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INTERIM PROVISIONS FOR THE CONTROL OF FOREIGN EXCHANGE SETTLEMENTS, SALES AND PAYMENTS

Category  BANKING Organ of Promulgation  The State Council Status of Effect  In Force
Date of Promulgation  1994-03-26 Effective Date  1994-04-01  


Interim Provisions for the Control of Foreign Exchange Settlements, Sales and Payments

Chapter I  General Provisions
Chapter II  Settlement of Foreign Exchange
Chapter III  Sale of Foreign Exchange
Chapter IV  Payment of Foreign Exchange
Chapter V  Supplementary Provisions

(Approved by the State Council on March 25, 1994 and Promulgated by

Decree No.3 of the People’s Bank of China on March 26, 1994)
Chapter I  General Provisions

    Article 1  These Provisions are formulated in order to
standardize methods of foreign exchange settlement, sale and payment
and to achieve conditional convertibility of Renminbi under current
payment items.

    Article 2  A designated foreign exchange bank shall conduct such
business operations as settlement of foreign exchange, sale of foreign
exchange, opening of foreign exchange accounts and payment to
foreigners in accordance with these Provisions.

    Article 3  The various foreign exchange earnings derived by any
domestic enterprise, public institution, government organ or social
organization (hereinafter referred to as “domestic organization”) must
be promptly remitted back into Chinese territory, and foreign exchange
settlements, sales, opening of foreign exchange accounts and payments
to foreigners shall be conducted pursuant to these Provisions.
Chapter II  Settlement of Foreign Exchange

    Article 4  Apart from those items included within the scope of
foreign exchange earnings prescribed in Articles 5 and 6 of these
Provisions, the following foreign exchange earnings derived by
domestic organizations must all be cleared and sold to designated
foreign exchange banks:

    (1) foreign exchange earnings derived from the export of goods or
goods in transit for which payment is received before collection and
from other trading activities:

    (2) foreign exchange earnings gained through the winning of bids under
overseas loans:

    (3) foreign exchange earnings gained through dealing in duty free
commodities within Chinese territory under the supervision and
administration of Customs:

    (4) foreign exchange earnings gained by providing commodities or
services in such industries and various types of agency business as
transport (including all types of transport), port-related business
(including seaports and airports), post and telecommunications (not
including international remittances), tourism, advertising,
consultancy, exhibitions, sales commission, maintenance and repair,
etc;

    (5) various foreign exchange income from the payment of stipulated
fees, fines and confiscated funds derived by the administrative and
judicial organs;

    (6) foreign exchange earnings gained through the assignment of
intangible assets such as land use rights, copyrights, trademark rights,
patent rights, technology with non-patent rights and goodwill, etc;

    (7) foreign exchange earnings gained through sales of real estate
and other assets to overseas buyers;

    (8) foreign exchange profits remitted back into Chinese territory
by overseas investment enterprises, foreign exchange recovered under
foreign economic aid projects and foreign exchange earnings gained
from overseas assets;

    (9) foreign exchange earnings gained through claims against foreign
parties and returned foreign exchange guarantee funds;

    (10) foreign exchange earnings gained through undertaking foreign
exchange insurance by insurance institutions;

    (11) foreign exchange earnings gained through foreign exchange
business operations by financial institutions which have obtained a
“Licence to Engage in Foreign Exchange Business Operations”;

    (12) foreign exchange earnings gained through overseas donations
of gifts, sponsorship and aid:

    (13) other foreign exchange earnings which shall be settled as
stipulated by the State Administration of Exchange Control.

    Article 5  For the following types of foreign exchange, domestic
organizations may apply to the State Administration of Exchange Control
or its branches (hereinafter referred to as “the Administration of Exchange
Control”) to open foreign exchange accounts with designated
foreign exchange banks in order to carry out foreign exchange
settlement pursuant to the regulations:

    (1) business transaction foreign exchange received in the course
of engaging in overseas contract projects, the provision of labor
services overseas, technical cooperation and other business service
operations by companies concerned;

    (2) foreign exchange withheld to be paid by organizations which
act as agents in undertaking foreign business operations or business
operations abroad;

    (3) foreign exchange temporarily withheld to be paid or to be
settled, including bid bonds, down-payments to guarantee fulfillment
of contract remitted from overseas, foreign exchange gained through
transit trade with collection before payment, foreign exchange
business remitted by post and telecommunications offices, advance
payments of foreign exchange received from foreign tourist
organizations by first class travel services, foreign exchange gained
through overseas insured transportation business operations by railway
departments and foreign exchange guarantee funds and mortgage funds
received by Customs authorities;

    (4) insurance premiums gained through acceptance of foreign
exchange insurance to be used for overseas reinsurance but which has
not yet been settled by insurance institutions.

    Earnings gained through settlement of the aforesaid types of
foreign exchange on time and in accordance with the accounting system
shall all be cleared and sold to designated foreign exchange banks.

    Article 6  Foreign exchange which falls within the following scope
need not be settled and may have foreign exchange accounts opened with
designated foreign exchange banks:

    (1) foreign exchange to be used for State-approved specific
purposes of repayment of domestic and overseas debts which have been
examined by the Administration of Exchange Control;

    (2) donated foreign exchange to be used for overseas payments as
stipulated in a donation agreement;

    (3) foreign exchange gained through overseas borrowings and the
issue of foreign currency bonds and shares;

    (4) foreign exchange remitted into Chinese territory as investment
by legal or natural persons overseas;

    (5) foreign exchange possessed by foreign diplomatic missions in
China, the representative offices of international organizations and
other overseas legal persons;

    (6) foreign exchange possessed by foreign investment enterprises;

    (7) foreign exchange owned by resident individuals and individuals
coming to China.

    Article 7  A domestic organization which is permitted to open
foreign exchange accounts as stipulated in Article 5 and 6 of these
Provisions shall carry out the procedures for opening foreign
exchange accounts with a designated foreign exchange bank by
presenting a document of opening a foreign exchange account issued by
the Administration of Exchange Control.
Chapter III  Sale of Foreign Exchange

    Article 8  Foreign exchange used for the following trade and non-
trade operational payments to foreigners by domestic organizations
shall be converted and paid at a designated foreign exchange bank by
presentation of valid commercial documents in relation to payment
method and the listed valid documents:

    (1) licences issued by the relevant departments, or import
documents and corresponding import contracts, shall be presented for
the import of goods subject to import quota control or for specific
goods under import control;

    (2) corresponding registration certificates and import contracts
shall be presented for the import of goods subject to the automatic
registration system;

    (3) apart from the aforesaid two items, an import contract shall
be presented for other goods imported in accordance with the State
regulations for import control.

    For advance payments (within the prescribed proportion), guarantee
funds for opening Letters of Credit, remaining payments, transportation
fees, insurance premiums and subsidiary expenses under import items as
stipulated in the aforesaid items (1) to (3), and commissions (within
the prescribed proportion), transportation fees, insurance premiums and
subsidiary expenses under export items, the valid documents as stipulated
in the aforesaid items (1) to (3), or relevant documents of approval,
shall be presented;

    (4) foreign exchange used to purchase commodities from bonded
zones and bonded warehouses, and to purchase items from foreign
exhibitions held in China, the valid documents stipulated in the
aforesaid items (1) to (3) shall be presented;

    (5) import contracts or agreements shall be presented for the
import of intangible assets such as patent rights, copyrights,
trademark and computer software, etc;

    (6) for foreign exchange to be used to pay compensation to
foreigners under export items, the exchange settlement sheet, claim
agreement, certificate of settlement of claim and certificate for the
refund of foreign exchange shall be presented;

    (7) bidding documentation shall be presented for bid bonds to be
used for overseas contract projects, and contracts shall be presented
for down payment of guarantee for fulfillment of contracts and project
funds to be paid on behalf of another party.

    Article 9  Foreign exchange used for the following trade and non-
trade operational payments to foreigners by domestic organizations
shall first be converted and paid at designated foreign exchange banks
based on the detailed account of payments provided by the customer
which shall then be examined and verified:

    (1) import processing contracts approved by foreign economic
relations and trade departments shall be presented for the import of
materials involved in processing for re-export;

    (2) payments for the import of duty-free commodities within the
prescribed scope of business operations made by duty-free companies
which have been approved by the State Council;

    (3) international through freight costs, cost of maintenance of
equipment, station, airport and seaport fees, fuel supply fees,
insurance premiums, non-financing lease fees and service charges to be
paid to foreigners by civil aviation, ocean shipping and railway
departments;

    (4) food allowances and subsidies to be paid to international
operational personnel by civil aviation, ocean shipping and railway
departments;

    (5) expenses paid for international postal services and
telecommunications by post and telecommunications departments.

    Article 10  Foreign exchange used for the following trade and non-
trade operational payments to foreigners by domestic organizations
shall be converted and paid at designated foreign exchange banks
against foreign exchange sales notices issued by the Administration of
Exchange Control:

    (1) advance payments for goods and commissions which are in excess
of the prescribed proportions;

    (2) payments to foreigners incurred in the course of making
payments before collection under transit trade items.

    Article 11  Foreign exchange which is used within the limits of
the financial budget by organs, public institutions and social
organizations for non-trade and non-profit purposes shall be
handled in accordance with the “Interim Provisions Regarding Financial
Administration of Non-trade and Non-profit Foreign Exchange”.

    Article 12  Foreign exchange which is without the financial
budget and used for the following non-profit purposes by domestic
organizations shall be converted and paid at designated foreign exchange
banks against the foreign exchange sales notices issued by the
Administration of Exchange Control:

    (1) foreign exchange to be used to hold exhibitions and
investment-seeking symposia, and to conduct training and to make film
and television programs abroad, etc;

    (2) costs of external publicity, aid to foreign countries,
foreign exchange donated to foreign parties, membership dues to
international organizations;

    (3) establishment costs and funds used for the establishment of
representative offices or administrative bodies overseas;

    (4) examination fees paid to foreigners by the overseas
examination coordination center of the State Education Commission;

    (5) foreign exchange which is used for other non-profit purposes.

    Article 13  Foreign exchange which is used for the following non-
trade and non-profit purposes by individuals shall be converted
and paid at designated foreign exchange banks authorized by the
Administration of Exchange Control pursuant to the relevant regulations:

    (1) Renminbi wages, living expenses and subsidies for leaves of
absence from work received by foreign experts who have been employed
by domestic organizations and which require conversion into foreign
exchange;

    (2) foreign exchange used by individuals when leaving the country
for personal reasons and for visiting and entertainment purposes by
individuals;

    (3) retirement, severance and discharge payments and disabled
person pensions which require the purchase of foreign exchange for
remittance overseas to individuals who have settled overseas;

    (4) foreign exchange specifically used for the purchase of small
amounts of medicine and medical equipment through the mail from
overseas by domestic resident individuals.

    Article 14  The following types of foreign exchange used under
capital financing items by domestic organizations shall be converted
and paid at designated foreign exchange banks by presentation of the
following listed documents:

    (1) loan agreement and notice of loan principal and interest
required repayments issued by creditor institutions shall be presented
for repayment of principal and interest on foreign exchange loans
issued by domestic financial institutions using their own funds;

    (2) guarantee contract and payment notice issued by creditor
institutions shall be presented for foreign exchange used for domestic
guarantees to fulfill contracts;

    (3) resolutions of distribution of profits proposed by a board of
directors and tax receipts shall be presented for dividends paid in
foreign currency which have been approved by the State.

    Article 15  The following types of foreign exchange used for
capital financing items by domestic organizations shall firstly be
declared to the Administration of Exchange Control by presentation of the
following listed valid documents and shall then be converted and paid
at designated foreign exchange banks by presenting documents of
examination and approval issued by the Administration of Exchange Control:

    (1) Foreign Debt Registration Certificates or Foreign Exchange
(Transferred) Loan Registration Certificates and notice of loan
principal and interest required repayments issued by creditor
institutions shall be presented for repayment of foreign debts or
foreign exchange (transferred) loan principal, interest and expenses;

    (2) guarantee contracts, Foreign Exchange Guarantee Registration
Certificates issued by the Administration of Exchange Control and
payment notice issued by overseas organizations shall be presented for
foreign exchange used to provide a foreign exchange guarantee overseas in
order to fulfill a contract;

    (3) a document of approval issued by a project examination and
approval department and an investment contract shall be presented for
overseas investment funds to be remitted abroad;

    (4) a document of approval issued by a project examination and
approval department and a contract shall be presented for registered
funds contributed in foreign exchange by Chinese investors in a
foreign investment enterprise as required and which has been approved.

    Article l6  Legal Renminbi income (such as visa fees and
certification fees, etc.) derived by foreign diplomatic missions in
China which is required to be remitted overseas shall be converted and
paid at designated foreign exchange banks authorized by the Administration
of Exchange Control.

    Legal Renminbi income (such as passenger-cargo freight received by
representative offices of foreign airlines or ocean-shipping companies
in China) derived by overseas organizations with legal person status
in China which is required to be remitted overseas must be declared to
the Administration of Exchange Control by presentation of certification
documents and shall then be converted and paid at designated foreign
exchange banks by presentation of the foreign exchange sales notice
issued by the Administration of Exchange Control.

    Article 17  Renminbi which has not been used up, when leaving the
country, by foreigners, overseas Chinese and Hong Kong, Macao and
Taiwanese compatriots who came to China for a temporary stay, may be
converted back into foreign exchange by presentation of their passport
and original conversion sheets (valid for a period of six months) for
taking out of China.
Chapter IV  Payment of Foreign Exchange

    Article 18  Where a foreign exchange account exists and payment
usage conforms to the prescribed scope of using a foreign exchange
account, the balance of that foreign exchange account may first be
used to make all external payments, where foreign exchange payments
are outside the prescribed scope of using a foreign exchange account
is insufficient to make payments, the foreign exchange may be purchased
in order to make external payments.

    Article 19  Where external payments are made from a foreign
exchange account, these shall be examined by the bank at which the
foreign exchange account is opened according to prescribed scope of
revenue and expenditure of the foreign exchange account and pursuant
to the relevant provisions of Chapter III of these Provisions, and
the payments shall be made.

    Article 20  A payment made through purchase of foreign exchange or
made from a foreign exchange account must be handled within the time
limit prescribed in the settlement method or in the contract, and
external payments shall not be made in advance.

    Article 21  Where repayment of overseas loan principal and
interest is required to be made ahead of the prescribed time, it shall
first be subject to approval by the Administration of Exchange Control,
after which foreign exchange may be purchased in order to make the
external payment.
Chapter V  Supplementary Provisions

    Article 22  In order to prevent exchange rate risks for units with
forward payment contracts or debt repayment agreements, the designated
foreign exchange banks may conduct forward deals between Renminbi and
foreign currencies and other value maintenance operations.

    Article 23  Payments for import under barter trade shall not be
made through the purchase of foreign exchange or from foreign exchange
accounts.

    Article 24  A designated foreign exchange bank shall open an
account with 50% of the amount of exchange settled by an export
enterprise for that export enterprise. The exchange used for expanding
its exports (including for import processing, packing materials,
export base, claims and settlement of claims, transport costs and
insurance premiums, after-sales service and other subsidiary trade
expenses) required by an export enterprise shall be handled for
conversion and payment pursuant to the provisions of articles 8 and 9
of these Provisions from the account balance by the bank handling
conversion and payment.

    Article 25  A designated foreign exchange bank shall submit
exchange settlement, sales and payment statements to the Administration
of Exchange Control every 10 days.

    Article 26  A domestic organization may select a designated
foreign exchange bank within its registered area to carry out business
operations such as the opening of foreign exchange accounts,
settlement and purchase of exchange, and these activities shall be
reported to the Administration of Exchange Control for the record.

    Financial institutions engaging in foreign exchange business
operations and domestic organizations which conduct exchange
settlement, sale and payment business shall, without preconditions,
accept the supervision and inspection of the Administration of Exchange
Control and shall produce and provide relevant documents.

    Article 27  If a party violates these Provisions, the Administration
of Exchange Control may impose such punishment as warnings,
fines or suspension of exchange settlement, sale and payment for
business operations.

    Article 28  The provisions of Chapter III of these Provisions shall
not apply to foreign investment enterprises.

    Article 29  The State Administration of Exchange Control shall be
responsible for the interpretation of these Provisions.

    Article 30  These Provisions shall become effective on April 1, 1994.
In the event of any conflict between these Provisions and other relevant
legislation promulgated previously, these current Provisions shall prevail.





PROVISIONS ON THE ADMINISTRATION OF EMPLOYMENT OF TAIWAN, HONG KONG AND MACAO RESIDENTS IN THE MAINLAND

20051001

The Ministry of Labor

Provisions on the Administration of Employment of Taiwan, Hong Kong and Macao Residents in the Mainland

LaoDongBuFa [1994] No.102

February 21, 1994

Chapter I General Provisions

Article 1

These Provisions are formulated in accordance with the relevant laws and regulations and for the purposes of strengthening the administration
of employment of Taiwan, Hong Kong and Macao residents (hereinafter referred to as the persons from Taiwan, Hong Kong and Macao)
in the Mainland and the units in the Mainland employing such persons and protecting the lawful rights and interests of employed persons
and employing units.

Article 2

Employment of the persons from Taiwan, Hong Kong and Macao in the Mainland mentioned in these Provisions means the acts that the persons
from Taiwan, Hong Kong and Macao are employed according to law by the employing units in the Mainland to engage in certain social
labors and get labor remuneration or business income.

Article 3

These Provisions apply to all employing units applying for employment of the persons from Taiwan, Hong Kong and Macao, including private
industrial and commercial households, and the persons from Taiwan, Hong Kong and Macao seeking employment in the Mainland.

Article 4

These Provisions do not apply to the experts from the regions of Taiwan, Hong Kong and Macao invited through the State Bureau of Foreign
Experts, legal representatives of business representative offices set up in the Mainland by Taiwan, Hong Kong and Macao, and investors
with legal person status who set up foreign-capital enterprises in the Mainland.

Article 5

Employment of the persons from Taiwan, Hong Kong and Macao in the Mainland is subject to the employment permit system. Persons from
Taiwan, Hong Kong and Macao having the employment permit may seek employment in the Mainland and are protected by law.

Article 6

Labor departments of provinces, autonomous regions and municipalities directly under the Central Government and their authorized labor
departments at the prefecture and city levels are responsible for the work of administration of employment of the persons from Taiwan,
Hong Kong and Macao in the Mainland.

Chapter II Application, Examination and Approval for Employment

Article 7

An employing unit in the Mainland intending to employ a person from Taiwan, Hong Kong or Macao must apply to the labor department;
and a person from Taiwan, Hong Kong or Macao seeking employment in the Mainland must fill in the Application Form for Employment
of Taiwan, Hong Kong or Macao Residents in the Mainland (see Attachment 1) and must be approved by the labor department.

Article 8

A person from Taiwan, Hong Kong or Macao seeking employment in theMainland must meet the following requirements:

(1)

to have attained the age of 18, healthy, and to have a valid travel permit issued by the competent organ in the Mainland.

(2)

to have a professional qualification certificate or corresponding certificate of education necessary for the work to be engaged in,
as well as practical experiences in engaging in the profession.

Article 9

An employing unit in the Mainland intending to employ a person from Taiwan, Hong Kong or Macao must meet the following requirements:

(1)

It has a special demand on the position for which the person from Taiwan, Hong Kong or Macao is to be employed, and there is temporary
shortage of a proper candidate for the said position in the Mainland;

(2)

It has a certificate issued by the employment agency organization under the labor department proving the impossibility in finding
and employing a proper person needed within its area, or unable to employ a proper person needed for the position after three-week
open employment activities carried out under the guidance of the labor department; and

(3)

It may not violate the relevant provisions of the State in employing the persons from Taiwan, Hong Kong and Macao.

Article 10

If the contract of a foreign-capital enterprise established in the Mainland stipulates that the general manager or deputy general
manager is the person from Taiwan, Hong Kong or Macao, he shall be exempt from examination and approval procedures for employment.

Article 11

If a person from Taiwan, Hong Kong or Macao is examined and approved to seek employment in the Mainland, the labor department of the
province, autonomous region or municipality directly under the Central Government or its authorized labor department at the prefecture
or city level issues him an Employment Permit of the Person from Taiwan, Hong Kong or Macao (see Attachment 2, and hereinafter referred
to as the Employment Permit). The Employment Permit is made centrally by the Ministry of Labor.

Article 12

Persons from Taiwan, Hong Kong and Macao who are approved to seek employment in the Mainland shall, by presenting the Employment Permit,
apply to local public security organs for temporary residence.

Chapter III Labor Management and Supervision

Article 13

Persons from Taiwan, Hong Kong and Macao who are employed in the Mainland shall abide by laws and regulations of the State. Labor
departments exercise labor management over the employed persons and employing units.

Article 14

Employing units and employed persons must sign a labor contract in accordance with the relevant provisions for the administration
of the labor contract promulgated by the State. The rights and obligations of both sides, the time limit, alteration, termination
of a labor contract, the conditions of releasing from the labor contract, responsibilities for violating the labor contract and other
proceedings needed to be defined should be prescribed clearly in the labor contract.

Article 15

If a labor dispute arises in the course of performing a labor contract, it is settled according to the Regulations of the People’s
Republic of China for the Settlement of Enterprise Labor Disputes.

Article 16

Labor departments implement the annual inspection system on the Employment Permit. When an employing unit employs a person from Taiwan,
Hong Kong or Macao up to one year each time, it shall, within one month at the expiration of the period, voluntarily go to the labor
department to go through the annual inspection procedures. If such procedures are not gone through on schedule, the Employment Permit
becomes invalid automatically.

Article 17

The employment of a person from Taiwan, Hong Kong or Macao by an employing unit shall end at the expiration of the contract term.
If it is necessary to extend the employment, it must, one month prior the expiration of the original contract term, submit an application
for extending the employment of the person from Taiwan, Hong Kong or Macao to the labor department, and the employment may be extended
only after being approved.

Article 18

If a person from Taiwan, Hong Kong or Macao is dismissed by an employing unit or terminates his contract on his own, the employing
unit shall timely report to the labor department to take back and cancel his Employment Permit. If the Employment Permit is lost
or damaged, it shall promptly report to the original issuing organ and apply for a new one.

Article 19

The unit employing a person from Taiwan, Hong Kong or Macao must be the same as the employing unit indicated in the Employment Permit.
The Employment Permit is valid only in the employing unit approved within the said jurisdiction area. A change of the employing unit
within the jurisdiction area must be approved by the original issuing organ and be subject to the procedures for the change. If the
employment is sought outside the original jurisdiction area, the procedures for employment application, examination and approval
must be gone through again.

Article 20

If an employment agency or brokerage service organization in the Mainland intends to introduce the persons from Taiwan, Hong Kong
and Macao to work in the Mainland, it must file an application to the labor department of the province, autonomous region or municipality
directly under the Central Government in the place of its location and may engage in such service only after being approved and authorized.

Article 21

Employing units and employed persons shall voluntarily accept the supervision from labor supervision organizations over their implementation
of related labor laws and regulations.

Chapter IV Penalty Provisions

Article 22

A person from Taiwan, Hong Kong or Macao who, in violation of Article 7 of these Provisions, seeks an employment without approval,
is ordered to stop the employment and imposed a fine of 5 to 10 times of his monthly average wage. The specific standard is formulated
by the labor department of the province, autonomous region or municipality directly under the Central Government.

Article 23

If an employing unit violates Article 7 of these Provisions, it is ordered to stop the employment and imposed a fine of 10 to 15
times of the monthly average wage of the employed person. The specific standard is formulated by the labor department of the province,
autonomous region or municipality directly under the Central Government.

Article 24

If an organization or individual, in violation of Article 20 of these Provisions, illegally engages in introducing the persons from
Taiwan, Hong Kong and Macao to work in the Mainland, all of its or his illegal incomes shall be confiscated, and it or he shall be
deemed an illegal labor service and punished according to law.

Article 25

If a person from Taiwan, Hong Kong or Macao forges, alters, passes off or transfers the Employment Permit or refuses the inspection
from the labor department, the labor department takes back and cancels the Employment Permit and imposes on him a fine of 5 to 10
times of his monthly average wage. The specific standard is formulated by the labor department of the province, autonomous region
or municipality directly under the Central Government. If a crime is constituted, he is handed over to the judicial department for
punishment.

Article 26

If a person from Taiwan, Hong Kong or Macao fails to comply with or violates these Provisions, the labor department refuses to issue
the Employment Permit thereto. If the Employment Permit has already been issued thereto, it shall be revoked and invalidated.

Article 27

Penalties specified in this Chapter are decided by labor departments. All fines collected are timely turned over into the State Treasury
according to the unified provisions of the State.

Chapter V Supplementary Provisions

Article 28

Labor departments of provinces, autonomous regions and municipalities directly under the Central Government may formulate the rules
for implementation in accordance with these Provisions, and submit them to the Ministry of Labor for the record.

Article 29

The Ministry of Labor is responsible for the interpretation of these Provisions.

Article 30

These Provisions shall enter into force as of the date of promulgation, that is, as of February 21, 1994. Persons from Taiwan, Hong
Kong and Macao who, without approval of labor departments of provinces, autonomous regions and municipalities directly under the
Central Government, have been already employed by employing units in the Mainland prior to the said date, shall go through the application
procedures according to these Provisions within one month from the date of operation of these Provisions. Labor departments shall
issue the Employment Permit to those who meet the requirements, and deal with those who fail to meet the requirements or fail to
go through the application procedures as illegal employment.



 
The Ministry of Labor
1994-02-21

 






LABOUR LAW

Category  LABOUR ADMINISTRATION Organ of Promulgation  The Standing Committee of the National People’s Congress Status of Effect  In Force
Date of Promulgation  1994-07-05 Effective Date  1995-01-01  


Labour Law of the People’s Republic of China

Contents
Chapter I  General Provisions
Chapter II  Promotion of Employment
Chapter III  Labor Contracts and Collective Contracts
Chapter IV  Working Hours, Rest and Vacations
Chapter V  Wages
Chapter VI  Occupational Safety and Health
Chapter VII  Special Protection for Female and Juvenile Workers
Chapter VIII  Vocational Training
Chapter IX  Social Insurance and Welfare
Chapter X  Labor Disputes
Chapter XI  Supervision and Inspection
Chapter XII  Legal Responsibility
Chapter XIII  Supplementary Provisions

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

National People’s Congress on July 5, 1994, promulgated by Order No. 28 of
the President of the People’s Republic of China on July 5, 1994, and effective
as of January 1, 1995)
Contents

    Chapter I  General Provisions

    Chapter II  Promotion of Employment

    Chapter III  Labor Contracts and Collective Contracts

    Chapter IV  Working Hours, Rest and Vacations

    Chapter V  Wages

    Chapter VI  Occupational Safety and Health

    Chapter VII  Special Protection for Female and Juvenile Workers

    Chapter VIII  Vocational Training

    Chapter IX  Social Insurance and Welfare

    Chapter X  Labor Disputes

    Chapter XI  Supervision and Inspection

    Chapter XII  Legal Responsibility

    Chapter XIII  Supplementary Provisions
Chapter I  General Provisions

    Article 1  This Law is formulated in accordance with the Constitution in
order to protect the legitimate rights and interests of laborers, readjust
labor relationship, establish and safeguard a labor system suited to the
socialist market economy, and promote economic development and social progress.

    Article 2  This Law applies to all enterprises and individual economic
organizations (hereinafter referred to as employing units) within the boundary
of the People’s Republic of China and laborers who form a labor relationship
therewith.

    State organs, institutional organizations and societies as well as
laborers who form a labor contract relationship therewith shall follow this
Law.

    Article 3  Laborers shall have the right to be employed on an equal
basis, choose occupations, obtain remuneration for their labor, take rest,
have holidays and leaves, obtain protection of occupational safety and health,
receive training in vocational skills, enjoy social insurance and welfare, and
submit applications for settlement of labor disputes, and other rights
relating to labor as stipulated by law.

    Laborers shall fulfill their labor tasks, improve their vocational
skills, follow rules on occupational safety and health, and observe labor
discipline and professional ethics.

    Article 4  The employing units shall establish and perfect rules and
regulations in accordance with the law so as to ensure that laborers enjoy
the right to work and fulfill labor obligations.

    Article 5  The State shall take various measures to promote employment,
develop vocational education, lay down labor standards, regulate social
incomes, perfect social insurance system, coordinate labor relationship, and
gradually raise the living standard of laborers.

    Article 6  The State shall advocate the participation of laborers in
social voluntary labor and the development of their labor competitions and
activities of forwarding rational proposals, encourage and protect the
scientific research and technical renovation engaged by laborers, as well as
their inventions and creations; and commend and award labor models and
advanced workers.

    Article 7  Laborers shall have the right to participate in and organize
trade unions in accordance with the law.

    Trade unions shall represent and safeguard the legitimate rights and
interests of laborers, and independently conduct their activities in
accordance with the law.

    Article 8  Laborers shall, through the assembly of staff and workers or
their congress, or other forms in accordance with the provisions of laws,
rules and regulations, take part in democratic management or consult with the
employing units on an equal footing about protection of the legitimate rights
and interests of laborers.

    Article 9  The labor administrative department of the State Council shall
be in charge of the management of labor of the whole country.

    The labor administrative departments of the local people’s governments at
or above the county level shall be in charge of the management of labor in
the administrative areas under their respective jurisdiction.
Chapter II  Promotion of Employment

    Article 10  The State shall create conditions for employment and increase
opportunities for employment by means of the promotion of economic and social
development.

    The State shall encourage enterprises, institutional organizations, and
societies to initiate industries or expand businesses for the increase of
employment within the scope of the stipulations of laws, and administrative
rules and regulations.

    The State shall support laborers to get jobs by organizing themselves on
a voluntary basis or by engaging in individual businesses.

    Article 11  Local people’s governments at various levels shall take
measures to develop various kinds of job-introduction agencies and provide
employment services.

    Article 12  Laborers shall not be discriminated against in employment,
regardless of their ethnic community, race, sex, or religious belief.

    Article 13  Females shall enjoy equal rights as males in employment. It
shall not be allowed, in the recruitment of staff and workers, to use sex as a
pretext for excluding females from employment or to raise recruitment
standards for the females, except for the types of work or posts that are not
suitable for females as stipulated by the State.

    Article 14  Where there are special stipulations in laws, rules and
regulations on the employment of the disabled, the personnel of national
minorities, and demobilized armymen, such special stipulations shall apply.

    Article 15  No employing units shall be allowed to recruit juveniles under
the age of 16.

    Units of literature and art, physical culture and sport, and special arts
and crafts that need to recruit juveniles under the age of 16 must go through
the formalities of examination and approval according to the relevant
provisions of the State and guarantee their right to compulsory education.
Chapter III  Labor Contracts and Collective Contracts

    Article 16  A labor contract is the agreement reached between a laborer
and an employing unit for the establishment of the labor relationship and the
definition of the rights, interests and obligations of each party.

    A labor contract shall be concluded where a labor relationship is to be
established.

    Article 17  Conclusion and modification of a labor contract shall follow
the principles of equality, voluntariness and unanimity through consultation,
and shall not run counter to the stipulations of laws, administrative rules
and regulations.

    A labor contract once concluded in accordance with the law shall possess
legal binding force. The parties involved must fulfill the obligations as
stipulated in the labor contract.

    Article 18  The following labor contracts shall be invalid:

    (1) labor contracts concluded in violation of laws, administrative rules
and regulations; and

    (2) labor contracts concluded by resorting to such measures as cheating
and intimidation.

    An invalid labor contract shall have no legal binding force from the very
beginning of its conclusion. Where a part of a labor contract is confirmed as
invalid and where the validity of the remaining part is not affected, the
remaining part shall remain valid.

    The invalidity of a labor contract shall be confirmed by a labor dispute
arbitration committee or a people’s court.

    Article 19  A labor contract shall be concluded in written form and
contain the following clauses:

    (1) term of a labor contract;

    (2) contents of work;

    (3) labor protection and working conditions;

    (4) labor remuneration;

    (5) labor disciplines;

    (6) conditions for the termination of a labor contract; and

    (7) responsibility for the violation of a labor contract.

    Apart from the required clauses specified in the preceding paragraph,
other contents in a labor contract may be agreed upon through consultation by
the parties involved.

    Article 20  The term of a labor contract shall be divided into fixed
term, flexible term or taking the completion of a specific amount of work as a
term.

    In case a laborer has kept working in a same employing unit for ten years
or more and the parties involved agree to extend the term of the labor
contract, a labor contract with a flexible term shall be concluded between
them if the laborer so requested.

    Article 21  A probation period may be agreed upon in a labor contract.
The longest probation period shall not exceed six months.

    Article 22  The parties involved in a labor contract may reach an
agreement in their labor contract on matters concerning keeping the
commercial secrets of the employing unit.

    Article 23  A labor contract shall terminate upon the expiration of its
term or the emergence of the conditions for the termination of the labor
contract as agreed upon by the parties involved.

    Article 24  A labor contract may be revoked upon agreement reached
between the parties involved through consultation.

    Article 25  The employing unit may revoke the labor contract with a
laborer in any of the following circumstances:

    (1) to be proved not up to the requirements for recruitment during the
probation period;

    (2) to seriously violate labor disciplines or the rules and regulations
of the employing unit;

    (3) to cause great losses to the employing unit due to serious dereliction
of duty or engagement in malpractice for selfish ends; and

    (4) to be investigated for criminal responsibilities in accordance with
the law.

    Article 26  In any of the following circumstances, the employing unit may
revoke a labor contract but a written notification shall be given to the
laborer 30 days in advance:

    (1) where a laborer is unable to take up his original work or any new
work arranged by the employing unit after the completion of his medical
treatment for illness or injury not suffered from at work;

    (2) where a laborer is unqualified for his work and remains unqualified
even after receiving a training or an adjustment to an other work post; and

    (3) no agreement on modification of the labor contract can be reached
through consultation by the parties involved when the objective conditions
taken as the basis for the conclusion of the contract have greatly changed so
that the original labor contract can no longer be carried out.

    Article 27  During the period of statutory consolidation when the
employing unit comes to the brink of bankruptcy or runs deep into difficulties
in production and management, and if reduction of its personnel becomes really
necessary, the unit may make such reduction after it has explained the
situation to the trade union or all of its staff and workers 30 days in
advance, solicited opinions from them and reported to the labor
administrative department.

    Where the employing unit is to recruit personnel six months after the
personnel reduction effected according to the stipulations of this Article,
the reduced personnel shall have the priority to be re-employed.

    Article 28  The employing unit shall make economic compensations in
accordance with the relevant provisions of the State if it revokes its labor
contracts according to the stipulations in Article 24, Article 26 and Article
27 of this Law.

    Article 29  The employing unit shall not revoke its labor contract with a
laborer in accordance with the stipulations in Article 26 and Article 27 of
this Law in any of the following circumstances:

    (1) to be confirmed to have totally or partially lost the ability to work
due to occupational diseases or injuries suffered from at work;

    (2) to be receiving medical treatment for diseases or injuries within the
prescribed period of time;

    (3) to be a female staff member or worker during pregnant, puerperal, or
breast-feeding period; or

    (4) other circumstances stipulated by laws, administrative rules and
regulations.

    Article 30  The trade union of an employing unit shall have the right to
air its opinions if it regards as inappropriate the revocation of a labor
contract by the unit. If the employing unit violates laws, rules and
regulations or labor contracts, the trade union shall have the right to
request for reconsideration. Where the laborer applies for arbitration or
brings in a lawsuit, the trade union shall render him support and assistance
in accordance with the law.

    Article 31  A laborer who intends to revoke his labor contract shall
give a written notice to the employing unit 30 days in advance.

    Article 32  A laborer may notify at any time the employing unit of his
decision to revoke the labor contract in any of the following circumstances:

    (1) within the probation period;

    (2) where the employing unit forces the laborer to work by resorting to
violence, intimidation or illegal restriction of personal freedom; or

    (3) failure on the part of the employing unit to pay labor remuneration
or to provide working conditions as agreed upon in the labor contract.

    Article 33  The staff and workers of an enterprise as one party may
conclude a collective contract with the enterprise on matters relating to
labor remuneration, working hours, rest and vacations, occupational safety
and health, and insurance and welfare. The draft collective contract shall be
submitted to the congress of the staff and workers or to all the staff and
workers for discussion and adoption.

    A collective contract shall be concluded by the trade union on behalf of
the staff and workers with the enterprise; in an enterprise where the trade
union has not yet been set up, such contract shall be also concluded by the
representatives elected by the staff and workers with the enterprise.

    Article 34  A collective contract shall be submitted to the labor
administrative department after its conclusion. The collective contract shall
go into effect automatically if no objections are raised by the labor
administrative department within 15 days from the date of the receipt of a
copy of the contract.

    Article 35  Collective contracts concluded in accordance with the law
shall have binding force to both the enterprise and all of its staff and
workers. The standards on working conditions and labor payments agreed upon
in labor contracts concluded between individual laborers and the enterprise
shall not be lower than those as stipulated in collective contracts.
Chapter IV  Working Hours, Rest and Vacations

    Article 36  The State shall practise a working hour system under which
laborers shall work for no more than eight hours a day and no more than 44
hours a week on the average.

    Article 37  In case of laborers working on the basis of piecework, the
employing unit shall rationally fix quotas of work and standards on piecework
remuneration in accordance with the working hour system stipulated in Article
36 of this Law.

    Article 38  The employing unit shall guarantee that its staff and workers
have at least one day off in a week.

    Article 39  Where an enterprise can not follow the stipulations in Article
36 and Article 38 of this Law due to its special production nature, it may
adopt other rules on working hours and rest with the approval of the labor
administrative department.

    Article 40  The employing unit shall arrange holidays for laborers in
accordance with the law during the following festivals:

    (1) the New Year’s Day;

    (2) the Spring Festival;

    (3) the International Labor Day;

    (4) the National Day; and

    (5) other holidays stipulated by laws, rules and regulations.

    Article 41  The employing unit may extend working hours due to the
requirements of its production or business after consultation with the trade
union and laborers, but the extended working hour for a day shall generally
not exceed one hour; if such extension is called for due to special reasons,
the extended hours shall not exceed three hours a day under the condition that
the health of laborers is guaranteed. However, the total extension in a month
shall not exceed thirty six hours.

    Article 42  The extension of working hours shall not be subject to
restriction of the provisions of Article 41 of this Law under any of the
following circumstances:

    (1) where emergent dealing is needed in the event of natural disaster,
accident or other reason that threatens the life, health and the safety of
property of laborers;

    (2) where prompt rush repair is needed in the event of breakdown of
production equipment, transportation lines or public facilities that affects
production and public interests; and

    (3) other circumstances as stipulated by laws, administrative rules and
regulations.

    Article 43  The employing unit shall not extend working hours of laborers
in violation of the provisions of this Law.

    Article 44  The employing unit shall, according to the following
standards, pay laborers remunerations higher than those for normal working
hours under any of the following circumstances:

    (1) to pay no less than 150 per cent of the normal wages if the extension
of working hours is arranged;

    (2) to pay no less than 200 per cent of the normal wages if the extended
hours are arranged on days of rest and no deferred rest can be taken; and

    (3) to pay no less than 300 per cent of the normal wages if the extended
hours are arranged on statutory holidays.

    Article 45  The State shall practise a system of annual vacation with pay.

    Laborers who have kept working for one year and more shall be enpost_titled to
annual vacation with pay. The concrete measures shall be formulated by the
State Council.
Chapter V  Wages

    Article 46  The distribution of wages shall follow the principle of
distribution according to work and equal pay for equal work.

    The level of wages shall be gradually raised on the basis of economic
development. The State shall exercise macro-regulations and control over the
total payroll.

    Article 47  The employing unit shall independently determine its form of
wage distribution and wage level for its own unit according to law and based
on the characteristics of its production and business and economic results.

    Article 48  The State shall implement a system of guaranteed minimum
wages. Specific standards on minimum wages shall be determined by the people’s
governments of provinces, autonomous regions or municipalities directly under
the Central Government and reported to the State Council for the record.

    Wages paid to laborers by the employing unit shall not be lower than the
local standards on minimum wages.

    Article 49  The determination and readjustment of the standards on minimum
wages shall be made with reference to the following factors in a comprehensive
manner:

    (1) the lowest living expenses of laborers themselves and the average
family members they support;

    (2) the average wage level of the society as a whole;

    (3) labor productivity;

    (4) the situation of employment; and

    (5) the different levels of economic development between regions.

    Article 50  Wages shall be paid monthly to laborers themselves in cash.
The wages paid to laborers shall not be deducted or delayed without
justification.

    Article 51  The employing unit shall pay wages according to law to
laborers who observe statutory holidays, take leaves during the periods of
marriage or funeral, or participate in social activities in accordance with
the law.
Chapter VI  Occupational Safety and Health

    Article 52  The employing unit must establish and perfect the system for
occupational safety and health, strictly implement the rules and standards of
the State on occupational safety and health, educate laborers on occupational
safety and health, prevent accidents in the process of work, and reduce
occupational hazards.

    Article 53  Facilities of occupational safety and health must meet the
standards stipulated by the State.

    Facilities of occupational safety and health installed in new projects and
projects to be rebuilt or expanded must be designed, constructed and put into
operation and use at the same time as the main projects.

    Article 54  The employing unit must provide laborers with occupational
safety and health conditions conforming to the provisions of the State and
necessary articles of labor protection, and provide regular health
examination for laborers engaged in work with occupational hazards.

    Article 55  Laborers to be engaged in specialized operations must receive
specialized training and acquire qualifications for such special operations.

    Article 56  Laborers must strictly abide by rules of safe operation in
the process of their work.

    Laborers shall have the right to refuse to operate if the management
personnel of the employing unit command the operation in violation of rules
and regulations or force laborers to run risks in operation; laborers shall
have the right to criticize, report or file charges against the acts
endangering the safety of their life and health.

    Article 57  The State shall establish a system for the statistics, reports
and dispositions of accidents of injuries and deaths, and cases of
occupational diseases. The labor administrative departments and other
relevant departments of the people’s governments at or above the county level
and the employing unit shall, according to law, compile statistics, report and
dispose of accidents of injuries and deaths that occurred in the process of
their work and cases of occupational diseases.
Chapter VII  Special Protection for Female and Juvenile Workers

    Article 58  The State shall provide female workers and juvenile workers
with special protection.

    “Juvenile workers” hereby refer to laborers at the age of 16 but not 18
yet.

    Article 59  It is prohibited to arrange female workers to engage in work
down the pit of mines, or work with Grade IV physical labor intensity as
stipulated by the State, or other work that female workers should avoid.

    Article 60  Female workers during their menstrual periods shall not be
arranged to engage in work high above the ground, under low temperature, or in
cold water or work with Grade III physical labor intensity as stipulated by
the State.

    Article 61  Female workers during their pregnancy shall not be arranged to
engage in work with Grade III physical labor intensity as stipulated by the
State or other work that they should avoid in pregnancy. Female workers
pregnant for seven months or more shall not be arranged to extend their
working hours or to work night shifts.

    Article 62  After childbirth, female workers shall be enpost_titled to no less
than ninety days of maternity leaves with pay.

    Article 63  Female workers during the period of breast-feeding their
babies less than one year old shall not be arranged to engage in work with
Grade III physical labor intensity as stipulated by the State or other labor
that they should avoid during their breast-feeding period, or to extend their
working hours or to work night shifts.

    Article 64  No juvenile workers shall be arranged to engage in work down
the pit of mines, work that is poisonous or harmful, work with Grade IV
physical labor intensity as stipulated by the State, or other work that they
should avoid.

    Article 65  The employing unit shall provide regular physical examinations
to juvenile workers.
Chapter VIII  Vocational Training

    Article 66  The State shall take various measures through various channels
to expand vocational training undertakings so as to develop professional
skills of laborers, improve their qualities, and raise their employment
capability and work ability.

    Article 67  People’s governments at various levels shall incorporate the
development of vocational training in the plans of social and economic
development, encourage and support all enterprises, institutional
organizations, societies and individuals, where conditions permit, to sponsor
all kinds of vocational training.

    Article 68  The employing unit shall establish a system for vocational
training, raise and use funds for vocational training in accordance with the
provisions of the State, and provide laborers with vocational training in a
planned way and in the light of the actual situation of the unit.

    Laborers to be engaged in technical work must receive pre-job training
before taking up their posts.

    Article 69  The State shall determine occupational classification, set up
professional skill standards for the occupations classified, and practise a
system of vocational qualification certificates. Examination and verification
organizations authorized by the government are in charge of the examination
and verification of the professional skills of laborers.
Chapter IX  Social Insuranc

ADVERTISEMENT LAW

Category  ADMINISTRATION FOR INDUSTRY AND COMMERCE Organ of Promulgation  The Standing Committee of the National People’s Congress Status of Effect  In Force
Date of Promulgation  1994-10-27 Effective Date  1995-02-01  


Advertisement Law of the People’s Republic of China

Contents
Chapter I  General Provisions
Chapter II  Requirements of Advertising
Chapter III  Advertising Activities
Chapter IV  Advertisement Examination
Chapter V  Legal Responsibility
Chapter VI  Supplementary Provisions

(Adopted at the Tenth Session of the Standing Committee of the Eighth

National People’s Congress, promulgated by Order No.34 of the President of
the People’s Republic of China on October 27, 1994, and effective as of
February 1, 1995.)
Contents

    Chapter I  General Provisions

    Chapter II  Requirements of Advertising

    Chapter III  Advertising Activities

    Chapter IV  Advertisement Examination

    Chapter V  Legal Responsibility

    Chapter VI  Supplementary Provisions
Chapter I  General Provisions

    Article 1  This law is formulated in order to regulate advertising
activities, promote the healthy development of the advertising sector, protect
the lawful rights and interests of consumers, maintain the social and economic
order, and let advertisements play an active role in socialist market economy.

    Article 2  Advertisers, advertising operators and advertisement
publishers, when engaging in advertising activities within the territory of
the People’s Republic of China, shall abide by this law.

    “Advertisement” as the term is used in this Law refers to any commercial
advertisement, which a commodity operator or service provider pays for,
through certain media or forms, directly or indirectly introducing their
commodities being sold or services being provided.

    “Advertiser” as the term is used in this Law refers to any legal person,
other economic organization or individual, who, with the purpose of promoting
the sales of commodities or providing services, is to design, produce and
publish advertisements by itself or through commissioning others.

    “Advertising operator” as the term is used in this Law refers to any legal
person, other economic organization or individual, who is commissioned to
provide advertisement designing, producing and agent services.

    “Advertisement publisher” as the term is used in this Law refers to any
legal person or other economic organization which publishes advertisements for
advertisers or advertising operators commissioned by advertisers.

    Article 3  An advertisement shall be true to facts, lawful, and in
compliance with the requirements of raising socialist cultural and ideological
progress.

    Article 4  An advertisement may not contain any false and deceiving
information, and may not cheat or misguide consumers.

    Article 5  Advertisers, advertising operators and advertisement publishers
shall, when engaging in advertising activities, abide by laws and
administrative regulations and adhere to the principles of fairness and
trustworthiness.

    Article 6  The administration for industry and commerce of the people’s
governments at or above the county level are advertising supervision and
control organs.
Chapter II  Requirements of Advertising

    Article 7  The contents of advertisements shall be conducive to the
physical and mental health of the people, promote the improvement in quality
of commodity and service, protect the lawful rights and interests of
consumers, be in compliance with social morality and professional ethics, and
safeguard the dignity and interests of the state.

    Advertisements may not contain any of the folIowing circumstances:

    1. using the national flag, national emblem and national anthem of the
People’s Republic of China;

    2. using the names of state organs or names of staff of state organs;

    3. using such words as the state-level, the highest-level or the best;

    4. hindering social stability or endangering the safety of life or
property, or harming the social public interests;

    5. hindering the social public order or violating the good social customs;

    6. carrying any pornographic, superstitious, horrible, violent or ugly
information;

    7. carrying any nationality, racial, religious or sex discriminating
information;

    8. hindering environmental and natural resources protection; and

    9. other circumstances that are prohibited by laws and administrative
regulations.

    Article 8  Advertisements may not impair the physical and mental health of
the minors and the disabled.

    Article 9  Statements in advertisements on commodity’s performance, origin
of production, use, quality, price, producer and manufacturer, valid term, and
promise, and service’s items, manner, quality, price and promise shall be
clear and explicit.

    An advertisement, in which gifts are indicated to be presented in
promoting the sales of commodities or providing services, shall state the type
and quantity of gifts as compliments.

    Article 10  Data, statistical information, investigation and survey
findings, digest and quotes used in an advertisement shall be true to facts
and accurate, and their sources shall be indicated.

    Article 11  An advertisement involving patented products or patent methods
shall clearly indicate the patent number and the type of patent.

    The unpatented may not pretend to be patented in advertisements.

    The use of ungranted patent applications or terminated, nullified or
invalid patents to advertise is prohibited.

    Article 12  An advertisement may not belittle the commodities or services
of other producers and manufacturers or operators.

    Article 13  An advertisement shall be distinguishable, and enable
consumers to identify it is an advertisement.

    The mass media may not publish advertisements in the form of news report.
Advertisements published through the mass media shall bear advertisement marks
to differentiate them from other nonadvertisement information and may not lead
to the misunderstanding of consumers.

    Article 14  Advertisements for pharmaceuticals, medical apparatus and
instruments may not contain the following contents:

    1. unscientific affirmations, statements or promises on efficacy;

    2. indication of the cure rate or efficacious rate;

    3. comparison of efficacy and safeness with other medicines, medical
apparatus and instruments;

    4. use of the name or image of medical research unit, academic
organization, medical unit or expert, doctor or patient as proofs; and

    5. other contents that are prohibited by laws and administrative
regulations.

    Article 15  The contents of advertisements for pharmaceuticals must take
as the standards the instructions approved by the public health administrative
department under the State Council or public health administrative departments
of provinces, autonomous regions and municipalities directly under the Central
Government.

    Advertisements for therapeutic pharmaceuticals which, as provided by the
state, shall be used under physician’s advice must be marked “purchase and use
on physician’s prescription”.

    Article 16  Special pharmaceuticals such as anaesthetic, narcotic,
psychotropic, toxic and radioactive drugs may not appear in advertisements.

    Article 17  Advertisements for agricultural chemicals may not contain the
following contents:

    1. absolute affirmations indicating its safeness such as non-toxic or
non-harm;

    2. unscientific affirmations or promises indicating its effectiveness;

    3. words, languages or pictures that violate the safe use regulations of
agricultural chemicals; and

    4. other contents that are prohibited by laws and administrative
regulations.

    Article 18  Publishing of advertisements for tobacco by means of radio,
cinema pictures, television, newspaper, magazine or periodical is prohibited.

    Erecting or placing advertisements for tobacco at public places such as
various waiting rooms, cinemas and theatres, conference halls and sports
stadiums and gymnasiums is prohibited.

    Advertisements for tobacco must be marked with “smoking is harmful to your
health”.

    Article 19  The contents of advertisements for foods, alcohol drinks or
cosmetics must comply with matters and items of hygiene license, and may not
use medical jargons or words which are easily to be mixed up with
pharmaceuticals.
Chapter III  Advertising Activities

    Article 20  Advertisers, advertising operators and advertisement
publishers shall sign written contracts according to law in their advertising
activities, stipulating explicitly each party’s rights and obligations.

    Article 21  No advertiser, advertising operator or advertisement publisher
may engage in unfair competition of any form in their advertising activities.

    Article 22  An advertiser, in designing, producing or publishing
advertisements either by itself or through committing others to promote the
sales of commodities or to provide services shall comply with its business
scope.

    Article 23  An advertiser shall, in commissioning to design, produce and
publish advertisements, commission an advertising operator or advertisement
publisher with legal business status.

    Article 24  An advertiser shall, in designing, producing and publishing
advertisements either by itself or through commissioning others, has or provide
true, lawful and valid documentation as follows:

    1. business license and other papers and documents proving production and
operation qualification;

    2. documents and papers issued by quality certification organs for the
content of commodity quality to be advertised;

    3. other documents and papers to confirm the truthfulness of the content
of advertisement.

    Where, pursuant to the provisions of Article 34 of this Law, publishing of
an advertisement is subject to examination by relevant administrative
departments, relevant documents and papers of approval shall also be provided.

    Article 25  Any advertiser or advertising operator shall, if using the
names or images of others in advertising, obtain in advance the written
consent of others; and if using the names or images of persons with incapacity
for civil actions or with limited capacity for civil actions, obtain in
advance the written consent from their guardians.

    Article 26  Those engaging in the advertising business shall have the
required professional and technical personnel and production equipment, and
undergo company or advertising business registration in accordance with law,
before they may engage themselves in advertising activities.

    The advertising business of radio stations, television stations, newspaper
or magazine and periodical publishing units shall be handled by their own
departments specializing in advertising business, and registration for
concurrent advertising business shall be made according to law.

    Article 27  Advertising operators and advertisement publishers are to
check relevant documentation and to examine and verify the contents of
advertisements in accordance with laws and administrative regulations. With
respect to an advertisement with untrue content or without the required
complete documentation, any advertising operator may not provide services on
designing, producing and serving as agent and any advertisement publisher may
not publish such advertisement.

    Article 28  Advertising operators and advertisement publishers, according
to relevant state regulations, are to establish and perfect the system on
acceptance registration, examination and verification, and record management
of their advertisement businesses.

    Article 29  Advertising charges shall be reasonable and open to the
public, the charging standards and measures shall be registered with the
administrative departments in charge of price and industry and commerce for
record.

    Advertising operators and advertisement publishers shall make public their
charging standards and measures.

    Article 30  Advertisement publishers shall provide true information on
media coverage, audience rate and circulation to advertisers and advertising
operators.

    Article 31  With respect to those commodities or services prohibited by
laws and administrative regulations to be produced and manufactured, marketed
or provided, and with respect to the commodities or services prohibited to be
advertised, advertisements may not be designed, produced and published.

    Article 32  No outdoor advertisement may be erected or placed under any of
the following circumstances:

    1. using traffic safety facilities or traffic signs and marks;

    2. affecting or interrupting the use of public utility facilities, traffic
safety facilities or traffic signs and marks;

    3. hindering the production or people’s living or damaging the appearance
or environment of cities;

    4. within the construction control areas of state organs, cultural relics
protection units or scenic sites; and

    5. within the areas prohibited to erect or place outdoor advertisements by
the people’s governments at or above the county level.

    Article 33  The people’s governments at or above the county level are, by
organizing relevant departments such as advertising supervision and control,
urban construction, environmental protection and public security, to work out
planning and measures for the control of erecting and placing outdoor
advertisements.
Chapter IV  Advertisement Examination

    Article 34  With respect to advertisements for such commodities as
pharmaceuticals, medical apparatus and instruments, agricultural chemicals or
veterinary drugs, which are published by means of radio, cinema pictures,
television, newspaper, magazine, periodical and other media, and other
advertisements which, as provided by laws and administrative regulations,
shall be subject to examination, the relevant administrative departments
(hereinafter referred to as the advertisement examination organ) must examine
and inspect, prior to their issuance, the contents of the advertisements in
accordance with the relevant laws and administrative regulations; any such
advertisement which is not examined and approved may not be published.

    Article 35  An advertiser shall, when applying for advertisement
examination, submit relevant documentation to the advertisement examination
organ according to laws and administrative regulations. The advertisement
examination organ shall, pursuant to laws and administrative regulations, make
an examination decision.

    Article 36  No unit or individual may counterfeit, alter and transfer the
document of advertisement examination decision.
Chapter V  Legal Responsibility

    Article 37  Where, in violation of the provisions of this Law, false and
deceiving publicity on commodity or service is made by using an advertisement,
the advertising supervision and control organ shall order the advertiser to
stop publishing the advertisement and to use the same amount of its
advertising expenses to make open correction and to clear up influence within
the same area, and impose the advertiser a fine of more than the amount of its
advertising charges and less than five times the amount of its advertising
charges; confiscate the advertising charges of the advertising operator
responsible and advertisement publisher responsible and impose them a line of
more than the amount of the advertising charges and less than five times the
amount of the advertising charges; and if the case is serious, prevent them,
according to law, from the advertising businesses. Where the act constitutes
a crime, criminal responsibility shall be investigated according to law.

    Article 38  Where, in violation of the provisions of this Law, publishing
of a false and deceiving advertisement cheats and misguides consumers, and
thus causes infringement and damage to the lawful rights and interests of
consumers who buy the commodity or accept the service, the advertiser shall
bear civil responsibility according to law, the advertising operator and
advertisement publisher, who know or are to know that the advertisement is
untrue to facts but continue to design, produce and publish it, shall bear
joint responsibility according to law.

    The advertising operator or advertisement publisher, who fails to provide
the real name and address of the advertiser, shall bear complete civil
responsibility.

    A social organization or other organizations, which recommends commodity
or service to consumers in a false and deceiving advertisement and
consequently causes infringement and damage to the lawful rights and interests
of consumers, shall bear joint responsibility.

    Article 39  Where publishing of an advertisement violates the provisions
of Article 7, Paragraph 2 of this Law, the advertising supervision and control
organ shall order the advertiser, advertising operator and advertisement
publisher, which are responsible to the advertisement, to stop publishing the
advertisement and to make open corrections, confiscate their advertising
charges, and impose a fine of more than the amount of the advertising charges
and less than five times the amount of the advertising charges; and if the
case is serious, prevent them, according to law, from the advertising
businesses. Where the act constitutes a crime, criminal responsibility shall
be investigated according to law.

    Article 40  Where publishing of an advertisement violates the provisions
of Article 9 to Article 12 of this Law, the advertising supervision and
control organ shall order the advertiser, advertising operator and
advertisement publisher, which are responsible to the advertisement, to stop
publishing the advertisement and to make open corrections, confiscate their
advertising charges, and may impose a fine of more than the amount of the
advertising charges and less than five times the amount of the advertising
charges.

    Where publishing of an advertisement violates the provisions of Article 13
of this Law, the advertising supervision and control organ shall order the
advertisement publisher to make correction, and impose a fine of more than
1,000 yuan and less than 10,000 yuan.

    Article 41  Where, in violation of the provisions of Article 14 to Article
17 and Article 19 of this Law, an advertisement for pharmaceuticals, medical
apparatus and instruments, agricultural chemicals, foods, alcoholic drinks or
cosmetics is published, or, in violation of the provisions of Article 31 of
this Law, an advertisement is published, the advertising supervision and
control organ shall order the advertiser, advertising operator and
advertisement publisher, which are responsible to the advertisement, to make
corrections or to stop publishing the advertisement, confiscate their
advertising charges, and may also impose a fine of more than the amount of the
advertising charges and less than five times the amount of the advertising
charges; and if the case is serious, prevent them, according to law, from the
advertising businesses.

    Article 42  Where, in violation of the provisions of Article 18 of this
Law, an advertisement for tobacco is published by means of radio, cinema
pictures, television, newspaper, magazine or periodical, or an advertisement
for tobacco is erected and placed in the public places and sites, the
advertising supervision and control organ shall order the advertiser,
advertising operator and advertisement publisher, which are responsible to the
advertisement, to stop publishing the advertisement, confiscate their
advertising charges, and may impose a fine of more than the amount of the
advertising charges and less than five times the amount of the advertising
charges.

    Article 43  Where, in violation of the provisions of Article 34 of this
Law, publishing of an advertisement without examination and approval from the
advertisement examination organ, the advertising supervision and control organ
shall order the advertiser, advertising operator and advertisement publisher,
which are responsible to the advertisement, to stop publishing the
advertisement, confiscate their advertising charges, and impose a fine of more
than the amount of the advertising charges and less than five times the amount
of the advertising charges.

    Article 44  Where an advertiser furnishes false and deceiving
documentation, the advertising supervision and control organ shall impose a
fine of more than 10,000 yuan and less than 100,000 yuan.

    Where anyone counterfeits, alters or transfers documents of an
advertisement examination decision, the advertising supervision and control
organ shall confiscate its illegal gains and impose a fine of more than 10,000
yuan and less than 100,000 yuan. Where the act constitutes a crime, criminal
responsibility shall be investigated according to law.

    Article 45  Where an advertisement examination organ has made an
examination and approval decision for illegal content of an advertisement, the
person directly in charge and other persons directly responsible shall be
subject to administrative penalties imposed by their units, superior organs or
administrative supervisory departments according to law.

    Article 46  Any person of an advertising supervision and control organ or
advertisement examination organ, who neglects his or her duty, abuses his or
her power of office or practises favouritism or other irregularities, shall be
subject to administrative penalties. Where his or her act constitutes a crime,
criminal responsibility shall be investigated according to law.

    Article 47  An advertiser, advertising operator or advertisement
publisher, who, in violation of the provisions of this Law, commits any of the
following right-infringing acts, shall bear civil responsibility according to
law.

    1. impairing in advertising the physical and mental health of the minors
or the disabled;

    2. palming off as a patent of others;

    3. belittling commodities or services of other producers and manufacturers
or operators;

    4. using the names and images of others without consent in advertising; or

    5. other infringements of the lawful civil rights and interests of others.

    Article 48  A party concerned which disagrees with an administrative
penalty decision may, within fifteen days from the date of receiving notice of
the penalty decision, apply for a reconsideration to the next higher organ of
the organ which makes the administrative penalty decision; the party may,
within fifteen days from the date of receiving notice of the penalty decision,
also directly file a suit in a people’s court.

    The reconsideration organ shall, within sixty days from the date of
receiving the application for reconsideration, make a reconsideration
decision. A party concerned which disagrees with the reconsideration decision
may, within fifteen days from the date of receiving the reconsideration
decision, file a suit in a people’s court. lf the reconsideration organ fails
to make a reconsideration decision within the time limit for reconsideration,
the party concerned may, within fifteen days from the expiration of the
reconsideration, file a suit in a people’s court.

    In the event of a party concerned failing both to apply for a
reconsideration or to file a suit in a people’s court within the time limit,
and to comply with a penalty decision, the organ which makes the penalty
decision may apply to a people’s court for enforcement.
Chapter VI  Supplementary Provisions

    Article 49  This Law shall come into force as of February 1, 1995. lf any
content related to advertising in other laws and regulations formulated prior
to the implementation of this Law is inconsistent with this Law, this Law
shall prevail.





MEASURES FOR THE CONTROL OF INVOICES

Category  TAXATION Organ of Promulgation  The Ministry of Finance Status of Effect  In Force
Date of Promulgation  1993-12-23 Effective Date  1993-12-23  


Measures of the People’s Republic of China for the Control of Invoices

Chapter I  General Provisions
Chapter II  Printing of Invoices
Chapter III  Purchasing of Invoices
Chapter IV  Issuance and Safekeeping of Invoices
Chapter V  Inspection of Invoices
Chapter VI  Penalty Provisions
Chapter VI  Supplementary Provisions

(Approved by the State Council on December 12, 1993 and promulgated

in Decree No.6 by the Ministry of Finance on December 23, 1993)
Chapter I  General Provisions

    Article 1  These Measures are formulated in accordance with the Law of the
People’s Republic of China for Tax Collection and Administration with a view
to strengthening the control of invoices and the supervision of financial
affairs, to ensuring tax revenue of the State and maintaining economic order.

    Article 2  Units and individuals who print, receive, purchase, issue,
obtain and keep invoices (hereinafter referred to as “units and individuals
who print and use invoices”) within the territory of the People’s Republic of
China, must comply with these Measures.

    Article 3  “The invoice” stated in these Measures refers to the
certificates of payment or receipt of money made out or received in purchases
and sales of goods, provision or acceptance of services and in other business
activities.

    Article 4  The State Administration for Taxation takes the overall
responsibility for the control of invoices nationwide. The branches of the
State Administration for Taxation and local tax bureaux of the provinces,
autonomous regions and municipalities directly under the Central Government
(hereinafter referred to as “tax authorities of the provinces, autonomous
regions and municipalities directly under the Central Government”) shall,
based on their respective responsibilities, make joint efforts to have good
control of invoices in their respective administrative regions.

    The relevant departments of finance, audit, administrations for industry
and commerce, and public security shall within the scope of their
responsibilities coordinate with the tax authorities to have good control of
invoices.

    Article 5  The categories, order of duplicates, contents and the range of
usage of invoices shall be determined by the State Administration for Taxation.

    Article 6  Any unit and individual can inform against any act violating
the legislation for the control of invoices. Tax authorities shall maintain
secrecy for the informers and present them with appropriate awards.
Chapter II  Printing of Invoices

    Article 7  Invoices shall be printed by enterprises appointed by tax
authorities of the provinces, autonomous regions and municipalities directly
under the Central Government; special invoices for Value-Added Tax shall
solely be printed by the State Administration for Taxation. Printing, forgery
and revision of invoices without permission are prohibited.

    Article 8  Devices against forgery of invoices shall be produced by
enterprises appointed by the State Administration for Taxation. Illegal
manufacturing of these anti-forgery devices is prohibited.

    Article 9  Tax authorities of the provinces, autonomous regions and
municipalities directly under the Central Government shall implement the
principle of unified control of the printing of invoices, strictly examine the
qualifications of the enterprises engaged in printing invoices and issue
invoice printing permit to these appointed enterprises.

    Article 10  lnvioces shall be stamped with a nationwide uniform stamp for
supervision of the printing of invoices. The form of the stamp and the
requirements for the printing and layout of invoices shall be stipulated by
the State Administration for Taxation. The stamp for supervision of the
printing of invoices shall be made by the tax authorities of the provinces,
antonomous regions and municipalities directly under the Central Government.
Forgery of the stamp for supervision of the printing of invoices is prohibited.

    A system of changing the printing plate at irregular intervals shall be
implemented.

    Article 11  In accordance with unified regulations of tax authorities,
enterprises printing invoices shall establish a system for printing and
managing invoices, and measures for safe-keeping.

    A system of person-in-charge of the usage and control of the stamp for
supervision of the printing of invoices and the special anti-forgery devices
shall be implemented.

    Article 12  Enterprises printing invoices must print the invoices in
accordance with the type and amount approved by tax authorities.

    Article 13  Invoices must be printed in Chinese. In autonomous regions, a
national language used in common in that particular region can be added to the
invoices. If necessary, invoices can be printed in both Chinese and a foreign
language simultaneously.

    Article 14  Apart from the special invoices for Value-Added Tax, the
invoices used by units and individuals in various provinces, autonomous
regions and municipalities directly under the Central Government should be
printed within the respective provinces, autonomous regions and
municipalities directly under the Central Government; if for any reason they
must be printed in other provinces, autonomous regions and municipalities
directly under the Central Government, the tax authorities of the relevant
provinces, autonomous regions and municipalities directly under the Central
Government should obtain consent from the tax authorities of these other
provinces, autonomous regions and municipalities directly under the Central
Government undertaking the printing of invoices. The invoices shall then be
printed by the enterprises appointed by the tax authorities of these other
provinces, autonomous regions and municipalities directly under the Central
Government which undertake the printing of invoices.

    Printing of invoices outside the territory of the People’s Republic of
China is prohibited.
Chapter III  Purchasing of Invoices

    Article 15  All units and individuals who perform tax registration
according to the law shall, upon receiving the tax registration certificate,
apply to acquire invoices from the respective tax authorities.

    Article 16  Units and individuals applying for acquisition of invoices
shall file an application for purchasing invoices, provide certificates of
identity of the person in charge, tax registration certificates or other
relevant documents, as well as moulds for stamps of the financial department
or special stamps for invoices. After examination and approval of the relevant
tax authorities, invoice purchase books will be issued.

    Units and individuals who need invoices shall, based on the categories,
quantity and mode of acquisition approved by the relevant authorities as
indicated in the invoice purchase books, purchase invoices from the relevant
tax authorities.

    Article 17  Units and individuals who temporarily need to use invoices may
directly apply to the relevant tax authorities for purchase.

    Article 18  Units or individuals who temporarily carry on business
activities outside their own provinces, autonomous regions and municipalities
directly under the Central Government should by presenting the certificates
from the tax authorities of their original location, apply for the acquisition
of invoices from the local tax authorities where their business activities
take place.

    Tax authorities of the provinces, autonomous regions and municipalities
directly under the Central Government shall regulate the procedures for
acquisition of invoices by units or individuals who temporarily carry on cross
city or county business within the provinces, autonomous regions and
municipalities directly under the Central Government.

    Article 19  For units and individuals from other provinces, autonomous
regions and municipalities directly under the Central Government applying for
purchase of invoices for temporary business activities in the areas under
their own jurisdication, tax authorities can request for provision of
guarantors or a security deposit of not exceeding 10,000 yuan based on the
face value of the invoices purchased and handing in the invoices for disposal
within a set time limit.

    For those who hand in invoices on time for disposal, their guarantors
shall be released from the commitments or have their security deposit
refunded; for those who fail to hand in the invoices for disposal on time,
their legal liabilities should be taken over by the guarantors or satisfied
with the security deposit.

    Tax authorities shall issue receipts upon collecting security deposit.
Chapter IV  Issuance and Safekeeping of Invoices

    Article 20  Units and individuals engaged in the sales of goods, provision
of services and other business activities, should issue invoices to the payers
when collecting payment in business activities with outside parties. However,
under extraordinary circumstances, payers can issue invoices to payees.

    Article 21  Units and individuals engaged in production and business
activities should obtain invoices from payees for payment made in purchasing
commodities, accepting services and taking part in other business activities.
Upon receipt of the invoice, they should not ask for alteration of the name of
article and amount of payment.

    Article 22  Invoices not in line with the regulations must not be taken as
the proof for reimbursement. Any unit and individual has the right to refuse
such invoices.

    Article 23  Invoices should be issued column by column and with all the
duplicates, in strict accordance with the time limit and sequence stipulated
in the regulations and be stamped with the unit’s stamp of the financial
department or a special stamp for invoices.

    Article 24  In use of computers to generate invoices, prior approval from
the respective tax authorities should be obtained. Standard invoices issued
under the supervision of tax authorities besides the computer-generated
invoices shall be used. The stubs of the invoices so issued must be bound into
booklets with sequential numbers.

    Article 25  No unit or individual can lend, transfer or issue invoices on
other unit’s or individual’s behalf. Without the prior approval from the tax
authorities, they cannot use invoices by tearing invoice books apart, nor
expand the scope of usage of the special invoices.

    Illegal sales or purchases of invoices, stamps for supervision of the
printing of invoices and anti-forgery devices for invoices are prohibited.

    Article 26  The area of issuance of invoices is limited to the provinces,
autonomous regions and municipalities directly under the Central Government
where the units and individuals purchase them.

    Tax authorities of the provinces, autonomous regions and municipalities
directly under the Central Government may regulate the procedures for issuance
of invoices cross city or county.

    Article 27  Without prior approval, no unit or individual can carry, mail
or transport blank invoices beyond the regions where these invioces are bound
to be used.

    Carrying, mailing and transporting blank invoices into or from the
territory of China is prohibited.

    Article 28  Units and individuals issuing invoices should establish a
system for the use and registration of invoices, prepare a invoice register
and report to the respective tax authorities on the use of invoices at regular
intervals.

    Article 29  Units and individuals issuing invoices should, at the same
time as they go through the formalities for changing or cancelling tax
registration, go through the formalities for changing or cancelling invoices
and invoice purchase books.

    Article 30  Units and individuals issuing invioces should, in accordance
with the regulations of the tax authorities, store and keep invoices and shall
not destroy the invoices without authorization. The stubs of the invoices
already issued and the invoice register should be kept for five years. Upon
completion of the period the invoices shall be destroyed after examination by
the relevant tax authorities.
Chapter V  Inspection of Invoices

    Article 31  ln managing invoices, the tax authorities have the right to
conduct the following inspections:

     (1) Examining the printing, purchasing, issuing, obtaining and safe
keeping of invoices;

     (2) Selecting invoices to be examined;

     (3) lnvestigating and duplicating documents and materials related to the
invoices;

     (4) Inquiring the parties concerned about the problems and the conditions
related to the invoices;

     (5) Making notes, tape-recording, video-recording, taking photographs and
making copies on the related state of affairs and data when dealing with cases
of investigation of invoices.

    Article 32  Units and individuals printing and using invoices must accept
lawful inspection by tax authorities, present the truth and provide the
relevant data without refusal or concealment.

    Tax officials should present their tax inspection permits at the time of
inspection.

    Article 33  When tax authorities take away the invoices already issued for
inspection, they should issue certificates for exchange of the invoices to the
units and individuals to be inspected. The certificates for exchange of the
invoices and the invoices to be examined are equally authentic. The units and
individuals whose invoices have been taken away for inspection must not refuse
the above arrangement.

    Tax authorities should issue receipts when taking away blank invoices for
inspection, blank invoices that are found in order should be returned in time.

    Article 34  In the course of examining the reporting of tax, should the
tax authorities find any doubt with invoices or evidence concerning the
reporting of tax obtained outside China by the units or individuals, they may
ask the units or individuals for certificates of confirmation provided by
foreign notary or chartered accountants. After examination and approval by the
tax authorities, these invoices or evidence could be taken as basis for
book-keeping.

    Article 35  In the course of examining invoices, tax authorities may find
the need to check how the stubs and invoices are completed, they may send out
invoice completion checking cards to the units in possession of the invoices
or stubs. These units concerned should complete the cards in accordance with
facts and return them in time.
Chapter VI  Penalty Provisions

    Article 36  Acts violating the legislation for management of invoices
include:

    (1) Failure to print invoices or manufacture anti-forging devices for
invoices in accordance with the relevant regulations;

    (2) Failure to purchase invoices in accordance with the relevant
regulations;

    (3) Failure to issue invoices in accordanoe with the relevant regulations;

    (4) Failure to obtain invoices in accordance with the relevant regulations;

    (5) Failure to keep invoices in accordance with the relevant regulations;

    (6) Failure to accept inspection by tax authorities in accordance with the
relevant regulations.

    For all the units and individuals who have committed one of the abovesaid
acts, the tax authorities may order them to rectify within a prescribed time
limit, confiscate their illicit income and impose a fine of up to l0,000 yuan
at the same time. Those who have committed two or more of the acts listed
above can be penalised on separate accounts.

    Article 37  Tax authorities shall confiscate the blank invoices and the
illicit income of those who illegally carry, mail, transport or keep these
invoices and a fine of up to 10,000 yuan may be imposed at the same time.

    Article 38  Tax authorities shall seal up, detain or destroy the invoices
illegally printed, counterfeited, bought or sold, and the privately made
stamps for supervision of the printing of invoices and the anti-forgery
products for invoices. Tax authorities shall also confiscate the illicit
income and the tools used in committing the offenses; a fine between 10,000
yuan and 50,000 yuan may be imposed at the same time; if these offenses
constitute crimes, legal actions shall be taken against the offenders for
their criminal liability.

    Article 39  In cases of violations of the regulations on the control of
invoices leading to the evasion and defraudation of tax by other units or
individuals, tax authorities shall confiscate the illicit income and a fine of
no more than the actual amount of the tax evaded, unpaid or underpaid may be
imposed at the same time.

    Article 40  If the units or individuals concerned do not agree to the
decisions of the tax authorities on the penalties imposed, they can apply to
the higher tax authorities for reconsideration or file a suit at the People’s
Court in accordance with the law; the tax authorities which have made the
decision on the penalties can apply to the People’s Court to forcefully
execute the penalties if the parties concerned have neither applied for
reconsideration within the prescribed time, nor filed a suit at the People’s
Court, nor implemented the decisions.

    Article 41  According to the relevant regulations, administrative
sanctions shall be imposed on any tax officials who, by taking advantage of
their positions, deliberately place obstacles before any units or individuals
who print or use invoices or indulge in acts in violation of the regulations
concerning the management of invoices. If such acts constitute criminal
offenses, they shall be prosecuted for their criminal liability.
Chapter VI  Supplementary Provisions

    Artitcle 42  The special invoices used by State-owned financial, posts and
telecommunications, railways, civil aviation, road and water transport
institutions, etc. may be managed by the respective competent departments of
the State Council or the respective departments of the People’s Governments of
the provinces, autonomous regions and municipalities directly under the
Central Government after the approval of the State Administration for Taxation
or its branches in the privinces, autonomous regions and municipalities
directly under the Central Government.

    Article 43  In accordance with the need for economic development and for
the collection and supervision of tax, the State ecourages the use of cash
registers. Specific procedures will be promulgated separately.

    Article 44  The State Administration for Taxation shall be responsible for
the interpretation of these Measures and the rules for their implementation
shall be formulated by the State Administration for Taxation.

    Article 45  These Measures shall come into effect on the day of their
promulgation. The Interim Measures of the People’s Republic of China for the
Control of Invoices promulgated by the Ministry of Finance in 1986 and the
Interim Provisions Concerning the Control of lnvoices of Foreign lnvestment
Enterprises and Foreign Enterprises promulgated in 1991 by the State
Administration for Taxation shall be repealed as of the same date.





PRINCIPLES FOR APPROVAL AND ESSENTIALS FOR EXAMINATION TO CONTRACTS AND ARTICLES OF ASSOCIATION OF ENTERPRISES WITH FOREIGN INVESTMENT

The Ministry of Foreign Trade and Economic Cooperation

Principles for Approval and Essentials for Examination to Contracts and Articles of Association of Enterprises with Foreign Investment

October 5, 1993

To strengthen the control of approvals to enterprises with foreign investment, the following principles for approval and essentials
for examination to contracts and articles of association of enterprises with foreign investment, as well as the contents of the approval
have been enacted:

1.

Basic principles for examining and approving contracts and articles of association:

(1)

To see to whether the contracts or articles of association concerned should comply with the laws and regulations of the People’s Republic
of China as well as government rules;

(2)

To see to whether the contracts or articles or association concerned meet the requirements for the contents of the feasibility study
report on the project and for the document of approval;

(3)

To see to whether the contracts or articles of association concerned follow the principle of equality and mutual benefit.

2.

Essentials for examining the contracts and articles of association:

(1)

Legitimacy of the contracts and articles of association, including whether time and place in which the contracts or articles of association
concerned were signed are properly addressed and whether the signatories are legal representatives or are authorized by the legal
representatives;

(2)

Whether there are any necessary contents missing in the contracts and articles of association concerned and whether the documents
which have to be submitted are complete;

(3)

Whether there are any articles in the contracts and articles of association involving matters concerning the government and/or restrictions
on a third party (namely a non-contractual party);

(4)

For projects on which the State restricts the use of foreign funds, projects that require the import of machinery and electronic equipment
restricted by the State, and projects for products that involve export permit control, whether procedures of reporting and approval
have been completed properly according to State stipulations;

(5)

Whether there is a clear definition on the scope of business and whether the wordings have been properly and strictly addressed;

(6)

The proportions of investment shared by various sides, the proportion of total investment to the registered capital, the form and
time limit of investment;

(7)

Whether the terms of technical transfer conform to the State’s Control Regulations for Technical Import Contracts and the provisions
in the feasibility study report;

(8)

Whether the purchase of equipment and raw and processed materials, the proportions of products to be sold domestically and abroad,
ways of selling, pricing principle, and liabilities have been clearly and sufficiently defined and specified;

(9)

Whether the methods for balancing foreign exchange are feasible;

(10)

Wages and welfare for Chinese and foreign workers and staff members;

(11)

Make-up of the board of directors, the extent of its authority, the procedure for calling meetings of the board of directors, the
establishment of operation and management organization;

(12)

The settlement of disputes and the punishment for breach of contract;

(13)

How the assets would be disposed upon the termination, dissolutions and clearing of the enterprises with foreign investment;

(14)

Whether the contracts and articles of association and supplements concerned are in full standardization and meet the requirements
of China’s laws.

3.

Contents that should be included in the document of approval for the contracts and articles of association.

The document of approval for the contracts and articles of association should not be too simple and general in content but include
the following terms at the least:

(1)

Names of the enterprises with foreign investment and all the partners;

(2)

The scopes of business and production scales;

(3)

Total investments, registered capitals, proportions of investment shared by all parties, and forms of investment, and the principles
of profit distribution should also be included if there it is a joint equity venture;

(4)

Terms of operation;

(5)

Confirmations to the lists of equipment to be imported;

(6)

Other issues should be emphasized by approval organs.

The above contents should be carefully and accurately addressed in the approval documents.

4.

Others

(1)

Chinese is the standard language for the documents that need to be examined and approved by the examining and approval organs. All
parties that sign the contracts should be responsible for the consistency of meanings of the Chinese and foreign versions.

(2)

Technical transfer agreements and contracts for entrusting operation and management or for contracting operation should be submitted
for examinations and approvals by examining and approval organs as supplementary contracts of the joint equity or coop venture contract
or independently. Business loan agreements and contracts for purchasing equipment without technical transfer and for the leasing
of factory buildings, the use of land, and the leasing of land, may not be submitted to the examining and approval organs for enterprises
with foreign investment for examination and approval.

(3)

If there should be any problems of principle discovered in the contracts and articles of association of enterprises with foreign investment,
the contracts and articles of associations should be properly corrected by the parties concerned to the enterprises with foreign
investment before they should be submitted again for re-approval.



 
The Ministry of Foreign Trade and Economic Cooperation
1993-10-05

 






MARITIME CODE OF THE PEOPLE’S REPUBLIC OF CHINA

Maritime Code of the People’s Republic of China








Maritime Code of the People’s Republic of China

AMENDMENT TO THE CONSTITUTION OF THE PEOPLE’S REPUBLIC OF CHINA 1993

Amendment to the Constitution of the People’s Republic of China

(Adopted at the First Session of the Eighth National People’s Congress and promulgated for implementation by the
Announcement of the National People’s Congress on March 29, 1993) 

Article 3  The last two sentences of the seventh paragraph of the Preamble to the Constitution, which reads, “The basic task
of the nation in the years to come is to concentrate its effort on socialist modernization. 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, 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 defence and science and technology step by step to turn China into a socialist country with a high level of culture and
democracy”, is revised to read, “China is at the primary stage of socialism. The basic task of the nation is to concentrate its effort
on socialist modernization in line 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, persevere in 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 defence and science and technology step by step to turn
China into a socialist country that is prosperous, powerful, democratic and culturally advanced.” 

Article 4  At the end of the tenth paragraph of the Preamble to the Constitution is added, “The system of the multi-party cooperation
and political consultation led by the Communist Party of China will exist and develop for a long time to come.” 

Article 5  Article 7 of the Constitution, which reads, “The State economy is the sector of socialist economy under ownership
by the whole people; it is the leading force in the national economy. The State ensures the consolidation and growth of the State
economy”, is revised to read, “The State-owned economy, namely, the socialist economy under ownership by the whole people, is the
leading force in the national economy. The State ensures the consolidation and growth of the State-owned economy.” 

Article 6  The first paragraph of Article 8 of the Constitution, which reads, “Rural people’s communes, agricultural producers’
cooperatives and other forms of cooperative economy, such as producers’, supply and marketing, credit and consumers’ cooperatives,
belong to the sector of socialist economy under collective ownership by the working people. 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 to read, “In rural areas the
responsibility system, the main form of which is household contract that links remuneration to output, and other forms of cooperative
economy, such as producers’, supply and marketing, credit and consumers’ cooperatives, belong to the sector of socialist economy
under collective ownership by the working people. 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 7  Article 15 of the Constitution, which reads, “The State practises planned economy on the basis of socialist public
ownership. It ensures the proportionate and coordinated growth of the national economy through overall balancing by economic planning
and the supplementary role of regulation by the market.” “Disturbance of the socio-economic order or disruption of the State economic
plan by any organization or individual is prohibited”, is revised to read, “The State practises socialist market economy.” “The State
strengthens economic legislation, improves macro-regulation and control, and prohibits in accordance with law any organization or
individual from disturbing the socio-economic order.” 

Article 8  Article 16 of the Constitution, which reads, “State enterprises have decision-making power with regard to operation
and management within the limits prescribed by law, on condition that they submit to unified leadership by the State and fulfill
all their obligations under the State plan. State enterprises practise democratic management through congresses of workers and staff
and in other ways in accordance with law”, is revised to read, “State-owned enterprises have decision-making power with regard to
their operation within the limits prescribed by law. State-owned enterprises practise democratic management through congresses of
workers and staff and in other ways in accordance with law.” 

Article 9  Article 17 of the Constitution, which reads, “Collective economic organizations have decision-making power in conducting
independent economic activities, on condition that they accept the guidance of the State plan and abide by the relevant laws. Collective
economic organizations practise democratic management in accordance with law. The entire body of their workers elects or removes
their managerial personnel and decides on major issues concerning operation and management”, is revised to read, “Collective economic
organizations have decision-making power in conducting independent economic activities, on condition that they abide by the relevant
laws. Collective economic organizations practise democratic management and in accordance with law, elect or remove their managerial
personnel and decide on major issues concerning operation and management.” 

Article 10  The third paragraph of Article 42 of the Constitution, which reads: “Work is a matter of honour for every citizen
who is able to work. All working people in State enterprises and in urban and rural economic collectives should approach their work
as the masters of the country that they are. The State promotes socialist labour emulation, and commends and rewards model and advanced
workers. The State encourages citizens to take part in voluntary labour”, is revised to read, “Work is a matter of honour for every
citizen who is able to work. All working people in State-owned enterprises and in urban and rural economic collectives should approach
their work as the masters of the country that they are. The State promotes socialist labour emulation, and commends and rewards model
and advanced workers. The State encourages citizens to take part in voluntary labour.” 

Article 11  Article 98 of the Constitution, which reads, “The term of office of the people’s congresses of provinces, municipalities
directly under the Central Government and cities divided into districts is five years. The term of office of the people’s congresses
of counties, cities not divided into districts, municipal districts, townships, nationality townships, and towns is three years”,
is revised to read, “The term of office of the people’s congresses of provinces, municipalities directly under the Central Government,
counties, cities and municipal districts is five years. The term of office of the people’s congresses of townships, nationality townships
and towns is three years.”

Notice: All Rights Reserved to the Legislative Affairs Commission of the Standing Committee of the National People’s Congress.



RED CROSS SOCIETY

Law of the People’s Republic of China on the Red Cross Society

    

CHAPTER I GENERAL PROVISIONS

CHAPTER II ORGANIZATION

CHAPTER III FUNCTIONS AND DUTIES

CHAPTER IV SIGN CHAPTER V FUNDS AND PROPERTY

CHAPTER VI SUPPLEMENTARY PROVISIONS

   Article 1 This Law is formulated with a view to protecting the life and health of human beings, fostering humanism, promoting peace
and progress, and ensuring the Red Cross Society’s performance of its functions and duties in accordance with the law.

   Article 2 The Red Cross Society of China is a unitary Red Cross organization of the People’s Republic of China and a social relief
and aid society that engages in humanitarian work.

   Article 3 All citizens of the People’s Republic of China who, regardless of ethnic status, race, sex, occupation, religious belief and education
status, recognize the Statutes of the Red Cross Society of China and pay membership dues, may join the Society on a voluntary
basis.

   Article 4 The Red Cross Society of China shall abide by the Constitution and laws of China, adhere to the Fundamental Principles laid down
by the International Red Cross and the Red Crescent Movement, and carry out its work independently in accordance with the Geneva
Conventions and their Additional Protocols acceded to by China and the Statutes of the Red Cross Society of China.

   Article 5 The people’s government shall provide support and financial aid to the Red Cross Society of China, ensure the Society’s performance
of its functions and duties according to law, and exercise supervision over its activities; the Society shall assist the people’s
government in activities relevant to its own functions and duties.

   Article 6 The Red Cross Society of China shall develop friendly relations and cooperation with the Red Cross Societies and the
Red Crescent Societies of all countries on the principles of independence, equality and mutual respect.

   Article 7 The Red Cross Society of China shall use the sign of the Red Cross against a white background.

   Article 8 Local Red Cross Societies at or above the county level shall be established according to the division of the administrative areas
and manned with full-time staff members according to the actual need of work.

Where necessary, the Red Cross Societies may be established in different national trades and professions.

The All-China Federation of the Red Cross Societies shall be established in the country.

   Article 9 The Councils of the Red Cross Societies at various levels shall be democratically elected by respective congresses of members.
The Councils shall democratically elect their Presidents and Vice- Presidents.

When the congresses of members of the Red Cross Societies at various levels are not in session, the Councils thereof shall
implement the decisions made by the congresses.

The Councils shall be responsible to the congresses of members, report on their work to them and accept their supervision.

The Red Cross Societies at higher levels shall direct the work of the Societies at lower levels.

   Article 10 The All-China Federation of the Red Cross Societies shall have an Honorary President and several Honorary Vice-Presidents.
The Honorary President and Honorary Vice-Presidents shall be invited by the Council of the Federation.

   Article 11 The All-China Federation of the Red Cross Societies shall have the status of legal person as a social organization; the local
Red Cross Societies at various levels and the Red Cross Societies of different trades and professions shall acquire
the status of legal persons as social organizations according to law.

   Article 12 The Red Cross Society shall perform the following functions and duties:

(1) to make preparations for disaster relief; in case of natural calamities and emergencies, to offer relief and assistance
to the sick, the injured and other victims;

(2) to disseminate knowledge about hygiene, rescue skills and disease prevention, conduct training in elementary hygiene and
rescue skills, organize the masses to participate in on-the-spot rescue operations; participate in the work of blood
transfusion and donation, promote gratuitous donation of blood, and provide other humanitarian services;

(3) to develop the Red Cross activities among teenagers;

(4) to take part in international humanitarian relief work;

(5) to propagate the Fundamental Principles of the International Red Cross and the Red Crescent Movement and the Geneva Conventions
and their Additional Protocols;

(6) to fulfil the tasks entrusted by the people’s government in accordance with the Fundamental Principles of the International
Red Cross and the Red Crescent Movement; and

(7) to conduct its work in accordance with the relevant provisions of the Geneva Conventions and their Additional Protocols.

   Article 13 The Red Cross Society of China shall have the right to dispose of the relief goods and materials accepted; and in disposing
of the contributed money and goods, it shall honour the wishes of the donors.

   Article 14 In conducting relief operations during natural calamities and emergencies, personnel, goods and materials, and transportation vehicles
marked with the sign of the Red Cross shall enjoy the priority of passage.

   Article 15 No organization or individual shall refuse or obstruct the staff of the Red Cross Society to perform their functions and
duties according to law.

In case of natural calamities and emergencies, anyone who obstructs, by resorting to violence or threat, the staff of the Red
Cross Society to perform their functions and duties according to law shall be investigated for criminal responsibility
by applying mutatis mutandis the provisions of Article 157 of the Criminal Law; anyone who obstructs, without resorting to
violence or threat, the staff of the Red Cross Society to perform their functions and duties according to law, shall be punished
by applying mutatis mutandis the provisions of Article 19 of the Regulations on Administrative Penalties for Public Security.

   Article 16 The sign of the Red Cross plays a protective role and an indicative role as well.

The protective role of the sign of the Red Cross is to show the personnel and equipment that must be respected and protected
in armed conflicts. The sign shall be used in conformity with the relevant provisions of the Geneva Conventions and
their Additional Protocols.

The indicative role of the sign of the Red Cross is to show the personnel or goods that are involved in activities of the
Red Cross. The way the sign is to be used shall be defined by the State Council.

   Article 17 Where the sign of the Red Crescent is used due to religious beliefs, the provisions on the use of the sign of the Red Cross
shall apply.

   Article 18 In case the armed forces use the sign of the Red Cross, the relevant provisions of the Geneva Conventions and their Additional
Protocols shall apply.

   Article 19 Abuses of the sign of the Red Cross is prohibited.

In case the sign of the Red Cross is abused, the Red Cross Society shall have the right to demand that such acts be ceased; in
case of refusing to cease such acts, the Red Cross Society may appeal to the people’s government to deal with the matter
according to the provisions of relevant laws and regulations.

   Article 20 The funds of the Red Cross Society come mainly from:

(1) membership dues paid by members of the Red Cross Society;

(2) money and goods donated by organizations and individuals at home and abroad;

(3) incomes derived from movable and immovable property; and

(4) appropriations of the people’s government.

   Article 21 The State shall support the social welfare undertakings set up by the Red Cross Society in conformity with its aims.

   Article 22 The Red Cross Society may, for the purpose of extending relief and assistance, solicit contributions.

   Article 23 The goods and materials donated to the Red Cross Society for the purpose of relief and public welfare undertakings may enjoy
the preferential treatment of tax reduction or exemption in accordance with the relevant provisions of the State.

   Article 24 The Red Cross Society shall establish a system for examining and supervising the use of its funds.

The Red Cross Society shall use its funds in conformity with its aims.

The Red Cross Society shall establish a special examination and supervision system for donations from abroad.

The Red Cross Society shall report to its Council every year on the sources and use of its funds.

   Article 25 The use of the funds of the Red Cross Society shall, in accordance with the provisions of relevant laws and regulations of
the State, be subjected to the examination and supervision of the people’s government.

   Article 26 No organization or individual shall appropriate or misuse the funds or property of the Red Cross Society.

CHAPTER VI SUPPLEMENTARY PROVISIONS

   Article 27 “The Fundamental Principles of the International Red Cross and the Red Crescent Movement” as mentioned in this Law refers to
the seven fundamental principles, namely, humanity, impartiality, neutrality, independence, voluntary service,
unity and universality, laid down in the Statutes of the International Red Cross and the Red Crescent Movement adopted
by the Twenty-fifth Conference of the International Red Cross in Geneva in October 1986.

“The Geneva Conventions” as mentioned in this Law refers to the four conventions concluded in Geneva on 12 August 1949 and then
acceded to by the People’s Republic of China, namely, the Geneva Convention on Amelioration of the Conditions of the
Wounded and the Sick in Armed Forces in the Field, the Geneva Convention on Amelioration of the Conditions of the
Wounded, the Sick and Shipwrecked Members of Armed Forces, the Geneva Convention on Treatment of Prisoners of War, and the
Geneva Convention on Protection of Civilians in Time of War. “The Additional Protocols” to the Geneva Conventions
as mentioned in this Law refers to the Protocol Additional to the Four Geneva Conventions, concluded on 12 August
1949, Concerning the Protection of Victims in International Armed Conflicts and the Protocol Additional to the Four Geneva
Conventions on 12 October 1949, Concerning the Protection of Victims in Non-international Armed Conflicts acceded to by
the People’s Republic of China on 8 June 1977.

   Article 28 This Law shall come into effect as of the date of its promulgation.

    





INTERIM PROVISIONS ON THE ADMINISTRAION OF SHANGHAI CEREALS AND EDIBLES OILS EXCHANGE

Interim Provisions on the Administraion of ShangHai Cereals and Edibles Oils Exchange

     (Effective Date:1993.07.10–Ineffective Date:)

CHAPTER I GENERAL PROVISIONS CHAPTER II ORGANIZATIONAL STRUCTURE CHAPTER III MEMBERSHIP CHAPTER IV TRADING CHAPTER V CLEARING CHAPTER
VI DELIVERY CHAPTER VII ARBITRATION AND PUNISHMENT CHAPTER VIII SUPPLEMENTARY PROVISIONS

   Article 1 These Provisions are formulated for the purposes of strengthening the administration of the cereals and edible oils exchange, of
regulating futures trading, of maintaining the market order, and of safeguarding the legitimate rights and interests of the trading
parties.

   Article 2 Shanghai Cereals and Edible Oils Exchange (hereinafter referred to as “the Exchange”), as a non-profit making, self-regulating institutional
legal person, shall provide places and facilities for futures trading in cereals and edible oils, and perform other related duties.

   Article 3 The Exchange, in accordance with the futures trading regulations and these Provisions, shall organize the futures trading in agricultural
products such as cereals and edible oils in the designated place and in an open, fair, impartial and regular way.

   Article 4 The Exchange is under the joint leadership of the state organ in charge of commerce and the Shanghai Municipal People’s Government.
It is supervised and managed by the Administrative Board of the Exchange (hereinafter-referred to as “the Board”).

   Article 5 Entities and personnel related to the futures trading in cereals and edible oils shall abide by these Provisions.

CHAPTER II ORGANIZATIONAL STRUCTURE

   Article 6 The Exchange will set up an Assembly of Members, a Council and Special Committees.

   Article 7 The Assembly of Members shall be the organ of authority of the Exchange. The Assembly Shall convene at least once every year. At
least two thirds of the Members shall attend the meeting and any resolution thereof must be adopted by a majority of the Members
before it becomes effective.

   Article 8 The Assembly of Members shall exercise the following functions and powers:

1. To work out and amend the Articles of Association of the Exchange;

2. To elect and recall the Councilors;

3. To review and adopt the report of the President;

4. To decide on matters which need to be reviewed and approved by the Assembly.

The Articles of Association of the Exchange, after being adopted by the Assembly of Members, must be submitted to the Board for approval.

   Article 9 The Council shall be the standing executive body of the Assembly of Members. It shall be responsible to the Assembly. The term of
office of the Council shall be three years.

   Article 10 The main functions of the Council are as follows:

1. To draw up and amend the business regulations of the Exchange, and submit them to the Board for approval;

2. To ratify the acceptance of new members;

3. To appoint the President of the Exchange;

4. To decide on the expelling of any Member;

5. To examine and approve the working plan submitted by the President;

6. To carry out other Duties commissioned by the Assembly.

   Article 11 The Council shall consist of at least seven members. At least one third of the total number of councilors shall come from the Members.

The councilor candidates from the Members shall be nominated by the Members; the councilor candidates from non-members shall be nominated
by the departments concerned; and all the candidates shall be elected by the Assembly.

   Article 12 The Council shall have one chairman and one or two vice chairmen. The chairman shall be nominated by the Board and elected by the
Council. The vice chairman shall be elected by the Council.

The meeting of the Council shall be convened by the chairman. When the chairman cannot perform his/her duty for certain reason, the
vice chairman shall perform the duty on his/her behalf. The decision of the Council shall be adopted by a two thirds majority.

When the Assembly holds its meeting, the chairman shall preside over the Assembly.

   Article 13 The Exchange shall have one president and several vice presidents, one chief accountant, one chief engineer and one general economist.

The president shall be nominated by the governmental department concerned and appointed by the Council. The president shall be responsible
to the Council. The term of office for the president shall be three years.

The vice presidents, chief accountant, chief engineer and general economist shall be appointed by the president.

   Article 14 The president shall take care of the daily routine of the Exchange. He/she is the legal representative of the Exchange. When the
president cannot perform his/her duty for any reason, the vice president shall take his/her place in performing the duty.

The president shall be a councilor as of right.

   Article 15 The Assembly shall set up a Supervisory Committee, which shall perform the following duties:

1. To supervise the implementation of the decision of the Assembly by the Council;

2. To supervise the implementation of the decision of the Assembly and the decision of the Council by the president, vice president(s)
and other employees of the Exchange;

3. To supervise the implementation of these Provisions, the Articles of Association of the Exchange and its business regulations.

The Exchange shall draw up rules for the Supervisory committee and submit them to the Board for approval.

   Article 16 The Exchange shall operate on a system of membership.

   Article 17 An applicant for the membership shall meet the following requirements:

1. Having registered at the administration department for industry and commerce as an independent legal person;

2. Having a registered capital of more than two million yuan;

3. Having a working capital, professional personnel and management systems;

4. Recognizing and observing the Articles of Association of the Exchange;

5. Having a good commercial credit standing.

   Article 18 Entities that meet the requirements listed in Article 17 and ask to acquire membership shall complete the following procedures:

1. To submit a written application with pertinent documents to the Exchange;

2. The Exchange shall screen the applicants and give its opinions based on the principle of selecting members according to their merits.
These opinions shall be submitted to the Council for examination and approval;

3. The Exchange shall issue the certificate of membership and the trading certificate to the entity that has been granted a membership.

   Article 19 A Member shall have the following rights:

1. To attend the Assembly and elect or be elected councilor;

2. To appoint floor representative to do business on the trading floor;

3. To use the facilities provided by the Exchange and to enjoy related services rendered by it;

4. To make suggestions on the work of the Exchange;

5. To withdraw from the Exchange.

   Article 20 A Member shall have the following obligations:

1. To abide by these Provisions and the business regulations;

2. To pay relevant fees as stipulated;

3. To be responsible for the trading account under its own name;

4. To tell its clients about the risk of the futures trading honestly, to take good care of the money entrusted by the client, and
to keep the client’s account secret;

5. To report regularly to the Exchange on the condition of its operation;

6. To maintain the trading order and the reputation of the Exchange, and to take good care of the property of the Exchange.

   Article 21 A Member shall set up its agency suiting its operation outside the Exchange.

   Article 22 A Member that wants to trade on its own account shall make a separate application, and cannot do the trading on its own account without
approval.

   Article 23 The floor representative of a Member and the broker and clearing personnel of its agency shall be screened and trained by the Exchange.
They can be involved in the trading only after being granted the certificate of qualification and being registered.

   Article 24 The membership of a Member and the qualification of its floor representative shall be reviewed once every year.

   Article 25 Any entity with the status of a legal person or any citizen with the full capability of civil action may open in the name of client
an account with the agency of a member of the Exchange and take part in the futures trading.

   Article 26 The following entities and persons are prohibited from doing futures trading:

1. State administrative organs;

2. The Exchange and public servants directly related to the administration of trading.

   Article 27 Commodities for the futures trading in the Exchange shall be agricultural products such as wheat, barley, soybean, rice, corn, vegetable
oil and oil stuff.

   Article 28 Futures trading shall be carried out through Standardized Contract. The basic contents of a contract shall include: name of the contract,
parties to the contract, contract month, minimum price change level, maximum price movement limit in one trading day, the last trading
date, delivery grade and delivery site.

   Article 29 The Exchange shall draw up an uniform futures contract and issue it after the approval of the Board.

   Article 30 The trading shall begin immediately after a futures contract is signed.

The trading under a futures contract shall take the non-paper form.

   Article 31 The maximum period for the futures shall be twelve months.

   Article 32 The price unit for the futures trading is RMB yuan/ton.

   Article 33 Each futures contract shall be regarded as one round lot. The trading quantity must be one round lot or its multiple.

   Article 34 The trading shall be conducted in the form of competition through the free offers gathered together.

   Article 35 A deal shall be concluded on the principle of the price and time taking precedence.

   Article 36 In trading, the bid and the offer shall be made through the computer terminal. When the buying price and the selling price coincide,
the deal is struck through the medium of the computer.

   Article 37 A client engaged in futures trading must commission the agency of a Member to do the business.

The floor representative in the trading room shall only execute the instructions of the Member he/she represents.

   Article 38 Futures trading shall operate on a system of tiered responsibility, under which the Exchange is responsible to the Member and the
Member is responsible to its client.

   Article 39 A trader can only operate within the buying and selling limits; for the holdings in excess of the limits, the Exchange has the right
to adopt measures to force the clearing of the contract after the buyer sells out.

   Article 40 A Member shall report its operation to the Exchange according to the regulation. The Exchange has the right to check on the operation
of a Member.

   Article 41 The Exchange shall stop floor dealings when there is an abnormal rise or fall in the trading price.

The Exchange may adjust the maximum price movement limit according to the change in the business situation. Approval must be obtained
from the Board if the adjusted range is 50% broader than the price movement range specified in a contract.

   Article 42 A Member that has been approved to trade on its own account as a sideline shall open separately an account for trading on its own
account and an account for trading on commission basis. The business on one’s own account and the business on commission basis shall
be handled through different business departments.

   Article 43 A Member sidelining in trading on its own account shall give priority to executing the instructions of the client on the business
commissioned to it.

When a Member buys and sells on its own account, the Member shall explicitly tell the opposite trading party about it.

   Article 44 Orders for buying versus selling under the same contracts shall be openly concluded at the Exchange. No Member shall itself conclude
the deal by pairing the orders.

Holdings for buying versus selling under the same contracts shall not be offset between different accounts by a Member itself.

   Article 45 Information about the trading quotations shall be centrally published by the Exchange.

   Article 46 The following activities are prohibited:

1. Over-the-counter trading or inside trading between a Member and its client or between clients;

2. A Member using its client’s name or account to do futures trading on its own account;

3. A Member revealing its client’s commissions and other related trade secret;

4. Fabricating or spreading false information;

5. Revealing unpublished information that affects market quotations;

6. A Member giving its client a promise to make profit;

7. A Member trading for a client who has not completed the procedures for opening an account;

8. Manipulating the market or disturbing the trading order.

   Article 47 The Exchange shall set up a clearing department, which is responsible for the centralized clearing of all deals done at the Exchange.

   Article 48 A Member’s trading account shall be centrally cleared and managed by the Exchange. A client’s trading account shall be centrally
cleared and managed by the Member commissioned by the client to act as its agent.

The Exchange has the obligation to provide account statements to its Members; A Member has the obligation to provide account statements
to its clients.

   Article 49 The trading shall adopt the deposit system. The deposit comprises clearing deposit, performance deposit and supplementary deposit.
No trade shall be done if the clearing deposit does not meet the specified amount. The supplementary deposit shall be fully paid
according to the stipulation if the performance deposit falls short of the specified amount.

The Exchange has the right to adopt measures to force the clearing of contract after the buyer sells out when the supplementary deposit
does not meet the specified amount.

   Article 50 The trading shall practise a daily clearing system. All the trading accounts in a trading day shall be cleared before the next trading
day begins. The clearing price for each trading day shall be published by the Exchange on the same day after the trading closes.

   Article 51 The income and the expenditure for each trading account must be entered separately. Misappropriating and indiscriminately using the
funds between different accounts are prohibited.

   Article 52 A Member shall keep the funds in each client’s account above the minimum balance set by the Exchange.

   Article 53 Once a trading account is balanced, the Exchange or the Member shall return the performance deposit to the client. The client may
withdraw money if there is a surplus in its account.

A trading enterprise shall enter its gains from trading as its profits and may offset the losses from trading against the profits.

   Article 54 When a deal is concluded, a client shall pay service fee to the Member and the Member shall pay service fee to the Exchange according
to the set standard.

   Article 55 A client has the right to examine its account.

   Article 56 All business records, bills, vouchers and accounting books coming into being in trading activities shall be kept intact for five
years. During the five year period, the governmental department concerned and the Exchange may examine these documents according
to the pertinent rules.

   Article 57 During the delivery month of a contract, the seller may ask for delivery, and the buyer shall be ready at any time to receive the
delivery. The holders of contracts that have not been offset at the closing time of the last trading day must all effect the delivery.

   Article 58 The delivery shall take place over three days, that is, the holding day, the notice day and the delivery day in turn.

   Article 59 The delivery shall take the form of exchanging bills. The two parties to the delivery shall complete the exchange procedures as required
in the delivery notice. The seller shall provide warehouse receipt and invoice, and the buyer shall provide payment voucher. After
the Exchange checks and exchanges the bills, the delivery is completed.

The Exchange shall be responsible for pairing deliveries and exchanging the bills among its Members. A Member shall be responsible
for pairing deliveries and exchanging the bills among its clients.

   Article 60 The price of the commodity for delivery shall be based on the clearing price prevailing on the holding day, and the premium standard
can be used when the substitute commodity is actually delivered subject, however, to the approval of the Exchange.

   Article 61 The Exchange shall designate specific delivery warehouse to provide storage, warehouse receipt, the commodity for delivery and other
services. The delivery warehouse shall be equipped with necessary facilities.

CHAPTER VII ARBITRATION AND PUNISHMENT

   Article 62 Any business disputes between the Members or between a Member and its client, which cannot be settled through consultation, may be
submitted to the Exchange for arbitration.

The interested parties applying for arbitration shall reach an agreement on arbitration and submit a written application.

   Article 63 The Exchange shall make an award within thirty days after receipt of the arbitration application from the interested parties.

   Article 64 A Member doing business on commission basis or on its own account shall be responsible for compensating its client for losses, if
any, that may be caused as a result of violation of these Provisions.

   Article 65 For any act in violation of these Provisions, the Exchange may order the party concerned immediately to stop acts violating the laws
and regulations, and may impose the following punishments: warning, suspension of trading or depriving it of its membership. The
Exchange may also impose an economic punishment according to the Articles of Association of the Exchange.

   Article 66 The Board has the right to instruct the relevant department to give administrative disciplinary measures or punishments according
to the relevant provisions to the party who violates these Provisions, the Articles of Association of the Exchange and the business
regulations.

CHAPTER VIII SUPPLEMENTARY PROVISIONS

   Article 67 The Board is responsible for the interpretation of the concrete application of these Provisions.

   Article 68 These Provisions shall become effective on the date of

    





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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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