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2004

NOTICE CONCERNING THE CHANCE OF SALES METHOD BY FOREIGN-INVESTED DIRECT SALE ENTERPRISES

Notice Concerning the Chance of Sales Method by Foreign-Invested Direct Sale Enterprises

     In order to implement the Notice on the Ban of Direct Sale Activities of the State Council (Guo Fa [1998] No. 10) and do a good job
in changing the sale method (hereinafter abbreviated as transformation) of the foreign-invested enterprises which originally engaged
in direct sale activities (hereinafter referred to as foreign-invested direct sale enterprises), this notice on relevant issues is
hereby issued with the approval from the State Council:

I. Foreign-invested direct sale enterprises shall change to store operation (including setting up counters at shops, selling their
products in wholesale to domestic wholesalers or retailers and setting up stores for their own).

II. Enterprises that have changed to store operation are divided into those hiring sales personnel (referring to personnel who are
not formal employees of the enterprises and obtain compensation from selling products of the enterprises) and those that do not hire
sales personnel.

III. Requirements and procedures for transforming to enterprises that do not hire sales personnel

(I) Applicant enterprises for transformation shall meet the following conditions:

1. The enterprise is established with legal approval;

2. The enterprise must be a manufacturing enterprise and can only sell products produced by itself;

3. The enterprise has not conducted any law-violating activities in its production and operation and has passed the joint annual inspection
of 1998.

(II) Procedures for transformation:

1. Enterprises which have pyramid or direct sale business clearly specified in their contracts, articles of association or approval
certificates

(1) Investors in the enterprise shall modify the contract and articles of association;

(2) The agreement on the modification of contract and articles of association shall be sent to the original approving agencies for
approval and the issuance of new approval certificate;

(3) The enterprises shall complete the procedures for registration changes at the original registration agencies with the newly-issued
approval certificate.

2. The enterprises with no contents on pyramid or direct sale in their contracts, articles of association or approval certificates
can directly go to the original registration agencies to complete the procedures for registration changes.

IV. Requirements and procedures for transforming to enterprises which hire sales personnel

(I) Applicant enterprises for transformation shall meet the following requirements:

1. The enterprise shall fulfill the three requirements in Section (I) of Article (III);

2. The enterprise shall have a total investment above US$10 million (not including investments for the establishment of branch sales
offices);

3. Foreign investor in the enterprise shall have direct sale as its core business.

(II) Procedures for transformation:

1. Investors in the enterprise shall modify relevant articles in the contract and articles of association according to the principles
of the transformation plan;

2. The enterprise shall report the agreement on the modification of contract and articles of association to MOFTEC according to legal
procedures (together with the transformation plan) and send copies to the State Administration for Industry and Commerce and the
State Bureau of Internal Trade. MOFTEC will examine and approve the agreement according to law after soliciting opinions from the
above-mentioned two departments and issue new approval certificate to those approved;

3. The enterprise shall complete the procedures for registration changes at the State Administration for Industry and Commerce with
the newly- issued approval certificate.

(III) The transformation plan shall satisfy the following principles:

1. The enterprise must have shops with product prices clearly marked;

2. The enterprise shall formulate rules on after-sale service and customer refund in conformity with the requirements of various laws
and regulations of the State and have the systems publicized;

3. The enterprise shall sign labor contract with the sales personnel and the enterprise shall bear the legal liability arising from
the sale of enterprise products by the sales personnel within the scope mandated by the labor contract;

4. The qualifications of the sales personnel shall satisfy the stipulations of relevant State laws and regulations and sales personnel
shall fulfill the basic requirements in the Standards on Professional Techniques and Skills of Sales Personnel (Lao Bu Fa [1997]
No. 10 Document) promulgated by the original Ministry of Labor and Ministry of Internal Trade;

5. Sales personnel shall not buy up products from the enterprise and can only get compensation for the sales volume directly realized
by themselves; The selling price charged by the sales personnel shall be the same as the retail price at shops; Sales personnel can
only sell the products directly to the end consumers;

6. Sales management personnel shall be formal staff members of the enterprise.

V. The government shall print and issue uniform certificate of sales personnel.

VI. Applications for transforming to commercial retail enterprises which sell products of other enterprises (including individual
shops and chain stores) shall be submitted to the State Council for approval according to relevant State stipulations.

VII. Branch sales offices set up by transformed enterprises shall be subject to re-verification. Branch offices without independent
legal person status shall open their own stores to sell products produced by their own enterprises.

VIII. For enterprises transformed to those that do not hire sales personnel, relevant departments shall complete various procedures
within one week after the application is received. For enterprises transformed to those that hire sales personnel, relevant departments
shall give an official written reply within one month after receiving all the application materials submitted by the local foreign
economic and trade departments. Where the submitted materials meet the above-mentioned stipulations, procedures for registration
changes shall be completed within 15 days after the official written reply is given.

Ministry of Foreign Trade and Economic Cooperation

State Administration for Industry and Commerce

State Bureau of Internal Trade

June 18th,1998.

    





PROVISIONS OF SHANGHAI MUNICIPALITY ON PAYMENT OF MEDICAL INSURANCE PREMIUMS BY STAFF AND WORKERS IN SERVICE

Provisions of Shanghai Municipality on Payment of Medical Insurance Premiums by Staff and Workers in Service

     In the spirit of the State Council’s schemes for promoting the reform of the medical security system for urban staff and workers,
and in accordance with the Municipal reform schemes in the medical insurance system for urban staff and workers, it is hereby provided
that the medical insurance premiums to be paid personally by staff and workers in service in the Municipality shall be as follows:

I. All staff and workers in the service of the organs, enterprises and institutions (hereinafter referred to as units) in the cities
and towns within the Municipality, self-employed workers and their helpers, as well as other personnel as defined by the Municipal
Medical Insurance Bureau together with the other departments concerned (hereinafter referred to as staff and workers in service),
shall pay medical insurance premiums, and shall be enpost_titled to the appropriate medical insurance treatment as specifically provided.

II. The staff and workers in service shall pay as the medical insurance premium 1% of their average monthly income of the previous
year. When the average monthly income of previous year of any staff member or worker exceeded 300% of the average monthly salary
or wage of whole Municipality, the excess over the 300% will not be calculated in the base for the payment of the insurance premium.
If the average monthly income of the previous year of any staff member or worker came under 60% of the average monthly salary or
wage of the whole Municipality, his or her average monthly income is calculated as 60% of the average monthly salary or wage of the
whole Municipality and shall pay accordingly.

The base for the payment by the staff and workers in the service of private enterprises, the self-employed workers and their helpers,
shall be defined and made public by the Municipal Labor and Social Security Bureau, in the light of the wage standard for tax calculation
for the private enterprises and self-employed workers as specified by the tax departments in the previous year, and in accordance
with the average monthly income of the staff and workers of the whole Municipality in the previous year.

III. The medical insurance premiums paid by the staff and workers in service, shall be withheld by the units in which they work, and
shall be levied unitarily by the social insurance handling organs when they levy other social insurance premiums.

The medical insurance premiums paid by the staff and workers in service who are enpost_titled to free medical service, shall enter an independent
accounting, and the specific scheme for using this fund shall be drafted by the Municipal Medical Insurance Bureau together with
other departments concerned, and shall be executed upon approval by the Municipal People’s Government.

IV. The Municipal Medical Insurance Bureau shall be responsible for the interpretation of the specific application of these Provisions.

V. These Provisions shall become effective on October 1,1998.

    





OFFICIAL REPLY OF THE STATE COUNCIL ON PROBLEMS OF TAX COLLECTION POLICY ON ENTERPRISES WITH FOREIGN INVESTMENT THE ESTABLISHMENT OF WHICH WERE APPROVED BEFORE DECEMBER 31, 1993

20011211

The State Council

Official Reply of the State Council on Problems of Tax Collection Policy on Enterprises with Foreign Investment the Establishment
of Which were Approved before December 31, 1993

December 5, 1998

The Ministry of Foreign Trade and Economic Cooperation, the Ministry of Finance and the State Administration of Taxation:

This is to acknowledge the receipt of your Request for Instructions on Problems of Tax Collection Policy on Enterprises with Foreign
Investment the Establishment of Which Were Approved Before December 31, 1993(WaiJingMaoZiFa [1998] No.928). The official reply is
hereby given as follows:

1.

According to the decision of the Standing Committee of the National People’s Congress on “Interim Regulations Concerning Tax Collection
of Value Added Tax, Consumption Tax and Business Tax to be Applicable to the Enterprises with Foreign Investment and Foreign Enterprises
“, with regard to the refund policy of exceeding tax burden of the enterprises with foreign investment the establishment of which
were approved before December 31, 1993 should be carried out up to the end of 1998, and there shall be no more extension.

2.

With regard to the policy of exemption from imposition and refund with respect to the export goods of enterprises with foreign investment
the establishment of which were approved before December 31, 1993,(namely: the measures to exempt from taxation over export goods,
to put a domestic tax on the raw materials procured domestically, to exempt from tax from the last export link, not to deduct and
refund to the tax amount of import items) shall continue to be carried out up to the end of the year 2000.

3.

The existing measures on export tax refund shall still be implemented with respect to the export goods of enterprises with foreign
investment the establishment of which were approved after January 1, 1994.

4.

The specific measures should be promulgated and implementation thereof organized by you.



 
The State Council
1998-12-05

 






CIRCULAR OF CHINA SECURITIES REGULATORY COMMISSION ON AUDITING OF MID-TERM FINANCIAL REPORTS OF B SHARE LISTED COMPANIES

The China Securities Regulatory Commission

Circular of China Securities Regulatory Commission on Auditing of Mid-term Financial Reports of B Share Listed Companies

ZhengJianGuoZi [1998] No.16

July 17, 1998

According to the newly amended No.3 Rules Concerning Information Disclosure of Public Listed Companies, Contents and Forms of Mid-term-Report,
security companies whose shares are under special treatment, that intend to apply for share allotment in the latter half of the year,
or that propose plans of sharing bonus or of converting public accumulated funds into share capital to be implemented in the latter
half of the year, and those are in circumstances of other forms recognized by the Commission and Stock Exchanges, must be audited.
Companies with foreign capital listed in domestic markets (including those issue A shares concurrently) shall, in principle, be subject
to the Rules. However, auditing of their mid-term reports may be applied to the following provisions:

1.

With regard to companies whose share are under special treatment, only domestic auditing of mid-term financial report (refers to the
auditing by Chinese CPAs of financial reports produced in line with Chinese accounting standards according to the independent auditing
principle of Chinese CPAs, hereinafter the same) is required and overseas auditing (refers to the auditing of financial reports adjusted
in line with international accounting standards or accounting standards of major overseas financing venues according to international
auditing principles or auditing principles of major overseas financing venues, hereinafter the same) and review is not required.

2.

Companies that intend to apply for share allotment in the latter half of the year may not conduct mid-term domestic, overseas auditing
and review. However, valid domestic auditing report must be attached, according to respective requirement of the Commission, when
materials of applying for share allotment are submitted. Valid overseas auditing report must be submitted if required by security
regulatory authorities of major overseas financing venues.

3.

With regard to companies that propose plans of sharing bonus or of converting public accumulated funds into share capital to be implemented
in the latter half of the year, no overseas auditing or review is required.



 
The China Securities Regulatory Commission
1998-07-17

 






CIRCULAR OF THE STATE ADMINISTRATION OF TAXATION AND THE MINISTRY OF FOREIGN TRADE AND ECONOMIC COOPERATION ON STANDARDIZING MANAGEMENT OF EXPORT AND PROCEDURE OF TAXATION REIMBURSEMENT AND GUARDING AGAINST AND PUNCTURING ACTIVITIES OF GAINING TAXATION REIMBURSEMENT FOR EXPORT PRODUCTS BY CHEATING

The State Administration of Taxation

Circular of the State Administration of Taxation and the Ministry of Foreign Trade and Economic Cooperation on Standardizing Management
of Export and Procedure of Taxation Reimbursement and Guarding against and Puncturing Activities of Gaining Taxation Reimbursement
for Export Products by Cheating

GuoShuiFa [1998] No.84

June 9, 1998

Taxation administrations and Foreign Economic Relations and Trade Departments (Commissions, Bureaus) of provinces, autonomous regions,
municipalities directly under the Central Government and municipalities separately listed on the State plan:

With a view to supporting export of foreign trade and speeding up taxation reimbursement on export and guarding against and puncturing
illegal activities and criminal offences of gaining taxation reimbursement for export by cheating, the State Bureau of Taxation and
MOFTEC have decided to further standardize export and procedure of taxation reimbursement. Details of the Circular are hereby given
as follows:

1.

To strengthen management of export trade

(1)

Export companies must correct their business thinking. They should on the one hand try to enlarge their business scope, earn more
foreign exchange and exhance efficiency, and on the other hand, observe laws and strictly forbid fraud of any form. We should firmly
prevent and companies from imitating import and export trade by way of changing currencies so as to gain taxation reimbursement by
cheating.

(2)

Export companies must do their work conscientiously and meticulously. They should make special efforts to educate their vocational
personnel, who should be required to acquaint themselves with sources of goods, quality, price, taxation and traders’ rating, to
personally take a hand in transaction, warehousing, transportation, declaration at the customs, etc, and to definitely avoid such
transactions as “four-self” and “three-unseen” (that is, trader or medium bring clients by themselves, bring goods by themselves,
bring draft by themselves, and declare at the Customs by themselves and exported products unseen, goods supplier unseen and foreign
trader unseen). Meanwhile, the system of job responsibility and system of rewards and penalties should be adopted inside the companies
so as to strengthen restriction and punishment.

2.

Procedure of taxation reimbursement

(1)

Regular report. Export companies should set up a system to gather certificates of taxation reimbursement and report to local authority
and apply for taxation reimbursement in regular intervals. Except for exported goods of ium or long-term exchange settlement, certificates
of taxation reimbursement should by fully gathered before clearance is finished (May 31 of the year). Otherwise, taxation authority
should not accept application for taxation reimbursement.

(2)

Regular approving of taxation reimbursement. After receiving application materials already chceked by foreign economic relations and
trade department, the taxation authority should verify documents and credits timely. To those with full and true documents and credits
and correct electronic information, formalities should be finished within 20 working days. For those with questions, timely investigation
should be made. The Taxation authority should send back letters in time according to stipulations of the State Bureau of Taxation,
and should send back results of investigation to the taxation reimbursement authority at the sending place within 2 months after
receiving the investigation letter from the taxation reimbursement authority. If it is impossible to get the outcome of the investigation
due to special reasons, acknowledge ment letter should be sent back first to indicate the reason and the deadline of the next letter.
For those which can not be found out within one production link, and needs calling-back of the past, export companies have the responsibility
to provide veidence. Taxation reimbursement can be made only after re-chcek is made by the taxation reimbursement authority. For
those with incorrect evidence or providing of evidence impossible within the clearing period of that year, taxation reimbursement
should not be made.

3.

Strict verification on electronic information of taxation reimbursement for export

(1)

Taxation authorities in charge of taxation reimbursement for export should improve electronic management on taxation reimbursement
and carry out strict verification according to relevant stipulations. Except for those stipulated by the State Administration that
verification of electronic information is unnecessary, and application must be checked against the declaration form, certificates
of exported goods, etc. For those applications impossible to be checked solely by way of electronic information, the method of combining
computers with staff should be adopted.

(2)

The State Bureau of Taxation should gather, transmit, issue and ues electronic information of specified taxation receipts according
to rules stipulated by the identification system o specified trceipts for taxation reimbursement so as to ensure the imtegrity and
correctness of electronic imformation. Specific methods will be stipulated separately.

4.

To guard against and puncture illegal activities and criminal cases of gaining taxation reimbursement for export by cheating.

(1)

Taxation departments and foreign economic relations and trade departments should keep a close eye on the tendency of cheating in taxation
reimbursement. They should guard against such activities and avoid loss to companies and the state.

(2)

The right of reimbursement for those adopting transactions of “four- self” and “three-unseen”, once found, will be stopped for at
least half a year no matter how much the amount of reimbursement is. The right to involve in export business for those cheating in
other ways, will be revoked upon apporving by MOFTEC and its authorized units. Rseponsible personnel will be punished by judicial
organs.

This Circular shall enter into force on June 1, 1998.

Please carry out completely.



 
The State Administration of Taxation
1998-06-09

 






CIRCULAR OF THE GENERAL ADMINISTRATION OF CUSTOMS ON PAYING THE OVERDUE TARIFF FOR GOODS IMPORTED BEFORE 1994 WITH TARIFF REDUCTION OR EXEMPTION AND TRANSFERRED DURING THE SUPERVISION PERIOD

The General Customs Administration

Circular of the General Administration of Customs on Paying the Overdue Tariff for Goods Imported Before 1994 with Tariff Reduction
or Exemption and Transferred During the Supervision Period

ShuShui [1998] No.200

April 13, 1998

Guangdong Customs and all customs directly under the General Administration of Customs:

Pursuant to the Provisions of the General Administration of Customs on Tariff Rates Applicable to Overdue Tariff Payment and Reimbursement
(ShuShuiZi [85] No.871), the applicable tariff rate for the transference and domestic sale during the supervision period of goods
imported before 1994 with tariff reduction or exemption shall be decided based on the tariff regulations and tariff rate of the date
of the original import declaration. Taking into consideration the actual conditions of the reform of our country’s tariff system,
especially the fundamental reform of China’s tariff system in 1994, which resulted in the cancellation of the prevailing tariff categories
and the lowering of the tariff level by a large margin, the General Administration of Customs decides to apply the tariff rate of
January 1, 1994 to the payment of the overdue tariff for goods imported with tariff reduction or exemption before January 1, 1994
and transferred during the supervision period, because the application of the tariff category and tariff rate of the date of the
original import declaration can no longer be justified by the prevailing tariff laws and regulations now. However, the same shall
not, according to the document coded ShuShuiZi [85] No.871, be applied to overdue tariff paid before the receiving of this Circular,
and therefore no adjustment shall follow. As for goods imported with tariff reduction or exemption after January 1, 1994, if there
rise conditions for overdue tariff payment, the document coded ShuiShiZi [85] No.871 shall still be observed.

Please act upon accordingly.



 
The General Customs Administration
1998-04-13

 






CIRCULAR OF THE MINISTRY OF FOREIGN TRADE AND ECONOMIC COOPERATION ON ISSUES CONCERNING THE AFFIRMATION OF PROJECTS WITH FOREIGN INVESTMENT WHICH ARE ESTABLISHED BY ENTERPRISES AND INSTITUTIONS DIRECTLY UNDER THE MINISTRY AND INVOLVE IN TAX EXEMPTION FOR IMPORT EQUIPMENT

The Ministry of Foreign Trade and Economic Cooperation

Circular of the Ministry of Foreign Trade and Economic Cooperation on Issues Concerning the Affirmation of Projects with Foreign Investment
Which are Established by Enterprises and Institutions Directly under the Ministry and Involve in Tax Exemption for Import Equipment

WaiJingMaoZiFa [1998] No.8

February 9, 1998

Institutions directly under the Ministry of Foreign Trade and Economic Cooperation (MOFTEC), all foreign trade centers, companies
directly under the MOFTEC:

In order to implement the spirit of Circular Concerning the Adjustment of Tax Policy of Imported Equipment promulgated by the State
Council (GuoFa [1997] No.37), and to ensure carrying out smoothly the tax exemption for import equipment of enterprises with foreign
investment that are established by enterprises and institutions directly under MOFTEC, the circular concerning relevant issues is
as follows:

1.

The enterprises with foreign investment established by enterprises directly under MOFTEC shall be checked and approved in accordance
with the procedures set out in the Circular Concerning Issues on Examination and Approval of Enterprises with Foreign Investment
Established by Enterprises and Institutions Directly under MOFTEC (WaiJingMaoZiZi [1992] No.40); the enterprises with foreign investment
established by institutions directly under MOFTEC shall be checked and approved in accordance with the procedures set out in the
Circular Concerning Issues on Examination and Approval of Enterprises with Foreign Investment Established by Subordinated Enterprises
of the Institutions Directly Under MOFTEC (WaiJingMaoZiZi [1996] No.70).

2.

As to the projects with foreign investment established by enterprises or institutions directly under MOFTEC within the number limitation
for reporting to MOFTEC for examination and approval, when replying to the feasibility research report, the hosting authorities of
examination and approval (the foreign-capital department) issue project affirmation papers to the projects that satisfy the requirements
of encouraging type or limited B type in the Instructive Catalogue of Industries with Foreign Investment.

3.

The examination and approval of projects with foreign investment established by enterprises or institutions directly under the Ministry
within the number limitation, shall be carried out in accordance with the current existing procedures and be accepted for disposal
uniformly by the foreign-capital department, and after the first trial, together by relevant departments, bureaus, be reported to
the State Council or transmitted to the State Development Planning Commission or the State Economic and Trade Commission.

4.

The ascertaining of the projects with foreign investment of trial type that are under the scope of authority of the State Council
and that are involved in the enterprises group directly under MOFTEC, shall be handled subject to relevant regulations.



 
The Ministry of Foreign Trade and Economic Cooperation
1998-02-09

 






HIGHER EDUCATION LAW

Category  EDUCATION Organ of Promulgation  The Standing Committee of the National People’s Congress Status of Effect  In Force
Date of Promulgation  1998-08-29 Effective Date  1999-01-01  


Higher Education Law of the People’s Republic of China

Contents
Chapter I  General Provisions
Chapter II  Basic System of Higher Education
Chapter III  Establishment of Institutions of Higher Learning
Chapter IV  Organization and Activities of Institutions of Higher
Chapter V  Teachers and Other Educational Workers of Institutions of
Chapter VI  Students of Institutions of Higher Learning
Chapter VII  Guarantee for Input and Conditions of Higher Education  
Chapter VIII  Supplementary Provisions

(Adopted at the 4th Meeting of the Standing Committee of the 9th

National People’s Congress on August 29, 1998 and promulgated by Order
No. 7 of the President of the People’s Republic of China on August 29, 1998)
Contents

    Chapter I  General Provisions

    Chapter II  Basic System of Higher Education

    Chapter III  Establishment of Institutions of Higher Learning

    Chapter IV  Organization and Activities of Institutions of Higher
Learning

    Chapter V  Teachers and Other Educational Workers of Institutions of
Higher Learning

    Chapter VI  Students of Institutions of Higher Learning

    Chapter VII  Guarantee for Input and Conditions of Higher Education

    Chapter VIII  Supplementary Provisions
Chapter I  General Provisions

    Article 1  This Law is enacted in accordance with the Constitution
and the Education Law for the purposes of developing the cause of higher
education, implementary the strategy of reinvigorating the country through
science and education and promoting the building of socialist material
civilization and spiritual civilization.

    Article 2  This Law shall be applicable to engagement in activities of higher education within the territory of the People’s Republic
of China.

    Higher education referred to in this Law means education imparted
on the basis of completion of senior secondary school education.

    Article 3  The state adheres to the development of the cause of socialist
higher education with Marxism-Leninism, Mao Zedong Thought and Deng Xiaoping’s
Theory as guidance following the basic principles defined by the Constitution.

    Article 4  Higher education must implement the educational policy of the
state, serve socialist modernization, integrate itself with production and
labor to train those educated to be builders and successors of the socialist
cause with all-round development of morality, intelligence and physique.

    Article 5  The task of higher education is to train senior specialized
talents with innovative spirit and practical capability, develop science,
technology and culture and promote socialist modernization.

    Article 6  The state formulates higher education development planning,
establishes institutions of higher learning and adopts various forms to
actively develop the cause of higher education in accordance with the
requirements of economic construction and social development.

    The state encourages such social forces as enterprises, institutions,
societies and other social organizations and citizens in the establishment
of institutions of higher learning, participation in and rendering support
for the reform and development of the cause of higher education in accordance
with law.

    Article 7  The state presses ahead the reform of the higher education
system and the reform of higher education teaching, optimizes the structure
of and resources allocation for higher education, improve the quality and
performance of higher education in the light of the actual conditions of different types and different tiers of institutions of higher
learning and in
accordance with the requirements of socialist modernization and development
of the socialist market economy.

    Article 8  The state assists and supports minority natinality regions
in the development of the cause of higher education and training of senior
specialized talents for minority nationalities in the light of the
characteristics and requirements of minority nationalities.

    Article 9  Citizens have the right to higher education according to law.

    The state adopts measures to assist students of minority nationalities
and students with financial difficulties to receive higher education.

    Institutions of higher learning must admit disabled students who meet
the admission standards set by the state and must not refuse to admit them
for their disabilities.

    Article 10  The state safeguards the freedom of scientific research,
literary and artistic creations and other cultural activities in institutions
of higher learning according to law.

    Scientific research, literary and artistic creations and other cultural
activities in institutions of higher learning should abide by law.

    Article 11  Institutions of higher learning should be geared to the needs
of society, run independently and practise democratic management in accordance
with law.

    Article 12  The state encourages cooperation among institutions of higher
learning, between institutions of higher learning and scientific research
institutes as well as enterprises and institutions to be mutually
supplementary with each’s own advantages and improve the performance
in the employment of educational resources.

    The state encourages and supports international exchanges and cooperation
for the cause of higher education.

    Article 13  The State Council uniformly leads and administers the cause
of higher education nationwide.

    People’s governments of the provinces, autonomous regions and
municipalities directly under the Central Government coordinate with
unified planning the cause of higher education within their respective
administrative areas, administer the training of talents mainly for the
localities and institutions of higher learning the administration of which
have been authorized by the State Council.

    Article 14  The department of education administration under the
State Council shall take charge of the work of higher education nationwide,
administer the institutions of higher learning that mainly train talents for
the whole country determined by the State Council. Other departments
concerned under the State Council shall be responsible for the related
work of higher education within the scope of responsibilites prescribed
by the State Council.
Chapter II  Basic System of Higher Education

    Article 15  Higher education consists of curricula education and
non-curricula education.

    Higher education adopts the educational forms of full-time system
and non-full-time system.

    The state supports the adoption of broadcast, television, correspondence
and other modes of distance education to impart higher education.

    Article 16  Higher curricula education is divided into specialty
education, undergraduate education and post graduate education.  

    Higher curricula education should meet the following standards for
school work:

    (1)specialty education should enable students to master the basic
theory and basic knowledge essential for the respective specialty and
acquire the basic skills and initial capability for the practical work
of the respective specialty;

    (2)undergraduate education should enable students to systematically
master the basic theory and basic knowledge necessary for the respective
discipline and specialty, master the basic skills, techniques and related
knowhow necessary for the respective specialty and acquire initial capability
for the practical work and research work of the respective specialty; and

    (3)master’s post graduate education should enable students to master firm
basic theory of the respective discipline, systematic specialty knowledge,
master corresponding skills, techniques and related knowhow, and acquire
capabilities for the practical work and scientific research work of the
respective specialty. Doctoral post graduate education should enable students
to master firm and broad basic theory, systematic and in-depth specialty
knowledge and corresspsonding skills and techniques, and acquire capabilities
for independent creative scientific research work and practical work of the
respective discipline.              

    Article 17  The basic length of schooling for specialty education
shall be two to three years, the basic length of schooling for undergraduate
education shall be four to five years, the basic length of schooling for
master’s post graduate education shall be two to three years and the basic
length of schooling for doctoral post graduate education shall be three to
four years. The length of schooling for non-full-time higher curricula
education should be adequately extended. Institutions of higher learning may
adjust the length of schooling of the respective schools in the light of
actual requirements subject to the approval of the competent department of
education administration.

    Article 18  Higher education shall be imparted by institutions of higher
learning and other institutions of higher education.

    Universities and independently established colleges(schools) mainly
impart undergraduate and post graduate education. Higher specialty
institutions impart specialty education. Scientific research institutes may,
subject to the approval of the department of education administration under
the State Council, undertake the task of post graduate education.

    Other institutions of higher education impart non-curricula higher
education.

    Article 19  Graduates of senior secondary school education or those
with equivalent educational level shall, upon passing the examination,
be admitted by institutions of higher learning imparting corressponding
curricula education, and obtain the qualification for admission as
specialty students or undergraduate students.

    Graduates of undergraduate course or those with equivalent educational
level shall, upon passing the examination, be admitted by institutions of
higher learning imparting corresponding curricula education or scientific
research institutes approved to undertake the task of post grduate education
and obtain the qualification for admission as master’s post graduate students.

    Graduates of master’s post graduate course or those with equivalent
educational level shall, upon passing the examination, be admitted by
institutions of higher learning imparting corresponding curricula education
or scientific research institutes approved to undertake the task of post
graduate education and obtain the qualification for admission as doctoral
post graduate students.

    It shall be permissible for university graduates of specific
disciplines and specialties to directly obtain the qualification for
admission as doctoral post graduate students. Specific measures shall be
worked out by the department of education administration under the State
Council.

    Article 20  Students receiving higher curricula education shall be
issued corresponding certificates of educational background or other
certificates of studies by the institutions of higher learning or
scientific research institutes approved to undertake the task of post
graduate education they have been in on the basis of the length of schooling
and achievements in studies in accordance with the relevant provisions of the state.

    Students receiving non-curricula higher education shall be issued
corresponding certificates of completion of studies by the institutions of higher learning or other institutions of higher education.
Certificates of completion of studies should carry length of schooling and contents of studies.

    Article 21  The state practises self-taught higher education examination
system. Students having passed the examination shall be issued corresponding
certificates of educational background or other certificates of studies.

    Article 22  The state practises the academic degree system. The degrees
are divided into the bachelor’s degree, the master’s degree and the doctor’s
degree.

    Citizens whose educational level has reached the standards for degrees
set by the state through receiving higher education or self-study may apply
to degree-awarding units for corresponding degrees.

    Article 23  Institutions of higher learning and other institutions of higher education should, in accordance with the requirements
of society and
their own conditions for running education, undertake the work of imparting
continuing education.
Chapter III  Establishment of Institutions of Higher Learning

    Article 24  Establishment of an institution of higher learning should
conform to the state higher education development planning, accord with
state interests and public interest of society and must not take profit-
making as the object.

    Article 25  The basic conditions prescribed by the Education Law
should be met for the establishment of an institution of higher learning.

    A university or an independently established college(school) should as
well have strong teaching and scientific research staff, higher teaching and
scientific research level and corresponding scale and be in a position to
impart undergraduate and above-undergraduate education. A university must
also have more than three departments of disciplines prescribed by the
state as major disciplines. Specific standards for the establishment of institutions of higher learning shall be formulated by the
State Council.

    Specific standards for the establishment of other institutions of higher education shall be formulated by
the departments concerned authorized
by the State Council or people’s governments of the provinces, autonomous
regions and municipalities directly under the Central Government in
accordance with the principles prescribed by the State Council.

    Article 26  Corresponding names should be used for the establishment of institutions of higher learning in accordance with thier
respective tiers,
categories, departments of disciplines, scale, teaching and scientific
research levels.

    Article 27  Whoever applies for the establishment of an institution of higher learning should present the following materials to
the organ of examination and approval:

    (1)a report on the application for the establishment;

    (2)materials on feasibility authentication;

    (3)articles of association; and

    (4)other materials the presentation of which is required by the organ
of examination and approval pursuant to the provisions of this Law.

    Article 28  Articles of association of an institution of higher learning
should specifiy the following particulars:

    (1)name and address of the institution;

    (2)aims of establishment of the institution;

    (3)scale of the institution;

    (4)establishment of departments of disciplines;

    (5)mode of education;

    (6)internal administrative system;

    (7)sources of funds, properties and financial rules;

    (8)rights and obligations between the sponsor(s) and the institution;

    (9)procedures for the revision of articles of association; and

    (10)other matters that must be provided for by articles of association.

    Article 29  Establishment of institutions of higher learning shall be
subject to the examination and approval of the department of education
administration under the State Council, among them establishment of institutions of higher learning imparting specialty education
may be
subject to the examination and approval of the people’s governments of the provinces, autonomous regions and municipalities directly
under the
Central Government upon authorization by the State Council; establishment
of other institutions of higher education shall be subject to the examination
and approval of the departments concerned authorized by the State Council or
people’s governments of the provinces, autonomous regions and municipalities
directly under the Central Government. The department of education
administration under the State Council has the power to nullify the
institutions of higher learning and other institutions of higher education
the establishment of which have been examaianed and approved not conforming
to the prescribed conditions.

    Evaluation and reviewing institution consisting of specialists should
be employed to conduct evaluation and review for the examination and approval
of the establishment of institutions of higher learning.

    Separation, amalgamation and termination of institutions of higher
learning and other institutions of higher education, change in name and
category and other important matters shall be subject to the examaination
and approval of the original examination and approval organ; revision of articles of association shall be submitted to the original
examination and
approval organ for verification and approval.
Chapter IV  Organization and Activities of Institutions of Higher
Learning

    Article 30  An institution of higher learning obtains the qualification
of a legal entity as of the date of approval for its establishment. The
president of the institution of higher learning shall be the legal
representative of the institution of higher learning.

    An institution of higher learning has civil rights in accordance with
law in civil activities and bears civil liability.

    Article 31  Institutions of higher learning should carry out teaching,
scientific research and social services centering round training talents
to guarantee that educational and teaching quality reaches standards
prescribed by the state.

    Article 32  Institutions of higher learning work out schemes for
admission and independently regulate the percentage of admission for
departments and disciplines in accordance with the requirements and
demand of society, conditions for running the institution and scale
of the institution verified by the state.

    Article 33  Institutions of higher learning independently set up and
adjust disciplines and specialties.

    Article 34  Institutions of higher learning independently work out
teaching plans, select and compile textbooks and organize activities of imparting teaching in accordance with the requirements of
teaching.

    Article 35  Institutions of higher learning independently conduct
scientific research, technological development and social services in
the light of their own conditions.

    The state encourages cooperation in diverse forms between institutions
of higher learning and enterprises, institutions, societies and other
social organizations in scientific research, technological development
and extension.

    The state supports those institutions of higher learning where conditions
mature becoming state scientific research bases.

    Article 36  Institutions of higher learning independently carry out
scientific, technological and cultural exchanges and cooperation with
foreign institutions of higher learning in accordance with the relevant
provisions of the state.

    Article 37  Institutions of higher learning independently decide on
the setting up and personnel employment of such internal organizational
structures as teaching, scientific research and administrative functional
departments in the light of actual requirements and in accordance with the
principle of streamlining and efficiency; assess the positions of teachers and other specialized technical personnel, adjust the
allocation
of subsidies and salary in accordance with the relevant provisions of the
state.

    Article 38  Institutions of higher learning independently administer
and use the property provided by the sponsor(s), state financial subsidy
and properties donated and granted in accordance with law.

    Institutions of higher learning must not use the property for teaching
and scientific research activities for other purposes.

    Article 39  The state-run institutions of higher learning practise the
president responsibility system under the leadership of the grass-roots
committees of the Chinese Communist Party in institutions of higher learning.
In accordance with the Constitution of the Chinese Communist Party, the
grass-roots committees of the Chinese Communist Party in instituions of higher learning exercise unified leadership over school work
and support
the presidents in independently and responsibly discharging their duties,
their responsibilities of leadership are mainly as follows:to implement
the line and policies of the Chinese Communist Party, adhere to the
socialist orientation of running the institutions, exercise leadership over
ideological and political work and work related to morality in the
institutions, hold discussions and take decisions on the set-up of internal organizational structures and candidates for the persons-in-charge
of internal organizational structures, hold discussions and take decisions
on such major matters as the reform, development and basic administrative
rules of the institutions to ensure the completion of various tasks
centered round training of talents.

    Internal management system of institutions of higher learning run by
social forces shall be determined in accordance with the provision of the
state concerning running of schools by social forces.

    Article 40  Presidency of institutions of higher learning shall be
taken up by citizens conforming to the qualifications for the office
prescribed by the Education Law. Appointment and relief from duties of presidents and vice presidents of institutions of higher learning
shall
be made pursuant to the relevant provisions of the state.

    Article 41  The president of an institution of higher learning shall
be fully responsible for the teaching, scientific research and other
administrative work of the respective institution and exercise the
following duties and powers:

    (1)to draft development planning, formulate specific rules and
regulations and annual work plan and organize their implementation;

    (2)to organize teaching activities, scientific research and ideological
and moral education;  

    (3)to draft schemes for the setting up of internal organizations,
recommend candidates for vice presidency, appoint and relieve persons-in-
charge of internal organizations;

    (4)to employ and dismiss teachers and other internal workers,
administer students’ school roll and give rewards or impose penalties;

    (5)to draft and implement annual fund budget proposal, protect and
manage school properties and safeguard the legitimate rights and interests
of the school; and

    (6)other duties and powers provided for in the articles of association.

    The president of an institution of higher learning chairs the president’s
administrative meeting or the institution’s administrative meeting and
handles the relevant matters prescribed in the preceding paragraph.

    Article 42  An institution of higher learning establishes an academic
committee for the review of such relevant academic matters as setting up of
disciplines and specialties, proposals of teaching plan and scientific
research plan, and evaluate achievements in teaching and scientific researh.

    Article 43  Institutions of higher learning guarantee the participation
of teaching and administrative staff in democratic management and supervision
and safeguard the legitimate rights and interests of teaching and
administrative staff in accordance with law in the organizational form of the conference of representatives of teaching and administrative
staff with
teachers as the main body.

    Article 44  Levels of running a school and educational quality of institutions of higher learning shall be subject to the supervision
of departments of education administration and the evaluation organized by them.
Chapter V  Teachers and Other Educational Workers of Institutions of
Higher Learning

    Article 45  Teachers and other educational workers of institutions of higher learning have the rights prescribed by law, fulfil the
obligations
prescribed by law and shall be faithful to the educational cause of the
people.

    Article 46  Institutions of higher learning practise the teachers’
qualification system. Chinese citizens who abide by the Constitution and
laws, ardently love the educational cause, have good ideology and moral
character, have an educational background of graduation of post graduate
course or graduates of regular college course and have corresponding
educational and teaching capabilities may, upon confirmation of being
qualified, acquire the qualification of teachers of institutions of higher
learning. Those citizens without the educational background of graduation of
post graduate course or graduates of regular college course who have acquired
a specialty from study and passed the state examaination for teachers’
qualification may also, upon confirmation of being qualified, acquire the
qualification of teachers of institutions of higher learning.

    Article 47  Institutions of higher learning practise the teachers’
postion system. Teachers’ positions of institutions of higher learning
shall be set up in accordance with the requirements of the tasks in
teaching, scientific research undertaken by the institutions. Teachers’
positions include assistant, lecturer, associate professor and professor.

    Teachers of institutions of higher learning should meet the following
basic conditions for acquiring the positions prescribed in the preceding
paragraph:

    (1)one who has acquired the teacher’s qualification for an institution
of higher learning;

    (2)one who has a systematic mastery of the basic theory of the
respective discipline;

    (3)one who has the educational and teaching capability and scientific
research capability of the corresponding position; and

    (4)one who undertakes the courses and teaching task of prescribed
periods of the corresponding position.

    Professors and associate professors should, in addition to having the
above basic conditions for taking up the position, also have systematic and
firm basic theory of the respective discipline and rich experiences in
teaching and scientific research, with remarkable achievements in teaching,
theses and works reaching high level or has outstanding achievements in
teaching and scientific research.

    Specific conditions for taking up positions for the positions of teachers
of institutions of higher learning shall be prescribed by the State Council.

    Article 48  Institutions of higher learning practise the teachers’
employment system. Teachers who have the qualification for taking up the
position upon evaluation shall be employed by institutions of higher learning
in accordance with the responsibilities, conditions and terms of office
of teachers’ positions.

    Employment of teachers of instituti

REPLY OF THE MINISTRY OF FOREIGN TRADE AND ECONOMIC COOPERATION TO THE LETTER OF SICHUAN FOREIGN TRADE AND ECONOMIC COMMISSION FOR INSTRUCTIONS ON SEVERAL LEGAL ISSUES

The Ministry of Foreign Trade and Economic Cooperation

Reply of the Ministry of Foreign Trade and Economic Cooperation to the Letter of Sichuan Foreign Trade and Economic Commission for
Instructions on Several Legal Issues

WaiJingMaoFaHanZi [1998] No.82

September 18, 1998

Commission of Foreign Trade and Economic Cooperation of Sichuan:

We have studied your request for instructions (ChuanWaiJingMaoZiZi [1998] No.113) on several legal issues and now reply in principle
as follows:

1.

The ways of financial contributions to be adopted by investors of Chinese-foreign equity joint ventures should be limited within the
range prescribed in Article 24 of the Company Law, Article 5 of the Law of the People’s Republic of China on Chinese-foreign Equity
Joint Ventures and Article 25 of the Regulations for the Implementation of the Law of the People’s Republic of China on Chinese-foreign
Equity Joint Ventures. Investors should not contribute capital in the form of priced stock equity.

2.

In accordance with existing provisions relating to the establishment of investment companies with foreign capital, the scope of business
of these investment companies should be limited to the prescription of Article 5 of the Interim Provisions on the Establishment
of Investment Companies with Foreign Capital. Investment companies should actively participate in the management of the companies
they invest in. With a view to standardizing and strengthening the administration and guidance on investment companies, currently
investment companies should, under no circumstance, be founders of stock companies or buy and hold shares (listed and non-listed)
of stock companies or engage in stock business of any kind.

3.

In accordance with the Company Law and the Interim Provisions on Several Issues Concerning the Establishment of Joint Stock Limited
Companies with Foreign Investment, the registered capital of stock companies should be the actual amount of capital stock received
by competent registration authorities, namely the paid full amount of capital stock. The concept of total investment is inapplicable
to joint stock limited companies.

4.

The Ministry of Foreign Trade and Economic Cooperation will, jointly with other related departments, conduct research on the issue
of reinvestment by enterprises with foreign investment in conjunction.

That is hereby the reply.



 
The Ministry of Foreign Trade and Economic Cooperation
1998-09-18

 






MEASURES FOR THE BANNING OF ILLEGAL FINANCIAL INSTITUTIONS AND ILLEGAL FINANCIAL BUSINESS OPERATIONS

Category  BANKING Organ of Promulgation  The State Council Status of Effect  In Force
Date of Promulgation  1998-07-13 Effective Date  1998-07-13  


Measures for the Banning of Illegal Financial Institutions and Illegal Financial Business Operations

Chapter 1  General Provisions
Chapter II  Procedures for the Imposition of Ban
Chapter III  Consolidation and Settlement of Financial Claims and Debts
Chapter IV  Penalty Provisions
Chapter V  Supplementary Provisions

(Promulgated by Decree No. 247 of the State Council of the People’s

Republic of China on July 13, 1998)
Chapter 1  General Provisions

    Article 1  These Measures are formulated for the purposes of banning
illegal financial institutions and illegal financial business operations,
maintaining financial order and protecting public interest of society.

    Article 2  All illegal financial institutions and illegal financial
business operations must be banned.

    Article 3  The illegal financial instituions referred to in these
Measures mean those institutions established on their own without the
approval of the People’s Bank of China for engaging in or mainly engaging
in such financial business operations as attraction of deposits, granting
of loans, handling of settlements, note discount, call loans, trust
investment, financial leasing, financing guaranty and foreign exchange
buying and selling.

    The preparatory organization of an illegal financial institution
shall be construed as an illegal financial institution.

    Article 4  The illegal financial business operations referred to in
these Measures mean the engagement on their own without the approval of the People’s Bank of China in the following operations:

    (1)illegal attraction of public deposits or attraction in disguised
forms of public deposits;

    (2)illegal fund-raising from non-specified objects of society in
any name without approval in accordance with law;

    (3)illegal granting of loans, handling of settlements, note discount,
fund calling, trust investment, financial leasing, fund accomodation
guaranty and foreign exchange buying and selling; and

    (4)other illegal financial business operations determined by the
People’s Bank of China.

    Illegal attraction of public deposits referred to in the preceding
paragraph means operations without the approval of the People’s Bank of China of attraction of funds from non-specified objects of
society,
issuance of vouchers and commitment to pay the principal and interest
within a specified time period; attraction of public deposits in disguised
forms referred to means operations without the approval of the People’s
Bank of China of attraction of funds from non-soecified objects of society
not in the name of attraction of public deposits however with the
commitment to the fulfilment of obligations identical in nature to
those of attraction of public deposits.

    Article 5  No unit or individual shall, without the approval of the
People’s Bank of China in accordance with law, establish on its/his/her own
a financial institution or engage on its/his/her own in financial business
operations.

    Organs of industry and commerce administration shall not process the
registration of illegal financial institutions and illegal financial business
operations.

    Financial institutions shall not open accounts, handle settlements
and provide loans for illegal financial institutions and illegal financial
business operations.

    Article 6  Illegal financial institutions and illegal financial business
operations shall be banned by the People’s Bank of China.

    Local people’s governments of the localities wherein the illegal
financial institutions have been established or wherein illegal financial
business operations have taken place shall be responsible for the work
related to organization, coordination, supervision and banning.

    Article 7  No unit or individual shall interfere with, reject and
obstruct the banning by the People’s Bank of China in accordance with
law of illegal financial institutions and illegal financial business
operations.

    Article 8  Functionaries of the People’s Bank of China should, in
the fulfilment of duties and responsibilities in banning illegal financial
institutions and illegal financial business operations, keep secrets
in accordance with law.
Chapter II  Procedures for the Imposition of Ban

    Article 9  The People’s Bank of China should, upon uncovering,
investigate and verify forthwith an illegal financial institution, illegal
attraction of public deposits or attraction of public deposits in disguised
forms as well as illegal fund-raising; and should, upon preliminary
determination, ask the public security organ in time to establish a case for
detection and investigation in accordance with law.

    Article 10  The People’s Bank of China and public security organ should
cooperate with each other in the process of investigation and detection of illegal financial institutions and illegal financial business
operations.

    Article 11  The public security organ shall take compulsory measures
against the criminal suspect(s), funds and assets involved in the case of the illegal financial institution and illegal financial
business operations
to guard against the escape of criminal suspect(s) and transfer of funds
and assets.

    Article 12  The People’s Bank of China shall, upon determination through
investigation, take a decision on the banning of the illegal financial
institution and illegal financial business operations and declare the
said financial institution and financial business operations illegal,
order it to stop all business operations, and make a public announcement.

    Article 13  The People’s Bank of China should, upon uncovering of a
financial institution opening an account, handling settlements and providing
loans for an illegal financial institution or illegal financial business
operations, order the said financial institution to stop forthwith the
business operations concerned. No unit or individual shall take down the
funds concerned on its/his/her own.

    The organ of industry and commerce administration should, upon
uncovering, nullify the registration or effect a change in the registration
forthwith of the registration of the organ of industry and commerce
administration for the establishemnt of the illegal financial institution
or engagement in illegal financial business operations obtained through
deceit.

    Article 14  During the investigation conducted by the People’s Bank of China on an illegal financial institution and illegal financial
business
operations, the unit or individual under investigation must accept the
investigation conducted by the People’s Bank of China in accordance with
law, report on the situation truthfully and provide relevant materials,
and must not refuse or conceal.

    Article 15  The People’s Bank of China may, during investigation on
an illegal financial institution and illegal financial business operations,
employ such means as taking notes, copying and tape recording of the
information and materials related to the case to obtain evidences.

    The People’s Bank of China may, under circumstances that the evidences
may be destroyed or lost or difficult to obtain later, enter into
registration and put it(them) in safekeeping beforehand, the interested
party and persons concerned shall not destroy or transfer the evidence(s).
Chapter III  Consolidation and Settlement of Financial Claims and Debts

    Article 16  The institution engaging in illegal financial business
operations shall be responsible for the consolidation and settlement of the
financial clamis and debts formed as a result of illegal financial business
operations.

    Article 17  For an illegal financial institution that has the approval
department, competent unit or founding unit, once declared banned by the
People’s Bank of China, the approval department, competent unit or founding
unit shall be responsible for the organization of consolidation and
settlement of financial claims and debts; for an institution that has no
approval department, competent unit or founding unit, the local people’s
government of the locality wherein it is located shall be responsible for
the organization of consolidation and settlement of financial claims and
debts.

    Article 18  The participant(s) shall bear by himself/herself(themselves)
the loss suffered as a result of participating in illegal financial business
operations.

    Article 19  The debts and risks formed by illegal financial business
operations shall not be passed onto state-owned banks and other financial
institutions as well as any other units that have not participated in
illegal financial business operations.

    Article 20  Any remaining illegal property(properties) after the
consolidation and settlement of financial claims and debts shall be
confisticated and delivered to the central treasury on the spot.

    Article 21  Dispute(s) arising from consolidation and settlement
shall be resolved by the parties interested through consultation;
in the event of failure of consultation, resolution shall be sought
through judicial procedures.
Chapter IV  Penalty Provisions

    Article 22  Criminal liability shall be investigated in accordance
with law for the establishment of an illegal financial institution or
engagement in illegal financial business operations constituting a
crime; where a crime has not been constituted, the People’s Bank of China shall confisticate its illegal gains and concurrently impose
a
fine of more than 100% less than five times of the amount of illegal
gains; where there are no illegal gains, a fine of more than RMB 100000
Yuan less than RMB 500000 Yuan shall be imposed.

    Article 23  For the approval without authorization of the establishment
of an illegal financial institution or the approval without authorization
of engagement in illegal financial business operations, the person-in-charge
held directly responsible and other personnel directly respsonsible shall
be imposed administrative sanctions in accordance with law; where a crime
has been constituted, criminal liability shall be investigated.

    Article 24  Any financial institution that opens an account, handles
settlements and provides loans for illegal financial institutions or illegal
financial business operations in contravention of provisions, shall be
ordered by the People’s Bank of China to make a rectification, confisticated
of the illegal gains, and concurrently imposed a fine of more than 100%
less than five times of the amount of the illegal gains; where there are
no illegal gains, a fine of more than RMB 100000 Yuan less than RMB 500000
Yuan shall be imposed; disciplinary sanctions shall be imposed on the
person-in-charge held directly responsible and other personnel directly
responsible; where a crime has been constituted, criminal liability shall
be investigated in accordance with law.

    Article 25  Whoever refuses or obstructs the People’s Bank of China
in the implementation of its functions constituting a crime shall be
investigated of criminal liability in accordance with law; where a crime
has not been constituted, penalty for public security administration
shall be imposed by the public security organ in accordance with law.

    Article 26  Any functionary of the People’s Bank of China who divulges
secrets in fulfilling responsibilities of banning the illegal financial
institution and illegal financial business operations shall be imposed
administrative sanctions in accordance with law; where a crime has been
constituted, criminal liability shall be investigated in accordance with
law.

    Article 27  Functionaries of the People’s Bank of China, public security
organs and organs of industry and commerce administration whose neglect of
duty, abuse of power and malpractises for selfish gains constitute a crime
shall be investigated of criminal liability in accordance with law; where
a crime has not been constituted, administrative sanctions shall be imposed
in accordance with law.

    Any functionary of the People’s Bank of China who should have transferred
the case of the illegal financial institution and illegal financial business
operations to the public security organ but has failed to do so constituting
a crime shall be investigated of criminal liability in accordance with law;
where a crime has not been constituted, administrative sanctions shall be
imposed in accordance with law.
Chapter V  Supplementary Provisions

    Article 28  Reference shall be made to these Measures in banning illegal
securities agencies and illegal securities business operations. China
Securitites Supervision and Control Commission shall be responsible for
the implementation thereof and may formulate specific measures for
implementation in accordance with the principles of these Measures.

    Reference shall be made to these Measures in banning illegal commercial
insurance agencies and illegal commercial insurance business operations.
The department of commercial insurance supervision and control under the
State Council shall be responsible for the implementation thereof and may
formulate specific measures for implementation in accordance with the
principles of these Measures.

    Article 29  All kinds of foundations, mutual aid societies, savings
societies, capital service departments, share service departments, settlement
centers and investment corporations that engage in illegal financial business
operations exceeding the scope of the state policy prior to the coming into
effect of these Measures should be sorted out and consolidated within the
specified time period pursuant to the provisions of the State Council.
Any institution that continues to engage in illegal financial business
operations beyond the specified time period shall be banned pursuant to
these Measures; where the circumstances are serious and a crime has been
constituted, criminal liability shall be investigated in accordance with
law.

    Article 30  These Measures shall come into force as of the date of promulgation.





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CONSTITUTION ACT, 1982 – page 22

NOTES (1) The enacting clause was repealed by the Statute Law Revision Act, 1893, 56-57 Vict., c. 14 (U.K.). It read as...

CONSTITUTION ACT, 1982 – page 21

CONSTITUTION ACT, 1982 – page 20

CONSTITUTION ACT, 1982 – page 19

CONSTITUTION ACT, 1982 – page 18

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