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DECISION OF THE STANDING COMMITTEE OF THE NATIONAL PEOPLE’S CONGRESS ON APPROVING THE INTERNATIONAL CONVENTION ON THE PREVENTION OF MARINE POLLUTION BY DUMPING OF WASTES AND OTHER MATTER, 1996 PROTOCOL

Decision of the Standing Committee of the National People’s Congress on Approving the International Convention on the Prevention of
Marine Pollution by Dumping of Wastes and Other Matter, 1996 Protocol

June 29, 2006

The 22nd meeting of the Standing Committee of the 10th National People’s Congress decides to approve the 1996 Protocol to the Convention
on the Prevention of Marine Pollution by Dumping of Wastes and Other Matter (hereinafter referred to as the Protocol), which were
adopted at the meeting of the state parties to the Convention on the Prevention of Marine Pollution by Dumping of Wastes and Other
Matter on November 7, 1996 is approved and a declaration is simultaneously made as follows:

1.

With respect to paragraphs 2 and 5 of Article 16 of the Protocol, if the People’s Republic of China turns into a party at issue due
to the explanations and application of the Protocol (including the explanations and application of paragraphs 1 and 2 of Article
3 ), the procedures for arbitration as prescribed in Attachment III to the Protocol shall be applied upon the strength of a written
approval of the government of the People’s Republic of China.

2.

The Protocol shall, for the time being, not be applied to the Macao SAR of the People’s Republic of China before the government of
the People’s Republic of China otherwise makes any promulgation.



 
The Standing Committee of the National People’s Congress
2006-06-29

 






CIRCULAR OF THE MINISTRY OF FINANCE AND THE STATE ADMINISTRATION OF TAXATION CONCERNING THE COLLECTION OF ENTERPRISE INCOME TAX ON THE INCREASED VALUE DUE TO ASSETS ASSESSMENT DURING THE RESTRUCTURING OF INDUSTRIAL AND COMMERCIAL BANK OF CHINA LIMITED

Circular of the Ministry of Finance and the State Administration of Taxation Concerning the Collection of Enterprise Income Tax
on the Increased Value due to Assets Assessment during the Restructuring of Industrial and Commercial Bank of China Limited

Cai Shui [2006] No. 81

The finance departments (bureaus), state taxation bureaus and local taxation bureaus of each province, autonomous region, municipality
directly under the Central Government and city specifically designated in the state plan, the Finance Bureau of Xinjiang Production
and Construction Corporations, and the financial supervision commissioners’ offices of the Ministry of Finance in each province,
autonomous region, municipality directly under the Central Government and city specifically designated in the state plan:

For the purpose of supporting the smooth operation of the restructuring and listing of the Industrial and Commercial Bank of China,
the relevant issues concerning taxation are hereby announced as follows in accordance with relevant spirit of the State Council on
supporting the restructuring of enterprises:

1.

Where the increased value due to assets assessment that occurs during the restructuring of Industrial and Commercial Bank of China
has been confirmed and included into state capital by competent finance authorities, it shall be exempted from the enterprise income
tax that should be paid subject to relevant provisions.

2.

The Industrial and Commercial Bank of China may make depreciation or amortization according to the assessed value of assets, and conduct
deduction before the levy of enterprise income tax.

Please abide hereby.

The Ministry of Finance

The State Administration of Taxation

August 14, 2006



 
The Ministry of Finance, the State Administration of Taxation
2006-08-14

 






CIRCULAR OF THE GENERAL OFFICE OF THE STATE ADMINISTRATION FOR INDUSTRY AND COMMERCE ON THE WORK ARRANGEMENT OF SPOT CHECKS FOR ACCEPTANCE OF SPECIAL LAW ENFORCEMENT INSPECTION OF THE REGISTRATION AND ADMINISTRATION OF FOREIGN INVESTMENT

Circular of the General Office of the State Administration for Industry and Commerce on the Work Arrangement of Spot Checks for Acceptance
of Special Law Enforcement Inspection of the Registration and Administration of Foreign Investment

Ban Zi [2006] No. 76

The Administrations for Industry and Commerce of all provinces, autonomous regions and municipalities directly under the Central Government:

In accordance with the arrangements of the Circular on Organizing and Carrying out the Inspection of Law Enforcement in Various Parts
for the Year 2006(Gong Shang Ming Dian [2006] No. 35), the State Administration for Industry and Commerce decides to carry out spot
checks for acceptance on the law enforcement situation in all parts in mid-January, 2007. And related work arrangements are herby
notified as follows:

1.

Contents and Appraisal Criteria of Spot Checks for Acceptance

(1)

The registration of authorized bureaus in accordance with the law.

The emphasis shall be placed on the examination and approval of the name, the enforcement of industrial policies (including pre-approval),
the examination of registration materials, etc. The above contents shall be examined one by one and be appraised as level A, level
B or level C in view of specific circumstances.

(2)

The supervision and administration of authorized bureaus.

The emphasis shall be placed on the case-handling in everyday routine supervision in accordance with relevant provisions, classified
supervision and administration of enterprise credit, and the investigation and prosecution of unlawful behaviors in annual inspection.
The above contents shall be examined one by one and be appraised as level A, level B or level C in view of specific circumstances.

(3)

The implementation of the Measures for Authorized Registration of Foreign-invested Enterprises by authorized bureaus.

The emphasis shall be placed on whether the authorized bureau is in conformity with authorized registration conditions and whether
there is registration in excess of authority. The above contents shall be examined one by one and be appraised as level A, level
B or level C in view of specific circumstances.

(4)

The implementation of special law enforcement task, the establishment of foreign investment monitoring system, and the improvement
of law enforcement effect in accordance with Document No. 146 by the State Administration on the part of the authorized bureaus.

The emphasis shall be placed on the organization and guidance work by authorized bureaus at the provincial level within the whole
province, the revision of the present software, the sorting-out, regulation and supplementation recording of original data, and the
collection, transformation and updating of data by authorized bureaus. The above contents shall be examined one by one and be appraised
as level A, level B or level C in view of specific circumstances.

See Appendix for the Form of Examination Contents and Appraisal Criteria

2.

Means of Spot Checks for Acceptance

(1)

Hearing the report by administrations for industry and commerce at the provincial level and relevant local administrations for industry
and commerce on the law enforcement of foreign investment registration.

(2)

Organizing discussions among foreign investment registration officials on relevant problems in law enforcement.

(3)

Spot-check of archives; and

(4)

Holding conferences by members of inspection teams to appraise and mark the law enforcement activities.

3.

The Scope of Spot Checks for Acceptance

Twelve provinces altogether throughout the country shall be spot checked. Two authorized bureaus in each province shall be chosen,
and 20 copies of foreign investment registration archives of each bureau shall be checked at random (including 15 registration archives
and 5 case investigation and prosecution archives).

4.

Organization, Implementation and Detailed Arrangements for Spot Checks for Acceptance

Six working groups shall be divided with 6 to 7 persons in each. Each group shall be responsible for the spot check work of 2 provinces,
in which, the person in charge of the regulations department or that in charge of the registration bureau for foreign-invested enterprises
shall assume the team leader. Members of the team group shall include 1 division chief in charge of the local law department, 3 division
chiefs in charge of local foreign investment departments and 1 retinue official from the regulations department or the registration
bureau for foreign-invested enterprises.

Provinces and Time for Spot Check:

Group 1: Heilongjinag, Liaoning

Group 2: Shannxi, Gansu

Group 3: Hunan, Hubei

Group 4: Guangdong, Hainan

Group 5: Henan, Jiangxi

Group 6: Yunnan, Sichuan

The spot check for acceptance shall start as of January 18, 2007 and end up on January 28, 2007.

5.

Summarization of the Spot Check for Acceptance

After the completion of the spot check for acceptance, each group shall write out a report. In the end, the Registration Bureau for
Foreign-invested Enterprises of the State Administration for Industry and Commerce shall formulate, based on the report of each groups
and that of the local authorities, a final report on the law enforcement situation. The local authorities shall also work out relevant
work summaries and deliberate on problems discovered during the law enforcement inspection so as to further promote and improve the
foreign investment registration work and enhance administration in accordance with the law.

The Administration for Industry and Commerce in such municipalities directly under the Central Government as Beijing, Shanghai, Tianjin
and Chongqing, and such provinces as Hebei, Shanxi, Inner Mongolia, Jilin, Shandong, Jiangsu, Anhui, Zhejiang, Fujian, Guangxi, Guizhou,
Tibet, Xinjiang, Ningxia and Qinghai, shall be required to submit the name list of the persons in charge of the Foreign Investment
Department who shall take part in the spot check for acceptance work to the Instruction Division of the Registration Bureau for Foreign-invested
Enterprises of the State Administration for Industry and Commerce.

Tel: 010-68057995

The Administration for Industry and Commerce in Beijing, Chongqing, Hebei, Inner Mongolia, Shandong and Zhejiang are required to submit
the name list of the persons in charge of the Law Department who shall take part in the spot check for acceptance work to the Case
Approval and Hearing Division of the Regulations Department of the State Administration for Industry and Commerce.

Tel: 010-68028434

Other matters involved shall be otherwise notified.

General Office of the State Administration for Industry and Commerce

December 21, 2006



 
General Office of the State Administration for Industry and Commerce
2006-12-21

 






NOTICE OF THE STATE ADMINISTRATION OF TAXATION ON THE ISSUES CONCERNING FURTHER STRENGTHENING THE ADMINISTRATION ON THE COLLECTION OF STAMP TAX

State Administration of Taxation

Notice of the State Administration of Taxation on the Issues concerning Further Strengthening the Administration on the Collection
of Stamp Tax

GuoShuiHan [2004] No. 150

January 30th, 2004

The bureaus of local taxation of all provinces, autonomous regions, municipalities directly under the Central Government and cities
directly under the State planning:

Since the stamp tax came into practice in 1988, the local tax organs of all levels have been continuously strengthening the administration
on its collection and have formulated effective measures for collection according to the local conditions, thus ensuring the steady
growth of the income from stamp tax. However, with the establishment and development of the market economy of our country and the
promulgation and implementation of the new Law of the People’s Republic of China on the Administration of Tax Collection (hereinafter
referred to as LATC), some provisions governing the stamp tax can’t meet the actual needs of the administration on tax collection,
thus the discrepancies between these provisions and the LATC are becoming increasingly obvious. With a view to strengthening the
administration on the collection of stamp tax, stopping up the related loopholes, making it convenient for the taxpayers and guaranteeing
the continuous and steady growth of the income from stamp lax, the relevant issues concerning strengthening the administration on
the collection of stamp tax are hereby clarified as follows:

1.

Strengthening the management of the taxable documents subject to stamp tax

The tax organs of all levels shall strengthen the management of the taxable documents subject to stamp tax, ask the taxpayers to establish
a uniform register of taxable documents subject to stamp tax, and ensure the timely, accurate and complete registration of various
taxable documents. With respect to an entity with numerous taxable documents or with several departments that may sign taxable documents
with other entities, the competent tax organ shall ask it to formulate the measures for the management of the registration of taxable
documents in light of the actual circumstances. A taxpayer shall, if possible, specify a special department or a special person to
be responsible for the management of the taxable documents.

In accordance with the Detailed Rules for the Implementation of the Law of the People’s Republic of China on the Administration of
Tax Collection, the taxable documents subject to stamp tax shall be preserved for 10 years.

2.

Perfecting the measures for the regular aggregate payment of stamp tax

The tax organs of all levels shall strengthen the tax management of the entities subject to regular aggregate stamp tax, issue a regular
aggregate payment license to the entities upon approval and determine the time limit for the regular aggregate payments. In the meanwhile,
the tax organs shall require the taxpayers to regularly submit the statements on the regular aggregate payments for stamp tax, and
regularly examine the taxpayers’ aggregate payments for stamp tax.

3.

Strengthening the management of the commission agents of the stamp tax

The tax organs of all levels shall strengthen the management of the payments of the tax stamps sold by the commission agents, and
shall conduct a thorough inspection over the sale of the tax stamps within their respective jurisdictions. Where a commission agent
violates the provisions governing the commissioned sale of tax stamps, it/he shall be disqualified from selling the tax stamps in
light of the seriousness of the circumstances. Any act of a commission agent that affects the sale of the tax stamps shall, once
found out, be corrected in good time.

A tax organ shall, in light of the actual local circumstance, choose some entities or individuals that have a perfect and standard
management system and a rather reliable credit standing to sell the tax stamps as commission agents, and shall often guide, examine
and supervise their work.

4.

Verification of the collection of stamp tax

Pursuant to Article 35 of the LATC and the features of the sources of the stamp tax, and with a view to strengthening the management
of the collection of stamp tax, under any of the following circumstances, the local tax organ may verify the base for the taxpayer’s
payable stamp tax:

(1)

The taxpayer fails to establish a register for the taxable documents subject to stamp tax, or failing to register faithfully or keep
properly the taxable documents subject to stamp tax;

(2)

The tax base for the payable stamp tax is obviously low due to the taxpayer’ refusal or failure to faithfully provide taxable documents
subject to stamp tax;

(3)

The taxpayer adopts the way of paying the aggregate stamp tax regularly, but fails to submit statements on the regular aggregate payments
for stamp tax to the local tax organ within the time limit as required by the tax organ; after admonished by the latter to submit
the statements within a time limit, the taxpayer still fails to do so or the local tax organ has found out in its examination that
the former has failed to make regular aggregate payments for stamp tax.

A local tax organ shall, when verifying the collection of stamp tax, issue to the taxpayer a notice on the verification of the collection
of stamp tax, in which it shall specify the base of stamp tax and the time limit for the tax payments.

A local tax organ shall, when verifying the collection of stamp tax, according to the taxpayer’s actual income from production and
business operations and by referring to the previous information on the taxpayer’s payments for stamp tax and the contract conclusion
in the same trade, determine a scientific and reasonable amount or proportion as the base for the payments of stamp tax.

The tax organs of all levels shall gradually establish basic stamp tax database, which shall cover the information of the collection
of stamp tax in different trades and the relevant materials of different taxpayers, shall determine a scientific and reasonable assessment
model, and shall ensure that the collection be verified in time, accurately, fairly and reasonably.

The local tax organs of all provinces, autonomous regions, municipalities directly under the Central Government and cities directly
under the State planning may, in light of the requirements of the present Notice and their respective actual circumstances, formulate
measures for the verification and collection of stamp tax, specifying the scope of the taxable documents subject to stamp tax, the
basis for the verification, the time limit for the tax payments and the verification amount or proportion, etc., and shall report
them to the State Administration of Taxation for archival purposes.



 
State Administration of Taxation
2004-01-30

 






MEASURES FOR THE ADMINISTRATION ON FOREIGN INVESTMENT IN COMMERCIAL FIELDS

The Ministry of Commerce

Order of the Ministry of Commerce of the People’s Republic of China

No.8

Measures for the Administration on Foreign Investment in Commercial Fields has been examined and approved at the sixth excutive meeting
of the Ministry of Commerce of the People’s Republic of China and shall be promulgated. It shall be implemented as of June 1,2004.

Bo Xilai, Minister of the Ministry of Commerce

April 16, 2004

Measures for the Administration on Foreign Investment in Commercial Fields

Article 1

For the purpose of further expanding the open-up to the outside world and improving the construction of market circulation system,
the present Measures are hereby formulated in accordance with the Law of the People’s Republic of China on Sino-foreign Equity Joint
Ventures, the Law of the People’s Republic of China on Sino-foreign Contractual Joint Ventures, Law of the People’s Republic of China
on Wholly Foreign-owned Enterprises, and the Company Law, and other relevant laws and administrative regulations.

Article 2

Where a foreign company, enterprise and other economic organization or individual (hereinafter referred to as “foreign investors”)
establishes foreign-funded commercial enterprises within the territory of China and engages in commercial business, the present Measures
shall be observed.

Article 3

The “foreign-funded commercial enterprises” shall refer to the enterprises with foreign investment which undertake the following commercial
activities:

1.

Commission agency: agents, brokers, auctioneers or other wholesalers for sale of goods, who sell goods of someone else and provide
relevant attached services through collecting fees on the basis of contract;

2.

Wholesale: Selling goods to retailers, customers of industry, commerce and organizations, or to other wholesalers or providing relevant
attached services;

3.

Retail: Selling goods for consumption and use of individuals or groups or providing relevant attached services in fixed places or
through television, telephone, mail order, internet, and automats; or

4.

Franchising: vesting other people with using its trademark, trade firm, or mode of management by signing contract for the purpose
of gaining remunerations or franchising fees.

Foreign companies, enterprises, and other economic organizations or individuals shall carry out business activities as prescribed
in items 1, 2, 3, and 4 of the preceding paragraph through foreign-funded enterprises they establish in China.

Article 4

Foreign-funded commercial enterprises shall abide by laws, administrative regulations and the relevant rules of the People’s Republic
of China. Their legitimate business activities and legal rights and interests shall be subject to the protection of Chinese laws.

Article 5

Competent commerce departments of the state shall make supervision over and administration on foreign investment in commercial fields
and the business activities of foreign-funded commercial enterprises according to laws.

Article 6

Foreign investors of the foreign-funded commercial enterprises shall have good credit and no history in violation of Chinese laws,
administrative regulations and relevant rules. Foreign investors with substantial financial strength, advance experiences, marketing
techniques in business management, and broad international marketing networks shall be encouraged to establish foreign-funded commercial
enterprises.

Article 7

Foreign-funded commercial enterprise shall meet the following conditions:

1.

The minimum registered capital shall accord with the relevant provisions of the Company Law.

2.

Conforming to the relevant provisions on the registered capital and total investment of the enterprises with foreign investment. And

3.

The term of operation of a foreign-funded commercial enterprise shall not exceed 30 years in general, and the term of operation of
a foreign-funded commercial enterprise which is established in the middle and western regions shall not exceed 40 years in general.

Article 8

Foreign-funded commercial enterprise shall meet the following conditions when opening up a store:

1.

Where it applies for establishing a store when applying for establishing a commercial enterprise, it shall follow the relevant provisions
on city development and urban commercial development. And

2.

Where a established foreign-funded commercial enterprise applies for establishing additional stores, it shall meet the following conditions
in addition to meeting the requirements of item 1:

(1)

Participating in the joint annual examination on enterprises with foreign investment and having passed the annual examination; and

(2)

The registered capital of the enterprise has been fully paid.

Article 9

Foreign-funded enterprises may deal with the following business upon approval:

1.

For the foreign-funded commercial enterprises that undertake retailing business:

(1)

Retailing;

(2)

Importing of self-managed goods;

(3)

Purchasing domestic products for export; and

(4)

Other relevant businesses. And

2.

For the foreign-funded commercial enterprises that undertake wholesaling business:

(1)

Wholesaling;

(2)

Commission agency (excluding auction);

(3)

Importing and exporting of goods; and

(4)

Other relevant businesses.

A foreign-funded commercial enterprise may authorize others to open stores by franchising.

A foreign-funded commercial enterprise may, upon approval, undertake one kind or several kinds of sales businesses. The kinds of goods
it manages shall be specified in the contents regarding business scope as prescribed in the contract or articles of association.

Article 10

The following procedures shall be followed when a foreign-funded commercial enterprise is to be established or opens up stores:

1.

One-off application and approval of the start-up, feasibility study report and establishment of foreign-funded commercial enterprises.

2.

Except the provisions in items (3) and (4) of Article one of the present Article, the investors of the foreign-funded commercial enterprises
to be established and the established foreign-funded commercial enterprises that apply for opening up stores shall submit respectively
the application documents as prescribed in Article 12 and Article 13 to the competent commerce department at the provincial level
where the foreign-funded commercial enterprise makes registration. The said competent commerce department at the provincial level
shall, after making preliminary examination on the documents submitted, report to the Ministry of Commerce within one month after
the date of receiving all the application documents. The Ministry of Commerce shall make decision on whether to approve the application
within three months after the date of receiving all the application documents. If it approves the establishment, the Certificate
of Approval for Foreign-funded Enterprises shall be issued; otherwise, the reasons thereof shall be explained.

The Ministry of Commerce may authorize the competent commerce departments at the provincial level to examine and approve the foregoing
applications in accordance with the present Measures.

3.

Where a foreign-funded commercial enterprise which undertakes the retail business opens up stores within the administrative region
at the provincial level of its locality, and meets the following conditions and its business scope does not relate the sale of television,
telephone, mail order, internet, or automats, and the goods as enumerated in Articles 17 and 18 of the present Measures, the said
competent commerce department of the province shall examine and approve it within the purview of examination and approval and report
it to and put it on records at the Ministry of Commerce.

(1)

The business area of a single store does not exceed 3,000 square meters, and the number of stores is no more than three, and the total
number of the similar stores established by foreign investors of the stores within China through the foreign-funded commercial enterprises
they have established is no more than thirty; and

(2)

The business area of a single store does not exceed 300 square meters, and the number of stores is no more than thirty, the total
number of similar stores opened in China by foreign investors of these stores through the oreign-funded commercial enterprises they
have established is no more than three hundred. And

4.

Where the owners of the trademark or business name of a sino-foreign equity joint venture or cooperative commercial enterprise are
Chinese-funded enterprises or Chinese natural persons, and the Chinese investors have the controlling shares in the foreign-funded
commercial enterprise, and the business scope of the foreign-funded commercial enterprise does not relate the goods as enumerated
in Articles 17 and 18 of the present Measures, its applications for establishment and opening stores shall be examined and approved
by the competent commerce department at the provincial level where the enterprise is located. If a store is opened in a different
province, the opinions of the competent commerce department at the level of the province where the store is to be located shall also
be consulted.

The competent commerce department at the provincial level shall not transfer the power for examination and approval as prescribed
in items (3) and (4) of paragraph 1 of the present Article by itself to a lower level without the authorization of the Ministry of
Commerce.

Article 11

The investors shall, within one month after receiving the certificate of approval, go through the registration formalities at the
administrative department of industry and commerce together with the Certificate of Approval for Foreign-funded Enterprises.

Article 12

The following documents shall be submitted when applying for establishing a foreign-funded commercial enterprise:

1.

Application letter;

2.

Feasibility study report signed by all the investors together;

3.

Contract, articles of association (for a foreign-funded commercial enterprise, only the articles of association should be submitted)
and the attachment;

4.

Bank credit certificates of all investors, registration certificate (photocopy), certificate of the legal representative (photocopy),
if the foreign investor is an individual, his/her identity certificate shall be provided;

5.

The audit report of all investors in the recent year, which is audited by accountant firms;

6.

The evaluation report on state-owned assets invested into the sino-foreign equity joint venture or contractual joint venture commercial
enterprises by Chinese investors;

7.

Catalogues of import and export goods of the planned foreign-funded commercial enterprise;

8.

Name list of the members of the board of directors of the planned foreign-funded commercial enterprise and the power of attorney for
directors of each investor;

9.

Notice of pre-approval of the enterprise name as issued by the administrative department of industry and commerce;

10.

The certificate documents (photocopy) of the usufruct of the land used for the planned store and (or) house lease agreement (photocopy),
except when the business area of the store to be opened is less than 3,000 square meters; and

11.

The documents of statement in conformity with the requirements for city development and urban commercial development as issued by
the competent commerce department of the government at the locality of the store.

In case the documents are signed by a person who is not the legal representative, the power of attorney of the legal representative
shall be showed.

Article 13

Where an already established foreign-funded commercial enterprise applies for opening a store, it shall submit the following documents:

1.

Application letter;

2.

The revised contract or articles of association shall be submitted in case the amendments to the contract or articles of association
are involved;

3.

Feasibility study report on opening the store;

4.

Resolutions of the board of directors on opening the store;

5.

The audit report of the enterprise in the recent one year;

6.

The capital verification report of the enterprise (photocopy);

7.

Registration certificate (photocopy) of all the investors, and the certificate of the legal representative (photocopy);

8.

Certificate documents of the usufruct of the land that is used for the store to be opened and (or) house lease agreement (photocopy),
except when the business area of the store opened is less than 3,000 square meters; and

9.

The documents of statement in conformity with the requirements for city development and the commercial development of the city as
issued by the government where the planned store is located.

In the case that the document is signed by someone who is not the legal person, the power of attorney of the legal representative
shall be issued.

Article 14

The license contract for use of a trademark or a business name, technology transfer contract, management contract and service contract
signed by a foreign-funded commercial enterprise, and other legal documents shall be submitted as the attachment of the contract
(for a foreign-funded commercial enterprises, it shall be deemed as the attachment of the articles of association).

Article 15

Foreign-funded commercial enterprises shall, when opening up a store, obtain the land for commercial use by way of public invitation
of bidding, auction or listing in accordance with the provisions of the relevant laws and administrative regulations of the state
on land management.

Article 16

Where a foreign-funded commercial enterprise deals with goods on which the state has special provisions or import and export goods
involving quota or license administration, it shall go through the formalities in accordance with the relevant state provisions.

Article 17

Foreign-funded commercial enterprises shall, when managing the following goods, conform to the following prescriptions in addition
to the provisions of the present Measures:

Where a foreign-funded commercial enterprise manages books, newspapers or periodicals, it shall accord with the Measures for the Administration
of Foreign-funded Distribution Enterprises of Books, Newspapers, or Periodicals;

Where a foreign-funded commercial enterprise manages gas station and undertakes retail of refined oil, it shall have stable channel
of supply of refined oil, conform to the construction plan of the local oil station, with the business establishments thereof corresponding
with the state standards and the provisions on computation and checking procedures, and meet the requirements for fire control and
environmental protection, etc. The specific implementation measures shall be formulated by the Ministry of Commerce separately.

Where a foreign-funded commercial enterprise manages drugs, it shall conform to the relevant standards for the administration of drug
sale. The specific implementation measures shall be formulated by the Ministry of Commerce separately.

Where a foreign-funded commercial enterprise manages automobiles, it shall manage within the approved business scope. The specific
implementation measures shall be formulated by the Ministry of Commerce separately.

Except the specific provisions in Article 18 of the present Measures and the present Article, if foreign investors establish commercial
enterprises of farm products and by-products, and agricultural production materials, they shall not be restricted in region, proportion
of share, and the amount of investment.

No wholesaling foreign-funded commercial enterprises may manage drugs, pesticides and agricultural films before December 11, 2004,
nor shall they manage fertilizers, refined oil and crude oil before February 11, 2006.

No retailing foreign-funded enterprises may manage drugs, pesticides, agricultural films and refined oil before December 11, 2004,
nor shall they manage fertilizers before December 11, 2006.

No wholesaling foreign-funded commercial enterprises may manage salt or tobacco, and no retailing foreign-funded commercial enterprises
may manage tobacco.

Article 18

Under the circumstance that the same foreign investor opens more than thirty stores accumulatively in China, if the goods it manages
include books, newspapers, magazines, automobiles (this restriction shall be cancelled from December 11, 2006), drugs, pesticides,
agricultural films, fertilizers, refined oils, food, vegetable oil, sugar, cotton, and etc., which are of different brands and come
from different suppliers, the proportion of capital contribution of the foreign investors shall not exceed 49%.

Article 19

Where a foreign-funded commercial enterprise authorizes others to open up stores by way of franchising, it shall, in addition to observing
the provisions of the present Measures, observe the special provisions of the state on franchising, if any.

Article 20

Where a foreign-funded commercial enterprise manages auction business, it shall accord with the Auction Law, Laws on Cultural Relics,
and other relevant laws, and shall be examined and approved by the Ministry of Commerce. The specific implementation measures shall
be formulated separately.

Article 21

Establishment of foreign-funded commercial enterprises shall be allowed from December 11, 2004.

Article 22

The regions where a foreign-funded retail commercial enterprise and its stores are to be established shall be restricted to the provincial
capital cities, metropolis of autonomous regions, municipalities directly under the Central Government, cities directly under state
planning, and special economic zones before December 11, 2004, and the regional restrictions shall be cancelled at December 11, 2004.

Regional restrictions on foreign-funded wholesaling commercial enterprises shall be cancelled at the date of implementation of the
present Measures.

Article 23

Where an foreign-funded commercial enterprise invests in commercial fields within the territory of China, it shall accord with the
Interim Provisions on Investment of Foreign-funded Enterprises in China, and refer to the present Measures.

Article 24

Foreign-funded enterprises undertaking the business activities as enumerated in Article 3 of the present Measures other than foreign-funded
commercial enterprises, shall conform to the provisions of the present Measures, and alter by law the business scope accordingly.

Article 25

Investors from Hong Kong Special Administrative Region, Macao Special Administrative Region, and from Taiwan region, who invest to
establish commercial enterprises in other provinces, autonomous regions, and municipalities directly under the Central Government,
shall refer to the present Measures except for the following prescriptions:

1.

Commercial service providers of Hong Kong and Macao may establish foreign-funded commercial enterprises in the Mainland after January
1, 2004.

2.

The regional scope of retail enterprises established in the Mainland by Hong Kong and Macao commercial service providers shall be
extended to cities at the prefecture level, and the cities at the county level in Guangdong province.

3.

Commercial service providers of Hong Kong and Macao may apply after January 1, 2004 to establish commercial enterprises that undertake
automobile retail business according to the relevant articles of the present Measures, but their average sales volume per annum in
the past three years before application shall be no less than one hundred million dollars; and the amount of capital in the previous
year before application shall be no less than ten million dollars; the minimum registered capital of an automobile retailing enterprise,
which is established in the Mainland shall be RMB ten million Yuan, and the minimum registered capital of an automobile retailing
enterprise, which is established in the middle and western districts shall be RMB six million Yuan.

4.

Chinese citizens among the Hong Kong and Macao permanent residents are allowed to establish individual business according to relevant
laws, regulations and rules to undertake commercial retail activities (excluding franchising), the business areas thereof shall not
exceed 300 square meters. And

5.

The Hong Kong/Macao commercial service providers as mentioned in this Article shall correspond with the definitions of and the relevant
requirements for “service providers” as prescribed in the “Mainland/Hong Kong Closer Economic Partnership Arrangements” and the “Mainland/Macao
Closer Economic Partnership Arrangements”.

Article 26

Foreign-funded commercial enterprises shall be encouraged to take part in the relevant trade associations so as to strengthen self-discipline
of the enterprises.

Article 27

The power to interpret the present Measures shall remain with the Ministry of Commerce.

Article 28

The present Measures shall be implemented as of June 1, 2004.

Article 29

The Measures for Trial Implementation of the Foreign-funded Commercial Enterprises as promulgated jointly by the former State Economic
and Trade Commission and the Ministry of Foreign Trade and Economic Cooperation shall be repealed as of the date of the implementation
of the present Measures.



 
The Ministry of Commerce
2004-04-16

 






CIRCULAR OF THE STATE ADMINISTRATION OF TAXATION ON RELEVANT TAX ISSUES CONCERNING THE PILOT JOINT DEVELOPMENT OF BONDED AREAS AND PORT ZONES

State Administration of Taxation

Circular of the State Administration of Taxation on Relevant Tax Issues Concerning the Pilot Joint Development of Bonded Areas and
Port Zones

Guo Shui Fa [2004] No.117

To State tax bureaus of various provinces, autonomous regions, municipalities directly under the Central Government and cities specifically
designated in the state plan:

In accordance with the Official Reply of the General Office of the State Council on Approving the Pilot Joint Development of Shanghai
Waigaoqiao Bonded Area and Port Zone (Guo Shui Han￿￿2003￿￿No.81), it is approved to carry out pilot joint development of Shanghai
Waigaoqiao bonded area and port zone, and, in Waigaoqiao port zone with enclosed fence, to allocate a piece of land covering an
area of 1.03 square meters as logistics zone of Waigaoqiao bonded area (hereinafter referred to as the “bonded logistics zone”).
Related tax policies to be implemented in such bonded logistics zone are hereby released as follows:

1.

A bonded logistics zone is a particular area which is approved by the State Council and administered by the Customs in a closed way.

2.

Goods transported into the bonded logistics zone by enterprises outside the zone (hereinafter referred to as enterprises outside the
bonded logistics zone) shall be regarded as exported goods. Such enterprises shall, upon presentation of goods declaration for exportation
(special for export tax refund) issued by the Customs in conjunction with other required certificates, apply to the competent tax
authority for tax refund (exemption). Enterprises outside the bonded logistics zone as used in these Measures shall refer to enterprises
authorized with the right to import or export (including industry and trade companies engaged in foreign business, foreign-funded
enterprises and productive enterprises with the right to import or export)and productive enterprises which have no right to import
or export but entrust other enterprises with such right to make export declaration.

3.

After receiving the application filed by enterprises outside the bonded logistics zone for tax refund (exemption), the competent tax
authority shall conduct examination and verification in strict compliance with the Circular of the State Administration of Taxation
on Printing and Issuing the Interim Measures on Taxation Administration of Export Processing Zones (Guo Shui Fa￿￿2000￿￿No.155), the
Circular of the State Administration of Taxation on Tax Refund for Water, Electricity and Gas Consumed in Export Processing Zones
(Guo Shui Fa￿￿2002￿￿No.116), the Official Reply of the State Administration of Taxation on Tax Refund for Exportation of Goods and
Materials for Capital Construction in Wuhu Export Processing Zone(Guo Shui Han￿￿2004￿￿No.805)and other pertinent documents, and shall
process the tax refund application after no incompliance and incorrectness has been found in such examination and verification.

4.

With regard to the sales, export and consigned processing of goods by enterprises located in the bonded logistics zone, tax policies
applicable to such enterprises as well as tax administration shall be carried out by applying mutatis mutandis Document Guo Shui
Fa￿￿2000￿￿No.155.

5.

This Circular shall come into effect as of the date when the bonded logistics zone is checked and accepted by the General Administration
of Customs, the State Administration of Taxation and other pertinent departments and is operated in a closed way by the customs.

State Administration of Taxation

September 13, 2004



 
State Administration of Taxation
2004-09-13

 






THE CIRCULAR OF THE GENERAL OFFICE OF THE CBRC ON RELEVANT MATTERS CONCERNING STANDARDIZING THE OPERATION AND ADMINISTRATION OF THE SECURITIES BUSINESS OF TRUST AND INVESTMENT COMPANIES

China Banking Regulatory Commission

The Circular of the General Office of the CBRC on Relevant Matters concerning Standardizing the Operation and Administration of the
Securities Business of Trust and Investment Companies

November 16, 2004

With a view to standardizing securities business of trust and investment companies, earnestly handling well the work of risk prevention,
and carrying out further the Circular on Relevant Matters of Trust and Investment Companies in Opening Trust Special Securities Account
and Trust Special Capital Account (Yin Jian Fa [2004] No.61), the relevant matters concerning the securities business of trust and
investment companies are notified as follows:

1.

Where the trust and investment company uses the trust capital to engage in securities investment, it shall conform strictly to the
provisions of Trust Law of the People’s Republic of China, Regulations on Trust and Investment Companies, Interim Measures for the
Administration of Capital Trust of Trust and Investment Companies, shall manage the trust capital and its inherent capital separately
and keep separate accounts, and shall manage the trust capital of different trustors separately and keep separate accounts. And pursuant
to the Circular on Relevant Matters concerning Open and Use of RMB Bank Settlement Accounts of Trust and Investment Companies (Yin
Fa [2003] No.232) and the Circular on Relevant Matters concerning Opening Special Securities Account for Trust and Special Capital
Account for Trust of Trust and Investment Companies (Yin Jian Fa [2004] No. 61), special property account of trust capital shall
be opened in a commercial bank, special securities account for trust thereof shall be opened in Shanghai branch or Shenzhen branch
of China Securities Depository &Clearing Corporation Limited and the special capital account for trust thereof shall be opened in
those securities companies as approved by China Securities Regulatory Commission.

Where the trustor stipulates the trust and investment company to manage and use independently the trust capital, the trust and investment
company shall open separate account for the trust capital pursuant to the principle of one account for one trust document. Where
the trustor stipulates the trust and investment company to use trust capital under a certain collective trust plan, the trust and
investment company shall open separate account for the trust capital in accordance with the principle of one account for one trust
program.

The trust and investment company shall disclose matters of opening special account to the trustor and beneficiary in time, and submit
a report on matters of opening trust special securities account and trust special capital account to banking regulatory authorities
responsible for the direct supervision and administration. As to failure to open the special account in former securities business
for being overdue, the reason and main contents of the thereof shall be reported.

2.

The trust and investment company shall establish and improve the company governance and internal control mechanism, strengthen the
independence and effectiveness of internal auditing department, take practical measures to prevent the controlling shareholders and
actual controlling persons from intervening, promote the management of securities investment business staff, and form a scientific
decision mechanism and long-term effective mechanism of securities investments.

3.

Where the trust and investment company uses its inherent capital or trust capital to engage in securities investments, it shall follow
the principle of portfolios of investments and decentralization of risks, and must formulate in advance the investment proportion
and strategy and establish the risk stop-loss point in accordance with the provisions of Circular on Further Strengthening the Supervision
and Administration of Trust and Investment Companies (Yin Jian Fa [2004] No.46) etc.

4.

Where the trust and investment company uses its self-owned capital to engage in securities investments, the sum of total balance of
market value per day from the investments to stocks, corporate bonds and securities investment funds shall not exceed 50 percent
of their net assets (including 50%).

5.

Banking regulatory authorities at all levels shall strengthen the supervision and administration of the securities business of trust
and investment companies within the areas under their respective jurisdictions. Where the trust and investment company, in engaging
in securities business, fails to comply with this Circular and the relevant administrative regulations, it shall be ordered to make
rectification, and limited to start new securities business; Where there are serious circumstances, its securities investment business
shall be suspended.

6.

Trust and investment companies shall conform strictly to the provisions of the relevant laws, regulations and this Circular in new
securities investment business after the issuance of this Circular.

Where the trust and investment company fails to conform to the provisions of this Circular in securities investment business engaged
before the issuance of this Circular, it shall be normalized earnestly before December 31, 2004.

This Circular shall enter into force as of the date of Promulgation. All banking regulatory bureaus shall report in good time to China
Banking Regulatory Commission where problems arise in the execution.



 
China Banking Regulatory Commission
2004-11-16

 






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

 






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

 






CIRCULAR OF THE MINISTRY OF FINANCE, THE MINISTRY OF LAND AND RESOURCES AND THE PEOPLE’S BANK OF CHINA CONCERNING THE RELATED MATTERS ON THE ADMINISTRATION OF INCOME FROM THE PURCHASE PRICE OF MINERAL PROSPECTING RIGHT AND MINING RIGHT

Circular of the Ministry of Finance, the Ministry of Land and Resources and the People’s Bank of China concerning the Related Matters
on the Administration of Income from the Purchase Price of Mineral Prospecting Right and Mining Right

Cai Jian [2006] No. 394

The public finance departments (bureaus) of each province, autonomous region, municipality directly under the Central Government,
city specially designated in the state plan, the departments (bureaus) of state land and resources, the Shanghai Headquarters of
the People’s Bank of China, each branch, business department, central sub-branch of provincial capital cities and deputy provincial
cities:

In accordance with the Circular of the State Council concerning Rectifying and Regulating the Mineral Recourse Exploration Order in
an All-around Way (Guo Fa [2005]No. 28 ) and the Decision of the State Council concerning Strengthening the Work of Geology (Guo
Fa [2006] No. 4 ), in order to further deepen the reform of the systems of paid use of mineral resources and paid acquisition of
mineral properties, rationalize the income distribution of mineral resources, and rationally determine the ratio for the sharing
of income from the purchase price of mineral prospecting right and mining right between the central and local governments, the relevant
issues concerning the administration of the income from the purchase price of mineral prospecting right and mining right are hereby
notified as follows:

1.

The term “income from the purchase price of mineral prospecting right and mining right” herein refers to the entire income gained
by the competent departments in charge of the approval and registration of mineral prospecting right and mining right of the central
and local people’s governments by means of aliening the mineral prospecting right and mining right, which are prospected and formed
with financial contributions from the state (including those from the central finance, local finances and joint contributions by
central and local finances, the same as below), in such market ways as bidding, auction, quotation or by agreement, and the payment
made up by state-owned enterprises for their gratuitous seizure of mineral prospecting right and mining right prospected and formed
with financial contributions from the state.

2.

As from September 1, 2006, the income derived from the purchase price of mineral prospecting right and mining right shall be shared
by the central government and local governments in light of a fixed proportion, which is 20% for the central government and 80% for
local governments. The ratio for any province, municipality or county shall be determined by the corresponding provincial people’s
government under the actual situation. Where there is any provision otherwise provided by the state, it shall prevail.

3.

The administration on the collection of income derived from the purchase price of mineral prospecting right and mining right shall
be intensified and be timely paid into the state treasury in full amount. If it is really difficult to pay the purchase price of
mineral prospecting right and mining right in a lump sum, it is allowed to pay by installments upon the approval by registration
administrative organ; the time limit for payment of the purchase price of mineral prospecting right shall not be more than 2 years,
and that of mining right shall not be more than 10 years.

The concrete procedures of payment into the state treasury are: the registration administrative organ of mineral prospecting right
and mining right fills a circular on payment to the state treasury in light of the evaluated price or negotiated price, or the trading
price of bidding, auction and quotation for transferring mineral prospecting right and mining right, so as to inform the applicant
for mineral prospecting right and mining right of the payment which shall be made within 7 workdays upon receiving of the circular.
The income derived from the purchase price of mineral prospecting right and mining right that fall within the registration and administration
ground of the State Land and Resources Department of the State Council shall be collected according to the Circular of the Ministry
of Finance concerning Confirming the Related Matters on the Pilot Reform of the Administration System on Income Collection by the
Ministry of Land and Resources (Cai Ku [2003]No. 6 ) and the related provisions concerning the reform of collection administration
system. The collection of the income derived from the purchase price of mineral prospecting right and mining right that fall within
the registration and administration ground of local land and resources departments shall, as for the places that have implemented
the reform on the collection management system of non-tax revenues, be implemented in light of related provisions concerning the
reform stipulated by the local departments of finance; as for the places that have not implemented such reform for the moment, a
way of paying into the local treasury shall be adopted; a “general covering warrant” shall be used in handling the procedure of paying
into the treasury, the budgetary account shall be filled in accordance with the related provisions of the Classification of Accounts
of Government Budgetary Revenue and Expenditure of that year, and the ratio for sharing of each budgetary class shall be marked at
the column of “Notes”. The state treasuries at all levels shall, upon receiving of the payments, according to the stipulated ratio
for sharing, turn over 20% of the payments to the general treasury of each higher national treasury level by level, and transfer
80% of the payments to provinces, municipalities or counties based on their respective ratios for sharing as prescribed by the relevant
people’s government of each province, autonomous region, and each municipality directly under the central government.

4.

The departments of public finance and the departments of state land and resources at all levels shall intensify the supervision and
administration over the income derived from the purchase price of mineral prospecting right and mining right. The registration administrative
organs of mineral prospecting right and mining right at all levels shall examine and verify on the basis of all the pages of the
related payment vouchers which are affixed with the transfer/receipt seal of the bank or state treasury, and related materials and
vouchers. If the purchase price of mineral prospecting right and mining right is not paid in full amount timely , the registration
of mineral prospecting right and mining right shall not be handled, and the license for mineral prospecting right or mining right
may not be issued. The departments of public finance shall ensure the necessary expenses to be enough for transacting the business
of transferring mineral prospecting right and mining right according to the requirements of the land and resources departments when
they are performing their functions and duties, and ensure that the income derived from the purchase price of mineral prospecting
right and mining right be collected in full amount and handed over to the treasury in time.

5.

The public finance departments shall closely cooperate with the departments of the state land and resources at all levels take more
measures in the investigation and prosecution of all kinds of violations of laws and regulations that exist in the course of transferring
of mineral prospecting right and mining right; investigate and prosecute violations of laws and regulations strictly, in accordance
with law, such as reducing or exempting fees by violating laws and regulations, failing to collect fees, failing to collect the due
fees, failing to pay to the state treasury in full amount timely, retaining fees, financing expenses with revenue, embezzling fees,
and commercial bribes and so on; investigate the administrative and economic liabilities of the related leaders and persons who held
liable; If any crime is constituted, the case shall be transferred to the judicial organ for investigating the criminal liabilities.

6.

Upon the issuance of this Circular, If there is any provision that isn’t consistent with this Circular, this Circular shall prevail.

Ministry of Finance of the People’s Republic of China

Ministry of Land and Resources of the People’s Republic of China

People’s Bank of China

August 14, 2006



 
the Ministry of Finance, the Ministry of Land and Resources￿￿the People’s Bank of China
2006-08-14

 






1234...14Page 3 of 14

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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