Facebook
Home German Laws Page 80

German Laws

CIRCULAR ON COOPERATING WITH COMPETENT DEPARTMENTS OF COMMERCE ON THE ESTABLISHMENT ADMINISTRATION OF FOREIGN-INVESTED CONSTRUCTION ENTERPRISES AND FOREIGN-INVESTED CONSTRUCTION ENGINEERING DESIGN ENTERPRISES

the Ministry of Construction

Circular on Cooperating with Competent Departments of Commerce on the Establishment Administration of Foreign-invested Construction
Enterprises and Foreign-invested Construction Engineering Design Enterprises

Jian Shi Han [2006] No. 76

The construction departments of all provinces and autonomous regions, the construction commissions of all municipalities directly
under the Central Government, and the Construction Administrative Bureaus of Jiangsu and Shandong Provinces:

For the purpose of simplifying the examination and approval formalities for establishing foreign-invested enterprises, in accordance
with the Provisions on the Administration of Foreign-invested Construction Enterprises (Order No. 113 of the Ministry of Construction
and the Ministry of Foreign Trade and Economic Cooperation), the Provisions on the Administration of Foreign-invested Construction
Engineering Design Enterprises (Order No. 114 of the Ministry of Construction and the Ministry of Foreign Trade and Economic Cooperation),
the Ministry of Commerce printed and issued the Circular of the Ministry of Commerce on Entrusting the Provincial Commercial Administrative
Departments to Examine and Approve Foreign-invested Construction Enterprises (Shang Zihan [2005] No. 90) in January 2006, as well
as the Circular of the Ministry of Commerce on Entrusting the Provincial Commercial Administrative Departments to Examine and Administer
Foreign-invested Construction Engineering Design Enterprises (Shang Zihan [2005] No. 92 ), and the provincial commercial administrative
departments and the administrative committees of national economic and technological development zones are entrusted to examine and
approve the establishment of foreign-invested construction enterprises and foreign-funded construction engineering design enterprises.
For the purpose of cooperating the commercial administrative departments to do well in the work concerning the examination and approval
of the establishment of foreign-invested enterprises, we hereby notify the relative matters as follows:

I.

Regarding an application for the level A+ or A qualification of a general contractor of construction or the level A qualification
of a professional contractor, the Ministry of Commerce should solicit the opinions from the Ministry of Construction as of the receipt
of application materials in accordance with Article 7 of the Provisions on the Administration of Foreign-invested Construction Enterprises,
however, as of the present circular, the provincial commercial administrative department shall solicit the opinions from the construction
administrative department at the same level in accordance with this Circular.

II.

Regarding an application for the level A qualification for construction engineering design or the level A or B qualification for any
other construction engineering design, the Ministry of Commerce should solicit the opinions from the Ministry of Construction as
of the receipt of application materials in accordance with Article 7 of the Provisions on the Administration of Foreign-invested
Construction Engineering Design Enterprises, however, as of the present circular, the provincial commercial administrative department
shall solicit the opinions from the construction administrative department at the same level in accordance with this Circular.

The provincial construction administrative departments shall strictly carry out the above-mentioned provisions; and shall, in accordance
with Article 22 of the Provisions on the Administration of Foreign-funded Construction Enterprises and the Measures of the Ministry
of Construction for the Implementation of the Relevant Qualification Administration in the Provisions on the Administration of Foreign-invested
Construction Enterprises (Jian Shi [2003] No. 73), make primary examination and approval on whether the enterprises have the qualifications
for directly applying for the same levels in the letters of local commercial administrative departments for soliciting opinions.

The relevant qualification administrative departments shall carry out specific examination on the qualifications for the enterprises
in accordance with the relative provisions on the qualification administration.

Ministry of Construction of the People’s Republic of China

March 29, 2006



 
the Ministry of Construction
2006-03-29

 






CIRCULAR OF THE MINISTRY OF FINANCE AND THE STATE ADMINISTRATION OF TAXATION CONCERNING ADJUSTING THE EXPENDITURE DEDUCTION STANDARDS FOR INDIVIDUAL INCOME TAXES ON INDIVIDUAL BUSINESS OWNERS AS WELL AS INDIVIDUAL PROPRIETORSHIP ENTERPRISE OR PARTNERSHIP ENTERPRISE INVESTORS

Circular of the Ministry of Finance and the State Administration of Taxation concerning Adjusting the Expenditure Deduction Standards
for Individual Income Taxes on Individual Business Owners as well as Individual Proprietorship Enterprise or Partnership Enterprise
Investors

Cai Shui [2006] No. 44

The public finance departments (bureaus) and bureaus of local taxation of all provinces, autonomous regions, municipalities directly
under the Central Government, cities specifically designed in the state plan, and the Bureau of Public Finance of Xinjiang Production
and Construction Army Corps:

According to the provisions of the current Individual Income Tax Law, the Regulations for its implementation and other relevant policies,
we hereby notice of the relevant issues concerning the expenditure deduction standards for individual income taxes on individual
business owners as well as individual proprietorship enterprise or partnership enterprise investors as follows:

I.

When individual income taxes are calculated and collected on the production and management incomes of individual business owners
as well as individual proprietorship enterprise and partnership enterprise investors according to law, the expenditure deduction
rate for every individual business owner, individual proprietorship enterprise or partnership enterprise investor shall be determined
at 19,200 Yuan/year (1,600 Yuan/month).

II.

Paragraph 1 of Article 13 of the “Circular of the State Administration of Taxation on Printing and Distributing the Measures for
Calculation of Individual Income Taxes of Individual Businesses (for Trial Implementation)” (Guo Shui Fa [1997] No. 43) is amended
as: “The expenditure deduction rate for an individual business owner shall be 19,200 Yuan/year (1,600 Yuan/month); the wage deduction
rates for practitioners shall be determined by the bureau of local taxation of each province, autonomous region, or municipality
directly under the Central Government in light of the local actual situation, and shall be reported to the State Administration of
Taxation for archival filing.”

III.

Item (1) of Article 6 of Attachment 1 of the “Circular of the Ministry of Finance and the State Administration of Taxation on Printing
and Distributing the Provisions on the Collection of Individual Income Taxes from Individual Proprietorship Enterprise and Partnership
Enterprise Investors” (Cai Shui [2000] No. 91) is amended as: “The expenditure deduction rate for every investor shall be 19,200
Yuan/year (1,600 Yuan/month). None of an investor’s wages may be deducted before tax is collected.”

The present Circular shall go into effect as of January 1, 2006.

The Ministry of Finance

The State Administration of Taxation

April 10, 2006



 
Ministry of Finance, State Administration of Taxation
2006-04-10

 






ANNOUNCEMENT NO. 35, 2006 OF MINISTRY OF COMMERCE AND GENERAL ADMINISTRATION OF CUSTOMS, ON POSTPONING THE IMPLEMENTATION OF ANNOUNCEMENT NO. 16, 2006

Ministry of Commerce, General Administration of Customs

Announcement No. 35, 2006 of Ministry of Commerce and General Administration of Customs, on Postponing the Implementation of Announcement
No. 16, 2006

[2006] No. 35

In order to protect the non-renewable resources and the environment, and control the severe damage caused by exploration of natural
sand resources, Ministry of Commerce and General Administration of Customs issued Announcement No. 16, 2006 to stop export of natural
sand (2505100000, 2505900000) as from May 1, 2006.

In order to offer more time for enterprises to establish new operation channels and to adjust operation styles, Announcement No. 16,
2006 shall be postponed. The specific implementation date shall be notified later.

Ministry of Commerce

General Administration of Customs

April 24, 2006



 
Ministry of Commerce, General Administration of Customs
2006-04-24

 






NOTICE OF THE MINISTRY OF FINANCE AND STATE ADMINISTRATION OF TAXATION CONCERNING THE RELATED POLICIES FOR COLLECTIVE AND URBAN LAND USE TAX

Notice of the Ministry of Finance and State Administration of Taxation Concerning the Related Policies for Collective and Urban Land
Use Tax

Cai Shui [2006] No. 56

The public finance departments (bureaus) and local taxation bureaus in each province, autonomous region, municipality directly under
the Central Government and city specifically designated in the state plan as well as the Finance Bureau of Xinjiang Production and
Construction Corporations:

In accordance with the new situation and problems in currently utilizing collective land, the related policies for collective and
urban land use tax are hereby, announced upon deliberation as follows:

In case any collectively-owned construction land as taxable is actually utilized, which falls within the levy scope of the urban land
use tax, and if the related procedures for circulating the land use right have not been conducted, the related entity or individual
that actually utilizes the collective land shall pay the urban land use tax subject to the related provisions.

This Notice shall enter into force as from May 1, 2006. In case any of the previous policies and provisions conflicts with this Notice,
this Notice shall prevail.

Ministry of Finance

State Administration of Taxation

April 30, 2006



 
Ministry of Finance, State Administration of Taxation
2006-04-30

 






ORDINANCE ON THE PROTECTION OF THE RIGHT TO NETWORK DISSEMINATION OF INFORMATION

Order of the State Council of the People’s Republic of China

No. 468

The Ordinance on the Protection of the Right to Network Dissemination of Information, which was adopted at the 135th executive meeting
of the State Council on May 10, 2006, is hereby promulgated and shall be implemented as of July 1, 2006.

Premier Wen Jiabao

May 18, 2006

Ordinance on the Protection of the Right to Network Dissemination of Information

Article 1

With a view to protecting the right to network dissemination of information of the copyright owners, performers and producers of
audio-visual products (hereinafter referred to as the owners) and encouraging the production and spread of the works which are conducive
to the development of material civilization and spiritual civilization, he present Ordinance is formulated in accordance with the
Copyright Law of the People’s Republic of China (hereinafter referred to as the Copyright Law).

Article 2

The owners’ rights to network dissemination of information shall subject to the protection by the Copyright Law and the present Ordinance.
Unless it is otherwise prescribed by any law or administrative regulation, an organization or individual that provides the general
public with any other person’s works, performance or audio-visual products through the information network shall obtain the owner’s
permission and pay the relevant remunerations.

Article 3

The works, performance or audio-visual products as prohibited from being provided according to law are not protected by the present
Ordinance.

Any owner that exercises his right to network dissemination of information shall not violate the Constitution, the relevant laws and
administrative regulations, and shall not injure any public interest.

Article 4

For the purpose of protecting the right to network dissemination of information, an owner may adopt technical measures.

No organization or individual may purposely avoid or break the technical measures, purposely manufacture, import or provide the general
public with any device or component that is mainly applied to avoiding or breaking the technical measures, or purposely provide such
technical services to any other person for the purpose of avoiding or breaking the technical measures, unless it is otherwise provided
for by any law or regulation that the relevant technical measures may be avoided.

Article 5

No organization or individual may, in the absence of an owner’s permission, conduct any of the following acts:

(1)

Purposely deleting or changing the electronic information on the right administration of works, performance and audio-visual products
as provided to the general public through the information network, with an exception of the circumstance under which it is impossible
to avoid deleting or changing such information due to technical reasons; or

(2)

Providing any work, performance or audio-visual product whose electronic information on right administration has been deleted or
changed in the absence of the owner’s permission to the general public who obviously know or should have known about the deletion
or change through the information network.

Article 6

Under any of the following circumstances, works may be provided through the information network, and the provider may be exempted
from obtaining the owner’s permission as well as paying the relevant remunerations thereto:

(1)

Where an appropriate portion of any published work is quoted in the works one provides to the general public for the purpose of introducing
or commenting on any work or elaborating any issue;

(2)

Where it is inevitable to reproduce or quote any published work in the works he provides to the general public for the purpose of
making any new release;

(3)

Where, in order to support the teaching research or scientific research, a small quantity of published works are provided to some
people who engage in teaching or scientific research;

(4)

Where any state organ provides to the general public any published work within a reasonable range for the purpose of exercising its
functions and duties;

(5)

Where the works as already published by any Chinese citizen, legal person or any other organization in Chinese are translated into
any language of any minority ethnic group and are provided to such people within the territory of China;

(6)

Where any already published work is provided to the blind in a way as particularly perceptible to the blind and not for the purpose
of making profits;

(7)

Where any Article on current affairs such as political and economic issues that has been published is provided through the information
network; or

(8)

Where a speech as delivered in a public gathering is provided to the general public.

Article 7

A library, archives, memorial, museum and art gallery may, in the absence of the copyright holder’s permission, provide the relevant
digital works as lawfully published and preserved by the aforesaid institutions as well as the works that shall, according to law,
be subject to digital photocopying for display or preservation to their objects of service through the information network within
their place and without paying any remuneration. Whereas the aforesaid institutions may not directly or indirectly seek for any economic
interest from such activities, unless it is otherwise stipulated by the parties concerned.

The works subject to digital photocopying for the purpose of display or conservation as prescribed in the preceding paragraph shall
be the works that have been damaged or destroyed or are almost damaged or destroyed, are lost or stolen, whose storage format has
been out-of-date, and which cannot be purchased through the market channel or can only be purchased at a price as obviously higher
than the standardized one.

Article 8

Where the nine-year compulsory education or state education planning is implemented through the information network, the owner’s
permission may be absent in using fragments of works, short written works or musical works, a single work of fine art, or photographic
works to produce courseware; the long-distance education institutions that have produced the courseware or acquired courseware according
to law may provide such courseware to the registered students through information networks but shall pay relevant remuneration to
the copyright owner.

Article 9

In order to alleviate poverty, where any work on planting and breeding, disease prevention and cure, disaster prevention and relief
as well as the works that meet the basic cultural demands is published by Chinese citizens, legal persons or other organizations
to the general public in the rural areas, a network service provider shall announce in advance the upload of such works to the network
as well as the authors and remunerations thereof before they are actually uploaded. Within 30 days as of announcement, where a copyright
holder refuses to provide his works, a network service provider shall not provide his works. Where 30 days elapse as of announcement
and if the copyright holder has no different opinion, the network service provider may provide his works and pay the corresponding
remunerations to the copyright holder in light of the announced rates. After a network service provider provides any work and if
the relevant copyright holder disagrees to the upload, the network service provider shall immediately delete the copyright holder’s
works and pay the relevant remunerations corresponding to the display period of the copyright holder’s works in light of the relevant
announced rates.

As for the works as provided according to the provisions of the preceding paragraph, no economic benefit may be directly or indirectly
obtained.

Article 10

Where any work is provided to the general public through the information network in the absence of the copyright holder’s permission
according to the present Ordinance, the following provisions shall be abided by as well:

(1)

Except for the circumstances as prescribed in sub-paragraphs (1) through (6) of Article 6 of the present Ordinance, the works whose
author has in advance announced that his works are prohibited from providing may not be provided;

(2)

The names of works as well as the names of the authors (post_titles) shall be specified;

(3)

Remunerations shall be paid according to the provisions of the present Ordinance;

(4)

Technical measures shall be adopted so as to prevent any person other than the service objects as prescribed in Article 7 , 8 or
9 of the present Ordinance from acquiring any of the copyright holder’s works and to prevent any material injury as incurred by the
service object’s act of photocopying as prescribed in Article 7 of the present Ordinance; and

(5)

None of the other rights of the copyright holder may be infringed upon.

Article 11

The performance or audio-visual products as provided through the information network shall be governed by the provisions of Articles
6 through 10 of the present Ordinance.

Article 12

Under any of the following circumstances, the relevant technical measures may be avoided, whereas the techniques, devices or components
of the technical measures may not be provided to any other person and the other rights as enjoyed by the owner according to law may
not be injured:

(1)

Where any published work, performance or audio-visual product is provided to a small number of people that engage in teaching or
scientific research through the information network for the purpose of teaching or scientific research, whereby the aforesaid published
products can only be accessed through the information network;

(2)

Where any of the written works as already published is provided not the for the purpose of making profits to the blind through the
information network in a unique way as particularly perceptible by the blind, and the aforesaid works can only be acquired through
the information network;

(3)

Where the state organ exercises its functions according to the administrative and judicial procedures; or

(4)

Carrying out any testing on the computer as well as its system or the safety performance of the network through the information network.

Article 13

The administrative department of copyrights may, with a view to investigating into the infringements upon the right to network dissemination
of information, require the relevant network service provider to provide such materials as the names, contact information, and the
web addresses of its service objects as suspected of infringement.

Article 14

With respect to a network service provider that provides information memory space, or searching or linking services, in case the
relevant owner believes that any of the works, performance or audio-visual products as involved in the services has injured his right
to network dissemination of information or that his electronic information on right administration has been deleted or altered, he
may file a written notice with the relevant network service provider, requesting it to delete his works, performance and audio-visual
products or to cut off the link to the works, performance and audio-visual products concerned, wherein the following contents shall
be included:

(1)

Name, contact information and address of the owner;

(2)

The names of the infringed works, performance and audio-visual products that are required to be deleted or the names of the web addresses
whose link is required to be cut off; and

(3)

The preliminary certification materials on infringement.

The owner shall be responsible for the authenticity of his notice.

Article 15

After receiving a notice from the right owner, the network service provider shall immediately delete the relevant works, performance
and audio-visual products as suspected of infringement or cut off the link to the relevant works, performance and audio-visual products
as suspected of infringement and shall transfer the notice to the service objects that enjoy the relevant works, performance and
audio-visual products simultaneously. Where the web address of a service object is not clear and therefore a transfer is impossible,
the notice contents shall be simultaneously announced on the information network.

Article 16

Where a service object receives a notice as transferred by a network service provider and deems that the works, performance or audio-visual
product it provides have not infringed upon any other person’s right, it may file a written statement with the network service provider,
requesting it to recover the deleted works, performance and audio-visual products or to recover the link to works, performance and
audio-visual products, wherein the following contents shall be included:

(1)

The name (post_title), contact way and address of the service object;

(2)

The names of the works, performance, audio-visual products as well as web addresses as requested for recovery; and

(3)

The preliminary certification materials on non-infringement.

The service object shall be responsible for the authenticity of his written statement.

Article 17

After receiving a written statement from a service object, the network service provider shall immediately recover the deleted works,
performance and audio-visual products or recover the link to the works, performance and audio-visual products and shall transfer
the written statement of the service object to the relevant owner simultaneously, who may not request the network service provider
to delete the works, performance and audio-visual products or to cut off the relevant link any longer.

Article 18

Where anyone violates the present Ordinance by committing any of the following infringement, he shall, in light of the severity of
the situation, assume such civil liabilities as stopping the infringement, eliminating the negative impacts, making an apology and
compensating for the losses incurred. In case the public security is injured, the administrative department of copyright may order
it to stop the infringement, confiscate the illegal proceeds and may impose thereupon a fine of 100, 000 yuan. In the event of any
serious circumstances, the administrative department of copyright may confiscate such facilities as computers that are mainly applied
to providing network services. Where any crime is constituted, the violator shall be subject to criminal liabilities according to
law:

(1)

Providing without permission any work, performance or audio-visual product to the general public through the information network;

(2)

Purposely avoiding or damaging the adopted technical measures;

(3)

Purposely deleting or changing the electronic information on right administration of the works, performance, audio-visual products
as provided to the general public through the information network, or providing any work, performance or audio-visual product whose
electronic information on right administration has been deleted or changed in the absence of the right owner’s permission to the
general public who obviously know or should have known about the aforesaid situation through the information network;

(4)

Overstepping the prescribed scope in providing any work, performance or audio-visual product to the rural areas through the information
network for the purpose of alleviating poverty, failing to pay the remunerations according to the announced rates or failing to immediately
deleting the relevant works, performance and audio-visual products which the owners disagree to provide; or

(5)

When providing any other person’s work, performance or audio-visual product through the information network, failing to clarify the
name of the works, performance or audio-visual products or the names of the relevant authors, performers, or producers of audio-visual,
or failing to pay remunerations or failing to adopt the relevant technical measures according to the present Ordinance so as to prevent
any person other than the service objects from acquiring the other person’s work, performance or audio-visual product or failing
to prevent the service objects from conducting the reproduction that may cause any material damage to such other person.

Article 19

Where anyone violates the present Ordinance by committing any of the following acts, the administrative department of copyright shall
give it a warning, confiscate its illegal proceeds, confiscate the devices or components that are mainly applied to avoiding or damaging
the technical measures. In the event of serious circumstances, such equipments as mainly applied to providing network services may
be confiscated and a fine of less than 100, 000 yuan may be imposed thereupon. In case a crime is constituted, the violator shall
be subject to criminal liabilities according to law:

(1)

Purposely producing, importing or providing any other person with any device or component that is mainly applied to avoiding or damaging
the adopted technical measures or providing any technical services to help any other person to avoid or damage any adopted technical
measure;

(2)

Providing the works, performance or audio-visual products through the information network so as to acquire economic benefits; or

(3)

When providing any work, performance or audio-visual product to the rural area through the information network for the purpose of
alleviating poverty, failing to publicize the name of the works, performance and audio-visual products, the name of the relevant
authors, performers or producers of audio-visual products as well as the rates for remunerations before they are uploaded.

Article 20

Where any network service provider provides the service of automatic access pursuant to the instructions of its service objects or
provides the service of automatic transmission of works, performance and audio-visual products to its service objects and if the
following requirements are satisfied, it is not required to assume the liabilities of compensation:

(1)

Having not chosen or altered the transmitted works, performance and audio-visual products; or

(2)

Providing the works, performance and audio-visual products to the designated service objects and preventing any person other than
the designated service objects from obtaining the access.

Article 21

Where a network service provider obtains the relevant works, performance and audio-visual products from any other network service
provider for the purpose of elevating the efficiency of network transmission and automatic storage and provides the aforesaid works
to the service objects automatically according to the technical arrangement and in case the following requirements are satisfied,
it is not required to assume the liabilities of compensation:

(1)

Having not altered any of the works, performance or audio-visual products that are automatically stored;

(2)

Having not affected the original network service provider of the works, performance and audio-visual products in grasping the relevant
works, performance and audio-visual products; or

(3)

When the original network service provider revises, deletes or shields the works, performance and audio-visual products, automatically
revising, deleting or shielding according to the technical arrangement.

Article 22

Where a network service provider provides information memory space to its service objects, or provides the works, performance and
audio-visual products to the general public through the information network and in case the following requirements are satisfied,
he is not required to assume the liabilities of compensation:

(1)

Clearly indicating that the information memory space is provided to the service objects and publicizing the name, contact person
and web address of the network service provider;

(2)

Having not altered the works, performance and audio-visual products that are provided to the service objects;

(3)

Having no knowledge of and being justifiable reason to know the infringement of the works, performance and audio-visual products;

(4)

Having not obtained any economic benefit from the provision of the works, performance and audio-visual products to its service objects;
and

(5)

After receiving a notice from the owner, deleting those works, performance and audio-visual products that the owner regards as infringing
ones according to the present Ordinance.

Article 23

Where a network service provider provides any searching or linking service to its service objects or cuts off the link to any infringing
work, performance, or audio-visual product after receiving a notice from the right owner according to the provisions of the present
Ordinance, it is not required to assume the liabilities of compensation. However, when anyone is fully aware or should have known
that any of the works, performance or audio-visual product it has linked to constitutes any infringement, it shall be subject to
the liabilities of joint infringement.

Article 24

Where the relevant network service provider, as a result of the right owner’s notice, wrongly deletes or cuts off the link to any
work, performance or audio-visual product and therefore causes any loss to its service object, the owner shall be subject to the
liabilities of compensation.

Article 25

Where any network service provider refuses or delays to provide such network materials as the name, contact information and web address
of its service objects as suspected of infringement, the administrative department of copyright shall give it a warning. In the event
of serious circumstances, equipments such as computers that are mainly applied to providing the network services shall be confiscated.

Article 26

The definitions of the terms in the present Ordinance are as follows:

The term “right to network dissemination of information” refers to the right to provide the works, performance and audio-visual products
to the general public in a wire or wireless manner so that the general public may get access to the works, performance and audio-visual
products at the time and place that the relevant owner has chosen.

The term “technical measures” refers to the efficient techniques, devices and components that are applied to preventing or restricting
the browse or appreciation of the works, performance and audio-visual products in the absence of the relevant owner’s permission
or in providing the works, performance and audio-visual products to the general public through the information network in the absence
of the relevant owner’s permission.

The term “electronic information on right administration” refers to the information elaborating the works and the author thereof,
the performance and the performers thereof, the audio-visual products and the producers thereof, the information on the right owners
of the works, performance and audio-visual products as well as the requirements for application and the digits or codes representing
the aforesaid information.

Article 27

The present Ordinance shall be implemented as of July 1, 2006.



 
State Council
2006-05-18

 






THE ANNOUNCEMENT NO. 31, 2006 OF THE GENERAL ADMINISTRATION OF CUSTOMS ON ACCEPTING THE GENERAL GUARANTEE FOR THE CUSTOMS PROTECTION OF INTELLECTUAL PROPERTY






The Announcement No. 31, 2006 of the General Administration of Customs on Accepting the General Guarantee for the Customs Protection
of Intellectual Property

[2006] No. 31
May 30, 2006

According to Article 14 of the Regulation of the People’s Republic of China on the Customs Protection of Intellectual Property (hereinafter
referred to as the Regulation) and Article 22 of the Implementation Measures of the Regulation on the Customs Protection of Intellectual
Property (hereinafter referred to as the Implementation Measures), the intellectual property right holders may provide general guaranties
to the customs according to the law. In order to implement the relative provisions of the Implementation Measures and facilitate
the intellectual property right holders to apply to the customs to take measures protecting intellectual property rights, we hereby
make the following announcement on the relative matters concerning the general guaranties for the customs protection of intellectual
property rights

1.

Within a certain period, if an intellectual property right holder has submitted several applications to the customs for detaining
the import and export goods suspected of infringing on the exclusive right of its trademark which has been put on record in the General
Administration of Customs (hereinafter referred to as goods suspected of infringement), it may submit an application to the General
Administration of Customs for providing a general guaranty for the customs protection of intellectual property (hereinafter referred
to as the general guarantee).

2.

If an intellectual property right holder applies for providing a general guarantee, it shall submit a written application to the
General Administration of Customs (see the format in Annex 1) and shall accompany it with the materials as follows:

(1)

A letter of general guaranty (see the format in Annex 2) issued by a bank (hereinafter referred to in general as guarantor), which
has obtained an approval to undertake the financial business within the territory of China mainland, on bearing the several and joint
liabilities for the general guaranty application of the intellectual property right holder; and

(2)

A checklist of the storage and disposal fees incurred in the previous year after the intellectual property right holder requested
the customs to detain the goods suspected of infringement (see the format in Annex 3).

3.

The amount of general guaranty shall be equivalent to the aggregate amount of the fees incurred for the storage, preservation and
disposal of the goods (hereinafter referred to as the storage and disposal fees) which are suspected of infringement and which were
detained by the customs in the previous year upon application of the intellectual property right holder. If the aggregate amount
of the aforesaid fees incurred in the previous year is less than 200, 000 yuan, the amount of general guaranty shall be 200, 000
yuan.

The period of validity of a letter of the general guaranty shall be from the date of issuance by the guarantor to June 30 of the next
year.

4.

During the period from the date on which the General Administration of Customs grants an approval of its using a general guaranty
to December 31 of the current year, the intellectual property right holder is not required to provide any guaranty to the customs
again if it requests the customs to detain any goods suspected of infringement. However, according to Article 31 of the Implementation
Measures, the relative storage and disposal fees shall still be paid by the intellectual property right holder . If the loss is caused
to the consignee or consignor on account of an improper application, the intellectual property right holder shall assume the civil
compensation liabilities.

5.

Under any of the circumstances as follows, the General Administration of Customs may notify in a written form to the guarantor that
it should pay the relative customs a sum of money which does not exceed the amount of guaranty within 10 working days:

(1)

If the intellectual property right holder fails to pay the storage and disposal fees as required by the customs within 10 working
days after the date of the notice received in written form, it shall pay the relevant fees according to Article 31 of the Implementation
Measures.

(2)

If the intellectual property right holder fails to assume the compensation liabilities according to Article 29 of the Regulation
and if the people’s court demands the customs to help enforce the relevant judgment within the valid period of the letter of general
guaranty.

From the day when the GAC issues a notice of performance of guaranty liabilities to the guarantor, the intellectual property right
holder requests the customs to detain any goods suspected of infringement, it shall provide a guaranty to the custom at the same
time.

6.

This Notice shall enter into effect as of the day of July 1, 2006.

Announced specially.

Attachments:

1.

Letter of Application for General Guaranty for the Customs Protection of Intellectual Property Rights (Format)

2.

Letter of General Guaranty (Format)

3.

Checklist of Storage and Disposal Fees (Format)




Annex 1

￿￿

￿￿

Annex 1:

Application for General Guaranty for the
Customs Protection of Intellectual Property Right (Format)

￿￿

General Administration of Customs of the
People’s Republic of China,

￿￿￿￿In light of the Announcement No. (         
),
2006 of the General Administration of Customs of the People’s Republic of
China, an application is hereby submitted to you
for a general guaranty for the
customs protection of intellectual property rights.

￿￿￿￿This intellectual property right holder
guarantees that the contents of the application and the documents attached
thereto are
genuine and valid, and that it will strictly perform its statutory
obligations.

￿￿￿￿Please grant an approval.

￿￿￿￿Applicant:                            

 Agent:                                

￿￿￿￿Guarantor:                           

 Legal
representative:                           

￿￿￿￿Address:                             

 Post
code:                               

(Seal):                         

Application date:                         

￿￿

Annex 2:

Letter of General Guaranty (Format)

￿￿

￿￿￿￿Date of issuance:                          

 No.                   

￿￿￿￿Beneficiary: General Administration of
Customs of the People’s Republic of China

￿￿￿￿No. 6 Jianguomennei Street, Beijing
(Post code: 100730)

￿￿￿￿This bank, namely the bank located at
No. () () Road, () City, issues this letter of guaranty whereby you are the
beneficiary
to guarantee the intellectual property right holder to perform the
obligations described in Article 14 of the Regulation of the
People’s Republic
of China on the Customs Protection of Intellectual Property Rights (hereinafter
referred to as the Regulation)
at the request of ( ) (hereinafter referred to as
the intellectual property right holder),.

￿￿￿￿If the applicant files an application
with the customs house for detaining any import and export goods suspected of
infringing
on the exclusive right of its trademark according to Article 16 of
the Regulation and if the intellectual property right holder
fails to pay the
relevant fees as required by the customs within 10 working days after it
receives a written notice about the
fees mentioned in Article 25 of the
Regulation, or if it fails to perform the compensation liabilities as prescribed
in Article
29 of the Regulation in compliance with the judgment of the people’s court, this bank promises to transfer the money you demand
to the
bank account designated by you within 10 working days after the receipt of the
payment demand notice.

￿￿￿￿The amount of guaranty in this letter of
guaranty is not more than RMB ( ) Ten Thousand Yuan (RMB   in Arabic numerals).

￿￿￿￿This letter of guaranty shall enter into
effect as of the date of issuance and shall be valid till the day of December
31,   (year).
If you fails to
issue to this bank a payment demand notice within 180 days after the expiration
of this letter of guaranty, this
bank will no longer assume the payment
liabilities as described in this letter of guaranty.

Guarantor:              
 Bank            Issuer
of the letter of guaranty:                

(Seal)                                                      

      (Seal)                           

Date:                          

￿￿

Annex 3:

Checklist of Storage and Disposal Fees
(Format)

￿￿

Unit
(RMB Yuan)

Serial Number

Port Customs

Date of Detainment

Names
of Goods and Trademark

Cases Worth

Amount of Storage Fee

￿￿

￿￿

￿￿

￿￿

￿￿

￿￿

￿￿

￿￿

￿￿

￿￿

￿￿

￿￿

￿￿

￿￿

￿￿

￿￿

￿￿

￿￿

￿￿

￿￿

￿￿

￿￿

￿￿

￿￿

￿￿

￿￿

￿￿

￿￿

￿￿

￿￿

￿￿

￿￿

￿￿

￿￿

￿￿

￿￿

￿￿

￿￿

￿￿

￿￿

￿￿

￿￿

￿￿

￿￿

￿￿

￿￿

￿￿

￿￿

￿￿

￿￿

￿￿

￿￿

￿￿

￿￿

￿￿

￿￿

￿￿

￿￿

￿￿

￿￿

￿￿

￿￿

￿￿

￿￿

￿￿

￿￿

￿￿

￿￿

￿￿

￿￿

￿￿

￿￿

￿￿

￿￿

￿￿

￿￿

￿￿

￿￿

￿￿

￿￿

￿￿

￿￿

￿￿

￿￿

￿￿

￿￿

￿￿

￿￿

￿￿

￿￿

￿￿￿￿Date of making the form:                        

 Intellectual
property right holder:                          

  (Seal)



CIRCULAR OF THE STATE ADMINISTRATION OF TAXATION ON STRENGTHENING THE ADMINISTRATION OF TAXATION FOR CONTRACTED PROJECTS UNDERTAKEN BY FOREIGN ENTERPRISES

Circular of the State Administration of Taxation on Strengthening the Administration of Taxation for Contracted Projects Undertaken
by Foreign Enterprises

Guo Shui Fa [2006] No. 83

State and Local Taxation bureaus in all provinces, autonomous regions, municipalities directly under the Central Government and cities
separately designated in the state plan:

In accordance with the arrangements and requirements of the national work meeting on the administration of international (foreign-related)
taxation of the State Administration of Taxation, and in view of the current weak foundation of the administration of taxation of
foreign enterprises, especially issues such as tax dodges related to contracted construction projects undertaken by foreign enterprises,
the measures and requirements concerning the strengthening of administration of taxation are herby notified as follows:

1.

Further strengthening the administration of taxation for contracted projects undertaken by foreign enterprises, enhancing responsibilities
and plugging up loopholes.

At present, the projects for which foreign enterprises come to China to contract are ever increasing and besides, foreign enterprises
are getting more and more opportunities to take part in major state construction projects, including the construction of gymnasiums
and stadiums for the Olympic Games and the World Exposition as well as the constructions of traffic and energy sources.

In order to strengthen the administration of taxation for contracted projects undertaken by foreign enterprises, the State Administration
of Taxation requires local tax departments to particularly grasp the basic work of the source of tax information by combining with
the actual local situation on the basis of fully strengthening the administration of taxation on foreign enterprises. State and local
tax departments at all levels shall tightly cooperate and coordinate with each other, actively connect with local governments and
fund settlement departments, such as commercial departments, development and reform commissions (bureaus), construction commissions,
industrial and commercial circles, the Customs, trade associations and banks, thus learning the trend of tax source as soon as possible,
perfecting internal process, clarifying liabilities and division of labor, strictly ascertaining responsibilities, and putting an
end to the phenomena of failing to levy or manage. All tax departments shall heighten and ascertain the withholding responsibilities
by steps with plans, and work hard to make the administration level of taxation for contracted construction projects undertaken by
foreign enterprises mount a new step within this year.

2.

Intensifying the publicity of the enforcement of foreign enterprise taxation policies and agreements.

All levels of tax authorities shall, in full use of all means of publicity, carry out wide publicity about the foreign enterprise
taxation policies and relevant enforcement provisions of taxation agreements to taxpayers and withholding agents, who must know their
obligations and liabilities. The tax departments shall persevere unremittingly, pay special attention to typical cases and fan out
from a point to an area. As for those serious illegal cases, tax departments shall make decisions of punishment in accordance with
the law and lay bare the selected cases upon approval by the State Administration of Taxation. Where the tax personnel commit dereliction
of duty of management and bring about significant loss to the state taxation, they shall be investigated in accordance with relevant
provisions of the Tax Collection and Administration Law of the People’s Republic of China.

3.

After receiving the present Circular, all levels of tax departments shall, in accordance with the above mentioned requirements and
in due time, make arrangements and carry them out as soon as possible. Any problem or difficulty encountered in the course of implementation
shall be reported to the State Administration of Taxation on a timely basis. Results of implementation shall be reported to the State
Administration of Taxation (International Department) in a written form before the end of November, 2006.

State Administration of Taxation

June 8, 2006

 
State Administration of Taxation
2006-06-08

 



DETAILED RULES FOR THE BUSINESS PERMISSION FOR NON-SCHEDULED FLIGHTS OF FOREIGN AIR TRANSPORT ENTERPRISES

Decree of the Civil Aviation Administration of China

No. 167

The Detailed Rules for the Business Permission for Non-scheduled Flights of Foreign Air Transport Enterprises (CCAR-119TR-R1) were
passed at the executive meeting of the Civil Aviation Administration of China on June 7, 2006, are hereby promulgated, and shall
go into effect as of July 21, 2006.
Director General of the Civil Aviation Administration of China: Yang Yuanyuan

June 21, 2006

Detailed Rules for the business permission for Non-scheduled Flights of Foreign Air Transport Enterprises
Chapter I General Rules

Article 1

In order to regulate the administration of the business permission for non-schedule flights of foreign air transport enterprises
within the territory of mainland China and remain the order of air transport market, the present Detailed Rules are constituted in
accordance with Article 176 of the Civil Aviation Law of the People’s Republic of China and Article 4 of the Interim Provisions
on the Administration of Non-scheduled Flights in the Civil Air Transportation.

Article 2

The present Detailed Rules shall be applicable to the business permission for non-schedule flights of foreign air transport enterprises
(hereinafter referred to as the foreign air carrier) for engaging in carrying passengers, baggage, cargoes and mails between any
foreign country and mainland China.

Article 3

The “business permission for non-schedule flights in the civil air transportation” as mentioned in the present Detailed Rules means
the flights for commercial air transportation other than scheduled flights and overtime flights, and covers the irregular group charter
flights, integrated tourism charter flights, public charter flights, social organization charter flights, charter flights with similar
interests, charter flights for special activities, student charter flights, charter flights for self use, cargo charter flights,
passenger and cargo charter flights, and sharing charter flights, etc.

Article 4

Given that a foreign air carrier wants to implement the operation of non-scheduled flights between the foreign country and the mainland
China, the operation may not be implemented until the foreign air carrier files an application with the Civil Aviation Administration
of China (hereinafter referred to as the CAAC) in accordance with the present Detailed Rules ,to get the business permission and
accomplish the operational appraisal in the light of the Rules for the Operation Conformity Appraisal of Foreign Public Air Carriers.

Article 5

The CAAC shall carry out the mutual benefit principle to the business permission for non-scheduled flights. The CAAC shall force
equal restrictions on the air transport enterprises of a foreign country if the aviation charging department of the foreign country
forces irrational restrictions on the business permission for the non-scheduled flights carried out by the civil air transport enterprises
of the People’s Republic of China between China and the said country.

Chapter II Application for the Business Permission for Non-scheduled Flights

Article 6

Application for the business permission for any non-scheduled flight, an applicant shall be made with the CAAC within 7 days before
the scheduled flight; otherwise, the CAAC may not accept the application, but except it is otherwise provided in the relevant air
transport agreement or arrangement.

In case the rescuing staff or materials need to be transported under the condition of calamity or any other crucial or special circumstance,
an applicant can submit an application to the CAAC within 3 days before the scheduled flight after the reasons are illustrated.

Article 7

Application for the business permission for any non-scheduled flight, an applicant shall illustrate the type of the business permission
for the non-scheduled flight it plans to run.

Article 8

To make an application for the business permission for any non-scheduled flight, an applicant can directly submit an application
or entrust an agent to submit the application.

Generally, an application shall be sent out via telegraph to the following SITA addresses: BJSSKCA, BJSZGCA; or to the following AFTN
address: ZBBBYAYX.

Article 9

An applicant shall offer documents to illustrate the conditions as follows:

(1)

the name and address of the owners and the operators of the aircrafts;

(2)

the radio communication and signal codes of the aircrafts;

(3)

the frequency range of the radio used in the aircrafts;

(4)

the types, maximum take-off weight and maximum landing weight and number of seats available or tonnage of the aircrafts;

(5)

the expected takeoff and arrival locations, dates, times (UTC Time), route, and the points for entering into and outside the territory
of mainland China;

(6)

the number of the flight and the flight sorties;

(7)

the name, address, contact person and contact information of the charter, the guarantor, and the reception entity;

(8)

the name, address, contact person and contact information of the agency providing agency services for the charter flight and obtaining
a corresponding qualification;

(9)

the name, address, contact person and contact information of the airport ground service company providing ground services for the
charter flight; and

(10)

the contract of charter.

Article 10

To make an application for the business permission for any non-scheduled flight for the first time, an applicant shall submit the
documents as follows except for those prescribed in Article 9 , :

(1)

the duplicated documentation of the business permission for air transportation and operating regulation released by the capable department
of the country (region) where the air transport enterprise is fitted for its qualification for pubic air transportation;

(2)

the duplicated documentation of the nationality registration certificate and the airworthiness certificate of the aircraft, the permission
for using the radio on the aircraft and the noise certificate; and

(3)

the duplicated documentation of the certifications which can show that the applicant has purchased the insurance for the aircraft,
passenger, goods or the liability to the third party on the ground.

Article 11

Whether an application is lodged by the applicant itself or by an agent, the applicant shall be responsible for the authenticity
of the documents submitted.

Article 12

The CAAC may make other additional conditions to the business permission for any non-scheduled flight which may prevent or destroy
public interests.

Article 13

The CAAC shall accept the application if the application materials are entire and abide by statutory forms; the CAAC shall inform
the applicant of all the contents which should be supplemented and corrected once and for all on the spot or within 3 days if the
application materials are not entire or do not abide by statutory forms; and the date when the application materials are received
shall be considered as the date of acceptance if the CAAC does not inform the applicant within the time limit.

Chapter III Determination on the Business Permission for Non-scheduled Flights

Article 14

The CAAC shall implement the examination within 4 days as of the day of the acceptance of an application, and make a written decision
on approval or disapproval.

Article 15

The CAAC shall make a decision on approval if the application of an applicant complies with the conditions and standards prescribed
in the present Detailed Rules.

The CAAC shall, when it makes a decision on disapproval, explain and inform the applicant of the right to apply for administrative
reconsideration or institute an administrative lawsuit.

Chapter IV Restrictive Conditions on the Business Permission for Non-scheduled Flights

Article 16

An applicant shall run the non-scheduled flights in accordance with the flight plan as approved by the CAAC, and may not change it
at random.

Article 17

In general, an applicant may not run any of the following acts in the non-scheduled flights, unless it is specially authorized by
the CAAC in accordance with foreign relations, economic and trade relations, public requirements or any other reason:

(1)

Carrying out non-scheduled flights between any two points within the territory of mainland China;

(2)

Carrying out combined flights between any two points or more points within the territory of mainland China;

(3)

Carrying out non-scheduled flights between the territory of mainland China and any third country (region);

(4)

Carrying out non-scheduled flights on the flight course or flight section for scheduled flights;

(5)

Carrying passengers in non-scheduled cargo charter flights;

(6)

Carrying out non-scheduled flights by using wet-lease aircrafts;

(7)

Through the computer reselling system, retailing the chartered seats or berths to the general public or reselling them to any other
charter;

(8)

Carrying out combined charter flights of the passenger and cargo; or

(9)

Conveying weapons and materials for battles.

Article 18

An applicant shall, before it obtains the business licensing for non-scheduled flights of carrying dangerous goods, lodge an application
with the CAAC under the Provisions on the Administration of the Civil Air Transportation of Dangerous Goods in China, and can not
transport dangerous goods until it is approved.

Article 19

On the condition that an applicant applies for using a wet-lease aircraft for running non-scheduled flights under a special circumstance,
it shall explain the reasons to the CAAC in advance. In case the CAAC deems that the reasons are set up, the applicant shall submit
a written application within 15 days before the expected flight, and shall submit the following documents except the documents mentioned
in Articles 9 and 10:

(1)

the aircraft wet-lease agreement;

(2)

the agreement between the lessor and lessee on the security liabilities for the wet-lease aircraft; and

(3)

the business permission for international air transportation released by the relevant department in charge of the country (region)
where the lessor of the aircraft is located.

Article 20

The operation shall be dealt with consistently by an air transport agent with corresponding qualifications if an applicant plans
to transport passengers or goods from the territory of mainland China to any point of a foreign country.

Article 21

To run non-scheduled flights within the territory of mainland China, an applicant shall accept the ground services offered by the
relevant service department with corresponding qualifications and terminate an agency agreement for ground services with it, and
may not accept the ground services offered by any foreign enterprise or individual within the territory of mainland China, unless
the said applicant has been authorized for offering ground services by itself or for using ground services provided by any other
foreign air transport enterprise or Taiwan, Hong Kong or Macao air transport enterprise for the scheduled flights it operates.

Article 22

To operate non-scheduled flights, an applicant shall pay airway expenses, take-off and landing expenses and other expenses in accordance
with the relevant provisions.

Chapter V Loading Statistics for the Business Permission for Non-scheduled Flights

Article 23

An applicant shall fill in and report a Statistical Form on the Transport Businesses of Foreign Airliners stated in the Appendix
to the present Detailed Rules within 10 days after the operation of a non-scheduled flight, and confirm the accuracy and integrity
of the contents it fills in.

Chapter VI Legal Liabilities

Article 24

The principal and other persons directly responsible shall be given administrative sanctions if the department in the CAAC and its
functionaries for accepting applications go against the relevant provisions in the present Detailed Rules when approving the business
permission for non-scheduled flights to the applicants and are under any of the following circumstances, and if the circumstances
are severe:

(1)

Refusing to accept an application in line with statutory conditions;

(2)

Failing to agree the permission to an applicant which accords with the permission conditions or within the statutory term;

(3)

Failing to notify the applicant of the contents that should be completed and corrected once and for all when the application materials
submitted by the applicant are inadequate or do not abide by statutory forms; or

(4)

Failing to illustrate the reasons for refusing the application or the disapproval.

Article 25

In case any working staff of the department for accepting applications in the CAAC try to accept properties or want to get other
interests when approving the business permission for non-scheduled flights from the applicants, if a crime is constructed, he shall
bear criminal liabilities; and if a crime is not constructed, he shall be imposed upon administrative sanctions.

Article 26

If an applicant conceals the relevant conditions or offers false materials when applying for the business permission for non-scheduled
flights, the CAAC may not accept the application or authorize the approval, and shall render it a warning, and any application for
the business permission for non-scheduled flights submitted by the said applicant may not be accepted within 6 months as of the day
when the warning is rendered.

Article 27

In the event that an applicant gets the business permission for non-scheduled flights through cheats, bribes or any other unjustifiable
means, the CAAC shall call off the said permission, and impose a fine of 10,000 Yuan up to 30,000 Yuan on it, and any application
for the business permission for non-scheduled flights presented by the said applicant may not be agreed within one year as of the
day when the permission is called off or the fine is imposed.

Article 28

If an applicant that has been permitted to run non-scheduled flights commits any of the following acts, the CAAC may give a warning
or a fine of 10,000 Yuan up to 30,000 Yuan to it in accordance with the difference of the circumstances:

(1)

Discretionarily changing the flight plan as approved by the CAAC;

(2)

Reselling for profiteering, leasing or conveying the business permission for non-scheduled flights;

(3)

Running business operations beyond the scope of the business permission for non-scheduled flights;

(4)

Hiding the relevant conditions, offering false materials or rejecting to offer true documents which can reflect the conditions to
the civil aviation administrative body responsible for the supervision and examination; or

(5)

Any other illegal act presented by the law or regulation.

Chapter VII Supplementary Rules

Article 29

The time range presented in the present Detailed Rules shall be reckoned by working days, excluding legal holidays.

Article 30

The present Detailed Rules shall be carried out by analogy if an aircraft owner or operator of Hong Kong or Macao Special Administrative
Region applies for the business permission for non-scheduled flights between Hong Kong or Macao Special Administrative Region and
the mainland China, or if an aircraft owner or operator of Taiwan Area applies for the business permission for non-scheduled flights
between Taiwan Area and the mainland China.

Article 31

The present Detailed Rules shall go into effect as of July 21, 2006. The Provisions on the Administration of Non-scheduled Flights
in the Foreign Civil Air Transportation promulgated by the Civil Aviation Administration of China on November 23, 1990 shall be concurrently
abolished.

Appendix: Statistics on the Transport Volume of Foreign Airliners (omitted)



 
Civil Aviation Administration of China
2006-06-21

 






GUIDELINES FOR THE INTERNAL CONTROL OF PILOT MARGIN TRADING OF SECURITIES COMPANIES

Circular of China Securities Regulatory Commission concerning Promulgating the Guidelines for the Internal Control of Pilot Margin
Trading of Securities Companies

Zheng Jian Ji Gou Zi [2006] No.124

All the securities companies:

For the purpose of guiding securities companies to establish and perfect the internal control mechanism for the pilot margin trading,
Guidelines for the Internal Control of Pilot Margin trading of Securities Companies are hereby formulated and promulgated, and shall
come into force as of August 1, 2006.

China Securities Regulatory Commission

June 30, 2006

Guidelines for the Internal Control of Pilot Margin trading of Securities Companies

Article 1

The present Guidelines are formulated for the purpose of guiding securities companies to establish and improve the internal control
mechanism for the margin trading and to prevent various risks related to the margin trading.

Article 2

Where a securities company develops the pilot margin trading, it shall establish and perfect the internal control mechanism in accordance
with the Guidelines for the Internal Control of Securities Companies and the present Guidelines.

Article 3

Where a securities company develops the pilot margin trading, it shall establish adequate management rules, operational procedures
as well as risk identification, evaluation and control systems to ensure that the risks can be monitored, controlled and endured.

Article 4

A securities company shall improve the business separation system, and ensure the separation of the margin trading from the securities
assets management, securities self-run business and investment banks etc. concerning the organization, personnel, information and
account etc.

Article 5

A securities company shall conduct a uniform administration on the margin trading. The policy decisions and major management functions
of the margin trading shall be borne by the head office of the securities company.

Article 6

A securities company shall establish the policy decisions and authorization system for the margin trading, which shall be established
and operated in principle under the structure of the board of directors – business policy decisions department – business implementation
department – branch office.

The board of directors shall be in charge of formulating basic management system for the margin trading, and shall decide the department
establishment, their respective functions and the total scale relating to the margin trading.

The business policy decisions department shall consists of relevant senior managers and person in charge of departments, and be responsible
for formulating operational procedures relating to the margin trading, choosing branch offices which are able to engage in the margin
trading, determining the credit quota to a single customer and of a single securities, the term and the interest rate (charging rate)
of the margin trading, the proportion of guaranty bonds, the minimum guaranty maintenance proportion, types and the conversion rates
of securities that can be used as guaranty bonds, as well as types of securities that can be bought or sold by the customers through
the margin trading.

The business implementation department shall take charge of substantial management and operation of the margin trading, draw up the
standard texts of margin trading contracts, determine the credit quota to specific customers, and examine and approve, cross check
and supervise the business operations of branch offices.

The branch offices shall, under the centralized supervision and control of the head office of the company and in accordance with the
uniform provisions and decisions of the company, specifically take charge of the credit investigation of customers, contracts signing,
accounts opening, guaranty bonds collection, businesses implementation and other business operations.

Article 7

The front, middle and back departments of the margin trading of a securities company shall be separated from each other and restricted
with each other, and various major links shall be in the separate charge of different departments and posts, the department and post
that is responsible for risk control and business audit shall be independent of other departments and posts, and no senior manager
in charge of the margin trading may be concurrently in charge of the risk control department or the business audit department.

Article 8

A securities company shall strengthen the control of the margin trading of its branch offices, prohibit them from providing the margin
trading to customers without approval of the head office and from deciding the contracts signing, accounts opening, credits granting,
guaranty bonds collection, or any other matter that should be determined by the head office.

Article 9

A securities company shall establish a system of customer choosing and credit granting and clearly define the procedures and power
limit for the customer choosing and credit granting:

(1)

To establish the customers choosing standards and an examination system of account opening for the margin trading, and clarify the
qualifications for customers to engaging in the margin trading and the key points and procedures for examining the account opening
application materials;

(2)

To establish the customer credit evaluating system, separate the customers into different types and levels in accordance with their
status, property and incomes, securities investment experiences, risk preference, and etc., and determine the credit quota, interest
rate or charging rate for each type or level of customers;

(3)

To clarify the contents, procedures and ways for the credit investigation of customers, assess the authenticity and accuracy of the
customer materials, know the credit status of customers, and evaluate the risk assumption ability and the possibility of breach of
contract of customers; and

(4)

To record and analyze the position varieties of customers and the business conditions, and adjust the credit ranking of customers
timely subject to the operational conditions and the modification of their credit status, and etc.

Article 10

A securities company shall print and use the standard text of the margin contract, the content of which shall pursuant to the provisions
in the Measures for the Administration of Pilot Margin Trading of Securities Companies and the Essential Clauses for the Margin Contracts.

Article 11

A securities company shall, before signing a margin contract with a customer, perform the following obligations for notifying the
customer:

(1)

To remind in written form the customer of the investment loss risk that may results from the enlargement of investment scale, the
misjudgment of market trend, the mandatory buy-in due to the failure to complement collaterals in time;

(2)

To assign a special person to explain to the customer the rules, procedures and contractual clauses for the margin trading; and

(3)

To notify the customer of the possible legal litigation risk if the customer lends the credit account to another, and remind the customer
to properly keep the credit account card, the identity certification and trading passwords.

Article 12

A securities company shall, after signing a margin trading contract with a customer, open a real name credit securities account for
the customer pursuant to the Measures for the Administration of Pilot Margin Trading of Securities Companies and the relevant provisions
of the securities depository & clearing institution.

A securities company shall entrust the third party depository bank to open real name credit securities accounts for customers.

Article 13

A securities company shall, on the basis of meeting the relevant provisions and in accordance with its own operational capital, market
situation and the credit status of customers, and etc., determine the interest rate and charging rate for the margin trading, and
publicize them in the business place.

Article 14

A securities company shall, on the basis of meeting the relevant provisions, determine the types and conversion rates of securities
that can be used for guaranty bonds, the types of securities that can be bought and sold by the customers in the margin trading,
the proportion of guaranty bonds and the minimum guaranty maintenance proportion, and publicize them in the business place.

Article 15

A securities company shall designate special persons, in real time, to supervise and control the collaterals value and the debts
value of customers, and the alteration of their proportion, and when the said proportion is lower than the minimum guaranty maintenance
proportion as reserved in the contract, the securities company shall, in a timely manner, notify the customers to complement collaterals
under a reserved means and adopt necessary measures to record down the time and contents of the notice, and etc..

Article 16

A securities company shall formulate operational rules and procedures for the mandatory buy-in, and when a customer fails to complement
collaterals subject to the relevant provisions or pay debts within the time limit, the mandatory buy-in shall be implemented immediately.
The capital from the buy-in shall first be used to make debt repayment of the customer, and the remaining capital shall be transferred
into the credit capital account of the customer.

A mandatory buy-in order shall be issued by the head office of the securities company, and the post for issuing buy-in orders and
the post for implementing buy-in orders shall not be held by a same person. The mandatory buy-in operation shall be recorded down.

Article 17

A securities company shall establish a technical system for the margin trading under the uniform administration of the head office,
and implement the automatic management to the main procedures of the margin trading.

A securities company shall establish a centralized risk supervision and control system for the margin trading, the functions of which
shall include centralized management of business data, total amount supervision and control of the margin trading, classified supervision
and control of credit accounts and automatic warning in advance, and etc.. The system shall set up necessary open functions or data
accesses so that the regulatory organ may timely know and examine the information about the margin trading.

Article 18

A securities company shall take effective measures to safeguard the safety of the assets of customers:

(1)

To enhance the administration on the operational procedures and technical systems, prevent technical obstacles, operational mistakes,
institutional and procedural omissions, moral risk of employees and other issues that may affect the safety of customers’ assets;

(2)

To establish and perfect the administration and audit system for credit accounts, and prevent the assets mixing, accounts mixing,
accounts lending, and false accounts, and etc.;

(3)

To provide reconciliation statements to customers pursuant to the reserved methods, and faithfully provide the detailed securities
and capital data to the securities depository & clearing institution and the third party depository bank for the inquiry of customers;
and

(4)

To inform the customer in a timely manner if the assets of customer are frozen, sealed up or deducted, and etc. due to the credits
or debts of the customer.

Article 19

A securities company shall strengthen the risk supervision and control and business audit in the margin trading, which shall cover
all the links of front, middle and back departments.

The risk supervision and control department shall implement the real time supervision and control and risk quantitative analysis of
the margin trading, analyze and evaluate the information about the proportion, bad debts, concentration, quota and etc. of the high
risk accounts, bring forward the control measures accordingly, and issue opinions on such serious matters as signing margin trading
contracts with customers, examination and approval of customers credit quotas, and the mandatory buy-in, and etc.

Article 20

A securities company shall establish a mechanism for supervising controlling and adjusting the scale of the margin trading with the
net capital as the core:

(1)

To determine rationally the proportion of the margin amount to all the customers, a single customer and of a single securities to
the net capital and other risk control indicators under the supervisory requirements and its own financial status;

(2)

To monitor the net capital, the fluidity, the assets, the liability and other main financial indicators, and timely adjust the scale
of margin trading in accordance with the alteration of indicators; and

(3)

To supervise and control of the scale of open interests of the margin trading of the customers through the centralized risk supervision
and control system, and making such main financial indicators as the net capital of the company subject to the supervisory requirements
through adjusting the scale of the margin trading.

Article 21

A securities company shall, pursuant to the relevant provisions and the supervisory requirements of the State, formulate the accounting
system for the margin trading, prudently evaluate the risk of bad debts that may be brought by the margin trading, sufficiently draw
the provisions for the relevant loss in the same term, and fully reveal it in the financial statements.

Article 22

A securities company shall establish an internal reporting system for the margin trading, and clarify the reporting routes and feedback
mechanism for the business operation, risk control, business audit and other relevant information.

A securities company shall establish an information submission system for the margin trading, assign special persons to be responsible
for the audit and cross check of relevant information, and ensure that the information submitted to the CSRC and the self-discipline
organization is true, accurate and complete.

Article 23

A securities company shall establish a management system for the customer archives and enhance the management of customer materials
of the margin trading. As to the customers in margin trading, the credit status of whose is not good or who have records of breach
of contract, the securities company shall record them down in the archives, and timely report them to the Securities Association
of China.

Article 24

The present Guidelines shall enter into force as of August 1, 2006.



 
China securities regulatory commission
2006-06-30

 






ANNOUNCEMENT NO.42, 2006 OF THE NATIONAL DEVELOPMENT AND REFORM COMMISSION OF THE PEOPLE’S REPUBLIC OF CHINA

Announcement No.42, 2006 of the National Development and Reform Commission of the People’s Republic of China

No.42 [2006]

94 trade sector criteria are approved by National Development and Reform Commission of the People’s Republic of China (See Appendix
for Criteria Code, post_title and Implementation Time), among which 14 trade sector criteria are of textile industry sector, 5 of coal
industry, 73 of petroleum and natural gas industry and 2 of boiler pressure container industry.

Standards Press of China, China Coal Industry Press, Petroleum Industry Press and Xinhua Publishing House are in charge of the publication
of the above-mentioned criteria.

Appendix: Criteria Code, post_title and Implementation Time for 94 Trade Sector Criteria. (omitted)

National Development and Reform Commission of the People’s Republic of China

July 10, 2006



 
National Development and Reform Commission
2006-07-10

 






1...798081...83Page 80 of 83

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

Disclaimer: There is no confidential attorney-client relationship formed by using Laws.com website and information provided on this site is not legal advice. For legal advice, please contact your attorney. Attorneys listed on this website are not referred or endorsed by this website. By using Laws.com you agree to Laws.com Terms Of Use.
Facebook
© LAWS.COM NETWORK 2023-2024