, causes and evidence submitted by
the party if they are sustainable.

    The administrative organ shall not aggravate punishments on account of
the party’s statements or defense.

    Section 1  Summary Procedure

    Article 33  A decision on administrative punishments of a fine less than
fifty renminbi yuan on citizens or less than a thousand renminbi yuan on
legal persons or other organizations, or a warning, can be made on the spot
for confirmed illegal acts with sound legal basis, and the party shall
execute said administrative punishments according to Articles 46, 47 and 48
of this Law.

    Article 34  Law administering personnels making a decision on
administrative punishments on the spot, shall show to the party the
identification certificates for administering law, and fill in the official
printed form and the statement of decision on administrative punishments with
serial number on it. The statement of decision on administrative punishment
shall be given to the party on the spot.

    The statement of decision on administrative punishment in the preceding
paragraph shall carry the illegal acts done by the party, legal basis for the
administrative punishment, sum of the fine, time and place, name of the
administrative organ, and shall be signed or stamped by the law administering
personnels.

    The decision on administrative punishment, made by the law administering
personnels on the spot, must be filed with their administrative organ.

    Article 35  The party who refuses to accept the decision on
administrative punishment made on the spot, may according to law apply for
administrative reconsideration or lodge an administrative law suit.

    Section 2  General Procedure

    Article 36  Except the case, stipulated in Article 33, where the
administrative punishment may be given on spot, the administrative organ,
finding that administrative punishment shall according to law be inflicted on
a citizen, legal person or other organization for their acts, must conduct an
overall, objective, fair and just investigation, collect relevant evidence,
or may conduct, when necessary, an inspection according to law or
regulations.

    Article 37  No less than two law administering personnels shall be
present on the scene when the administrative organ conducts investigation or
inspection, and shall show their certificates to the party or related persons
who should give truthful reply to inquiries and cooperate in the
investigation or inspection, without obstructing the process. Written records
shall be made of the inquiries or inspection.

    The administrative organ, when collecting evidence, may take evidence by
random sampling and, when evidence may possibly be lost or collected with
difficulty at a later time, may preserve them with registrations being made,
subject to the approval by the responsible person of the administrative
organ. Decision on the disposal shall be timely made within seven days during
which period the party or related persons shall not destroy or transfer such
evidence.

    Law administering personnels, having direct concern therein with the
party concerned, shall withdraw.

    Article 38  Following the conclusion of the investigation, responsible
persons of the administrative organ shall examine the findings of the
investigation and according to various circumstances of the case, make the
following decisions respectively:

    (1) Decision on administrative punishment shall be made according to the
seriousness and particulars of the case if there are illegal acts for which
administrative punishment should be imposed;

    (2) Administrative punishment shall not be inflicted if illegal acts are
minor ones for which administrative punishments may not be inflicted
according to law;

    (3) No administrative punishment shall be imposed if illegal acts are not
sustainable; and

    (4) Illegal acts which constitute a crime shall be transferred to the
judicial organ.

    Where serious administrative punishment shall be imposed for complicated
or major illegal acts, the decision shall be made through collective
consideration by the responsible persons of the administrative organ.

    Article 39  The administrative organ, inflicting administrative
punishment according to Article 38 of this Law, shall draw up a statement of
decision on administrative punishment. The statement of decision on the
administrative punishment shall carry the following items:

    (1) The name or post_title of the party and address;

    (2) The facts and evidence concerning the violation of law, regulations
or rules;

    (3) Classification and legal basis of the administrative punishment;

    (4) Method and time limit for executing the administrative punishment;

    (5) Avenue and time limit for application for administrative
reconsideration and for the institution of an administrative law suit, if the
party refuses to accept the administrative punishment; and

    (6) The name of the administrative organ making such punishment and the
date of the decision.

    Decision on administrative punishment must carry the official stamp of
the administrative organ making the administrative punishment.

    Article 40  The statement of decision on administrative punishment shall
be delivered to the party on spot after pronouncement, and in absence of the
party, the administrative organ shall, according to Civil Procedure Law,
serve within seven days the statement of the decision to the party.  

    Article 41  In case the administrative organ and its law administering
personnels fail, before making the decision on administrative punishment, to
inform the party of the facts, causes and legal basis for making such a
decision, or refuse to hear the party’s presentation of the case and defense,
as stipulated in Articles 31 and 32 of this Law, the administrative
punishment can not be established, unless the party has waived his right to
the presentation and defense.

    Section 3  Hearing Procedure

    Article 42  The administrative organ before making a decision on the
administrative punishment such as ordering to stop production and business,
withdrawing the permit or license, or large sum of fine, shall advise the
party of the right to hearing. And the administrative organ at the request of
the party shall organize hearing, and the party shall not bear the expenses
for the hearing. Hearing shall be organized in the following manner:

    (1) The party shall, within 3 days after being informed by the
administrative organ, notify them of the party’s request for hearing;

    (2) The administrative organ shall notify the party of the time and place
of the hearing seven days before it;

    (3) Hearing shall be held in public, with the exception that the state’s
or commercial secret or personal privacy is involved;

    (4) Hearing shall be presided over by the personnel appointed by the
administrative organ other than the investigators of the case and the party,
submitting that the presider has direct interest in the case, have the right
to apply for the withdrawal;

    (5) The party may attend in person or appoint one or two agents to the
hearing;

    (6) At hearing the investigators state the facts of the illegal acts done
by the party, present the evidence and make suggestion on administrative
punishment; the party may make defense and question the evidence; and

    (7) Written records on the hearing shall be made which shall be examined
to see no error with it, and signed or stamped by the party.

    The party who takes objection to administrative punishment on restraint
of personal liberty, shall act according to the Regulations on Administrative
Penalties for Public Security.

    Article 43  Following the hearing, the administrative organ shall make
the decision in accordance with the provisions of Article 38 of this Law.
Chapter VI  Execution of Administrative Punishment

    Article 44  After the decision on administrative punishment is made in
accordance with law, the party shall execute the decision within the time
limit prescribed in the decision.

    Article 45  The execution of the administrative punishment shall not be
suspended when the party refuses to accept the decision and applies for
administrative reconsideration or lodge an administrative law suit, unless
otherwise provided by law.

    Article 46  The administrative organ making the decision on fine shall be
separated from the collecting agency of the fine.

    The administrative organ making the decision on administrative
punishments and its law administering personnels shall not collect fines on
their own authority, with the exception of the fines collected on spot in
accordance with Articles 47 and 48.

    The party shall, within fifteen days from the day of receiving the
statement of decision on administrative punishment, pay the fines to the
appointed bank. The bank shall, after receipt of the fines, hand them
directly to the state treasury.

    Article 47  In case a decision is made on administrative punishment on
spot in accordance with the provisions of Article 33 of this Law, the law
administering personnels may collect fines on spot, subject to one of the
following instances:

    (1) A fine less than twenty renminbi yuan imposed according to law; or

    (2) Fines, if not collected on spot, shall be hardly executed.

    Article 48  Administrative organs and their law administering personnels,
having made the decisions on fines in accordance with Articles 33 and 38, may
collect them on spot at the request of the parties, provided the parties in
remote border areas, or on waters, or in area’s with inconvenient traffic,
have difficulties when paying the fines to the appointed banks.

    Article 49  Administrative organs and their law administering personnels
collecting fines on spot, must issue to the parties the uniform receipt for
fines printed and issued by the financial departments of provinces,
autonomous regions and municipalities directly under the central government,
and without issuing the uniform receipts for fines printed and issued by the
financial departments, parties have the right to refuse the payment of fines.

    Article 50  Law administering personnels collecting fines on spot shall,
within two days from the day of fine, hand the fines over to the
administrative organs; fines collected on spot on waters shall be handed over
to the administrative organs within two days from the day of disembarkation.
Administrative organs shall within two days hand the fines over to the
appointed banks.

    Article 51  In case of failure by the party to execute the decision on
administrative punishment within the prescribed time limit, the
administrative organ making the decision on the punishment may take the
following measures:

    (1) In case of failure to pay the fine in time, an additional fine shall
be imposed amounting to three per cent of the original fine on a daily rate
basis;

    (2) In accordance with law, the sealed up or seized property can be put
to auction to pay, or appropriation of the frozen bank deposit can be made
for payment of, the fine; or

    (3) Apply to the people’s court for enforcement.

    Article 52  At the request of the party assuredly in economic difficulty,
payment of fine may be postponed or made in installments, subject to the
approval by the administrative organ.

    Article 53  Illegal property which has been confiscated with the
exception of those to be destroyed according to law, must be auctioned
publicly or otherwise disposed of according to relevant stipulations of the
state.

    Fines, confiscated illegal earnings or proceeds of the illegal property
by auction must be handed over in its entirety to the state treasury, and
shall not be withheld or shared privately and secretly in any manner by any
administrative organs or individuals. Financial departments shall not return
in any forms to administrative organs making decisions on administrative
punishments, the fines, confiscated illegal earnings or proceeds by auction
of the confiscated illegal property.

    Article 54

CIRCULAR OF THE GENERAL OFFICE OF THE STATE COUNCIL ON THE TRANSMISSION OF THE SUGGESTIONS OF THE STATE COCOON-SILK COORDINATION GROUP CONCERNING THE REFORM OF THE COCOON-SILK OPERATIONAL AND MANAGEMENT SYSTEM

Category  FOREIGN TRADE Organ of Promulgation  The State Council Status of Effect  In Force
Date of Promulgation  1996-11-16 Effective Date  1996-11-16  


Circular of the General Office of the State Council on the Transmission of the Suggestions of the State Cocoon-silk Coordination
Group Concerning the Reform of the Cocoon-silk Operational and Management System


APPENDIX: THE SUGGESTIONS CONCERNING THE REFORM OF THE COCOON-SILK

(November 16, 1996)

    The Suggestions Concerning the Reform of the Cocoon-Silk Operational and
Management System of the State Cocoon-Silk Coordination Group have been
approved by the State Council and are hereby transmitted to you for
implementation in the light of the actual conditions of your respective
regions.
APPENDIX: THE SUGGESTIONS CONCERNING THE REFORM OF THE COCOON-SILK
OPERATIONAL AND MANAGEMENT SYSTEM (October 10, 1996)

    With a view to changing the present status of weakness in macro-control in
the cocoon-silk industry, separation of trade, industry and agriculture,
dislocation in production, supply and marketing and export competition at low
prices by multi-channels in the operational system, and establishing a
cocoon-silk operational and management system in conformity with the
requirements of the development of the socialist market economy, and in
compliance with the spirit of the instructions of the leadership of the State
Council, the following suggestions concerning the reform of the cocoon-silk
operational and management system are put forward:

    1. Principles and Objectives of the Reform

    The reform of the cocoon-silk operational and management system should, in
line with the basic requirements for the establishment of the socialist market
economy system and modern enterprise system, effect the separation of the
government from the enterprises, break regional blockade and departmental
compartmentalism, and strengthen and perfect macro-control to promote the
formation of a unified socialist market; embark on the road of forming
entities with the establishment of integrated trade, industry and agriculture
cocoon-silk group corporations in accordance with the principle of
voluntariness and with the market as the guidance; manage satisfactorily the
interests of agriculture, industry, commerce and trade and mobilize the
enthusiasm of all sides by adhering to the principle of reciprocity and
mutual benefit and with assets as the linkage; center on the improvement in
economic performance, increase the income of farmers, promote the benign
development of the industry, expand export and foreign exchange earnings,
increase handing-over of profit-tax, make the distribution channels smooth and
realize the transformation of the mode of economic growth from the extensive
type to the intensive type so as to promote sustained, steady and healthy
development of the cocoon-silk industry.

    2. Formation of Provincial (Municipal) Cocoon-Silk Group Corporations

    The major cocoon-silk producing provinces (municipality) (Zhejiang,
Jiangsu, Sichuan, Shandong, Anhui and Guangdong Provinces and the city of
Chongqing) shall be the focus in the formation of integral trade, industry and
agriculture cocoon-silk group corporations. All major cocoon-silk producing
provinces (municipality) shall, on the basis of in-depth investigation and
study and repeated authentication, put forth proposals for the formation
taking into consideration the actual conditions of the localities; study and
work out qualifications of the enterprises required to join the group
corporations including scales of the enterprises, quality of products,
management standards and economic performance; sort out and consolidate silk
reeling mills and silk spinning mills, close down and suspend the operations
of a number of small-scale enterprises turning out products of poor quality,
amalgamate them with others or switch to the manufacture of other products and
organize enterprises with strength into group corporations. The group
corporations may be classified in three tiers: the closely knit tier, the
semi-closely knit tier and the loose tier, the modes of association include
association in assets, contractual association and service association.

    “Trade” shall be the “dragon head” (driving force) in the formation of
provincial (municipal) group corporations, that is, the existing provincial
(municipal) silk corporations shall be the “dragon head”. Prefectures, cities
and counties should determine the “dragon head” units on the basis of the
strength of the enterprises in promoting the development of the industry,
which may either be foreign trade enterprises or production enterprises or
supply and marketing cooperatives.

    The responsibilities of the newly-formed provincial (municipal)
cocoon-silk group corporations shall be: implementation of relevant industrial
policy of the state and the overall development plans of the cocoon-silk
industry of their respective regions, responsibility for the internal
management of the groups, organization of production and export of cocoon-silk
and coordination of the interests of agriculture, industry, commerce and
trade. Specifically they contain the following contents:

    (1) Establishment of stable mulberry tree-silkworm-cocoon bases,
implementation of plans of mulberry tree planting, silkworm raising and cocoon
procurement, providing support for mulberry tree planting and silkworm raising
and series of pre-production, mid-production and post-production services to
silkworm raising farmers; extension of excellent silkworm breeds and
scientific silkworm raising techniques, and prevention and treatment of
diseases and pests; fostering big households of mulberry tree planting and
silkworm raising; exercising unified control over the production and business
operation of silkworm eggs and procurement of cocoons, and strict
implementation of the state policy of cocoon price and standards for cocoon
quality.

    (2) Responsibility for the control of enterprises of the silk industry
within the groups, formulation and implementation of plans for technological
transformation, scientific research projects and annual development; control
over the blind development of processing capabilities; adjustment of product
structure, and development of famous, special, superior and new products.

    (3) Stepping up the construction of procurement and distribution networks,
opening up international and domestic markets, coordinating export prices and
increasing export and foreign exchange earnings.

    (4) Establishing and perfecting various control measures of the group
corporations with the purpose of enhancing their economic strength to ensure
the preservation and increment of value of state-owned assets.

    3. Smoothing out Property Rights Relations

    Existing interests of all sides should be taken into account and
satisfactory settlement and arrangement made in respect of personnel, property
and materials in the formation of cocoon-silk group corporations.

    (1) Assets of silkworm egg breeding stations of agricultural departments
and scientific research institutions shall be taken into silk corporations in
accordance with relevant provisions on the management of state-owned assets,
and there shall be no change in the nature of the institutions, treatment of
their personnel and original sources of financial resources.

    (2) Assets of cocoon stations belonging to the state shall be taken into
the group corporations in accordance with the provisions on the management of
state-owned assets; for assets belonging to the supply and marketing
cooperatives and farmers, the group corporations may follow the mode of
leasing, entrusted agency, pooling shareholder and purchasing. In cases the
property rights relations of which are not clear, a settlement shall be sought
with the coordination of the local government and the formation of group
corporation shall in no way be affected. Satisfactory settlement of existing
workers, staff members and honorary retirees and other retired personnel
engaging specially in cocoon procurement and drying for supply and marketing
departments shall be carried out in the light of the specific conditions of
the localities.

    (3) The silk reeling mills and silk spinning mills kept after sorting out
and consolidation, regardless of their relations of subordination and types of
ownership, may join cocoon-silk group corporations in accordance with the
principle of voluntariness and subject themselves to the control of
cocoon-silk group corporations.

    4. Strengthening Leadership and Conducting the Work in an Active, Steady
and Satisfactory Way

    Formation of cocoon-silk group corporations shall be undertaken in a
planned way, in steps, actively, steadily and satisfactorily. With existing
provincial (municipal) silk corporations as the basis, silkworm egg breeding
stations, research institutions and cocoon procurement units shall first be
taken into the group corporations, then the state-owned large- and medium-size
backbone enterprises shall be absorbed into the group corporations according
to classifications.

    Efforts should be made for the proposals for formation to be approved and
adopted by the provincial (municipal) governments by the end of the year and
the time seized in the organization for implementation.

    Reform of the cocoon-silk operational and management system involves many
areas and heavy tasks and the time is pressing. To ensure the smooth carrying
out of the reform, major cocoon-silk producing provinces (municipality) may
set up coordination groups to be put under the charge of the competent leaders
of provincial (municipal) governments, and concrete work shall be done by the
economic and trade commissions (economic commissions, planning and economic
commissions) in conjunction with departments of foreign economic relations and
trade, textile, silk, agriculture, supply and marketing, price administration,
industry and commerce and technical supervision, and macro-regulation and
control and unified management of the cocoon-silk industry strengthened in
accordance with the unified deployment of the State Cocoon-Silk Coordination
Group and provincial (municipal) governments.

    Reference may be made to the above-mentioned Suggestions in the
implementation of the reform of cocoon-silk trade, industry and agriculture
integration in non major cocoon-silk producing provinces (autonomous regions).





CIRCULAR OF THE STATE COUNCIL ON THE APPROVAL AND TRANSMISSION OF THE SUGGESTIONS SUBMITTED BY THE STATE ECONOMIC AND TRADE COMMISSION AND OTHER DEPARTMENTS CONCERNING THE FURTHER PROMOTION OF COMPREHENSIVE RESOURCES UTILIZATION

Category  GENERAL Organ of Promulgation  The State Council Status of Effect  In Force
Date of Promulgation  1996-08-31 Effective Date  1996-08-31  


Circular of the State Council on the Approval and Transmission of the Suggestions Submitted by the State Economic and Trade Commission
and Other Departments Concerning the Further Promotion of Comprehensive Resources Utilization


Appendix: Suggestions Concerning the Further Promotion of Comprehensive

(August 31, 1996)

    The State Council has approved the “Suggestions Concerning the Further
Promotion of Comprehensive Resources Utilization” submitted by the State
Economic and Trade Commission, the Ministry of Finance and the State Taxation
Administration. It is hereby transmitted for your earnest implementation.

    With the growth in population and development of the economy, the
contradiction that the resources of the country are relatively inadequate
will become increasingly prominent. The principle of resources development
and economy must be upheld simultaneously, putting economy first. Economy and
rational utilization of all resources must be practiced and reduction in
occupation and consumption of resources by all means in the fields of
production, construction, circulation and consumption.

    Comprehensive utilization of resources constitutes a major technological
and economic policy of the country, and it is also a long-term strategic
policy in national economic and social development, and is of significance in
economy of resources, improvement of the environment and economic efficiency,
promoting the transformation of the mode of economic growth from the
extensive type to the intensive type and the realization of the optimal
disposition of resources and sustainable development. All regions and
departments must pay full attention to it and adhere to the policy of
“adaptation to local conditions, encouragement of exploitation, employment of
multi-channels, striving for practical benefits, achieving breakthrough in
major areas and promoting gradual extension”, actively promote comprehensive
resources utilization and economy of resources and strive for the upgrading
of the level of resources comprehensive utilization and promotion of the
healthy development of the national economy and social undertakings in
compliance with the principle of the combination of comprehensive resources
utilization with the development of enterprises, prevention and control of
pollution, and the unification of economic results, environmental and social
effect.

Appendix: Suggestions Concerning the Further Promotion of Comprehensive
Resources Utilization

    Since the issuance of the “Circular of the State Council on the Approval
and Transmission of ‘the Interim Rules Concerning the Questions Relating to
Comprehensive Resources Utilization’ of the State Economic Commission”, under
the encouragement and guidance of the state policy, considerable achievements
have been made in comprehensive resources utilization in our country.
However, there still universally exist such problems as high resources
consumption, low resources utilization ratio, low comprehensive waste
utilization and low degree of harmless treatment. To suit the requirements of
the transformation of the mode of economic growth and the implementation of
the sustainable development strategy and promote comprehensive resources
utilization, the following suggestions are hereby put forth:

    1. Range of Comprehensive Resources Utilization

    Comprehensive resources utilization mainly cover the comprehensive
development and rational exploitation of paragenetic or associated mines in
the mining process; the recycling and rational utilization of waste residue,
waste water, waste gas, surplus heat and surplus pressure from the production
process; collection and regenerative utilization of all kinds of waste and
used materials produced in the process of social production and consumption.
The “Catalogue of Comprehensive Resources Utilization” shall be published
jointly by the State Economic and Trade Commission in conjunction with the
State Planning Commission, the Ministry of Finance and the State Taxation
Administration, which can be amended in the light of actual conditions.

    2. Implementation of Preferential Policies for Encouraging and Supporting
Enterprises in the Active Promotion of Comprehensive Resources Utilization

    The scope of enjoyment of preferential policies shall be those as laid
down in the “Catalogue of Comprehensive Resources Utilization”. The existing
preferential taxation policy of the state relating to comprehensive resources
utilization finds its expressions mainly in the following documents:
“Circular on a Number of Preferential Policies Concerning Enterprise Income
Tax”, “Circular on the Continued Implementation of the Preferential Policy in
Value-added Tax for Part of Products from Comprehensive Resources
Utilization”, “Circular on the Continued Implementation of the Preferential
Policy in Value-added Tax for Enterprises Operating in the Collection of
Waste and Used Materials” and “Circular on the Publication of the Notes of
Taxation Items and Rates of ‘Comprehensive Resources Utilization and
Warehousing Facilities’ of the Regulatory Tax for Fixed Assets Investment
Direction”. The State shall further study and formulate other preferential
policies for comprehensive resources utilization relating to price,
investment, finance and credit. The reduction and exemption in tax(charge)
money gained by enterprises from relevant preferential policies shall be used
for the special purpose of comprehensive resources utilization.

    All regions and departments concerned shall provide key support for
projects of comprehensive resources utilization of enterprises and list those
projects on a priority basis. Banks shall give positive support in arranging
loans in accordance with the credit policy. Management of funds for
comprehensive resources utilization shall be strengthened and efficiency in
fund utilization improved.

    3. Enhancement of Comprehensive Resources Development and Rational
Utilization, Prevention of Waste in Resources and Environment Pollution

    (1) In the prospecting and mining of mineral resources, there must be
unified planning and comprehensive exploration, evaluation, mining and  
exploitation of paragenetic or associated mines having the value of
development and exploitation. The geological exploration reports of the
geological prospecting departments shall contain a chapter(section) on
comprehensive resources utilization; the mine designing departments shall
present feasible proposals for the collection and exploitation of paragenetic
or associated mines while deciding on the plan for the mining of major
mineral.

    (2) Installations for comprehensive resources utilization at a
construction project must be designed, built and brought into operation
together with the principal part of the project. For projects with a
possibility of comprehensive utilization, the project proposals, feasibility
study reports and preliminary designs shall all contain contents of
comprehensive resources utilization, otherwise no examination and approval
shall be given by the departments concerned.

    (3) Enterprises shall actively promote comprehensive utilization of wastes
from the production processes. Those which do not have the required
conditions for utilization shall support other units in the promotion of
comprehensive utilization and give appropriate subsidy for loading and
transporting to the enterprises exploiting the wastes. Enterprises providing
exploitable wastes and enterprises exploiting the wastes should sign long-
term supply-and-demand contracts and strictly carry out the contracts.
Enterprises providing exploitable wastes shall not collect charges from
enterprises exploiting the wastes for unprocessed or dumped industrial solid
wastes; for processed industrial solid wastes, enterprises providing
exploitable wastes may charge a certain amount of expenses from enterprises
exploiting the wastes according to the processing cost and quality and in
accordance with the principle that benefits of enterprises exploiting the
wastes shall be greater than those of the enterprises providing exploitable
wastes.

    (4) The departments of construction administration shall, by means of
building design standards, construction standards and requirements, render
active support to enterprises in the promotion of new-type wall building
materials produced through utilizing wastes. Neither new construction nor
expansion of solid clay brick factories shall be permitted within the
parameter of 20 kilometers of the piling sites of coal dust or gangue; solid
clay brick factories and other building materials enterprises already in
existence must use a certain percentage of coal dust and gangue in the
production of solid clay bricks, if they have the necessary conditions; a
certain percentage of coal dust must be used in road-building, dam-
construction and port-construction projects.

    (5) All departments of industries administration shall work out standard
quotas for water consumption and plans of economy of water for their
respective industries, adopt measures of circulated use of water and multiple
uses of the same water to improve the rate of repetition in water use. In
areas where there are shortage of water resources, development of industries
of high water consumption shall be strictly restricted and the feasibility
study reports of new construction projects of high water consumption must
include special demonstration on water use.

    4. Adoption of Measures in Support of the Production of Electricity and
Heat by Comprehensive Exploitation Power Plants

    As for enterprises engaging in the production of electric power and heat
by exploiting surplus heat, surplus pressure, urban garbage and such low heat
value fuels as gangue and coal peat or coal seam gas(hereinafter referred
to as comprehensive exploitation power plants), the single-generator capacity
of which is 500kw and above conforming to the conditions of grid control, the
departments of electricity shall permit them to join the grid and sign grid
agreements, with generators joining the grid exempted from matching expenses
for joining the grid by small thermal power plants, and give priority in
purchasing their electricity within the approved volume of the grid
electricity.

    Rates of grid electricity from comprehensive exploitation power plants
shall, in principle, be determined according to the principle of same grid,
same quality and same rate, and peak rate may be adopted where conditions are
ripe; where due to such special circumstances as over high cost, the
principle of same grid, same quality and same rate cannot be followed,
separate rate can be fixed and proposals put forward by the comprehensive
exploitation power plants in consultation with the enterprises operating the
grid and submitted to departments of price administration at the provincial
level and above for examination and approval in accordance with relevant
provisions of the state. Expenses incurred from purchasing the electricity
from comprehensive exploitation power plants by the grid can be included in
its cost as the basis for the adjustment of rate of electricity sold by the
grid. The amount of electricity mutually supplied between a comprehensive
exploitation power plant and the grid at the same measurement point can be
settled monthly by mutual setoff. Electricity generated by comprehensive
exploitation power plants shall not be included in the national distribution
plan but can be used for internal adjustment. The electricity departments
shall not deduct and reduce the planned targets of electricity supply to the
enterprise.

    Comprehensive exploitation power plants with an installed generating
capacity under 12000kw(inclusive) shall not join peak adjustment of the grid;
comprehensive exploitation power plants with an installed generating capacity
above 12000kw may have an arrangement of certain amount for peak adjustment
and are permitted to have full peak generation but, during the low period
generation, payload shall not be lower than 85% of the rated capacity of the
generation equipment.

    5. Enforcement of Strict Administration to Ensure the Collection,
Recycling and Exploitation of Waste and Used Materials

    Enterprises shall formulate rules for the collection and recycling of
waste and used materials and for the repair of old equipment and exploitation
of wastes. Waste and used materials the enterprise itself is incapable of
exploitation shall be sold positively to enterprises collecting waste and
used materials. Enterprises collecting waste and used materials shall improve
their methods of purchasing and actively organize collection and purchase;
where conditions are ripe, processing according to varieties shall be carried
out.

    Enterprises intending to engage in the collection and processing of waste
and used metals for production purposes must go through the examination and
approval procedure with the competent department designated by the people’s
government of the locality where the enterprise is located and upon the
issuance of the unifiedly printed certificate of examination and approval,
apply to the public security organ for the examination and issuance of
special industries license, and then to the administrative department for
industry and commerce for the examination and issuance of business license,
before they can engage in business operations of the collection and
processing of waste and used metals for production purposes within designated
scope of categories. No points for the collection and purchase of waste and
used metals may be set up in the neighborhood of railways, mining areas,
oilfields, ports, airports, construction sites, restricted military area or
metallurgical refining and processing enterprises. Individual businesses are
prohibited from engaging in business operations of collection or processing
of waste and used metals for production purposes. People’s governments at all
localities must henceforth ban the existing individual businesses engaging in
the collection and processing of waste and used metals for production
purposes. Public security organs shall, in accordance with the law, reinforce
their supervision over enterprises engaging in the collection of waste and
used materials.

    It is strictly forbidden to transfer vehicles condemned or mechanical and
electrical equipment phased out by unequivocal order to the country or
township enterprises to be used there. Units and individuals not permitted to
operate in the collection and purchase of condemned vehicles must not collect
and purchase condemned vehicles. Departments of vehicle operations
supervision shall carry out inspection over the state of use of the tyres of
automotive vehicles and supervise timely renewal of tyres of units employing
vehicles.

    6. Acceleration of the Pace of Legislation, Formulation and Perfection of
Rules for Administration to Promote Comprehensive Resources Utilization

    (1) All regions and departments shall actively formulate certain local
regulations in accordance with relevant regulations of the state and taking
into account the actual conditions of the localities to promote the
standardization and legalization of comprehensive resources utilization.

    (2) Enterprises shall organize production in strict accordance with
national standards, industrial standards or local standards to promote
comprehensive resources utilization.

    (3) Rules shall be formulated gradually for statistics of basic
information on comprehensive resources utilization. Enterprises shall submit
statistical report on comprehensive resources utilization to the competent
departments concerned at regular intervals.

    (4) The work of examination and approval of applications for projects of
comprehensive resources utilization shall be strengthened. The departments
concerned shall strengthen the administration of examination and approval
of projects, implement the preferential policies of the state and prevent
fraud in taxation preferences.

    (5) The reward and penalty system for comprehensive resources utilization
shall be established. Units and individuals scoring outstanding achievements
shall be praised and rewarded. Those violating relevant provisions shall be
penalized. Enterprises having any of the following misconduct shall be
criticized in circulars and rectifications should be made within the specified
time limit:

    a. Failing to exploit the wastes while the conditions are ripe or failing
to exploit and failing to support other enterprises in their exploitation;

    b. Non-fulfillment or incomplete fulfillment of contracts on
comprehensive wastes exploitation or arbitrary suspension of the relation of
demand and supply of wastes;

    c. Non-compliance of the rules for the submission of relevant
information; or

    d. Collection of charges or disguised collection of charges in violation
of relevant provisions.

    7. Upgrading the Technical Levels of Comprehensive Resources Utilization
by Relying on the Advancement of Science and Technology

    Technical and economic policies conducive to the development and
extension of technologies of comprehensive resources utilization shall be
implemented and catalogues on state technological guidance of comprehensive
resources utilization shall be published at irregular intervals. Major
subjects of scientific research and technological development of
comprehensive resources utilization shall be included in state or local plans
for the joint tackling of key scientific and technical projects and their
implementation organized in earnest. Demonstration projects shall be actively
arranged for mature technologies with broad prospects of application and
industrialization gradually realized; a number of advanced technologies in
comprehensive resources utilization suitable for the state of our country
shall be introduced appropriately and scientific and technical forces
organized for their digestion, absorption and innovation; technical markets
shall be fostered and developed for the promotion of consultancy and
information services and transfer and extension in the application of
scientific and technological achievements.

    Organization work for the implementation of these Suggestions shall be
done by the State Economic and Trade Commission in conjunction with the State
Planning Commission, the Ministry of Finance and the State Taxation
Administration and other departments concerned. The Provinces, Autonomous
Regions and Municipalities directly under the central government as well as
cities enjoying the provincial-level status in the state economic plan and
departments concerned under the State Council may formulate specific measures
for implementation in accordance with these Suggestions.





CONTROL OF FIREARMS

Category  PUBLIC SECURITY 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  1996-10-01  


Law of the People’s Republic of China on the Control of Firearms

Contents
Chapter I  General Provisions
Chapter II  The Equipment with and Allocation of Firearms
Chapter III  Manufacture of Firearms and Rationing of Civil-Use Firearms
Chapter IV  Routine Control of Firearms
Chapter V  Transportation of Firearms
Chapter VI  Entry and Exit of Firearms
Chapter VII  Legal Responsibility
Chapter VIII  Supplementary Provisions
Appendix: Relevant Provisions of Laws
Relevant Articles in the Criminal Law
Relevant Provisions in the Decision of the Standing Committee of the
Relevant Provisions in the Supplementary Provisions of the Standing

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

National People’s Congress on July 5, 1996, promulgated by Order No.72 of the
President of the People’s Republic of China on July 5, 1996)
Contents

    Chapter I     General Provisions

    Chapter II    The Equipment with and Allocation of Firearms

    Chapter III   Manufacture of Firearms and Rationing of Civil-Use Firearms

    Chapter IV    Routine Control of Firearms

    Chapter V     Transportation of Firearms

    Chapter VI    Entry and Exit of Firearms

    Chapter VII   Legal Responsibility

    Chapter VIII  Supplementary Provisions
Chapter I  General Provisions

    Article 1  This Law is formulated for the purposes of strengthening the
control of firearms, maintaining the public order and safeguarding the public
security.

    Article 2  This Law shall apply to the control of firearms within the
territory of the People’s Republic of China.

    If the State Council or the Central Military Commission has special
provisions concerning the control of firearms for the equipment of the
Chinese People’s Liberation Army, Chinese People’s Armed Police Force and the
Militia, those provisions shall prevail.

    Article 3  The state shall strictly control firearms. All units and
individuals shall be forbidden to hold, manufacture(doctor or assemble),
trade in, transport, hire out or lend out firearms in violation of the law.

    The state shall severely punish those committing illegal activities and
criminal offenses breaking the firearm control regulations. All units and
individuals shall have the duty to inform relevant authorities against acts
violating the firearm control regulations. The state shall protect the
informers and give rewards to those having rendered great service in
informing against criminal offenses breaking the firearm control regulations.

    Article 4  The department of public security of the State Council shall
take charge of the nationwide control of firearms. Public security organs
of local people’s governments at and above the county level shall be
responsible for the control of firearms within their respective regions. The
public security organs of higher-level people’s government shall supervise
the public security organs of the lower-level people’s government with regard
to the control of firearms.
Chapter II  The Equipment with and Allocation of Firearms

    Article 5  The policemen in public security organs, state security
organs, prisons and reeducation-through-labor organs, judicial policemen of
people’s courts, judicial policemen and procuratorial personnel who take on
the investigation of law cases in people’s procuratorates and anti-contraband
personnel of the customs may be equipped with firearms for official use if it
is really necessary for them to carry firearms in performing their duties in
accordance with the law.

    Full-time guards and transport escorts with the state’s important war
industrial, financial, storing and scientific research units may be equipped
with firearms for official use if it is really necessary for them to carry
firearms in performing their duties in guarding or escorting.

    The special measures for giving equipment with firearms for official use
shall be formulated by the department of public security of the State Council
in conjunction with other relevant state organs on the principle of strict
control, and be implemented after submitted to and approved by the State
Council.

    Article 6  Firearms for civil use may be allocated to the following
units:

    (1) Units approved by the administrative department of physical culture
and sports of the people’s government at the provincial level to specialize in
shooting sports, and shooting ranges for commercial purpose approved by the
public security organs of the people’s government at the provincial level may
have the allocation of sports guns;

    (2) Hunting fields approved by the administrative department of forestry
of the people’s government at or above the provincial level may have the
allocation of hunting rifles; and

    (3) Units engaging in the protection, breeding or scientific research of
wild animals may have the allocation of hunting rifles and narcotic-injection-
guns.

    Huntsmen in hunting areas and herdsmen in pastoral areas may apply for
an allocation of hunting rifles. The territories of hunting areas and
pasturage areas shall be delimited by the people’s government at the
provincial level.

   The special measures for allocation of civil-use firearms shall be
formulated by the department of public security of the State Council on the
principle of strict control, and be implemented after submitted to and
approved by the State Council.

    Article 7  Having firearms for official use shall be unifiedly examined
and approved by the department of public security of the State Council.

    With the granting of firearms for official use, a certificate for holding
official-use firearms shall be issued by the department of public security of
the State Council or the public security organ of the people’s government at
the provincial level.

    Article 8  The allocation of sports guns to units specializing in shooting
sports shall be proposed by the administrative department of physical culture
and sports of the State Council and examined and approved by the department
of public security of the State Council. The allocation of sports guns to
shooting ranges for commercial purpose shall be submitted by the public
security organ of the people’s government at the provincial level to the
department of public security of the State Council for approval.

    With the allocation of sports guns, a certificate for holding civil-use
firearms shall be issued by the public security organ of the people’s
government at the provincial level.

    Article 9  Applications by hunting fields for allocation of hunting
rifles shall be submitted to the public security organ of the people’s
government at or above the provincial level for approval against the approval
document issued by the administrative department of forestry of the people’s
government at or above the provincial level and, with the approval of said
public security organ, the public security organ of the people’s government
at the districted-city level shall issue a ration certificate for civil-use
firearms.

    Article 10  For applying for an allocation of hunting rifles or narcotic-
injection-guns, the unit engaging in the protection, breeding or scientific
research of wild animals shall submit the application to the local public
security organ of the people’s government at the county level by producing
its business license and the hunting license or special permit for hunting
issued by the local administrative department for wild animals of the
people’s government at the county level. Huntsmen applying for the allocation
of hunting rifles shall submit the application to the local public security
organ of the people’s government at the county level by producing their
identity card and the hunting license issued by the local administrative
department for wild animals of the people’s government at the county level.
Herdsmen applying for the allocation of hunting rifles shall submit the
application to the local public security organ of the people’s government at
the county level by producing their identity card.

    After examination and approval by the public security organ handling the
application, an application shall be submitted to the public security organ
of the people’s government at the districted-city level for a ration
certificate for civil-use firearms.

    Article 11  Units and individuals making the ration purchase of hunting
rifles or narcotic-injection-guns must, within 30 days after the purchase,
apply to the public security organ issuing the ration certificate for civil-
use firearms for a certificate for holding civil-use firearms.

    Article 12  Civil-use firearms allocated to shooting ranges or hunting
fields for commercial purpose may not be carried out of the said shooting
ranges or hunting fields.

    Hunting rifles allocated to huntsmen or herdsmen may not be carried out
of the hunting areas or pasturage areas.
Chapter III  Manufacture of Firearms and Rationing of Civil-Use Firearms

    Article 13  The state shall adopt a special licensing system to the
manufacture and rationing of firearms. No unit or individual may manufacture
or trade in firearms without license.

    Article 14  Official-use firearms shall be manufactured by the
enterprises designated by the state.

    Article 15  Enterprises for manufacturing civil-use firearms shall be
proposed by relevant departments of the State Council and determined by the
department of public security of the State Council.

    Enterprises for rationing out civil-use firearms shall be determined by
the public security organ of the people’s government at the provincial level.

    A license for manufacturing civil-use firearms shall be issued by the
department of public security of the State Council to the approved
manufacturing enterprise. A license for rationing out civil-use firearms
shall be issued by the public security organ of the people’s government at
the provincial level to the approved rationing enterprise.

    The term of validity of license for either manufacturing or rationing out
civil-use firearms shall be three years; if it is needed to continue the
manufacture or rationing of civil-use firearms when the period of validity
expires, an application shall be submitted for a fresh license.

    Article 16  The state shall make quota control on the quantity of civil-
use firearms manufactured and rationed out.

    The annual quota for civil-use firearms to be manufactured shall be
proposed by the administrative department of forestry, the physical culture
and sports and other relevant departments of the State Council and the public
security organ of the people’s government at the provincial level, and
determined, unifiedly numbered and then allocated to the manufacturing
enterprises by the department of public security of the State Council.

    The annual quota for civil-use firearms to be rationed out shall be
proposed by the administrative department of forestry, physical culture and
sports and other relevant departments of the State Council and the public
security organ of the people’s government at the provincial level, and
determined and allocated to the rationing enterprises by the department of
public security of the State Council.

    Article 17  Enterprises manufacturing civil-use firearms may not
manufacture civil-use firearms in excess of quota. They must deliver all the
firearms they have manufactured to the designated rationing enterprise and
may not sell the firearms by themselves. Enterprises rationing out civil-use
firearms shall, within the rationing quota, ration out the civil-use firearms
manufactured by the designated enterprise.

    Article 18  Enterprises manufacturing civil-use firearms must manufacture
the firearms in strict accordance with the technical standards stipulated by
the state and may not make any changes in the performance or structure of the
civil-use firearms; they must on the designated position of the body of
firearms cast the name of manufacturer, the category code of the firearms and
the serial number unifiedly given by the department of public security of the
State Council and may not manufacture civil-use firearms which have no
number or have an overlapping or false number.

    Enterprises manufacturing civil-use firearms must adopt closed
management, take safety and protective measures and prevent the loss of
civil-use firearms or their components.

    Article 19  The ration certificate must be checked when civil-use
firearms are rationed out. The civil-use firearms must be rationed out in
strict accordance with the category, type and quantity indicated in the
ration certificate. The certificate for holding firearms must be checked when
the ammunition is rationed out. Enterprises rationing out civil-use firearms
must, in accordance with the provisions of the department of public security
of the State Council, set up rationing account books and keep them
permanently for reference.

    Article 20  Public security organs must conduct regular inspections on
enterprises manufacturing or rationing out civil-use firearms with regard to
the situation of manufacturing, rationing, storing and the keeping of account
books and, when necessary, may send resident supervisors and inspectors to
the manufacturing enterprises.

    Article 21  The development and design-finalization of civil-use firearms
shall be organized and carried out by relevant competent departments of the
State Council in conjunction with the department of public security of the
State Council.

    Article 22  It is forbidden to make or sell imitations of genuine
firearms.
Chapter IV  Routine Control of Firearms

    Article 23  Units and individuals equipped with firearms or those with
the allocation of firearms must take care of the firearms and ensure the
safety of firearms.

    Units equipped with firearms or those with the allocation of firearms must
clarify the responsibility for the care of firearms and put someone special
in charge. They shall have secure storing facilities and keep the firearms
and ammunition separately. In the case of firearms assigned to individuals,
the unit must establish a strict control system for the registration,
transfer, inspection and maintenance of the firearms, and the firearms
assigned to individuals must be called in as soon as their service has ended.

    Effective measures must be taken to safeguard the firearms assigned to
individuals from theft, forcible seizure, loss or other accidents.

    Article 24  Persons using firearms must grasp the performance of the
firearms, abide by regulations concerning the use of firearms and guarantee a
legal and safe use of firearms. Persons using official-use firearms must
receive special training.

    Article 25  Units and individuals equipped with and those with the
allocation of firearms must abide by the following provisions:

    (1) Those carrying firearms must on the same time take along the
certificate for holding firearms, otherwise the public security organ may
detain the firearms;

    (2) Firearms shall not be carried in regions or places where they are
forbidden to be carried; and

    (3) In case of theft, forcible seizure or loss of firearms, a report must
by delivered to the public security organ without delay.

    Article 26  When a person equipped with official-use firearms no longer
meets the conditions for holding firearms, the relevant unit shall call in
the firearms and the certificate for holding firearms.

    Units and individuals with the allocation of civil-use firearms must,
when they no longer meet the conditions for holding firearms, turn over in
good time the firearms together with the certificate for holding firearms to
the public security organ issuing the certificate; those which are not turned
over in good time shall be taken over by the public security organ.

    Article 27  Firearms that fail to meet the national technical standards
and thus cannot be used safely shall be scrapped. Units and individuals
equipped with and those holding firearms shall turn over the scrapped firearms
together with the certificate for holding firearms to the public security
organ issuing the certificate; those which are not turned over in good time
shall be taken over the public security organ. Scrapped firearms shall be
destroyed without delay.

    The destruction of firearms shall be organized and carried out by the
public security organ of the people’s government at the provincial level.

    Article 28  The state shall adopt an inspection system for firearms.
Units and individuals holding firearms shall submit to inspection at the time
and place designated by the public security organ. When conducting
inspection, the people’s security organ must make a strict examination as to
whether the unit or individual holding firearms meets the conditions
specified by this Law, and check on the condition and use of the firearms;
firearms being used illegally or held by those without stipulated conditions
or firearms which should be scrapped must be taken over together with the
certificate for holding firearms. If anyone refuses to submit to inspection,
their firearms and certificate for holding firearms shall be taken over by
the public security organ.

    Article 29  For the special purpose of public order, local public
security organs of the people’s government at and above the county level may,
with the approval of the department of public security of the State Council,
adopt special control measures such as concentrated management to firearms
lawfully provided or allocated to specific regions.
Chapter V  Transportation of Firearms

    Article 30  No unit or individual may transport firearms without
permission. Those wishing to transport firearms must give a true report to
the public security organ with regard to the type and quantity of the
firearms and the route and method of transport, and apply for a
transport permit. In the case of transport within one province, autonomous
region or municipality directly under the central government, the transport
permit shall be applied for to and obtained from the public security
organ of the people’s government at the districted-city level at the place of
the destination of the transport; in the case of transport involving two or
more provinces, autonomous regions or municipalities directly under the
central government, the transport permit shall be applied for to and obtained
from the public security organ of the people’s government at the provincial
level at the place of the destination of the transport.

    No unit or individual may accept to transport firearms without a
transport permit; moreover, they shall give timely report to the local
public security organ.

    Public security organ shall detain the firearms if they are to be or
being transported without a transport permit or without abiding by the
stipulations by the permit.

    Article 31  Firearms must be transported by safe and reliable closed
conveyances and escorted by someone specially responsible in accordance with
regulations; when there is a need to stay overnight on the way of transport,
a report must be given to the local public security organ.

    Firearms and ammunition must be transported separately in accordance with
regulations.

    Article 32  It is strictly forbidden to post firearms or put firearms
into post parcels.
Chapter VI  Entry and Exit of Firearms

    Article 33  The state shall strictly control the entry and exit of
firearms. No unit or individual may take firearms into or out of the country
without permission.

    Article 34  Personnel of foreign diplomatic and consular missions in
China who want to carry firearms into China must in advance report to the
Ministry of Foreign Affairs of the People’s Republic of China for approval;
when taking firearms out of China, they shall present a prior note to the
Ministry of Foreign Affairs of the People’s Republic of China and go through
necessary formalities.

    Firearms carried into the country under the preceding paragraph may not
be carried out of the residence of said resident missions.

    Article 35  When there is a need for foreign sports delegations or
Chinese sports delegations to carry firearms into or out of the country for
attending shooting sports competitions, it shall be subject to the approval
of the administrative department of physical culture and sports under the
State Council.

    Article 36  Persons other than those specified in Articles 34 and 35 of
this Law shall be subject to the approval of the department of public
security of the State Council when they are to carry firearms into or out
of the country.

    Article 37  Those who are permitted to carry firearms into the country
shall, against the permission document, handle registration for firearms with
the frontier inspection station at the place of entry, apply for a permit for
carrying firearms, and make a declaration to the customs, which shall give
customs clearance after examining the permit for carrying firearms; upon
arriving at the destination, they shall, against the permit for carrying
firearms apply for a certificate for holding firearms to the local public
security organ of the people’s government at the districted-city level.

    Those who are permitted to take firearms out of the country shall make a
declaration to the customs at the place of exit by producing the permission
document; the frontier inspection station shall give release after examining
the permission document.

    Article 38  In the case of foreign conveyances carrying firearms entering
or passing through the country, the person in charge of the conveyance shall
make a declaration to the frontier inspection station, which shall seal up
the conveyance, or unseal it, if it is leaving the country.
Chapter VII  Legal Responsibility

    Article 39  Anyone who violates the provisions of this Law and
manufactures, trades in or transports firearms without being licensed shall
be investigated for criminal responsibility in accordance with the provisions
of Article 112 of the Criminal Law and the Decision of the Standing Committee
of the National People’s Congress Regarding the Severe Punishment of
Criminals Who Seriously Endanger Public Security.

    When a unit commits any of the acts mentioned in the preceding paragraph,
it shall be given a fine, and the person in charge directly responsible and
other person directly responsible shall be investigated for criminal
responsibility in accordance with the provisions of Article 112 of the
Criminal Law.

    Article 40  If any enterprise designated or determined to engage in
firearms manufacture or sales in accordance with the law commits any of the
following acts, it shall be given a fine, and the person in charge directly
responsible and other person directly responsible shall be investigated for
criminal responsibility in accordance with the provisions of Article 112 of
the Criminal Law; the public security organ may order the enterprise to
suspend business for rectification, or revoke its license for manufacturing
or rationing out firearms:

    (1) manufacture or ration out firearms in excess of quota or without
following the stipulated specifications;

    (2) manufacture firearms which have no number or have an overlapping or
false number; or

    (3) sell firearms without permission or sell within the territory of
China firearms manufactured for export.

    Article 41  Anyone who violates the provisions of this Law and illegally
holds or secretly keeps firearms shall be investigated for criminal
responsibility in accordance with the provisions of Article 163 of the
Criminal Law.

    Those illegally transporting or carrying firearms into or out of the
country shall be investigated for criminal responsibility in accordance with
the provisions of the Supplementary Provisions of the Standing Committee of
the National People’s Congress Concerning the Punishment of the Crimes of
Smuggling.

    Article 42  In case that anyone in transporting firearms violates the
provisions of this Law and fails to use safe and reliable conveyances, fails
to send a person especially for escorting, fails to transport the firearms
and ammunition separately or fails to report to the public security organ
when staying overnight on the way of transport, if the circumstances are
serious, the offender shall be investigated for criminal responsibility by
applying mutatis mutandis the provisions of Article 187 of the Criminal Law;
if the offense does not constitute a crime, the person directly responsible
shall be given a detention up to 15 days by the public security organ.

    Article 43  Anyone who violates firearm control regulations and hires out
or lends out official-use firearms shall be punished by applying mutatis
mutandis the provisions of Article 187 of the Criminal Law.

    If a unit commits any of the acts mentioned in the preceding paragraph,
the person in charge directly responsible and other person directly
responsible shall be punished in accordance with the provisions of the
preceding paragraph.

    If any unit with the allocation of civil-use firearms violates firearm
control regulations and hires out or lends out firearms resulting in great
consequences or with other serious circumstances, the person in charge
directly responsible and other person directly responsible shall be punished
by applying mutatis mutandis the provisions of Article 187 of the Criminal
Law.

    Any individual with the allocation of civil-use firearms who violates
firearm control regulations and hires out or lends out firearms resulting in
great consequences shall be punished by applying mutatis mutandis the
provisions of Article 163 of the Criminal Law.

    If any individual or unit violates firearm control regulations and hires
out or lends out firearms and if the violation is minor with no crime
constituted, the public security organ shall give a detention up to 15 days
to the individual or the person in charge directly responsible and other
person directly responsible, and may concurrently impose a fine up to 5,000
yuan; the firearms hired out or lent out shall be confiscated.

    Article 44  If any individual or unit commits any of the following acts
in violation of the provisions of this Law, the public security organ shall
give a warning or a detention up to 15 days to the individual or the person
in charge directly responsible and other person directly responsible; if a
crime is constituted, the offender shall be investigated for criminal
responsibility in accordance with the law:

    (1) manufacture civil-use firearms without according to the stipulated
technical standards;

    (2) carry firearms in r

CIRCULAR OF THE GENERAL OFFICE OF THE STATE COUNCIL ON TRANSMITTING A REPORT OF THE LEADING GROUP FOR DEVELOPMENT OF UNDERDEVELOPED REGIONS UNDER THE STATE COUNCIL ON ORGANIZING COOPERATION FOR POVERTY RELIEF BETWEEN ECONOMICALLY LESS DEVELOPED AND ECONOMICALLY DEVELOPED REGIONS

Category  GENERAL Organ of Promulgation  The State Council Status of Effect  In Force
Date of Promulgation  1996-07-06 Effective Date  1996-07-06  


Circular of the General Office of the State Council on Transmitting a Report of the Leading Group for Development of Underdeveloped
Regions under the State Council on Organizing Cooperation for Poverty Relief Between Economically Less Developed and Economically
Developed Regions


APPENDIX: REPORT ON ORGANIZING COOPERATION FOR POVERTY RELIEF BETWEEN

(July 6, 1996)

    The Report on Organizing Cooperation for Poverty Relief between
Economically Less Developed and Economically Developed Regions submitted by
the State Council Leading Group for Development of Underdeveloped Regions has
been agreed to by the State Council and is herewith transmitted to you for
implementation accordingly.

    It is a strategic task of future reform and development to lead regional
economies to a coordinated development approach, to strengthen cooperation of
mutual-aid between the eastern and the western regions, to help impoverished
regions provide just adequate food and clothing to masses and to gradually
reduce the gap between regions. Cooperation for poverty relief between
economically developed and economically underdeveloped regions can
significantly promote mutual-replenishment of advantages between regions,
facilitate liberalization and development of social productivity, speed up
steps of poverty elimination and wealth acquisition of underdeveloped regions,
realize the goal of enjoying common wealthy life, improve nationalities
unification and maintain long-term stability and order of the state. People’s
governments at different levels and relevant departments shall pay close
attention to this work, organize a variety of manpower of the society to
participate, take different approaches to support and help impoverished
regions develop economy and make new and greater contribution to scheduled
realization of objectives laid down in the State Eighth-Seven-Year Plan on
Poverty Relief.
APPENDIX: REPORT ON ORGANIZING COOPERATION FOR POVERTY RELIEF BETWEEN
ECONOMICALLY LESS DEVELOPED AND ECONOMICALLY DEVELOPED REGIONS

    With a view to mobilizing different strengths of the society to
participate in helping underdeveloped regions develop economy, making joint
effort in helping people in impoverished regions get adequate food and
clothing and acquire wealth and eliminate poverty, and in accordance with the
spirit of the Fifth Plenary Session of the Fourteenth Central Committee of the
Communist Party and requirements of the State Eighth-Seven-Year Plan on
Poverty Relief, it is hereby reported on arrangements for cooperation for
poverty relief between economically developed and less developed regions:

    1. After consultation with relevant local governments and upon their
agreement, it has been determined to have the following pairs of partners in
cooperation for poverty relief: Beijing Municipality & Inner Mongolia
Autonomous Region; Tianjin Municipality & Gansu Province; Shanghai
Municipality & Yunnan Province; Guangdong Province & Guangxi Zhuang Autonomous
Region; Jiangsu Province & Shaanxi Province; Zejiang Province & Sichuan
Province; Shandong Province & Xinjiang Uygur Autonomous Region; Liaoning
Province & Qinghai Province; Fujian Province & Ningxia Hui Autonomous Region;
the cities of Dalian, Qingdao, Shenzhen and Ningbo & Guizhou Province.

    2. The main task of cooperation for poverty relief is to follow the
Party’s basic theories and guidelines, observe the principles of
mutual-replenishment of advantages between the east and west, mutual-benefit
and common development, strengthen the work on poverty elimination and
economic development of underdeveloped regions and realize objectives laid
down in the State Eighth-Seven-Year Plan on Poverty Relief.

    Major contents of cooperation for poverty relief are:

    (1) to help training and introducing of talents into underdeveloped
regions, introducing technologies and funds, passing on information,
coordinating flow of commodities and facilitating exchange of goods;

    (2) to conduct economic and technological cooperation: help poor regions
develop planting, aquiculture and relevant processing industry which are
beneficial to speedy supply of adequate food and clothing to the poor, and
help poor regions develop labour-intensive and resources-exploiting production;

    (3) to organize those relatively efficient enterprises in developed
regions to spur and help development of production in enterprises of
underdeveloped regions which produce same kind of products;

    (4) to develop labour cooperation: according to actual needs, organize, in
a rational and orderly manner, surplus labour of underdeveloped regions to go
to economically developed regions for employment;

    (5) to mobilize social donations, on a voluntary basis, of clothing,
quilts, funds, medicine, medical apparatus and instruments, cultural and
education apparatus and other daily necessities;

    Contents and forms of cooperation for poverty relief may be determined by
the partners through consultation in light of necessity and possibility.

    3. According to the gist of the Ninth-Five-Year Plan on National Economy
and Social Development and Outlines of Long-term Objectives in Perspective of
the Year 2010 and the State Eighth-Seven-Plan on Poverty Relief, both of which
were adopted by the Fourth Session of the Eighth National People’s Congress,
and with a view to promoting the cooperation for poverty relief, it is
suggested that the following policies be reiterated and reaffirmed:

    (1) Whenever state industrial policies are formulated or carried out,
considerations shall be given to particularity of underdeveloped regions and
supports be offered to such regions;

    (2) The state shall give priority to the middle and western regions when
choosing sites for the construction of resources exploiting and infrastructure
projects and make preferential arrangements for funds in case a resource
exploiting project within the middle or western regions is intended to serve
as a national base;

    (3) Whoever establishes an exploitative enterprise in an underdeveloped
region may in a proper manner utilize local funds intended for poverty relief
and may engage in joint development;

    (4) Enterprises newly sponsored within state-designated “old, minority,
border or impoverished” regions may enjoy reduction and exemption of income
tax over the first 3 years;

    (5) In case that underdeveloped regions utilize foreign capital, develop
international trade and economic cooperation, they shall enjoy priority over
similar cases in other regions and be supported as key places. In this case
restrictions on areas for foreign investment may be properly relaxed.

    (6) Railway and communication departments shall relax restriction on
transport destinations in the case of cargoes for cooperation and
replenishment. Large quantity of cargoes intended for underdeveloped regions
shall enjoy priority in transport planning.

    Underdeveloped regions shall on the basis of their actual conditions
formulate preferential policies to attract exterior investment, speed up local
resources exploitation and facilitate economic development.

    4. The original arrangements for regional economic cooperation remain
unchanged, under which all regions of the country offer help and support to
the Tibet Autonomous Region geared to the needs of the latter and relevant
regions offer help and support to the Three Gorges Reservoir District geared
to its needs. The people’s governments of each province, autonomous region or
municipality directly under the central government shall be responsible for
organizing the cooperation for poverty relief between developed cities and
counties and underdeveloped prefectures and counties within the territory of
the respective province, autonomous region or municipality directly under the
central government. And such cooperation shall be developed into a long,
steady practice.

    5. People’s governments at different levels shall effectively strengthen
leadership over cooperation for poverty relief and mobilize extensive social
forces for their active involvement. One leading official in each government
shall be nominated to be in charge of the work and departments undertaking the
work shall be specified. Both partners to such cooperation shall each year
hold a joint meeting to sum up experiences and solve concerned issues through
consultation. The State Council Leading Group for Development of
Underdeveloped Regions shall be in charge of the organization of and
coordination for cooperation for poverty relief that involves different
provinces, autonomous regions or municipalities. Relevant departments of the
State Council shall actively cooperate and give support. All provinces,
autonomous regions and municipalities shall submit written agreements on
cooperation for poverty relief and reports on their implementation to the
office of the State Council Leading Group for Development of Underdeveloped
Regions for record.

    Poverty-relieving cooperation between developed and underdeveloped regions
is a important approach to facilitating poverty elimination and wealth
acquisition in poor places, and is a necessary measure for realization of
common prosperity. People’s governments and cadres at different levels in
underdeveloped regions shall carry on the spirit of self-reliance and working
hard, and lead the people to do strenuous and effective work so as to
eliminate poverty as soon as possible.





PROVISIONAL REGULATIONS ON ENVIRONMENTAL PROTECTION IN CASES OF WASTES IMPORTATION

Provisional Regulations on Environmental Protection in Cases of Wastes Importation

     CHAPTER ONE GENERAL PROVISIONS CHAPTER TWO ENVIRONMENTAL CONTROL OF IMPORTED WASTES CHAPTER THREE PENALTIES CHAPTER FOUR SUPPLEMENTAL
PROVISIONS APPENDIX ONE

   Article 1 This set of provisional regulations has been formulated in accordance with Law of the People’s Republic of China on Prevention and
Control of Environmental Pollution by Solid Wastes and other laws concerned, with the aim of strengthening environmental protection
in cases of wastes importation so as to prevent the pollution by imported wastes.

   Article 2 This set of provisional regulations is applicable to imports of wastes into the People’s Republic of China and the supervision and
administration associated with environment.

   Article 3 Imports of overseas wastes to be dumped, stored or treated inside China are forbidden.

   Article 4 All units and individuals have the right to report to environmental protection administration agencies, foreign economic and trade
administration agencies, import and export commodities inspection agencies, industrial and commerce administration agencies and judicial
agencies unlawfully imports of overseas wastes to the country by any entities.

   Article 5 The State Environmental Protection Agency shall exercise the supervision and administration of wastes importation nationwide.

Environmental protection organs at the local levels, in accordance with this set of provisional regulations, shall exercise the supervision
and administration of wastes importation of the localities under their jurisdiction. They also have the right to conduct on-site
inspection of entities engaged in imports of wastes.

   Article 6 The State Environmental Protection Agency shall compile, revise and promulgate Catalogue of Wastes Imported as Raw Materials Restricted
by the State (Appendix One) with joint efforts of the Ministry of Foreign Trade and Economic Cooperation and the General Administration
of Customs.

The State Import and Export Commodity Inspection Bureau and the State Environmental Protection Agency shall jointly establish standards
for compulsory inspection of imported wastes.

   Article 7 Departments in charge of foreign economic cooperation and trade, customs, import and export commodity inspection institutions and
industrial and commerce administration departments exercise the supervision and administration of wastes importation and related
business activities in their respective scopes of responsibility.

CHAPTER TWO ENVIRONMENTAL CONTROL OF IMPORTED WASTES

   Article 8 Any wastes listed in Appendix One can only be imported after the examination and approval of the State Environmental Protection Agency.

All other wastes not listed in Appendix One (Please refer to Article 32 for the scope of wastes) are banned from importation.

   Article 9 The procedures for the application, examination and approval of wastes importation are as the following:

1 Application for imports of wastes which have been listed in the sixth category of Appendix One with customs codes 7204-1000, 7204-2100,
7204-2900, 7204-3000, 7204-4100, 7204-4900 and 7204-5000 (referred to hereinafter as wastes with codes from 7204-1000 to 7204- 5000)
shall be filed directly by the units that plan to import or utilize the wastes with the State Environment Protection Agency for examination
and approval of the latter.

2 Applications for the imports of other wastes listed in Appendix One should be filed by the units that plan to import or utilize
the wastes with the local environment protection departments at the prefectural or municipal level (referred to hereinafter as environment
protection departments at the municipal level). The applications, after the examination and approval of the environmental protection
departments at the municipal level and the environmental protection departments of the provinces, autonomous regions and municipalities
directly under the Central Government, should be reported to the State Environmental Protection Agency for examination and ratification.

   Article 10 Applications for imports of wastes should meet the following conditions:

1 Entities applying for the imports of wastes as raw materials should be legally established enterprises with legal person status
and in possession of capabilities of utilizing the wastes and associated equipment for pollution control;

2 The wastes to be imported are included in the Catalogue of Wastes lmported as Raw Materials Restricted by the State.

   Article 11 Entities applying for the imports of wastes listed in Appendix One should present the following documents:

1 Application for the import of wastes (Appendix One);

2 Report on the environmental risks of the import of the wastes as raw materials or report table on the environmental risks of the
importation of the wastes as raw materials.

The afore-mentioned application papers should be submitted with three copies.

   Article 12 The environment protection departments, shall do the following within five work days since the receipt of the application papers
for wastes importation:

1 The departments shall handle the applications which comply with Articles 9 and 10 of this set of provisional regulations;

2 The departments shall reject the applications which do not comply with Articles 9 and 10 of this set of provisional regulations
and inform the applicants of the reasons;

3 If one of the documents required for application failed to be presented during the application, the applicants shall be notified
to make up for the document within a certain period of time. The applications will be rescinded if the required documents are not
presented within the specified period.

   Article 13 Entities applying for imports or uses of wastes with codes from 7204-1000 to 7204-5000 listed in Appendix One should make a correct
assessment on the risks to the environments as the result of the import, storage, transport and uses of the waste as raw materials,
and fill up and submit the “Report Table on the Environmental Risks of the Importation of the Wastes as Raw Materials” to the State
Environment Protection Agency for examination and approval.

   Article 14 Entities applying for imports or uses of wastes listed as the second, seventh, eighth and ninth categories in Appendix One should
make a correct assessment on the risk to the environment as the result of the import, storage, transport and uses of the waste as
raw materials and fill up the” Report on the Environmental Risks of the Importation of Wastes as Raw Materials, in accordance with
related regulations of the State Environment Protection Agency.

   Article 15 Entities applying for imports or uses of wastes listed as the second, third, forth, fifth and the wastes other than those with codes
from 7204-1000 to 7204-5000 in the sixth category or applying for fresh imports of wastes described in Article 14, should make a
correct assessment on risks as the result of the wastes as raw materials and fill up and submit the Report Table on The Environmental
Risks of the Importation of the Wastes as Raw Materials, together with the application for wastes imports, in accordance with the
procedures as set in the second paragraph of Article 9 of this set of provisional regulations, to the environment protection departments
for examination.

   Article 16 The technical requirements and examination procedures on the assessment of risks to environment arising from imports of waste shall
be formulated separately by the State Environmental Protection Agency.

Entities engaged in assessment of risks in environment arising from imports of waste should acquire credentials for assessment of
environmental risks arising from wastes importation as approved and issued by the State Environment Protection Agency.

   Article 17 Environment protection departments at the municipal level and at the provincial level that handle applications for wastes importation
shall propose, sign and send opinions on the examination to the applicants within 10 work days since the receipt of the application
documents.

   Article 18 The State Environment Protection Agency shall decide to approve or disapprove the applications and notify the applicants of the decisions
within 10 work days since the receipt of the application documents submitted directly from the applicants or via the environment
protection departments at the provincial level.

Upon an approval to the import of wastes, the State Environment Protection Agency shall issue a Wastes lmportation Approval Certificate
(Appendix Three).

   Article 19 During the examination of application documents for wastes importation, the State Environment Protection Agency shall solicit opinions
from concerned departments or specialists when necessary.

   Article 20 A wastes importation approval certificate shall expire one year after its issuance by the State Environment Protection Agency.

   Article 21 For wastes listed in Appendix One the Customs shall release on the strength of a Wastes lmportation Approval Certificate issued by
the State Environment Protection Agency and the certificate of inspection issued by the local port’s import and export commodity
inspection department.

   Article 22 Entities which import and utilize wastes should compile and submit a quarterly Wastes Importation Reports (Appendix Four) to the
environment protection administrative departments at the municipal level in the locality where the entities reside.

Entities which utilize imported wastes should abide by the requirements as stipulated in the Reports on the Environmental Risks of
the Importation of the Wastes as Raw Materials or Report Tables on the Environmental Risks of the Importation of the Wastes as Raw
Materials to prevent the imported wastes from polluting the environment.

   Article 23 Should possibilities of polluting the environment be discovered when inspection of the imported commodities by the import and export
commodity inspection departments, the latters should timely report to the local environment protection departments and Customs for
suitable handling of the matter in accordance with law.

   Article 24 Upon the setting up of processing projects utilizing imported wastes as raw materials, the responsible units of the projects should
assess risks to the environment involved and compile and send a Report on the environmental Risks of the Importation of the wastes
with opinions signed by the environment protection departments at the municipal and provincial levels to the State Environment Protection
Agency for examination.

   Article 25 Entities utilizing the wastes as listed under the seventh category of Appendix One should have been approved and designated by the
State Environment Protection Agency to process and utilize wastes in the specified location.

   Article 26 When application for registration as enterprises engaging in import, management, and/or utilization of overseas wastes, approval
documents issued by the State Environment Protection Agency should be presented. For those who fail to present the approval documents
issued by the State Environment Protection Agency, the industrial and commerce administrative departments shall deny the application
for registration.

Enterprises already engaged in import of wastes before the promulgation of this set of provisional regulations should, in accordance
with the provisions in document NO. (1995) 54 issued by the General Office of the State Council, apply for retroactive examination
and approval formalities with the State Environment Protection Agency.

   Article 27 Dumping, storage and treatment of overseas wastes inside the country in violation of this set of provisional regulations, or imports
of wastes without authorization and approval by the State Environment Protection Agency shall be punished in accordance with Article
66 of Law of the People’s Republic of China on Prevention and

Control of Environmental Pollution by Solid Wastes.

Imports of wastes that cannot be used as raw materials under the pretext of importing them as raw materials shall be punished in accordance
with provisions as stated in the previous paragraph.

   Article 28 Solid wastes that have already entered into the country through illegal ways shall be handled in accordance with Article 68 of Law
of the People’s Republic of China on Prevention and Control of Environmental Pollution by Solid Wastes.

   Article 29 Counterfeiting and alteration of the State Environment Protection Agency’s Wastes lmportation Approval Certificates shall be fined
RMB50,000-500,000 and be investigated and affixed with criminal responsibility by judicial departments.

   Article 30 For those who failed to apply for retroactive examination and approval formalities in time for previous imports and continue the
act of importation in violation of the second paragraph of Article 26 of this set of provisional regulations, the customs shall not
release their imports and order the imports be transported back; foreign trade and economic cooperation departments shall rescind
their power of import in accordance with law; industrial and commerce administrative departments shall rescind their business licenses
in accordance with the law.

   Article 31 Whenever supervision and administrative personnel in charge of wastes import and export have offenses of abuse of power, dereliction
of duties, graft and embezzlement administrative punishment will be meted out if their acts have not been as serious as to constitute
a crime, but if the acts are so serious as to constitute a crime, criminal responsibility shall be affixed.

CHAPTER FOUR SUPPLEMENTAL PROVISIONS

   Article 32 Explanations of certain terms in this set of provisional regulations:

1 The scope of wastes:

Solid wastes refer to environment-polluting solid or semi-solid waste materials arising from production construction, daily living
or other activities.

Industrial solid wastes refer to solid wastes arising from industrial or transport activities.

Urban daily living wastes refer to solid wastes arising from urban daily living or services and other solid wastes stipulated as urban
daily living wastes by the laws and regulations.

Hazardous wastes refer to wastes listed in the State’s catalogue of hazardous wastes or those established to be with hazardous properties
in accordance with the State-stipulated hazardous wastes appraisal criteria and appraisal methods.

2 Wastes importation entities refer to those foreign trade entities engaged in the importation of wastes.

3 Wastes utilization entities refer to those entities engaged in the actual processing and utilization of imported wastes.

   Article 33 Regulations formulated jointly by departments under the State Environment Protection Agency and other related departments on the
environmental control and administration of wastes importation before the promulgation of this set of provisional regulations, where
there are contradictions with this set of regulations, shall be nullified and ceased to be implemented.

   Article 34 This set of provisional regulations shall be interpreted jointly by the State Environment Protection Agency and other departments
concerned.

   Article 35 This set of provisional regulation goes into effect as of April 1, 1996.

NOTE: Related Articles of Law of the People’s Republic of China on Prevention and Control of Environmental Pollution by Solid Wastes;

   Article 66 For the dumping, storage, treatment of overseas solid wastes inside the Chinese territory, or import solid wastes as raw materials
without authorization by related responsible departments of the State Council in violation of provisions of this Law, the Customs
shall order the solid wastes involved be transported back and impose at the same time a fine of RMB100,000-1,000,000. Those who evade
the supervision and administration of the Customs and constitute smuggling offenses shall be meted out with criminal responsibilities.

Those who import wastes that cannot be used as raw materials under the pretext of importing them as raw materials shall be punished
in accordance with provisions as specified in the previous paragraph.

   Article 68 For solid wastes having entered the territory illegally, penalties shall be meted out by the Customs in accordance with provisions
of Article 66 of this Law after conveying opinions put forward by environment protection administrative departments above the provincial
level in accordance with the law. For those already polluted the environment, the environment protection departments above the provincial
level shall ordered the importer to clear up the pollution.

APPENDIX ONE:

Catalogue of Wastes Restricted by State to Be Imported as Raw Materials

Category Customs Codes Description of Wastes

First Category: 0506-9010 Bone wastes Animal Wastes

Second Category: 2619-0000 Molten slag, scummings (including Metallurgy Wastes vanadium slags), oxide skin and

Third Category: 4401-3000 Sawdust, wood wastes and splinters, Wood and Wood no matter pressed into logs, lumps, Products Wastes slices
or similar shapes

Fourth Category: 4707-1000 Recycled( waste and split) Recycled (waste unbleached kraft paper or paperboard and split) paper or and
recycled (waste and split) paperboard corrugated paper or paperboard

Fifth Category: 5202-1000 Waste cotton yarn (including waste Textile Wastes cotton thread)

Sixth Category: 7204-1000 Waste and split materials from iron Waste and split casting materials of base metals and base metals products

    





PROCEDURES GOVERNING REGISTRATION OF STATE OWNED PROPERTY RIGHT IN ENTERPRISES

Category  FINANCE Organ of Promulgation  The State Council Status of Effect  In force
Date of Promulgation  1996-01-25 Effective Date  1996-01-25  


Procedures Governing Registration of State Owned Property Right in Enterprises



(Promulgated by Decree No.192 of the State Council of the People’s

Republic of China on January 25, 1996)

    Article 1  With a view to strengthening registration management of state
owned property rights, improving the basic management system of state owned
property and protecting the state owned property from loss, the present
Procedures are hereby formulated.

    Article 2  The registration of state owned property rights in enterprises
(hereinafter referred to as registration of property rights) mentioned in the
present Procedures refers to the action conducted by the state owned property
management authorities on behalf of the government in respect to registration
of the state quo of property rights including assets, liabilities, rights and
interests of owners in different enterprises who hold state owned properties
and identification of the ownership of the properties in question according to
law.

    Article 3  State owned enterprises, state owned companies with sole state
investment, units holding state equity and enterprises holding state property
in other forms (hereinafter referred to as enterprises) shall undergo
registration of properties according to the present Procedures.

    Article 4  Where uncertainty occurs as to the ownership of enterprise
properties or dispute arises concerning property rights, deferred undergoing
of property rights registration may be applied for.

    Enterprises approved to defer undergoing registration of property rights
shall before the prescribed deadline make clear identifications as to the
property rights in question, settle the dispute over property rights and in
due time undergo registration of property rights.

    Article 5  State owned property management authorities of the people’s
governments at and above the county level shall handle the registration of
property rights based on the ownership thereof.

    The state owned property management authorities may, due to needs of work,
entrust relevant governmental departments or agencies with the handling of
property rights registration based on ownership thereof.

    Article 6  Registration of property rights is broken down into
registration of ownership of property rights, property rights changes and
cancellation of property rights.

    Article 7  Enterprises shall undergo registration of ownership of property
rights according to the present Procedures.

    The main contents under the subject of registration of property rights
ownership are:

    (1) the names, residents, amount of capital and legal representatives of
the investors;

    (2) the name, location and legal representative of the enterprise;

    (3) assets, liabilities and rights and interests of owners of the
enterprise;

    (4) actually received capitals and state owned capitals of the enterprises;

    (5) state of investments of the enterprises;

    (6) other items as are prescribed by the state owned property management
authorities of the State Council.

    The Forms of Registration of State Owned Property Rights examined and
issued to enterprises by the state owned property management authorities are
documents in testimony of the capital and credit of enterprises.

    Article 8  Enterprises in case of occurrence of any of the following
changes shall within 30 days after the change undergo registration of property
rights changes:

    (1) change of the name, location or legal representative of the enterprise;

    (2) change of proportion of the state owned capital to actually received
capitals of the enterprise;

    (3) disintegration, merging or change in business operation form of the
enterprise;

    (4) other changes as are defined by the state owned property management
authorities of the State Council.

    Article 9  Enterprises in case of any of the following occurrences shall
within 30 days from the date of occurrence undergo registration of property
rights cancellation:

    (1) dissolving of the enterprise, cancellation of the enterprise according
to law or the enterprise proclaiming bankruptcy according to law;

    (2) the enterprise transferring all its property rights or the enterprise
itself being transferred;

    (3) other occurrences as are prescribed by the state owned property
management authorities of the State Council.

    Article 10  Enterprises undergoing registration of property rights shall
according to prescriptions fill in and submit the Form of Registration of
State Owned Property Rights and relevant documents, vouchers and report forms
etc. Where the contents filled in or the submitted documents, vouchers or
report forms do not accord with prescriptions, the state owned property
management authorities shall have the power to require correction from
enterprises.

    Article 11  The property rights registration shall subject to an annual
inspection system.

    Enterprises shall within 90 days after the end of each year undergo
property rights registration for annual inspection, submit to the state owned
property management authorities financial report and annual report on
operation of state owned properties which shall cover the main points as the
following:

    (1) state of realized injection of capitals from investors;

    (2) structural changes of the state owned assets of the enterprise
including external investment of the enterprise;

    (3) increase, decrease and other changes of the state owned assets;

    (4) other items as are prescribed by the state owned property management
authorities of the State Council.

    Article 12  The Form of Registration of State Owned Property Rights shall
be solely designed by the state owned property management authorities of the
State Council.

    Any unit or individual may not forge, alter, sell or lend the Form of
Registration of State Owned Property Rights.

    Where the Forms of Registration of State Owned Property Rights are lost or
destroyed, second supply of the Form shall be applied for according to
prescriptions.

    Article 13  The state owned property management authorities shall
establish and perfect the property rights registration filing system and
analyse and report on the state quo of state owned properties at regular
intervals.

    Article 14  If an enterprise has committed any of the following actions in
violation of the present Procedures, the state owned property management
authorities shall order a correction thereof, circulate a notice of criticism,
or further impose a fine of less than 100,000 yuan and propose that relevant
governmental departments impose a disciplinary sanction upon the enterprise
leaders or those persons directly responsible for the actions:

    (1) refusal to undergo registration of property rights within the
prescribed time;

    (2) withholding the truth and failing to undergo property rights
registration as things really are;

    (3) refusal to undergo property rights registration for annual inspection
according to regulations;

    (4) forging, altering, selling or lending the Forms of Registration of
State Owned Property Rights.

    Article 15  If working staff of the state owned property management
authorities have practised negligence of office, favoritism, abuse of power or
have obtained personal gains, the criminal responsibilities shall be
investigated into where a crime is constituted and an disciplinary sanction
shall be imposed where a crime is not constituted.

    Article 16  Procedures governing registration of state owned property
rights in enterprises of the army shall be formulated with reference to the
present Procedures by the General Logistics Department of the People’s
Liberation Army in consultation with the state owned property management
authorities of the State Council.

    Article 17  The present Procedures shall come into effect as of the date
of promulgation. The Trial Procedures Regarding Registration and Management of
State Owned Property jointly promulgated by the State Administration of State
Property, the Ministry of Finance and the State Administration for Industry
and Commerce on May 11, 1992 shall be from then on annulled.





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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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