Regulations for the Implementation of the Trademark Law of the People’s Republic of China

(Promulgated by Decree No.358 of the State Council of the
People’s Republic of China on August 3, 2002, and effective as of
September 15, 2002)

Chapter I General Provisions

Article 1 These Regulations are formulated in
accordance with the Trademark Law of the People’s Republic of China
(hereinafter referred to as the Trademark Law).

Article 2 Provisions regarding the goods
trademarks in these Regulations shall apply to service marks.

Article 3 The use of a trademark, as referred
to in the Trademark Law and these Regulations, shall include the
use of the trademark on goods, packages or containers of the goods
or in trading documents, and the use of the trademark in
advertising, exhibition or any other business activities.

Article 4 Goods on which the State requires the
use of a registered trademark, as mentioned in Article 6 of the
Trademark Law, refer to those on which a registered trademark must
be used as required by laws or administrative regulations.

Article 5 Where a dispute arises in the
procedures of trademark registration or trademark review and
adjudication and the party concerned believes that its trademark
constitutes a well-known trademark, it may, in accordance with the
provisions of the Trademark Law and these Regulations, request the
Trademark Office or the Trademark Review and Adjudication Board to
determine whether its trademark constitutes a well-known trademark
or not and to refuse the application for trademark registration
which is in violation of the provisions of Article 13 of the
Trademark Law or to cancel the trademark registration which is in
violation of the provisions of Article 13 of the Trademark Law.
When an application for this purpose is filed, the party concerned
shall submit evidence to prove that its trademark constitutes a
well-known trademark.

At the request of the party, the Trademark Office or the
Trademark Review and Adjudication Board shall, on the basis of
ascertaining the facts, determine whether its trademark is a
well-known one or not in accordance with the provisions of Article
14 of the Trademark Law.

Article 6 For geographical indications referred
to in Article 16 of the Trademark Law, applications may be filed to
register them as certification marks or collective marks under the
provisions of the Trademark Law and these Regulations.

Where a geographical indication is registered as a certification
mark, any natural person, legal person or other organization whose
goods satisfy the conditions under which the geographical
indication is used may request the use of the certification mark,
and the organization in control of such certification mark shall
permit the use. Where a geographical indication is registered as a
collective mark, any natural person, legal person or other
organization whose goods satisfy the conditions under which the
geographical indication is used may request the membership of the
society, association or any other organization that has the
geographical indication registered as a collective mark, and the
society, association or any other organization shall accept the
membership in accordance with its articles of association; those
who do not request the membership of the society, association or
any other organization that has the geographical indication
registered as a collective mark may legitimately use the
geographical indication, and the society, association or any other
organization is not entitled to prohibit such use.

Article 7 Where a party entrusts a trademark
agency with the application for registration of a trademark or with
the handling of other trademark matters, a Power of Attorney shall
be submitted. The Power of Attorney shall state the contents and
the scope of powers; the Power of Attorney of a foreigner or
foreign enterprise shall also state the nationality of the
principal.

Procedures for notarizing and authenticating the Power of
Attorney and certifying documents relating thereto of a foreigner
or foreign enterprise shall be undertaken based on the principle of
reciprocity.

As mentioned in Article 18 of the Trademark Law, a foreigner or
foreign enterprise refers to a foreigner or foreign enterprise
having no habitual residence or place of business in China.

Article 8 The Chinese language shall be used in
applying for trademark registration or handling other trademark
matters.

Where any certificate, certifying document or evidence submitted
in accordance with the provisions of the Trademark Law and these
Regulations is written in a foreign language, a Chinese translation
shall be attached thereto; if no Chinese translation is attached,
it shall be deemed that the certificate, certifying document or
evidence has never been submitted.

Article 9 In any of
the following situations, a staff member of the Trademark Office or
the Trademark Review and Adjudication Board shall voluntarily
recuse himself, and a party or an interested person may demand his
recusal:

(1) if he is a party, or a close relative of a party or an
agent;

(2) if he has any other relation with a party or an agent that
may affect impartiality; or

(3) if he has an interest with the application for trademark
registration or the handling of other trademark matters.

Article 10 Except as otherwise provided in
these Regulations, the date on which a party submits documents or
papers to the Trademark Office or the Trademark Review and
Adjudication Board shall be the date of delivery if the documents
or papers are submitted in person, or be the mailing date indicated
by the postmark if they are sent by mail, or, if the mailing date
indicated by the postmark is illegible or there is no postmark, be
the date on which all of the papers or documents are received in
the Trademark Office or the Trademark Review and Adjudication
Board, except if the party can provide evidence of the exact date
indicated by the postmark.

Article 11 The documents of the Trademark
Office or the Trademark Review and Adjudication Board may be sent
to a party by mail, in person or by other means. Where the party
entrusts a trademark agency, the documents shall be considered
served on the party once they are delivered to the trademark
agency.

The date of service of any document on a party by the Trademark
Office or the Trademark Review and Adjudication Board shall, if the
document is sent by mail, be the receiving date indicated by the
postmark on which the document is received; if the receiving date
indicated by the postmark is illegible or there is no postmark, the
document shall be considered served on the party 15 days after the
date on which the document is sent. If the document is delivered in
person, the date of service shall be the date on which the document
is delivered. If the document cannot be sent by mail or delivered
in person, it may be served on the party by means of public notice,
and the service of the document shall be considered completed 30
days after the date on which the public notice is issued.

Article 12 Applications for international
registration of trademarks shall be dealt with in accordance with
the relevant international treaties to which China has acceded. The
specific measures therefor shall be formulated by the authority of
administration for industry and commerce under the State
Council.

Chapter II Application for Trademark
Registration

Article 13 Anyone who applies for registration
of a trademark shall file an application based on the categories in
the published Classification of Goods and Services. For each
application for registration of a trademark, the applicant shall
submit to the Trademark Office one copy of the Application for
Trademark Registration and five copies of reproductions of the
trademark; if color or colors is or are designated, five copies of
colored reproductions of the trademark and one copy of the black
and white design shall be submitted.

The reproductions of a trademark must be clear, easy to be
pasted up, printed on smooth and clear durable paper or use
photographs as a substitute, and the length and breadth of which
shall be not more than ten centimeters and not less than five
centimeters each.

If applying for the registration of a three-dimensional sign as
a trademark, the applicant shall make a statement in the
application, and submit a reproduction thereof by which the
three-dimensional shape can be determined.

If applying for the registration of the combination of colors as
a trademark, the applicant shall make a statement in the
application, and submit the descriptions thereof.

If applying for the registration of a collective mark or a
certification mark, the applicant shall make a statement in the
application, and submit the documents certifying the qualifications
of the subjects and the rules on the administration of the use of
the mark.

Where a trademark is, or consists of, foreign words, their
Chinese meanings shall be indicated.

Article 14 When applying for the registration
of a trademark, the applicant shall submit a duplicated copy of the
valid credentials that can certify its identity. The name in which
the applicant has filed the application for trademark registration
shall be consistent with that shown in the credentials
submitted.

Article 15 The goods or services shall be
listed as specified in the Classification of Goods and Services;
where any goods or services are not included in the Classification
of Goods and Services, a description of the goods or services in
question shall be attached to the application.

Applications for trademark registration and other related
documents shall be typewritten or printed.

Article 16 Where an application is jointly
filed for the registration of a trademark, a representative shall
be designated in the application; if no representative is
designated, the first person in order in the application shall be
the representative.

Article 17 Where an applicant modifies its
name, address, agent, or deletes the goods designated, it may go
through the formalities of modification with the Trademark
Office.

Where an applicant assigns an application for trademark
registration, it shall go through the formalities of assignment
with the Trademark Office.

Article 18 The filing date of an application
for trademark registration shall be the date on which the
application documents are received by the Trademark Office. Where
the application formalities are complete and the application
documents are filled in as required, the Trademark Office shall
accept the application and notify the applicant in writing. Where
the application formalities are not complete and the application
documents are not filled in as required, the Trademark Office shall
not accept the application and shall notify the applicant in
writing and give the reasons therefor.

Where the application formalities are basically complete or the
application documents are basically in compliance with the
provisions, but there is a need for supplements or amendments, the
Trademark Office shall notify the applicant to make supplements or
amendments, requesting it to make supplements or amendments to the
specified parts and deliver them back to the Trademark Office
within 30 days from the date of receipt of the notification. Where
the supplements or amendments are made and delivered back to the
Trademark Office within the specified time limit, the filing date
shall be retained; where no supplements or amendments are made at
the expiration of the specified time limit, the application shall
be considered abandoned and the Trademark Office shall notify the
applicant in writing.

Article 19 Where two or more applicants apply
respectively on the same day for the registration of identical or
similar trademarks in respect of the same or similar goods, both or
all of the applicants shall, within 30 days from the date of
receipt of the notification of the Trademark Office, submit the
evidence of prior use of such trademarks before applying for
registration. Where the use started on the same day or none is yet
in use, both or all of the applicants may, within 30 days from the
date of receipt of the notification of the Trademark Office,
conduct consultations on their own and submit a written agreement
to the Trademark Office; if they are not willing to conduct
consultations or they fail to reach an agreement through
consultations, the Trademark Office shall notify both or all of the
applicants to determine one of them by drawing lots and refuse the
applications for registration filed by others. Where an applicant
has been notified by the Trademark Office but fails to participate
in the drawing of lots, the application filed by such an applicant
shall be considered abandoned, and the Trademark Office shall
notify the applicant in writing who does not participate in the
drawing of lots.

Article 20 Where a priority is claimed in
accordance with the provisions of Article 24 of the Trademark Law,
the copies of the application documents submitted by the applicant
for the first time for registering the trademark in question shall
be certified by the competent trademark authority which accepts the
said application, and the filing date and serial number of the
application shall be indicated.

Where a priority is claimed in accordance with the provisions of
Article 25 of the Trademark Law, the certifying documents submitted
by the applicant shall be authenticated by the institution
specified by the authority of administration for industry and
commerce under the State Council, except that the international
exhibition on which the applicant’s goods are displayed is held
within Chinese territory.

Chapter III Examination of Applications for Trademark
Registration

Article 21 The Trademark Office shall, in
accordance with the relevant provisions of the Trademark Law and
these Regulations, examine the applications for trademark
registration it has accepted, granting preliminary approval to
those that are in compliance with the provisions and to the
applications for the registration of trademarks used on some of the
designated goods that are in compliance with the provisions, and
publishing them; the application that is not in compliance with the
provisions and the application for the registration of a trademark
used on some of the designated goods that is not in compliance with
the provisions shall be refused, the applicant shall be notified in
writing and the reasons therefor shall be given.

Where the Trademark Office grants preliminary approval to an
application for the registration of a trademark used on some of the
designated goods, the applicant may, before the date on which the
opposition period expires, apply to abandon the application for the
registration of the trademark used on some of the designated goods;
where the applicant abandons the application for the registration
of a trademark used on some of the designated goods, the Trademark
Office shall withdraw the previous preliminary approval, terminate
the examination proceedings and republish it.

Article 22 Where an opposition is filed against
a trademark which has been preliminarily approved and published by
the Trademark Office, the opponent shall submit in duplicate an
Application for Trademark Opposition to the Trademark Office. The
Application for Trademark Opposition shall specify both the issue
number of the Trademark Gazette in which the opposed trademark is
published and the number of the preliminary approval. The
Application for Trademark Opposition shall state the requests and
grounds in plain terms, and the relevant evidence shall be attached
thereto.

The Trademark Office shall promptly send a copy of the
Application for Trademark Opposition to the opposed party, who
shall be requested to make a response within 30 days from the date
of receipt of the copy of the Application for Trademark Opposition.
If the opposed party fails to make a response, it shall not affect
the Trademark Office’s ruling of the opposition.

Where a party needs to supplement related evidence after filing
an application of opposition or making a response, it shall make a
statement for this purpose in the application or in the response
made in writing, and submit the said evidence within three months
from the date on which the application is filed or the response is
made in writing; if no evidence is submitted at the expiry of the
time limit, the party shall be considered given up the
supplementing of related evidence.

Article 23 A justified
opposition referred to in the second paragraph of Article 34 of the
Trademark Law shall include the opposition that is justified for
some of the designated goods. If an opposition is justified for
some of the designated goods, the application for the registration
of the trademark on this part of the designated goods shall not be
approved.

Where an opposed trademark is already published as a registered
trademark prior to the entry into force of the ruling on the
opposition, the publishing of the registration shall be canceled,
and the trademark the registration of which has been approved upon
the ruling of the opposition shall be republished.

Where the registration of a trademark has been approved upon the
ruling of an opposition, from the date of expiration of the
opposition period to the date of entry into force of the ruling on
the opposition, it shall have no retroactive effect on the use by
another party of the marks that are identical or similar to the
said trademark on the same or similar goods. However, the user
shall make compensation for any loss suffered by the trademark
registrant as a result of the user’s bad faith.

Where the registration of a trademark has been approved upon the
ruling of an opposition, the period for filing an application for
review and adjudication thereof shall be counted from the date on
which the ruling on the opposition to the said trademark is
published.

Chapter IV Modification, Assignment and Renewal of
Registered Trademarks

Article 24 Where the name or address of a
trademark registrant or any other registration matter is to be
modified, the applicant shall submit an application for
modification to the Trademark Office. The Trademark Office shall,
upon approval, issue a corresponding certification to the trademark
registrant and publish the modification; if no approval is granted,
the applicant shall be notified in writing and the reasons therefor
shall be given.

Where the name of a trademark registrant is to be modified, the
modification certification issued by the relevant registration
authorities shall be also submitted. If the modification
certification is not submitted, it may be submitted within 30 days
from the date on which the application is filed; if it is not
submitted at the expiry of the time limit, the application for
modification shall be considered abandoned and the Trademark Office
shall notify the applicant in writing.

Where the name or address of a trademark registrant is to be
modified, the trademark registrant shall make the modification in
respect of all its registered trademarks in a lump; if they are not
so modified, the application for modification shall be considered
abandoned and the Trademark Office shall notify the applicant in
writing.

Article 25 When a registered trademark is to be
assigned, both the assignor and assignee shall jointly send an
application for assignment of the registered trademark to the
Trademark Office. The assignee shall go through the formalities for
the application for assignment of the registered trademark. The
Trademark Office shall, upon approval of the application for
assignment of the registered trademark, issue the assignee a
corresponding certification and publish the assignment.

Where a registered trademark is to be assigned, the trademark
registrant shall assign in a lump all of its trademarks that are
identical or similar to each other in respect of the same or
similar goods; if they are not so assigned, the Trademark Office
shall notify it to rectify the situation within a specified time
limit; if it fails to rectify it at the expiry of the said time
limit, the application for assignment of the registered trademark
shall be considered abandoned, and the Trademark Office shall
notify the applicant in writing.

With respect to applications for the assignment of registered
trademarks, which may produce misleading, confusing or other
adverse effects, the Trademark Office shall refuse them, and shall
notify the applicants in writing and give the reasons therefor.

Article 26 Where the exclusive right to use a
registered trademark is transferred due to the reasons other than
assignment, the party who accepts the transfer of the exclusive
right to use the registered trademark shall, by producing the
relevant evidential documents or legal instruments, go through the
formalities of the transfer of the exclusive right to use the
registered trademark with the Trademark Office.

Where the exclusive right to use a registered trademark is
transferred, the right holder shall assign in a lump all of its
trademarks that are identical or similar to each other in respect
of the same or similar goods; if they are not so transferred, the
Trademark Office shall notify it to rectify the situation within a
specified time limit; if it fails to rectify it at the expiry of
the said time limit, the application for transfer of the registered
trademark shall be considered abandoned, and the Trademark Office
shall notify the applicant in writing.

Article 27 Where the registration of a
registered trademark needs to be renewed, an application for
renewal of registration of the trademark shall be submitted to the
Trademark Office. The Trademark Office shall, upon approval of the
application for renewal of registration of the trademark, issue a
corresponding certification and publish the renewal.

The period of validity of a renewed trademark registration shall
be calculated from the day following the expiration of the previous
period of validity of such a trademark.

Chapter V Review and Adjudication of
Trademarks

Article 28 The Trademark Review and
Adjudication Board shall accept applications for trademark review
and adjudication filed under Articles 32, 33, 41 and 49 of the
Trademark Law. The Trademark Review and Adjudication Board shall,
on the basis of facts, conduct review and adjudication according to
law.

Article 29 As referred to in the third
paragraph of Article 41 of the Trademark Law, “a dispute against a
registered trademark” means that a prior trademark registrant
believes that a trademark registered later by another party is
identical or similar to its registered trademark in respect of the
same or similar goods.

Article 30 When applying for trademark review
and adjudication, an application shall be submitted to the
Trademark Review and Adjudication Board, accompanied with the
copies corresponding to the number of the other party. If an
application for review and adjudication is filed on the basis of
the decision or the ruling made by the Trademark Office, the copies
of such decision or ruling shall also be filed.

Upon receiving the application, the Trademark Review and
Adjudication Board shall, upon examination, accept it if the
requirements for acceptance are satisfied; if the requirements for
acceptance are not satisfied, it shall not accept the application,
and shall notify the applicant in writing and give the reasons
therefor. If the application needs to be supplemented or corrected,
the applicant shall be notified to make supplements or corrections
within 30 days from the date of receipt of the notification. If,
after being supplemented or corrected, the application still does
not conform to the provisions, the Trademark Review and
Adjudication Board shall refuse it, and notify the applicant in
writing and give the reasons therefor; if no supplements or
corrections are made at the expiry of the specified time limit, the
application shall be considered withdrawn and the Trademark Review
and Adjudication Board shall notify the applicant in writing.

If the Trademark Review and Adjudication Board finds that an
application does not satisfy the requirements for acceptance after
it has accepted the application, it shall refuse the application,
notify the applicant in writing and give the reasons therefor.

Article 31 The Trademark Review and
Adjudication Board shall, upon the acceptance of the application
for trademark review and adjudication, send in time the copy of the
application to the other party, who shall be required to make a
response within 30 days from the date of receipt of such copy. If
no response is made at the expiry of the time limit, it shall not
affect the review and adjudication of the Trademark Review and
Adjudication Board.

Article 32 Where a party needs to supplement
related evidence after filing an application for review and
adjudication or making a response, a statement for this purpose
shall be made in the application or in the response, and the said
evidence shall be submitted within three months from the date on
which the application is filed or the response is made; if no
evidence is submitted at the expiry of the time limit, the party
shall be considered given up the supplementing of related
evidence.

Article 33 The Trademark Review and
Adjudication Board may, at the request of a party or on the basis
of the practical needs, decide to review and adjudicate an
application for review and adjudication in public session.

Where the Trademark Review and Adjudication Board decides to
review and adjudicate the application for review and adjudication
in public session, it shall notify in writing the parties 15 days
before the public review and adjudication, informing them of the
date, venue and persons conducting the public review and
adjudication. The parties shall make a response within the time
limit specified in the written notice.

Where the applicant does not make a response nor appear at the
public review and adjudication, its application for review and
adjudication shall be considered withdrawn, and the Trademark
Review and Adjudication Board shall notify the applicant in
writing. If the other party does not make a response nor appear at
the public review and adjudication, the Trademark Review and
Adjudication Board may conduct the review and adjudication by
default.

Article 34 Where an applicant requests to
withdraw its application before the Trademark Review and
Adjudication Board makes a decision or ruling, it may withdraw its
application after making an explanation of the reasons therefor in
writing to the Trademark Review and Adjudication Board; where an
application is withdrawn, the review and adjudication proceedings
shall be terminated.

Article 35 Where an application for trademark
review and adjudication has been withdrawn, the applicant shall not
file another application for review and adjudication on the basis
of the same facts and grounds. Where the Trademark Review and
Adjudication Board has already made a decision or ruling on an
application for trademark review and adjudication, no one shall
file another application for review and adjudication on the basis
of the same facts and grounds.

Article 36 Where a registered trademark is
canceled pursuant to Article 41 of the Trademark Law, the exclusive
right to use the said trademark shall be deemed as not existing
from the very beginning. A decision or ruling on canceling a
registered trademark shall have no retroactive effect on any
judgment or order on any trademark infringement case made and
already enforced by the people’s court before the cancellation, nor
on any decision on any trademark infringement case made and already
enforced by the authority of administration for industry and
commerce before the cancellation, and nor on any trademark
assignment contract or trademark license contract already performed
before the cancellation. However, the trademark registrant shall
compensate any loss caused to another person due to its bad
faith.

Chapter VI Administration of the Use of
Trademarks

Article 37 Where a registered trademark is
used, the characters “注册商标”or a registration mark may be indicated
on goods, packages of goods, descriptions of goods or other
ancillary items.

The registration mark includes 注and R, which，in the use of such
registration mark, shall be placed on the upper or lower right-hand
corner.

Article 38 Where a Certificate of Trademark
Registration is lost or damaged, an application for reissuance
shall be filed with the Trademark Office. Where a Certificate of
Trademark Registration is lost, a loss declaration shall be
published in the Trademark Gazette. The damaged Certificate of
Trademark Registration shall be sent back to the Trademark Office
when the application for reissuance is submitted.

Where a Certificate of Trademark Registration is forged or
altered, criminal liability shall be investigated according to the
provisions of the criminal law on the crime of forging or altering
certificates of State organs or other crimes.

Article 39 With respect to any of the acts
referred to in Article 44 (1), (2) and (3) of the Trademark Law,
the authority of administration for industry and commerce shall
order the trademark registrant to rectify the situation within a
specified time limit; where there is a refusal to rectify, it shall
report to the Trademark Office for the cancellation of the
registered trademark.

With respect to the act referred to in Article 44 (4) of the
Trademark Law, any person may apply to the Trademark Office for the
cancellation of such registered trademark, and state the relevant
circumstances. The Trademark Office shall notify the trademark
registrant to, within two months from the date of receipt of the
notification, provide evidence of use of the trademark prior to the
submission of the application for cancellation, or explain proper
reasons for non-use. If, at the expiry of the time limit, no
evidence of use is provided or the evidence provided is invalid and
there are no proper reasons for non-use, the Trademark Office shall
cancel the registered trademark.

The evidence referred to in the preceding paragraph includes the
evidence of use of the registered trademark by the trademark
registrant and the evidence of licensing another person by the
trademark registrant to use its registered trademark.

Article 40 For a registered trademark canceled
under Article 44 or 45 of the Trademark Law, the Trademark Office
shall publish it, and the exclusive right to use the said
registered trademark shall be terminated from the date on which the
Trademark Office makes the decision of cancellation.

Article 41 Where a registered trademark is
canceled by the Trademark Office or the Trademark Review and
Adjudication Board and the grounds for the cancellation involve
some of the designated goods only, the registered trademark used on
such goods shall be canceled.

Article 42 The amount of a fine imposed under
Articles 45 and 48 of the Trademark Law shall be not more than 20%
of the volume of the illegal business or not more than two times of
the profit illegally earned.

The amount of a fine imposed under Article 47 of the Trademark
Law shall be not more than 10% of the volume of the illegal
business.

Article 43 Where licensing another person to
use its registered trademark, the licensor shall, within three
months from the date of conclusion of the license contract, submit
the copy of the contract to the Trademark Office for the
record.

Article 44 Where anyone violates the provisions
of the second paragraph of Article 40 of the Trademark Law, the
authority of administration for industry and commerce shall order
it to make corrections within a specified time limit, or seize the
representations of its trademark if no corrections are made at the
expiry of the specified time limit. Where it is impossible to
separate the representations of the trademark from the goods
involved, both of them shall be seized and destroyed.

Article 45 Where the use of a trademark is in
violation of the provisions of Article 13 of the Trademark Law, the
party concerned may request the authority of administration for
industry and commerce to prohibit such use. When filing an
application for this purpose, the party shall submit evidence
proving that its mark constitutes a well-known trademark. If the
mark is determined as a well-known trademark by the Trademark
Office pursuant to Article 14 of the Trademark Law, the authority
of administration for industry and commerce shall order the
infringer to stop the act of using the well-known trademark in
violation of the provisions of Article 13 of the Trademark Law,
seize and destroy the representations of the trademark; where it is
impossible to separate the representations of the trademark from
the goods involved, both of them shall be seized and destroyed.

Article 46 A trademark
registrant applying for the removal of its registered trademark or
for the removal of the registration of its trademark used on some
of the designated goods from the Trademark Register shall submit an
application for the removal of the trademark to the Trademark
Office and return the original Certificate of Trademark
Registration.

Where a trademark registrant applies for the removal of its
registered trademark or the removal of the registration of its
trademark on some of the designated goods from the Trademark
Register, the exclusive right to use the registered trademark or
the effect of the exclusive right to use the registered trademark
on some of the designated goods shall be terminated from the date
on which the Trademark Office receives the application for
removal.

Article 47 Where a trademark registrant dies or
terminates, each and every person may, at the expiry of one year
from the date of death or termination, apply to the Trademark
Office for the removal of the registered trademark in question from
the Trademark Register if no formalities of transfer have been
conducted with respect to the registered trademark. When applying
for the removal, the applicant shall submit the evidence certifying
the death or termination of the trademark registrant.

Where a registered trademark is removed from the Trademark
Register due to the death or termination of the trademark
registrant, the exclusive right to use the registered trademark
shall cease from the date of death or termination of the trademark
registrant.

Article 48 Where a registered trademark is
canceled or removed from the Trademark Register as provided in
Articles 46 and 47 of these Regulations, the original Certificate
of Trademark Registration shall become invalid. Where the
registration of the trademark on some of the designated goods is
canceled or the trademark registrant applies for the removal of the
registration of its trademark on some of the designated goods from
the Trademark Register, the Trademark Office shall make a note on
the original Certificate of Trademark Registration and return it to
the registrant, or reissue the Certificate of Trademark
Registration and publish it.

Chapter VII Protection of the Exclusive Right to Use a
Registered Trademark

Article 49 Where a registered trademark
consists of the generic name, design or model of the goods in
question, or directly shows the quality, main raw materials,
functions, intended purposes, weight, quantity or other
characteristics of the goods in question, or consists of
geographical names, the proprietor of the exclusive right to use
the registered trademark shall have no right to prohibit the fair
use thereof by another person.

Article 50 Any of the following acts shall
constitute an infringement on the exclusive right to use a
registered trademark referred to in Article 52 (5) of the Trademark
Law:

(1) using any signs which are identical or similar to another
person’s registered trademark as the name of the goods or
decoration of the goods on the same or similar goods, thus
misleading the public;

(2) intentionally providing facilities such as storage,
transport, mailing, concealing, etc. for the purpose of infringing
another person’s exclusive right to use a registered trademark.

Article 51 Where the exclusive right to use a
registered trademark is infringed upon, each and every person may
lodge a complaint with or report the case to the authority of
administration for industry and commerce.

Article 52 The amount of a fine imposed on an
act infringing the exclusive right to use a registered trademark
shall be not more than three times of the volume of the illegal
business. If it is impossible to calculate the volume of the
illegal business, the amount of the fine shall be not more than
100,000 yuan.

Article 53 A trademark
owner who believes that the registration of its well-known
trademark as an enterprise name by another person is likely to
deceive or mislead the public may apply to the competent
registration authorities of enterprise names for the cancellation
of the registration of the enterprise name. The competent
registration authorities of enterprise names shall handle the case
in accordance with the Provisions on Administration of Enterprise
Name Registration.

Chapter VIII Supplementary Provisions

Article 54 Service marks continuously in use to
July 1, 1993, which are identical or similar to any registered
service marks of another person for the same or similar services,
may continue to be used; however, if such use is suspended for a
period of three years or more after July 1, 1993, it shall not be
used any longer.

Article 55 The specific measures for the
administration of trademark agency shall be separately formulated
by the State Council.

Article 56 The Classification of Goods and
Services for trademark registration shall be worked out and
published by the authority of administration for industry and
commerce under the State Council.

The format of the documents for applying for trademark
registration or for handling other trademark matters shall be
determined and published by the authority of administration for
industry and commerce under the State Council.

The rules on review and adjudication to be followed by the
Trademark Review and Adjudication Board shall be formulated and
promulgated by the authority of administration for industry and
commerce under the State Council.

Article 57 The Trademark Office shall establish
and keep the Trademark Register recording registered trademarks and
other registration matters.

The Trademark Office shall compile and issue the Trademark
Gazette publishing trademark registration and other related
matters.

Article 58 Fees shall be paid for applying for
trademark registration or for handling other trademark matters. The
items and standards for collecting fees shall be prescribed and
published by the authority of administration for industry and
commerce under the State Council jointly with the competent
department for pricing of the State Council.

Article 59 These Regulations shall become
effective as of September 15, 2002. The Rules for the
Implementation of the Trademark Law of the People’s Republic of
China, which was promulgated by the State Council on March 10,
1983, revised for the first time with the approval of the State
Council on January 3, 1988 and revised for the second time with the
approval of the State Council on July 15, 1993, and the Official
Reply from the State Council Concerning Papers Furnished as
Attachments to Applications for Trademark Registration, which was
issued on April 23, 1995, shall be repealed simultaneously.

(State Council)

Regulations for the Implementation of the Copyright Law of the People’s Republic of China

(Promulgated by Decree No. 359 of the State Council of the
People’s Republic of China on August 2, 2002, and effective as of
September 15, 2002)

Article 1 These Regulations are formulated in
accordance with the Copyright Law of the People’s Republic of China
(hereinafter referred to as “the Copyright Law”).

Article 2 The term “works” as referred to in
the Copyright Law means intellectual creations with originality in
the literary, artistic or scientific domain, insofar as they can be
reproduced in a tangible form.

Article 3 The term “creation” as referred to in
the Copyright Law means intellectual activities in which literary,
artistic or scientific works are directly created.

Any organizational activity, consultation, material support or
other auxiliary services conducted or offered for another person’s
creation shall not be deemed as creation.

Article 4 For the purposes of the Copyright Law
and these Regulations, the following expressions concerning works
shall have the meanings hereunder assigned to them:

(1) “written works” means works expressed in written form, such
as novels, poems, essays and theses;

(2) “oral works” means works expressed in form of spoken
language, such as impromptu speeches, lectures and court
debates;

(3) “musical works” means such works as songs and symphonic
works, with or without accompanying words, which can be sung or
performed;

(4) “dramatic works” means such works as dramas, operas and
local traditional operas for stage performance;

(5) “qu yi works” means such works as “xiang sheng” (cross
talk), “kuai shu” (clapper talk), “da gu” (ballad singing with drum
accompaniment) and “ping shu” (story telling based on novels),
which are mainly performed by recitation or singing, or by
both;

(6) “choreographic works” means works in which ideas and
feelings are or can be expressed through successive body movements,
gestures, facial movements, etc;

(7) “acrobatic works” means works expressed through body
movements and skills, such as acrobatics, magic and circus;

(8) “works of fine arts” means two- or three-dimensional works
of the plastic arts created in lines, colours or other media which
impart aesthetic effect, such as paintings, works of calligraphy
and sculptures;

(9) “works of architecture” means works with aesthetic effect
which are expressed in form of buildings or structures;

(10) “photographic works” means artistic works created by
recording images of objects on light-sensitive or other materials
with the aid of devices;

(11) “cinematographic works and works created by a process
analogous to cinematography” means works which are recorded on some
material, consisting of a series of images, with or without
accompanying sound, and which can be projected with the aid of
suitable devices or communicated by other means;

(12) “graphic works” means such works as drawings of engineering
designs and product designs for the purpose of actual construction
and manufacturing, and as maps and sketches showing geographical
phenomena and demonstrating the fundamentals or the structure of a
thing or an object;

(13) “model works” means three-dimensional works made on the
basis of the shape and the structure of an object to a certain
scale, for the purpose of display, test or observation.

Article 5 For the purposes of the Copyright Law
and these Regulations, the following expressions shall have the
meanings hereunder assigned to them:

(1) “news on current affairs” means the mere facts or happenings
conveyed through the media such as newspapers, periodicals and
radio and television programs;

(2) “sound recordings” means aural fixations of sounds of
performances or of other sounds;

(3) “video recordings” means fixations of a connected series of
related images or pictures, with or without accompanying sounds,
other than cinematographic works and works created by a process
analogous to cinematography;

(4) “producer of sound recordings” means the person who first
makes the sound recordings;

(5) “producer of video recordings” means the person who first
makes the video recordings;

(6) “performer” means an actor, or a performing group or any
other person who performs literary or artistic works.

Article 6 A copyright
shall subsist on the date when a work is
created.

Article 7 Works of foreigners or stateless
persons first published in the territory of China, as provided in
the third paragraph of Article 2 of the Copyright Law, shall be
protected from the date of the first publication of the works.

Article 8 Where a work of a foreigner or a
stateless person first published outside the territory of China is
published in the territory of China within 30 days thereafter, it
shall be deemed published simultaneously in the territory of
China.

Article 9 Where a work of joint authorship
cannot be separated into parts and exploited separately, the
copyright therein shall be enjoyed by the co-authors and exercised
under a unanimous agreement; where an agreement thereupon cannot be
reached through consultation, any party may not, without
justifications, prevent the other party or parties from exercising
the copyright, except the transfer right; however, the gains thus
obtained shall be distributed reasonably among all the
co-authors.

Article 10 Where a copyright owner authorizes
another person to make, based on his works, cinematographic works
or works created by a process analogous to cinematography, it is
deemed that he has permitted him to make necessary alteration of
his works, insofar as such alteration does not distort or mutilate
the original works.

Article 11 The term “tasks” as referred to in
the first paragraph of Article 16 of the Copyright Law regarding a
work created in the course of employment means the duties the
citizen shall fulfill in the legal person or organization by which
he is employed.

The term “material and technical resources” as referred to in
the second paragraph of Article 16 of the Copyright Law regarding a
work created in the course of employment means the funds, equipment
or materials purposely provided to the citizen by the legal person
or organization by which he is employed for the creation of a
work.

Article 12 Where, within two years after the
completion of a work created in the course of employment, the
author, with the consent by the entity he belongs to, authorizes a
third party to exploit his work in the same manner as the entity
may have, the remuneration obtained therefrom shall be divided
between the author and the entity according to the agreed
proportions.

The period of two years after the completion of the work shall
be calculated from the date on which the author submits the work to
the entity.

Article 13 In the
case of a work of an unidentified author, the copyright, except the
right of authorship, shall be exercised by the owner of the
original copy of the work. Where the author is identified, the
copyright shall be exercised by the author or his
successor.

Article 14 Where one of the co-authors of a
work dies without any successor or legatee, the rights he enjoyed
in the work as stipulated in subparagraphs (5) through (17) of the
first paragraph of Article 10 of the Copyright Law shall be
exercised by the other co-authors.

Article 15 The right of authorship, the right
of revision and the right of integrity included in a copyright
shall, after the death of the author, be protected by his successor
or legatee.

In the absence of a successor or legatee, the right of
authorship, the right of revision and the right of integrity
included in a copyright shall be protected by the administrative
departments for copyright.

Article 16 The exploitation of a work the
copyright in which is enjoyed by the State shall be managed by the
administrative department for copyright of the State Council.

Article 17 In the
case of a posthumous work, the right of publication may be
exercised by the author’s successor or legatee within a period of
50 years after the death of the author, unless the author had
expressly stated otherwise. In the absence of a successor or
legatee, the said right shall be exercised by the owner of the
original copy of the work.

Article 18 In the
case of a work of an unidentified author, the term of protection
for the rights of such an author as provided in subparagraphs (5)
through (17) of the first paragraph of Article 10 of the Copyright
Law shall expire on December 31 of the 50th year after the first
publication of the work. The provisions of Article 21 of the
Copyright Law shall be applicable after the author of the work has
been identified.

Article 19 Anyone who exploits another person’s
work shall clearly indicate the name of the author and the title of
the work, except where the parties agree otherwise or the
indication cannot be undertaken due to the special characteristic
of the manner of exploiting the work.

Article 20 The term “published work” as
referred to in the Copyright Law means a work which has been made
available to the public by the copyright owner himself or under his
permission.

Article 21 The exploitation of a published work
which may be exploited without permission from the copyright owner
in accordance with the relevant provisions of the Copyright Law
shall not impair the normal exploitation of the work concerned, nor
unreasonably prejudice the legitimate interests of the copyright
owner.

Article 22 The rates of remuneration for the
exploitation of works in accordance with the provisions of Article
23, the second paragraph of Article 32 and the third paragraph of
Article 39 of the Copyright Law shall be fixed and issued by the
administrative department for copyright of the State Council
jointly with the competent department for pricing of the State
Council.

Article 23 Anyone who exploits another person’s
work shall conclude a licensing contract with the copyright owner,
and the contract shall be made in written form insofar as the right
licensed for exploiting the work has an exclusive nature, except
where the work is to be published in a newspaper or a
periodical.

Article 24 The contents of an exclusive right
of exploitation provided in Article 24 of the Copyright Law shall
be agreed upon by the contract. In the absence of such an agreement
or of any clear agreement thereupon in the contract, it shall be
deemed that the licensee has the right to prevent any other person,
including the copyright owner himself, from exploiting the work in
the same manner; unless otherwise agreed in the contract, the
sublicensing of the same right to a third party by the licensee
shall be subject to the permission from the copyright owner.

Article 25 An exclusive licensing contract and
a copyright transfer contract concluded with the copyright owner
may be filed with the administrative departments for copyright for
the record.

Article 26 The term “rights and interests
related to copyright” as referred to in the Copyright Law and these
Regulations means the rights enjoyed by publishers in the
typographical designs of their books or periodicals, the rights
enjoyed by performers in their performances, the rights enjoyed by
producers of sound and video recordings in their sound and video
recordings, and the rights enjoyed by radio and television stations
in their broadcasting programs.

Article 27 Publishers, performers, producers of
sound and video recordings, and radio and television stations, in
the course of exercising their rights, shall not prejudice the
rights of the copyright owners in the works being exploited and in
the original works.

Article 28 Where it is agreed in a book
publishing contract that the book publisher enjoys an exclusive
publishing right but its particular contents are not specified, it
shall be deemed that the book publisher has the exclusive right to
publish a book in the same language and in the form of original or
revised version, within the term of validity of the contract and
the territory defined by the contract.

Article 29 If two separate subscription forms
mailed by the copyright owner to the book publisher are still not
able to be fulfilled within six months, it shall be deemed that the
stock of the book is exhausted as referred to in Article 31 of the
Copyright Law.

Article 30 Where a copyright owner declares in
accordance with the second paragraph of Article 32 of the Copyright
Law that no reprinting or excerpting of his work is permitted, he
shall append such a declaration to the work when it is published in
a newspaper or a periodical.

Article 31 Where a copyright owner declares in
accordance with the third paragraph of Article 39 of the Copyright
Law that no making of sound recordings of his work is permitted, he
shall make such a declaration when his work is legally
recorded.

Article 32 To exploit another person’s work in
accordance with the provisions of Article 23, the second paragraph
of Article 32 and the third paragraph of Article 39 of the
Copyright Law, the exploiter shall pay remuneration to the
copyright owner within two months from the date of exploitation of
the said work.

Article 33 Performances by foreigners or
stateless persons in the territory of China shall be protected by
the Copyright Law.

The rights enjoyed by foreigners or stateless persons in their
performances under the international treaties to which China has
already acceded shall be protected by the Copyright Law.

Article 34 Sound recordings produced and
distributed by foreigners or stateless persons in the territory of
China shall be protected by the Copyright Law.

The rights enjoyed by foreigners or stateless persons in the
sound recordings produced and distributed by them under the
international treaties to which China has acceded shall be
protected by the Copyright Law.

Article 35 The rights enjoyed by foreign radio
and television stations in their broadcasting programmes under the
international treaties to which China has acceded shall be
protected by the Copyright Law.

Article 36 Where any act of infringement is
committed as enumerated in Article 47 of the Copyright Law, which
also prejudices the social or public interests, the administrative
department for copyright may impose a fine of not more than three
times the volume of the illegal business; where the volume of
illegal business is difficult to calculate, a fine of not more than
100,000 yuan may be imposed.

Article 37 Where any act of infringement is
committed as enumerated in Article 47 of the Copyright Law, which
also prejudices the social or public interests, the administrative
department for copyright of the local people’s government shall be
responsible for the investigation into and dealing with such an
act.

The administrative department for copyright of the State Council
may investigate into and deal with any act of infringement that is
of nationwide effect.

Article 38 These Regulations shall be effective
on September 15, 2002. The Regulations for the Implementation of
the Copyright Law of the People’s Republic of China, which were
approved by the State Council on May 24, 1991 and promulgated by
the National Copyright Administration on May 30, 1991, shall be
abolished at the same time.

(State Council)

Insurance Law of the People’s Republic of China

(Adopted at the 14th Meeting of the Standing Committee of the
Eighth National People’s Congress on June 30, 1995, promulgated by
Order No. 51 of the President of the People’s Republic of China,
and amended in accordance with the Decision on Amending the
Insurance Law of the People’s Republic of China adopted at the 30th
Meeting of the Standing Committee of the Ninth National People’s
Congress on October 28, 2002)

Contents

Chapter I       General
Provisions

Chapter II      Insurance
Contracts

Section 1 General
Provisions

Section 2 Contract of Property
Insurance

Section 3 Contract of
Insurance of the Person

Chapter III   Insurance Company

Chapter IV   Rules Governing Insurance
Business

Chapter
V             
Supervision and Control of the Insurance Industry

Chapter VI   Insurance Agents and
Brokers

Chapter VII   Legal Liabilities

Chapter VIII   Supplementary
Provisions

Chapter I

General Provisions

Article 1 This Law is enacted for the purpose of regulating
insurance activities, protecting the legitimate rights and
interests of the parties involved, strengthening supervision and
control of the insurance industry and promoting its healthy
development.

Article 2 The term of the “insurance” as used in this Law
refers to a commercial insurance transaction whereby an insurance
applicant, as contracted, pays insurance premiums to the insurer,
and the insurer bears an obligation to indemnify him for property
loss or damage caused by the happening of a contingent event that
is agreed upon in the contract, or to pay the insurance benefits
when the insured person dies, is injured or disabled, suffers
illness or reaches the age or time-limit agreed upon in the
contract.

Article 3 Insurance activities conducted within the
territory of the People’s Republic of China shall be governed by
this Law.

Article 4 Insurance activities shall be conducted in
compliance with laws and administrative rules and regulations, with
respect for public morality and on the principle of voluntary
participation.

Article 5 In exercising their rights and performing their
obligations, the parties to insurance activities shall follow the
principle of good faith.

Article 6 Commercial insurance business must be conducted
by insurance companies established in accordance with this Law; and
no other entities or individuals may be permitted to operate
commercial insurance business.

Article 7 Any legal persons or other organizations within
the territory of the People’s Republic of China that need insurance
coverage within the People’s Republic of China shall for the
purpose thereof apply to insurance companies established within the
territory of the People’s Republic of China.

Article 8 Insurance companies shall observe the principle
of fair competition in developing insurance business and shall not
engage in unfair competition.

Article 9 The insurance supervision and control authority
under the State Council shall be responsible for supervision and
control of the insurance industry in accordance with this Law.

Chapter II

Insurance Contracts

Section 1

General Provisions

Article 10 An insurance contract is an agreement whereby the
rights and obligations pertaining to insurance are specified and
agreed by the applicant and the insurer.

The applicant means the party who enters into an insurance
contract with an insurer and is obligated to pay the premiums under
the insurance contract.

The insurer means the insurance company, which enters into an
insurance contract with an applicant and is obligated to make
indemnity or pay insurance benefits.

Article 11 In concluding an insurance contract, the applicant
and the insurer shall abide by a fair, mutually beneficial,
consultative and voluntary principle and shall not infringe upon
public interests of society.

Insurance companies and other entities shall not constrain
others to enter into insurance contracts, except for such
insurances as have been made compulsory by laws and administrative
rules and regulations.

Article 12 An applicant shall have an insurable interest in the
subject matter of the insurance.

An insurance contract is null and void if the applicant has no
insurable interest in the subject matter of the insurance.

Insurable interest means the legally recognized interest, which
the applicant has in the subject matter of the insurance.

The subject matter of the insurance refers, as regards the
object of the insurance, either to the property of the insured and
related interests associated therewith, or to the life and the
person of the insured.

Article 13 An insurance contract is formed when an applicant
applies for and the insurer accepts insurance under the terms and
conditions agreed therefore by both parties. The insurer shall
issue to the applicant in good time, an insurance policy or other
insurance certificate, which indicates the terms and conditions as
agreed upon by both parties.

An insurance contract may take other written form than as
prescribed in the preceding paragraph upon mutual agreement of the
applicant and the insurer.

Article 14 Once an insurance contract is formed, the applicant
shall pay the premium in accordance with the terms of the contract
and the insurer shall begin to undertake the insurance liability
from the time agreed upon.

Article 15 Unless otherwise stipulated in this Law or agreed in
the insurance contract, the applicant may rescind the contract
after it is formed.

Article 16 Unless otherwise stipulated in this Law or agreed in
the insurance contract, the insurer may not rescind the contract
after it is formed.

Article 17 In concluding an insurance contract, the insurer
shall explain the contract terms to the applicant and may inquire
about the subject matter of the insurance or relevant circumstances
concerning the insured. The applicant shall make an honest
disclosure.

The insurer shall have the right to rescind the insurance
contract, if the applicant intentionally conceals the facts and
does not perform his obligation of making an honest disclosure, or
negligently fails to make disclosure, thereby materially affecting
the insurer making a decision whether or not to provide the
insurance or whether or not to increase the premium rate.

If an applicant intentionally fails to perform his obligation of
making an honest disclosure, as regards the insured event, which
occurs prior to the rescission of the contract, the insurer shall
bear no obligation for indemnification or payment of the insured
amount, or for returning the premiums paid.

If an applicant negligently fails to perform his obligation of
making an honest disclosure and this has a material effect on the
occurrence of an insured event, the insurer shall, in connection
with the insured event which occurred prior to the rescission of
the contract, bear no obligation for indemnification or payment of
the insured amount but may return the premiums paid.

The insured event means an event falling within the scope of
cover under the insurance contract.

Article 18 If there are exclusion clauses provided by the
insurer in the insurance contract, then the insurer shall make
precise and clear explanations in respect thereof to the applicant
when concluding the insurance contract, otherwise such clauses
shall have no effect.

Article 19 An insurance contract shall contain the following
particulars:

(1) name and address of the insurer;

(2) names and addresses of the applicant and the insured, and
name and address of the beneficiary in case of insurance of the
person;

(3) subject matter of the insurance;

(4) scope of cover and exclusions;

(5) period of insurance and commencement of liability of the
insurer;

(6) insured value;

(7) amount insured;

(8) premium and way of its payment;

(9) way of payment of indemnity or insurance benefits;

(10) liability arising from breach of contract and resolution of
disputes; and

(11) day, month and year of the conclusion of the contract.

Article 20       The
applicant and the insurer may include other particulars for matters
relating to the insurance contract besides those stipulated in the
preceding article.

Article 21       During the
period of validity of the insurance contract, the applicant and the
insurer may amend the contents of the insurance contract subject to
mutual agreement.

Where amendments to the insurance contract are made, the insurer
shall endorse them in the original policy or other insurance
certificates, or affix an endorsement slip thereto, or have a
written agreement of amendment made with the applicant.

Article 22       The
applicant, the insured or the beneficiary shall, in good time,
notify the insurer the occurrence of an insured event soon after
they knew it.

The insured refers to one whose property or person is protected
by the insurance contract and who is entitled to claim for the
insured amount. The applicant may also be the insured.

The beneficiary with respect to insurance of the person refers
to the one who, designated by the insured or the applicant, is
entitled to claim for the insurance benefits. The applicant or
the insured may also be the beneficiary.

Article 23       Where a
claim for indemnity or payment of insurance benefits is lodged with
the insurer after the occurrence of the insured event, the
applicant, the insured or the beneficiary shall, to the best of
their ability, provide the insurer with evidence and other material
relevant to ascertaining the nature, the cause and the extent of
the loss.

Based on the provisions of the insurance contract, the insurer,
in considering the relevant evidence or other material incomplete,
shall notify the applicant, the insured or the beneficiary to
provide supplementary evidence or other material.

Article 24       The insurer
shall, after receipt of a claim for indemnity or for payment of the
amount insured from the insured or the beneficiary, determine the
matter without delay, and inform the insured or the beneficiary of
the result of the determination. Where responsibility lies with the
insurer, the insurer shall fulfill its obligation for such
indemnity or payment within 10 days after agreement is reached with
the insured or the beneficiary on the amount of such indemnity or
payment. If there are stipulations in the insurance contract on the
sum insured and on the period within which indemnification or
payment should be made, then the insurer shall fulfill its
obligation accordingly.

If the insurer fails to fulfill its obligations as prescribed in
the preceding paragraph in a timely manner then, in addition to
payment of the amount insured, the insurer shall compensate the
insured or the beneficiary for any damage incurred thereby.

No entity or individual may illegally interfere with the
insurer’s fulfillment of its obligation for indemnification or
payment of the insured amount, or restrict the right of the insured
or the beneficiary to receive such payments.

The sum insured refers to the maximum amount, which the insurer
undertakes to pay for indemnity or for its insurance
obligations.

Article 25       After
receiving a claim for indemnity or payment of the sum insured from
the insured or the beneficiary, the insurer shall send to the
insured or the beneficiary, a notice declining indemnity or payment
of the sum insured for events not falling within the scope of
cover.

Article 26       If the
amount of indemnity or of the payment of insurance benefits cannot
be determined within 60 days of receipt of a claim for indemnity or
for payment of insurance benefits, together with relevant evidence
and information in respect thereof, the insurer shall first effect
primary payment of the minimum amount which can be determined by
the evidence and material in hand. The insurer shall
accordingly pay the balance after the amount of indemnity or of the
payment of insurance benefits is finally determined.

Article 27       With
respect to insurance other than life insurance, the right of the
insured or the beneficiary to claim for indemnity or payment of
insurance benefits shall lapse if the insured or the beneficiary
fails to exercise such right within two years from the date the
insured or the beneficiary is aware of the occurrence of the
insured event.

With respect to life insurance, the right of the insured or the
beneficiary to claim for payment of insurance benefits shall lapse
if the insured or the beneficiary fails to exercise such right
within five years from the date the insured or the beneficiary is
aware of the occurrence of the insured event.

Article 28       The insurer
is entitled to terminate the insurance contract and not to refund
the premiums if the insured or the beneficiary lies that an insured
event has occurred, and submits a claim for indemnity or payment of
insurance benefits, although such insured event has not
occurred.

If the applicant, the insured or the beneficiary fabricates the
occurrence of an insured event on purpose, the insurer is entitled
to terminate the insurance contract, and to bear no obligation for
indemnity or payment of insurance benefits, and except as otherwise
provided in the first paragraph of Article 65 of this Law, not to
refund the premiums either.

If the applicant, the insured or the beneficiary, following the
occurrence of an insured event, fabricates the cause of the
occurrence of the insured event or exaggerates the extent of the
loss with forged or altered relevant evidence, information or other
proofs, then the insurer shall bear no obligation for indemnity or
payment of insurance benefits for the portion which is fabricated
or exaggerated.

The applicant, the insured or the beneficiary shall refund to,
or indemnify the insurer for the purpose, payments of insurance
benefits or expenses incurred by the insurer due to the commission
of any of the acts stipulated in the foregoing three paragraphs of
this Article by the applicant, the insured or the beneficiary.

Article 29       Reinsurance
means the assignment by an insurer of part of its accepted business
to another insurer assuming the form of a contractor.

At the request of the reinsurance assignee, the insurance
assignor shall inform the former of its own liability and all
relevant information with respect to the original insurance.

Article 30       The
reinsurance assignee shall not demand payment of premiums by the
applicant of the original insurance.

The insured or the beneficiary of the original insurance shall
not lodge claims with reinsurance assignee for indemnity or payment
of insurance benefits.

The reinsurance assignor shall not decline or delay fulfilling
its own original obligations by reason of the non-performance of
the obligations of reinsurance assignee.

Article 31       If there is
any dispute between the insurer and the applicant, the insured or
the beneficiary, over the clauses in an insurance contract, the
People’s Courts or arbitration organizations shall interpret such
disputed clauses in favor of the insured and the
beneficiary.

Article 32       The insurer
or the reinsurance assignee shall be obligated to keep confidential
all information obtained in the course of conducting insurance
business regarding the business, financial position and individual
privacy of the applicant, the insured, the beneficiary or the
insurance assignor.

Section 2

Contract of Property Insurance

Article 33       A property
insurance contract means a contract of which the subject matter of
insurance is a piece of property and related interests associated
therewith.

A property insurance contract mentioned in this Section is
referred to for short as “the contract” unless specified
otherwise.

Article 34       Insurer
must be notified of the assignment of the subject matter of
insurance and after the consent of the insurer to continue the
insurance, the original insurance contract shall be altered
according to law, but except for cargo insurance contracts and
those contracts having otherwise specified.

Article 35       A cargo
insurance contract or an insurance contract for the carrier’s
voyage shall not be terminated by the parties thereto subsequent to
the commencement of insurance liability.

Article 36       The insured
shall observe all controls of the State pertaining to such areas as
fire prevention, safety, production operations and labour
protection, to ensure safety of the subject matter of
insurance.

In accordance with the terms of the contract, the insurer may
inspect the safety conditions of the subject matter of insurance
and, make timely suggestions in writing to the applicant or the
insured so as to eliminate unsafe factors and latent risks.

In the event that the applicant or the insured fails to fulfill
his contractual obligations to ensure the safety of the subject
matter of insurance, the insurer has the right to ask for an
increase in the premium or to terminate the contract.

The insurer may, with the consent of the insured, take
preventive measures to ensure the safety of the subject matter of
the insurance.

Article 37       If the
extent of risk attending the subject matter of insurance increases
during the period of the contract, the insured shall, in accordance
with the contract, notify the insurer in a timely manner, who shall
have the right to ask for an increase in the premium or terminate
the contract.

If the insured fails to notify the insurer as stipulated in the
preceding paragraph, the insurer shall bear no obligation for
indemnification where the occurrence of the insured event is caused
by the increased risk attending the subject matter of the
insurance.

Article 38       Unless
otherwise specified in the contract, the insurer shall reduce the
premium and refund correspondingly the part thereof calculated on
per diem basis in either of the following cases:

(1) a change occurs in relative circumstances under which the
insurance rate was determined, so that the risk attending the
subject matter of the insurance is noticeably reduced; or

(2) an obvious reduction occurs in the insurable value of the
subject matter of the insurance.

Article 39       Where an
applicant requests termination of the contract prior to
commencement of insurance liability, the applicant shall pay
service charges to the insurer and the insurer shall then refund
the premiums paid. If the applicant requests termination of
the contract subsequent to commencement of insurance liability, the
insurer may retain the premiums for the period from commencement of
insurance liability to the date of termination of the contract, and
shall refund the balance of the premiums to the
applicant.

Article 40       The
insurable value of the subject matter of insurance may be agreed by
the applicant and insurer and specified in the contract; or it may
be determined, at the occurrence of the insured event, on the basis
of the actual value of the subject matter of the
insurance.

The sum insured shall not exceed the insurable value; and the
part in excess shall be null and void.

Where the sum insured is less than the insurable value, the
insurer shall bear obligation for indemnity pro rata of the sum
insured to the insurable value, unless otherwise stipulated in the
contract.

Article 41       In the
event of double insurance, the applicant shall notify all insurers
concerned of relevant information with respect to such double
insurance.

Where the amount in aggregate of the sum insured by double
insurance exceeds the insurable value, the total amount of
indemnity paid by all insurers concerned shall not exceed the
insurable value. Unless specified otherwise in the contract,
the insurers concerned shall undertake their respective obligation
for indemnity in the proportion, which the sum insured by each of
them bears to the total amount of the sum insured.

Double insurance means such insurance wherein an applicant
enters into separate insurance contracts with two or more insurers
on the same subject matter of insurance, the same insurable
interests and the same insured event.

Article 42       At the
occurrence of an insured event, the insured is obligated to take
all necessary measures to prevent or mitigate loss, or
damage.

The insurer shall bear all necessary and reasonable expenses
incurred by the insured after the occurrence of the insured event
in taking measures to prevent or mitigate loss or damage of the
subject matter of the insurance; the amount of such expenses borne
by the insurer shall be calculated separately from the indemnity
for the loss of the subject matter of the insurance and it shall
not exceed the sum insured in the maximum.

Article 43       In the
event of partial loss of the subject matter of insurance, the
applicant may terminate the contract within 30 days after
indemnification by the insurer; unless specified otherwise in the
insurance contract, the insurer may also terminate the contract. In
the event that the insurer terminates the contract, the insurer
shall notify the applicant 15 days in advance of such termination
and refund to the applicant the premium for the portion of the
subject matter of insurance which is not lost or damaged after
deducting the earned premium for the subject matter of the
insurance which is not lost or damaged from the date of the
commencement of the insurance liability to the date of termination
of the contract.

Article 44       After the
occurrence of the insured event, if the insurer pays in full the
sum insured which is equal to the insurable value, the insurer
shall retain all rights pertaining to the lost or damaged subject
matter of insurance; if the sum insured is less than the insurable
value, the insurer shall obtain partial rights pertaining to the
lost or damaged subject matter of insurance pro rata of the sum
insured to the insurable value.

Article 45       When the
occurrence of the insured event results from the loss or damage to
the subject matter of insurance caused by a third party, the
insurer may, from the date when indemnity is paid to the insured,
exercise by subrogation the right of the insured to demand
indemnification against the third party up to the amount of
indemnity paid.

After the occurrence of the insured event referred to in the
preceding paragraph, the insurer may, when paying indemnity, deduct
therefrom a corresponding amount, which the insured has received as
indemnity from the third party.

The right to indemnity by subrogation exercised by the insurer
in accordance with the first paragraph shall in no way affect the
insured’s right to indemnity against the third party for the
portion un-indemnified.

Article 46       If the
insured waives the right to indemnity against the third party after
the occurrence of the insured event and before the insurer pays the
indemnity, the insurer shall bear no obligation for
indemnity.

If the insured, without the insurer’s consent, waives the right
to indemnity against the third party after indemnity is paid by the
insurer, the waiver shall be invalid.

The insurer may deduct a corresponding sum from the amount of
indemnity if it is not able to exercise the right to indemnity by
subrogation due to the fault of the insured.

Article 47       The insurer
has no right to indemnity by subrogation against any family member
or staff member of the insured unless the occurrence of the insured
event referred to in the first paragraph of Article 45 above has
resulted from the willful misbehavior of such a party.

Article 48       When the
insurer exercises the right to indemnity by subrogation against a
third party, the insured shall provide the insurer with necessary
documents and relevant information known to him.

Article 49       The insurer
shall bear all necessary and reasonable expenses incurred by the
insurer and the insured for the purpose of investigating and
ascertaining the nature and cause of the occurrence of the insured
event, and the extent of loss or damage to the subject matter of
the insurance.

Article 50       The insurer
may, in accordance with the provisions of law or the terms of an
insurance contract, directly indemnify a third party for loss or
damage caused him by the insured of a liability insurance
contract.

Insurance liability means insurance of which the subject matter
is the insurer’s liability to indemnify a third party according to
law.

Article 51       If the
insured of a liability insurance contract is brought to arbitration
or legal proceedings due to the occurrence of an insured event
which caused loss or damage to a third party, the insurer shall
bear the cost of such arbitration or legal proceedings and other
necessary and reasonable expenses paid by the insured, unless
provided otherwise in the insurance contract.

Section 3

Contract of Insurance of the Person

Article 52       A contract
of insurance of the person is an insurance contract of which the
subject matter of insurance is a person’s life and body.

The contract of insurance of the person mentioned in this
Section is briefly referred to as “the contract”, unless specially
designated.

Article 53       The
applicant has insurance interest in the following
persons:

(1) the applicant himself;

(2) the applicant’s spouse, children and parents; or

(3) apart from the above-mentioned, other family members and
close relatives bearing foster or support or maintenance
relationship with the applicant.

The stipulations in the preceding paragraph apart, the applicant
shall be deemed as having an insurance interest in the insured, if
the insured consent to the applicant concluding the contract for
him.

Article 54       If the age
of the insured is not correctly given by the applicant, and the
actual age of the insured does not fall within the age limit
specified by the contract, the insurer may terminate the contract
and refund the premiums to the applicant after deducting service
charge. However, this does not apply to cases where formation
of the contract has been over two years.

In the event that the applicant has wrongly given the age of the
insured, thus causing him to underpay the premiums, the insurer
shall have the right to rectify the mistake and demand the
applicant to pay the balance, or when paying insurance benefits,
reduce the payment in the proportion which the amount of premiums
actually paid bears to the amount that should have been paid.

In the event that the applicant has wrongly given the age of the
insured, thus causing him to overpay the premiums, then the insurer
shall refund the overpaid portion to the applicant.

Article 55       An
applicant shall not apply for and the insurer shall not provide
insurance of the person for one in want of capacity for civil acts,
taking death as a condition for payment of insurance
benefits.

The restriction stipulated in the preceding paragraph does not
apply to cases where parents apply for insurance of the person for
their minor children. However, the total amount of payments
for death shall not exceed the limit prescribed by the insurance
supervision and control authority.

Article 56       A contract
stipulating death as the term for payment of insurance benefits is
not valid unless it is agreed to in writing by the insured with the
amount of insurance approved by him.

An insurance policy signed and issued pursuant to a contract
prescribing death as the term for payment of insurance benefits may
not be transferred or pledged without the written consent of the
insured.

Where parents apply for insurance of the person on their minor
children, the restriction stipulated in paragraph one of this
Article shall not apply.

Article 57       After the
formation of the contract, the applicant may either pay the whole
of the premiums once for all or pay by installments in accordance
with the terms of the contract.

If the contract stipulates that the premium is to be paid by
installments, the applicant shall pay the first installment at the
conclusion of the contract and the other installments as
scheduled.

Article 58       Where the
contract specifies payment of the premiums by installments and the
applicant has paid the first installment but fails to pay the
current installment despite the lapse of over 60 days from the
scheduled date of payment, the validity of the contract is
suspended, or the insurer may, in accordance with the terms of the
contract, reduce the insured amount, unless stipulated otherwise in
the contract.

Article 59       The
validity of a contract that has been suspended in accordance with
the preceding Article can be reinstated upon agreement therefor
being reached between the insurer and the applicant and after the
making of the outstanding premium payment by the applicant.
However, the insurer is entitled to terminate the contract if no
agreement has been reached by both parties within two years from
the date of suspension of the validity of the contract.

Where an insurer terminates the contract in accordance with the
preceding paragraph when the applicant has paid the premiums for
two years or more, the insurer shall refund the cash value of the
policy in accordance with the contract. In the event that the
applicant has paid the premiums for less than two years, the
insurer shall refund the premiums with the service charge deducted
therefrom.

Article 60       The insurer
shall not resort to legal proceedings to demand payment by the
applicant of the premiums in respect of insurance of the
person.

Article 61       The
beneficiary of the insurance of the person shall be designated by
the insured or the applicant.

The designation of the beneficiary by the applicant is subject
to the approval of the insured.

If the insured is a person with no capacity for civil acts or a
person with limited capacity for civil acts, the beneficiary may be
designated by his guardian.

Article 62       The insured
or the applicant may designate one or more persons as the
beneficiaries.

In the event that there are more than one beneficiaries, the
insured or the applicant may specify the order of priority in their
enjoyment of the insurance benefits and their respective
proportions; if such proportions have not been defined, all the
beneficiaries shall share the insurance benefits in equal
proportions.

Article 63       The insured
or the applicant may change the beneficiary and notify the insurer
of this in writing. The insurer shall endorse the change on
the policy upon receipt of the notice.

The change of the beneficiary by the applicant shall be subject
to the consent of the insured.

Article 64       In the
event of the death of the insured, the amount of insurance shall be
treated as the deceased state, and the insurer shall, in any of the
following circumstances, be obligated to pay insurance benefits to
the legal heirs of the insured:

(1) where there is no designated beneficiary;

(2) where the beneficiary dies before the insured without other
beneficiary being designated; or

(3) where the beneficiary forfeits or surrenders his rights as
such in accordance with law without any other beneficiary.

Article 65       When the
applicant or the beneficiary has intentionally caused the death,
disability or illness of the insured, the insurer shall bear no
obligation to pay for the insurance. In the event that the
applicant has paid premiums for two years or more, the insurer
shall, in accordance with the contract, return the cash value of
the policy to other beneficiaries, who are entitled to their rights
as such.

If the beneficiary has intentionally caused the death or
disability of the insured, or attempted to cause the death of the
insured, the beneficiary shall forfeit his right to claim insurance
benefits.

Article 66       Where a
contract stipulates death as the term for payment of the insurance
benefits, then the insurer shall have no obligation to make such
payment if the insured commits suicide, except for the stipulations
in the second paragraph of this Article. However, the insurer
shall, as regards the insurance premiums already paid by the
applicant, return the cash value thereof in accordance with the
insurance policy.

Where a contract stipulates death as the term for payment of the
insurance benefits, the insurer may effect such payment in
accordance with the contract if the insured commits suicide two
years or more after the formation of the contract.

Article 67       Where death
or disability of the insured results from his intentional
committing a crime, the insurer shall have no obligation to effect
payment of the insurance benefits. If, however, the applicant has
paid premiums for two years or more, the insurer shall return the
cash value thereof to the insured in accordance with the insurance
policy.

Article 68       Where
insured events perils such as death, disability, or illness of the
insured in insurance of the person result from acts of a third
party, the insurer shall have no right of claim against the third
party by subrogation after payment of the insurance benefits to the
insured or the beneficiary. However, the insured or the beneficiary
shall still have the right to demand compensation from the third
party.

Article 69       Where an
applicant who has already paid in full the insurance premiums for
two years or more, terminates the contract, then the insurer shall
return the cash value of the policy within 30 days after receipt of
the notice of termination; if the applicant has paid the insurance
premiums for less than two years, then the insurer shall, in
accordance with the contract, return the premiums after deducting
the service charge.

Chapter III

Insurance Company

Article 70       An
insurance company shall take either of the following forms for its
organization:

(1) stock company with limited liability; or

(2) solely State-owned company.

Article 71       The
establishment of an insurance company is subject to the approval of
the insurance supervision and control authority.

Article 72       To
establish an insurance company, the following are
required:

(1) articles of Association in conformity with this Law and the
Company Law;

(2) a minimum registered capital as prescribed in this Law;

(3) senior management personnel with professional knowledge and
experience in business operations;

(4) a sound organizational structure and management systems;
and

(5) business premises conforming to requirements and other
facilities relative to the insurance business.

When examining the application for the establishment of an
insurance company, the insurance supervision and control authority
shall take into consideration the development of the insurance
industry and the need for fair competition.

Article 73       The minimum
registered capital required for the establishment of an insurance
company is RMB 200,000,000 yuan.

The minimum registered capital for the establishment of an
insurance company shall be fully paid-up in monetary form.

The insurance supervision and control authority may adjust the
amount of the minimum registered capital, in accordance with the
proposed scope of business and scale of operations; however, the
minimum capital shall not be less than that stipulated in the first
paragraph of this Article.

Article 74       For the
establishment of an insurance company, the applicant shall submit
the following documents and material:

(1) a formal written application giving therein the name,
registered capital and the scope of business of the proposed
insurance company;

(2) a feasibility study report; and

(3) other documents and information required by the insurance
supervision and control authority.

Article 75       Where an
application of the establishment of an insurance company has been
approved in preliminary examination, the applicant shall begin
preparations for its establishment in accordance with this Law and
the Company Law. The applicant who meets the requirements of
establishment stipulated in Article 71 of this Law shall submit to
the insurance supervision and control authority a formal completed
form of application together with the following documents and
material:

(1) articles of Association of the insurance company;

(2) a list of shareholders and their shares, or the investors
and the amount of their investment;

(3) a certificate of the credit standing and relevant
information of those shareholders holding 10% or more of the
company’s shares;

(4) a certificate verifying the paid-up capital issued by a
statutory institution;

(5) resumes and proofs of qualification of proposed senior
management personnel;

(6) operation strategy and business plan;

(7) details of business premises and other facilities related to
the insurance business; and

(8) other documents and material requested by the insurance
supervision and control authority.

Article 76       The
insurance supervision and control authority shall make a decision
approving or disapproving the application, within six months from
the date of receipt of the formal application to establish an
insurance company.

Article 77       An
insurance company whose establishment has been approved shall be
issued by the approving department a license to carry on insurance
business, which shall be used to affect registration with and
obtain a business license from the administrative department of
industry and commerce.

Article 78       The license
to carry on insurance business will be invalidated of itself if the
insurance company fails to complete its registration without any
proper reasons, within six months from the date of receipt of the
insurance license.

Article 79       Upon its
establishment, an insurance company shall deposit 20% of its total
registered capital with a bank designated by the insurance
supervision and control authority as guarantee fund; this guarantee
fund shall not be used except for repayment of debts when the
company is liquidated.

Article 80       An
insurance company that intends to establish a branch office within
or outside the territory of the People’s Republic of China shall
need to obtain the approval of the insurance supervision and
control authority and to obtain a license to carry on insurance
business for such branch office.

The branch offices of an insurance company do not possess the
status of a legal person; and their civil liability shall be borne
by the insurance company.

Article 81       Approval by
the insurance supervision and control authority is required for the
establishment of any representative office of an insurance company
within or without the territory of the People’s Republic of
China.

Article 82       Approval by
the insurance supervision and control authority is required for any
of the following changes to an insurance company:

(1) change of the name of the insurance company;

(2) change in the amount of the registered capital;

(3) change of business premises of the company or its branch
offices;

(4) adjustment of the scope of business;

(5) division or merger of the company;

(6) amendment to its articles of association;

(7) change of investors or shareholders who hold 10% or more of
the company’s shares; or

(8) other changes as specified by the insurance supervision and
control authority.

An insurance company shall report any changes of its chairman
and its general manager to the insurance supervision and control
authority for examination of their qualifications for the
positions.

Article 83       The
provisions of the Company Law shall apply to the organizational
structure of an insurance company.

Article 84       A solely
State-owned insurance company shall have a Board of Supervisors
comprising representatives of the insurance supervision and control
authority, relevant experts, and employees of the insurance
company. The board of supervisors shall exercise supervision
with respect to the solely State-owned insurance company, over
matters such as the drawing of reserve funds, the minimum solvency
margin, the maintenance of the value of State owned assets, the
value-added State-owned assets, as well as over acts of its senior
management personnel in respect of violations of law,
administrative rules and regulations or the articles of association
and acts considered detrimental to the company’s
interest.

Article 85       In the
event of division or merger of an insurance company, or by virtue
of the presence of a cause for its dissolution as stipulated by the
company’s articles of association, the insurance company shall be
dissolved only upon the approval of the insurance supervision and
control authority. The insurance company shall in accordance with
law form a liquidation group to carry out the
liquidation.

Those insurance companies, which include life insurance in their
business may not be dissolved, only divided or merged.

Article 86       An
insurance company shall be eliminated according to law in the event
that its insurance license is revoked by the insurance supervision
and control authority due to its violation of law, or
administrative rules and regulations. The insurance supervision and
control authority shall appoint in time a liquidation committee to
carry out the liquidation.

Article 87       In the
event that an insurance company is unable to pay its debts when
due, it can be declared bankrupt by the People’s Court in
accordance with law, with the consent of the insurance supervision
and control authority. If an insurance company is declared
bankrupt, the People’s Court shall organize a liquidation committee
to be composed of the insurance supervision and control authority,
other relevant departments and relevant personnel to carry out the
liquidation.

Article 88       In the
event that an insurance company which includes life insurance in
its business is eliminated according to law or declared bankrupt
according to law, all life insurance contracts and reserve funds in
its possession must be transferred to other insurance companies
that include life insurance in their business activities; if no
agreement can be reached with respect to such transfer with other
insurance companies, the insurance supervision and control
authority shall, for the purpose thereof, designate an insurance
company that includes life insurance in its business operations to
accept the transfer.

Where life insurance contracts and reserve funds, as prescribed
in the preceding paragraph, are transferred to or accepted by
another insurance company designated by the insurance supervision
and control authority, the legitimate rights and interests of the
insured and the beneficiary shall be preserved.

Article 89       In the
event of bankruptcy of an insurance company according to law, the
bankrupt State shall, after giving priority to paying off the
expenses of bankruptcy proceedings, be used for payment of debts in
the following order:

(1) wages, salaries and social insurance expenses due to its
employees;

(2) indemnity or payment of the insurance benefits;

(3) unpaid taxes and duties; and

(4) cleaning off the company debts.

Where the State is insufficient to cover all the claims having
the same order of priority, then settlement shall be made on a pro
rata basis.

Article 90       When an
insurance company ceases its business operations in accordance with
law, its license to carry on insurance business shall be
canceled.

Article 91       In the
absence of provisions in this Law, with regard to such matters as
the establishment of, changes to, dissolution and liquidation of an
insurance company, the Company Law and other relevant laws and
administrative rules and regulations shall apply.

Chapter IV

Rules Governing Insurance Business

Article 92       The scope
of business of an insurance company shall be as follows:

     (1) property insurance, which
includes insurance against loss or damage to property, liability
insurance and credit insurance;

     (2) insurance of the person which
includes life insurance, health insurance and accident and injury
insurance.

     No insurer may concurrently
engage in both the business of property insurance and insurance of
the person; however, an insurance company engaged in the business
of property insurance may, upon approval by the insurance
supervision and control authority, operate the short-term business
of health insurance and accidental injury insurance.

    The scope of business of an insurance
company is subject to the approval of the insurance supervision and
control authority. An insurance company shall only operate its
insurance business within the scope of business
approved.

   No insurance company may concurrently engage
in the business other than that provided for by this Law or other
laws, or administrative rules and regulations.

Article 93       Subject to
approval by the insurance supervision and control authority,
insurance companies may engage in the following reinsurance
business with respect to the insurance business prescribed in the
preceding article:

(1) outward reinsurance; and/or

(2) inward reinsurance.

Article 94       Insurance
companies shall, in accordance with the principle of safeguarding
the interests of the insured and guaranteeing the capability of
reimbursement, set aside all liability reserve funds.

       Specific measures for
setting aside and carrying forward the liability reserve funds to
be done by insurance companies shall be formulated by the insurance
supervision and control authority.

Article 95       Insurance
companies shall set aside a reserve fund for undetermined
indemnities pursuant to claims already made or insurance benefits
paid, and to claims not yet made nor insurance benefits paid
subsequent to the occurrence of the insured event.

Article 96       In addition
to the reserve funds described in the preceding two articles,
insurance companies shall collect accumulated fund in accordance
with relevant laws, administrative rules and regulations and
stipulations of the State financial and accounting
systems.

Article 97       In order to
protect the interests of the insured, and to ensure their own
steady and healthy operation, insurance companies shall contribute
to an insurance protection fund through making deductions pursuant
to the provisions of the insurance supervision and control
authority.

The insurance protection fund shall be under centralized
management and used on the basis of overall planning and
arrangement.

Specific measures for control and use of the insurance
protection fund shall be formulated by the insurance supervision
and control authority.

Article 98       An
insurance company shall maintain a minimum solvency commensurate
with the size of its business. After deduction of the amount
of its actual liability from the value of its actual assets, the
balance shall not be less than the amount specified by the
insurance supervision and control authority. In the event that the
balance is less than the amount stipulated, its equity capital
shall be replenished to make up the difference.

Article 99       For those
insurance companies engaged in property insurance business, the
premiums retained for the current year shall not exceed four times
the combined total of its paid-up capital and its accumulated
fund.

Article 100      The liability
borne by an insurance company for each risk unit, that is, the
liability of an insurance company that might arise from the maximum
loss or damage caused by the occurrence of a single insured event,
shall not exceed 10% of the combined total of its paid-up capital
and its accumulated fund. Reinsurance shall be arranged for
the portion in excess of this sum.

Article 101      The method of
computation of an insurance company and its plan for managing huge
calamities in respect of a risk unit shall be submitted to the
insurance supervision and control authority for
approval.

Article 102      An insurance
company shall arrange reinsurance in accordance with the relevant
provisions specified by the insurance supervision and control
authority.

Article 103      Where an
insurance company needs to put through outward reinsurance
business, it shall give priority to insurance companies established
within the territory of the People’s Republic of China.

Article 104      The insurance
supervision and control authority shall have the authority to
restrict or prohibit insurance companies from handling outward
reinsurance business with insurance companies situated outside the
territory of the People’s Republic of China or from accepting
inward reinsurance business from outside the territory of the
People’s Republic of China.

Article 105      An insurance
company shall employ its funds in a steady manner, follow the
safety principle and ensure that its assets be maintained and
increased in value.

The employment of funds of an insurance company is limited to
bank deposits, bringing and selling of government and financial
bonds and other forms of fund stipulated by the State Council.

No funds of an insurance company may be employed for the
establishment of institutions dealing in bonds or securities or for
the establishment of enterprises other than insurance
companies.

The funds employed by an insurance company and the percentage of
the total amount, of funds employed in each specific item shall be
prescribed by the insurance supervision and control authority.

Article 106      An insurance
company and its employees shall not commit any of the following
acts in their business activities:

(1) deceiving the applicant, the insured or the beneficiary;

(2) concealing from the applicant material information relevant
to the insurance contract;

(3) preventing the applicant from fulfilling his obligation of
making a full and accurate disclosure as provided for in this Law
or inducing him not to fulfill such obligation;

(4) promising the applicant, the insured or the beneficiary to
give them premium rebates or other benefits which are not specified
in the insurance contract; or

(5) settling a false claim by purposely making up an insured
event that never happens, to obtain insured amount by fraudulent
means.

Chapter V

Supervision and Control of the Insurance Industry

Article 107      The insurance
clauses and premium rates for risks insured that have a bearing on
the interests of the public, for risks that are compulsorily
insured in accordance with law, and for the newly developed life
insurance shall be submitted to the insurance supervision and
control authority for examination and approval. When conducting
examination before giving approval, the insurance supervision and
control authority shall abide by the principle of protecting the
interests of the public and preventing unfair competition. The
scope of and specific measures for examination and approval shall
be formulated by the insurance supervision and control
authority.

The insurance clauses and premium rates for other insured risks
shall be submitted to the insurance supervision and control
authority for the record.

       Article
108      The insurance supervision and
control authority shall establish a sound indicator system for
supervision and control over the solvency of insurance companies,
in order to exercise supervision and control over the minimum
solvency of the companies.

Article 109      The insurance
supervision and control authority shall have the authority to
inspect the business situation, financial situation and employment
of funds situation of an insurance company, and shall have the
authority to request an insurance company to furnish relevant
written reports and information within a prescribed period of
time.

An insurance company shall accept supervision and inspection in
accordance with law.

The insurance supervision and control authority shall have the
power to inquire of financial institutions about the deposits of
insurance companies.

Article 110      Where an
insurance company fails to set aside or carry forward various
reserve funds, or fails to carry out reinsurance in accordance with
this Law, or seriously violates the provisions of this Law
governing the employment of funds, the insurance supervision and
control authority shall direct the insurance company to take the
following measures for rectification within a prescribed period of
time:

(1) setting aside or carrying forward various reserve funds
in accordance with law;

(2) carrying out reinsurance in accordance with law;

(3) correcting acts of illegally employing the funds; or

(4) replacing its person in charge and relevant management
personnel involved.

Article 111      Pursuant to the
stipulations of the preceding article, in the event that an
insurance company fails to correct the situation within the
prescribed period, after it has been directed to do so by a
decision of rectification of the insurance supervision and control
authority, the latter department shall then select insurance
professionals and designate relevant personnel from the insurance
company to form a rectification task force to carry out the
rectification work of the said insurance company.

The decision of rectification shall be publicized, giving the
name of the insurance company referred to, the reason for
rectification, the composition of the rectification task force as
well the period of rectification.

Article 112      In the course of
the rectification, the rectification task force shall have the
authority to supervise the daily business operation of the said
insurance company. The person in charge and relevant personnel
of the insurance company shall perform their respective functions
under the supervision of the rectification task force.

Article 113      In the course of
the rectification, the existing business of the insurance company
may be continued. The insurance supervision and control authority
shall, however, have the authority to stop the insurance company
from developing new business, or to suspend part of its business,
or to make adjustment in employment of its funds.

Article 114      Where an
insurance company under rectification has, subsequent to the
rectification, corrected its violations of this Law and has resumed
its normal business operations, the rectification shall cease after
the report submitted by the rectification task force is approved by
the insurance supervision and control authority.

Article 115      Where an
insurance company violates the provisions of this Law and impairs
the public interest of society, by which it might seriously
jeopardize or has already jeopardized its solvency, the insurance
supervision and control authority may implement a take-over of the
said insurance company.

The purpose of such a take-over is to adopt necessary measures
to protect the interests of the insured and resume the normal
operations of the insurance company. The credit-debt situation
of the insurance company taken over shall not change as a result of
the take-over.

Article 116      The composition
of the take-over task force and the implementing procedure of the
take-over shall be determined and publicized by the insurance
supervision and control authority.

Article 117      Where the term
of the take-over expires, the insurance supervision and control
authority may determine to extend it. However, the maximum
term of the take-over may not exceed two years.

Article 118      Where the term
of the take-over expires and the insurance company has resumed its
normal operational capacity, the insurance supervision and control
authority may determine to terminate the take-over.

     Where the take-over task force
deems that the assets of the insurance company taken over are no
longer sufficient to meet its liabilities, the take-over task force
may, with the approval of the insurance supervision and control
authority, apply to the People’s Court to have the said insurance
company declared bankrupt in accordance with law.

Article 119      An insurance
company shall submit its business reports, financial and accounting
reports and related Statements for the preceding year to the
insurance supervision and control authority within three months
after the end of each fiscal year, and publicize such reports and
statements in accordance with law.

Article 120      An insurance
company shall submit to the insurance supervision and control
authority its business statistics Statements for the preceding
month by the end of each month.

Article 121      Insurance
companies shall appoint and employ actuarial professionals
recognized by the insurance supervision and control authority and
establish an actuarial report system.

Article 122      Insurance
companies shall see to it that matters of insurance business are
truthfully recorded in the business reports, financial and
accounting reports, actuarial reports and other relevant
statements, documents and materials and that there are no false
records, misleading statements or major omissions.

Article 123      The insurer and
the insured may employ independent loss adjusting organizations
established in accordance with law or experts having statutory
qualifications, to carry out adjustments and appraisals as regards
losses and damages resulting from the occurrence of insured
events.

The loss adjusting organizations or experts employed according
to law to carry out adjustments and appraisals of insured events
shall conduct their business impartially in accordance with law.
Where losses or damages are caused to the insurer or the insured
intentionally or by mistake, the organizations or experts shall
bear the liability to pay compensation in accordance with law.

The loss adjusting organizations employed according to law to
carry out adjustments and appraisals of insured events shall
collect charges in accordance with the provisions of laws,
administrative rules and regulations.

Article 124      An insurance
company shall properly keep its complete account books, original
vouchers as well as relevant material with respect to its business
operations.

The accounting books, original vouchers and other relevant
material stipulated in the preceding paragraph should be kept for
not less than 10 years beginning from the date of the termination
of the contract.

Chapter VI

Insurance Agents and Insurance Brokers

Article 125      An insurance
agent is an entity or individual that has been authorized by an
insurer to transact insurance business on its behalf within the
scope of authorization and gets in return agent’s handling fees to
be collected from the insurer.

Article 126      An insurance
broker is an entity that, in the interest of the applicant,
provides intermediary services between the applicant and the
insurer for the conclusion of an insurance contract and receives a
commission therefor in accordance with law.

Article 127      Where the
insurer authorizes an insurance agent to transact insurance
business on its behalf, it shall sign an agreement to such an
effect with the insurance agent, in which the rights and
obligations of both parties and other agency matters are agreed
upon according to law.

Article 128      The insurer
shall be liable for the acts of its agents when they transact
insurance business on behalf of the insurer in pursuance of the
authorization.

Where an insurance agent, when transacting insurance business on
behalf of the insurer, oversteps the authority delegated and the
applicant has good reason to believe that it has the authority of
agency, and has concluded an insurance contract with it, it shall
bear the insured liability. However, the insurer may, in accordance
with law, investigate the responsibility of the insurance agent
that oversteps the authority delegated to it.

Article 129      When transacting
life insurance business, no individual insurance agents may accept
authorization from two or more insurers concurrently.

Article 130      An insurance
broker shall be liable for loss or damages caused to the applicant
or the insured due to his fault in the course of transacting
insurance business.

   Article
131       When transacting insurance
business, no insurance agents or brokers may commit any of the
following acts:

       (1)  
deceiving the insurer, applicant, insured or
beneficiary;

       (2)  
concealing material information with respect to the insurance
contract;

       (3)  
preventing the applicant from fulfilling his obligation of making a
full and accurate disclosure, or inducing the applicant not to
fulfill his obligation of making a full and accurate
disclosure;

       (4)  
promising to give the applicant, the insured or the beneficiary
benefits other than the ones provided for in the insurance
contract; or

(5)   by taking advantage of the administrative
powers and position, or of the occupational facilities, or by
employing other illegitimate means, coercing or inducing the
applicant to enter into an insurance contract.

Article 132      An insurance
agent or an insurance broker shall meet the qualification
requirements prescribed by the insurance supervision and control
authority and shall obtain an insurance agent license or an
insurance broker license, issued by the insurance supervision and
control authority, with which to register with the industry and
commerce administration authorities, get a business license
therefrom and pay a guarantee deposit or buy insurance to cover
professional liability.

Article 133      An insurance
agent or an insurance broker shall have his own business site, set
up special account book for keeping revenue and expenditure in
connection with the business of the insurance agent or the
insurance broker, and shall be subject to the supervision of the
insurance supervision and control authority.

Article 134      The service fees
for insurance agents and commissions for insurance brokers shall
only be paid to the legally qualified insurance agents and
insurance brokers, not to any other persons.

Article 135      An insurance
company shall keep a register of its insurance agents.

Article 136      Insurance
companies shall improve training and management of the insurance
agents to enhance their professional ethics and competence, and
they may not instigate or mislead them to conduct or into
conducting activities in violation of the obligation of good
faith.    

Article 137      The provisions
of Articles 109 and 119 of this Law shall apply to insurance agents
and insurance brokers.

Chapter VII

Legal Liabilities

Article 138      An applicant, an
insured or a beneficiary, who commits insurance fraud by means of
any of the following acts, which constitutes a crime, shall be
investigated for his criminal responsibility in accordance with
law:

(1)   in the case of the applicant, deliberately
falsifying the subject matter of the insurance and swindling the
insured amount out of the insurer;

       (2)  
falsely alleging the occurrence of an insured event which in fact
has not occurred, and swindling the insured amount out of the
insurer;

       (3)  
deliberately causing the occurrence of an event which leads to
property damage and obtaining the insured amount by fraudulent
means;

       (4)  
deliberately causing the occurrence of such insured events in the
insurance of the person as death of the insured, injury and
disability, or illness and obtaining the insured amount by
fraudulent means; whereupon an insurance claim is fraudulently
made; or

       (5)  
forging or tampering with certifications, data or other evidence
related to the occurrence of the insured event, or abetting,
instigating or bribing others to adduce false evidence, data, or
other proofs, or cooking up the cause of the occurrence of the
insured event or overstating the extent of loss, thereby obtaining
the insured amount by fraudulent means.

       Administrative
sanctions shall be imposed in accordance with the relevant
regulations of the State if the circumstances attending any of the
acts listed in the preceding paragraphs are minor and do not
constitute a crime.

   Article
139       Where an insurance company
or one of its staff members, when transacting insurance business,
conceals material information with respect to the insurance
contract, and deceives the applicant, the insured or the
beneficiary, or where the insurance company refuses to fulfill its
obligation agreed to in the insurance contract to pay indemnity or
insurance benefits, which constitute a crime, the insurance company
shall be investigated for criminal responsibility in accordance
with law. If the violation is not serious enough to constitute a
crime, the insurance supervision and control authority shall impose
on the insurance company a fine of not less than 50,000 yuan but
not more than 300,000 yuan; the staff member who violates the law
shall be fined not less than 20,000 yuan but not more than 100,000
yuan; and if the circumstances are serious, restrictions shall be
imposed on the business scope of the insurance company or the
company shall be instructed to cease accepting new insurance
business.

 An insurance company or one of its staff members that
prevents the applicant from fulfilling his obligation of making a
full and accurate disclosure, or induces the applicant not to
fulfill his obligation of making a full and accurate disclosure, or
promises to give unlawful premium rebates or other benefits to the
applicant, the insured or the beneficiary, which constitutes a
crime, shall be investigated for criminal responsibility in
accordance with law; if the violation is not serious enough to
constitute a crime, the insurance company shall be instructed by
the insurance supervision and control authority to make
rectification and shall be fined not less than 50,000 yuan but not
more than 300,000 yuan; the staff member who violates the law shall
be fined not less than 20,000 yuan but not more than 100,000 yuan;
and if the circumstances are serious, restrictions shall be imposed
on the business scope of the insurance company or the company shall
be instructed to cease accepting new insurance business.

Article 140      Where an
insurance agent or an insurance broker deceives the insurer, the
applicant, the insured or the beneficiary in his business
operations, which constitutes a crime, the insurance agent or the
insurance broker shall be investigated for criminal responsibility
in accordance with law; if the violation is not serious constitute
a crime, the insurance supervision and control authority shall
instruct him to make rectification and impose upon him a fine of
not less than 50,000 yuan but not more than 300,000 yuan; and if
the circumstances are serious, the business license of the
insurance agent or the insurance broker shall be
revoked.

Article 141      Where an
insurance company or one of its staff members deliberately
fabricates the occurrence of an insured event and falsely settles a
fictitious claim, thereby swindling the insured amount, which
constitutes a crime, the insurance company or the staff member
shall be investigated for criminal responsibility in accordance
with law.

Article 142      Anyone who, in
violation of the provisions of this law, establishes an insurance
company or illegally engages in commercial insurance business shall
be outlawed by the insurance supervision and control authority; if
the violation constitutes a crime, he shall be investigated for
criminal responsibility in accordance with law; if the
circumstances are not serious enough to constitute a crime, his
unlawful gains shall be confiscated by the insurance supervision
and control authority, and he shall be fined not less than the
amount of, but not more than five times the amount of, the unlawful
gains; and if there are no unlawful gains or the amount of the
unlawful gains is less than 200,000 yuan, he shall be fined not
less than 200,000 yuan but not more than one million
yuan.

Article 143      Where an
insurance company, in violation of the provisions of this law,
engages in insurance business beyond the scope of business approved
or concurrently engages in the business other than that provided
for by this Law, or other laws, or administrative rules and
regulations, which constitutes a crime, it shall be investigate for
criminal responsibility in accordance with law; if the
circumstances are not serious enough to constitute a crime, the
insurance supervision and control authority shall instruct the
insurance company to make rectification and to return the premiums
collected, shall confiscate its unlawful gains and shall impose on
it a fine of not less than one time the amount of, but not more
than five times the amount of, its unlawful gains; and if there are
no unlawful gains or the amount of the unlawful gains is less than
100,000 yuan, it shall be fined not less than 100,000 yuan but not
more than 500,000 yuan; and if the insurance company fails to make
rectification within the specified time limit or if the
consequences are serious, the said authority shall instruct it to
suspend business operation for rectification or revoke its
insurance business license.

Article 144      Whoever, in
violation of the provisions of this Law and without being approved,
arbitrarily makes changes in the name, articles of association,
registered capital of the insurance company, its business site or
that of its branches, shall be subject to the direction of the
insurance supervision and control authority for correction and the
imposition of a fine of not less than 10,000 yuan but not more than
100,000 yuan.

Article 145      Whoever, in
violation of the provisions of this Law, commits any of the
following acts, shall be subject to the direction of the insurance
supervision and control authority for correction and the imposition
of a fine of not less than 50,000 yuan but not more than 300,000
yuan; where the circumstances are severe, the insurance supervision
and control authority may restrict the scope of business, direct
the company to cease accepting new business or revoke the insurance
business license:

(1) failing to set up a guarantee fund as required or using the
guarantee fund in violation of the provisions;

(2) failing to set aside or carry forward all the liability
reserve funds, or set aside an outstanding loss reserve, as
required;

(3) failing to contribute to the insurance guarantee fund or the
accumulated reserve fund as required;

(4) failing to effect outward reinsurance as required;

(5) employing the funds of the insurance company in violation of
the provisions;

(6) establishing branches or representative offices without
approval;

(7) carrying out a division or a merger of the company without
approval; or

(8) failing to submit for examination and approval the insurance
clauses and premium rates for risks, as required.

Article 146      Whoever, in
violation of the provisions of this Law, commits either of the
following acts, shall be subject to the direction of the insurance
supervision and control authority to correct the wrong, and the
imposition of a fine of not less than 10,000 but nor more than
100,000 yuan, if he/she fails to correct the wrong within a
prescribed period of time:

(1) failing to submit relevant reports, statements, documents
and information as required; or

(2) failing to submit for the record the insurance clauses and
premium rates for risks, as required.

Article 147      Where an
insurance company, in violation of the provisions of this Law,
commits one of the following acts, which constitutes a crime, it
shall be investigated for criminal responsibility in accordance
with law; if the circumstances are not serious enough to constitute
a crime, the insurance supervision and control authority shall
instruct the insurance company to make rectification and shall
impose on it a fine of not less than 100,000 yuan but not more than
500,000 yuan; and if the circumstances are serious, the authority
may impose restrictions on its scope of business, instruct it to
cease accepting new insurance business or revoke its insurance
business license:

       (1) submitting
false reports, statements, documents and information; or

       (2) refusing to
accept or hindering inspection and supervision conducted in
accordance with law.

Article 148      Whoever, in
violation of the provisions of this Law, commits any of the
following acts, shall be subject to the direction of the insurance
supervision and control authority to correct the wrong, and the
imposition of a fine of not less than 50,000 yuan but not more than
300,000 yuan:

(1) underwriting insurance for the subject matter thereof in
excess of its insurable value, where the circumstances are serious;
or

(2) underwriting life insurance where death is the prerequisite
for the payment of the insurance benefits, for those who have no
capacity for civil acts.

Article 149      Any unit that,
in violation of the provisions of this Law and without the license
for insurance agent business or insurance brokerage business,
illegally engages in insurance agent business or insurance
brokerage business shall be outlawed by the insurance supervision
and control authority; if the violation constitutes a crime, it
shall be investigated for criminal responsibility in accordance
with law; if the circumstances are not serious enough to constitute
a crime, the said authority shall confiscate its unlawful gains and
impose on it a fine of not less than the amount of, but not more
than five times the amount of, the unlawful gains; and if there are
no unlawful gains or the amount of the unlawful gains is less than
100,000 yuan, it shall be fined not less than 100,000 yuan but not
more than 500,000 yuan.

Article 150      With regard to
the senior managers and other persons of an insurance company who
are directly responsible for a violation of the provisions of this
Law, which is not serious enough to constitute a crime, the
insurance supervision and control authority may, on the merits of
each case, give a disciplinary warning, instruct to have them
replaced, or impose a fine of not less than 20,000 yuan but not
more than 100,000 yuan.

Article 151      Whoever, in
violation of the provisions this Law, causes damage or loss to
others, shall bear civil liability therefor in accordance with
law.

Article 152      An official who
approves the application for establishment of an insurance company
which does not meet the requirements stipulated by this Law, or
approves the application for insurance agent or insurance broker
which does not meet the requirements stipulated by this Law, or
commits other acts by abusing their powers or neglecting their
duties, which constitutes a crime, shall be investigated for
criminal responsibility in accordance with law; and if the
violation is not serious enough to constitute a crime, he shall be
given administrative sanctions in accordance with law.

Chapter VIII

Supplementary Provisions

Article 153      The Maritime
Code of the People’s Republic of China shall be applicable to
marine insurance. For matters where the Maritime Code does not
specify, this Law shall apply.

Article 154      This Law shall
be applicable to Chinese-foreign equity insurance companies, wholly
foreign-funded insurance companies and branches of foreign
insurance companies; where other laws and administrative rules and
regulations provide otherwise, the provisions there shall
prevail.

Article 155      The State
supports the development of insurance businesses, which facilitate
agricultural production. Agricultural insurance shall be
governed by other laws and administrative rules and
regulations.

Article 156      Insurance
institutions not in the nature of insurance companies as provided
by this Law shall be governed by other laws and administrative
rules and regulations.

Article 157      Insurance
companies established prior to the implementation of this Law upon
approval in accordance with the regulations of the State Council
shall continue to exist. Those which do not fully meet the
requirements stipulated in this Law shall satisfy the requirements
within a prescribed period of time. Specific measures shall be
formulated by the State Council.

Article 158      This Law shall
go into effect as of October 1, 1995.

(Legislative Affairs Commission of the Standing Committee of the
National People’s Congress)

Trade Union Law of the People’s Republic of China

(Adopted at the Fifth Session of the Seventh National People’s
Congress on April 3, 1992 and promulgated by Order No.57 of the
President of the People’s Republic of China on April 3, 1992;
amended in accordance with the Decision on Amending the Trade Union
Law of the People’s Republic of China adopted at the 24th Meeting
of the Standing Committee of the Ninth National People’s Congress
on October 27, 2001)  

Contents 

Chapter I      General Provisions 

Chapter II     Trade Union Organizations
 

Chapter III    Rights and Obligations of Trade Unions
 

Chapter IV     Basic-level Trade Union
Organizations 

Chapter V      Trade Union Funds and
Property 

Chapter VI     Legal Liabilities 

Chapter VII    Supplementary Provisions 

Chapter I  General Provisions 

Article 1 This Law is enacted in accordance with the
Constitution of the People’s Republic of China with a view to
ensuring the status of trade unions in the political, economic and
social life of the State, defining their rights and obligations and
bringing into play their role in the socialist modernization
drive. 

Article 2 Trade unions are mass organizations of the
working class formed by the workers and staff members on a
voluntary basis. 

The All-China Federation of Trade Unions and all the trade union
organizations under it represent the interests of the workers and
staff members and safeguard the legitimate rights and interests of
the workers and staff members according to law. 

Article 3 All manual and mental workers in enterprises,
institutions and government departments within the territory of
China who rely on wages or salaries as their main source of income,
irrespective of their nationality, race, sex, occupation, religious
belief or educational background, have the right to organize or
join trade unions according to law. No organizations or individuals
shall obstruct or restrict them. 

Article 4 Trade unions shall observe and safeguard the
Constitution, take it as the fundamental criterion for their
activities, take economic development as the central task, uphold
the socialist road, the people’s democratic dictatorship,
leadership by the Communist Party of China, and Marxist-Leninism,
Mao Zedong Thought and Deng Xiaoping Theory, persevere in reform
and the open policy, and conduct their work independently in
accordance with the Constitution of trade unions.  

The National Congress of Trade Unions formulates or amends the
Constitution of Trade Unions of the People’s Republic of China,
which shall not contravene the Constitution of the People’s
Republic of China or other laws. 

The State protects the legitimate rights and interests of trade
unions from violation. 

Article 5 Trade unions shall organize and conduct education
among workers and staff members in order that they shall, in
accordance with the provisions of the Constitution of the People’s
Republic of China and other laws, give play to their role as
masters of the country and participate in various ways and forms in
the administration of State affairs, management of economic and
cultural undertakings and handling of social affairs; trade unions
shall assist the people’s governments in their work and safeguard
the socialist State power under the people’s democratic
dictatorship led by the working class and based on the alliance of
workers and peasants. 

Article 6 The basic duties and functions of trade unions
are to safeguard the legitimate rights and interests of workers and
staff members. While protecting the overall interests of the entire
Chinese people, trade unions shall represent and safeguard the
legitimate rights and interests of workers and staff
members. 

Trade unions shall coordinate labor relations and safeguard the
rights and interests enjoyed in work by the workers and staff
members of enterprises through consultation at an equal footing and
the collective contract system. 

Trade unions shall, in accordance with the provisions of laws
and through the congresses of the workers and staff members or
other forms, organize the workers and staff members to participate
in democratic decision-making and management of and democratic
supervision over their own work units. 

Trade unions shall maintain close ties with workers and staff
members, solicit and voice their opinions and demands, show concern
for their everyday life, help them solve their difficulties and
serve them wholeheartedly. 

Article 7 Trade unions shall mobilize and organize workers
and staff members to take an active part in economic development
and to strive to fulfill their tasks in production and other work.
Trade unions shall educate workers and staff members constantly in
the need to improve their ideological, ethical, technical,
professional, scientific and cultural qualities, in order to build
a contingent team of well-educated and self-disciplined workers and
staff members with lofty ideals and moral integrity. 

Article 8 The All-China Federation of Trade Unions shall,
on the principle of independence, equality, mutual respect and
non-interference in each other’s internal affairs, strengthen
friendly and cooperative relations with trade union organizations
of other countries. 

Chapter II  Trade Union Organizations 

Article 9 Trade union organizations at various levels shall
be established according to the principle of democratic
centralism. 

Trade union committees at various levels shall be democratically
elected at members’ assemblies or members’ congresses. No close
relatives of the chief members of an enterprise may be candidates
for members of the basic-level trade union committee of the
enterprise. 

Trade union committees at various levels shall be accountable,
and report their work, to the members’ assemblies or members’
congresses at their respective levels and be subjected to their
supervision as well. 

Trade union members’ assemblies or congresses shall have the
right to remove or recall the representatives or members of trade
union committees they elected. 

A trade union organization at a higher level shall exercise
leadership over a trade union organization at a lower
level. 

Article 10 A basic-level trade union committee shall be set up
in an enterprise, an institution or a government department with a
membership of twenty-five or more; where the membership is less
than twenty-five, a basic-level trade union committee may be
separately set up, or a basic-level trade union committee may be
set up jointly by the members in two or more work units, or an
organizer may be elected, to organize the members in various
activities. Where female workers and staff members are relatively
large in number, a trade union committee for female workers and
staff members may be set up, which shall carry out its work under
the leadership of the trade union at the corresponding level; where
they are relatively small in number, there may be a member in
charge of the female workers and staff members on a trade union
committee. 

In townships, towns or in urban neighborhoods, where workers and
staff members of enterprises are relatively large in number, joint
basic-level trade union federations may be set up. 

Local trade union federations shall be established in places at
or above the county level. 

Industrial trade unions may be formed, when needed, at national
or local levels for a single industry or several industries of a
similar nature. 

The All-China Federation of Trade Unions shall be established as
the unified national organization. 

Article 11 The establishment of basic-level trade union
organizations, local trade union federations, and national or local
industrial trade union organizations shall be submitted to the
trade union organization at the next higher level for
approval. 

Trade union organizations at higher levels may dispatch their
members to assist and guide the workers and staff members of
enterprises to set up their trade unions, no units or individuals
may obstruct the effort. 

Article 12 No organizations or individuals may dissolve or
merge trade union organizations at will. 

A basic-level trade union organization shall be dissolved
accordingly when the enterprise or institution or government
department to which it belongs is terminated or dissolved, and the
matter shall be reported to the trade union organization at the
next higher level. 

The membership of the members of the dissolved trade union
organization specified in the provisions of the preceding paragraph
may be retained, and the specific administrative measures in this
regard shall be formulated by the All-China Federation of Trade
Unions. 

Article 13 For a trade union in an enterprise or
institution with two hundred and more workers and staff members,
there may be a full-time chairman. The number of the full-time
functionaries of a trade union shall be determined by the trade
union together with the enterprise or institution through
consultation. 

Article 14 The All-China Federation of Trade Unions, a
local trade union federation or an industrial trade union enjoys
the status of a legal person in the capacity of a public
organization. 

A basic-level trade union organization, which has acquired the
qualifications of a legal person as prescribed in the General
Principles of the Civil Law, shall, in accordance with law, be
granted the status of a legal person as a public
organization. 

Article 15 The term of office of the basic-level trade union
committee is three or five years. The term of office of the
committees of the local trade union federations at different levels
and of the industrial trade union organizations is five
years. 

Article 16 Basic-level trade union committees shall convene
members’ assemblies or members’ congresses at regular intervals, at
which major issues related to the work of trade union organizations
shall be discussed and decided. Upon the proposal made by a
basic-level trade union committee or over one-third of the trade
union members, a provisional members’ assembly or members’ congress
may be convened. 

Article 17 No trade union chairman or vice-chairman may be
arbitrarily transferred to another unit before the expiration of
his tenure of office. When such a transfer is prompted by the need
of work, it shall be subject to approval by the trade union
committee at the corresponding level and the trade union at the
next higher level. 

The recall of the chairman or vice-chairman of a trade union
must be discussed at the members’ assembly or members’ congress,
and no such recall shall be made without approval by more than half
of all the members at the assembly or congress. 

Article 18 The term of labor contract for the full-time
chairman, vice-chairman or member of a basic-level trade union
shall be automatically extended from the date he assumes the
office, and the term extended shall be equal to the term of office;
if the term of labor contract left to be served by a chairman,
vice-chairman or member is shorter than the term of office from the
date he the assumes the office, the term of the labor contract
shall be automatically extended to the expiration of the term of
office, except that he commits serious mistakes during the term of
office or reaches the statutory age for retirement. 

Chapter III Rights and Obligations of Trade
Unions 

Article 19 If an enterprise or institution acts in contravention
to the system of the congress of workers and staff members or other
systems of democratic management, the trade union shall have the
right to demand rectification so as to ensure the workers and staff
members the exercise of their right in democratic management as
prescribed by law. 

For matters which should be submitted to the assembly or
congress of workers and staff members for deliberation, adoption or
decision, as prescribed by laws and regulations, enterprises or
institutions shall do so accordingly. 

Article 20 Trade unions shall assist and guide workers and
staff members in signing labor contracts with enterprises or
institutions managed as enterprises. 

Trade unions shall, on behalf of the workers and staff members,
make equal consultations and sign collective contracts with
enterprises or institutions under enterprise-style
management.  The draft collective contracts shall be submitted
to the congresses of the workers and staff members or all the
workers and staff members for deliberation and approval. 

When trade unions sign collective contracts, trade unions at
higher levels shall afford support and assistance to
them. 

If an enterprise infringes upon labor rights and interests of
the workers and staff members in violation of the collective
contract, the trade union may, according to law, demand the
enterprise to assume the responsibilities for its acts; if the
disputes arising from the performance of the collective contract
fail to be settled through consultations, the trade union may
submit them to the labor dispute arbitration bodies for
arbitration; if the arbitration bodies refuse to accept the case or
the trade union is not satisfied with the arbitral ruling, 
the trade union may bring the case before a People’s
Court. 

Article 21 If an enterprise or institution punishes a worker or
staff member in a manner that the trade union considers improper,
the trade union shall have the right to advance its
opinion. 

Before unilaterally deciding to dissolve the labor contract with
a worker or staff member, the enterprise shall inform the trade
union of the reasons why; and, if the trade union considers that
the enterprise violates laws, regulations or the contract in
question and demands that it reconsider the matter, the enterprise
shall study the opinion of the trade union, and inform the trade
union of its final decision in writing. 

Where a worker or staff member believes that the enterprise
infringes upon his labor rights and interests and therefore applies
for labor dispute arbitration or brings the case before a People’s
Court, the trade union shall give him support and
assistance. 

Article 22 If an enterprise or institution, in violation of
laws and regulations on labor, infringes upon the labor rights and
interests of the workers and staff members in any of the following
ways, the trade union shall, on behalf of the workers and staff
members, make representations to the enterprise or institution and
demand that it take measures for rectification; the enterprise or
institution shall review and handle the matter, and give a reply to
the trade union; if the enterprise or institution refuses to make
rectification, the trade union may apply to the local people’s
government for a decision according to law: 

(1) embezzling part of the wages of the workers and staff
members; 

(2) failing to provide occupational safety and health
conditions; 

(3) arbitrarily extending working hours; 

(4) infringing upon the special rights and interests of female
workers and staff members as well as the minor workers;
or 

(5) seriously infringing upon other labor rights and interests
of the workers and staff members. 

Article 23 Trade unions shall, in accordance with State
regulations, see to it that the working conditions and occupational
safety and health facilities for enterprises under construction or
expansion and for technological transformation projects are
designed, built and put into operation or use simultaneously with
the main parts of projects. The enterprises or the competent
departments shall give serious consideration to the opinions put
forth by the trade unions, and inform the trade unions of the
results of their consideration in writing. 

Article 24 When the trade union finds that the enterprise
gives a command contrary to the established rules and compels
workers to operate under unsafe conditions, or when major hidden
dangers and occupational hazards are found in the course of
production, the trade union shall have the right to put forward
proposals for a solution, and the enterprise shall, without delay,
consider the proposals and give a reply to the trade union. Where
the very lives of the workers and staff members are found to be in
danger, the trade union shall have the right to make a proposal to
the enterprise that a withdrawal of the workers and staff members
from the dangerous site be organized, and the enterprise shall make
a decision promptly. 

Article 25 Trade unions shall have the right to investigate
into the infringements upon the legitimate rights and interests of
the workers and staff members by enterprises or institutions, and
the units concerned shall give them assistance. 

Article 26 Trade unions shall participate in investigation
into and settlement of job-related accidents causing death or
injuries to workers and staff members and in investigation into and
solution of other problems seriously endangering the health of
workers and staff members. Trade unions shall make proposals for
solutions to the departments concerned, and have the right to
demand that the persons who are directly in charge and the other
persons who are responsible be investigated for their liabilities.
The proposals put forth by trade unions shall be considered and
replies be given without delay. 

Article 27 In case of work-stoppage or slow-down strike in
an enterprise or institution, the trade union shall, on behalf of
the workers and staff members, hold consultation with the
enterprise or institution or the parties concerned, present the
opinions and demands of the workers and staff members, and put
forth proposals for solutions. With respect to the reasonable
demands made by the workers and staff members, the enterprise or
institution shall try to satisfy them. The trade union shall assist
the enterprise or institution in properly dealing with the matter
so as to help restore the normal order of production and other work
as soon as possible. 

Article 28 Trade unions shall participate in the
conciliation of labor disputes in enterprises. 

Local labor dispute arbitration bodies shall include
representatives of trade unions at the corresponding
levels. 

Article 29 Trade union federations at or above the county
level may provide legal services to their affiliated trade unions
and workers and staff members. 

Article 30 Trade unions shall assist enterprises,
institutions and government departments in providing adequate
collective welfare services to the workers and staff members and in
properly dealing with matters concerning wages, occupational safety
and health as well as social insurance. 

Article 31 Trade unions shall, in conjunction with
enterprises and institutions, conduct education among the workers
and staff members in the need to do their work and protect the
property of the enterprises and the State in the attitude of
masters of the country, mobilize the masses of workers and staff
members in activities to make rational proposals and technical
renovations and in sparetime cultural and technical studies and
vocational training, and also in recreational and sports
activities. 

Article 32 Entrusted by the government, trade unions shall,
together with relevant departments, do a good job of choosing,
commending, cultivating and administering model workers and
advanced producers (workers). 

Article 33 When organizing people to draft or revise laws,
regulations or rules directly related to the immediate interests of
workers and staff members, the government departments shall listen
to the opinions of trade unions. 

When working out plans for national economic and social
development, the people’s governments at or above the county level
shall, where major questions related to the interests of workers
and staff members are concerned, listen to the opinions of the
trade unions at the corresponding levels. 

When studying and working out policies and measures on
employment, wages, occupational safety and health, social
insurance, and other questions related to the immediate interests
of workers and staff members, the people’s governments at or above
the county level and their relevant departments shall invite the
trade unions at the corresponding levels to take part in the study
and listen to their opinions. 

Article 34 The people’s governments at or above the county
level may, through meetings or by other appropriate ways, inform
the trade unions at the corresponding levels of their important
work programmes and administrative measures related to trade union
work, analyse and settle the problems as reflected in the opinions
and aspirations of the masses of the workers and staff members
conveyed by trade unions. 

Administrative departments for labor under the people’s
governments at various levels shall, together with the trade unions
at the corresponding levels and the representatives of enterprises,
establish trilateral consultation mechanisms on labor relations and
jointly analyse and settle major issues regarding labor
relations. 

Chapter IV Basic-level Trade Union
Organizations 

Article 35 In a State-owned enterprise, the congress of the
workers and staff members is the basic form of democratic
management of the enterprise and the organ by which the workers and
staff members exercise their right to democratic management, and
discharges its functions and powers in accordance with the
provisions of laws. 

The trade union committee of the State-owned enterprise is the
working body of the congress of the workers and staff members and
takes care of the day-to-day work of the congress, checks and
supervises the implementation of the resolutions adopted by the
congress. 

Article 36 The trade union committee of a collectively
owned enterprise shall support and organize the participation of
the workers and staff members in democratic management and
democratic supervision, and defend their rights in electing,
removing managerial personnel and deciding on major questions
concerning operation and management. 

Article 37 Trade union committees of enterprises or
institutions other than the ones specified in Articles 35 and 36 of
this Law shall, in accordance with the provisions of laws, organize
the participation of the workers and staff members in democratic
management of the enterprises and institutions by ways appropriate
to the enterprises or institutions. 

Article 38 When discussing major issues on operation,
management and development, the enterprise or institution shall
listen to the opinions of trade union. The trade union in an
enterprise or institution shall have its representative(s)
attending any meetings held by the enterprise or institution to
discuss matters on wages, welfare, occupational safety and health,
social insurance and other questions related to the immediate
interests of the workers and staff members. 

An enterprise or institution shall support the trade union in
carrying out its activities in accordance with law, and the trade
union shall support the enterprise or institution in exercising its
power of operation and management in accordance with law. 

Article 39 Election of the representative(s) from among the
workers and staff members to the board of directors or the board of
supervisors of a company shall be conducted in accordance with the
relevant provisions of the Company Law. 

Article 40 Basic-level trade union committees shall hold
meetings or organize activities for workers and staff members
outside production- or work-hours; when such meetings or activities
are to take up production- or work-hours, they shall seek prior
consent from the enterprises or institutions. 

Part-time committee members of basic-level trade unions shall
receive their normal wages, and their other benefits shall remain
unaffected if the meetings they attend or the trade union work they
do during production- or work-hours take up not more than three
working days every month. 

Article 41 Full-time functionaries of trade union committees in
enterprises, institutions and government departments shall have
their wages, bonuses and subsidies paid by the units to which they
belong. They shall enjoy the same social insurance and other
welfare benefits as the other workers and staff members of their
units.  

Chapter V Trade Union Funds and Property 

Article 42 The sources of trade union funds are as
follows: 

(1) membership dues paid by union members; 

(2) contribution, equivalent to two percent of the monthly
payroll of all the workers and staff members, allocated by the
enterprise, institution or government department where the trade
union is established; 

(3) incomes derived from enterprises and undertakings run by
trade unions; 

(4) subsidies provided by the people’s governments;
and 

(5) other incomes. 

The contribution allocated by the enterprises or institutions,
as specified in Subparagraph (2) of the preceding paragraph, shall
be listed and allocated before tax. 

Trade union funds shall mainly be used in the service of the
workers and staff members and for activities sponsored by trade
unions. Measures for the use of trade union funds shall be
formulated by the All-China Federation of Trade Unions. 

Article 43 Where an enterprise or institution delays allocating
or refuses to allocate the contribution to the trade union without
justifiable reasons, the basic-level trade union or the trade union
at a higher level may apply to the local People’s Court for an
order for payment; if it refuses to obey the order, the trade union
may, in accordance with law, apply to the People’s Court for
compulsory enforcement. 

Article 44 Trade unions shall establish budgets, final
accounts and auditing and supervisory systems based on the
principle of financial autonomy. 

For trade unions at various levels, auditing commissions shall
be set up. 

Trade unions at various levels shall subject their incomes and
expenditures to examination by the auditing commissions at the
corresponding levels, report them regularly to the members’
assemblies or congresses and receive their supervision.  The
trade union members’ assemblies or congresses shall have the right
to express their opinions on the use of funds. 

The use of trade union funds shall be subject to State
supervision according to law. 

Article 45 People’s governments at various levels and
enterprises, institutions and government departments shall make
available such necessary material means as facilities and places
for trade unions to function and conduct their
activities. 

Article 46 No trade unions’ property, funds, or immovable
property allocated by the State may be embezzled, diverted to other
uses or arbitrarily disposed of, by any organization or
individual. 

Article 47 No enterprises or institutions run by trade
unions to serve the workers and staff members may have their
affiliation changed arbitrarily.  

Article 48 Retired trade union functionaries at or above
the county level shall enjoy the same treatment as retired
functionaries of government departments do.  

Chapter VI  Legal Liabilities 

Article 49 Where their legitimate rights and interests are
infringed upon in violation of the provisions of this Law, the
trade unions shall have the right to submit the matter to people’s
governments or relevant departments for solution, or to bring the
case before a People’s Court. 

Article 50 Any organization or individual that, in
violation of the provisions of Articles 3 and 11 of this Law,
obstructs the workers’ and staff members’ from joining or
organizing of trade unions in accordance with law or the effort
made by trade unions at higher levels to assist and guide the
workers and staff members in establishing trade unions shall be
ordered to by the administrative department for labor to make
rectification; if it refuses to do so, the said department may
apply to the people’s government at or above the county level for
solution; where grave consequences are caused as a result of the
use of such means as violence and threat in obstruction and thus a
crime is constituted, criminal responsibility shall be investigated
according to law. 

Article 51 Any organization that, in violation of the
provisions of this Law, retaliate the functionaries of trade unions
who perform their duties and functions according to law by
transferring them to other posts without justifiable reasons shall
be ordered by the administrative department for labor to rectify
and reinstate the functionaries; if losses are caused therefrom,
compensation shall be made to them. 

Anyone who humiliates, slanders or inflict injuries upon the
functionaries of trade unions who perform their duties and
functions according to law, which constitutes a crime, shall be
investigated for criminal responsibility according to law; if the
case is not serious enough to constitute a crime, he shall be
punished by the public security organ in accordance with the
regulations on administrative penalties for public
security. 

Article 52 In any of the following cases in which the
provisions of this Law are violated, the administrative department
for labor shall order that the victim be reinstated, his
remuneration payable during the period of the termination of the
labor contract be made up, or that a compensation two times the
amount of his annual income be given: 

(1) the labor contract of a worker or staff member is terminated
due to his participation in trade union activities; or 

(2) the labor contract of a trade union functionary is
terminated due to the performance of his duties and functions
prescribed by this Law. 

Article 53 Any organization or individual that, in
violation of the provisions of this Law, commits one of the
following acts shall be ordered by the people’s governments at or
above the county level to rectify, and the said government shall
handle the case according to law: 

(1) preventing a trade union from mobilizing the workers and
staff members to exercise, according to law, their democratic
rights through the congress of the workers and staff members and
other forms; 

(2) illegally dissolving or merging trade union
organizations; 

(3) preventing a trade union from participating in the
investigation into and solution of an accident causing job-related
injuries or death to workers or staff members or other
infringements upon the legitimate rights and interests of the
workers and staff members; or 

(4) rejecting consultation on an equal footing without
justifiable reasons. 

Article 54 Anyone who, in violation of the provisions of
Article 46 of this Law, embezzles the fund or property of a trade
union and refuses to return it, the trade union may bring the case
before a People’s Court and demand that the fund or property be
returned and that the losses caused be compensated. 

Article 55 Where a trade union functionary, in violation of
the provisions of this Law, infringes upon the rights and interests
of the workers and staff members or of the trade union, the trade
union at the corresponding level or the trade union at a higher
level shall order the functionary to rectify, or impose a sanction
on him; if the circumstances are serious, the functionary shall be
removed from office in accordance with the Constitution of Trade
Unions of the People’s Republic of China; if losses are caused, the
liability for compensation shall be borne; if a crime is
constituted, criminal responsibility shall be investigated
according to law.  

Chapter VII  Supplementary Provisions 

Article 56 Specific measures for implementation of this Law
by the trade unions in government departments shall be formulated
by the All-China Federation of Trade Unions together with relevant
government departments. 

Article 57 This Law shall go into effect as of the date of
its promulgation. The Trade Union Law of the People’s Republic of
China, promulgated by the Central People’s Government on June 29,
1950, shall be nullified at the same time.

(Legislative Affairs Commission of the Standing Committee of the
National People’s Congress)

Law of the People’s Republic of China on the Administration of Tax Collection

(Adopted at the 27th Meeting of the Standing Committee of the
Seventh National People’s Congress on September 4, 1992; amended in
accordance with the Decision on Amending the Law of the People’s
Republic of China on the Administration of Tax Collection made by
the Standing Committee of the Eighth National People’s Congress at
its 12th Meeting on February 28, 1995; revised at the 21st Meeting
of the Standing Committee of the Ninth National People’s Congress
on April 28, 2001 and promulgated by Order No.49 of the President
of the People’s Republic of China on April 28, 2001)  

Contents 

Chapter I     General Provisions 

Chapter II    Tax Administration 

Section 1  Tax Registration 

Section 2  Administration of Accounting Books and
Vouchers 

Section 3  Tax Declaration 

Chapter III   Tax Collection 

Chapter IV    Tax Inspection 

Chapter V     Legal Liabilities 

Chapter VI    Supplementary Provisions 

Chapter I  General Provisions 

Article 1  This Law is enacted for the purpose of
standardizing tax collection and payment, ensuring the tax revenues
of the State, protecting the legitimate rights and interests of
taxpayers and promoting economic and social development. 

Article 2  The administration of tax collection in respect
of all taxes to be collected by the tax authorities in accordance
with law shall be governed by this Law. 

Article 3  The imposition of tax, the cessation thereof,
tax reduction, tax exemption, refund of tax and payment of
delinquent tax shall be governed by the provisions of relevant
laws; where the State Council is authorized by law to formulate
relevant regulations, the provisions of relevant administrative
regulations formulated by the State Council shall apply. 

No units including government departments or individuals may, in
violation of laws or administrative regulations, make decisions
regarding the imposition of tax, the cessation thereof, tax
reduction, tax exemption, refund of tax or payment of delinquent
tax, or any other decision which is in contravention with laws or
administrative regulations governing tax collection. 

Article 4  Units and individuals that are obligated to pay
tax as prescribed by laws or administrative regulations are
taxpayers. 

Units and individuals that are obligated to withhold and remit
tax or collect and remit tax as prescribed by laws or
administrative regulations are withholding agents. 

Taxpayers and withholding agents shall pay tax or withhold and
remit or collect and remit tax in accordance with the provisions of
relevant laws or administrative regulations. 

Article 5  The competent department for taxation under the
State Council shall be in charge of the administration of tax
collection throughout the country. The national tax bureaus and the
local tax bureaus in various places shall administer tax collection
respectively within the limits set by the State Council. 

The local people’s governments at various levels shall
strengthen their leadership over or coordination of the
administration of tax collection within their respective
administrative regions, and support the tax authorities in
performing out their duties in accordance with law, calculating the
amounts of taxes to be paid according to the statutory tax rates
and collecting taxes in accordance with law. 

The departments and units concerned shall support and assist the
tax authorities in performing their duties in accordance with
law. 

No units or individuals may obstruct the tax authorities from
performing their duties in accordance with law. 

Article 6  The State, in a planned way, equips the tax
authorities at various levels with modern information technology,
enhances the modernization of the information system for
administration of tax collection, and establishes and improves a
information-sharing system among tax authorities and other
administrative departments of the governments. 

Taxpayers, withholding agents and other units concerned shall,
in accordance with relevant State regulations, provide the tax
authorities with truthful information relating to payment of or
withholding and remittance or collection and remittance of
tax. 

Article 7  The tax authorities shall extensively
disseminate the laws and administrative regulations on tax
collection, popularize knowledge about payment of tax and provide,
free of charge, the taxpayers with consultancy relating to payment
of tax. 

Article 8  Taxpayers and withholding agents shall have the
right to approach the tax authorities for information about the
provisions of the State laws and administrative regulations on tax
collection and information relating to the procedures of payment of
tax.  

Taxpayers and withholding agents shall have the right to request
the tax authorities to keep their information confidential. The tax
authorities shall do so in accordance with law. 

Taxpayers shall, in accordance with law, have the right to apply
for tax reduction, tax exemption and refund of tax. 

With regard to the decisions made by tax authorities, taxpayers
and withholding agents shall have the right to argue their cases
and defend themselves; they shall, in accordance with law, have the
right to apply for administrative reconsideration, take
administrative proceedings, request State compensation,
etc. 

Taxpayers and withholding agents shall have the right to accuse
tax authorities and officials of their violation of laws and rules
of discipline and report such violations.  

Article 9  Tax authorities should enhance the level of
their contingents, in order to improve the political and vocational
quality of the tax officials. 

Tax authorities and officials shall implement laws impartially,
devote themselves to their duties, be honest and upright, treat
people politely, serve them with civility, respect and protect the
rights of taxpayers and withholding agents and, in accordance with
law, accept supervision. 

No tax officials may extort or take bribes, engage in
malpractices for personal gain, neglect their duties, or fail to
collect, or undercollect the amount of tax payable; nor may they
abuse their power to overcollect tax or deliberately create
difficulties for taxpayers or withholding agents. 

Article 10  Tax authorities at various levels shall
establish and improve a system for internal restriction and
supervision.  

The tax authorities at higher levels shall, in accordance with
law, exercise supervision over the law-enforcement activities
conducted by the authorities at lower levels. 

Tax authorities at various levels shall conduct inspection to
see that their staff members are implementing laws and
administrative regulations and observe the norms for
incorruptibility and self-discipline.  

Article 11  The functions and responsibilities of the
officials of the tax authorities in charge of tax collection,
management, internal checking or administrative reconsideration
shall be explicitly defined and shall be separate from each other
and mutually restrained. 

Article 12  Any tax official who, in collecting taxes or
investigating and handling cases of violation of laws on tax
collection, is an interested party in relation to the taxpayers or
withholding agents or the said cases, shall withdraw. 
 

Article 13  Every unit or individual shall have the right
to report any violations of the laws and administrative regulations
on tax collection. The authorities receiving such report and the
authorities responsible for investigating and handling the case
shall maintain confidentiality in respect of the accuser. The tax
authorities concerned shall grant the accuser rewards in accordance
with relevant regulations. 

Article 14  The tax authorities mentioned in this Law refer
to the tax bureaus at various levels and their sub-bureaus and tax
stations as well as the tax institutions which are established in
accordance with the regulations of the State Council and are
publicly announced. 

Chapter II  Tax Administration 

Section 1 Tax Registration 

Article 15  Enterprises, the branches and the sites engaged
in production or business operations established by enterprises in
other places, industrial and commercial households and institutions
engaged in production or business operations (hereinafter all
referred to as taxpayers engaged in production or business
operations) shall, within 30 days from the date the business
license is obtained, apply to the tax authorities for tax
registration by presenting the relevant documents. The tax
authorities shall, within 30 days from the date the application is
received, issue the tax registration certificate upon examination
and verification of the documents. 

The administrative departments for industry and commerce shall
keep the tax authorities regularly informed of their handling of
registration and issuing of business licenses upon
examination. 

The items for tax registration by taxpayers and withholding
agents other than those specified in the first paragraph of this
Article and the measures in this regard shall be formulated by the
State Council. 

Article 16  When a taxpayer engaged in production or
business operations intends to make any change in the items of tax
registration, he shall, within 30 days from the date he completes
the formalities for such change in the business registration with
the administrative departments for industry and commerce or before
he submits to the said department an application for cancellation
of business registration, apply to the tax authorities for the
change in or cancellation of tax registration by presenting the
relevant documents. 

Article 17  Any taxpayer engaged in production or business
operations shall, in accordance with relevant State regulations and
by presenting the tax registration certificate, open a basic
deposit account and other deposit accounts in banks or other
financial institutions and shall report all the account numbers to
the tax authorities. 

Banks and other financial institutions shall record in the
accounts of the taxpayer engaged in production or business
operations the number of his tax registration
certificate. 

Where the tax authorities, in accordance with law, inquire about
the accounts of a taxpayer engaged in production or business
operations, the banks or other financial institutions shall provide
assistance.  

Article 18  Use of tax registration certificates by
taxpayers shall be governed by the relevant regulations formulated
by the competent department for taxation under the State Council.
No tax registration certificate may be lent, altered, damaged,
traded or forged. 

Section 2 Administration of Accounting Books and
Vouchers 

Article 19  Taxpayers and withholding agents shall,
pursuant to the relevant laws, administrative regulations and
regulations of the competent departments for finance and taxation
under the State Council, establish accounting books, keep accounts
on the basis of legitimate and valid vouchers and conduct
accounting. 

Article 20  The financial and accounting systems or the
financial and accounting procedures and the accounting softwares of
taxpayers engaged in production or business operations shall be
submitted to the tax authorities for the record. 

Where the financial and accounting systems or the financial and
accounting procedures of taxpayers or withholding agents contravene
the relevant regulations on tax collection formulated by the State
Council or the departments for finance and taxation under the State
Council, the tax payable, the tax withheld and remitted or
collected and remitted shall be calculated in accordance with the
said regulations. 

Article 21  The tax authorities are the competent
departments in charge of invoices and are responsible for the
control and supervision over printing, purchasing,  writing
out, obtaining, keeping and handing in for cancellation of
invoices. 

When purchasing or selling commodities, providing or receiving
business services or engaging in other business activities, all
units and individuals shall write out, use or be given
invoices. 

Measures for control of invoices shall be formulated by the
State Council.  

Article 22  The special invoices for value-added tax shall
be printed by enterprises designated by the competent department
for taxation under the State Council; other invoices shall,
pursuant to the regulations of the said department, be printed by
the enterprises designated respectively by the national taxation
bureaus or local taxation bureaus of provinces, autonomous regions
or municipalities directly under the Central Government. 

No enterprises that are not designated by the taxation bureaus
as provided for in the preceding paragraph may print
invoices.      

Article 23  The State, based on the needs of the
administration of tax collection, positively promotes the wide use
of tax-monitoring devices. Taxpayers shall, in accordance with
regulations, install and use tax-monitoring devices, and no one may
damage or destroy or, without authorization, alter such devices.
 

Article 24  Taxpayers engaged in production or business
operations and withholding agents shall preserve their accounting
books, vouchers for the accounts, tax payment receipts and other
relevant information for a period as specified by the competent
departments for finance and taxation under the State
Council. 

No accounting books, vouchers for the accounts, tax payment
receipts or other relevant information may be forged, altered or,
without authorization, damaged or destroyed.   
 

Section 3 Tax Declaration 

Article 25  Taxpayers shall, within the time limit for and
according to the items of tax declaration as prescribed by laws or
administrative regulations, or as determined by the tax authorities
in accordance with laws or administrative regulations, truthfully
complete the formalities for tax declaration and submit tax
returns, financial and accounting statements as well as other
relevant information on tax payments as required of the taxpayers
by the tax authorities in light of actual needs.  

Withholding agents shall, within the time limit for and
according to the items of tax declaration as prescribed by laws or
administrative regulations, or as determined by the tax authorities
in accordance with laws or administrative regulations, submit
truthful statements on taxes withheld and remitted or collected and
remitted as well as other relevant information as required of the
withholding agents by the tax authorities in light of actual
needs. 

Article 26  Taxpayers and withholding agents may directly
go to the tax authorities to complete the formalities for tax
declaration or to submit statements on tax withheld and remitted or
collected and remitted, or, in accordance with regulations, handle
the declaration or submission matters mentioned above by mail,
electronic data transmission or other means. 

Article 27  Where taxpayers or withholding agents are
unable to complete the formalities for tax declaration or to submit
statements on the tax withheld and remitted or collected and
remitted within the prescribed time limit, the time limit may be
extended upon examination and approval by the tax
authorities. 

Anyone who is permitted to handle the declaration or submission
matters mentioned above within the time limit extended upon
examination shall, within the prescribed time limit for tax
payment, prepay the tax on the basis of the amount of the tax he
actually paid last or the amount determined by the tax authorities
upon examination, and settle the payment within the extended time
limit approved upon examination.  

Chapter III  Tax Collection 

Article 28  The tax authorities shall collect tax in
accordance with the provisions of laws or administrative
regulations. They may not, in violation of such provisions, impose,
cease to collect, overcollect, undercollect, collect in advance,
postpone the collection of, or apportion tax. 

The amount of agricultural tax payable shall be determined upon
examination in accordance with the provisions of laws and
administrative regulations. 

Article 29  With the exception of tax authorities, tax
officials and the units and individuals authorized by the tax
authorities in accordance with laws and administrative regulations,
no unit or individual may engage in tax collection. 

Article 30  Withholding agents shall perform their
obligations of withholding or collecting tax in accordance with the
provisions of laws or administrative regulations. With respect to
units or individuals that are not obligated to withhold or collect
tax as prescribed by laws or administrative regulations, no tax
authorities may request them to perform such obligations. 

When withholding agents perform the obligations of withholding
or collecting tax in accordance with law, no taxpayers may refuse
to pay tax to them. Where a taxpayer refuses to do so, the
withholding agent shall promptly report the matter to the tax
authorities for disposition. 

The tax authorities shall, in accordance with relevant
regulations, pay to withholding agents service fees for withholding
or collecting tax.  

Article 31  A taxpayer or withholding agent shall pay or
remit tax in compliance with the time limit as prescribed by laws
or administrative regulations, or as determined by tax authorities
in accordance with laws or administrative regulations.  

Where a taxpayer is unable to pay tax within the prescribed time
limit on account of special difficulties, he may, upon approval by
a national tax bureau or a local tax bureau of a province,
autonomous region or municipality directly under the Central
Government, defer the payment of tax for a maximum period of three
months. 

Article 32  Where a taxpayer fails to pay tax or a
withholding agent fails to remit tax within the specified time
limit, the tax authorities shall, in addition to ordering the
taxpayer or withholding agent to pay or remit the tax within a
fixed period of time, impose a surcharge on a daily basis at the
rate of 0.05% of the amount of tax in arrears, from the date the
tax payment is defaulted. 

Article 33  A taxpayer may, in accordance with laws or
administrative regulations, apply in writing for tax reduction or
tax exemption. 

Applications for tax reduction or tax exemption shall be subject
to examination and approval by the examination and approval
authorities for tax reduction or tax exemption specified by laws or
administrative regulations. All decisions on tax reduction or tax
exemption made in violation of laws or administrative regulations
by the local people’s governments at various levels, the competent
departments under the said people’s governments, or by units or
individuals shall be null and void. No tax authorities may
implement such decisions, and they shall instead report the matter
to the tax authorities at a higher level. 

Article 34  When collecting tax, tax authorities shall
issue tax payment receipts to taxpayers. When withholding or
collecting tax, the withholding agents shall, upon request by
taxpayers, issue to them receipts for withholding or collecting
tax. 

Article 35  If a taxpayer is under one of the following
circumstances, tax authorities shall have the power to assess the
amount of tax payable by him: 

(1) where the establishment of accounting books is dispensed
with in accordance with the provisions of laws and administrative
regulations; 

(2) where accounting books are required to be established by the
provisions of laws and administrative regulations, but they are not
established; 

(3) where the taxpayer damages or destroys accounting books
without authorization or refuses to provide information on tax
payment; 

(4) where accounting books are established, but the accounts are
not in order or information on costs, receipt vouchers and expense
vouchers are incomplete, making it difficult to check the
books; 

(5) where, when the obligation to pay tax arises, the taxpayer
fails to complete the formalities for tax declaration within the
specified time limit and, after being ordered by tax authorities to
make tax declaration within a fixed period of time, still fails to
do so upon expiration of the time limit; and 

(6) where the basis for assessing tax declared by the taxpayer
is obviously on the low side and without justifying
grounds. 

The specific procedure and measures for the tax authorities to
determine the amounts of the tax payable shall be formulated by the
competent department for taxation under the State
Council. 

Article 36  The payment or receipt of money or charges in
business transactions between an enterprise, or an establishment or
site engaged in production or business operations which is set up
by a foreign enterprise in China, and its associated enterprises
shall be made in the same manner as the payment or receipt of money
or charges in business transactions between independent
enterprises. Where the payment or receipt of money or charges is
not made in the said manner and thus results in a reduction of the
taxable revenue or income, the tax authorities shall have the power
to make reasonable adjustments. 

Article 37  Where a taxpayer engaged in production or
business operations or a taxpayer temporarily engaged in business
operations fails to complete the formalities for tax registration
in accordance with regulations, the tax authorities shall assess
the amount of tax payable by him and order him to make the payment;
if he fails to do so, the tax authorities may distrain the
commodities or goods of a value equivalent to the amount of tax
payable; if he pays the amount of tax payable after the distraint,
the tax authorities shall immediately remove the distraint and
return the commodities or goods distrained; if he still fails to
pay the amount of tax payable after the distraint, the commodities
or goods distrained shall, upon approval of the commissioner of the
tax bureau (or sub-bureau) at or above the county level, be
auctioned or sold off in accordance with law and the proceeds
therefrom shall be used to offset the amount of tax
payable. 

Article 38  Where the tax authorities have grounds to
believe that a taxpayer engaged in production or business
operations commits an act of tax evasion, they may, prior to the
prescribed date of tax payment, order the taxpayer to pay the tax
payable within a fixed period of time. If, within the fixed period
of time, the tax authorities discover evident signs that the
taxpayer is transferring or concealing the taxable commodities,
goods or other property, or taxable income, they may order the
taxpayer to provide a guaranty for tax payment. If the taxpayer is
unable to do so, the tax authorities may, upon approval of the
commissioner of the tax bureau (or sub-bureau) at or above the
county level, adopt the following tax preservation
measures: 

(1) to notify in writing the bank or any other financial
institution with which the taxpayer has opened an account to freeze
the taxpayer’s deposits to the tune equivalent to the amount of tax
payable; and 

(2) to distrain or seal up the taxpayer’s  commodities,
goods or other property to the value equivalent to the amount of
tax payable. 

Where the taxpayer makes the tax payment within the fixed period
of time prescribed in the preceding paragraph, the tax authorities
shall immediately lift the tax preservation measures. Where the
taxpayer fails to do so on the expiration of the fixed period of
time, the tax authorities may, upon approval of the commissioner of
the tax bureau (or sub-bureau) at or above the county level, notify
in writing the bank or any other financial institution with which
the taxpayer has opened an account to withhold and remit the amount
of tax payable from the taxpayer’s frozen deposits, or, in
accordance with law, auction or sell off the commodities, goods or
other property distrained or sealed up and use the proceeds
therefrom to offset the amount of tax payable. 

Any housing or articles for use which are necessary for the
daily lives of an individual and the family members he supports
shall not be subjected to the tax preservation measures.  

Article 39  Where a taxpayer makes the tax payment within
the fixed period of time while the tax authorities fail to
immediately lift the tax preservation measures, thus causing losses
to the legitimate interests of the taxpayer, the tax authorities
shall be liable for compensation. 

Article 40  Where a taxpayer engaged in production or
business operations or a withholding agent fails to pay or remit
tax within the prescribed time limit, or a tax payment guarantor
fails to pay the guaranteed amount of tax within the prescribed
time limit, the tax authorities shall order him to pay the tax
within a fixed period of time. Where he fails to pay the tax on the
expiration of the time limit, the tax authorities may, upon
approval of the commissioner of the tax bureau (or sub-bureau) at
or above the county level, adopt the following compulsory
enforcement measures: 

(1) to notify in writing the bank or any other financial
institution with which the taxpayer, withholding agent or tax
payment guarantor has opened an account to withhold and remit the
amount of tax from his deposits; 

(2) to distrain, seal up or, in accordance with law, auction or
sell off the commodities, goods or other property of the taxpayer,
withholding agent or tax payment guarantor, to the value equivalent
to the amount of tax payable, and to use the proceeds therefrom to
offset the amount of tax payable. 

When executing the compulsory enforcement measures, the tax
authorities shall do the same with regard to the surcharge which is
unpaid by the taxpayer, withholding agent or tax payment guarantor
mentioned in the preceding paragraph. 

Any housing or articles for use which are necessary for the
daily lives of an individual and the family members he supports
shall not be subjected to the compulsory enforcement measures.
 

Article 41  No units or individuals other than the
statutory tax authorities may exercise the power to adopt tax
preservation measures or compulsory enforcement measures provided
for in Articles 37, 38 and 40 of this Law. 

Article 42  The tax authorities shall adopt tax
preservation measures or compulsory enforcement measures in
compliance with the limits of power and procedures prescribed by
law, and they may not seal up or distrain any housing and articles
for use which are necessary for the daily lives of the taxpayer
himself and the family members he supports. 

Article 43  Where the tax authorities abuse their power
and, in violation of law, adopt tax preservation measures or
compulsory enforcement measures, or inappropriately adopt such
measures, thus causing losses to the legitimate rights and
interests of taxpayers, withholding agents or tax payment
guarantors, the tax authorities shall be liable for compensation in
accordance with law. 

Article 44  Where the taxpayer, who defaults on tax
payment, or his legal representative needs to leave the territory
of China, either of them shall pay the amount of the tax payable
and the surcharge thereon with, or provide a guaranty to, the tax
authorities before leaving the country. If neither the tax payable
and the surcharge thereon are paid nor a guaranty is provided, the
tax authorities may notify the exit administration to prevent him
from leaving the country. 

Article 45  Tax collection by the tax authorities shall
have precedence over unwarranted claims, except where otherwise
provided for by law; where tax is defaulted before the taxpayer
mortgages or pledges his property or before the taxpayer’s property
is distrained, tax collection shall have the precedence over the
exercise of the right of mortgage, pledge or lien. 

Where a taxpayer defaults on tax payment and is at the same time
fined and his unlawful gains are to be confiscated upon decision by
an administrative department, tax collection shall have precedence
over the fine and confiscation of unlawful gains. 

The tax authorities shall regularly announce the taxes defaulted
on by taxpayers. 

Article 46  Where a taxpayer defaults on tax payment and
puts his property in mortgage or pledge, he shall explain to the
mortgagee or pledgee about his default on tax payment. The
mortgagee or pledgee may request the tax authorities to provide
information about the default.  

Article 47  The tax authorities shall issue a receipt when
distraining commodities, goods or other property, and issue a
detailed list when sealing up commodities, goods or other
property.   

Article 48  Where taxpayers merge or separate their
businesses, they shall report the matter to the tax authorities and
pay off the tax payable in accordance with law. If a taxpayer fails
to pay off the tax payable at the time of merger, the new taxpayer
after the merger shall continue to fulfill the duty to pay tax; if
a taxpayer fails to pay off the tax payable at the time of
separation, the new taxpayer after the separation shall bear joint
and several liability for the unfulfilled duty.  

Article 49  Any taxpayer who defaults on payment of a
considerable amount of tax shall, before disposing of his real
estate or large amount of fixed assets, report the matter to the
tax authorities. 

Article 50  Where a taxpayer who defaults on tax payment is
indolent in exercising his natural creditor’s rights, or disclaims
such rights, or transfers gratis his property, or transfers his
property at a low price evidently unreasonable, which the
transferee is aware of, thus causing losses to tax collection of
the State, the tax authorities may, in accordance with the
provisions in Articles 73 and 74 of the Contract Law, exercise the
rights of subrogation and rescission. 

Where the tax authorities exercise the rights of subrogation and
rescission in accordance with the provisions in the preceding
paragraph, the taxpayer who defaults on tax payment shall not be
exempted from fulfilling the duty to pay the tax or from bearing
the legal liability. 

Article 51  Where the tax authorities discover that a
taxpayer makes a tax payment in excess of the amount of tax
payable, they shall immediately refund the excess payment; where a
taxpayer discovers the same, he may, within three years from the
date the payment is made, claim from the tax authorities a refund
of the excess payment, plus the interests calculated according to
the bank interest rates at the time, and the tax authorities shall
immediately pay back the money upon examination and verification of
the case; where such refund involves the State Treasury, it shall
be dealt with in accordance with the provisions on the
administration of the State Treasury in relevant laws and
administrative regulations.  

Article 52  Where a taxpayer or withholding agent fails to
pay or underpays tax, for which the responsibility rests with the
tax authorities, the latter may, within three years, require the
taxpayer or withholding agent to pay the tax in arrears without,
however, the imposition of any surcharge thereon.  

Where a taxpayer or withholding agent fails to pay or underpays
tax owing to his own miscalculation or other faults, the tax
authorities may, within three years, pursue the collection of the
tax in arrears and the surcharge thereon; under special
circumstances, the time limit for pursuing the collection of the
tax in arrears may be extended to five years. 

Where a taxpayer evades, refuses to pay or practises fraud in
tax payment and the tax authorities pursue the collection of the
unpaid or underpaid tax, the surcharge thereon, or the tax payment
defrauded on, the latter shall not be restricted by the time limit
prescribed in the preceding paragraph. 

Article 53  The national and local tax bureaus shall, in
conformity with their respective areas of administration for tax
collection and the levels of budgeted tax for the State Treasury
prescribed by State regulations, turn over the collected tax to the
State Treasury. 

Where, in accordance with law, the auditing or finance
authorities find out any violation of law on tax collection, the
tax authorities shall, based on the decisions or written
suggestions of the related authorities and in accordance with law,
turn over the tax and surcharge thereon collected to the State
Treasury in conformity with the levels of budgeted tax for the
State Treasury, and inform in return the related authorities of the
result without delay. 

Chapter IV Tax Inspection 

Article 54  The tax authorities shall have the power to
conduct the following tax inspections: 

(1) to inspect a taxpayer’s accounting books, vouchers for the
accounts, statements and relevant information; to inspect a
withholding agent’s accounting books, vouchers for the accounts and
relevant information in respect of the amount of tax withheld and
remitted or collected and remitted; 

(2) to inspect a taxpayer’s taxable commodities, goods or other
property at the taxpayer’s sites where production or business
operations are conducted and places where goods are stored; to
inspect a withholding agent’s operational conditions  relating
to the withholding and remittance of tax or the collection and
remittance of tax; 

(3) to order a taxpayer or withholding agent to furnish
documents, certifying papers and information pertaining to the
payment of tax or the amount of tax withheld and remitted or
collected and remitted; 

(4) to make inquiries of a taxpayer or withholding agent
regarding issues and particulars relevant to the payment of tax or
the amount of tax withheld and remitted or collected and
remitted; 

(5) to inspect, at railway stations, docks, airports, postal
enterprises and their branches, supporting documents, vouchers and
information pertaining to the taxable commodities, goods or other
property which a taxpayer has delivered for carriage or sent by
post; and 

(6) upon approval of the commissioner of the tax bureau (or
sub-bureau) at or above the county level, to inquire about the
deposit accounts that a taxpayer engaged in production or business
operations or a withholding agent has opened with a bank or any
other financial institution. Upon approval of the commissioner of
the tax bureau (sub-bureau) at or above the level of the city
divided into districts or the autonomous prefecture, inquire about
the savings a suspect involved in a case. No information obtained
through inquiry by the tax authorities may be used for purposes
other than tax collection. 

Article 55  When the tax authorities, in accordance with
law, conduct tax inspection of a taxpayer engaged in production or
business operations in respect of the tax payment made during
earlier tax periods and discover the taxpayer’s evasion of the
obligation to pay tax and evident signs of transfer or concealment
of taxable commodities, goods or other property or incomes, they
may adopt tax preservation measures or compulsory enforcement
measures in conformity with the power granted according to this
Law.  

Article 56  A taxpayer or withholding agent shall subject
himself to tax inspection conducted by the tax authorities in
accordance with law, report the particulars truthfully and provide
relevant information, and may not refuse to accept such inspection
or conceal any facts.  

Article 57  When the tax authorities conduct tax inspection
in accordance with law, they shall have the power to inquire the
related units and individuals about the particulars of taxpayers,
withholding agents and other parties in respect of the payment of
tax and the amount of tax withheld and remitted or collected and
remitted, and the said units and individuals shall truthfully
provide the relevant information and certifying papers to the tax
authorities. 

Article 58  When investigating a case concerning violation
of laws or regulations on tax collection, the tax authorities may
take notes and make tape-recordings, video-recordings,
photographings and duplications of the particulars and information
pertaining to the case. 



Article 59  When conducting tax inspection, the officials sent
by the tax authorities shall produce tax inspection certificate and
tax inspection notice, and shall have the duty to keep
confidentiality for the persons under inspection; where no such
certificate and notice are produced, the persons subject to
inspection shall have the right to refuse to accept the
inspection. 

Chapter V Legal Liabilities 

Article 60  Where a taxpayer commits one of the following
acts, he shall be ordered by the tax authorities to rectify within
a time limit and may be fined not more than RMB 2,000 yuan; if the
circumstances are serious, he may be fined not less than 2,000 yuan
but not more than 10,000 yuan: 

(1) failing to apply for tax registration or for change or
cancellation of tax registration within the prescribed time
limit; 

(2) failing to establish and preserve accounting books, or keep
the vouchers for the accounts and the relevant information in
accordance with regulations; 

(3) failing to submit the financial and accounting systems or
the financial and accounting procedures and the accounting
softwares to the tax authorities for the record in accordance with
regulations; 

(4) failing to report all the numbers of bank accounts to the
tax authorities in accordance with regulations; and 

(5) failing to install or use tax-monitoring devices in
accordance with regulations, or damaging or destroying or, without
authorization, altering such devices. 

Where a taxpayer fails to go through the formalities for tax
registration, the tax authorities shall order him to rectify within
a time limit; if he still fails to rectify on the expiration of the
time limit, the administrative department for industry and commerce
shall, upon proposal and request of the tax authorities, revoke his
business license. 

Where a taxpayer fails to use the tax registration certificate
in accordance with regulations, or lends, alters, damages or
destroys, trades or forges tax registration certificate, he shall
be fined not less than 2,000 yuan but not more than 10,000 yuan; if
the circumstances are serious, he shall be fined not less than
10,000 yuan but not more than 50,000 yuan. 

Article 61  Where a withholding agent fails to establish
and preserve accounting books for the tax withheld and remitted or
collected and remitted, or preserve the vouchers for the accounts
and the relevant information regarding the tax withheld and
remitted or collected and remitted, in accordance with relevant
regulations, he shall be ordered by the tax authorities to rectify
within a time limit and may be fined not more than 2,000 yuan; if
the circumstances are serious, he shall be fined not less than
2,000 yuan but not more than 5,000 yuan.     

Article 62  Where, within the prescribed time limit, a
taxpayer fails to go through the formalities for tax declaration
and submit information on tax payment or a withholding agent fails
to submit to the tax authorities statements on taxes withheld and
remitted or collected and remitted and other relevant information,
he shall be ordered by the tax authorities to rectify within a time
limit and may be fined not more than 2,000 yuan; if the
circumstances are serious, he may be fined not less than 2,000 yuan
but not more than 10,000 yuan. 

Article 63  Tax evasion means that a taxpayer forges,
alters, conceals or, without authorization, destroys accounting
books or vouchers for the accounts, or overstates expenses or omits
or understates incomes in the accounting books, or, after being
notified by the tax authorities to make tax declaration, refuses to
do so or makes false tax declaration, or fails to pay or underpays
the amount of tax payable. Where a taxpayer evades tax, the tax
authorities shall pursue the payment of the amount of tax he fails
to pay or underpays and the surcharge thereon, and he shall also be
fined not less than 50 percent but not more than five times the
amount of tax he fails to pay or underpays; if a crime is
constituted, he shall be investigated for criminal responsibility
in accordance with law. 

Where a withholding agent fails to pay, or underpays the tax
which he withholds or collects by the means mentioned in the
preceding paragraph, the tax authorities shall pursue the payment
of the amount of tax he fails to pay or underpays and the surcharge
thereon, and he shall also be fined not less than 50 percent but
not more than five times the amount of tax he fails to pay or
underpays; if a crime is constituted, he shall be investigated for
criminal responsibility in accordance with law. 

Article 64  Where a taxpayer or withholding agent
fabricates the basis on which tax is assessed, he shall be ordered
by the tax authorities to rectify within a time limit and shall
also be fined not more than 50,000 yuan. 

Where a taxpayer fails to make tax declaration, or fails to pay
or underpays the tax payable, the tax authorities shall pursue the
payment of the amount of tax he fails to pay or underpays and the
surcharge thereon, and he shall also be fined not less than 50
percent but not more than five times the amount of tax he fails to
pay or underpays. 

Article 65  Where a taxpayer who fails to pay the tax due
adopts the means of transferring or concealing his property, thus
preventing the tax authorities from pursuing the payment of the tax
in arrears, the tax authorities shall pursue the payment of the tax
and the surcharge thereon and shall also impose on him a fine of
not less than 50 percent but not more than five times the amount of
tax in arrears; if a crime is constituted, he shall be investigated
for criminal responsibility in accordance with law. 

Article 66  Where anyone, by making false export
declaration or by other means, defrauds tax refund for exports from
the State, the tax authorities shall pursue the return of the
refund defrauded, and the person shall also be fined not less than
the amount of the refund defrauded but not more than five times
that amount; if a crime is constituted, he shall be investigated
for criminal responsibility in accordance with law. 
 

Where anyone defrauds tax refund for exports from the State, the
tax authorities may, within a specified time limit, suspend tax
refund for his exports. 

Article 67 Refusal to pay tax means refusing to pay tax with
resort to violence or threats. In such a case, the tax authorities
shall, in addition to pursuing the payment of the amount of tax a
person refuses to pay and the surcharge thereon, conduct
investigation for criminal responsibility in accordance with law.
If the circumstances are not serious and no crime is constituted,
the tax authorities shall pursue the payment of the amount of tax
he refuses to pay and the surcharge thereon and shall also impose
on him a fine of  not less than the amount of the tax he
refuses to pay but not more than five times that amount. 

Article 68  Where a taxpayer or a withholding agent fails
to pay or underpays the amount of tax that should be paid or
remitted within the prescribed time limit and, after ordered by the
tax authorities to pay or remit within a time limit, still fails to
do so on the expiration of the time limit, the tax authorities may,
in addition to pursuing, by adopting compulsory enforcement
measures in accordance with the provisions in Article 40 of this
Law, the payment of the amount of tax the taxpayer or withholding
agent fails to pay or underpays or fails to remit, impose a fine of
not less than 50 percent but not more than five times the amount of
tax he fails to pay or underpays or fails to remit.  

Article 69  Where a withholding agent fails to withhold or
collect the amount of tax which should be withheld or collected,
the tax authorities shall pursue the payment of the said amount,
and impose on the withholding agent a fine of not less than 50
percent but not more than three times the amount of tax that should
have been withheld or collected. 

Article 70  Where a taxpayer or a withholding agent avoids,
refuses to undergo or, by other means, hinders inspection by the
tax authorities, he shall be ordered by the tax authorities to
rectify and may be fined not more than 10,000 yuan; if the
circumstances are serious, he shall be fined not less than 10,000
yuan but not more than 50,000 yuan. 

Article 71  Where anyone, in violation of the provisions in
Article 22 of this Law, illegally prints invoices, the tax
authorities shall destroy the invoices illegally printed,
confiscate his unlawful gains and tools for criminal purposes and
impose on him a fine of not less than 10,000 yuan but not more than
50,000 yuan; if a crime is constituted, he shall be investigated
for criminal responsibility in accordance with law. 

Article 72  Where a taxpayer engaged in production or
business operations or a withholding agent commits an act in
violation of the provisions in this Law on tax collection and
refuses to be dealt with by the tax authorities, the tax
authorities may confiscate his invoices or discontinue selling
invoices to him. 

Article 73   Where a bank or other financial
institution with which a taxpayer or a withholding agent has opened
deposit accounts refuses to accept the tax authorities’ inspection
of the deposit accounts of the said taxpayer or withholding agent
in accordance with law, or refuses to execute the decision made by
the tax authorities on freezing the deposits or withholding the
tax, or, after receiving the written notice of the tax authorities,
assists the taxpayer or withholding agent in transferring his
deposits, thus causing the loss of tax, it shall be fined by the
tax authorities not less than 100,000 yuan but not more than
500,000 yuan, and the persons who are directly in charge and the
other persons who are directly responsible shall be fined not less
than 1,000 yuan but not more than 10,000 yuan. 

Article 74  The imposition of administrative penalties
prescribed in this Law, if the fines involved are not more than
2,000 yuan, may be decided on by the tax stations. 

Article 75  The tax and judicial authorities shall, in
conformity with the levels of budgeted tax for the State Treasury,
turn over all the revenues from tax-related fines and confiscations
to the State Treasury. 

Article 76  Where the tax authorities that, in violation of
regulations and without authorization, change the administrative
areas for tax collection and the levels of budgeted tax for the
State Treasury shall be ordered to rectify within a time limit, and
the persons who are directly in charge and the other persons who
are directly responsible shall, in accordance with law, be demoted
or dismissed from office, as administrative sanctions. 

Article 77  Where a taxpayer or withholding agent is
suspected of committing an offense against the provisions in
Article 63, 65, 66, 67 or 71 of this Law, the tax authorities shall
transfer the case to the judicial authorities to be investigated
for criminal responsibility in accordance with law. 

Where a tax official, engaging in malpractices for personal
gain, fails to transfer, in accordance with law, the case to the
judicial authorities for investigation for criminal responsibility
as he should have done, if the circumstances are serious, he shall
be investigated for criminal responsibility in accordance with
law. 

Article 78  Where anyone collects tax without authorization
by the tax authorities in accordance with law, he shall be ordered
to return the money and things of value collected and, in
accordance with law, be given administrative sanctions or
penalties; where losses are caused to other persons’ legitimate
rights or interests, he shall be liable for compensation in
accordance with law; if a crime is constituted, he shall be
investigated for criminal responsibility in accordance with law.
 

Article 79  Where the tax authorities or tax officials seal
up or distrain a taxpayer’s housing  and articles of use which
are necessary for the daily lives of the taxpayer himself and the
family members he supports, they shall be ordered to return the
said housing and articles for use and, in accordance with law, be
given administrative sanctions; if a crime is constituted, they
shall be investigated for criminal responsibility in accordance
with law. 

Article 80  Where tax officials, working in collusion with
taxpayers or withholding agents, instigate or assist them to commit
an offense against the provisions in Article 63, 65 or 66 of this
Law, if a crime is constituted, the tax officials shall be
investigated for criminal responsibility in accordance with law; if
no crime is constituted, they shall be given administrative
sanctions in accordance with law.  

Article 81  Where tax officials, by taking advantage of
their positions, accept or extort money or things of value from
taxpayers or withholding agents, or seek other illegitimate
interests, if a crime is constituted, they shall be investigated
for criminal responsibility in accordance with law; if no crime is
constituted, they shall be given administrative sanctions in
accordance with law. 

Article 82  Where tax officials, engaging in malpractices
for personal gain or neglecting their duty, fail to collect or
under-collect the tax that should be collected, thus causing heavy
losses to State revenue, if a crime is constituted, they shall be
investigated for criminal responsibility in accordance with law; if
no crime is constituted, they shall be given administrative
sanctions in accordance with law. 

Tax officials who, abusing their power, deliberately create
difficulties for taxpayers or withholding agents shall be
transferred from the post for tax collection and, in accordance
with law, be given administrative sanctions. 

Where tax officials retaliate against taxpayers or withholding
agents who complain of or report violations of the laws or rules of
discipline on tax collection, or any other accuser, they shall be
given administrative sanctions in accordance with law; if a crime
is constituted, they shall be investigated for criminal
responsibility in accordance with law. 

Where tax officials, in violation of the provisions of laws or
administrative regulations, deliberately over- or under-assess the
agricultural yield taxable, thus causing over- or under-collection
of tax, infringing upon the peasants’ legitimate rights and
interests or undermining the interests of the State, if a crime is
constituted, they shall be investigated for criminal responsibility
in accordance with law; if no crime is constituted, they shall be
given administrative sanctions in accordance with law. 

Article 83  Where, in violation of the provisions of laws
or administrative regulations, tax are collected in advance, the
collection is postponed, or taxes are apportioned, the authorities
at a higher level or the administrative supervisory authorities
shall order its rectification, and the persons who are directly in
charge and the other persons who are directly responsible shall be
given administrative sanctions in accordance with law. 

Article 84  Where decisions regarding the imposition or
cessation of tax, tax reduction, tax exemption, refund of tax or
payment of tax underpaid, or other decisions contravening the laws
or administrative regulations on tax collection are made without
authorization and in violation of the provisions of laws or
administrative regulations, in addition to revocation of such
decisions in accordance with the provisions of this Law, the amount
of tax that should have been collected shall be collected, the
amount of tax that should not have been collected shall be
refunded, and the persons who are directly in charge and the other
persons who are directly responsible shall be pursued for
administrative liability by the authorities at a higher level; if a
crime is constituted, investigation for criminal responsibility
shall be conducted in accordance with law. 

Article 85  Where, in collecting tax or in investigating
cases of violation of the laws on tax collection, tax officials
fail to withdraw as required by the provisions of this Law, the
persons who are directly in charge and the other persons who are
directly responsible shall be given administrative sanctions in
accordance with law. 

Article 86  If any violation of the laws or administrative
regulations on tax collection which deserves administrative
penalties is undetected for five years, no administrative penalties
shall be imposed any longer. 

Article 87  Where tax officials fail to keep
confidentiality for the taxpayers, withholding agents or accusers,
the persons who are directly in charge and the other persons who
are directly responsible shall, in accordance with law, be given
administrative sanctions by the units they belong to or the units
concerned.   

Article 88  Where a tax dispute arises between a taxpayer,
withholding agent or tax payment guarantor and the tax authorities,
the former shall pay or remit the amount of tax payable and the
surcharge thereon, or provide the necessary guaranty in accordance
with the decisions made by the tax authorities on tax collection,
before he may apply for administrative reconsideration in
accordance with law; if he is not satisfied with the decision made
after reconsideration, he may bring a lawsuit in the People’s Court
in accordance with law. 

Where a party is not satisfied with the penalty decision made or
the compulsory enforcement measures or tax preservation measures
adopted by the tax authorities, he may, in accordance with law,
apply for administrative reconsideration or bring a lawsuit in the
People’s Court in accordance with law. 

Where, on the expiration of the time limit, the party fails to
apply for administrative reconsideration of the penalty decision
made by the tax authorities, nor does he bring a lawsuit in the
People’s Court or comply with the decision, the tax authorities
that make the decision may adopt compulsory enforcement measures
prescribed in Article 40 of this Law, or apply to the People’s
Court for compulsory enforcement of the decision. 

Chapter VI  Supplementary Provisions 

Article 89  A taxpayer or withholding agent may entrust a
tax agent with the handling of tax affairs on his behalf. 

Article 90  Specific measures for the administration of
collection of cultivated land use tax, deed tax, agricultural tax
and animal husbandry tax shall be formulated by the State Council
separately. 

The administration of collection of the Customs duties and the
taxes collected by the Customs on behalf of the tax authorities
shall be exercised in accordance with the provisions of relevant
laws or administrative regulations. 

Article 91  Where the provisions of treaties or agreements
on tax concluded between the People’s Republic of China and other
countries contain provisions differing from those of this Law, the
provisions of such treaties or agreements shall apply. 

Article 92  Where the tax laws promulgated prior to the
implementation of this Law contain provisions differing from those
of this Law, the provisions of the latter shall apply. 

Article 93  The detailed rules for implementation of this
Law shall be formulated by the State Council in accordance with
this Law. 

Article 94  This Law shall go into effect as of May 1,
2001.

( Legislative Affairs Commission of the Standing Committee of
the National People’s Congress)

Regulations on Administration of Printing Industry

(Adopted at the 43rd Executive Meeting of the State Council
on July 26, 2001, promulgated by Decree No.315 of the State Council
of the People’s Republic of China on August 2, 2001, and effective
as of the date of promulgation)

Chapter I General Provisions

Article 1 These Regulations are formulated for
the purpose of strengthening administration of printing industry,
safeguarding the lawful rights and interests of printing operators
and social and public interests, and promoting socialist cultural
and ethical progress and material progress.

Article 2 These Regulations apply to printing
business activities with regard to publications, packaging and
decorating printed matter, and other printed matter.

“Publications” referred to in these Regulations include
newspapers, periodicals, books, maps, Spring Festival paintings,
painted cards, wall calendars, pictorials, and covers of
audiovisual products and electronic publications, etc.

“Packaging and decorating printed matter” referred to in these
Regulations include representations of trade marks, advertising
materials and printed matter such as paper, metal and plastic used
for package and decoration of products.

“Other printed matter” referred to in these Regulations include
documents, data and information material, charts, tickets and
coupons, certificates, name cards, etc.

“Printing business activities” referred to in these Regulations
mean business activities such as typesetting, platemaking,
printing, binding, reprography, photomechanical printing and
typing.

Article 3 Printing operators must abide by the
relevant laws, administrative regulations and rules, and pay
attention to social benefits.

It is prohibited to print publications, packaging and decoration
printed matter, or other printed matter that contain reactionary,
obscene or superstitious contents or other contents explicitly
prohibited by the State.

Article 4 The publication administration
department of the State Council takes charge of the supervision and
administration of printing industry throughout the country. The
administrative department responsible for the administration of
publication under the local people’s government at or above the
county level (hereinafter referred to as the publication
administration department) is responsible for the supervision and
administration of printing industry within its own administrative
region.

The department of public security, the department for industry
and commerce administration and other relevant departments of the
people’s government at or above the county level are responsible
for the supervision and administration with regard to printing
industry within their respective functions and duties.

Article 5 A printing
operator shall establish and improve such systems as the system of
verification of print undertaking, the system of registration of
print undertaking, the system of storage of printed matter, the
system of delivery of printed matter, and the system of destruction
of defective products and substandard products, etc. The specific
measures shall be formulated by the publication administration
department of the State Council jointly with the public security
department of the State Council.

When finding any illegal or criminal act in printing business
activities, a printing operator shall promptly report to the public
security department or the publication administration
department.

Article 6 Social organizations of the printing
industry shall, under the guidance of the publication
administration department, carry out self-regulated management in
accordance with their articles of association.

Chapter II Establishment of Printing
Enterprises

Article 7 The State implements a system of
licensing printing businesses. No unit or individual may engage in
printing business without acquiring a permit for printing business
according to these Regulations.

Article 8 The following conditions shall be met
in establishing a printing enterprise:

(1) possession of a name of the enterprise and its articles of
association;

(2) possession of a well-defined scope of business;

(3) possession of production and business premises that can meet
the needs of its scope of business, and of necessary capital,
equipment and other production and business conditions as well;

(4) possession of the organizational structure and staff that
can meet the needs of its scope of business; and

(5) other conditions stipulated by the relevant laws and
administrative regulations.

In addition to the provisions stipulated in the preceding
paragraph, the approval of the establishment of a printing
enterprise shall also conform to the planning of the State for the
total number, structure and distribution of printing
enterprises.

Article 9 Where a printing enterprise that
engages in printing business activities with regard to
publications, packaging and decorating printed matter and other
printed matter is to be established, an application shall be made
to the local publication administration department of the people’s
government of the province, autonomous region or municipality
directly under the Central Government; where an enterprise that
solely engages in printing name cards is to be established, an
application shall be made to the local publication administration
department of the people’s government at the county level. Upon
examination and approval, the applicant shall obtain a permit for
printing business; on the basis of this permit, the applicant shall
apply to the public security department in accordance with the
relevant provisions of the States and, upon verification and
approval, obtain a special industry permit; on the basis of the
permit for printing business and the special industry permit, the
applicant shall apply to the department for industry and commerce
administration for registration and obtain a business license.

No individual may engage in any printing business activities
with regard to publications and packaging and decorating printed
matter; any individual who intends to engage in the printing
business activity of other printed matter go through the
examination and approval formalities according to the provisions of
the preceding paragraph.

Article 10 The publication administration
department that undertakes an application for establishing an
enterprise engaging in printing business activities shall, within
60 days from the date of receipt of the application, make a
decision of approval or disapproval. If the application for the
establishment is approved, a printing permit shall be granted to
the applicant; if the application for the establishment is not
disapproved, the publication administration department shall notify
the applicant and give the reasons.

A printing permit shall indicate the category of the printing
business activity in which a printing enterprise engages.

A printing permit shall not be sold, rent, lend or assigned in
other manners.

Article 11 Where a printing operator applies
for a concurrent business or to make a change to the printing
business activities with regard to publications, packaging and
decorating printed matter or other printed matter, or to
incorporate other printing operators, or to establish a new
printing operator as a result of merger or division, formalities
shall be gone through according to the provisions of Article 9 of
these Regulations.

Where a change is to be made to any main registration item such
as the name, legal representative or responsible person, domicile
or premise, or the printing business activities are to be
terminated, the printing operator shall have the change or
cancellation registered with the public security department and the
department for industry and commerce administration that made the
original registration, and shall report for the record to the
publication administration department that originally approved the
establishment.

Article 12 The State allows the establishment
of Chinese-foreign equity joint ventures and Chinese-foreign
contractual joint ventures that engage in printing business,
foreign capital enterprises that engage in printing business
activities with regard to packaging and decorating printed matter
are also allowed. The specific measures shall be formulated by the
publication administration department of the State Council jointly
with the competent department of foreign economic relations and
trade of the State Council.

Article 13 A unit that
intends to establish an internal printing factory (shop) shall go
through registration formalities with the publication
administration department of the local people’s government at or
above the county level of the place where it is located, and shall
apply to the public security department for the record according to
the relevant provisions of the State; if an internal printing
factory (shop) established by a unit involves printing of printed
matter of State secrets, it shall also go through registration
formalities with the secret-guarding department.

An internal printing factory (shop) established by a unit shall
not engage in printing business activities; it shall go through
formalities in accordance with the provisions of this Chapter when
engaging in printing business activities.

Chapter III Printing of Publications

Article 14 The State encourages enterprises
engaged in printing business activities with regard to publications
to print promptly publications that embody the latest best cultural
accomplishments both at home and abroad, and to attach great
importance to the printing of excellent works of traditional
culture and valuable academic writings.

Article 15 Enterprises engaged in printing
business activities with regard to publications shall not print
publications explicitly prohibited by the State or published by
non-publishing units.

Article 16 Where publications are to be
printed, the unit commissioning the printing and the printing
enterprise shall conclude a printing contract in accordance with
the relevant provisions of the State.

Article 17 Where a printing enterprise
undertakes a commission from a publishing unit to print books or
periodicals, it shall verify and keep the letter of commission with
the seal of the publishing unit, and, before the printing begins,
report for the record to the publication administration department
of the people’s government of the province, autonomous region or
municipality directly under the Central Government where the
publishing unit is located; where a printing enterprise undertakes
a commission to print books or periodicals from a publishing unit
outside the province, autonomous region or municipality directly
under the Central Government where it is located, the letter of
commission shall be reported for the record in advance to the
publication administration department of the people’s government of
the province, autonomous region or municipality directly under the
Central Government where the printing enterprise is located. The
format of the letter of commission shall be unified by the
publication administration department of the State Council and be
printed unitarily by the publication administration department of
the people’s government of the province, autonomous region or
municipality directly under the Central Government.

Where a printing enterprise undertakes a commission from a
publishing unit to print newspapers, it shall verify the newspaper
publication license; where it undertakes a commission from a
publishing unit to print a supplement to a newspaper or periodical,
it shall also verify the documents issued by the competent
publication administration department to approve the publication of
the supplement.

Article 18 Where a printing enterprise
undertakes a commission to print publications of internal
information, it shall verify the printing permit issued by the
publication administration department of the people’s government at
or above the county level.

Where a printing enterprise undertakes a commission to print
publications of internal information with religious contents, it
shall verify the documents of approval issued by the religious
affairs administration department of the people’s government of the
province, autonomous region or municipality directly under the
Central Government and the printing permit issued by the
publication administration department of the people’s government of
the province, autonomous region or municipality directly under the
Central Government.

The publication administration department shall decide whether
to issue the printing permit or not within 30 days from the date of
receipt of the application for printing publications of internal
information or publications of internal information with religion
contents, and notify the applicant; if the publication
administration department makes no decision within the time limit,
its consent shall be deemed to have been given.

Article 19 Where a printing enterprise
undertakes a commission to print overseas publications, it shall,
on the basis of legal certifying documents relating to copyright,
acquire approval from the publication administration department of
the people’s government of the province, autonomous region or
municipality directly under the Central Government; such printed
publications shall all be transported overseas and shall not be
issued and distributed within the territory.

Article 20 The unit commissioning printing
must, in accordance with the relevant provisions of the State,
indicate on the publications printed under commission the name and
address of the publishing unit, book number, periodical number or
edition number, date of publication or number of issue, the actual
name and address of the enterprise that undertakes the commission
to print publications, and other relevant items.

A printing enterprise shall, within two years from the date of
accomplishment of the printing of a publication, keep a sample of
the publication printed under commission for checking.

Article 21 A printing
enterprise shall not pirate publications, shall not sell, print
more than the commissioned amount or print for a third party the
publications printed under commission, and shall not sell, rent,
lend or in any other manner transfer to any other unit or
individual the paper matrixes or printing negatives of the
publications printed under commission.

Article 22 A printing
enterprise shall not solicit orders for or sell publications, and
shall not counterfeit or usurp the name of other persons to print
or sell publications.

Chapter IV Printing of Packaging and Decorating Printed
Matter

Article 23 An enterprise engaged in printing
business activities with regard to packaging and decorating printed
matter shall not print counterfeit or forged representations of
registered trade marks, and shall not print advertising materials
or printed matter used to package or decorate a product by which
consumers may be easily misled.

Article 24 Where a printing enterprise
undertakes a commission to print the representation of a registered
trade mark, it shall verify the copy of the Trade Mark Registration
Certificate with the seal of the department for industry and
commerce administration at the county level in the place where the
trade mark registrant is located, and check the drawing of the
registered trade mark provided by the commissioning party; where a
printing enterprise undertakes a commission from the licensee of a
registered trade mark to print the representation of the registered
trade mark, it shall also verify the licensing contract of the
registered trade mark. The printing enterprise shall keep for two
years the copy of the Trade Mark Registration Certificate with the
seal of the department for industry and commerce administration,
the drawing of the registered trade mark and the copy of the
licensing contract of the registered trademark for examination and
verification.

Where the State has separate provisions on the printing of the
representation of registered trade mark, printing enterprises shall
also comply with these provisions.

Article 25 Where a printing enterprise
undertakes a commission to print advertising materials or printed
matter used to package or decorate a product, it shall verify the
business license of the unit or the resident identity card of the
individual commissioning the printing; where a printing enterprise
undertakes a commission from an advertising operator to print
advertising materials, it shall also verify the advertising
qualifications certificate.

Article 26 Where a printing enterprise
undertakes a commission to print packaging and decorating printed
matter, it shall deliver all the finished products, semi-finished
products, waste products and printing plates, paper matrixes,
negatives and original manuscripts to the unit or individual
commissioning the printing, and shall not retain any of them
without permission.

Article 27 Where a printing enterprise
undertakes a commission to print overseas packaging and decorating
printed matter, it shall, before the printing begins, report for
the record to the publication administration department of the
people’s government of the province, autonomous region or
municipality directly under the Central Government where it is
located; such printed packaging and decorating printed matter shall
all be transported overseas and shall not be sold within the
territory.

Chapter V Printing of Other Printed Matter

Article 28 Printing of documents, materials,
charts, tables and other matter on which categories of secrecy are
marked shall be in compliance with the provisions of the relevant
laws, regulations or rules of the State.

Article 29 For printing public notices,
circulars, staff identity cards or passes for major activities, or
coupons circulated for use in the society, the unit commissioning
the printing shall present the certification issued by its
competent department, and, in accordance with the relevant
provisions of the State, go through formalities for approval of
printing at the public security department of the place where the
printing enterprise is located and the printing shall be conducted
by a printing enterprise designated by the public security
department. The printing enterprise designated by the public
security department shall verify the certification issued by the
competent department and the printing-approval certification issued
by the public security department and keep for two years the copy
of the certification issued by the competent department and the
copy of the printing-approval certification issued by the public
security department for examination and verification, and shall not
further commission other persons to print the above-mentioned
printed matter.

For printing valuable or non-value coupons to be used internally
within an agency, a social organization, a military unit, an
enterprise or an institution, or for printing special printed
matter such as introduction letters, employee cards, membership
cards, passes, academic degree certificates, educational
qualification certificates or other academic certificates bearing
the name of a unit, the unit commissioning the printing shall
present a printing commission certification. The printing
enterprise shall verify the certification.

The enterprise undertaking the printing shall not retain any
sample copy or specimen page of the printed matter referred to in
the preceding two paragraphs; where it is necessary indeed to
retain the sample copy or specimen page for professional reference
purposes, consent shall be obtained from the unit commissioning the
printing and the retained printed matter shall be stamped with
“sample copy “or “specimen page”, and be properly preserved and
shall not be lost.

Article 30 Where a printing enterprise
undertakes a commission to print religious articles, it shall
verify the documents of approval issued by the religious affairs
administration department of the people’s government of the
province, autonomous region or municipality directly under the
Central Government, and the printing permit issued by the
publication administration department of the people’s government of
the province, autonomous region or municipality directly under the
Central Government; the publication administration department of
the people’s government of the province, autonomous region or
municipality directly under the Central Government shall decide
whether to issue the printing permit or not within 10 days from the
date of receipt of the application for printing the religious
articles and notify the applicant; if the publication
administration department makes no decision within the time limit,
it shall be deemed to have given its consent.

Article 31 An individual engaged in printing
business activities with regard to other printed matter shall not
print documents, materials, charts, tables or other printed matter
on which categories of secrecy are marked, shall not print public
notices, circulars, staff identity cards or passes for major
activities, or coupons circulated for use in the society, shall not
print valuable or non-value coupons to be used internally within an
agency, a social organization, a military unit, an enterprise or an
institution, shall not print special printed matter such as
introduction letters, employee cards, membership cards, passes,
academic degree certificates, educational qualification
certificates or other academic certificates bearing the name of a
unit, and shall not print religious articles.

Article 32 Where a printing enterprise
undertakes a commission to print other printed matter from
overseas, it shall, before the printing begins, report for the
record to the publication administration department of the people’s
government of the province, autonomous region or municipality
directly under the Central Government where it is located; such
other printed matter shall all be transported overseas and shall
not be sold within the territory.

Article 33 A printing
enterprise and an individual engaged in printing business
activities with regard to other printed matter shall not pirate
other persons’ other printed matter, shall not sell, print more
than the commissioned amount or print for a third party the other
printed matter printed under commission, and shall not sell, rent,
lend, or in any other manner transfer to any other unit or
individual the paper matrixes or printing negatives of the other
printed matter printed under commission from a publishing
unit.

Chapter VI Penalty Provisions

Article 34 Anyone who, in violation of the
provisions of these Regulations, establishes a printing enterprise
without authorization or engages in printing business activities
without authorization shall be banned by the public security
department and the department for industry and commerce
administration according to their statutory functions and powers;
the printed matter, illegal income and the devices and equipment
specially used for the purpose of the illegal activities shall be
confiscated; if the amount of the illegal operations is not less
than 10,000 yuan, a fine of not less than five times but not more
than 10 times the amount of the illegal operations shall be
concurrently imposed; if the amount of the illegal operations is
less than 10,000 yuan, a fine of not less than 10,000 yuan but not
more than 50,000 yuan shall be concurrently imposed; if the act
constitutes a crime, the criminal liability shall be investigated
according to law.

Where an internal printing factory(shop) established by a unit
engages in printing business activities without going through the
formalities provided for in Chapter II of these Regulations, it
shall be punished according to the provisions of the preceding
paragraph.

Article 35 Where, in violation of the
provisions of these Regulations, a printing operator commits any
one of the following acts, the publication administration
department of the people’s government at or above the county level
shall order him to stop illegal activities, and suspend the
business for rectification, confiscate the printed matter and
illegal income, and concurrently impose a fine of not less than
five times but not more than ten times the amount of the illegal
operations if the amount of the illegal operations is not less
10,000 yuan; if the amount of the illegal operations is less than
10,000 yuan, a fine of not less than 10,000 yuan but not more than
50,000 yuan shall be concurrently imposed; if the circumstances are
serious, the permit shall be revoked by the original issuing
department; if the act constitutes a crime, the criminal liability
shall be investigated according to law.

(1) without acquiring the permit issued by the publication
administration department, operating a concurrent business or
making a change to the printing business activities with regard to
publications, packaging and decorating printed matter or other
printed matter, or incorporating other printing operators;

(2) establishing a new printing operator as a result of merger
or division without going through the formalities according to the
provisions of these Regulations; or

(3) selling, renting, lending the printing business license or
assigning it in other manners.

Article 36 Where a printing operator prints
publications, packaging and decorating printed matter or other
printed matter which, it or he knows clearly or ought to know,
contain the contents prohibited by the provisions of Article 3 of
these Regulations, or prints publications explicitly prohibited by
the State or published by non-publishing units, the publication
administration department and public security department of the
people’s government at or above the county level shall order to
suspend business for rectification according to their statutory
functions and powers, confiscate the printed matter and illegal
income, and concurrently impose a fine of not less than five times
but not more than ten times the amount of the illegal operations if
the amount of the illegal operations is not less than 10,000 yuan;
if the amount of the illegal operations is less than 10,000 yuan, a
fine of not less than 10,000 yuan but not more than 50,000 yuan
shall be concurrently imposed; if the circumstances are serious,
the permit shall be revoked by the original issuing department; if
the act constitutes a crime, the criminal liability shall be
investigated according to law.

Article 37 Any printing operator, if committing
any one of the following acts, shall be ordered to make corrections
and given a warning by the publication administration department
and the public security department of the people’s government at or
above the county level; if the circumstances are serious, it or he
shall be ordered to suspend business for rectification or its or
his permit shall be revoked by the original issuing department:

(1) failure to establish the systems such as the system of
verification of print undertaking, the system of registration of
print undertaking, the system of storage of printed matter, the
system of delivery of printed matter;

(2) failure to report promptly to the public security department
or publication administration department illegal or criminal acts
found in printing business activities;

(3) failure to report for the record to the publication
administration department that originally approves the
establishment where a change is to be made to any main registration
item such as the name, legal representative or responsible person,
domicile or premise, or the printing business activities are to be
terminated;

(4) failure to keep the documents for examination and
verification according to the provisions of these Regulation.

Where, in violation of the provisions of these Regulations, an
internal printing factory (shop) is established by a unit without
going through registration formalities with the publication
administration department and the secret-guarding department of the
local people’s government at or above the county level of the place
where it is located, and without reporting for the record to the
public security department in accordance with the relevant
provisions of the State, the publication administration department,
the secret-guarding department and the public security department
of the local people’s government at or above the county level
shall, according to their statutory functions and powers, order to
make corrections and give a warning; where the circumstances are
serious, the business shall be suspended for rectification.

Article 38 Any enterprise engaged in printing
business activities with regard to publications, if committing any
one of the following acts, shall be given a warning and have the
illegal income confiscated by the publication administration
department of the local people’s government at or above the county
level; if the amount of the illegal operations is not less than
10,000 yuan, a fine of not less than five times but not more than
ten times the amount of the illegal operations shall be
concurrently imposed; if the amount of the illegal operations is
less than 10,000 yuan, a fine of not less than 10,000 yuan but not
more than 50,000 yuan shall be concurrently imposed; if the
circumstances are serious, it or he shall be ordered to suspend
business for rectification or its or his permit shall be revoked by
the original issuing department; if the act constitutes a crime,
criminal liability shall be investigated according to law:

(1) undertaking a commission from another person to print
publications without verifying the letter of commission, relevant
certification or printing permit according to the provisions of
these Regulations, or without reporting for the record the letter
of commission to the publication administration;

(2) counterfeiting or usurping the name of other person to print
publications;

(3) pirating publications of other person;

(4) illegally printing more than the commissioned amount or
selling publications printed under commission;

(5) soliciting orders for or selling publications;

(6) renting, lending, selling or transferring in any other
manner to other person without authorization the paper matrixes and
printing negatives of publications printed under commission of a
publishing unit; or

(7) undertaking a commission to print overseas publications
without approval, or failing to transport all such printed
publications overseas.

Article 39 Any enterprise engaged in printing
business activities with regard to packaging and decorating printed
matter, if committing any one of the following acts, shall be given
a warning and have the illegal gains confiscated by the publication
administration department of the local people’s government at or
above the county level; if the amount of the illegal operations is
not less than 10,000 yuan, a fine of not less than five times but
not more than ten times the amount of the illegal operations shall
be concurrently imposed; if the amount of the illegal operations is
less than 10,000 yuan, a fine of not less than 10,000 yuan but not
more than 50,000 yuan shall be concurrently imposed; where the
circumstances are serious, it or he shall be ordered to suspend
business for rectification or its or his permit shall be revoked by
the original issuing department; if the act constitutes a crime,
criminal liability shall be investigated according to law.

(1) undertaking a commission to print the representation of a
registered trade mark without verifying and checking, according to
the provisions of these Regulations, the copy of the Trade Mark
Registration Certificate with the seal of the department for
industry and commerce administration, the drawing of the registered
trade mark or the copy of the licensing contract of the registered
trade mark;

(2) undertaking a commission to print advertising materials or
printed matter used to package or decorate a product without
verifying, according to the provisions of these Regulations, the
business license of the unit or the resident identity card of the
individual commissioning printing, or undertaking a commission from
an advertising operator to print advertising materials without
verifying the advertising qualifications certificate;

(3) pirating packaging and decorating printed matter of other
person; or

(4) undertaking a commission to print overseas packaging and
decorating printed matter without reporting for the record to the
publication administration department according to the provisions
of these Regulations, or failing to transport all printed matter
overseas.

Where a printing enterprise violates the relevant provisions of
the State on the administration of the printing of trade marks or
advertisements when undertaking a commission to print
representations of registered trade marks or advertising materials,
it shall be given a warning and have the printed matter and illegal
income confiscated by the department for industry and commerce
administration; if the amount of the illegal operations is not less
than 10,000 yuan, a fine of not less than five times but not more
than ten times the amount of the illegal operations shall be
concurrently imposed; if the amount of the illegal operations is
less than 10,000 yuan, a fine of not less than 10,000 yuan but not
more than 50,000 yuan shall be concurrently imposed.

Article 40 Any enterprise or individual engaged
in printing business activities with regard to other printed
matter, if committing any on of the following acts, shall be given
a warning and have the printed matter and illegal income
confiscated by publication administration department of the local
people’s government at or above the county level; if the amount of
the illegal operations is not less than 10,000 yuan, a fine of not
less than five times but not more than ten times the amount of the
illegal operations shall be concurrently imposed; if the amount of
the illegal operations is less than 10,000 yuan, a fine of not less
than 10,000 yuan but not more than 50,000 yuan shall be
concurrently imposed; where the circumstances are serious, it or he
shall be ordered to suspend business for rectification or its or
his permit shall be revoked by the original issuing department; if
the act constitutes a crime, criminal liability shall be
investigated according to law.

(1) undertaking a commission to print other printed matter
without verifying relevant certifications according to the
provisions of these Regulations;

(2) further commissioning other person to print the other
printed matter under a commission without authorization;

(3) renting, lending, selling or transferring in any other
manner to other persons the paper matrixes and printing negatives
of other printed matter printed under a commission;

(4) counterfeiting or altering official documents or
certificates of State organs such as academic degree certificates,
educational qualification certificates, etc., or official documents
or certificates of enterprises, institutions or people’s
organizations, or pirating other printed matter of other
person;

(5) illegally printing other printed matter more than the
commissioned amount or selling other printed matter under a
commission;

(6) undertaking an overseas commission to print other printed
matter without reporting for the record to the publication
administration department according to the provisions of these
Regulations, or failing to transporting all such printed matter
overseas;

(7) an individual engaged in printing business activities with
regard to other printed matter exceeding the scope of his
business.

Article 41 Where any of the following acts is
committed, a warning shall be given by the public security
department, and the printed matter and illegal income shall be
confiscated; if the amount of the illegal operations is not less
than 10,000 yuan, a fine of not less than five times but not more
than ten times the amount of the illegal operations shall be
concurrently imposed; if the amount of the illegal operations is
less than 10,000 yuan, a fine of not less than 10,000 yuan but not
more than 50,000 yuan shall be concurrently imposed; where the
circumstances are serious, the business shall be suspended for
rectification or the special industry permit hall be revoked:

(1) printing public notices, circulars, staff identity cards or
passes for major activities, or coupons circulated for use in the
society without verifying the certification issued by the competent
department and the printing permit issued by the public security
department, or further commissioning other persons to print the
above-mentioned printed matter;

(2) printing public notices, circulars, staff identity cards or
passes for major activities, or coupons circulated for use in the
society without being designated by the public security
department;

(3) a printing operator counterfeits or alters official
documents or certificates of State organs such as academic degree
certificates, educational qualification certificates, etc., or
official documents or certificates of enterprises, institutions or
people’s organizations;

For printing public notices, circulars, staff identity cards or
passes for major activities, or coupons circulated for use in the
society, if the unit commissioning the printing fails to acquire
the certification issued by its competent department, or fails to
go through the formalities for approval of printing according to
the provisions of the State with the public security department of
the place where the printing enterprise is located, or fails to
have the printing conducted at a printing enterprise designated by
the public security department, it shall be imposed a fine not less
than 500 yuan but not more than 5,000 yuan by the public security
department of people’s government at or above the county level.

Article 42 Where, in violation of the
provisions of these Regulations, a printing operator commits any
one of the following acts, it or he shall be ordered to make
corrections and given a warning by the publication administration
department of the local people’s government at or above the county
level; where the circumstances are serious, it or he shall be
ordered to suspend business for rectification or its or his permit
shall be revoked by the original issuing department:

(1) an enterprise engaged in printing business activities with
regard to packaging and decorating printed matter retains without
permission the finished products, semi-finished products, waste
products and printing plates, paper matrixes, negatives or original
manuscripts of the packaging and decorating printed matter printed
under commissioned;

(2) an enterprise or individual engaged in printing business
activities with regard to other printed matter retains without
permission the sample copy or specimen page of the other printed
matter; or fails to stamp the retained printed matter with “sample
copy “or “specimen page”.

Article 43 Where a printing operator is imposed
the administrative penalty of revoking of its or his permit, it or
he shall, according to the relevant provisions of the State, have
the change(s) or cancellation registered with the department for
industry and commerce administration; if it or he fails to do so
after expiration of the time limit, its or his business license
shall be revoked by the department for industry and commerce
administration.

Article 44 Where a printing enterprise is
imposed the administrative penalty of revoking of its permit, its
legal representative or responsible person shall not hold the same
post in any printing enterprise within ten years from the date of
revocation of its permit.

Where an individual engaged in printing business activities with
regard to other printed matter is imposed the administrative
penalty of revoking of his permit, he shall not engage himself in
printing business activities within ten years from the date of
revocation of its permit.

Article 45 The administrative punishment
imposed according to the provisions of these Regulations shall, in
accordance with the relevant laws and administrative regulations,
exercise the separation of decision making and fine collecting, and
the fine collected shall all be turned over to the State
Treasury.

Article 46 Where a publication administration
department, a public security department, a department for industry
and commerce administration or any other relevant departments, in
violation of the provisions of these Regulations, approves the
establishment of a printing enterprise that does not meet the
conditions for establishment, or fails to perform its functions and
duties of supervision, or fails to investigate and deal with
illegal acts, thus resulting in serious consequences, the person in
charge who is responsible and the other person who is directly
responsible shall be given a administrative sanction of demotion or
dismissal from office; if a crime is constituted, criminal
liability shall be investigated according to law.

Chapter VII Supplementary Provisions

Article 47 Those printing enterprises
established according to law before the effectiveness of these
Regulations shall renew their Permit for Printing Business with the
publication administration departments within 180 days from the
date of effectiveness of these Regulations.

For issuing permits according to these Regulations, no other
fees shall be charged other than the cost of the permits charged
according to statutory standards.

Article 48 These Regulations shall be effective
as of the date of promulgation. The Regulations on Administration
of Printing Business promulgated by the State Council on March 8,
1997 shall be repealed simultaneously.

(State Council)

Regulations on Administration of Foreign Law Firms’ Representative Offices in China

(Adopted at the 51st Executive Meeting of the State Council
on December 19, 2001, promulgated by the Decree No. 338 of the
State Council of the People’s Republic of China on December 22,
2001, and effective as of January 1, 2002)

Chapter I General Provisions

Article 1 These Regulations are formulated in
accordance with the Law of the People’s Republic of China on
Lawyers for the purposes of regulating the establishment of
representative offices in China by foreign law firms and legal
service activities thereof.

Article 2 These Regulations are applicable to
the establishment of representative offices in China (hereinafter
referred to as “representative offices”) by foreign law firms and
the legal service activities they conduct.

Article 3 Representative offices and their
representatives shall, when conducting legal service activities,
abide by the laws, regulations and rules of China, scrupulously
observe the professional ethics and practice discipline of Chinese
lawyers, and shall not endanger the State security, social and
public interests in China.

Article 4 Representative offices and their
representatives, when conducting legal service activities in
accordance with the provisions of these Regulations, are protected
by Chinese law.

Article 5 Foreign law firms assume civil
liability for the legal service activities conducted by their
representative offices and representatives within the territory of
China.

Chapter II Establishment, Change, and Registration
Cancellation of Representative Offices

Article 6 The establishment of a representative
office in China and the posting of representatives thereto by a
foreign law firm shall be permitted by the judicial administration
department of the State Council.

No foreign law firms, other organizations or individuals may
conduct legal service activities within the territory of China as a
consulting firm or under other names.

Article 7 A foreign
law firm applying to establish a representative office in China and
post representatives thereto shall meet the following
requirements:

(1) it has been in practice lawfully in its home country and
never has been punished for a violation of lawyers’ professional
ethics or practice discipline;

(2) the representatives of the representative office are
practitioner lawyers who are members of the bar or law society of
the country where they obtain the qualifications to practice, have
practiced for not less than two years outside of China, and have
never been punished for a criminal offense or a violation of
lawyers’ professional ethics or practice discipline. The chief
representative of the representative office has practiced for not
less than three years outside of China and is a partner or
equivalent of the said firm.

(3) there is an actual need to establish a representative office
in China to conduct legal service business.

Article 8 A foreign
law firm applying to establish a representative office in China
shall produce the following documents to the judicial
administration department of the people’s government of the
province, autonomous region or municipality directly under the
Central Government where the proposed representative office is to
be located:

(1) an application signed by the principal responsible person of
the said foreign law firm for establishing the representative
office in China and posting representatives thereto. The name of
the proposed representative office shall be “Representative Office
of ______(name of the said law firm translated into Chinese) in
______(name of the Chinese city where the proposed representative
office is to be located)”;

(2) documents certifying that the said law firm has been
lawfully established in its home country;

(3) the partnership agreement or the articles of association of
the said law firm, and a list of its responsible persons and
partners;

(4) the power of attorney issued by the said law firm to the
representatives of the proposed representative office, and a
written statement confirming that the chief representative is a
partner of the said law firm or equivalent;

(5) certificates of the qualifications to practice of each
representative of the proposed representative office, and documents
certifying that the chief representative has practiced law for not
less than three years outside of China and the other
representatives for not less than two years.

(6) documents from the bar or law society of the said law firm’s
home country certifying that the representatives of the proposed
representative office are their members;

(7) documents from the lawyer administration department of the
said law firm’s home country certifying that the said law firm and
the representatives of the proposed representative office have
never been punished for a criminal offense or a violation of
lawyers’ professional ethics or practice discipline.

The documents listed in the preceding paragraph shall be
notarized by a notary institution or a notary in the applicant’s
home country, authenticated by the competent foreign affairs organ
of the applicant’s home country or an organ authorized by it, and
authenticated by the Chinese Embassy or Consulate in such
country.

The documents submitted by the foreign law firm shall have three
copies, and a corresponding Chinese translation shall be attached
to those in a foreign language.

Article 9 The judicial administration
departments of the people’s governments of provinces, autonomous
regions and municipalities directly under the Central Government
shall, within three months from the date of receiving the
application documents, finish the examination of them, and submit
their examination opinions and such application documents to the
judicial administration department of the State Council for
reexamination. The judicial administration department of the State
Council shall make a decision within six months; if the
establishment of the proposed representative office is permitted, a
license to practice shall be issued thereto and certificates to
practice to its representatives; if permission is not granted, the
applicant shall be informed of the reasons in writing.

Article 10 Before conducting the legal service
activities provided for in these Regulations, representative
offices and their representatives shall, on the basis of their
licenses to practice and certificates to practice, register with
the judicial administration department of the people’s government
of the provinces, autonomous regions and municipalities directly
under the Central Government where such representative offices are
located. Representative offices and their representatives shall
register annually.

The judicial administration departments of the people’s
governments of provinces, autonomous regions and municipalities
directly under the Central Government shall handle the registration
applications within two days from the date of receiving them.

Article 11 A
representative office shall, in accordance with relevant laws and
administrative regulations, go through formalities of taxation,
banking and foreign exchange, etc.

Article 12 A foreign
law firm which needs to change the name of its representative
office, or reduce its representatives shall in advance submit an
application signed by its principle responsible person and other
relevant documents to the judicial administration department of the
people’s government of the province, autonomous region or
municipality directly under the Central Government where the said
office is located. Such changes or reduction shall be subject to
the examination and approval of the judicial administration
department of the State Council, and the certificates to practice
of those who do not serve as representatives any longer shall be
withdrawn.

In the case of merger, division or posting of new
representatives, a representative office shall go through the
permission formalities in accordance with the provisions of these
Regulations for the establishment of a representative office.

Article 13 Where a representative of a
representative office falls into one of the following
circumstances, the judicial administration department of the State
Council shall revoke the permission to practice granted to him and
withdraw his certificate to practice, and the judicial
administration department of the people’s government of the
province, autonomous region or municipality directly under the
Central Government shall cancel his registration to practice
accordingly:

(1) his license to practice in his home country has become
void;

(2) being disqualified as a representative by the foreign law
firm he belongs to;

(3) his certificate to practice or the license to practice of
the representative office he belongs to is revoked according to
law.

Article 14 Where a representative office falls
into one of the following circumstances, the judicial
administration department of the State Council shall revoke the
permission to practice granted to it and withdraw its license to
practice; and the judicial administration department of the
people’s government of the province, autonomous region and
municipality directly under the Central Government shall cancel its
registration to practice accordingly:

(1) the foreign law firm it affiliates to has been dissolved or
the registration of which has been canceled;

(2) the foreign law firm it affiliates to applies to cancel its
registration;

(3) it does not meet the requirements set forth in Article 7 of
these Regulations any longer;

(4) its license to practice is revoked according to law.

The representative offices whose registration is cancelled in
accordance with the preceding paragraph shall be liquidated
according to law, and before the repayment of their liabilities,
their property shall not be transferred out of the territory of
China.

Chapter III Business Scope and Practice
Rules

Article 15 A
representative office and its representatives may only conduct the
following activities that does not encompass Chinese legal
affairs:

(1) to provide clients with the consultancy on the legislation
of the country where the lawyers of the law firm are permitted to
engage in lawyer’s professional work, and on international
conventions and international practices;

(2) to handle, when entrusted by clients or Chinese law firms,
legal affairs of the country where the lawyers of the law firm are
permitted to engage in lawyer’s professional work;

(3) to entrust, on behalf of foreign clients, Chinese law firms
to deal with the Chinese legal affairs;

(4) to enter into contracts to maintain long-term entrustment
relations with Chinese law firms for legal affairs;

(5) to provide information on the impact of the Chinese legal
environment.

Representative offices may directly instruct lawyers in the
entrusted Chinese law firms, as agreed between both parties.

A representative office and its representatives shall not
conduct any legal service activities or other for-profit activities
other than those set forth in the first paragraph and the second
paragraph of this Article.

Article 16 A
representative office shall not employ Chinese practitioner
lawyers; its support staff employed shall not provide legal
services to clients.

Article 17 A
representative office and its representatives shall not commit any
of the following acts in their practice:

(1) to provide false evidence, conceal facts, intimidate or
induce another with promise of gain to provide false evidence or
conceal facts, or obstruct the opposing party’s lawful obtaining of
evidence;

(2) to accept money or other things of value from parties by
using the advantage of providing legal services;

(3) to divulge commercial secrets or private matters of
parties.

Article 18 A
representative of a representative office shall not be concurrently
a full-time or part-time representative in two or more
representative offices.

Article 19 Representatives of a representative
office shall be resident in China for not less than 6 months each
year, if the said representatives fail to do so, they will not be
registered in the following year.

Article 20 A
representative office may charge its clients fees when conducting
legal services provided for in these Regulations. The fees
collected must be settled within the territory of
China.

Chapter IV Supervision and Administration

Article 21 The judicial administration
department of the State Council and the judicial administration
departments of the people’s governments of provinces, autonomous
regions and municipalities directly under the Central Government,
in accordance with their duties, are responsible for the
supervision and administration of representative offices and their
representatives.

Article 22 A
representative office shall, before March 31 of each year, submit
to the judicial administration department of the peoples’
government of the province, autonomous region or municipality
directly under the Central Government where it is located for
annual examination a copy of its license to practice and its
representatives’ certificates to practice, and the following
materials of the previous year:

(1) information on their performance of legal services,
including the legal affairs entrusted to Chinese law firms;

(2) its annual financial statement audited by an accounting
firm, and documents certifying that its accounts have been settled
within the territory of China and taxes have been paid according to
law.

(3) information on the change of its representatives and the
employment of Chinese support staff;

(4) information on the residence of its representatives in the
territory of China.

(5) information on the registration of itself and its
representatives.

(6) other information on the performance of the duties provided
for in these Regulations.

The judicial administration departments of the people’s
governments of provinces, autonomous regions and municipalities
directly under the Central Government shall, after finishing the
annual examination of the representative offices that are located
in their respective administrative regions, submit their
examination opinions to the judicial administration department of
the State Council for the record.

Article 23 The judicial administration
departments of the people’s governments of provinces, autonomous
regions and municipalities directly under the Central Government
shall, when collecting fees in registering representative offices
and their representatives or collecting fees in conducting annual
examination of representative offices according to law, strictly
follow the same standards for Chinese law firms and practitioner
lawyers which are verified and determined by the pricing
administration department of the State Council. All fees collected
shall be turned over to the State Treasury.

Where the judicial administration departments of the people’s
governments of provinces, autonomous regions and municipalities
directly under the Central Government impose administrative
punishment of fines according to law, the fine decisions and
collection of such fines shall be separated in accordance with the
provisions of relevant laws and administrative regulations. All
fines collected and illegal income confiscated shall be turned over
to the State Treasury.

Chapter V Legal Liability

Article 24 Any representative office or
representative who endangers China’s State security, public
security or administration of public order, shall be investigated
for criminal liability according to the provisions of the Criminal
Law on crimes of endangering State security, crimes of endangering
public security or crimes of obstructing the administration of
public order, and the license to practice of the representative
office or the certificate to practice of the representative shall
be revoked by the judicial administration department of the State
Council. If the case is not serious enough for criminal punishment,
administrative penalties for public security shall be imposed
according to law, and the license to practice of the representative
office or the certificate to practice of the representative shall
be revoked by the judicial administration department of the State
Council.

Article 25 Any representative office or
representative who, in violation of Article 15 of these
Regulations, illegally conducts legal service activities or other
for-profit activities shall be ordered to suspend its/his business
within a specified time limit by the judicial administration
department of the people’s government of the province, autonomous
region or municipality directly under the Central Government. If
the circumstances are serious, the judicial administration
department of the State Council shall revoke the license to
practice of the representative office or the certificate to
practice of the representative.

The judicial administration department of the people’s
government of the province, autonomous region and municipality
directly under the Central Government shall confiscate the illegal
income of the representative office or the representative who
commits the acts set forth in the preceding paragraph, and impose a
fine of not less than 50,000 yuan but not more than 200,000 yuan
respectively on the chief representative and other representatives
directly responsible.

Article 26 Where a representative office falls
under one of the following circumstances, the judicial
administration department of the people’s government of the
province, autonomous region and the municipality directly under the
Central Government shall give it a warning and order it to make
corrections within a specified time limit; if the circumstances are
serious, the judicial administration department of the people’s
government of the province, autonomous region and the municipality
directly under the Central Government shall order a suspension of
its business within a specified time limit; if the representative
office fails to make corrections within the specified time limit,
the judicial administration department of the State Council shall
revoke its license to practice:

(1) employing Chinese practitioner lawyers, or its employed
support staff conducts legal services activities;

(2) failing to settle the fees that it collects for legal
services within the territory of China;

(3) failing to submit relevant materials for annual examination
on time, or failing to pass the annual examination.

If the representative office commits the acts set forth in item
(2) of the preceding paragraph, the judicial administration
department of the people’s government of the province, autonomous
region and the municipality directly under the Central Government
shall impose on it a fine of not less than one time but not more
than three times the money that should have been settled in the
territory of China.

Article 27 Where a representative office or a
representative falls under one of the following circumstances, the
judicial administration department of the people’s government of
the province, autonomous region and the municipality directly under
the Central Government give it/him a warning, confiscate its/his
illegal income, and concurrently impose a fine of not less than
20,000 yuan but not more than 100,000 yuan:

(1) concurrently serving as a full-time or part-time
representative in two or more representative offices;

(2) divulging commercial secrets or private matters of
parties;

(3) accepting money or other things of value from parties by
using the advantage of providing legal services.

Article 28 Where a representative office whose
registration is cancelled transfers its property out of the
territory of China before repaying its liabilities, the judicial
administration department of the people’s government of the
province, autonomous region and municipality directly under the
Central Government shall order a retransfer of the property
transferred out of the territory of China for the repayment of
liabilities. If such transfer seriously infringes upon other
persons’ interests, the chief representative of the representative
office and other persons directly responsible for such transfer
shall be investigated for criminal liability for the crime of
concealing property according to the provisions of the Criminal
Law. If the case is not serious enough for criminal punishment, the
judicial administration department of the people’s government of
the province, autonomous region and municipality directly under the
Central Government shall impose a fine of not less than 50,000 yuan
but not more than 300,000 yuan on the representative office, and a
fine of not less than 20,000 yuan but not more than 100,000 yuan
respectively on the chief representative and other persons directly
responsible for such transfer.

Article 29 Where a representative of a
representative office provides false evidence, conceals facts or
intimidates or induces another with promise of gain to provide
false evidence or conceal facts, he shall be investigated for
criminal liability for the crime of obstructing testimony in
accordance with the provisions of the Criminal Law, and his
certificate to practice shall be revoked by the judicial
administration department of the State Council.

Article 30 Where a foreign law firm, a foreign
lawyer or any other foreign organization or individual conducts
legal service activities within the territory of China without
permission, or where a representative office or a representative
whose permission to practice has been revoked continues to conduct
legal service activities within the territory of China, the
judicial administration department of the people’s government of
the province, autonomous region and municipality directly under the
Central Government shall ban such activities, confiscate the
illegal income, and impose a fine of not less than 50,000 yuan but
not more than 300,000 yuan concurrently.

Article 31 Where the license to practice of a
representative office is revoked according to law, the foreign law
firm that the said office is affiliated to will not be permitted to
apply to establish its representative office in China for five
years; where the certificate to practice of a representative of a
representative office is revoked according to law, he will not be
permitted to serve as a representative of any representative office
in China for five years.

Where a representative of a representative office is imposed a
criminal punishment for endangering the State security, public
security or administration of public order in China, the foreign
law firm that his representative office affiliates to will not be
permitted to apply to establish its representative office again and
the said representative will not be permitted to serve as a
representative of any representative office in China for life.

Article 32 Where a judicial administration
department staff member commits one of the following acts, an
administrative sanction of demerit recording, grave demerit
recording or demotion shall be imposed on the person in charge and
other persons directly responsible according to law:

(1) failing to examine or reexamine the certifying documents on
proposed representative offices and their representatives in
accordance with the requirements provided for in these
Regulations;

(2) failing to conduct registration or annual examination for
representative offices in accordance with the provisions of these
Regulations;

(3) failing to collect fees in accordance with the fee items and
fee standards set forth by the State.

Article 33 If a judicial administration
department staff member commits one of the following acts, an
administrative sanction of demotion, dismissal from the post or
discharge from public employment shall be imposed on the person in
charge and other persons directly responsible:

(1) issuing license to practice or certificate to practice to
proposed representative offices or its representatives which do not
meet the requirements provided for in these Regulations;

(2) using advantage of the office to accept money or property,
or to seek personal gain;

(3) in violation of the provisions of these Regulations, failing
to revoke the permission to practice granted to representative
offices or representatives, withdraw their license to practice or
certificate to practice, or cancel their registration where such
revocation or cancellation shall be done;

(4) failing to issue a receipt for the lawfully collected fines
or failing to truthfully fill in the amount of the fines;

(5) violating the system for separation of the fine decision
respecting and collection of fines or failing to turn over to the
State Treasury the fees and fines collected and the illegal income
confiscated as provided for;

(6) failing to promptly investigate and deal with the violations
of these Regulations by representative offices or their
representatives;

(7) other acts of not strictly enforcing laws or abusing powers
which cause serious consequences.

Those who commit one of the acts set forth in the preceding
paragraph which cause a heavy loss to public property or the
interests of the State and people shall be investigated for
criminal liability for the crime of abuse of power, negligence of
duty or acceptance of bribes in accordance with the provisions of
the Criminal Law.

Chapter VI Supplementary Provisions

Article 34 Measures for administration of the
representative offices established in Chinese mainland by law firms
in the separate customs territories shall be separately formulated
by the judicial administration department of the State Council in
accordance with the principles of these Regulations.

Article 35 These Regulations shall be effective
as of January 1, 2002. Representative offices of foreign law firms
and their representatives which have been approved to operate and
practice on a trial basis by the judicial administration department
of the State Council shall, within 90 days from effective date of
these Regulations, apply anew to handle examination and approval
formalities.

(State Council)

Regulations on Computers Software Protection

(Promulgated by Decree No. 339 of the State Council of the
People’s Republic of China on December 20, 2001, and effective as
of January 1, 2002)

Chapter I General Provisions

Article 1 These Regulations are formulated in
accordance with the Copyright Law of the People’s Republic of
China, for the purposes of protecting the rights and interests of
copyright owners of computer software, regulating the relationship
of interests generated in the development, dissemination and use of
computer software, encouraging the development and application of
computer software, and promoting the development of software
industry and the informatization of national economy.

Article 2 For the purposes of these
Regulations, the term “computer software” (hereinafter referred to
as “software”) means computer programs and relevant documents.

Article 3 For the purposes of these
Regulations, the following definitions apply:

(1) “computer program” means a coded instruction sequence which
may be executed by devices with information processing capabilities
such as computers, or a symbolic instruction sequence or symbolic
statement sequence which may be automatically converted into a
coded instruction sequence for the purpose of obtaining certain
expected results; the source program and object program of a
computer program shall be deemed as one and the same work;

(2) “documents” means literal descriptions or charts used to
describe the content, structure, design, functional performance,
historical development, test results and usage, such as program
design instructions, flowcharts, and user’s manuals;

(3) “software developer” means a legal entity or other
organization that actually organizes, or directly carries out, the
development of a piece of software and assumes responsibility for
the accomplished software, or a natural person who independently
completes, relying on his own conditions, the development of a
piece of software and assumes responsibility therefor;

(4) “software copyright owner” means a natural person, legal
entity or other organization that enjoys software copyright in
accordance with these Regulations.

Article 4 The software protected under these
Regulations must be developed independently by the developer and
fixed on tangible medium.

Article 5 Chinese citizens, legal entities or
other organizations enjoy, in accordance with these Regulations,
copyright in the software which they have developed, whether
published or not.

Foreigners or stateless persons having software first published
within the territory of the People’s Republic of China enjoy
copyright in accordance with these Regulations.

Software copyright enjoyed by foreigners or stateless persons
under an agreement concluded between China and the country to which
they belong to or in which they have their habitual residences, or,
under an international treaty acceded to by China, is protected in
accordance with these Regulations.

Article 6 The protection of software copyright
under these Regulations shall not extend to the ideas, processing,
operating methods, mathematical concepts or the like used in
software development.

Article 7 A software
copyright owner may register with the software registration
institution recognized by the copyright administration department
of the State Council. A registration certificate issued by the
software registration institution is a preliminary proof of the
registered items.

Fees shall be paid for software registration. The charging
standards for software registration shall be provided for by the
copyright administration department of the State Council jointly
with the competent department for pricing of the State Council.

Chapter II Software Copyright

Article 8 A software
copyright owner shall enjoy the following
rights:

(1) the right of divulgation, that is, the right to decide
whether to make the software available to the public;

(2) the right of developer-ship, that is, the right to claim
developer’s identity and to have the developer’s name mentioned in
connection with the software;

(3) the right of alteration, that is, the right to supplement or
abridge the software, or to change the sequence of instructions or
statements;

(4) the right of reproduction, that is, the right to produce one
or more copies of the software;

(5) the right of distribution, that is, the right to provide the
original copy or reproductions of the software to the public by
selling or donating;

(6) the right of rental, that is, the right to authorize others
to use temporarily and onerously the original copy or reproductions
of the software, except where the software itself is not the
essential object of the rental;

(7) the right of communication through information network, that
is, the right to make the software available to the public by wire
or wireless means so that members of the public may have access to
the software from a place and at a time individually chosen by
them;

(8) the right of translation, that is, the right to converse the
natural language of the software into another natural language;
and

(9) other rights which shall be enjoyed by software copyright
owners.

A software copyright owner may authorize others to exploit his
copyright, and has a right to receive remuneration.

A software copyright owner may transfer, wholly or in part, his
copyright, and has a right to receive remuneration.

Article 9 Except where otherwise provided in
these Regulations, the copyright in a piece of software belongs to
its developer.

The natural person, legal entity or other organization whose
name is mentioned in connection with a piece of software shall, in
the absence of proof to the contrary, will be its developer.

Article 10 Where a piece of software is
developed jointly by two or more natural persons, legal entities or
other organizations, the copyright ownership shall be agreed upon
in a written contract between the co-developers. Where, in the
absence of a written contract or an explicit agreement in the
contract, the joint software can be separated into independent
parts and exploited separately, each co-developer may enjoy
independent copyright in the part which he has developed, but the
exploitation of such copyright shall not extend to the copyright in
the joint software as a whole. Where the joint software cannot be
separated into independent parts and exploited separately, its
copyright is enjoyed jointly by those co-developers and exploited
by agreement. In the absence of such an agreement, any co-developer
shall not prevent, without justification, the other(s) from
exploiting the copyright except the right of transfer; however, the
profit received for exploiting the joint software shall be
reasonably shared between all the co-developers.

Article 11 Where a piece of software is
developed on commission, the copyright ownership shall be agreed
upon in a written contract between the commissioning and the
commissioned parties. In the absence of a written contract or an
explicit agreement in the contract, the copyright shall be enjoyed
by the commissioned party.

Article 12 Where a piece of software is
developed under a task assigned by a State organ, the ownership and
exploitation of its copyright shall be stipulated in a letter of
project assignment or a contract. In the absence of an explicit
stipulation in the letter of project assignment or the contract,
the copyright shall be enjoyed by the legal entity or other
organization that has accepted the task.

Article 13 Where a piece of software developed
by a natural person working in a legal entity or other organization
in the course of his service involves one of the following
circumstances, the copyright therein shall be enjoyed by such legal
entity or organization, which may reward the natural person for the
development of the software:

(1) the software is developed based on the development objective
explicitly designated in the line of his service duty;

(2) the software is a foreseeable or natural result of his work
activities in the line of his service duty; or

(3) the software is developed mainly with the material and
technical resources of the legal entity or other organization, such
as funds, special equipment or unpublished special information, and
the legal entity or other organization assumes the responsibility
therefor.

Article 14 The software copyright shall exist
from the date on which its development has been completed.

In the case of software copyright of a natural person, the term
of protection shall be the lifetime of such person and fifty years
after his death, expiring on December 31 of the fiftieth year after
his death. In the case of a piece of joint software, the term of
protection shall expire on December 31 of fiftieth year after the
death of the last surviving developer.

In the case of software copyright a legal entity or other
organization, the term of protection shall be fifty years, expiring
on December 31 of the fiftieth year after the first publication of
such software; however, if any such software has not been published
within fifty years from the date on which its development has been
completed, it shall be no longer protected under these
Regulations.

Article 15 Where software copyright belongs to
a natural person, his successer(s) may, after his death, inherit
the rights provided for in Article 8 of these Regulations except
the right of developer-ship, during the term of protection provided
for in these Regulations, in accordance with the succession Law of
the People’s Republic of China.

Where software copyright belongs to a legal entity or other
organization, the copyright shall, after the change or the
termination of the legal entity or other organization, be enjoyed,
during the term of protection provided for in these Regulations, by
the legal entity or other organization that has taken over the
former’s rights and obligations, or, in the absence of such entity
or organization, by the State.

Article 16 Owners of lawful copies of a piece
of software enjoy the following rights:

(1) to install and store the software in devices with
information processing capabilities, such as computers, according
to the need of their use;

(2) to make backup copies against damage, provided that such
owners do not offer others in any way the backup copies for their
use and that they destroy such copies once they lose the ownership
thereof; and

(3) to make necessary alterations to the software in order to
implement it in an actual environment of computer application or to
improve its functions or performance, provided that such owners do
not, except otherwise agreed in the contract, offer any third party
the altered software without permission from the software copyright
owner.

Article 17 A piece of
software may be used by its installing, displaying, transmitting or
storing for the purposes of studying or researching the design
ideas or principles embodied therein, without permission from, and
without payment of remuneration, to the software copyright
owner.

Chapter III Software Copyright Licensing and
Transfer

Article 18 In the
case of a license to exploit software copyright, the parties shall
conclude a licensing contract.

The licensee shall not exploit any right that the software
copyright owner has not expressly granted in the contract.

Article 19 In the
case of an exclusive license to exploit software copyright, the
parties shall conclude a written contract.

In the absence of a written contract or an explicit agreement
upon exclusive license in the contract, the right that the licensee
is authorized to exploit shall be deemed as a non-exclusive
right.

Article 20 In the
case of a transfer of software copyright, the parties shall
conclude a written contract.

Article 21 Anyone that concludes an exclusive
licensing contract or a transfer contract of software copyright may
register with the software registration institution recognized by
the copyright administration department of the State Council.

Article 22 A Chinese
citizen, legal entity or other organization that authorizes a
foreigner’s exploiting software copyright, or transfers it to a
foreigner, shall comply with the Regulations of the People’s
Republic of China on Administration of Technology Import and
Export.

Chapter IV Legal Liability

Article 23 Except where otherwise provided in
the Copyright Law of the People’s Republic of China or these
Regulations, anyone who commits any of the following acts of
infringement shall, in light of the circumstances, bear civil
liability by means of ceasing infringements, eliminating ill
effects, making an apology, or compensating for losses:

(1) to publish or register a piece of software without the
authorization of the software copyright owner;

(2) to publish or register a piece of software developed by
another person as ones own;

(3) to publish, or register, a piece of joint software as
developed solely by oneself, without the authorization of the other
co-developer(s);

(4) to have ones name mentioned in connection with, or alter the
name on, a piece of software developed by another person;

(5) to alter or translate a piece of software without the
authorization of the software copyright owner; or

(6) to commit other acts of infringing upon software
copyright.

Article 24 Except where otherwise provided in
the Copyright Law of the People’s Republic of China, these
Regulations, or other laws or administrative regulations, anyone
who, without the authorization of the software copyright owner,
commits any of the following acts of infringement shall, in light
of the circumstances, bear civil liability by means of ceasing
infringements, eliminating ill effects, making an apology, or
compensating for losses; where such act also prejudices the public
interest, the copyright administration department may order to
cease infringements, confiscate illegal income, confiscate or
destroy the infringing copies, and may impose a fine concurrently;
where the circumstances are serious, the copyright administration
department may confiscate the material, tools and equipment mainly
used to produce infringing copies; and where the act violates the
Criminal Law, criminal liability shall be investigated for the
crime of infringing upon copyright or selling infringing copies in
accordance with the provisions of the Criminal Law:

(1) to reproduce, wholly or in part, a piece of software of the
copyright owner;

(2) to distribute, rent or communicate to the public through
information network a piece of software of the copyright owner;

(3) to knowingly circumvent or sabotage technological measures
used by the copyright owner for protecting the software
copyright;

(4) to knowingly remove or alter any electronic rights
management information attached to a copy of a piece of software;
or

(5) to transfer, or authorize another person to exploit, the
software copyright of the owner.

Whoever commits the act referred to in item (1) or (2) of the
preceding paragraph may be concurrently fined 100 yuan for per copy
or not more than 5 times of the value of the products; and, those
who commits the act referred to in item (3), (4) or (5) of the
preceding paragraph may be fined not more than 50,000 yuan
concurrently.

Article 25 The compensation paid for infringing
upon software copyright shall be determined in accordance with
Article 48 of the Copyright Law of the People’s Republic of
China.

Article 26 A software
copyright owner that can present evidence to prove that another
person is committing, or is to commit, an infringement which, if
not being prevented promptly, is likely to cause irreparable harm
to him, may, before instituting legal proceedings, apply to a
people’s court, in accordance with Article 49 of the Copyright Law
of the People’s Republic of China, for an order of a stop to
relevant act and for measures of property
preservation.

Article 27 In order
to prevent infringement, a software copyright owner may, before
instituting legal proceedings, apply to a people’s court, in
accordance with Article 50 of the Copyright Law of the People’s
Republic of China, for evidence preservation where the evidence is
likely to be missing, or to be obtained difficultly
later.

Article 28 A
publisher or producer of copies of a piece of software that fails
to prove that the legal authorization for the publication or
production, or, a distributor or renter of copies of a piece of
software that fails to prove the legal source of the copies which
he distributes or rents, shall bear legal
liability.

Article 29 The development of a piece of
software which is similar to a pre-existing one due to a limit of
alternative forms of expression does not constitute an infringement
of the copyright in the pre-existing one.

Article 30 A holder
of copies of a piece of software that neither knows nor has
reasonable grounds to know that such copies are infringing ones
does not bear liability of compensation but shall cease the use of,
and destroy, the infringing copies. Nevertheless, if the cease of
use or the destruction of such copies is likely to cause heavy
losses to him, the holder of such copies may, after paying
reasonable remuneration to the software copyright owner, continue
to use such copies.

Article 31 A dispute
over software copyright infringement may be settled by
mediation.

A dispute over a software copyright contract may be submitted to
an arbitration institution for arbitration under an arbitration
clause in the copyright contract or under a written arbitration
agreement concluded later between the parties.

Any party may institute legal proceedings directly in a people’s
court in the absence of an arbitration clause in the contract or of
a written arbitration agreement concluded afterwards between the
parties.

Chapter V Supplementary Provisions

Article 32 Any act of infringing upon software
copyright committed prior to the entry into force of these
Regulations shall be dealt with under the relevant provisions of
the State that are in force at the time when the act was
committed.

Article 33 These Regulations shall be effective
as of January 1, 2002. The Regulations on Computer Software
Protection promulgated by the State Council on June 4, 1991 shall
be repealed simultaneously.

(State Council)

Regulations on Administration of Audio-visual Products

(Adopted at the 50th Executive Meeting of the State Council
on December 12, 2001, promulgated by Decree No.341 of the State
Council of the People’s Republic of China on December 25, 2001, and
effective as of February 1, 2002)

Chapter I General Provisions

Article 1 These Regulations are formulated to
strengthen the administration of audio-visual products, promote the
healthy development and flourish of the audio-visual undertakings,
enrich the cultural life of the people and promote the construction
of socialist material civilization and spiritual civilization.

Article 2 These Regulations shall apply to the
administration of the publication, production, reproduction,
importation, wholesale, retail and rental of such recorded
audio-visual products as audio tapes, video tapes, gramophone
records, compact discs and laser discs.

Those audio-visual products for the purpose of radio and TV
broadcasting shall be applied to the laws and administrative
regulations on radio and TV broadcasting.

Article 3 Publication, production,
reproduction, importation, wholesale, retail and rental of the
audio-visual products shall conform to the Constitution and
relevant laws and regulations, adhere to the principle of serving
the people and socialism and disseminate the ideological, ethical,
scientific, technological and cultural knowledge that is beneficial
to economic development and social progress.

No audio-visual product shall contain the following
contents:

(1) those opposing the basic principles established in the
Constitution;

(2) those endangering the unification, sovereignty and
territorial integrity of the State;

(3) those divulging secrets of the State, harming national
security, or impairing the honor and interests of the State;

(4) those inciting the enmity, discrimination of nationalities,
jeopardizing the unity among the various ethnic groups, or
violating the Customs and habits of minority nationalities;

(5) those spreading cults or superstitions;

(6) those disturbing social order and destroying social
stability;

(7) those inciting pornography, gambling, violence or
instigating a crime;

(8) those insulting or libeling others, violating the lawful
rights and interests of others; or

(9) those endangering social moralities or fine national
cultural traditions;

(10) other contents which are prohibited by laws and
administrative regulations or by the State.

Article 4 The publication administration
department of the State Council shall be responsible for the
publication, production and reproduction of audio-visual products
nationwide; the culture administration department of the State
Council shall be responsible for the supervision and administration
of the importation, wholesale, retail and rental of audio-visual
products nationwide; the other relevant administrative departments
of the State Council shall, in accordance with division of duties
prescribed by the State Council, be responsible for the supervision
and administration of commercial activities of audio-visual
products.

A administrative departments in charge of publication of the
local people’s governments at or above the county level shall be
responsible for the supervision and administration of the
publication, production and reproduction of audio-visual products
within their administrative areas; the culture administration
department of the local governments at or above county level shall
be responsible for the supervision and administration of the
importation, wholesale, retail and rental of audio-visual products
within their administrative areas; the other relevant
administrative departments of the local governments at or above
county level shall, within their own duties, be responsible for the
supervision and administration of commercial activities of
audio-visual products.

Article 5 The State implements a license system
for the publication, production, reproduction, importation,
wholesale, retail, and rental of audio-visual products. Any entity
or individual, without a license, shall not be engaged in the
publication, production, reproduction, importation, wholesale,
retail or rental of audio-visual products.

Any license or approval documents issued according to these
Regulations shall not be assigned by means of rental, lending, sale
or any other means.

Article 6 The publication administration
departments and culture administration department of the State
Council are responsible for formulating a development program of
the audio-visual publishing undertakings and determining, in
accordance with the division of duties prescribed by the State
Council, the total number, distribution and structure nationwide of
the audio-visual publishing units, audio-visual reproduction units
and audio-visual end products importation units.

Article 7 The departments and their staff
members in charge of the supervision and administration of
commercial activities of audio-visual products shall not engage or
engage, in a disguised form, in the commercial activities in
audio-visual products nor participate or participate, in a
disguised form, in such activities of the units dealing in
audio-visual products.

Chapter II Publication

Article 8 For establishment, an audio-visual
publishing unit shall meet the following conditions:

(1) possess a name and the articles of association of the
audio-visual publishing unit;

(2) possess a sponsoring unit which is recognized by the
publication administration department of the State Council and its
competent agency at the higher level;

(3) possess a well-defined scope of business;

(4) possess an organizational structure which meets the needs of
its scope of business and audio-visual publication professionals
conforming to the qualification conditions stipulated by the
State;

(5) possess necessary funds, equipment and production premises;
and

(6) other requirements prescribed by the laws and administrative
regulations.

In addition to the conditions listed in the preceding paragraph,
the approval of the establishment of an audio-visual publishing
unit shall conform to the development program concerning the total
number, distribution and structure of the audio-visual publishing
units.

Article 9 An application for establishing an
audio-visual publishing unit shall be, after being examined and
consented to by the publication administrative department of the
people’s government of the province, autonomous region or
municipality directly under the Central Government, submitted to
the publication administrative department of the State Council for
examination and approval. The latter shall, within 60 days from the
date of receipt of the application, make a decision on approving or
not approving the application, and make a notice to the applicant.
Where an application is approved, the License for Publishing
Audio-visual Products shall be issued, with which the applicant may
go through the formalities of registration at the administrative
department for industry and commerce, and obtain the business
license according to law; while the application is not approved,
the reason shall be given.

The application shall include the following items:

(1) the name and address of the audio-visual publishing
unit;

(2) the names and addresses of the sponsoring unit of the
audio-visual publishing unit and its competent agency at the higher
level;

(3) the name, address and qualification certifying document of
the legal representative or the major responsible person of the
audio-visual publishing unit; and

(4) the source and amount of fund of the audio-visual publishing
unit.

Article 10 Where an audio-visual publishing
unit intends to change its name, its sponsoring unit or the
competent agency at the higher level, or its business scope, , or
to merge other audio-visual publishing unit, or to establish a new
audio-visual publishing unit due to amalgamation or separation, it
shall go through the formalities of examination and approval in
accordance with the provisions of Articles 9, and go through the
relevant formalities of registration at the administrative
department for industry and commerce where the original
registration was gone through.

Where an audio-visual publishing unit intends to change address,
its legal representative or the major responsible person, or to
terminate its operations, it shall go through the formalities of
registration for change or revocation at the administrative
department for industry and commerce where the original
registration was gone through, and file for the record with the
publication administration department of the State Council at the
same time.

Article 11 The annual publication plan, and
important subjects involving national security and social stability
of an audio-visual publishing unit shall be examined by the
publication administration department of the people’s government of
the province, autonomous region or municipality directly under the
Central Government and be filed for the record with the publication
administration department of the State Council. Any audio-visual
product with important subjects shall not be published without
filing for the record before its publication.

Article 12 An audio-visual publishing unit
shall indicate at prominent positions on the audio-visual products
and their packages such contents as the name and address of the
publishing unit, the publisher’s code, the date of publication and
the owner of copyright of the audio-visual products. In the case of
publishing an imported audio-visual product, the importation
approval document number shall also be indicated.

The audio-visual publishing unit shall, within 30 days from the
date of publication of audio-visual products, present sample copies
for free to the National Library of China, National Editions
Library and the publication administration department of the State
Council.

Article 13 An audio-visual publishing unit may
not rent out, lend or sell its name or to assign its name in any
other ways to any other unit or individual, nor to sell publisher’s
code to any other unit or individual or to assign in any other ways
its publisher’s code to any other unit or individual.

Article 14 No unit or individual may engage in
the publication of audio-visual products by the means of
.purchasing, renting, borrowing or using without authorization the
name of an audio-visual publishing unit, or by the means of
purchasing or forging a publisher’s code.

No books publishing unit, newspapers publishing unit,
periodicals publishing unit or electronic publishing unit may
publish audio-visual products which are not in support of the
publications under its own imprint. However, in accordance with the
provisions by the publication administration department of the
State Council, they may engage in publication of audio-visual
products in support of the publications under its own imprint, and
enjoy the rights and bear the obligations with reference to those
of an audio-visual publishing unit.

Article 15 An audio-visual publishing unit may
cooperate with an organization or individual from Hong Kong Special
Administrative Region, Macao Special Administrative Region, and the
region of Taiwan or from a foreign country to produce audio-visual
products. The specific measures shall be formulated by the
publication administration department of the State Council.

Article 16 An audio-visual publishing unit
shall adopt a system of editor’s responsibility to ensure that the
contents of its audio-visual products conform to the provisions of
these Regulations.

Article 17 Any application for establishing, by
a unit other than an audio-visual publishing unit, a unit to engage
separately in the production of audio-visual products(hereinafter
referred as to audio-visual production unit) shall be examined and
approved by the publication administration department of the
people’s government of the province, autonomous region or
municipality directly under the Central Government. The publication
administration department of the people’s government of the
province, autonomous region or municipality directly under the
Central Government shall, within 60 days from the date of receipt
of the application, make a decision on approving or not approving
the application, and make a notice to the applicant. Where an
application is approved, the License for Producing Audio-visual
Products shall be issued, with which the applicant may go through
the formalities of registration at the administrative department
for industry and commerce, and obtain the business license
according to law; while the application is not approved, the reason
shall be given. The establishment of a unit to engage in production
of radio and TV programs shall be dealt with in accordance with the
provisions of the relevant laws and administrative regulations.

The application shall include the following items:

(1) the name and address of the audio-visual production
unit;

(2) the name, address and qualification certifying document of
the legal representative or the major responsible person of the
audio-visual publishing unit; and

(3) the source and amount of fund of the audio-visual production
unit.

Where the establishment of an audio-visual production unit is to
be examined for approval, in addition to the requirements listed in
the preceding paragraph, the total number, distribution and
structure of the audio-visual production unit shall also be
considered.

Article 18 Where an audio-visual production
unit intends to change its name or its business scope, or to merge
other audio-visual production unit, or to establish a new
audio-visual production unit due to amalgamation or separation, it
shall go through the formalities of examination and approval in
accordance with the provisions of Articles 17, and go through the
relevant formalities of registration at the administrative
department for industry and commerce where the original
registration was gone through.

Where an audio-visual production unit intends to change its
address, its legal representative or the major responsible person,
or to terminate its operations, it shall go through the formalities
of registration for change or revocation at the administrative
department for industry and commerce where the original
registration was gone through, and file the record with the
publication administration department of the people’s government of
the province, autonomous region or municipality directly under the
Central Governmental at the same time.

Article 19 Any audio-visual production unit
shall not commission a unit that has not obtained a License for
Production of Audio-visual Products to produce audio-visual
products.

When an audio-visual production unit accepts a commission to
produce audio-visual products, it shall, in accordance with the
relevant provisions by the State, enter into an agreement on
commissioned production with the commissioning publishing unit, and
verify the License for Production of Audio-visual Products of the
commissioning publishing unit, or the certificate of publications
under its own imprint and the commissioning deed for production of
audio-visual products sealed by the commissioning publishing
unit.

An audio-visual production unit shall not publish, reproduce,
wholesale, retail or rent out audio-visual products.

Chapter III Reproduction

Article 20 For establishment, an audio-visual
reproduction unit shall meet the following conditions:

(1) possess the name and the articles of association of the
audio-visual reproduction unit;

(2) possess a well-defined scope of business;

(3) possess an organizational structure and personnel which
meets to the needs of its scope of business;

(4) possess necessary funds, equipment and reproduction
premises; and

(5) other requirements prescribed by the laws and administrative
regulations.

Where the establishment of an audio-visual reproduction unit is
to be examined for approval, in addition to the requirements listed
in the preceding paragraph, the total number, distribution and
structure of the audio-visual reproduction units shall also be
considered.

Article 21 An application for establishing an
audio-visual reproduction unit shall be, after being examined or
consented to by the publication administration department of the
people’s government of the province, autonomous region or
municipality directly under the Central Government shall, submitted
to the publication administration department of the State Council
for examination and approval. The publication administration
department of the State Council shall, within 60 days from the date
of receipt of the application, make a decision on approving or not
approving the application, and make a notice to the applicant.
Where an application is approved, the License for Reproduction in
Audio-visual Products shall be issued, with which the applicant may
go through the formalities of registration at the administrative
department for industry and commerce, and obtain the business
license according to law; while the application is not approved,
the reason shall be given.

The application shall include the following items:

(1) the name and address of the audio-visual reproduction
unit;

(2) the name and address of the legal representative or the
major responsible person of the audio-visual reproduction unit;
and

(3) the source and amount of fund of the audio-visual
reproduction unit.

Article 22 Where an audio-visual reproduction
unit intends to change its business scope, or to merge other
audio-visual reproduction unit, or to establish a new audio-visual
reproduction unit due to amalgamation or separation, it shall go
through the formalities of examination and approval in accordance
with the provisions of Article 21, and go through the relevant
formalities of registration at the administrative department for
industry and commerce where the original registration was gone
through.

Where an audio-visual reproduction unit intends to change its
name, address, its legal representative or the major responsible
person, or to terminate its operations, it shall go through the
formalities of registration of change or revocation at the
administrative department for industry and commerce where the
original registration was gone through, and file the record with
the publication administration department of the State Council at
the same time.

Article 23 Where an audio-visual reproduction
unit accepts a commission to reproduce audio-visual products, it
shall, in accordance with the relevant provisions of the State,
enter into an agreement on commissioned reproduction with the
commissioning publishing unit, and verify the License for
Publishing Audio-visual Products and the copy of the business
license of the commissioning publishing unit, the commissioning
deed for reproduction of audio-visual products sealed by the
commissioning publishing unit and the letter of authorization of
the copyright owner. Where the commissioned audio-visual products
are products not for sale, it shall verify the commissioning deed
for reproduction of products issued by the publication
administration department of the people’s government of provinces,
autonomous region, and the municipality under the central
government and sealed by commissioning unit.

The audio-visual reproduction unit shall, within 2 years from
the date of completion of the reproduction of audio-visual
products, preserve the agreement on commissioned reproduction,
sample copies of its reproduced audio-visual products and copies of
the relevant certifying documents for purpose of examination and
verification.

Article 24 No audio-visual reproduction unit
may accept commission to reproduce commercial audio-visual products
from a unit or individual other than an audio-visual publishing
unit. The audio-visual reproduction unit may not reproduce
audio-visual products of its own accord, nor wholesale, retail or
rent out audio-visual products.

Article 25 An audio-visual reproduction unit
shall, when reproducing laser discs, use the plastic mould etched
with the source identification code of laser digital storage chip
approved and issued by the publication administration department of
the State Council.

Article 26 Where an audio-visual reproduction
unit accepts a commission to reproduce overseas audio-visual
products, it shall submit the sample copies of such audio-visual
product to the publication administration department of the
people’s government of the province, autonomous region or
municipality directly under the Central Government for examination
and approval, and shall submit the letter of authorization of the
copyright owner for registration at the administrative department
in charge of copyright affairs. The audio-visual products
reproduced shall all be transported overseas.

Chapter IV Importation

Article 27 The importation business of the
audio-visual end products shall be operated by the units engaged in
importation of audio-visual end products designated by the culture
administration department of the State Council. No unit or
individual may engage in importation of audio-visual end products
without designation.

Article 28 Any importation of audio-visual
products to be used for publication, and of audio-visual end
products to be used for wholesale, retail or rental, shall be
subject to the content examination by the culture administration
department of the State Council.

The culture administration department of the State Council
shall, within 30 days from the date of receipt of the application
for content examination of audio-visual products, make a decision
on approving or not approving the application, and make a notice to
the applicant. Where an application is approved, the approved
documents shall be issued, while the application is not approved,
the reason shall be given.

The unit importing audio-visual products to be used for
publication or the unit engaged in importation of audio-visual end
products shall, with the documents approved by the culture
administration department of the State Council, go through the
formalities of importation at the Customs.

Article 29 When audio-visual products are
imported for purpose of publishing, the relevant copyright matters
shall be registered with the copyright affairs administration
department of the State Council.

Article 30 Any importation of audio-visual
products for reference in research, teaching and studying shall be
handled and commissioned by the unit engaged in importation of
audio-visual end products in accordance with Article 28 of these
Regulations.

Any importation of audio-visual products for exhibition and
demonstration shall, after approved by the culture administration
department of the State Council, go through the formalities of
temporary importation at the Customs.

Any audio-visual products imported according to these
Regulations shall not be used for commercial reproduction,
wholesale, retail, rental or projection.

Chapter V Wholesale, Retail and Rental

Article 31 For establishment, a wholesale,
retail or rental unit of audio-visual products shall meet the
following conditions:

(1) possess the name and the articles of association of the
wholesale, retail or rental unit of audio-visual products ;

(2) possess a well-defined scope of business;