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2003

DECISION OF THE STANDING COMMITTEE OF THE NATIONAL PEOPLE’S CONGRESS REGARDING THE TREATMENT OF THE EXISTING HONG KONG LAWS ACCORDING TO ARTICLE 160 OF THE HONG KONG SPECIAL ADMINISTRATIVE REGION BASIC LAW

Category  SPECIAL ADMINISTRATIVE REGION Organ of Promulgation  The Standing Committee of the National People’s Congress Status of Effect  In Force
Date of Promulgation  1997-02-23 Effective Date  1997-02-23  


Decision of the Standing Committee of the National People’s Congress Regarding the Treatment of the Existing Hong Kong Laws According
to Article 160 of the Basic Law of the Hong Kong Special Administrative Region of the People’s Republic of China



(Adopted at the 24th Meeting of the Standing Committee of the Eighth

National People’s Congress on February 23, 1997)

    The Basic Law of the Hong Kong Special Administrative Region of the
People’s Republic of China (hereinafter referred to as the Basic Law)
provides in its Article 160: “Upon the establishment of the Hong Kong Special
Administrative Region, the laws previously in force in Hong Kong shall be
adopted as laws of the Region except for those which the Standing Committee
of the National People’s Congress declares to be in contravention of this
Law. If any laws are later discovered to be in contravention of this Law, they
shall be amended or cease to have force in accordance with the procedure as
prescribed by this Law.” Article 8 of the same Law provides: “The laws
previously in force in Hong Kong, that is, the common law, rules of equity,
ordinances, subordinate legislation and customary law shall be maintained,
except for any that contravene this Law, and subject to any amendment by the
legislature of the Hong Kong Special Administrative Region.” According to the
aforesaid provisions, and having deliberated the suggestions by the
Preparatory Committee for the Hong Kong Special Administrative Region
regarding the treatment of the laws previously in force in Hong Kong, the
24th Meeting of the Eighth National People’s Congress hereby makes the
following decisions:

    1. The laws previously in force in Hong Kong, including the common law,
rules of equity, ordinances, subordinate legislation and customary law, shall
be adopted as laws of the Hong Kong Special Administrative Region, except for
those contravening the Basic Law.

    2. The ordinances and subordinate legislation previously in force in Hong
Kong, which are listed in Appendix I of this Decision, shall not be adopted
as laws of the Hong Kong Special Administrative Region for their contravening
the Basic Law.

    3. Some provisions of certain ordinances and subordinate legislation
previously in force in Hong Kong, which are listed in Appendix II of this
Decision, shall not be adopted as laws of the Hong Kong Special
Administrative Region for their contravening the Basic Law.

    4. The laws previously in force in Hong Kong which have been adopted as
laws of the Hong Kong Special Administrative Region shall, starting July 1,
1997, make necessary modification, adaptation, restriction or exception in
applying, so as to tally with the relevant provisions of the Basic Law and
the status of Hong Kong after the resumption of the exercise by the People’s
Republic of China of the sovereignty over Hong Kong. For instance, the
application of the New Territories Land (Exemption) Ordinance shall conform
to the above-mentioned principles.

    In addition to the aforesaid principles, among the ordinances and
subordinate legislation previously in force,

    (1) If any laws concerning foreign affairs related with the Hong Kong
Special Administrative Region are inconsistent with any national law in force
in Hong Kong, the latter shall prevail, with conformation with the
international rights and obligations which the Central People’s Government
enjoys or bears.

    (2) Any provisions granting privileges to Britain or other nations or
regions of the British Commonwealth shall not be maintained, except for those
reciprocity provisions between Hong Kong and Britain or other nations or
regions of the British Commonwealth.

    (3) As for provisions concerning the rights, immunity and duties of
military forces stationed to Hong Kong by Britain, those not contravening the
Basic Law and the Garrison Law of the Hong Kong Special Administrative Region
of the People’s Republic of China shall be maintained and apply to the
military forces stationed to Hong Kong by the Central People’s Government of
the People’s Republic of China.

    (4) Provisions concerning English language’s higher authenticity than
Chinese language shall be interpreted as both of them are formal languages.

    (5) Provisions containing citations of British laws may continue to be
referred to and apply during the transition process before any amendment has
been made to them, provided that they do not impair the sovereignty of the
People’s Republic of China or contravene the Basic Law.

    5. Unless the context otherwise requires, the laws previously in force in
Hong Kong adopted as laws of the Hong Kong Special Administrative Region
under Article 4 of this Decision shall have their post_titles or expressions
interpreted and applied in accordance with the substitution principles
provided for in Appendix III.

    6. Any laws previously in force in Hong Kong adopted as laws of the
Hong Kong Special Administrative Region may be amended or invalidated in
accordance with the procedures stipulated by the Basic Law, if, in the
future, they are discovered to contravene the Basic Law.

    Appendix I

    The following ordinances and subordinate legislation among the laws
previously in force in Hong Kong shall not be adopted as laws of the Hong
Kong Special Administrative Region because of their contravening the Basic
Law:

    1. Trustees (Hong Kong Government Securities) Ordinance (Chapter 77,
Laws of Hong Kong);

    2. Application of English Law Ordinance (Chapter 88, Laws of Hong Kong);

    3. Foreign Marriage Ordinance (Chapter 180, Laws of Hong Kong);

    4. Chinese Extradition Ordinance (Chapter 235, Laws of Hong Kong);

    5. Colony Armorial Bearings (Protection) Ordinance (Chapter 315, Laws of
Hong Kong);

    6. Secretary of State for Defence (Succession to Property) Ordinance
(Chapter 193, Laws of Hong Kong);

    7. Royal Hong Kong Regiment Ordinance (Chapter 199, Laws of Hong Kong);

    8. Compulsory Service Ordinance (Chapter 246, Laws of Hong Kong);

    9. Army and Royal Air Force Legal Services Ordinance (Chapter 286, Laws
of Hong Kong);

    10. British Nationality (Miscellaneous Provisions) Ordinance
(Chapter 186, Laws of Hong Kong);

    11. British Nationality Act 1981 (Consequential Amendments) Ordinance
(Chapter 373, Laws of Hong Kong);

    12. Electoral Provisions Ordinance (Chapter 367, Laws of Hong Kong);

    13. Legislative Council (Electoral Provisions) Ordinance (Chapter 381,
Laws of Hong Kong); and

    14. Boundary and Election Commission Ordinance (Chapter 432, Laws of
Hong Kong).

    Appendix II

    Certain provisions of the following ordinances and subordinate
legislation among the laws previously in force in Hong Kong shall not be
adopted as laws of the Hong Kong Special Administrative Region because of
their contravening the Basic Law:

    1. The definition of “permanent residents of Hong Kong” in Section 2, and
the provisions of “permanent residents of Hong Kong” in Appendix 1,
Immigration Ordinance (Chapter 115, Laws of Hong Kong);

    2. Any provisions for the implementation in Hong Kong of the British
Nationality Act;

    3. Provisions concerning election in Urban Council Ordinance
(Chapter 101, Laws of Hong Kong);

    4. Provisions concerning election in Regional Council Ordinance
(Chapter 385, Laws of Hong Kong);

    5. Provisions concerning election in District Boards Ordinance
(Chapter 366, Laws of Hong Kong);

    6. Subordinate legislation A, Urban Council, Regional Council and Board
Election Expenses Order and subordinate legislation C, Resolution of the
Legislative Council, of Corrupt and Illegal Practices Ordinance (Chapter 288,
Laws of Hong Kong);

    7. Provisions concerning the interpretation and the purpose of the
Ordinance in Section 2(3), provisions concerning the “affection to previous
law” in Section 3 and provisions concerning the “interpretation of laws in
the future” in Section 4, of Hong Kong Bill of Rights Ordinance (Chapter 383,
Laws of Hong Kong);

    8. Provisions concerning the Ordinance’s overriding position in
Section 3(2), of Personal Data (Privacy) Ordinance (Chapter 486, Laws of Hong
Kong);

    9. Major amendments, having been made since July 17, 1992, to the
Societies Ordinance (Chapter 151, Laws of Hong Kong); and

    10. Major amendments, having been made since July 27, 1995, to the Public
Order Ordinance (Chapter 245, Laws of Hong Kong).

    Appendix III:

    The laws previously in force in Hong Kong adopted as laws of the Hong
Kong Special Administrative Region shall generally have their post_titles and
expressions interpreted and applied in accordance with the following
substitution principles:

    1. Any reference of “the Queen”, “royal”, “the British Government”,
“Secretary of State” or other similar post_titles or expressions shall be regarded
as referring to the central or other competent authorities of China, if the
provisions are concerning the Hong Kong land use right or involving the
affairs under the central administration or the relationship between the Hong
Kong Special Administrative Region and the central authorities prescribed by
the Basic Law; in other context, they shall be regarded as referring to
the government of the Hong Kong Special Administrative Region.

    2. Any reference of “the Queen in Privy Council” or the “Privy Council”
shall be regarded as referring to the Court of Final Appeal of the Hong Kong
Special Administrative Region, if the provisions are concerning the right of
appeal; in other context, it shall be treated in accordance with the
provisions of the preceding paragraph.

    3. Any government organizations or semi-governmental organizations which
have their name preceded by “royal” shall delete the word “royal” and
regarded as organizations of the Hong Kong Special Administrative Region.

    4. Any reference of “this colony” shall be regarded as referring to the
Hong Kong Special Administrative Region; any provisions concerning the
territories of Hong Kong shall be applied after relevant interpretations have
been made in accordance with the map of the administrative division of the
Hong Kong Special Administrative Region published by the State Council.

    5. Any reference of “Supreme Court” and “High Court” shall be regarded as
respectively referring to the High Court and the Court of First Instance of
the High Court.

    6. Any reference of “Governor”, “Governor in Executive Council”, “Chief
Secretary”, “Attorney General”, “Chief Justice”, “Secretary for Home Affairs”,
“Secretary for Constitutional Affairs”, “Commissioner of Customs and Excise”
or “Judges” shall be regarded as respectively referring to the Chief Executive
of the Hong Kong Special Administrative Region, Chief Executive in the
Executive Council, Administrative secretary, Secretary of Justice, Chief
Justice of the Court of Final Appeal or Chief Judge of the High Court,
Secretary for Home Affairs, Secretary for Electoral Affairs, Commissioner of
Customs and Excise and Judges of the High Court.

    7. Any post_titles or expressions in the Chinese texts of laws previously in
force in Hong Kong, of or regarding the Legislative Council, the judiciary or
the executive authorities or the personnel thereof shall be interpreted and
applied in accordance with relevant provisions of the Basic Law.

    8. Any reference of “the People’s Republic of China”, “China” or other
similar post_titles or expressions shall be regarded as referring to the People’s
Republic of China including Taiwan, Hong Kong and Macao; any individual or
simultaneous reference of the mainland, Taiwan, Hong Kong or Macao shall be
regarded as referring to a part of the People’s Republic of China.

    9. Any reference of “foreign countries” or other similar post_titles or
expressions shall be regarded as referring to any country or region other
than the People’s Republic of China or, in accordance with the context of the
law or articles or sections, regarded as referring to “any area outside the
Hong Kong Special Administrative Region”; any reference of “foreigners” or
other similar post_titles or expressions shall be regarded as referring to any
persons other than citizens of the People’s Republic of China.

    10. Any provisions as “the stipulations of this ordinance shall not
prejudice nor may be regarded as prejudice to the rights of the Queen, her
crown prince or successor to the throne” shall be interpreted as “the
stipulations of this ordinance shall not prejudice nor may be regarded as
prejudice to the rights enjoyed by the Central Government or the government
of the Hong Kong Special Administrative Region according to the provisions of
the Basic Law and other laws.






CIRCULAR OF THE STATE ADMINISTRATION OF TAXATION ON APPLICABLE RATE OF INCOME TAX FOR THE BRANCHES OF THE ENTERPRISES WITH FOREIGN INVESTMENT

The State Administration of Taxation

Circular of the State Administration of Taxation on Applicable Rate of Income Tax for the Branches of the Enterprises with Foreign
Investment

GuoShuiFa [1997] No.49

April 9, 1997

The state and local tax bureaus of various provinces, autonomous regions, municipalities directly under the Central Government and
municipalities separately listed on the State plan:

Recently, the issues on how to determine the applicable income tax rate for the branches established in the area within the territory
of our country where different rates of income tax exist by the enterprises with foreign investment under the Income Tax Law of the
People’s Republic of China on the Enterprises with Foreign Investment and Foreign Enterprises (hereinafter referred to as Tax Law)
have been enquired for many times by the local taxation institutions. In accordance with Article 5 and Article 7 of Law of Income
Tax and Article 71 of Rules for the Implementation of it, the above issues should be handled depending on the following situations:

I.

The branches established in our country by the enterprises with foreign investment and undertaking the production, commodity trade
and services are applied to the income tax rate of the local enterprises with the same trade. The headquarters of the foreign-funded
enterprises should pay the income tax of the branches on a consolidated basis.

II.

The profits of products by the enterprises with foreign investment which produce and sell the products in our country by their own
is applied to the income tax rate of the local enterprises in the area where the products are produced, no matter whether the enterprises
sell the products through the sales agent or not and no matter how the sales organizations square the account. The income tax should
be calculated and paid on a consolidated basis by their headquarters.

III.

The previous settlements opposite to this Circular can be adjusted according to the relevant provisions of this Circular from 1996.



 
The State Administration of Taxation
1997-04-09

 







INTERIM MEASURES ON THE ESTABLISHMENT OF CHINESE-FOREIGN EQUITY JOINT RESEARCH AND DEVELOPMENT INSTITUTIONS AND CHINESE-FOREIGN CONTRACTUAL JOINT RESEARCH AND DEVELOPMENT INSTITUTIONS

The State Science and Technology Commission

Interim Measures on the Establishment of Chinese-foreign Equity Joint Research and Development Institutions and Chinese-foreign Contractual
Joint Research and Development Institutions

the State Science and Technology Commission

September 10,1997

Chapter I General Provisions

Article 1

These Measures are formulated in accordance with the provisions of Article 36 of the Law of the People’s Republic of China on Progress
of Science and Technology for the purposes of safeguarding the lawful rights and interests of Chinese-foreign (overseas) equity joint
research and development institutions and Chinese-foreign (overseas )contractual joint research and development institutions (hereinafter
referred to as “Chinese-foreign equity and Chinese-foreign contractual joint research and development institutions”), enhancing basic
research, applied research and experimental developments, and fostering international scientific and technological cooperation and
exchange.

Article 2

These Measures are applicable to Chinese-foreign equity and Chinese-foreign contractual joint research and development institutions
established by foreign and overseas organizations or individuals (hereinafter referred to as “the foreign party”) with Chinese scientific
research institutes and research and development institutions of higher education institutions (hereinafter referred to as “the Chinese
party”) within the territory of the People’s Republic of China.

Article 3

A Chinese-foreign equity joint research development institution refers to a research and development institution which is jointly
established by a Chinese party and a foreign party on the basis of a joint venture agreement where both parties invest capital, equipment
and scientific and technological resources. The investment amount of the foreign party in a Chinese-foreign equity joint research
and development institution must account for no less than 25 per cent of the total investment amount. A Chinese-foreign equity joint
research and development institution shall have the qualification of an institution legal person.

Article 4

A Chinese-foreign contractual joint research and development institution refers to a research and development institution which is
established in cooperation by a Chinese party and a foreign party on the basis of a contract. A Chinese-foreign contractual joint
research and development institution shall not have the qualification of a legal person.

Article 5

The establishment of a Chinese-foreign equity or Chinese-foreign contractual joint research and development institution shall abide
by the laws, regulations and policies of the People’s Republic of China and implement the principles of equity and mutual benefit,
honesty and trustworthiness, sharing of achievements, joint assumption of risk, protection of intellectual property and respect for
international practices.

Article 6

Chinese-foreign equity and Chinese-foreign contractual joint research and development institutions shall, in the fields of natural
science and its interrelated scientific and technological fields, engage in basic research, applied research, high scientific and
technological research, social public welfare-related scientific research, and in technological developments and experimental developments
within the above mentioned fields.

Where a Chinese-foreign equity or Chinese-foreign contractual joint research and development institution is to engage in production
or business operations, it must obtain approval from its competent department in advance, then separately undertake enterprise legal
person registration with the local administrative department for industry and commerce and apply for the relevant business license.

Article 7

To establish a Chinese-foreign equity or Chinese-foreign contractual joint research and development institution, the foreign party
to the equity or cooperation shall supply advanced scientific and technological achievements, information materials and testing equipment
or send highly skilled scientific and technological personnel to participate in the joint research and development work.

Article 8

The State Science and Technology Commission shall be responsible for macro-administration, coordination and guidance in respect of
Chinese-foreign equity and Chinese-foreign contractual joint research and development institutions throughout the country. The various
departments and directly affiliated organizations of the State Council shall centrally administer Chinese-foreign equity and Chinese-foreign
contractual joint research and development institutions within their respective departments. The science and technology commissions
of the provinces, autonomous regions, municipalities directly under the Central Government and municipalities separately listed in
the State plan shall centrally administer Chinese-foreign equity and Chinese-foreign contractual join research and development institutions
within their respective administrative areas.

Chapter II Establishment, Alteration and Termination

Article 9

The establishment of a Chinese-foreign equity or Chinese-foreign contractual joint research and development institution must meet
the following requirements:

(1)

complying with the overall arrangements of the State’s allocation of scientific and technological resources;

(2)

its research and development shall be in a direction which complies with technology and industry policies of the State;

(3)

possessing articles of association complying with China’s laws, regulations and policies;

(4)

possessing necessary scientific research funds, testing equipment, intelligence information and other scientific research requirements;

(5)

possessing a certain number of scientific research personnel;

(6)

possessing fixed premises and organizational structure;

(7)

other requirements stipulated by the competent department.

Article 10

The establishment of a Chinese-foreign equity or Chinese-foreign contractual joint research and development institution shall be examined
and approved according to the following jurisdictions:

(1)

When a research and development institution under the jurisdiction of a department or a directly subordinate institution of the State
Council applies to establish a Chinese-foreign equity joint research and development institution, the matter shall be approved by
the competent department, and reported to the State Science and Technology Commission for examination and verification, and then
examined and approved by the Office of the State Commission for Public Service Structure and Establishment Administration.

(2)

When a research and development institution under the jurisdiction of a province, autonomous region, municipality directly under the
Central Government or municipality separately listed in the State plan applies to establish a Chinese-foreign equity joint research
and development institution, the matter shall be approved by the local competent department, and reported to the science and technology
commission of the province, autonomous region, municipality directly under the Central Government or municipality separately listed
in the State plan for examination and verification, and then examined and approved by the local departments for public service structure
and establishment administration.

(3)

When a research and development institution applies to establish a Chinese-foreign contractual joint research and development institution,
the matter shall be examined and approved by the competent department in accordance with the subordination framework, and then reported
to the science and technology committee at the same level for the record.

Article 11

To establish a Chinese-foreign equity joint research and development institution, the joint venture agreement shall specify the following
items:

(1)

the names, addresses and countries or regions of the two parties to the joint venture;

(2)

the name and domicile of the research and development institution;

(3)

the field, specialization and direction of research and development;

(4)

the total capital amount of the institution;

(5)

the means of investment, investment amounts and conditions for the transfer of investment in respect of all parties;

(6)

the organizational structure of the research and development institution;

(7)

the enpost_titlement to and sharing of scientific and technological achievements and intellectual properties;

(8)

the life of the joint venture and liquidation procedures after its termination;

(9)

liability for breach of contract;

(10)

measures for resolving disputes;

(11)

the language(s) to be used in the agreement and the conditions required for the agreement to take effect.

A feasibility proof and assessment report, the articles of association of the research and development institution and a capital verification
certificate shall be attached to the joint venture agreement.

Article 12

To establish a Chinese-foreign contractual joint research and development institution, the contractual venture contract shall specify
the following items:

(1)

the names, addresses and countries or regions of the two parties to the contractual venture;

(2)

the type of the research and development institution and its name and domicile;

(3)

the fields of scientific experimentation, research and development or technological innovations in which the institution is to engage;

(4)

the conditions of cooperation;

(5)

the means of cooperation;

(6)

the enpost_titlement to and sharing of scientific and technological achievements and intellectual properties;

(7)

the life of the contractual venture and relevant matters after its termination;

(8)

liability for breach of contract;

(9)

measures for resolving disputes;

(10)

the language(s) to be used in the contract and the conditions required for the contract to take effect.

A feasibility study report and the articles of association of the research and development institution shall be attached to the contract.

Article 13

No Chinese-foreign equity or Chinese-foreign contractual joint research and development institution may be established in any fields
which involve State security or vital interests where confidentiality is essential, or in any fields in which investment in China
by foreign or overseas organizations is prohibited in accordance with the laws, regulations or policies of the State.

Article 14

A Chinese-foreign equity joint research and development institution which is to be divided or merged, or to alter its articles of
association, relocate or amend its name, etc., must obtain approval from its original examination and approval organ. Its claims
and debts shall be borne by the altered research and development institution.

A Chinese-foreign contractual joint research and development institution which is to alter the contents of its contract must report
the matter to its original examination and approval organ for the record.

Article 15

A Chinese-foreign equity or Chinese-foreign contractual joint research and development institution may apply for renewal with its
original examination and approval organ 60 days before the expiry of the joint venture agreement or contract.

Article 16

To establish a Chinese-foreign equity or Chinese-foreign contractual joint research and development institution, the two parties may
use currency, factories, equipment, instruments and other assets as investment; they may also use intellectual properties, scientific
and technological achievements, land-use rights and other intangible assets as investment. These assets shall be assessed by an assets
assessment institution recognized by the administration department of State-owned assets.

Chapter III Rights and Obligations

Article 17

A Chinese-foreign equity joint research and development institution shall enjoy the following rights:

(1)

enjoying legal person property rights;

(2)

formulating research and development plans, deciding research and development topics;

(3)

deciding internal organizational structures and personnel allocations;

(4)

employing scientific and technological personnel and deciding their wages and remuneration on its own;

(5)

obtaining intellectual properties and entering into technology transfer contracts with other parties in respect of these intellectual
properties.

Chinese-foreign equity and Chinese-foreign contractual joint research and development institutions may apply to undertake science
and technology projects listed in State plans or science and technology projects commissioned by enterprises or society.

Chinese-foreign equity and Chinese-foreign contractual joint research and development institutions meeting the requirements stipulated
by the State may, upon approval by the relevant departments, recruit students with masters or doctorate degree.

Chinese-foreign equity and Chinese-foreign contractual joint research and development institutions may open their laboratories, research
centers, experimental bases, etc., to domestic and foreign parties.

Article 18

Chinese-foreign equity and Chinese-foreign contractual joint research and development institutions shall, in accordance with the provisions
of the laws and regulations of the People’s Republic of China, stick to their research and development direction, and promote the
progress of science and technology, the transformation of scientific and technological achievements and the popularization of scientific
and technological knowledge.

Article 19

A Chinese-foreign equity joint research and development institution which employs scientific and technological personnel shall enter
into a contract of appointment with these personnel. The contract shall specify the appointment, dismissal, wage and remuneration,
welfare benefits, labor protection, personal insurance, intellectual properties and other issues. When appointing part-time personnel,
an agreement shall be concluded with the unit to which the personnel belong.

Article 20

For scientific and technological achievements and intellectual properties which result from the work of a Chinese-foreign equity or
Chinese-foreign contractual joint research and development institution, their enpost_titlement to and sharing shall be handled in accordance
with the provisions of the joint venture agreement or contractual contract. If no relevant provisions are included in the joint venture
agreement or contractual contract, the above-mentioned achievements shall be jointly owned by the two parties, and the Chinese party
shall enjoy priority right of usage and transfer.

Chapter IV Awards and Penalties

Article 21

The inventions, discoveries and other scientific and technological achievements which are completed by Chinese-foreign equity and
Chinese-foreign contractual joint research and development institutions within the Chinese territory may, subject to the recommendation
by the competent department, receive a State Natural Science Prize, Invention Prize or Scientific and Technological Progress Prize
of the People’s Republic of China.

Foreign joint venture partners and contractual venture partners in Chinese-foreign equity and Chinese-foreign contractual joint research
and development institutions, who have made an important contribution in promoting China’s scientific and technological advancement,
may be awarded an International Science and Technology Cooperation Prize in accordance with the provisions of Article 54 of the
Law of the People’s Republic of China on Progress of Science and Technology.

Article 22

Where a Chinese-foreign equity or Chinese-foreign contractual joint research and development institution departs from its research
and development direction and violates the laws or regulations of China, it shall be ordered by the competent department to rectify
the situations within a prescribed time limit; if the rectification is ineffective, the institution shall be dismantled.

Where a Chinese-foreign equity or Chinese-foreign contractual joint research and development institution infringes upon or steals
other’s intellectual properties or encroaches other’s technological and economic rights and interests, it shall bear the corresponding
legal liability.

Article 23

Where any of the relevant administrative departments or their staff neglect their duties, commit illegalities by fraudulent means
or for personal gains, or oppress or obstruct research and development activities, penalties shall be imposed in accordance with
the laws and administrative regulations.

Chapter V Supplementary Provisions

Article 24

Financial administration and accounting practices of Chinese-foreign equity and Chinese-foreign contractual joint research and development
institutions shall be governed in accordance with relevant provisions of the Ministry of Finance.

Article 25

Chinese-foreign equity and Chinese-foreign contractual joint research and development institutions established before the promulgation
of these Measures shall undertake examination and approval procedures again in accordance with the provisions of these Measures.

Article 26

The State Science and Technology Commission shall be responsible for the interpretation of these Measures.

Article 27

These Measures shall enter into force as of the date of promulgation.



 
The State Science and Technology Commission
1997-09-10

 







REGULATIONS ON NUCLEAR EXPORT CONTROL

Category  FOREIGN TRADE Organ of Promulgation  The State Council Status of Effect  In Force
Date of Promulgation  1997-09-10 Effective Date  1997-09-10  


Regulations of the People’s Republic of China on Nuclear Export Control



(Adopted at the 61st Executive Meeting of the State Council on August 1,

1997  Promulgated by Decree No. 230 of the State Council of the People’s
Republic of China on September 10, 1997)

    Article 1  These Regulations are formulated for the purpose of enhancing
nuclear export control, safeguarding state security and public interest of society and promoting international cooperation in the
peaceful uses of nuclear energy.

    Article 2  Nuclear export referred to in these Regulations means export
for trade as well as grant to foreign countries, exhibitions, scientific-
technological cooperation and foreign assistance of such items as nuclear
materials, nuclear equipment and non-nuclear materials for reactors and their
related technologies listed in the (hereinafter
referred to as the ) as the appendix to these Regulations.

    Article 3  The State exercises strict control over nuclear export and
strictly abides by the international obligations undertaken for non-
proliferation of nuclear weapons.

    The State does not advocate, encourage or engage in proliferation of nuclear weapons, nor shall it assist
other countries in the development of nuclear weapons. Nuclear export shall only be used for peaceful purposes
and shall be subject to safeguards and supervision of the International
Atomic Energy Agency, and an acceptor must not transfer it to any third
country without the permission of the Chinese Government. The State
prohibits provision of assistance to nuclear facilities not under the
safeguards and supervision of the International Atomic Energy Agency,
and no nuclear export to them or personnel and technological exchanges
and cooperation shall be conducted.

    Article 4  Nuclear export shall abide by the provisions of the relevant
state laws and regulations and must not harm state security or public interest
of society.

    Article 5  Examination of and permission for nuclear export shall abide
by the following norms:

    (1)The acceptor government shall guarantee that the nuclear materials,
nuclear equipment or non-nuclear materials for reactors supplied by China
as well as the special fissionable materials produced through the uses
thereof shall not be used for the purpose of any nuclear explosion;

    (2)The acceptor government shall guarantee that it shall take approriate
in-kind protective measures for the nuclear materials supplied by China as
well as the special fissionable materials produced through the uses thereof;

    (3)The acceptor government has concluded with the International Atomic
Energy Agency the agreement for safeguards and supervision which is in force
and has undertaken to integrate into the agreement for safeguards and
supervision the nuclear materials, nuclear equipment or non-nuclear materials
for reactors supplied by China as well as the special fissionable materials
produced through the uses thereof and accept the safeguards and supervision
of the International Atomic Energy Agency;

    (4)The acceptor pledges that it will not retransfer to any third party
the nuclear materials, nuclear equipment or non-nuclear materials for
reactors and the related technologies thereof supplied by China without
advance permission in writing of the State Atomic Agency of China; for
retransfer with advance permission, the third party accepting the retransfer
shall undertake the obligations equivalent to those taking direct supply
from China.

    Article 6  Nuclear export shall be monopolized by units designated by the
State Council, and no other unit or individual shall engage in the operations.

    Article 7  For export of items and the related technologies thereof listed
in the , an application shall be filed with the State Atomic
Energy Agency, an application form for nuclear export filled out and the
following documents presented:

    (1)Certification of monopoly qualification for nuclear export of the
applicant;

    (2)Identifications of the legal representative, chief manager in the
operations as well the person handling the operations of the applicant;

    (3)A copy of the contract or agreement;

    (4)Analytical reports of the nuclear materials or non-nuclear materials
for reactors;

    (5)Certification of the end user;

    (6)Certification of guarantee provided by the acceptor pursuant to the
provisions of Article 5 of these Regulations; and

    (7)Other documents required to be presented by the examination organ.

    Article 8  The applicant shall truthfully fill out the application form
for nuclear export.

    Application forms for nuclear export shall be uniformly printed by the
State Atomic Energy Agency.

    Article 9  The applicant shall file revisions in time in the case of changes in the itmes filled out in the application form for
nuclear export
or file a new application for export.

    The applicant shall withdraw the application for nuclear export in time
in the case of suspension of nuclear export.

    Article 10  The State Atomic Energy Agency shall, within fifteen working
days starting from the date of the receipt of the application form for
nuclear export and the documents listed in Article 7 of these Regulations,
put forth its remarks of examination and notify the applicant; for those
approved upon examination, the cases shall be processed pursuant to the
following provisions in the light of different circumstances:

    (1)For export of nuclear materials, the case shall be transmitted to
the Defense Science Technology and Industries Commission for reexamination;

    (2)For export of nuclear equipment or non-nuclear materials for reactors
and the related technologies thereof, the case shall be transmitted to the
Ministry of Foreign Trade and Economic Cooperation for reexamination or to
the Ministry of Foreign Trade and Economic Cooperation for reexamination
in conjunction with the Defense Science Technology and Industries Commission.

    The Defense Science Technology and Industries Commission and the Ministry
of Foreign Trade and Economic Cooperation shall, within fifteen working days
starting from the date of receipt of the application form for nuclear export,
the documents listed in Article 7 of these Regulations and the remarks of examination transmitted by the State Atomic Energy Agency,
put forth remarks
of reexamination and notify the applicant.

    In the case of necessity to extend the time limit for examination or
reexamination by the State Atomic Energy Agency, the Defense Science
Technology and Industries Commission and the Ministry of Foreign Trade and
Economic Cooperation owing to extraordinary circumstances, an extension of fifteen working days may be effected in which case, however,
the applicant
should be notified.

    Article 11  For nuclear export having important impact on state security,
public interest of society or foreign policy, the State Atomic Energy Agency,
the Defense Science Technology and Industries Commission and the Ministry of Foreign Trade and Economic Cooperation should consult
with the Ministry of Foreign Affairs in the examination or reexamination; the case should be
submitted to the State Council for examination and approval when necessary.

    The cases submitted to the State Council for examination and approval
shall not be subject to the time limit prescribed in Article 10 of these
Regulations.

    Article 12  The Ministry of Foreign Trade and Economic Cooperation
shall issue nuclear export licenses to applications for nuclear export upon
approval after reexamination or examination and approval pursuant to the
provisions of these Regulations.

    Article 13  A holder of the nuclear export license should return the
original license for changes in the export items and the related technologies
thereof in the original application and reapply for a nuclear export license
pursuant to the provisions of these Regulations.

    Article 14  The Ministry of Foreign Trade and Economic Cooperation
should inform the State Atomic Energy Agency in writing of the issuance of a nuclear export license.

    Article 15  A nuclear export monopoly unit should, in the process of nuclear export, present the nuclear export license to the customs,
go through
customs formalities pursuant to the provisions of the Customs Law and accept
customs supervision and control.

    Article 16  In the case of violation of the guarantee made pursuant to
the provisions of Article 5 of these Regulations by the acceptor or its
government, or when the danger of nuclear proliferation arises, the Ministry
of Foreign Trade and Economic Cooperation is, in conjunction with the
departments concerned under the State Council, empowered to make a decision on
the suspension of export of the items concerned or the related technologies
thereof, and the Ministry of Foreign Trade and Economic Cooperation shall
inform the customs in writing for execution.

    Article 17  For export of nuclear materials, nuclear equipment, non-
nuclear materials for reactors and the related technologies thereof in
violation of the provisions of these Regulations constituting a criminal
offense, criminal responsibility shall be investigated according to law;
for a case which does not constitute a criminal offense, the violator
shall be penalized pursuant to the provisions of the Customs Law and
the Foreign Trade Law.

    Article 18  For forgery, alteration, buying and selling of nuclear
export licenses, criminal responsibility shall be investigated according to
law.

    Article 19  State functionaries for nuclear export control who commit
a criminal offense in negligence of duties, self-seeking misconduct or
abuse of power shall be investigated of the criminal responsibility
according to law; those whose conduct do not constitute a criminal offense
shall be given administrative sanctions in accordance with law.

    Article 20  The State Atomic Energy Agency may, in conjunction with
such departments as the Defense Science Technology and Industries Commission,
the Ministry of Foreign Trade and Economic Cooperation, the Ministry of Foreign Affairs and the General Administration of Customs,
make adjustments
in the in the light of actual conditions for implementation
upon approval of the State Council.

    Article 21  In the case of differences in provisions between the
international treaties concluded or acceded to by the People’s Republic of China and these Regulations, the provisions of the international
treaties
shall apply; however, the articles for which the People’s Republic of China
has stated her reservations are excluded.

    Article 22  These Regulations shall come into force as of the date of promulgation.(For Nuclear Export Control List, please refer
to the appendix
in Chinese.)






INTERIM MEASURES FOR EXEMPTION FROM THE IMPORT DUTIES ON THE SPECIAL-PURPOSE ARTICLES FOR THE DISABLED

Category  CUSTOMS Organ of Promulgation  The State Council Status of Effect  In Force
Date of Promulgation  1997-04-10 Effective Date  1997-04-10  


Interim Measures for Exemption From the Import Duties on the Special-purpose Articles for the Disabled



(Approved by the State Council on January 22, 1997 and promulgated by

Decree No.61 of the General Customs Administration on April 10, 1997)

    Article 1  These Measures are formulated with a view to supporting
the work of recovery of the disabled, facilitating the import of the
special-purpose articles for the disabled.

    Article 2  Customs import duties and value-added taxes or consumption
taxes in import links shall be exempted from on the following import
special-purpose articles for the disabled:

    (1) The propping and auxiliary utensils, artificial limbs and relevant
parts, artificial eyes, artificial noses, supporting belts for internal
organs, orthopedic appliances, orthopedic shoes, non-motorized walking-aids,
means of transport instead of walk(not including cars, motors), self-help
living appliances, or special sanitary materials for the mutilated persons;

    (2) Walking-sticks for the persons disabled in eyes, guided glasses for
the blind, sight-aids, reading appliances for the blind;

    (3) Language training appliances for the lingually or aurally disabled;

    (4) Action training appliances and living ability training articles for
the intellectually disabled.

    When importing the special-purpose articles for the disabled as
prescribed in the proceeding paragraph, the duty payers shall go through
the formalities of exemption from Customs duties directly at the Customs
authorities.

    Article 3  The following special-purpose articles for the disabled which
are imported by relevant units and can not be made in China shall, upon the
approval of the Ministry of Civil Affairs or the Chinese Federation for the
disabled according to subordinate relations and after examination of
the General Customs Administration, be exempted from Customs import duties
and value-adding taxes or consumption taxes:

    (1) Recovery equipments and special-purpose equipments for the disabled,
including guarding equipments of beds or wards of hospitals, central guarding
equipments, biochemical analysing instruments and ultrasonic diagnosing
instruments;

    (2) Specific educational equipments and professional educational
equipments for the disabled;

    (3) Instruments of assessing and gauging of professional ability for the
disabled;

    (4) Special-purpose working instruments and working protection instruments
for the disabled;

    (5) Special-purpose instruments for the cultural and sports acts of the
disabled;

    (6) Special-purpose equipments for producing assembling and testing
artificial limbs,including special-purpose milling and polishing machines,
special-purpose vacuum forming machines, special-purpose flat hearing
machines and comprehensively testing instruments employed in artificial
limbs production;

    (7) Hearing aids used by persons disabled in ears.

    Article 4  The term “relevant units” stipulated in Article 3 of these
Measures denotes:

    (1) Enterprises and institutions directly under the Ministry of Civil
Affairs, and welfare institutions, artificial limbs factories and recovery
hospitals for disabled disaled soldiers(including various kinds of sanitariums
for disabled revolutionary soldiers, hospitals and recovery hospitals for
disabled disaled soldiers directly under provinces, autonomous regions and
municipalities directly under the Central Government;

    (2) Institutions directly under the Chinese Federation for the Disabled
(the Chinese Welfare Foundation for the Disabled), welfare institutes
and recovery institutes directly under the Federation for the Disabled(the
Welfare Foundation for the Disabled) of provinces, autonomous regions and
municipalities directly under the Central Government;

    Article 5  The import special-purpose articles for the disabled with
duties exemption according to These Measures shall not be used for other
purposes.

    Where anyone, in violation of the provisions of the proceeding paragraph,
use the import articles with duties exemption for other purposes, and such
an act constitutes a smuggling crime, he shall be investigated for criminal
responsibilities in accordance with law; Where such an act does not
constitutes a crime, the case shall be treated as a smuggling act or an act
violating Regulations on Customs control.

    Article 6  Provisions for implementation shall be formulated by the
General Customs Administration in accordance with These Measures.

    Article 7  These Measures shall come into effect as of the date of
promulgation.






MEASURES FOR ADMINISTRATION OF BORROWING INTERNATIONAL COMMERCIAL LOANS BY DOMESTIC INSTITUTIONS

19970908the People’s Bank of China

The State Administration of Foreign Exchange

Measures for Administration of Borrowing International Commercial Loans by Domestic Institutions

(Approved by the People’s Bank of China on September 8, 1997, promulgated by the State Administration of Foreign Exchange on September
24, 1997)

Chapter I General Provisions

Article 1

These Measures are formulated in accordance with the Regulations of the People’s Republic of China on Foreign Exchange Control and
other relevant provisions of the State Council for the purpose of improving the administration of the borrowing international commercial
loans

Article 2

The term “international commercial loans” mentioned in these Measures refers to funds raised and borrowed by domestic institutions
from financial institutions, enterprises, individuals or other economic organizations outside the Chinese territory or from financial
institutions with foreign investment within the Chinese territory, which are subject to contractual obligations for repayment in
foreign currency. Export credits, international financial leases, compensation trade repaid in foreign exchange, foreign exchange
deposits of institutions and individuals out of the territory (excluding foreign exchange deposits in banks which are approved to
conduct offshore banking business), project financing, financing under trade with the minimum term of 90 days and other types of
foreign exchange loans shall be regarded and administered as international commercial loans.

Article 3

The People’s Bank of China shall be the examination and approval organ of borrowing international commercial loans by domestic institutions.

The People’s Bank of China shall authorize the State Administration of Foreign Exchange and its branches offices (hereinafter referred
to as the foreign exchange bureaus) to be responsible for the examination, approval, supervision and administration of borrowing
international commercial loans by domestic institutions.

Article 4

A domestic institution must obtain approval from the foreign exchange bureau for borrowing an international commercial loan. An international
commercial loan agreement signed without the approval from the foreign exchange bureau shall be invalid. The foreign exchange bureau
shall not undertake foreign debt registration. The bank shall not open a foreign debt special account for it and the loan principals
and interests shall not be remitted abroad without authorization.

Article 5

Domestic institutions borrowing international commercial loans from foreign parties shall be restricted to:

(1)

Chinese-funded financial institutions authorized by the State Administration of Foreign Exchange to engage in foreign exchange loan
business operations;

(2)

non-financial enterprise legal persons approved by the departments authorized by the State Council.

Article 6

A financial institution borrowing an international commercial loan shall conform to the provisions of the People’s Bank of China on
the administration of the ratio of foreign exchange equity-debt of financial institutions.

Article 7

A non-financial enterprise legal person directly borrowing an international commercial loan from a foreign party shall meet the following
requirements:

(1)

having successively made profits over the previous three years, possessing an import-export business licence and engaging in an industry
encouraged by the State;

(2)

possessing a sound and complete financial management system;

(3)

for a trade-type non-financial enterprise legal person, its net assets shall account for not less than 15 per cent of its total assets;
for a non-trade-type non-financial enterprise legal person, its net assets shall account for not less than 30 per cent of its total
assets;

(4)

the sum of the international commercial loan borrowed and the surplus of the guaranty provided to a foreign party shall not exceed
50 per cent of the equivalent foreign exchange of its net assets;

(5)

the sum of the foreign exchange loan and the surplus of foreign exchange guaranty shall not exceed the foreign exchange revenue created
in the last financial year.

Article 8

A domestic institution shall borrow an international commercial loan on the basis of its own creditworthiness, and shall bear repayment
responsibility of its own accord.

Article 9

In the borrowing of an international commercial loan from a foreign party, a domestic institution shall strengthen the control of
cost. The total cost of its loan shall not exceed the total cost of a loan at the same period from a loan institution of the same
credit grading on the international financial market.

The foreign exchange bureaus shall supervise and direct the cost control in the borrowing of international commercial loans by domestic
institutions.

Article 10

A domestic institution borrowing an international commercial loan from a foreign party shall, in accordance with the provisions of
the State Administration of Foreign Exchange, submit the foreign loan statement for the previous quarter and the annual report on
the use of the international commercial loan to the foreign exchange bureau within the first ten days of each quarter.

Article 11

Foreign Exchange bureaus shall have the right to inspect the situations of the raising, using and repayment of international commercial
loans by domestic institutions. Loan institutions shall provide cooperation and submit the relevant documents and data.

Article 12

Without the approval of a foreign exchange bureau, a domestic institution shall not have the international commercial loan it has
borrowed deposited or directly paid out of the territory or converted into Renminbi for use.

Chapter II Medium-and-long-term International Commercial Loans

Article 13

The term “a medium-and-long-term international commercial loan” mentioned in these Measures refers to an international commercial
loan with a term of more than one year (not including one year), including a usance letter of credit with a term of more than one
year.

Article 14

The borrowing of a medium-and-long-term international commercial loan by a domestic institution shall be listed into the State plan
for the use of foreign capital.

Article 15

When borrowing a medium-and-long-term international commercial loan, a domestic institution shall apply to the foreign exchange bureau
by submitting all or part of the following data:

(1)

documents certifying that the borrowing is listed into the State plan for the use of foreign capital;

(2)

a document of project establishment approval for the loan;

(3)

a letter of intent on loan conditions, which shall include the name of the creditor, currency of the loan, amount, term and grace
period, interest rate, charges, early repayment intents and other financial conditions;

(4)

the source of repayment funds, repayment plan and the foreign exchange guaranty;

(5)

balance sheets in foreign exchange or Renminbi for the previous three years and other financial statements which have been verified
by a public accounting firm;

(6)

other relevant data as required by the foreign exchange bureau.

In addition to the provisions of the preceding paragraph, a branch of a financial institution borrowing a medium-and-long-term international
commercial loan from a foreign party shall also submit the relevant document of authorization from its head office (head company).

Article 16

The borrowing of an international commercial loan by a national institution resided in Beijing from a foreign party shall be directly
submitted to the State Administration of Foreign Exchange for examination and approval;

The borrowing of a loan from a foreign party by a national institution not resided in Beijing or by a local institution shall, after
being verified by the local foreign exchange bureau of the place where it is located, be submitted to the State Administration of
Foreign Exchange for examination and approval.

The branches of national and local financial institutions may make an application for approval only after they have been authorized
by their head offices (head companies).

Chapter III Short-term International Commercial Loans

Article 17

The term “a short-term international commercial loan” mentioned in these Measures refers to an international commercial loan with
a maximum term of one year (including one year), including inter-bank foreign exchange call loans, outward documentary bills, packing
loans and usance letter of credit with a term of more than 90 days but less than 365 days, etc..

Article 18

A short-term international commercial loan shall not be used for investment into long-term projects, fixed assets loans or other inappropriate
purposes.

Article 19

The foreign exchange bureaus shall implement administration of balance in respect of short-term international commercial loans borrowed
by domestic institutions.

Article 20

The balance control quota applied to short-term international commercial loans of domestic institutions (hereinafter referred to as
“the short-term loan quota”) shall be verified by the foreign exchange bureaus annually.

The balance of a short-term international commercial loan borrowed by a domestic institution shall not exceed the verified quota.

Article 21

The short-term loan quota of national financial institutions and non-financial enterprise legal persons shall be verified and made
known to lower levels by the State Administration of Foreign Exchange.

The short-term loan quota of local financial institutions and non-financial enterprise legal persons shall be examined and approved
by the foreign exchange bureaus of the place where they are located within the short-term loan quota verified and made known to lower
levels by the State Administration of Foreign Exchange.

Article 22

A Chinese-funded financial institution approved by the State Administration of Foreign Exchange to engage in international account
settlement businesses shall formulate the measures for the administration of usance letter of credit which shall be submitted to
the foreign exchange bureau for verification.

A Chinese-funded financial institution shall open usance letter of credit in accordance with the measures for the administration of
usance letter of credit that have been verified by the foreign exchange bureau.

A usance letter of credit with a term of more than 90 days but less than 365 days opened by a Chinese-funded financial institution
shall not use its short-term loan quota.

Article 23

If a non-financial enterprise legal person applies to a domestic financial institution with foreign investment to open a usance letter
of credit with a term of more than 90 days but less than 365 days, it shall be use its short-term loan quota.

Article 24

When applying to the foreign exchange bureau for a short-term loan quota, a domestic institution shall submit all or part of the following
data:

(1)

an application (including such contents as fund demand, situations of its credit-worthiness, purposes of the funds, etc.);

(2)

the previous year’s balance sheets and profit and loss statements verified by a public accounting firm;

(3)

a loan commitment letter of intention issued by the credit agency;

(4)

the foreign exchange receipts and expenditures in the previous year;

(5)

other data required by the foreign exchange bureau to be submitted.

Article 25

When borrowing a short-term international commercial loan, a non-financial enterprise legal person which does not implement the administration
of short-term loan quota balance shall have it reported case by case to the foreign exchange bureau, and shall have it included in
the short-term loan quota of the place where it is located.

Chapter IV Project Financing

Article 26

The term “project financing” mentioned in these Measures refers to the method of raising foreign exchange funds out of the territory
in the name of a domestic construction project, with the debt prepayment obligation to the foreign party by the project’s own expected
income and assets. It shall possess the following natures:

(1)

The creditor has no right of recourse over any assets and income other than the construction project;

(2)

The domestic institution is not required to mortgage, pledge or pay debts by using any assets, rights and interests as well as income
other than the construction project;

(3)

The domestic institution is not required to provide any forms of financial guaranty.

Article 27

The scale of financing with a foreign party in respect of project financing shall be incorporated into the State guidelines for borrowing
international commercial loan.

Article 28

The conditions for project financing shall be competitive and shall be examined and approved or examined and verified by the State
Administration of Foreign Exchange. With regard to the conditions for financing of project financing submitted to higher levels by
local authorities, after being preliminarily examined by the local foreign exchange bureau of the places where they are located,
they shall be reported to the State Administration of Foreign Exchange for examination and approval or examination and verification.

Article 29

When reporting the conditions for project financing to the State Administration of Foreign Exchange for examination and approval or
examination and verification, the project company shall submit the following documents:

(1)

an application, which shall include the methods for project financing, amount of money, market, as well as the term and interest rate
of the loan, the various charges and other financing conditions;

(2)

the project feasibility study report or other documents approved by the State Planning Commission;

(3)

documents certifying the incorporation of this project financing into the State guidelines for international commercial loans borrowed;

(4)

a project financing agreement;

(5)

documents with a nature of guaranty related to the project financing;

(6)

other necessary documents.

Chapter V International Commercial Loans Borrowed by Oversea Braches of Domestic Institutions

Article 30

The term “an overseas branch of a Chinese-funded financial institution” (hereinafter referred to as “an overseas branch”) refers to
a non-independent legal person branch which is established overseas by a Chinese-funded financial institution in accordance with
the local laws.

Article 31

A Chinese-funded financial institution shall decide the total amount of overseas financing for each of its overseas branches in accordance
with its overseas branches’ working capital amount, equity-debt ratio, volume of business for the current year and other indexes,
and shall have them reported to the State Administration of Foreign Exchange for the record before the end of February of each year.
If an overseas branch is to raise an international commercial loan equivalent to the value of more than US $ 50 million (including
US $ 50 million) on a one-off basis, its head office (head company) shall in advance report the matter to the State Administration
of Foreign Exchange for approval.

Article 32

Any financing which an overseas branch carries out overseas shall be incorporated into the equity-debt ratio administration of its
head office (head company).

Funds raised overseas by an overseas branch shall be only used for the development of overseas business. These funds must not be repatriated
for use into China without the approval of the State Administration of Foreign Exchange.

Article 33

A non-operating working office or representative office or other institutions established overseas by a Chinese-founded enterprise
shall not undertake financing overseas.

Article 34

Where a branch or other operating institution established overseas by a Chinese-funded enterprise borrows funds overseas in the name
of its head (parent) company with the authorization of its head (parent) company, the funds shall be regarded as the overseas loans
of the head (parent) company, and the head (parent) company shall undergo the relevant application and approval procedures in the
territory in accordance with the provisions of these Measures.

Chapter VI Legal Liability

Article 35

Where a domestic institution borrows an international commercial loan without authorization or fails to carry out inflation proof
work in accordance with the provisions of Article 42 of these Measures, the foreign exchange bureau shall give a warning, circulate
a notice of criticism and impose a fine of not less than RMB100,000 yuan nor more than RMB500,000 yuan. Where a crime is constituted,
criminal liability shall be investigated in accordance with the law.

Article 36

Where a domestic institution has the international commercial loan it has borrowed deposited or directly paid out of the territory
without authorization, or has it converted into Renminbi for use without authorization and without approval, the foreign exchange
bureau shall order it to make corrections, give a waning, circulate a notice of criticism and impose a fine in Renminbi of not less
than 30 per cent nor more than five times the amount of the illegally used funds. Where a crime is constituted, criminal liability
shall be investigated in accordance with the law.

Article 37

Where the overseas branch of a domestic institution, in violation of the provisions of Articles 31, 33 or 34 of these Measures, undertake
overseas financing without authorization, the foreign exchange bureau shall give the domestic institution a warning, circulate a
notice of criticism and impose a fine of not less than RMB100,000 yuan nor more than RMB500,000 yuan.

Article 38

Where, in violation of the provisions of Article 32 of these Measures, the overseas branch of a Chinese-funded financial institution
repatriates the funds raised overseas for use in China without authorization, the foreign exchange bureau shall order it to make
corrections and shall give the domestic Chinese-funded financial institution a warning, circulate a notice of criticism and impose
a fine of not less than RMB 100,000 yuan nor more than RMB500.000 yuan.

Article 39

Where a domestic institution submits false or invalid documents or other data to the foreign exchange bureau in order to fraudulently
obtain approval from the foreign exchange bureau, the foreign exchange bureau shall recover the documents of approval and impose
a punishment in accordance with the provisions of Article 35 of these Measures. Where a crime is constituted, criminal liability
shall be investigated in accordance with the law.

Article 40

Where a domestic institution fails to submit statements or data in accordance with the provision of these Measures, or refuses to
accept an inspection by and to cooperate with the foreign exchange bureau, the foreign exchange bureau shall give a warning, circulate
a notice of criticism and impose a fine of not less than RMB10,000 yuan nor more than RMB30,000 yuan.

Chapter VII Supplementary Provisions

Article 41

After signing an international commercial loan agreement, a domestic institution shall undertake foreign debt registration with the
foreign exchange bureau in accordance with the provisions on statistical monitoring of foreign debts and shall undertake repayment
procedures in accordance with relevant provisions.

Article 42

A domestic institution borrowing an international commercial loan must comply with the following principles based on the fluctuations
in international market exchange rates and interest rates and on the premise of not expanding the scale of foreign debts and not
extending the debt term in order to conscientiously minimize the foreign debt risks:

(1)

The matter shall be reported to the State Administration of Foreign Exchange for examination and approval where the amount to be borrowed
is low while the repayments are high;

(2)

A Chinese-funded financial institution that is approval to operate a foreign exchange trading business on a self-operation or agency
basis may carry out the business of preserving the value of international commercial loans in respect of its own debt or on commissions
accepted from other domestic institutions;

(3)

Where any other Chinese-funded financial institution commissions an overseas financial institution or a domestic financial institution
with foreign investment to carry out the business of preserving the value of its international commercial loan borrowed, the matter
shall be approved by the foreign exchange bureau;

(4)

An enterprise with foreign investment may itself commission an overseas financial institution or a domestic financial institution
with foreign investment to carry out the business of preserving the value of its international commercial loan borrowed.

Article 43

After a domestic institution has carried out the business of preserving the value of international commercial loan borrowed, the modification
of foreign debt registration procedures shall be undertaken in accordance with the provisions on statistical monitoring of foreign
debts.

Article 44

Provisions on the administration of foreign exchange accounts shall apply to the administration of account of international commercial
loans borrowed.

Article 45

These Measures shall apply to the borrowing of international commercial loans from the overseas branches of Chinese-funded financial
institutions by domestic institutions.

Article 46

These Measures shall apply to aircraft financial lease and international commercial loan funds which are borrowed for advance payment
on aircraft financial lease.

Article 47

The provisions of these Measures on project financing shall apply to domestic institutions which transfer overseas at fixed costs
the operating rights or rights to earnings of already established projects.

Article 48

The international commercial loans borrowed by Chinese-funded banks to engage in offshore banking operations shall be handled in accordance
with the provisions of these Measure on the administration of overseas branches.

Article 49

Foreign exchange loans which domestic institutions borrow from the offshore banking departments of Chinese-funded banks shall be regarded
and administered as international commercial loans.

Article 50

The provisions of Articles 1,2,3,8,9,10,11,12,13,17,18,35,36,37,39,40,41, 42(4), 43,44,45,46,47,49,51,52 and Chapter IV of these Measures
shall apply to enterprises with foreign investment. Other articles shall not apply to enterprises with foreign investment.

Article 51

The State Administration of Foreign Exchange shall be responsible for the interpretation of these Measures.

Article 52

These Measures shall enter into force as of January 1, 1998. The Measures for Administration of Borrowing International Commercial
Loans by Domestic Institutions, approved on September 26, 1991 by the people’s Bank of China and promulgated by the State Administration
of Foreign Exchange, the Circular on Matters Relating to Project Financing by Domestic Institutions, promulgated on July 14, 1995
by the People’s Bank of China, the Provisions on Administration of Overseas Financing by Overseas Branches of Chinese-funded Banks
Conducting Foreign Exchange Business, promulgated on April 17, 1996 by the State Administration of Foreign Exchange, and the Circular
on Strengthening the Administration of Financing Conducted by Overseas Institutions of Chinese-funded Enterprises, promulgated on
January 16, 1997 by the State Administration of Foreign Exchange, shall be repealed simultaneously.



 
The State Administration of Foreign Exchange
1997-09-24

 







REGULATIONS ON THE MONETARY POLICY COMMISSION OF THE PEOPLE’S BANK OF CHINA

Category  BANKING Organ of Promulgation  The State Council Status of Effect  In Force
Date of Promulgation  1997-04-15 Effective Date  1997-04-15  


Regulations on the Monetary Policy Commission of the People’s Bank of  China

Chapter I  General Provisions
Chapter II  Organization
Chapter III  Rights and Obligations of Members
Chapter IV  Working Procedures
Chapter V  Supplementary Provision

(Promulgated by Decree No. 215 of the State Council of the People’s

Republic of China on April 15, 1997)
Chapter I  General Provisions

    Article 1  These Regulations are formulated in pursuance of the
provisions of the Law on the People’s Bank of China for the purpose
of being instrumental to the correct formulation of the state monetary
policy.

    Article 2  The Monetary Policy Commission is the advisory and discussion
body of the People’s Bank of China in the formulation of monetary policy.

    The Monetary Policy Commission shall be formed pursuant to these
Regulations.

    Article 3  The functions and responsibilities of the Monetary Policy
Commission are to discuss the following monetary policy matters and put
forth proposals on the basis of comprehensive analysis of the macroeconomic
situation in accordance with the macroeconomic regulatory and control goals
of the State:

    (1) formulation and adjustment of monetary policy;

    (2) monetary policy control goals within a specified period;

    (3) employment of monetary policy tools;

    (4) important measures concerning monetary policy; and

    (5) coordination between monetary policy and other macroeconomic policies.

    Article 4  The Monetary Policy Commission carries out its functions and
responsibilities through its plenary meeting.
Chapter II  Organization

    Article 5  The Monetary Policy Commission shall be composed of the
personnel of the following units:

    Governor of the People’s Bank of China;

    Two Deputy Governors of the People’s Bank of China;

    One Vice President of the State Planning Commission;

    One Vice President of the State Economic and Trade Commission;

    One Vice Minister of the Ministry of Finance;

    Director General of the State Administration of Foreign Exchange Control;

    President of China Securities Supervisory and Control Commission;

    Two Governors of commercial banks of sole state proprietorship; and

    One financial specialist.

    Adjustment in the units of which the Monetary Policy Commission is
composed shall be determined by the State Council.

    Article 6  The Governor of the People’s Bank of China, Director General
of the State Administration of Foreign Exchange Control and President of China
Securities Supervisory and Control Commission are members with automatic
qualification of the Monetary Policy Commission.

    Candidacy for other members of the Monetary Policy Commission shall be
nominated by either the People’s Bank of China or the People’s Bank of China
in consultation with the departments concerned and submitted to the State
Council for appointment.

    Article 7  The Monetary Policy Commission shall have one President and
one Vice President. The Governor of the People’s Bank of China shall be the
President; and the Vice President shall be nominated by the President.

    Article 8  Members of the Monetary Policy Commission should have the
following qualifications:

    (1) He or she should normally be under 65 years of age with citizenship
of the People’s Republic of China;

    (2) He or she should be upright and honest in performing official duties
with no law-breaking and discipline-breaking record; and

    (3) He or she should have expertise in such areas as macro-economy,
monetary matters and banking and practical experiences, and be conversant
with relevant laws, regulations and policies.

    Article 9  The financial specialist on the Monetary Policy Commission
should, in addition to meeting the qualifications prescribed in Article 8 of
these Regulations, have the following qualifications:

    (1) He or she should have senior special technical post_title with more than
ten years in financial research; and

    (2) He or she should be a non-public servant of the State and have no
position in any profit-making institution.

    Article 10  The term of office of membership of the governors of the
commercial banks with sole state proprietorship and the financial specialist
on the Monetary Policy Commission shall be two years.

    Article 11  Any member on the Monetary Policy Commission having any of
the following circumstances, the People’s Bank of China shall submit a
report to the State Council for the relief of the said member from the
membership of the Monetary Policy Commission:

    (1) He or she who submits a written application for resignation;

    (2) He or she who is no longer capable of representing the unit concerned
to serve as a member of the Monetary Policy Commission due to change in
position during the term of office; and

    (3) He or she who fails to fulfil obligations of a member or is incapable
of carrying out the duties as a member owing to various reasons.

    Article 12  Change in the membership of the Monetary Policy Commission
shall be handled in accordance with the provisions of Article 6 of these
Regulations.

    Article 13  The Monetary Policy Commission shall set up a secretariat
as the standing office of the Monetary Policy Commission.
Chapter III  Rights and Obligations of Members

    Article 14  Members of the Monetary Policy Commission have equal rights
and obligations.

    Article 15  Members of the Monetary Policy Commission enjoy the
following rights in the fulfillment of their duties and responsibilities:

    (1) to get to know the situation in financial and monetary policies;

    (2) to express views on questions discussed in the Monetary Policy
Commission; and

    (3) to put forward proposals to the Monetary Policy Commission on
monetary policy questions and have the right to vote.

    Article 16  Members of the Monetary Policy Commission should be
present at the meetings of the Monetary Policy Commission and put forth
suggestions and proposals relating to monetary policy matters.

    In case of inability of a member to be present at the meeting owing to
extraordinary circumstances, he or she should delegate a relevant person
who is conversant with the situation as his or her representative to take
part in the meeting with his or her written remarks, and the representative
has no right to vote.

    Article 17  Members of the Monetary Policy Commission should scrupulously
abide by their duties and not abuse their powers and engage in malpractices
for selfish purposes.

    Article 18  Members of the Monetary Policy Commission should keep state
secrets and commercial secrets, comply with the working rules of the
Monetary Policy Commission and shall not divulge monetary policy and
related information in contravention of provisions.

    Any member of the Monetary Policy Commission divulging state secrets and
commercial secrets in contravention of provisions shall be removed from the
membership of the Monetary Policy Commission and his or her legal
responsibilities investigated in accordance with law.

    Article 19  Any member of the Monetary Policy Commission shall not
openly object to the monetary policy formulated according to legal procedures
during his or her term of office and within one year after leaving the post.
Chapter IV  Working Procedures

    Article 20  The Monetary Policy Commission shall practise the system of
regular meetings.

    An ad hoc meeting can be held on the proposal of the President of the
Monetary Policy Commission or the joint proposal of over one third of the
members.

    Article 21  The secretariat of the Monetary Policy Commission should,
ten days before the convocation of the regular meeting of the Monetary Policy
Commission, deliver the topics of the meeting and relevant materials to all
the members; and during the meeting provide latest statistics and relevant
technical analyses to all the members.

    Article 22  The meeting of the Monetary Policy Commission can only be
held when there are over two thirds of the members present.

    The meeting of the Monetary Policy Commission shall be presided over by
the President. The meeting shall be presided over by the Vice President
on behalf of the President in case of the inability of the President to
carry out his or her duties due to unforeseen reasons.

    Article 23  Various views expressed at the meeting of the Monetary
Policy Commission should be recorded in the form of summary of minutes.

    A monetary policy motion put forward by members of the Monetary Policy
Commission shall, when passed by vote by over two thirds of the members
present at the meeting, form a proposal of the Monetary Policy Commission.

    Article 24  The People’s Bank of China should, while submitting its
report on proposal for decision of yearly money supply, interest rates,
exchange rates or other important monetary policy matters to the State
Council for approval, enclose the proposal of the Monetary Policy Commission
or the summary of minutes of its meeting as appendices.

    The People’s Bank of China should, while submitting its report on the
decision of other related matters concerning the monetary policy to the
State Council for the record, also submit the proposal of the Monetary
Policy Commission or the summary of minutes of its meeting for the record.

    Article 25  Internal working rules for the Monetary Policy Commission
shall be worked out by the Monetary Policy Commission.
Chapter V  Supplementary Provision

    Article 26  These Regulations shall come into force as of the date of
promulgation.






SUPPLEMENTARY PROVISIONS TO SEVERAL PROVISIONS CONCERNING THE INVESTMENT MADE BY THE VARIOUS PARTIES TO CHINESE-FOREIGN EQUITY JOINT VENTURES

Category  FOREIGN ECONOMIC RELATIONS AND TECHNOLOGICAL COOPERATION Organ of Promulgation  The State Council Status of Effect  In Force
Date of Promulgation  1997-09-29 Effective Date  1997-09-29  


Supplementary Provisions to Several Provisions Concerning the Investment Made by the Various Parties to Chinese-foreign Equity Joint
Ventures



(Approved by the State Council on September 2, 1997 and promulgated by

Decree No. 2 of the Ministry of Foreign Trade and Economic Cooperation and the
State Administration for Industry and Commerce on September 29, 1997)

    In order to strengthen the administration of investment contributions made
by investors of foreign investment enterprises (including those foreign
investment enterprises established by purchasing assets or stocks of internal
enterprises), these Supplementary Provisions are hereby formulated as follows
to the Several Provisions Concerning the Investment Made by the Various
Parties to Chinese-foreign Equity Joint Ventures.

    1. Any foreign investor who establishes a foreign investment enterprise by
purchasing assets or stocks of an internal enterprise(s) shall pay fully
purchasing charges within three months as of the date the business licence of
the said foreign investment enterprise is issued. If extension of payment is
required due to special circumstances, after approved by the examining and
approving authorities, more than 60% of the total amount of the purchasing
charges shall be paid within six months as of the date the business licence is
issued, and within one year the total amount shall be paid up; the
distribution of profit shall be made in proportion as the actual payment of
investment contributions. Unless the total amount of the purchasing charges
has been paid up, any holding investor may not have the enterprise’s
decision-making power, nor he may in the form of a combination statement
incorporate rights and interests or assets of the said enterprise into his
accounting statement.

    2. Investors in a Chinese-foreign equity joint venture must simultaneously
pay up their respective investment contributions according to the percentage
and deadline stipulated in the contract. If any of them cannot do so, the case
shall be reported to the original examining and approving authorities for
approval and the distribution of profit be made according to the percentage of
the actual payment of his investment contributions. With regard to the holding
(including relatively holding) investor in a Chinese-foreign equity joint
venture, before the actual payment of his investment contributions attains his
total amount of his subscribed payment, he shall not obtain the enterprise’s
decision-making power, nor he can in the form of a combination statement
incorporate rights and interests or assets of the said enterprise into his
accounting statement.

    3. Chinese-foreign contractual joint ventures and solely foreign invested
enterprises shall be handled with reference with these Provisions.






MEASURES FOR THE IMPLEMENTATION OF ADMINISTRATION OF NEGOTIABLE INSTRUMENTS

Category  BANKING Organ of Promulgation  The State Council Status of Effect  In Force
Date of Promulgation  1997-08-21 Effective Date  1997-10-01  


Measures for the Implementation of Administration of Negotiable Instruments



(Approved by the State Council on June 23, 1997  Promulgated by the

People’s Bank of China on August 21, 1997)

    Article 1  These Measures are formulated in pursuance of the provisions
of (hereinafter referred to as The Law of Negotiable Instruments) with a view
to enhancing the administration of negotiable instruments and maintaining
financial order.

    Article 2  These Measures shall be applicable in the administration
negotiable instruments within the territory of the People’s Republic of China.

    Article 3  The People’s Bank of China is the department of administration
of negotiable instruments.

    Administration of negotiable instruments should abide by the provisions
of The Law of Negotiable Instruments and these Measures as well as relevant
laws and regulations and must not harm the legitimate rights and interests
of parties to a bill.

    Article 4  Parties to a bill should engage in bill activities, exercise
bill rights and fulfil bill obligations in accordance with law.

    Article 5  Parties to a bill should use bills on uniform format
prescribed by the People’s Bank of China.

    Article 6  The makers of bills of bank exchange shall be banks handling
the business of bills of bank exchange approved by the People’s Bank of China.

    Article 7  The makers of bankers’ orders shall be banks handling the
business of bankers’ orders approved by the People’s Bank of China.

    Article 8  The makers of commercial bills of exchange shall be enterprises
and other organizations other than the banks.

    The makers of commercial bills of exchange applying to banks for the
handling of acceptance of bills of exchange must meet the following
qualifications:

    (1)opening of deposit account in banks of acceptance;

    (2)enjoying good credibility and having reliable source of capital for
the payment of the amount of the bills of exchange.

    Article 9  Accepting banks of commercial bills of exchange must have
the following qualifications:

    (1)having true relations of authority to pay with the makers;

    (2)having reliable capital for the payment of the amount of the bills
of exchange.

    Article 10  The bearers of commercial bills of exchange applying to
banks for discount on check must have the following qualifications:

    (1)opening of deposit account in banks;

    (2)having true trading relations and creditor-debtor relations with the
makers and prior endorsers.

    Article 11  The makers of checks shall be enterprises, other
organizations and individuals with opening of check deposit accounts in banks
handling check deposit business, urban credit cooperatives and rural credit
cooperatives approved by the People’s Bank of China.

    Article 12  The “guarantor” referred to in the Law of Negotiable
Instruments means the legal person, other organizations or individuals
with repayment ability of debts in negotiable instruments.

    Branches and functional departments of state organs, non-profit
institutions, societies and corporate enterprises must not serve as
guarantors; unless it is otherwise provided for by law.

    Article 13  The signature and seal of the maker of the bank money order
and the signature and seal of the bank accepting commercial bills of exchange
shall be the special-purpose seal of the bank plus the signature or the
affixed seal of its legal representative or his or her authorized agent.

    The signature and seal of the maker on bank check shall be the special-
purpose seal of the bank for bank check plus the signature or the affixed
seal of its legal representative or his or her authorized agent.

    Special-purpose seals for bank money order and special-purpose seals for
bank check must be subjected to the approval of the People’s Bank of China.

    Article 14  The signature and seal of the maker on commercial bills of exchange shall be the special-purpose financial seal of the
unit or official
seal plus the signature or the affixed seal of its legal representative or
his or her authorized agent.

    Article 15  The signature and seal of the maker on the checks shall be
the special-purpose financial seal or official seal plus the signature or
the affixed seal of its legal representative or his or her authorized agent
which are in line with the signature and seal left in advance by the unit
at the bank when the maker is the unit; they shall be the signature or the
affixed seal in line with those left in advance by the said individual at
the bank when the maker is an individual.

    Article 16  The “proper name” referred to in the Law of Negotiable
Instruments means the name on the identity card in keeping with laws,
regulations as well as the relevant provisions of the State.

    Article 17  The bills shall be null and void when the signature and
seal of the maker on the bills are not in line with the provisions of the
Law of Negotiable Instruments and these Measures; their signatures and seals
shall be null and void when the signatures and seals of the endorser,
acceptor and guarantor on the bills are not in line with the provisions
of the Law of Negotiable Instruments and these Measures, however, they
shall not affect the efficacy of other signatures and seals on the bills.

    Article 18  The “paying agent” referred to in the Law of Negotiable
Instruments means the bank, urban credit cooperative and rural credit
cooperative which makes the payment of the amount on the bills as entrusted
by the payer.

    Article 19  The loser of bills can, pursuant to the provisions of the
Law of Negotiable Instruments, report to the payer or the paying agent in
time the loss of checks for stoppage of payment for loss of bills of exchange which can be reported for stoppage of payment as provided
for
by the Law of Negotiable Instruments.

    The loser of bills should fill in the report-loss-and-stop-payment note,
affix his or her signature and seal when notifying the payer or the paying
agent of the loss of the bills for stoppage of payment. The report-loss-
and-stop-payment note should carry the following particulars:

    (1)time and cause(s) of the loss of bills;

    (2)types, numbers and amount of bills, date(s) of making, date(s) of payment, name of the payer and name
of the payee; and

    (3)name of the person reporting the loss and requesting stoppage of payment, business site or residence as
well as ways of contact.

    Article 20  The payer or paying agent should immediately suspend
payment on receipt of the report-loss-and-stop-payment note. Within twelve
days starting from the date of the receipt of the report-loss-and-stop-
payment note when the payer or paying agent does not receive the stop-payment
note from the people’s court, the report-loss-and-stop-payment note shall be
null and void as of the thirteenth day.

    Article 21  The payer or paying agent who has already made payment to
the bearer according to law before the receipt of the report-loss-and-stop-
payment note shall no longer accept the report of loss and stop payment.

    Article 22   Banks, urban credit cooperatives and rural credit
cooperatives can reach an agreement with the applicants on the use of encrypted code for payment on checks as terms for the payment
of the
amount on the checks when the applicants applying for the opening of
check deposit accounts.    

    Article 23  The guarantor should, pursuant to the provisions of the
Law of Negotiable Instruments, carry particulars of guarantee on the bills
or their allonge. The guarantor who provides guarantee for the maker, the
payer and the acceptor should carry particulars of guarantee on the front
side of the bills; the guarantor who provides endorser guarantee should
carry particulars of guarantee on the back of the bills or on their allonge.

    Article 24  No unit or individual shall freeze amount on bills which
are transferred after endoresement according to law; unless it is otherwise
provided for by law.

    Article 25  The “signature for receipt” referred to in Article 55 of the
Law of Negotiable Instruments means the signature and seal of the bearer on
the front side of the bill which indicates the bearer has already obtained
the payment.

    Article 26  The date of the bearer presenting the bill to the bank
shall be the date of presenting payment when presenting payment to the
payer through the remitting bank or through the clearing system.

    Article 27  The “refusal of certification” referred to in Article 62
of the Law of Negotiable Instruments should include the following particulars:

    (1)types of bills and the principal particulars carried thereon the
acceptance and payment of which have been refused;

    (2)the factual basis and legal basis for the refusal of acceptance and
payment;

    (3)time of refusal of acceptance and payment; and

    (4)signatures and seals of the accepter and payer of refusal.

    The “note of dishonor” referred to in Article 62 of the Law of Negotiable
Instruments should contain the following particulars:

    (1)types of bills dishonored;

    (2)the factual basis and legal basis of dishonor;

    (3)time of dishonor; and

    (4)signature and seal of the person returning the bills.

    Article 28  The “other relevant certifications” referred to in Article 63
of the Law of Negotiable Instruments mean:

    (1)certification of death of the accepter and payer issued by a hospital
or a unit concerned;

    (2)certification of absconding of the accepter and payer issued by a
judicial organ; and

    (3)documents with validity of refusal of certification issued by a
notarial office.

    Article 29  The “interest rate” prescribed in section (2) of paragraph
one of Article 70 and in section (2) of paragraph one of Article 71 of the
Law of Negotiable Instruments means the interest rate for floating fund
loans fixed by the People’s Bank of China.

    Article 30  Whoever having any of the acts listed in Article 103 of the
Law of Negotiable Instruments which is slight in circumstances and does not
constitute a crime shall be penalized by public security organs according to
law.

    Article 31  Issuance of dud checks or issuance of checks the signature
and seal thereon are not in line with those left in advance not with the
purpose of gaining money and belongings by cheating shall be imposed a
fine of 5% of the amount at face value but not less than RMB 1000 Yuan
by the People’s Bank of China; the bearer has the right to ask the maker
for 2%  compensation of the amount on the check.

    Article 32  Staff members of financial institutions who accept, make
payment, guarantee or discount to bills which are in contravention of the
provisions of the Law of Negotiable Instruments and these Measures due to
negligence of duties in bill business, the persons-in-charge directly
responsible and other persons directly responsible shall be meted out
punishments of warning, recording of a demerit, removal or expulsion;
those causing heavy losses and constituting a criminal offence shall be
investigated of their criminal liabilities.

    Article 33  The payers of bills who deliberately suppress bills or
defer payment for bills payable at sight or mature bills shall be imposed
a 0.7%. fine of the amount of the bills every day within the period of suppression of bills and deferred payment by the People’s
Bank of China;
the persons-in-charge directly responsible and other persons directly
responsible shall be meted out punishments of warning, recording of a
demerit, removal or expulsion.

    Article 34  Whoever print bills without authorization in violation of the provisions of the People’s Bank of China shall be directed
to make
corrections by the People’s Bank of China and be imposed a fine of more than
RMB 10000 Yuan and less than RMB 200000 Yuan; for those with serious offences,
the People’s Bank of China is empowered to submit a request to the
department concerned for the revocation of their business licences.

    Article 35  Formats, order of triplicate, colors, specifications and
anti-forgery technical requirements and printing of bills shall be prescribed
by the People’s Bank of China.

    In determining the formats of bills, the People’s Bank of China may add
languages of the minority nationalities or foreign languages, taking into
account the actual requirements of the minority nationalities regions and
foreign embassies and consulates in China.

    Article 36  These Measures shall come into force as of October 1, 1997.






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...