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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.






CONSITUTION AMENDMENT (APPENDED WITH AMENDED VERSION OF THE CONSTITUTION )

Category  CONSTITUTION Organ of Promulgation  The National People’s Congress Status of Effect  In Force
Date of Promulgation  1999-03-15 Effective Date  1999-03-15  


The Amendment to the Constitution of the People’s Republic of China (Appended with 1999 amended version of the Constitution of the
People’s Republic of China)


Appendix: Constitution of the People’s Republic of China – 1999
Preamble
Chapter One  General Principles
Chapter Two  The fundamental Rights and Duties of Citizens
Chapter Three  The Structure of the State  
Chapter Four  The National Flag, the National Emblem and the Capital

(Adopted at the Second Session of the Ninth National People’s Congress on March 15, 1999, promulgated for implementation by the Proclamation
of the Ninth National People’s Congress on March 15, 1999)

    Article 12  The seventh paragraph of the Preamble of the Constitution, which reads, “Both the victory in China’s New-Democratic Revolution
and the successes in its socialist cause have been achieved by the Chinese people of all nationalities, under the leadership of the
Communist Party of China and the guidance of Marxism and Leninism and Mao Zedong Thought, by upholding truth, correcting errors and
surmounting numerous difficulties and hardships. Our country is in the primary stage of socialism. The basic task .0.before the nation
is the concentration of efforts of socialist modernization construction in accordance with the theory of building socialism with
Chinese characteristics. Under the leadership of the Communist Party of China and the guidance of Marxism-Leninism and Mao Zedong
Thought, the Chinese people of all nationalities will continue to adhere to the people’s democratic dictatorship and the socialist
road and to uphold reform and opening to the outside world, steadily improve socialist institutions, develop socialist democracy,
improve the socialist legal system, and work hard and self-reliantly to modernize the country’s industry, agriculture, national defense
and science and technology step by step to build China into a strong, prosperous culturally advances, democratic socialist nation.”
is revised as follows: “Both the victory in China’s New-Democratic Revolution and the successes in its socialist cause have been
achieved by the Chinese people of all nationalities, under the leadership of the Communist Party of China and the guidance of Marxism
and Leninism and Mao Zedong Thought, by upholding truth, correcting errors and surmounting numerous difficulties and hardships. Our
country will be in the primary stage of socialism over a long period of time. The basic task before the nation is the concentration
of efforts of socialist modernization construction along the road of building socialism with Chinese characteristics. Under the leadership
of the Communist Party of China and the guidance of Marxism-Leninism, Mao Zedong Thought and Deng Xiaoping Theory, the Chinese
people of all nationalities will continue to adhere to the people’s democratic dictatorship and the socialist road and to uphold
reform and opening to the outside world, steadily improve socialist institutions, develop socialist market economy, develop socialist
democracy, improve the socialist legal system, and work hard and self-reliantly to modernize the country’s industry, agriculture,
national defense and science and technology step by step to build China into a strong, prosperous culturally advances, democratic
socialist nation.”

    Article 13  One paragraph, which reads, “The People’s Republic of China exercises the governing of country according to law, making
a socialist country ruled by law.” is added to Article 5 of the Constitution as Paragraph One.

    Article 14  Article 6 of the Constitution, which reads, “The basis of the socialist economic system of the People’s Republic of China is socialist public
ownership of the means of production, namely, ownership by the whole people and collective ownership by the working people. ” “Socialist
public ownership eliminates the exploitation of man by man and implements the principle of ‘from each according to his ability, and
to each according to his work’.” is revised as follows: “The basis of the socialist economic system of the People’s Republic of China
is socialist public ownership of the means of production, namely, ownership by the whole people and collective ownership by the working
people. Socialist public ownership eliminates the exploitation of man by man and implements the principle of ‘from each according
to his ability, and to each according to his work’.” “At the primary stage of socialism, the state upholds the basic economic system
of ‘public ownership being principal, and multi ownership economies developing together’ and upholds the distribution system of ‘distribution
according to work being principal, and distribution mode coexisting’.”

    Article 15  the fist paragraph of Article 8 of the Constitution, which reads, “The rural contracted responsibility system based mainly
on the household linking remuneration to output and cooperative economic forms – producers’, supply and marketing, credit and consumers’
cooperatives – are part of the socialist economy collectively owned by the working people. All working people who are members of
rural economic collectives have the right, within the limits prescribed by law, to farm plots of cropland and hilly land allotted
for their private use, engage in household sideline production and raise privately owned livestock.” is revised as follows: “The
rural collective economic organizations implement double level operation structure, which is based on household contractual operation
and which coordinates both collective and individual production. All working people who are members of rural economic collectives
have the right, within the limits prescribed by law, to farm plots of cropland and hilly land allotted for their private use, engage
in household sideline production and raise privately owned livestock.”

    Article 16  Article 11 of the Constitution, which reads, “The individual economy of urban and rural working people, operating within the limits prescribed
by law, is a complement to the socialist public economy. The state protects the lawful rights and interests of the individual economy.”
“The state guides, assists and supervises the individual economy by administrative control.” “The state permits the private sector
of the economy to exist and develop within the limits prescribed by law. The private sector of the economy is a complement to the
socialist public economy. The state protects the lawful rights and interests of the private sector of the economy, and exercises
guidance, supervision and control over the private sector of the economy.” is revised as follows: ” The non-public economies such
as the individual economy and the private sector of the economy, operating within the limits prescribed by law, are important components
of the socialist market economy.” “The state protects the lawful rights and interests of the individual economy and the private sector
of the economy. The state exercises guidance, supervision and control over the individual economy and the private sector of the economy.”

    Article 17  Article 28 of the Constitution, which reads, “The state maintains public order and suppresses treasonable and other counter-revolutionary activities;
it penalizes is revised as follows: “The state maintains public order and suppresses treasonable criminal activities and other criminal
activities that endanger state security; it penalizes criminal activities that endanger public security and disrupt the socialist
economy as well as other criminal activities; and it punishes and reforms criminals.”

Appendix: Constitution of the People’s Republic of China – 1999
(Adopted at the Fifth Session of the Fifth National People’s Congress on December 4, 1982, amended at the First Session of the Seventh
National People’s Congress on April 12, 1988, and amended for the second time at the First Session of the Eighth National People’s
Congress on March 29, 1993, and amended for the third time at the Second Session of the Ninth National People’s Congress on March
15, 1999.)

    Table of Contents

    Preamble

    Chapter One – General Principles

    Chapter Two – The Fundamental Rights and Duties of Citizens

    Chapter Three – The Structure of the State

        Section I The National People’s Congress

        Section II The President of the People’s Republic of China

        Section III The State Council

        Section IV The Central Military Commission

        Section V The Local People’s Congresses and Local People’s Governments at Various
Levels

        Section VI The Organs of Self-Government of National Autonomous Regions

        Section VII The People’s Courts and the People’s Procuratorates

    Chapter Four – The National Flag, the National Emblem and the Capital

Preamble

    China is a country with one of the longest histories in the world. The people of all of nationalities of China
have jointly created a culture of grandeur and have a glorious revolutionary tradition. After 1840, feudal China was gradually turned
into a semi-colonial and semi-feudal country. The Chinese people waged many successive heroic struggles for national independence
and liberation and for democracy and freedom. Great and earthshaking historical changes have taken place in China in the 20th century.
The Revolution of 1911, led by Dr. Sun Yat-sen, abolished the feudal monarchy and gave birth to the Republic of China. However, the
historic mission of the Chinese people to overthrow imperialism and feudalism remained unaccomplished.

    After waging protracted and arduous struggles, armed and otherwise, along a zigzag course, the Chinese people
of all nationalities led by the Communist Party of China with Chairman Mao Zedong as its leader ultimately, in 1949, overthrew the
rule of imperialism, feudalism and bureaucrat-capitalism, won a great victory in the New-Democratic Revolution and founded the People’s
Republic of China. Since then the Chinese people have taken control of state power and become masters of the country.

    After founding the People’s Republic, China gradually achieved its transition from a New Democratic to a socialist
society. The socialist transformation of the private ownership of the means of production has been completed, the system of exploitation
of man by man abolished and the socialist system established. The people’s democratic dictatorship held by the working class and
based on the alliance of workers and peasants, which is in essence the dictatorship of the proletariat, has been consolidated and
developed. The Chinese people and the Chinese People’s Liberation Army have defeated imperialist and hegemonist aggression, sabotage
and armed provocations and have thereby safeguarded China’s national independence and security and strengthened its national defense.
Major successes have been achieved in economic development. An independent and relatively comprehensive socialist system of industry
has basically been established. There has been a marked increase in agricultural production. Significant advances have been made
in educational, scientific and cultural undertakings, while education in socialist ideology has produced noteworthy results. The
life of the people has improved considerably.

    Both the victory in China’s New-Democratic Revolution and the successes in its socialist cause have been achieved
by the Chinese people of all nationalities, under the leadership of the Communist Party of China and the guidance of Marxism and
Leninism and Mao Zedong Thought, by upholding truth, correcting errors and surmounting numerous difficulties and hardships. Our country
will be in the primary stage of socialism over a long period of time. The basic task before the nation is the concentration of efforts
of socialist modernization construction along the road of building socialism with Chinese characteristics. Under the leadership of
the Communist Party of China and the guidance of Marxism-Leninism, Mao Zedong Thought and Deng Xiaoping Theory, the Chinese people
of all nationalities will continue to adhere to the people’s democratic dictatorship and the socialist road and to uphold reform
and opening to the outside world, steadily improve socialist institutions, develop socialist market economy, develop socialist democracy,
improve the socialist legal system, and work hard and self-reliantly to modernize the country’s industry, agriculture, national defense
and science and technology step by step to build China into a strong, prosperous culturally advances, democratic socialist nation.

    The exploiting classes as such have been abolished in our country. However, class struggle will continue to
exist within certain bounds for a long time to come. The Chinese people must fight against those forces and elements, both at home
and abroad, that are hostile to China’s socialist system and try to undermine it.

    Taiwan is part of the sacred territory of the People’s Republic of China. It is the inviolable duty of all
Chinese people, including our compatriots in Taiwan, to accomplish the great task of reunifying the motherland.

    In building socialism it is essential to rely on workers, peasants and intellectuals and to unite all forces
that can be united. In the long years of revolution and construction, there has been formed under the leadership of the Communist
Party of China a broad patriotic united front which is composed of the democratic parties and people’s organizations and which embraces
all socialist working people, all patriots who support socialism and all patriots who stand for the reunification of the motherland.
This united front will continue to be consolidated and developed. The Chinese People’s Political Consultative Conference, a broadly
based representative organization of the united front which has played a significant historical role, will play a still more important
role in the country’s political and social life, in promoting friendship with other countries and in the struggle for socialist modernization
and for the reunification and unity of the country. Multi-party cooperation and the political consultation system under the leadership
of the Communist Party of China shall continue and develop for the extended future.

    The People’s Republic of China is a unitary multi-national state created jointly by the people of all its
nationalities. Socialist relations of equality, unity and mutual assistance have been established among the nationalities and will
continue to be strengthened. In the struggle to safeguard the unity of the nationalities, it is necessary to combat big-nation chauvinism,
mainly Han chauvinism, and to combat local national chauvinism. The state will do its utmost to promote the common prosperity of
all the nationalities.

    China’s achievements in revolution and construction are inseparable from the support of the people of the
world. The future of China is closely linked to the future of the world. China consistently carries out an independent foreign policy
and adheres to the five principles of mutual respect for sovereignty and territorial integrity, mutual non-aggression, non-interference
in each other’s internal affairs, equality and mutual benefit, and peaceful coexistence in developing diplomatic relations and economic
and cultural exchanges with other countries. China consistently opposes imperialism, hegemonism and colonialism, works to strengthen
unity with people of other countries, supports the oppressed nations and the developing countries in their just struggle to win and
preserve national independence and develop national economies, and strives to safeguard world peace and promote the cause of human
progress.

    This Constitution, in legal form, affirms the achievements of the struggles of the Chinese people of all nationalities
and defines the basic system and basic tasks of the state; it is the fundamental law of the state and has supreme legal authority.
The people of all nationalities, all state organs, the armed forces, all political parties and public organizations and all enterprises
and institutions in the country must take the Constitution as the basic standard of conduct, and they have the duty to uphold the
dignity of the Constitution and ensure its implementation.
Chapter One  General Principles

    Article 1  The People’s Republic of China is a socialist state under the people’s democratic dictatorship led by the working class
and based on the alliance of workers and peasants.

    The socialist system is the basic system of the People’s Republic of China. Disruption of the socialist state
by any organization or individual is prohibited.

    Article 2  All power in the People’s Republic of China belongs to the people.

    The National People’s Congress and the local people’s congresses at various levels are the organs through
which the people exercise state power.

    The people administer state affairs and manage economic, cultural and social affairs through various channels
and in various ways in accordance with the law.

    Article 3  The state organs of the People’s Republic of China apply the principle of democratic centralism.

    The National People’s Congress and the local people’s congresses at various levels are constituted through
democratic elections. They are responsible to the people and subject to their supervision.

    All administrative, judicial and procuratorial organs of the state are created by the people’s congresses
to which they are responsible and by which they are supervised.

    The divisions of functions and powers between the central and local state organs is guided by the principle
of giving full scope to the initiative and enthusiasm of the local authorities under the unified leadership of the central authorities.

    Article 4  All nationalities in the People’s Republic of China are equal. The state protects the lawful rights and interests of the
minority nationalities and upholds and develops a relationship of equality, unity and mutual assistance among all of China’s nationalities.
Discrimination against and oppression of any nationality are prohibited; any act that undermines the unity of the nationalities or
instigates division is prohibited.

    The state assists areas inhabited by minority nationalities accelerating their economic and cultural development
according to the characteristics and needs of the various minority nationalities.

    Regional autonomy is practiced in areas where people of minority nationalities live in concentrated communities;
in these areas organs of self-government are established to exercise the power of autonomy. All national autonomous areas are integral
parts of the People’s Republic of China.

    All nationalities have the freedom to use and develop their own spoken and written languages and to preserve
or reform their own folkways and customs.

    Article 5  The People’s Republic of China exercises the governing of country according to law, making a socialist country ruled by
law.

    The state upholds the uniformity and dignity of the socialist legal system.

    No laws or administrative or local rules and regulations may contravene the Constitution.

    All state organs, the armed forces, all political parties and public organizations and all enterprises and
institutions must abide by the Constitution and the law. All acts in violation of the Constitution and the law must be investigated.

    No organization or individual is privileged to be beyond the Constitution or the law.

    Article 6  The basis of the socialist economic system of the People’s Republic of China is socialist public ownership of the means
of production, namely, ownership by the whole people and collective ownership by the working people. Socialist public ownership eliminates
the exploitation of man by man and implements the principle of “from each according to his ability, and to each according to his
work”.

    At the primary stage of socialism, the state upholds the basic economic system of “public ownership being
principal, and multi ownership economies developing together” and upholds the distribution system of “distribution according to work
being principal, and distribution mode coexisting”.

    Article 7  The state-owned economy, i.e. the socialist economy with ownership by the people as a whole, is the leading force in the
national economy. The state will ensure the consolidation and development to the state-owned economy.”

    Article 8  The rural collective economic organizations implement double level operation structure, which is based on household contractual
operation and which coordinates both collective and individual production. All working people who are members of rural economic collectives
have the right, within the limits prescribed by law, to farm plots of cropland and hilly land allotted for their private use, engage
in household sideline production and raise privately owned livestock. The various forms of cooperative economy in the cities and
towns, such as those in the handicraft, industrial, building, transport, commercial and service trades, all belong to the sector
of socialist economy under collective ownership by the working people.

    The state protects the lawful rights and interests of the urban and rural economic collectives and encourages,
guides and helps the growth of the collective economy.

    Article 9  All mineral resources, waters, forests, mountains, grasslands, unreclaimed land, beaches, and other natural resources
are owned by the state, that is, by the whole people, with the exception of the forest, mountains, grasslands and unreclaimed land
and beaches that are owned by collectives in accordance with the law.

    The state ensures the rational use of natural resources and protects rare animals and plants. Appropriation
or damaging natural resources by any organization or individual by whatever means is prohibited.

    Article 10  Land in cities is owned by the state.

    Land in the rural and suburban areas is owned by collectives except for those portions which belong to the
state in accordance with the law; house sites and privately farmed plots of cropland and hilly land are also owned by collectives.
The state may, in the public interest, requisition land for its use in accordance with the law.

    No organization or individual may appropriate, buy, sell or unlawfully transfer land in other ways. The right
to the use of the land may be transferred in accordance with the law.

    All organizations and individuals using land must ensure its rational use.

    Article 11  The non-public economies such as the individual economy and the private sector of the economy, operating within the limits
prescribed by law, are important components of the socialist market economy.

    The state protects the lawful rights and interests of the individual economy and the private sector of the
economy. The state exercises guidance, supervision and control over the individual economy and the private sector of the economy.

    Article 12  Socialist public properties are inviolable.

    The state protects socialist property. Appropriation or damaging of state or collective property by any organization
or individual by whatever means is prohibited.

    Article 13  The state protects the right of citizens to own lawfully earned income, savings, houses and other lawful property.

    The state protects according to law the right of citizens to inherit private property.

    Article 14  The state continuously raises labor productivity, improves economic results and develops the productive forces by enhancing
the enthusiasm of the working people, raising the level of their technical skill, disseminating advanced science and technology,
improving the systems of economic administration and enterprise operation and management, instituting the socialist system of responsibility
in various forms and improving the organization of work.

    The state practices strict economy and combats waste.

    The state properly apportions accumulation and consumption, concerns itself with the interests of the collective
and the individual as well as of the state and, on the basis of expanded production, gradually improves the material and cultural
life of the people.

    Article 15  The state practices socialist market economy.

    The state shall enhance economic legislation and improve macro-control of the economy.

    The state shall, in accordance with the law, prohibit disturbance of the socioeconomic order by any organization
or individual.

    Article 16  State-owned enterprises have decision-making power with regard to operations within the limits prescribed by law.

    State-owned enterprises practice democratic management through congresses of workers and staff and in other
ways in accordance with the law.

    Article 17  Collective economic organizations have decision-making power in conduction independent economic activities, on condition
that they abide by the relevant laws.

    Collective economic organizations practice democratic management, elect and remove their managerial personnel
in accordance with the law and decide major issues concerning operation and management.

    Article 18  The People’s Republic of China permits foreign enterprises, other foreign economic organizations and individual foreigners
to invest in China and to enter into various forms of economic cooperation with Chinese enterprises and other Chinese economic organizations
in accordance with the law of the People’s Republic of China.

    All foreign enterprises, other foreign economic organizations as well as Chinese-foreign joint ventures within
Chinese territory shall abide by the law of the People’s Republic of China.

    Article 19  The state undertakes the development of socialist education and works to raise the scientific and cultural level of the
whole nation.

    The state establishes and administers schools of various types, universalizes compulsory primary education
and promotes secondary, vocational and higher education as well as pre-school education.

    The state develops educational facilities in order to eliminate illiteracy and provide political, scientific,
technical and professional education as well as general education for workers, peasants, state functionaries and other working people.
It encourages people to become educated through independent study.

    The state encourages the collective economic organizations, state enterprises and institutions and other sectors
of society to establish educational institutions of various types in accordance with the law.

    The state promotes the nationwide use of Putonghua.

    Article 20  The state promotes the development of natural and social sciences, disseminates knowledge of science and technology, and
commends and rewards achievements in scientific research as well as technological innovations and inventions.

    Article 21  The state develops medical and health services, promotes modern medicine and traditional Chinese medicine, encourages
and supports the setting up of various medical and health facilities by the rural economic collectives, state enterprises and institutions
and neighborhood organizations, and promotes health and sanitation activities of a mass character, all for the protection of the
people’s health.

    The state develops physical culture and promotes mass sports activities to improve the people’s physical fitness.

    Article 22  The state promotes the development of art and literature, the press, radio and television broadcasting, publishing and
distribution services, libraries, museums, cultural centers and other cultural undertakings that serve the people and socialism,
and it sponsors mass cultural activities.

    The state protects sites of scenic and historical interest, valuable cultural monuments and relics and other
significant items of China’s historical and cultural heritage.

    Article 23  The state trains specialized personnel in all fields who serve socialism, expands the ranks of intellectuals and creates
conditions to give full scope to their role in socialist modernization.

    Article 24  The state strengthens the building of a socialist society with an advanced culture and ideology by promoting education
in high ideals, ethics, general knowledge, discipline and legality, and by promoting the formulation and o

CIRCULAR OF THE GENERAL ADMINISTRATION OF CUSTOMS ON IMPROVING THE WORK OF EXPORT TAXES REFUND TO FOSTER EXPORT TRADE

The General Administration of Customs

Circular of the General Administration of Customs on Improving the Work of Export Taxes Refund to Foster Export Trade

ShuTong [1999] No.339

May 12, 1999

The General Administration of Customs Guangdong Branch, departments and sections of variaus Customs directly under the General Administration
of Customs:

The policy of export Taxes refund is an important measure adopted by the to promote exports. In order to speed up the work of export
refund, encourage enterprises to enlarge exports and guarantee the implementation of the State’s policy of export refund, the General
Administration of Customs hereby notifies as follows:

1.

Speeding up the Electronic Data Interchange for Export Manifests

(1)

For the ports where the electronic data interchange for manifests has already realized, the various Customs should take vigorous action
to strengthen the connection and coordination with the port office, the airline, the railway, the shipping agent, the forwarding
agent and other related sectors, establish a regular liaison system, formulate jointly concrete asfeguarding measures for data interchange
and make regular inspection so as to secure the promptness and correctness of data interchange.

(2)

For the ports where the electronic data interchange for manifests has not been realized so far, the various Customs should accelerate
the installation of H883/EDI System (version 5.0) to handle the issues like manifest entry and the cancellation after verification
of Customs declaration. The General Administration of Customs is now working for the development of unified network delivering software
and the solution to the problems of communications and identification through public network, so as to completely realize the electronic
data interchange for manifests. At present the various Customs must adopt the interim measure of imputting manifest data by hand
and verifying manifest data by the H883/EDI System.

2.

Achieving at an Early Date the Goal of Providing the State Taxation Departments with Real Time Electronic Data of Declaration

The General Administration of Customs has decided to extend the use of Export Declaration Network Verifying System among the various
Customs throughout the country from January 1, 2000, achieving through the network the goal of providing the State taxation departments
with real time electronic data of the certified note of the export declaration so as to improve the promptness and correctness of
verifying the declaration. The clearance management departments of the various Customs shall make correspondent technological and
professional preparations in advance to make sure that the system will be used in time by all the Customs throughout the country.

3.

Ensuring That Enterprises Can Receive in Time the Certified Note of Export Refund

The various Customs shall strictly follow the requirement of the General Administration of Customs and finish the cancellation after
verification of and the issuing of the certified note of the export declaration in five working days, so as to ensure the export
enterprises in receiving the certified note in time. The Customs shall publicize this working time limit as a service promise and
accept social supervision.

4.

Improving the Quality of the Electronic Data of the Export Declaration

The procedure of customs clearance shall be standardized and enterprises shall be required to strictly follow the “Declaration Filling-in
Norm” when filling in the declaration of import and export goods. The Customs shall specify responsibilities and examine and verify
the electronic data carefully to ensure their correctness, so as to avoid any delay in the enterprises’ going through the procedure
of export refund due to the questionable quality of electronic data. All the on-the-spot Customs shall ensure the consistence of
the electronic data with the certified note of the export declaration, the various functional departments of all Customs directly
under the General Administration of Customs shall ensure the completeness of the data, the technological divisions shall ensure the
smoothness of the network and the entry-exit management divisions of the General Administration of Customs shall ensure the data
submitted by all the Customs to be stored and put on the net in time.

5.

Strengthening Technological Gurantee

In the network technological divisions, the entryexit management divisions and the Customs spots, the Customs shall assign specific
people and specific telephones to establish the system of on-duty hot line to keep close contact with the Inspection and Control
Office of Entry-exit Operation under the General Administration of Customs, so as to handle questionable electronic data and the
cancellation after verification of the declaration in time. Enterprises shall be helped to get timely information on export clearance
through the network technology and means of communication.

6.

Perfecting the Work of Signing and Issuing the Verified Note of the Transit Declaration

The various Customs shall strictly follow the operation norm of the computer administration system of transit shipment and verify
and write off in time the data of transit goods so that the Customs of the departure can get timely information of the exported goods
and sign and issue the certified note of the export declaration for enterprises in time. The General Administration of Customs will
improve further the administration system of transit shipment and instruct the Customs to install the computer administration system
of transit shipment and connect it with the H883/EDI System, so as to respond more promptly to the clearing out of transit goods.

7.

Further Pushing Forward the Construction of Dedicated Network for Ports

The Inormation Management Divisions under the General Administration of Customs shall strengthen further the cooperation with the
Ministry of Information Industry, accelerate the construction of dedicated network for state ports, strive to connect the 600-plus
grassroots Customs in the whole country with the net by the end of the first half of the year and ensure technologically the smooth
exchange of entry data so as to provide correct and prompt service for related sectors and import and export enterprises.



 
The General Administration of Customs
1999-05-12

 







REGULATIONS ON MANAGEMENT OF ENTERTAINMENT VENUES

Category  Culture Organ of Promulgation  The State Council Status of Effect  In Force
Date of Promulgation  1999-03-26 Effective Date  1999-07-01  


Regulations on Management of Entertainment Venues

Chapter I  General Provisions
Chapter II  The Establishment of Operating Units of Entertainment Venues
Chapter III   The Operation Activities of Entertainment Venue
Chapter IV  The Public Security Administration in Entertainment Venues  
Chapter V  Penalty  Provisions
Chapter VI  Supplementary Provisions

(Adopted by the 15th Executive Meeting of the State Council on March 17, 1999, promulgated by Decree No.261 of the State Council of
People’s Republic of China on March 26, 1999, and effective as of July 1, 1999)

Chapter I  General Provisions

    Article 1  These Regulations are formulated to strengthen the management of entertainment venues, enrich people’s civilized and sound
recreation life, and promote the construction of socialist spiritual civilization.

    Article 2  Entertainment venues mentioned in these Regulations refer to commercial places for singing, dancing and amusement open
to the public for self-entertainment of consumers.  

    Article 3  Operating units of entertainment venues shall follow the direction of serving the people and the cause of socialism, and
carry out civilized and sound entertainment activities.

    Article 4  The State promotes and develops the excellent national culture, and prohibits from conducting activities containing the
following contents at entertainment venues:

    (1) opposing the fundamental principles defined in the Constitution;

    (2) jeopardizing the unity, sovereignty and territorial integrity of the State;

    (3) jeopardizing the security, interest or social stability of the State;

    (4) inciting the split of nationalities, infringing the minority customs and habits, and disrupting the unity
of nationalities

    (5) preaching the obscenity, eroticism, superstition or exaggerating violence, which is harmful to the physical
and mental health of consumers;

    (6) breaching the social morality or libeling and insulting others.  

    Article 5  The competent administrative departments of culture and public security organs of the people’s governments at or above
the county level, within their respective functions and duties, shall, in accordance with the provisions of these Regulations, strengthen
their guidance and supervision over the business activities, fire control and security at entertainment venues respectively.

    Article 6  The competent administrative departments of culture and public security organs of the people’s governments at various
levels as well as their staff members shall not operate entertainment venues, nor participate in or participate in under disguised
forms the business activities of entertainment venues.

    Article 7  Working staff members of competent administrative departments of culture  and public security organs, when performing
official duties at entertainment venues, shall show their credentials for law enforcement, be in civilized and courteous manners,
and handle cases according to law.

    The competent administrative departments of culture and public security organs, when conducting supervision
and examination over entertainment venues, shall not charge any fees; the outlay needed for conducting supervision and examination
over entertainment venues by the competent administrative department of culture may be provided by local public finance through the
legal adjustment of the tax rate of business tax of entertainment industry. The specific measures are to be formulated by people’s
governments of provinces, autonomous regions and municipalities directly under the Central Government.  
Chapter II  The Establishment of Operating Units of Entertainment Venues

    Article 8  The establishment of an operating unit of entertainment venues shall meet the following requirements:

    (1) have its name, domicile, organization and articles of association;

    (2) have its definite business range and entertainment items;

    (3) have places, equipment and facilities suitable for the entertainment items it provides;

    (4) installations for safety and fire control as well as sanitary conditions conform to the standard prescribed
by the State.

    Article 9  No entertainment venues shall be established at places which possibly disturb normal work and study of schools, hospitals
and organs.    

    The boundary noise of an entertainment venue shall conform to the standard prescribed by the State.

    Article 10  Anyone who falls under any of the following categories shall not assume the office of legal representative or manager
in charge of an operating unit of entertainment venue, nor participate in the operation and management of the operating unit of entertainment
venue:

    (1) A person has ever been sentenced to fixed-term imprisonment for the crime of rape, the crime of molesting,
humiliating a woman by forces, the crime of organizing, forcing, seducing, harboring, or introducing prostitution, the crime of gambling,
the crime of producing, selling, or disseminating obscene materials, or the crime of smuggling, trafficking, transporting and manufacturing
drugs;

    (2) A person has ever been deprived of political rights because of crime.

    Article 11  The State forbids the establishment of any entertainment venue operated with investment solely made by foreign businessman.

    Article 12  The competent department of culture administration, public security organ, and the administrative department of public
health under the people’s government at or above the county level at the place where an operating unit of entertainment venue to
be established is located shall, within their respective functions and duties, examine and verify the establishment of such an operating
unit of entertainment venue in accordance with the provisions of these Regulations; only those that are found up to standard upon
examination and verification may apply to the administrative department of industry and commerce for registration, and for obtaining
a business license.  

    Article 13  Where an operating unit of entertainment venue modifies its name, domicile, legal representative or manager in charge,
business range, entertainment items or any other important items, the matter shall be subjected to examination and verification by
original examining and verifying departments, and it shall apply to the administrative department of industry and commerce for undertaking
modification registration according to law.  
Chapter III   The Operation Activities of Entertainment Venue

    Article 14  An unit not examined and verified up to standard by the competent department of culture administration, public security
organ, and the administrative department of public health in accordance with these Regulations and without obtaining a business license
shall not engage in operation activities of an entertainment venue.

    An operating unit of entertainment venue shall not alternate, lend and lease its business license, nor contract
the entertainment venue to others.

    Article 15  Charges for all the entertainment items and services provided by an entertainment venue shall be clearly marked with their
prices.

    For improper prices and high charges, the price administration department under the people’s government at
or above the county level shall, in accordance with the relevant provisions of the State, adopt measures for controlling prices.

    Article 16  Performance activities organized by entertainment venues or songs they broadcast as well as screen pictures they show
shall not contain the contents listed in Article 4 of these Regulations.

    Any game programs with image and sound shown by electronic screen shall not contain the contents listed in
Article 4 of these Regulation.

    Sound and video products and electronic publications used in entertainment venues must be those published
by legally approved publishing units or legally imported upon approval.  

    Article 17  Entertainment venues shall not use electronic game machines or circuit boards that have the gambling function such as
return of coil, steel ball and lottery.

    Article 18  If an entertainment venue intends to increase or change electronic game machines or circuit boards, the matter must be
examined and verified by the original examining and verifying administrative department of culture.

    Article 19  Entertainment venues shall not provide any entertainment activities engaged in by use of computers.

    Article 20  When inviting art performance groups or individuals for commercial performances, the entertainment venues of song and
dance concerned shall abide by the management provisions of the State on commercial performances.

    Article 21  Entertainment venues of song and dance shall not receive minors.

    Electronic game machines in entertainment venues of game shall not be provided to minors except on stipulated
national holidays.

    Article 22  Staff in entertainment venues shall wear uniforms and credentials during opening hours.
Chapter IV  The Public Security Administration in Entertainment Venues  

    Article 23  Entertainment Venues shall establish and make different security systems and employ security personnel according to the
relevant provisions of the State.

    Security personnel must be trained by the public security organs of the people’s governments at or above the
county level; only those who have been trained and obtained qualification certificates may begin to work.

    Article 24  Working personnel in entertainment venues must hold resident identity cards; among them, those who come from other places
must additionally hold certificates for temporary stay and certificates for work. Foreigners and other persons from outside of mainland
China working in entertainment venues shall obtain licenses for foreigners to work.

    Entertainment venues shall not employ persons without or without full of the certificates mentioned in the
preceding paragraph.

    Article 25  It is strictly prohibit operation units of entertainment venues and their working personnel from organizing, forcing,
seducing, harboring, or introducing prostitution, from opening gambling houses or gambling parties, from seducing, abetting, cheating,
forcing others to eat or inject drugs, form conducting feudal superstition activities, form selling, disseminating obscene books,
films, video tapes, records, pictures and other obscene materials, and from providing accompanies for making profit, or providing
convenience and conditions for people who enter into entertainment venues to conduct above mentioned activities.

    Persons entering into entertainment venues are strictly prohibited from prostitution, wench, gambling, freak-out,
from selling and disseminating obscene books, films, video tapes, records, pictures and other obscene materials, from participating
in obscene or anti-society activities and other superstitious activities, and from engaging in accompanies for making profit.

    When founding persons entering into entertainment venues commit the acts stipulated in the preceding paragraph,
the operation unit of entertainment must order to stop, and promptly report to local public security organs.  

    Article 26  No one shall fight, overdrink, affray or humiliate and molest women at entertainment venues nor conduct activities which
disturb the normal operation order of entertainment venues.

    Article 27  No one shall illegally bring guns, ammunitions, controlled knives, and explosive, combustible , poisonous, or erosive
articles into entertainment venues.

    Article 28  Box rooms in entertainment venues of song and dance shall install transparent door and windows that show whole inner scenes
and no inner-locks shall be installed.

    Article 29  Operation units of entertainment venues shall strengthen measures for fire control, and guarantee the normal function
of fire control equipment.

    Article 30  The number of consumers received in entertainment venues of song and dance shall not exceed the verified number.
Chapter V  Penalty  Provisions

    Article 31  An operation unit of entertainment venue established without authorization and in violation of the provisions of these
Regulations shall be banned by the administrative department of industry and commerce, illegal earnings and equipment sued for illegal
business activities shall be confiscated; if the amount of illegal earnings is more than 4000 yuan, a fine of not less than 2 times
nor more than 5 times the illegal earnings shall also be imposed; if there are no any illegal earnings or the amount of illegal earnings
is less than 4000 yuan, a fine of not less than nor more than 20,000 yuan shall also be imposed.

    Article 32  If an operation unit of entertainment venues alter, lend and lease its business license, the administrative department
of industry and commerce shall impose punishment according to the provisions of the relevant laws or regulations.

    Article 33  If an operation unit of entertainment venues alternates the recreation item, add or reduce the model and type of game
machine or change the circuit board without the verification by the competent department of culture administration, the competent  department
of culture administration shall order and enforce the remedial procedure of verification within the time limit; if failing to make
the remedial procedure of verification, the operation unit of entertainment venues shall be ordered to suspend business for rectification,
have its illegal earnings confiscated, and also be imposed a fine of not less than 2,000 yuan nor more than 10,000 yuan.

    Article 34  If an operation unit of entertainment venues has any one of the following circumstances, the competent department of culture
administration shall order it make corrections, give it a warning, order it to suspend its business for rectification, confiscate
its illegal earnings; if the amount of illegal earnings is more than 2,500 yuan, it shall be concurrently imposed a fine of not less
than 2 times nor more than 4 times the illegal earnings; if there are no any illegal earnings or the amount of the illegal earnings
is less than 2,500 yuan, it shall be imposed concurrently a fine of not less than 2,500 yuan nor more than 10,000 yuan; if the circumstances
are serious, its business license shall be revoked by the administrative department of industry and commerce:

    (1) to contract with others for the operation of business by others;

    (2 to receive minors and provide game machines to minors except on the stipulated national holidays;

    (3) to use sound or video products and electronic publications that are not published by lawful publishing
units or imported in line with the verification of relevant laws;

    (4) to provide any recreation activities using computer;

    (5) to provide the model and type of game machine and circuit board with gambling functions.

    Article 35  In case of the following situations in an entertainment venue, the competent department of culture administration shall
order it to suspend its business for rectification, confiscate its illegal earnings and equipment or facilities used in illegal operation,
and shall also impose a fine of not less than 4,000 nor more than 40,000 yuan upon it; if the circumstances are serious, the administrative
department of industry and commerce shall revoke its business license; if a crime is constituted, criminal liability shall be investigated
according to law.

    (1) the organized performance or played songs or shown video images containing the contents which are prohibited
by Article 4 of these Regulations;

    (2) game programs designed and installed in game machines containing the contents which are prohibited by
Article 4 of these Regulations.

    Article 36  Except the situations described in Article 35 of these Regulations, any activities prohibited by Article 4 of these Regulations
in entertainment venues shall be dealt with by public security organs according to the provisions of the relevant laws and regulations;
if crimes are constituted, criminal liabilities shall be investigated according to law.

    Article 37  In case of any one of the following situations in an entertainment venue, the public security organ shall order it to
make corrections, give it a warning, order it to suspend its business for rectification, and shall also impose a fine of not less
than 1,000 yuan nor more than 10,000 yuan upon it; if the circumstances are serious, its business license shall be revoked by the
administrative department of industry and commerce:

    (1) its employees have no or have no complete certificates stipulated in Article 24 of these Regulations;

    (2) it fails to staff security guards according to the relevant provisions of the State or arrange security
guards without qualification certificates to work;

    (3) the box rooms do not conform to the provisions of Article 28 of these Regulations;

    (4) the number of consumers received in entertainment venue of song and dance exceeds the verified number.    

    Article 38  If an operation unit of entertainment venue violates the provisions on fire control, the public security organ shall punish
it according to the provisions of the relevant laws and regulations.

    Article 39  Any persons of an entertainment venue who has any one of the following situations shall be investigated for criminal liabilities
if crimes are constituted; if no crimes are constituted, penalties shall be given according to the relevant provisions of the regulations
on administrative penalties for public security:

    (1) to utilize conditions of its own to organize, force, seduce, harbor, or introduce prostitution;

    (2) to disguise or notify law-breakers or criminals when police investigate and suppress the prostitution
and wench;

    (3) to utilize conditions of its own open gambling games;

    (4) to utilize conditions of its own to seduce, abet, cheat, force others to eat or inject drugs.

    Article 40  If an operation unit of entertainment venue let prostitution and wench in the place drift, taking no measure to stop,
the public security organ shall order it to suspend its business for rectification, and shall also impose a fine of not less than
10,000 yuan nor more than 100,000 yuan upon it; if the circumstances are serious, its business license shall be revoked by the administrative
department of industry and commerce; the persons in charge directly responsible and the other responsible persons shall be given
disciplinary sanctions according to the provisions, and shall also be fined not more than 1,000 yuan by the public security organ.

    Article 41  In case of any one of the following situations in an entertainment venue, the public security organ shall order it to
make corrections, give it a warning, order it to suspend its business for rectification, and shall also impose a fine of not less
than 4,000 yuan nor more than 20,000 yuan upon it; if the circumstances are serious, its business license shall be revoked by the
administrative department of industry and commerce:

    (1) to engage in feudal superstitious activities;

    (2) to provide accompanies for making profit;

    (3) to provide convenience and conditions for people entering into the entertainment venue to engage in the
activities mentioned in Items (1),(2) of this Article.

    Article 42  In case of any one of the following situations, penalties shall be given  according to the provisions of the
regulations on administrate penalties for public security; if crimes are constituted, criminal liabilities shall be investigated
according to law:

    (1) to illegally bring guns, ammunitions, controlled knives, and explosive, combustible, poisonous, erosive
articles into an entertainment venue;

    (2) to prostitute, wench, gamble, freak-out, engage in feudal superstitious activities, sells and disseminate
obscene materials, participate in obscene or anti-society activities and obscene activities;

    (3) to fight, overdrink, affray or humiliate and molest women in place of entertainment or other activities
which disturb the normal running of business.

    Article 43  Personnel of the competent departments of culture administration or of the public security organs who operate entertainment
venues, or participate in or participate in under disguised forms business activities of entertainment venues, shall be given the
administrative sanctions of dismissal from post or dismissal.

    If the competent departments of culture administration or the public security organs commit any acts listed
in the preceding paragraph, the persons in charge directly responsible and the other directly responsible persons shall be punished
according to the provisions of the preceding paragraph

    Article 44  Personnel of the competent department of culture administration, the public security organs or any other administrative
departments abuse their powers, neglect their duties, practice favoritism or participate in or harbor illegal acts shall be investigated
for criminal liabilities according to law if crimes are constituted; or be given administrative sanctions according to law if no
crimes are constituted.
Chapter VI  Supplementary Provisions

    Article 45  The operation units of entertainment venues established upon approval before the effectiveness of these Regulations, shall
re-undergo the procedures for  of examination and verification according to the provisions of Article 12 of these Regulations
within 6 months since the effectiveness of these Regulations.

    Article 46  If an operation unit of non-entertainment venue concurrently operate entertainment items, these Regulations shall be implemented
as a reference.

    Article 47  These Regulations take effect as of July 1, 1999.






EXPLANATIONS OF THE SUPREME PEOPLE’S COURT AND SUPREME PEOPLE’S PROCURATORATE CONCERNING LAWS APPLICABLE TO HANDLING CASES OF ORGANIZATIONS AND EMPLOYING

OFFICIAL REPLY OF THE STATE ADMINISTRATION OF TAXATION ON ISSUES CONCERNING TAXATION ON INTEREST INCOME OF ENTERPRISES WITH FOREIGN INVESTMENT AND FOREIGN ENTERPRISES FROM PURCHASING TREASURY BONDS

The State Administration of Taxation

Official Reply of the State Administration of Taxation on Issues Concerning Taxation on Interest Income of Enterprises with Foreign
Investment and Foreign Enterprises from Purchasing Treasury Bonds

GuoShuiHan [1999] No.818

December 1,1999

Beijing State Taxation Bureau:

Your Request for Instruction on the Taxation of Interest Income of Enterprises with Foreign Investment and Foreign Enterprises from
Purchasing Treasury Bonds has been received. The reply is given as follows upon deliberation:

According to Article 12 of the Regulations on Treasury Bonds of the People’s Republic of China (the decree No.95 of the State Council)
promulgated by the State Council on March 18,1992, the interest income of enterprises with foreign investment and foreign enterprises
from purchasing treasury bonds is exempted from corporate income tax. But proceeds from assignment of treasury bonds shall be levied
corporate income tax according to law.



 
The State Administration of Taxation
1999-12-01

 







RESOLUTION OF THE STANDING COMMITTEE OF THE NATIONAL PEOPLE’S CONGRESS ON CONTINUED DISSEMINATION OF AND EDUCATION IN THE LEGAL SYSTEM

Resolution of the Standing Committee of the National People’s Congress on Continued Dissemination of and Education in the Legal System

     Dissemination of and education in the legal system, which began in 1986, has been going on for ten years and has played a positive
role in enhancing the whole nation’s understanding of the legal system, promoting the development of socialist democracy and the
socialist legal system and ensuring success in reform and the open policy and progress of the socialist modernization drive. In order
to meet the need of building and improving the system of a socialist market economy and promoting fulfillment of the Ninth Five-Year
Plan for national economic and social development and attainment of the Outline of the Long-Range Objectives through the Year 2010,
the Standing Committee of the National People’s Congress believes that it is necessary to implement a third five-year plan (1996-2000)
for dissemination of and education in the legal system among citizens. The purpose is, through continued and deepened dissemination
of and education in the legal system, focusing on the Constitution, the basic laws and the knowledge of laws governing the socialist
market economy, to further enhance all citizens’ conception of the legal system and their awareness of the importance of laws, help
cadres at all levels steadily raise their level and increase their ability of handling matters and administering affairs in accordance
with law, see to it that acts mut be compatible with the existing laws, laws must be enforced strictly and any violation of law must
be investigated, and push forward the process of administering State affairs according to law and building the country under a socialist
legal system. Hence, the Standing Committee has adopted the resolution as follows:

1. All citizens who are able to do so should receive publicity of and education in the legal system and carefully study the Constitution
and acquire knowledge of the relevant laws, so that they will be able to understand the laws, observe them and protect the lawful
rights and interests of the State, the collective and the individual in accordance with law.

2. Leading cadres at all levels, senior leading cardres in particular, should take the lead in studying the Constitution and acquiring
knowledge of the laws, abiding by the Constitution and laws and handling matters strictly in accordance with law, so that they will
make policy decisions and administer affairs according to law.

Cadre schools of all types and at all levels should make education in the legal system a required course. When examining or appraising
their cadres, all departments and local authorities should see whether they have acquired the necessary knowledge of laws and whether
they can handle matters strictly in accordance with law, which should be made one of the major qualifications.

3. Law-enforcing officers of judicial organs and administrative law- enforcing organs should, according to need of their work, receive
training in the knowledge of laws, proficiently master and apply the laws and rules and regulations as required by their own jobs,
enhance their own understanding of laws and perform their duties in accordance with law, so that they can administer affairs according
to law and execute justice impartially.

4. Managers and administers of enterprises and institutions should make mastery of the knowledge of the laws governing the socialist
market economy a necessary qualification and study the relevant laws, rules and regulations in connection with the actual conditions
of their own enterprise or institution, so that they can manage or administer affairs strictly in accordance with law, conscientiously
observe market order and safeguard public interests.

5. Teenagers should acquire the necessary knowledge of laws. Universities, colleges, secondary schools (including the secondary
technical schools) and primary schools should all offer education in the legal system. Organizations at the grassroots level should
pay attention to education in the general knowledge of laws among teenagers in society at large.

6. Vivid dissemination of and education in the legal system should be conducted in different forms to suit the different characteristics
of people and stress should be placed on actual results. Departments of culture, the press, publishing, radio, television and film
should give full play to the important role of the mass media and actively disseminate and conduct education in the legal system.

7. Dissemination of and education in the legal system should be conducted in connection with the application of the system and the
actual economic and social development and with the aim of promoting the lawful management of all undertakings. Lawful administration
of the affairs of a village, town, county, city or province and lawful management of different trades and departments should be promoted
with the high aim of administering State affairs according to law in mind.

8. Implementation of the third five-year plan for disseminating and conducting education in the legal system among citizens and its
continued and deepened dissemination and education are the common obligation of the society as a whole and must be accomplished under
the leadership of the Chinese Communist Party and by mobilizing and relying on all sectors of the society. All State organs and armed
forces, all political parties and public organizations, and all enterprises and institutions should conscientiously disseminate and
conduct education in the legal system among citizens working in there. The standing committees of the people’s congresses and the
people’s governments at all levels should exercise firm leadership and supervision over the implementation of the plan and this Resolution
and take effective measures to carry out the work steadily as a regular practice and make it a rule, so that studying and applying
laws and handling matters in accordance with law will become a social conduct throughout the society and a good legal environment
will be created for reform and the open policy and for the socialist modernization drive.

    

MOFTEC P.R.C.

EDITOR:Victor






CIRCULAR OF THE CHINA INSURANCE REGULATORY COMMISSION ON THE INTERIM MEASURES ON THE ADMINISTRATION OF CONCURRENT-BUSINESS INSURANCE AGENCY

The China Insurance Regulatory Commission

Circular of the China Insurance Regulatory Commission on the Interim Measures on the Administration of Concurrent-business Insurance
Agency

BaoJianFa [2000] No.144

August 4, 2000

Chapter I General Provisions

Article 1

These Measures are enacted in accordance with the “Insurance Law of the People’s Republic of China” in order to strengthen the administration
of concurrent-business insurance agents, regulate the acts of concurrent-business insurance agencies, maintain the order of the insurance
market, and promote the healthy development of the insurance industry.

Article 2

Concurrent-business insurance agents shall refer to the entities which are entrusted by the insurers to handle insurance business
on behalf of the latter at the time of engaging in their own business.

Article 3

Concurrent-business insurance agents shall, when engaging in the business of insurance, abide by the relevant laws and regulations
of the State and administrative rules, and shall comply with the principles of volunteerism, honesty and credibility.

Article 4

The legal liabilities occurred from a concurrent-business insurance agent’s agency of insurance business within the scope of the insurer’s
authorization shall be borne by the insurer.

Article 5

No party or governmental organization or its functional department, public institution or social organization shall engage in the
business of insurance agency.

Chapter II Administration on the Agency Qualifications

Article 6

The application for the qualification of concurrent-business insurance agent and the modification of relevant contents shall be reported
by the principal insurance company to China Insurance Regulatory Commission (hereinafter referred to as “CIRC”) for approval.

Article 7

Whoever applies for the qualification for concurrent-business insurance agency shall meet the following conditions:

(1)

having the business license checked and issued by the administrative organ of industry and commerce;

(2)

having the source of a certain scale of business of insurance agency directly relating to its major business;

(3)

having a fixed business premises;

(4)

having the conveniences to directly undertake the agency of insurance business in its business premises.

Article 8

Whoever applies for the qualification for concurrent-business insurance agency shall submit the following documents to CIRC:

(1)

an application form for the qualification to be a concurrent-business insurance agent (in triplet);

(2)

a duplicate of the copy of industrial and commercial business license;

(3)

a duplicate of the “Organization Code Certificate”;

(4)

a computer data disk for applying for the qualification to be a concurrent-business insurance agent;

(5)

a duplicate of the principal insurance company’s “License for Operating Insurance Business”;

(6)

other documents required by CIRC.

Article 9

CIRC shall issue a “License for Concurrent-Business Insurance Agency” to each entity that is checked and approved to have obtained
the qualification for concurrent-business insurance agency.

Article 10

The validity period for the “License for Concurrent-Business Insurance Agency” shall be three years, and a concurrent-business insurance
agent shall apply to go through the procedures for change of the license two months before the expiration of the validity period.

Article 11

Where a concurrent-business insurance agent needs to modify any content of the “License for Concurrent-Business Insurance Agency”
due to the change of its name or scope of its major business, it shall, within three months, apply to CIRC to go through the modification
procedures.

Article 12

Where a concurrent-business insurance agent is no longer to be qualified for concurrent-business insurance agency due to merger, cancellation
or dissolution, etc., it shall return the “License for Concurrent-Business Insurance Agency” to CIRC within one month.

Chapter III Administration of Agency Relationships

Article 13

An insurance company may only set up the concurrent-business insurance agency relationship with an entity that has obtained the “License
for Concurrent-Business Insurance Agency”, and authorize such an entity to carry out the business of insurance agency.

Article 14

An insurance company shall, when setting up the insurance agency relationship with a concurrent-business insurance agent, report to
CIRC for record, and shall submit the following documents:

(1)

a registration form for the concurrent-business insurance agency relationship (in triplet);

(2)

a duplicate of the “License for Concurrent-Business Insurance Agency”;

(3)

a computer data disk for applying for the insurance agency relationship. Where CIRC does not raise any objection within ten working
days of receipt of the documents for record, the insurance agency contract shall become effective, and the insurance agency relationship
is therefore set up.

Article 15

After the insurance agency relationship is set up, the insurance company shall issue a “Power of Attorney for Concurrent-Business
Insurance Agency” to the concurrent-business insurance agent. The production of the “Power of Attorney for Concurrent-Business Insurance
Agency” shall be centrally supervised by the CIRC.

Article 16

An insurance company shall, when terminating the insurance agency relationship with a concurrent-business insurance agent, take back
the “Power of Attorney for Concurrent-Business Insurance Agency”, fill out the “Registration Form for Concurrent-Business Insurance
Agency Relationship” and report the termination to the CIRC for record in a timely fashion.

Article 17

A concurrent-business insurance agent may only undertake the insurance business on behalf of one insurance company, and the scope
of the undertaken business shall be limited to the undertaken insurance category specified in the “License for Concurrent-Business
Insurance Agency”.

Article 18

A concurrent-business insurance agent shall place its “License for Concurrent-Business Insurance Agency” and “Power of Attorney for
Concurrent-Business Insurance Agency” at an obvious location of its business premise.

Chapter IV Administration of Practicing of Business

Article 19

An insurance company shall, when setting up the agency relationship with a concurrent-business agent, be responsible for determining
that the concurrent-business agent:

(1)

has the “License for Concurrent-Business Insurance Agency”; and

(2)

has no agency relationship with any other insurance company.

Article 20

An insurance company shall guarantee that each of its concurrent-business agents:

(1)

hold the “Power of Attorney for Concurrent-Business Insurance Agency”;

(2)

undertake the insurance within the category permitted by the “License for Concurrent-Business Insurance Agency”;

(3)

have received corresponding professional trainings.

Article 21

A concurrent-business insurance agent may only undertake the insurance business inside its main business premise, and shall not separately
set up agency offices outside its business premises.

Article 22

A concurrent-business insurance agent shall not have any of the following acts when it engages in the business of insurance agency:

(1)

to, without authorization, modify the insurance clauses, or raise or lower the insurance premium;

(2)

to, by taking advantage of administrative power or of duty or occupational conveniences, force or entice a insurer to purchase the
designated insurance policy;

(3)

to, by unfair means, force, entice or limit a insurer or insured to take out insurance policies or change the insurer ;

(4)

to collude with the insurer, the insured or the beneficiary to deceive the insurer ;

(5)

to make incorrect or misleading propaganda to other insurance institutions or insurance agency institutions;

(6)

to undertake the business of a re-insurance agency;

(7)

to misappropriate or embezzle the insurance premium;

(8)

to concurrently engage in the business of insurance brokerage;

(9)

other acts ascertained by the CIRC to have damaged the benefits of the insurer, the insurer or the insured.

Article 23

A concurrent-business insurance agent’s taking out policies of its own property insurance or life insurance from an insurance company
shall be regarded as if the insurance company directly underwrites the insurance business, and the concurrent-business insurance
agent shall not draw any agency commission.

Article 24

The agency period in a concurrent-business insurance agency contract shall be limited to the validity period of the “License for Concurrent-business
Insurance Agency” held by concurrent-business insurance agent at the time of conclusion of the contract.

Article 25

A concurrent-business insurance agency contract shall clearly state such contents as the category of the undertaken insurance, scope
of authorization, rate of commission, payment method and the time limit for transfer of premium, etc..

Article 26

A concurrent-business insurance agent shall, in accordance with the concurrent-business insurance agency contract, settle the premium
with and deliver the relevant documents to the insurance company in time. The time for the settlement of the premium shall be no
more than one month, and the premium shall not be used to deduct the agency commission.

Article 27

A concurrent-business insurance agent shall set up an independent premium income account and shall conduct separate accounting for
the business of concurrent-business insurance agency.

Article 28

A concurrent-business insurance agent shall set up account books for its business, which shall clearly state item by item such contents
as the item number of the insurance policy, category of the undertaken insurance, insurance amount, insurance premium, agency commission,
etc..

Article 29

An insurance company shall not pay the agency commission to a concurrent-business insurance agent by means of direct deduction with
premium or by cash.

Article 30

An insurance company shall not, without being approved by CIRC, entrust a concurrent-business insurance agent to issue the insurance
policies.

Article 31

An insurance company shall set up a registration book of concurrent-business insurance agency contracts, shall establish and improve
the archives of concurrent-business insurance agents, and shall set up account books for the agency business by regarding each concurrent-business
insurance agent to be a unit.

Article 32

An insurance company shall formulate a uniform text of concurrent-business insurance agency contracts and shall submit it to CIRC
for record.

Article 33

An insurance company shall hold regular trainings for the concurrent-business insurance agents, and the time for each concurrent-business
insurance agent to receive trainings in each year shall be no less than 60 hours.

Article 34

The measures for the payment and deposition of the guarantee bond of concurrent-business insurance agent shall be separately stipulated.

Chapter V Penalty Provisions

Article 35

Whoever violates these Measures by illegally engaging in the business of insurance agency without obtaining the “License for Concurrent-Business
Insurance Agency” and the “Power of Attorney for Concurrent-Business Insurance Agency” shall be punished in accordance with Article
142 of the “Insurance Law of the People’s Republic of China”.

Article 36

Any concurrent-business insurance agent who violates these Measures by deceiving the insurer, the insured or the beneficiary in the
business of insurance agency shall be punished in accordance with Article 133 of the “Insurance Law of the People’s Republic of
China”.

Article 37

Where a concurrent-business insurance agent violates Article 17 , 21, 22, or 23 of these Measures, it shall be ordered by CIRC to
make a correction, and a warning or a fine of no less than 10,000 Yuan but no more than 50,000 Yuan shall be imposed; if the case
is serious, its “License for Concurrent-Business Insurance Agency” shall be revoked. If its act constitutes a crime, it shall be
investigated for criminal liabilities in accordance with the law.

Article 38

Where an insurance company violates Article 13 , 19, 20, 29 or 30 of these Measures, it shall be ordered by the CIRC to make a correction,
and a fine of no less than 10,000 Yuan but no more than 100,000 Yuan shall be imposed; if the case is serious, it shall be ordered
by the CIRC to dismiss and replace the relevant liable person(s) or to cease its business for rectification, or the relevant main
liable person’s qualification for holding the post as a senior manager shall be cancelled.

Chapter VI Supplementary Provisions

Article 39

CIRC shall be responsible for the interpretation and amendment of these Measures.

Article 40

Where any provision relating to the original administration of concurrent-business insurance agents is inconsistent with these Measures,
these Measures shall prevail.

Article 41

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



 
The China Insurance Regulatory Commission
2000-08-04

 







DECISION OF THE GOVERNMENT ADMINISTRATION COUNCIL OF THE CENTRAL PEOPLE’S GOVERNMENT CONCERNING THE ESTABLISHMENT OF A FOREIGN TRADE ARBITRATION COMMISSION WITHIN THE CHINA COUNCIL FOR THE PROMOTION OF INTERNATIONAL TRADE

ROVISIONAL RULES OF PROCEDURE OF THE MARITIME ARBITRATION COMMISSION OF THE CHINA COUNCIL FOR THE PROMOTION OF INTERNATIONAL TRADE