PART ONE　GENERAL PROVISIONS

　　Article 1　These Provisions have been formulated in accordance with the Administrative Licensing Law and relevant laws and administrative regulations in order to standardize enterprise registration and enhance the efficiency of registration.

　　Article 2　These Provisions apply to the registration of establishment， change of registration and deregistration of enterprises and the preliminary verification and approval of enterprise names.

　　Article 3　An enterprise registration authority shall examine the completeness and compliance with the statutory format of the application materials in accordance with the law. Where there is a need to verify the substantive contents of the application materials in accordance with the statutory conditions and procedures， verification shall be carried out in accordance with the law.

　　Article 4　An enterprise registration authority shall set up an enterprise registration venue to handle enterprise registration matters in a uniform manner.

　　Qualified enterprise registration authorities shall set up an enterprise registration website to accept enterprise registration applications， and to make it convenient for applicants to download standard texts for application， submit application materials and inquire enterprise registration status and administrative provisions on enterprise registration， etc.

　　Article 5　The working staff of an enterprise registration authority shall， within their scope of duties and responsibilities， examine enterprise registration applications， and render decisions on whether or not to accept applications and approve registration on behalf of the enterprise registration authority.

　　PART TWO　APPLICATION FOR REGISTRATION

　　Article 6　To apply for enterprise registration， an applicant or the agent it appoints may submit the application by：

　　1. going to the enterprise registration venue directly； or

　　2. postal mail， facsimile， electronic data interchange， electronic mail， etc.

　　If an application is submitted by such means as facsimile， electronic data interchange or electronic mail， the contact method and the correspondence address of the applicant or its agent shall be provided. Where the application is accepted by the enterprise registration authority， the applicant shall， within 15 days of the date of receipt of the Acceptance Notice， submit the original application materials that are consistent with the contents of the facsimile， electronic data interchange or electronic mail and that comply with the statutory format.

　　Article 7　An applicant shall submit the application based on the standard texts for application formulated by the State Administration for Industry and Commerce， and shall provide the relevant materials according to the provisions of the laws and administrative regulations on enterprise registration and the rules of the State Administration for Industry and Commerce.

　　If the application involves an item for which licensing prior to enterprise registration is required under laws， administrative regulations or the decisions issued by the State Council， the applicant shall provide a licence or approval document in the statutory format.

　　Article 8　An applicant shall truthfully submit the relevant materials and reflect the true circumstances to the enterprise registration authority， and shall assume responsibility for the authenticity of the substantive contents of its application materials.

　　PART THREE　EXAMINATION， ACCEPTANCE AND DECISION

　　Article 9　Upon receipt of an application for registration， the registration authority shall examine the completeness and compliance with the statutory format of the application materials.

　　“Application materials are complete” means all materials that an applicant is required to submit by the State Administration for Industry and Commerce in accordance with laws， administrative regulations and rules on enterprise registration.

　　“Application materials comply with the statutory format” means that the application materials comply with the statutory time limit， that the matters recorded therein comply with the statutory requirements， and that the document format comply with standards.

　　Article 10　After examining the application for registration of an applicant， the enterprise registration authority shall render a decision on whether or not to accept the application according to the following circumstances respectively：

　　1. If the application materials are complete and comply with the statutory format， it shall decide to accept the application.

　　2. If the application materials are complete and comply with the statutory format but need to be verified， it shall decide to accept the application and， at the same time， notify the applicant in writing of the matters that need to be verified， and the reason and time for such verification.

　　3. If the application materials contain errors that may be corrected on the spot， it shall permit correction by the person with the authority to make corrections， who shall sign or seal at the corrected spots and indicate the date of correction； and， upon confirmation that the application materials are complete and comply with the statutory format， it shall decide to accept the application.

　　4. If the application materials are incomplete or do not comply with the statutory format， it shall， on the spot or within five days， notify the applicant in one notice of all the contents that need to be supplemented and corrected by the applicant. At the time of such notification， it shall return the application materials to the applicant and decide not to accept the application. If the notification is made within five days， it shall accept the materials and issue a receipt therefor.

　　5. If the matter is not within the scope of enterprise registration or the jurisdiction of registration of the authority， it shall immediately decide not to accept the application and shall notify the applicant to apply to the relevant administrative authority.

　　If the application is submitted by such means as postal mail， facsimile， electronic data interchange or electronic mail， it shall render a decision on whether or not to accept the application within five days of receipt thereof.

　　For the purposes of these Provisions， a “person with the authority to make corrections” means the applicant or a person handling the application that has been expressly authorized by the applicant to make corrections to the relevant items， texts and contents related to the application materials.

　　Article 11　If the enterprise registration authority deems it necessary to verify the substantive contents of the application materials， it shall assign two or more of its working personnel to verify the application materials. After verification， an “application materials verification report” shall be submitted， and a decision on whether or not to grant registration shall be rendered on the basis of the verification.

　　Article 12　In regards to applications for registration that the enterprise registration authority has decided to accept， it shall render a decision on whether or not to grant registration within the stipulated time period according to the particular circumstances：

　　1. If the application is accepted upon submission by the applicant or the agent it appoints at the enterprise registration venue， a decision to grant registration shall be rendered on the spot.

　　2. If the application is accepted upon submission by postal mail， a decision to grant registration shall be rendered within 15 days of the date of acceptance.

　　3. If the application is submitted by facsimile， electronic data interchange or electronic mail， and the originals of the application materials are submitted at the enterprise registration venue by the applicant or the agent it appoints， a decision to grant registration shall be rendered on the spot. If the originals of the application materials are submitted by postal mail， a decision to grant registration shall be rendered within 15 days of the date of receipt of the originals of the application materials. If the originals of the application materials submitted by the applicant are not consistent with those for the accepted application， a decision not to grant registration shall be rendered. If the originals of the application materials are submitted as a new application， the application shall be handled in accordance with Articles 9， 10， 11 and 12. If the enterprise registration authority has not received the originals of the application materials within 60 days of the date of issue of the Acceptance Notice， it shall decide not to grant registration.

　　If it needs to verify the application materials， it shall render a decision on whether or not to grant registration within 15 days of the date of acceptance.

　　Article 13　If an application for enterprise registration is to be examined by a lower level enterprise registration authority before it is submitted to a higher level registration authority for decision according to law， the lower level enterprise registration authority shall give an examination opinion within 15 days of the date of acceptance.

　　Article 14　Where a local people‘s government stipulates that enterprise registration applications shall be accepted centrally by the enterprise registration authority， which shall then notify the relevant authorities to carry out inter-related examination and approval， the examination and approval procedures and time limit shall be implemented in accordance with the regulations of the local people’s government.

　　Article 15　Except where a decision to grant registration is rendered pursuant to Item （1） of Article 12 hereof， the enterprise registration authority shall issue an Acceptance Notice where it decides to accept an application. If it decides not to accept an application， it shall issue a Non-acceptance Notice and state therein the reasons for not accepting the application.

　　Article 16　If the enterprise registration authority grants preliminary verification and approval to an enterprise name， it shall issue a Notice of Preliminary Verification and Approval of Enterprise Name. If it grants registration of establishment of an enterprise， it shall issue a Notice of Grant of Establishment Registration and notify the applicant to obtain a business licence within 10 days of the date of decision. If it grants registration of change in enterprise， it shall issue a Notice of Grant of Change of Registration and notify the applicant to obtain a business licence within 10 days of the date of decision. If it grants deregistration of an enterprise， it shall issue a Notice of Grant of Deregistration and collect the business licence.

　　If the enterprise registration authority decides not to grant registration， it shall issue a Notice of Rejection of Registration and state therein the reasons for not granting registration， and shall notify the applicant of its rights to apply for administrative review or institute an administrative action according to law.

　　PART FOUR　DEREGISTRATION FOR CANCELLATION AND REVOCATION

　　Article 17　In any of the following circumstances， registration may be cancelled by the enterprise registration authority or its superior authority at the request of an interested party or on the basis of its authority：

　　1. the decision to grant registration has been rendered through abuse of authority or dereliction of duties；

　　2. the decision to grant registration has been rendered ultra vires；

　　3. the decision to grant registration has been rendered to an applicant that does not qualify to apply or does not meet the statutory conditions； or

　　4. other circumstances in which the decision to grant registration may be cancelled in accordance with the law.

　　If registration is obtained by a licensee through fraud， bribery or other improper means， it shall be cancelled.

　　If cancellation of registration pursuant to the two preceding paragraphs may result in material damage to public interests， registration shall not be cancelled but an order of correction and rectification shall be issued.

　　Article 18　If the registration of establishment of an enterprise is cancelled or if its business licence is revoked according to law， the enterprise shall cease business activities and organize liquidation according to law. The liquidation organization shall， within 30 days of the completion of liquidation， apply for deregistration according to law.

　　Article 19　If the registration of establishment of an enterprise is cancelled or if its business licence is revoked according to law， the non-legal person branches established by the enterprise shall cease business activities and complete its deregistration according to law. Affiliated enterprises invested in and established by the enterprise shall complete change of registration or deregistration according to law.

　　PART FIVE　PUBLIC NOTICE AND DISCLOSURE OF REGISTRATION

　　Article 20　The enterprise registration authority shall publicize the following particulars at the enterprise registration venue：

　　1. registration items；

　　2. basis for registration；

　　3. conditions for registration；

　　4. registration procedure and time limit；

　　5. list of application materials to be submitted；

　　6. registration fee standards and basis； and

　　7. model application forms.

　　The enterprise registration authority shall state and explain the contents in the public notice specified in the preceding paragraph at the request of applicants.

　　Article 21　The enterprise registration authority shall set up an enterprise register for public inspection.

　　If the registration materials of an enterprise involve State secrets， trade secrets or personal privacy， the enterprise registration authority shall not disclose such information to the public.

　　PART SIX　SUPPLEMENTARY PROVISIONS

　　Article 22　For the purposes of these Provisions， the term “enterprises” include all types of enterprises and their branches.

　　Article 23　The registration of enterprise groups， resident representative offices of enterprises from foreign countries （regions） and enterprises from foreign countries （regions） that engage in business activities in China shall be carried out with reference to these Provisions.

　　Article 24　These Provisions shall be implemented as of 1 July 2004.

Article 1　These Provisions are formulated in accordance with the PRC， Company Law （the Company Law）， the PRC， Administration of Company Registration Regulations （the Company Registration Regulations） and other relevant regulations in order to strengthen the administration of registration of company registered capital and standardize the acts of company registration.

　　Article 2　Company registered capital is the amount of capital contribution actually paid in or subscribed for by all shareholders or promoters registered by company registries according to law.

　　Article 3　Company registries shall register company registered capital according to laws， administrative regulations and the relevant State provisions. Registration shall be granted where regulations are complied with. Registration shall not be granted where regulations are not complied with.

　　Article 4　The amount of company registered capital and the method of capital contribution of shareholders or promoters shall conform to the relevant provisions of laws and administrative regulations.

　　Article 5　In case of registration of the establishment of a company or change in registered capital， a statutory capital verification institution shall carry out capital verification and issue a capital verification certificate.

　　Article 6　Where a capital contribution is subject to appraisal and valuation required under the Company Law， it shall be appraised and valuated by an asset appraisal institution with appraisal qualifications before verification by a capital verification institution.

　　Article 7　The shareholders or promoters of a company must contribute capital in their own names. Where a capital contribution is made in the form of physical objects， industrial property rights or non-patented technology， the shareholder or promoter shall possess the ownership thereof. Where a capital contribution is made in the form of leaseholds， the shareholder or promoter shall own such leaseholds.

　　Article 8　Where， in the case of registration of the establishment of a company， the shareholders or promoters make their capital contribution in the form of currency， the full amount of currency shall be deposited into the temporary account opened at a bank by the company preparing to be established.

　　Article 9　Where， in the case of registration of the establishment of a company， capital contribution is made in the form of physical objects， industrial property rights， non-patented technology or leaseholds， the company’s articles of association shall stipulate on the matters relevant to the transfer of the afore-mentioned capital contributions. The company shall， within six months of the establishment of the company， handle the procedures for transfer of ownership in accordance with the relevant provisions， and report the same to the company registry for record filing.

　　Article 10　Where the registered capital is contributed in the form of industrial property rights or non-patented technology that are capitalized according to their value， the proportion of the registered capital accounted for by such value shall comply with the relevant State provisions. Where industrial property rights or non-patented technology are high and new technology achievement as stipulated by the State and their value accounts for more than 20% of the company registered capital， they shall be recognized by the competent science and technology department at the provincial level or above.

　　Article 11　The capital verification certificate for the establishment of a company shall specify the following particulars：

　　1. name；

　　2. type；

　　3. the names of the shareholders or promoters；

　　4. amount and method of capital contribution of the shareholders or promoters； companies limited by shares that are established by means of share offer shall also specify the shares subscribed for by the promoters and the proportion of the total number of company shares they account for；

　　5. the capital contribution actually paid in by the shareholders or promoters. If capital contribution is made in the form of currency， the time when the shareholders or promoters make the capital contribution， the amount of capital contribution， the bank at which the account is opened， the temporary account and account number shall be specified. If capital contribution is made in a form other than currency， the details of the ownership， transfer or undertaking shall be specified；

　　if capital contribution is made in the form of physical objects， industrial property rights， non-patented technology or leaseholds， the details of the appraisal and appraisal results as well as the proportion of the registered capital accounted for by the industrial property rights and non-patented technology shall be specified； and

　　6. other matters.

　　Article 12　If a company increases its registered capital and makes a capital contribution in the form of currency， the shareholders or promoters shall deposit the full amount of capital contribution into the company’s account， and such amount shall be verified by a capital verification institution. If the capital contribution is made in the form of physical objects， industrial property rights， non-patented technology or leaseholds， the capital contribution shall be appraised， and appraised and verified by a capital verification institution after the shareholders or promoters have handled the property transfer procedures according to law.

　　Article 13　If a company reduces its registered capital， it shall comply with the procedure stipulated in the Company Law. The amount of registered capital after reduction shall reach the minimum amount of company registered capital stipulated in laws and administrative regulations， and shall be verified by a capital verification institution.

　　Article 14　A company that changes its registered capital shall amend the company’s articles of association.

　　Article 15　The capital verification certificate for a change in registered capital shall specify the following particulars：

　　1. name；

　　2. the names of the shareholders or promoters before and after the change；

　　3. amount and method of capital contribution of the shareholders or promoters before and after the change；

　　4. the amount of registered capital before and after the change；

　　5. the details of the actual payment of the increase in registered capital. If the capital contribution is made in the form of currency， the amount of capital contribution of the shareholders or promoters， the time of capital contribution， the bank at which the account is opened， the temporary account and account number shall be specified. If the capital contribution is made in the form of physical objects， industrial property rights， non-patented technology or leaseholds， the details of the shareholders’ handling of procedures for transfer of property rights， and of the appraisal shall be specified. If an increase in registered capital is resulted from a conversion of capital reserve， surplus reserve or undistributed profits， the amount converted for the increase， the base date on which company effected the conversion， the adjustments to the financial statements， the actual details of the relevant items on the financial statements before and after the conversion for the increase， and the amount of capital contribution of the shareholders after the conversion for the increase shall be specified； and

　　6. if the registered capital is reduced， the details of the implementation of the procedure stipulated in the Company Law by the company， and of the discharge of， and provision of security for， the debts of the company by the shareholders shall be specified.

　　Article 16　Where， after a limited liability company has been established， the actual amount contributed in physical objects， industrial property rights， non-patented technology or leaseholds is obviously lower than the amount stipulated in the company’s articles of association， the shareholders that make such contribution shall make up the difference. The physical objects， industrial property rights， non-patented technology or leaseholds in the original capital contribution shall be appraised and valuated anew. The company’s registered capital shall be verified anew； and a capital verification certificate shall be issued by a capital verification institution.

　　Article 17　If the shareholders of a limited liability company that make capital contribution in the form of physical objects， industrial property rights， non-patented technology or leasehold fail to handle the procedures for transfer of property rights within the stipulated time period， the shareholders that make the capital contribution shall make up the amount in other forms of capital contribution. The shareholders’ general meeting shall pass a resolution on the making up of capital contribution in other forms by the shareholders， and shall amend the company’s articles of association accordingly.

　　If the promoters of a company limited by shares that make capital contribution in physical objects， industrial property rights， non-patented technology or leaseholds fail to handle the procedures for transfer of property rights within the stipulated time period， the promoters that make the capital contribution shall make up the amount in other forms of capital contribution. The shareholders’ general meeting shall examine and verify the valuation of the property used by the promoters as subscription monies

　　The capital contribution made up by the shareholders or promoters shall comply with these Provisions and be verified by a capital verification institution， which shall issue a verification certificate and report to the company registry for record filing.

　　Article 18　If the company registry suspects that the registered capital of a company is false after the company has been established， it may request the company to have the registered capital verified with a designated capital verification institution， and to submit a capital verification certificate within a stipulated time period.

　　Article 19　If a shareholder or promoter that makes capital contribution in a form other than currency fails to handle the procedures for transfer of ownership according to Article 9 hereof， or if the transferred capital contribution fails to reach the amount of registered capital stipulated in the company’s articles of association， such contribution shall be deemed as a sham capital contribution.

　　Article 20　If a shareholder or promoter fails to pay its capital contribution in currency according to provisions， or fails to handle the property transfer procedures for capital contribution to be made in a form other than currency according to provisions； or if a company falsely reports its registered capital； or if a shareholder or promoter makes a sham capital contribution； or if a shareholder or promoter surreptitiously withdraws its capital contribution after the company has been established， the company registry shall impose punishment according to law.

　　Article 21　If a capital verification institution or asset appraisal institution issues false certification documents， the company registry shall impose punishment according to law.

　　Article 22　These Provisions shall apply to the administration of the registration of the registered capital of foreign-invested enterprises， except where otherwise provided by laws and administrative regulations.

　　Article 23　The administration of registration of the registered capital of enterprises not owned by the people registered according to the PRC， Administration of Enterprise Legal Person Registration Regulations shall， mutatis mutandis， be implemented according to these Provisions.

　　Article 24　These Provisions shall be implemented as of 1 July 2004. The Administration of Registration of Company Registered Capital Tentative Provisions promulgated by the State Administration for Industry and Commerce on 18 December 1995 shall be repealed simultaneously.

　　Article 2　These Provisions shall apply to the distribution activities of publications and the supervision and administration thereof.

　　For the purposes of these Provisions， the term “publications” refers to newspapers， periodicals， books and electronic publications， etc.

　　For the purposes of these Provisions， the term “distribution” includes activities such as general distribution， wholesale， retail and leasing， and exhibition for sale， etc.

　　For the purposes of these Provisions， the term “general distribution” refers to the unified exclusive sale of publications by a publications general distribution work unit.

　　For the purposes of these Provisions， the term “wholesale” refers to the sale of publications to other publication business operators.

　　For the purposes of these Provisions， the term “retail” refers to the sale of publications direct to consumers.

　　For the purposes of these Provisions， the term “leasing” refers to the provision of publications to readers on receipt of a rental fee.

　　For the purposes of these Provisions， the term “exhibition for sale” refers to the collective exhibition， sale of， or order for， publications in a fixed place or in a fixed manner for a certain period.

　　Article 3　The State shall implement a licensing system for distribution of publications. No work unit or individual may engage in the distribution of publications without permission.

　　Publications distribution work units established in accordance with the law and individuals approved to engage in the business of distribution of publications may distribute publications in accordance with the law， and no work unit or individual shall interfere with such activities unless in accordance with the provisions of law.

　　Article 4　The General Administration of Press and Publishing shall be responsible for the supervision and administration work of distribution activities of publications throughout the country and the formulation of a national development plan for the publications distribution industry.

　　The press and publishing administrative departments of provinces， autonomous regions and municipalities directly under the central government shall be responsible for the supervision and administration work of distribution activities of publications within their administrative region and shall formulate development plans for the publications distribution industry in their own province， autonomous region or municipality directly under the central government.

　　Press and publishing administrative departments of the people‘s governments of all levels below the provincial level shall be responsible for the supervision and administration work of distribution activities of publications within their administrative region.

　　Article 5　The plans for establishment of publications distribution points formulated by the General Administration of Press and Publishing and the press and publishing administrative departments of provinces， autonomous regions and municipalities directly under the central government must be scientifically proven and shall abide by the principles of lawfulness and impartiality， practicality and promotion of development.

　　The plans for establishment of publications distribution points formulated by the press and publishing administrative departments of provinces， autonomous regions and municipalities directly under the central government must be examined and verified， and consented to by the General Administration of Press and Publishing， reported to the people‘s government at that level for approval， and promulgated within their administrative region； otherwise， they may not be used as the basis for examination and approval of publications distribution work units.

　　PART TWO　ESTABLISHMENT OF PUBLICATIONS DISTRIBUTION WORK UNITS

　　Article 6　When establishing publications general distribution enterprises or when other work units engage in the business of general distribution of publications， the following conditions shall be fulfilled：

　　1. having a determined enterprise name and scope of business；

　　2. the main line of business shall be distribution of publications；

　　3. having distribution personnel suitable for the business of general distribution of publications， the legal representative or main person in charge shall have the professional qualifications for publication distributor at higher level or above， or professional technical qualifications related to the profession of distribution of publications at intermediate level or above that are recognized by the General Administration of Press and Publishing；

　　4. having the equipment and a fixed place of business commensurate with the business of general distribution of publications， and the commercial area of the place of business shall not be less than 1，000 square metres；

　　5. having a registered capital of not less than Rmb 20 million； and

　　6. having the corresponding computer administration conditions and a sound management system.

　　Article 7　When applying to establish a publications general distribution enterprise or when other work units apply to engage in the business of general distribution of publications， the work unit must submit the application materials specified in Paragraph Two of this Article to the General Administration of Press and Publishing. The General Administration of Press and Publishing shall decide whether or not to approve the application within 20 working days of the date of receipt of the application materials， and shall notify the applicant in writing thereof. If the application is approved， the General Administration of Press and Publishing shall issue a Publications Business Permit， and the applicant shall obtain a business licence from the administration for industry and commerce on the strength of the Publications Business Permit in accordance with the law. If the application is rejected， the reasons therefor shall be stated.

　　The application materials shall include the following written materials：

　　1. an application form stating the name and address of the work unit， the name and domicile of the legal representative or the main person in charge， and the source and amount of capital， etc.；

　　2. the organizational structure and the articles of association；

　　3. proof of creditworthiness for the registered capital；

　　4. details of the business premises and proof of the right to use；

　　5. proof of identity of the legal representative or the main person in charge；

　　6. professional or technical qualification certificates of the legal representative or the main person in charge； and

　　7. supporting documents for the corresponding computer administration conditions.

　　Article 8　When establishing a publications wholesale enterprise or when other work units engage in the publications wholesale business， the following conditions shall be fulfilled：

　　1. having a determined enterprise name and scope of business；

　　2. having the distribution personnel suitable for publications wholesale business， the legal representative or main person in charge shall have the professional qualifications for publication distributor at intermediate level or above， or professional technical qualifications related to the profession of distribution of publications at intermediate level or above that are recognized by the General Administration of Press and Publishing；

　　3. having the equipment and a fixed place of business commensurate with the publications wholesale business. The commercial area of single shops in a wholesale market shall not be less than 50 square metres and that of independent places of business shall not be less than 500 square metres；

　　4. having a registered capital of not less than Rmb 2 million； and

　　5. having the corresponding computer administration conditions.

　　Article 9　When applying to establish a publications wholesale enterprise or when other work units apply to engage in the publications wholesale business， the work unit must submit the application materials specified in Paragraph Three of this Article to the press and publishing administrative department at the municipal level of the place where it is located. The press and publishing administrative department at the municipal level shall issue an examination and verification opinion within 20 working days of the date of acceptance of the application， and shall submit the same together with the application materials to the press and publishing administrative department of the province， autonomous region or municipality directly under the central government for examination and approval.

　　The press and publishing administrative department of the province， autonomous region or municipality directly under the central government shall decide whether or not to approve the application within 20 working days of the date of acceptance of the application， and shall notify the applicant in writing thereof. If the application is approved， the press and publishing administrative department of the province， autonomous region or municipality directly under the central government shall issue a Publications Business Permit， and shall report to the General Administration of Press and Publishing for record filing. The applicant shall obtain a business licence from the administration for industry and commerce on the strength of the Publications Business Permit in accordance with the law. If the application is rejected， the reasons therefor shall be stated.

　　The application materials shall include the following written materials：

　　1. an application form stating the name and address of the work unit， the name and domicile of the legal representative or the main person in charge， and the source and amount of capital， etc.；

　　2. the articles of association of the enterprise；

　　3. proof of creditworthiness for the registered capital；

　　4. details of the business premises and proof of the right to use；

　　5. proof of identity of the legal representative or the main person in charge；

　　6. professional or technical qualification certificates of the legal representative or the main person in charge； and

　　7. supporting documents for the corresponding computer administration conditions.

　　Article 10　When establishing a publications retail enterprise or when other work units or individuals engage in the business of retail of publications， the following conditions shall be fulfilled：

　　1. having a determined name and scope of business；

　　2. the business operator shall have the professional qualifications for publication distributor at elementary level or above， or professional technical qualifications related to the profession of distribution of publications at elementary level or above that are recognized by the General Administration of Press and Publishing； and

　　3. having a fixed place of business commensurate with its business activities.

　　Article 11　When applying to establish a publications retail enterprise or when other work units or individuals apply to engage in the business of retail of publications， the application materials specified in Paragraph Two of this Article shall be submitted to the local press and publishing administrative department of the people‘s government at the county level. The press and publishing administrative department shall decide whether or not to approve the application within 20 working days of the date of acceptance of the application， and shall notify the applicant in writing thereof. If the application is approved， the press and publishing administrative department shall issue a Publications Business Permit and report to the press and publishing administrative department at the level above for record filing. The applicant shall obtain a business licence from the administration for industry and commerce on the strength of the Publications Business Permit in accordance with the law. If the application is rejected， the reasons therefor shall be stated.

　　The application materials shall include the following written materials：

　　1. an application form stating the name and address of the work unit， and the name and domicile of the legal representative or the main person in charge， etc.；

　　2. details of the business premises and proof of the right to use； and

　　3. proof of identity and professional or technical qualification certificates of the business operator.

　　Article 12　When establishing a publications leasing enterprise or when other work units or individuals engage in the business of leasing of publications， the work unit or individual shall， within 15 days after obtaining the business licence， report to the local press and publishing administrative department of the people‘s government at the county level for record filing on the strength of materials such as a photocopy of the business licence， the business address and the particulars of the legal representative or the main person in charge.

　　Article 13　When establishing a publications chain enterprise or when other chain enterprises engage in publications chain business， the following conditions shall be fulfilled：

　　1. having a determined enterprise name and articles of association；

　　2. be in accord with the organizational structure and operation methods of chain businesses；

　　3. having a registered capital of not less than Rmb 3 million. To engage in nationwide chain business， it shall have a registered capital of not less than Rmb 10 million；

　　4. having 10 or more directly managed outlets of chain stores；

　　5. the legal representative or main person in charge shall have the professional qualifications for publication distributor at intermediate level or above， or professional technical qualifications related to the profession of distribution of publications at intermediate level or above that are recognized by the General Administration of Press and Publishing；

　　6. the headquarters and its outlets shall have business premises that commensurate with its business， and the commercial area of each sample store shall not be less than 500 square metres； and

　　7. having the corresponding computer administration systems and a sound management system.

　　Article 14　When applying to establish a publications chain enterprise or when other chain enterprises apply to engage in publications chain business， the enterprise must submit the application materials specified in Paragraph Three of this Article to the press and publishing administrative department at the municipal level of the place where its headquarters is located. The press and publishing administrative department at the municipal level shall issue an examination and verification opinion within 20 working days of the date of acceptance of the application and submit the same together with the application materials to the press and publishing administrative department of the province， autonomous region or municipality directly under the central government for examination and approval. When applying to establish a national publications chain enterprise or when other chain enterprises apply to engage in nationwide publications chain business， the enterprise must submit the application materials specified in Paragraph Three of this Article to the press and publishing administrative department of the province， autonomous region or municipality directly under the central government of the place where its headquarters is located. The press and publishing administrative department of the province， autonomous region or municipality directly under the central government shall issue an examination and verification opinion within 20 working days of the date of acceptance of the application and submit the same together with the application materials to the General Administration of Press and Publishing for examination and approval.

　　The examination and approval authority shall decide whether or not to approve the application within 20 working days of the date of acceptance of the application， and shall notify the applicant in writing thereof. If the application is approved， the press and publishing administrative department of the province， autonomous region or municipality directly under the central government shall issue a Publications Business Permit and report to the General Administration of Press and Publishing for record filing. If engagement in nationwide chain business is approved， the General Administration of Press and Publishing shall issue a Publications Business Permit. The applicant shall obtain a business licence from the administration for industry and commerce on the strength of the Publications Business Permit in accordance with the law. If the application is rejected， the reasons therefor shall be stated.

　　The application materials shall include the following written materials：

　　1. an application form stating the name and address of the enterprise， the name and domicile of the legal representative or the main person in charge， and the source and amount of capital；

　　2. the organizational structure and the articles of association；

　　3. proof of creditworthiness for the registered capital；

　　4. the plan for the opening of stores；

　　5. list of business premises of the headquarters and outlets of the chain stores， and proof of the right to use；

　　6. proof of identity of the legal representative or the main person in charge；

　　7. professional or technical qualification certificates of the legal representative or the main person in charge； and

　　8. supporting documents for the corresponding computer administration systems.

　　Article 15　Directly managed outlets of chain stores shall not require an individual Publications Business Permit， but they may obtain a business licence from the administration for industry and commerce in accordance with the law on the strength of a photocopy of the Publications Business Permit of the headquarters of the publications chain operation work unit after reporting to the press and publishing administrative department of the people‘s government at the county level of the place where the outlet is located for record filing.

　　When publications chain operation work units open non-directly managed outlets of chain stores， such outlets must handle the examination and approval procedures in accordance with Articles 10 and 11 hereof， except for those already holding a Publications Business Permit.

　　Article 16　Establishment of Sino-foreign equity joint ventures， Sino-foreign cooperative joint ventures and foreign enterprises that engage in the distribution of books， newspapers and periodicals shall be handled in accordance with the Administration of Foreign-invested Books， Newspapers and Periodicals Distribution Enterprises Procedures formulated by the General Administration of Press and Publishing and the Ministry of Foreign Trade and Economic Cooperation.

　　Article 17　Applications for establishment of enterprises that engage in the business of distribution of publications through information networks such as the internet， and applications of other work units for engaging in the business of distribution of publications through information networks such as the internet shall be handled in accordance with Articles 8 and 9 hereof.

　　Publications general distribution enterprises and publications wholesale enterprises may engage in the business of distribution of publications through information networks such as the internet without examination and approval.

　　Article 18　Applications for setting up book clubs， reading clubs or other similar organizations that enrol members in the local province， autonomous region or municipality directly under the central government and applications of publishers for setting up book clubs， reading clubs or other similar organizations for distribution of their own publications shall be handled in accordance with Articles 10 and 11 hereof.

　　Applications for setting up book clubs， reading clubs or other similar organizations that enrol members across provinces， autonomous regions or municipalities directly under the central government shall be handled in accordance with Articles 8 and 9 hereof.

　　Publications general distribution enterprises and publications wholesale enterprises may set up book clubs， reading clubs or other similar organizations， and publications retail enterprises may set up book clubs， reading clubs or other similar organizations that enrol members in their local province， autonomous region or municipality directly under the central government without examination and approval.

　　Article 19　When establishing a publications wholesale market， the following conditions shall be fulfilled：

　　1. having an adequate， fixed place for centralized business by wholesale work units with a commercial area of not less than 5，000 square metres；

　　2. the business work units entering into the wholesale market must be publications distribution enterprises with publications wholesale right；

　　3. having sound market administration organization and regulatory systems；

　　4. having basic office， storage， transportation and communications facilities that can provide the necessary services to the business work units；

　　5. be capable of implementing unified overall computer administration of the market administration organization and the business work units； and

　　6. other conditions stipulated by laws， regulations and rules.

　　Article 20　Distribution enterprises reorganized from the distribution departments of publishers may engage in the general distribution of their own publications， but they must handle the procedures in accordance with Articles 6 and 7 hereof.

　　Publications distribution enterprises established by publishers that wholesale or retail the publications of other publishers must handle the procedures in accordance with Articles 8 and 9 or Articles 10 and 11 hereof.

　　Publishers may set up distribution branches without legal person status to distribute their own publications. The publisher must， on the strength of the relevant materials such as a photocopy of the Publications Business Permit issued by the General Administration of Press and Publishing， the address of the branch to be established and the particulars of the personnel， report to the local press and publishing administrative department of the province， autonomous region or municipality directly under the central government of the place where the branch is located within 15 days after the branch is established. The establishment of a branch shall comply with the local plan for publications distribution.

　　Article 21　In case of changes to the name or scope of business of publications distribution work units， merger with other publications distribution work units， new publications distribution work units established as a result of merger or division， and change of address due to movement beyond the administrative region of the approval department， approval procedures must be handled in accordance with these Provisions.

　　Changes to other registered items of publications distribution work units shall be reported to the press and publishing administrative department that granted approval for record filing after handling the corresponding procedures with the administration for industry and commerce that handled the original registration.

　　Publications distribution work units that terminate operation due to suspension of operation， being shut down， bankruptcy or other reasons must cancel their registration with the press and publishing administrative department that granted approval and return their business licence.

　　Article 22　When establishing a publications general distribution enterprise， publications wholesale enterprise， publications retail enterprise， or when other work units or individuals engage in the business of general distribution， wholesale or retail of publications， the work unit or individual shall， apart from fulfilling the conditions specified in Articles 6， 8 and 10 hereof， conform to the plans for establishment of publications distribution points formulated by the General Administration of Press and Publishing and the press and publishing administrative departments of provinces， autonomous regions and municipalities directly under the central government.

　　Article 23　Press and publishing administrative departments shall examine the application materials of applicants in a timely manner. If they discover that the application materials are incomplete， they shall specifically notify the applicant of all the materials required to be supplemented and corrected within five working days of the date of receipt of the application materials. If they fail to notify the applicant within the time limit， the application materials shall be deemed to have been accepted as of the date of receipt thereof.

　　PART THREE　ADMINISTRATION OF DISTRIBUTION ACTIVITIES OF PUBLICATIONS

　　Article 24　No organization or individual may distribute the following publications：

　　1. banned publications containing prohibited contents specified in Articles 26 and 27 of the Administration of Publishing Regulations；

　　2. various kinds of illegal publication， including： publications published， printed or duplicated without approval， publications that forge or counterfeit the name of a publisher， newspaper or periodical， illegally imported publications， publications published by selling or purchasing book numbers， serial numbers or publication numbers；

　　3. publications that infringe on the copyright or exclusive right of publication of another party； or

　　4. publications the publication and printing or duplication and distribution of which has been explicitly prohibited by a press and publishing administrative department.

　　Article 25　Internal informative publications shall be distributed free of charge within the relevant system， industry or work unit. They shall not be distributed by any organization or individual.

　　Article 26　Work units and individuals engaged in the business of distribution of publications shall abide by the following provisions：

　　1. they may not source stock from work units that are not publishers of publications or publications distribution work units；

　　2. they may not participate in the sale or purchase of book numbers， serial numbers or publication numbers in any manner；

　　3. they may not engage in business outside the scope and place of business approved by the press and publishing administrative department；

　　4. they may not post or disseminate order or subscription forms， advertisements or publicity pictures with content prohibited by laws and regulations or with duplicitous language；

　　5. they may not engage in tie-in sale of publications or hard selling of publications；

　　6. they may not alter without authorization the copyright page of publications； and

　　7. the Publications Business Permit shall be displayed in a prominent place in the business premises. Such Permit may not be altered or reproduced， or sold， lent， rented or transferred in any manner.

　　Article 27　Publications distribution work units shall establish a vocational training system and shall， according to the Labour Law， the occupation category determined by the State and the vocational skill standards for publication distributors， organize the employees of the work unit to participate in the appraisal and assessment of vocational skills implemented by appraisal and assessment institutions that are approved by the labour administrative department of the State.

　　Article 28　A publisher shall have general distribution rights for its own publications.

　　When a publisher appoints a publications general distribution work unit to distribute publications on its behalf， a unified Power of Attorney for Distribution of Publications shall be used. It may not assign， or assign in a disguised manner， the general distribution rights for publications to a work unit without general distribution rights for publications. It may not appoint a work unit without publications wholesale right to wholesale publications or to act as publications wholesale agent. It may not appoint a work unit that is not a publications distribution work unit to distribute publications on its behalf.

　　Article 29　A business work unit that enters into a publications wholesale market must submit samples of its publications to the wholesale market administration organization for examination and inspection before the sale of publications. The samples of publications submitted for examination and inspection must be the same as the publications being sold.

　　Article 30　The press and publishing administrative departments of provinces， autonomous regions and municipalities directly under the central government， and national publishing and distribution industry associations， may apply to sponsor national publications ordering events and publications fairs.

　　Publishing and distribution industry associations at the provincial level or above may apply to sponsor publications ordering events and publications fairs for regional publications. National publishing and distribution industry associations may apply to sponsor trans-provincial professional publications ordering events and publications fairs. Their subordinate professional committees may accept entrustment to undertake such events and fairs.

　　Article 31　To hold a national publications ordering event or publications fair， the sponsoring work unit must apply to the General Administration of Press and Publishing for examination and approval at least six months in advance. The General Administration of Press and Publishing shall render a decision within two months of the date of receipt of the application， and shall notify the sponsoring work unit.

　　To hold a regional or professional publications ordering event or publications fair， the sponsoring work unit must， on the strength of the relevant materials such as the event proposal， list of participating units， floor plan of the venue and list of members of the organization committee， report to the local press and publishing administrative department of the province， autonomous region or municipality directly under the central government for record filing one month before the event.

　　Article 32　Publications distribution enterprises recognized by press and publishing administrative departments， education administrative departments and departments in charge of pricing at the provincial level and above by way of invitation of bids or other public and impartial methods may engage in the distribution of primary and secondary school textbooks. No other work units or individuals may engage in the business of distribution of primary and secondary school textbooks.

　　Article 33　Publications distributed internally shall not be publicly promoted， displayed， shown or sold.

　　Article 34　Publications imported for distribution must be imported by a publications import business work unit that has been established in accordance with the law. Newspapers and periodicals imported for distribution must be imported by publications import business work units designated by the General Administration of Press and Publishing.

　　Article 35　Work units or individuals engaged in the business of distribution of publications must retain the relevant non-financial bills such as inventories of publications imported for distribution for two years or more for examination and inspection.

　　Work units or individuals engaged in the business of distribution of publications must report the address and area of the storage facilities for the publications and the details of the administrators to the press and publishing administrative department that granted approval. If there are any changes to the address and area of the storage facilities for the publications or the details of the administrators， they must be reported to the press and publishing administrative department that granted approval for record filing within 15 days of the date of change.

　　Article 36　Engagement in the storage， transportation and delivery of publications shall be subject to the supervision ad inspection of the press and publishing administrative departments.

　　Article 37　No organization or individual may engage in the solicitation of orders， storage， transportation， mailing， delivery or distribution of， or include for free， publications listed in Article 24 hereof.

　　Article 38　Work units and individuals engaged in the business of distribution of publications must truthfully submit statistical data in accordance with the PRC， Statistics Law， the General Administration of Press and Publishing， Administration of Press and Publishing Statistics Procedures and the relevant statistical systems stipulated by the State. They may not use any excuse to refuse to report， delay the report of， make a false or incomplete report of， or falsify or distort， the statistical data.

　　Article 39　Work units and individuals engaged in the business of distribution of publications must provide the relevant data to designated databank administration work units according to the regulations of the General Administration of Press and Publishing and the press and publishing administrative departments of provinces， autonomous regions and municipalities directly under the central government.

　　Article 40　Work units and individuals engaged in the business of distribution of publications shall carry out examination， verification and registration procedures in accordance with the regulations of the General Administration of Press and Publishing.

　　PART FOUR　PENAL PROVISIONS

　　Article 41　Establishment of publications distribution work units or engagement in the business of distribution of publications without approval shall be punished in accordance with Article 55 of the Administration of Publishing Regulations.

　　Article 42　Distribution of banned publications in violation of these Provisions shall be punished in accordance with Article 56 of the Administration of Publishing Regulations.

　　Article 43　Distribution of publications that infringe on the copyright or exclusive right of publication of others in violation of these Provisions shall be punished in accordance with the provisions of the PRC， Copyright Law and the PRC， Copyright Law Implementing Regulations.

　　Article 44　In cases of distribution of illegal publications or publications the publication and printing or duplication and distribution of which has been prohibited by a press and publishing administrative department in violation of these Provisions， the press and publishing administrative department shall order cessation of the illegal act. The illegally distributed publications and the illegal income shall be confiscated. If the illegal business amount is Rmb 10，000 or more， a fine of not less than five times and not more than ten times the illegal business amount shall be imposed. If the illegal business amount is less than Rmb 10，000， a fine of not less than one time and not more than five times the illegal business amount shall be imposed. If the case is serious， it shall order suspension of business for rectification or the original permit issuing department shall revoke the permit.

　　Article 45　In cases of violation of Article 24 hereof， at the same time of the imposition of the administrative penalties according to Articles 42， 43 and 44 hereof， the licence issuing work unit shall cancel the professional qualification certificates for publications distributor of the legal representative or the main person in charge and the directly responsible persons.

　　Article 46　Distribution of primary and secondary school textbooks without statutory recognition shall be punished in accordance with Article 59 of the Administration of Publishing Regulations.

　　Distribution of imported publications in violation of these Provisions shall be punished in accordance with Article 57 of the Administration of Publishing Regulations.

　　Article 47　In case of any of the following acts， the press and publishing administrative department shall order cessation of the illegal act and shall issue a warning. The illegal income and illegally distributed publications shall be confiscated， and a fine of not less than Rmb 3，000 and not more than Rmb 30，000 shall be imposed：

　　1. the distribution of internal informative publications；

　　2. the assignment， or assignment in a disguised manner， of the general distribution rights for publications to a work unit without general distribution rights for publications；

　　3. the sourcing of stock from a work unit that is not a publisher of publications or publications distribution work unit；

　　4. violation of Paragraph Two of Article 28 hereof by a publisher；

　　5. conducting business outside the scope or place of business approved by the press and publishing administrative department；

　　6. participating in the sale or purchase of book numbers， serial numbers or publication numbers；

　　7. sale， lending， leasing or assignment of a Publications Business Permit；

　　8. failure to follow the examination， verification and registration procedures in accordance with provisions；

　　9. unauthorized change of registered items；

　　10. failure to file a record according to these Provisions for establishment of publications leasing work unit or engagement in the business of leasing of publications by other work units or individuals； or

　　11. failure to file a record according to these Provisions for the sponsor of a regional or trans-provincial professional publication ordering event or publications fair by a sponsoring work unit that fulfils the requirements of these Provisions.

　　Article 48　In case of any of the following acts， the press and publishing administrative department shall order cessation of the illegal act and shall issue a warning. The illegal income and illegally distributed publications shall be confiscated， and a fine of not less than Rmb 2，000 and not more than Rmb 20，000 shall be imposed：

　　1. posting or dissemination of order or subscription forms， advertisements， or publicity pictures containing content prohibited by laws and regulations or containing duplicitous language；

　　2. tie-in sale of publications or hard selling of publications；

　　3. unauthorized change to the copyright page of publications；

　　4. failure to display the Publications Business Permit in a prominent place in the business premises， or unauthorized alteration or reproduction of the permit；

　　5. violations of Articles 29， 35 and 39 hereof； or

　　6. public promotion， display or sale of publications that should be distributed internally according to provisions.

　　Article 49　In case of establishment of a publications wholesale market without approval， the publications distribution work unit that establishes the market without authorization shall be punished.

　　In case of sponsor of a national publications ordering event or publications fair without approval， or a sponsoring work unit that does not fulfil the requirements of these Provisions sponsors regional or trans-provincial professional publications ordering event or publications fair without authorization， penalty for engaging in the business of distribution of publications without authorization shall be imposed.

　　Article 50　Engagement in the solicitation of orders， storage， transportation， delivery， distribution of， and including for free， publications listed in Article 24 hereof shall be handled in accordance with Article 42， 43 or 44 hereof respectively.

　　Article 51　Violations of Article 38 hereof shall be handled in accordance with the General Administration of Press and Publishing， Administration of Press and Publishing Statistics Procedures.

　　PART FIVE　SUPPLEMENTARY PROVISIONS

　　Article 52　Apart from the publications wholesale markets approved by the press and publishing administrative departments of provinces， autonomous regions and municipalities directly under the central government according to law based on the quota of the General Administration of Press and Publishing， all provinces， autonomous regions and municipalities directly under the central government shall no longer approve the establishment or establishment in a disguised form of publications wholesale markets， nor expand the current scale of wholesale markets. The wholesale work units within the approved wholesale markets must fulfil the conditions for wholesale work units to independently establish business premises specified in these Provisions within five years.

　　Article 53　For the purposes of Articles 13 and 14 hereof， the term “nationwide chain business” refers to chain business across provinces， autonomous regions or municipalities directly under the central government.

　　Article 54　The format of Publications Business Permit shall be stipulated by the General Administration of Press and Publishing and shall be printed uniformly by the General Administration of Press and Publishing or the press and publishing administrative departments of provinces， autonomous regions and municipalities directly under the central government.

　　Article 55　These Provisions shall be effective as of 1 September 2003. The Administration of the Publications Market Tentative Provisions promulgated and implemented on 22 November 1999 by the General Administration of Press and Publishing shall be simultaneously repealed. Other provisions implemented prior to these Provisions that are not in accord with these Provisions shall no longer apply.

No. 16 [2004] of the Ministry of Labor and Social Security

　　The labor and social security offices or bureaus of all provinces， autonomous regions， municipalities directly under the Central Government，

　　Circular of the former Ministry of Labor concerning Printing and Distributing the Interim Provisions on the Administration of Wages of Foreign-funded Enterprises （No. 46 [2004] of the Ministry of Labor） was decided to be abolished after deliberation. The documents on interpretation of this Circular shall be abolished simultaneously， namely the Reply of the General Office of the Ministry of Labor to the Request for Instructions on the Ownership of the Disposal Power of the Nominal Wage of Chinese Senior Managers in Chinese-foreign Equity Joint Venture Enterprises and Chinese-foreign Contractual Joint Enterprises （No. 106 [2004] of the Ministry of Labor）。

　　After the aforesaid documents are abolished， the authorities in all places shall continue to strengthen the supervision over and inspection of the conditions of how wages are paid to the workers in foreign-funded enterprises and cooperate with relevant departments on relatisng issues.

　　the Ministry of Labor and Social Security

　　May 18th， 2004

Article 1　These Provisions have been formulated on the basis of the laws and administrative regulations related to the administration of enterprise registration in order to standardize the administration of registration of the scopes of business of enterprises， standardize the operations of enterprises and protect the lawful rights and interests of enterprises.

　　Article 2　These Provisions apply to enterprises registered in the People’s Republic of China.

　　Article 3　The “scope of business” is the scope within which an enterprise engages in business activities， and shall be registered with an enterprise registration authority in accordance with the law.

　　The scope of business of an enterprise shall be registered by an enterprise registration authority according to law upon the application of the investor（s） or the enterprise. The scope of business of the enterprise shall be consistent with the stipulations of the articles of association or partnership agreement.

　　Article 4　Scopes of business are divided into licensed operations and general operations.

　　“Licensed operations” means operations for which an enterprise shall apply for the approval of the relevant authority in accordance with laws， administrative regulations and State Council decisions before applying for registration.

　　“General operations” means operations for which an enterprise may apply on its own without approval.

　　Article 5　To apply for licensed operations， an applicant shall submit an application to the examination and approval authority in accordance with laws， administrative regulations and State Council decisions and， after the application is approved， apply to the enterprise registration authority for registration on the strength of the approval document and certificate. If the examination and approval authority imposes restrictions on the term of operation of the licensed operation， the registration authority shall register such term of operation， and the enterprise shall engage in operation within the term of operation approved by the examination and approval authority.

　　To apply for general operations， an applicant shall select on its own one or more business categories by reference to the Industrial Classification of the National Economy and the relevant provisions， and apply directly to the enterprise registration authority for registration in accordance with the law.

　　Article 6　The enterprise registration authority shall register licensed operations on the basis of the approval document and certificate issued by the examination and approval authority. If a licensed operation is not stated in the approval document or certificate or the statement does not conform to standards， registration shall be made in accordance with the relevant laws， administrative regulations and State Council decisions， and the Industrial Classification of the National Economy.

　　The enterprise registration authority shall register general operations in accordance with the articles of association， partnership agreement or application of the enterprise by reference to the categories in the Industrial Classification of the National Economy and the relevant regulations.

　　Article 7　The scope of business of an enterprise shall include or reflect the industry or business characteristics in the enterprise name. In the case of an enterprise that operates in more than one industry， the industry to which the first operation in its scope of business belongs shall be the industry of that enterprise.

　　Article 8　An enterprise that changes the scope of business shall， within 30 days of the date on which the resolution or decision on the change is made， apply to the enterprise registration authority for a change of registration. If a licensed operation is involved， it shall， within 30 days of the date of approval of the examination and approval authority， apply to the enterprise registration authority for change of registration on the strength of the approval document and certificate.

　　A partnership or wholly individually-owned enterprise that changes the scope of business shall， within 15 days of the date on which the decision on the change is made， apply to the enterprise registration authority for change of registration.

　　Article 9　If an enterprise newly established following a division or merger applies for a licensed operation， it shall apply to the examination and approval authority specified in laws， administrative regulations and State Council decisions in accordance with the law before applying for registration and， after the application is approved， apply to the enterprise registration authority for registration on the strength of the approval document and certificate. If an enterprise that continues to exist following a division or merger applies for a licensed operation and such operation has been approved by the examination and approval authority prior to the change of registration， the enterprise shall not be required to complete the examination and approval procedures again.

　　Article 10　If an enterprise changes its enterprise type， it shall not be required to complete the examination and approval procedures again for licensed operations that have been approved by the examination and approval authority prior to the change of enterprise type， unless otherwise stipulated by laws， administrative regulations or the State Council.

　　Article 11　If there is a change in the investor（s） of an enterprise， the enterprise shall not be required to complete the examination and approval procedures again after the change of investor（s） for the licensed operations that have been approved by the examination and approval authority， unless otherwise stipulated by laws， administrative regulations or the State Council.

　　If an investor of the enterprise is changed from a domestic investor to a foreign investor or from a foreign investor to a domestic investor， the enterprise registration authority shall register the scope of business anew on the basis of the approval document and certificate issued by the examination and approval authority.

　　Article 12　The scope of business of a branch incapable of assuming civil liability independently （a Branch） shall not exceed that of the enterprise to which it belongs.

　　If a Branch engages in a licensed operation within the scope of business of the enterprise to which it belongs， it shall apply to the examination and approval authority for approval， unless otherwise stipulated by laws， administrative regulations or the State Council.

　　If a Branch is individually approved by the examination and approval authority to engage in a licensed operation， the enterprise may apply for addition of the corresponding scope of business on the basis of the approval document and certificate for the licensed operation granted to the Branch， but the words “（Branch operation）” shall be noted after the scope of business applied to be added.

　　Article 13　If the scope of business applied for by an enterprise is in the following circumstances， the enterprise registration authority shall not grant registration：

　　1. the operation is prohibited to be engaged in by enterprises according to laws， administrative regulations or State Council decisions；

　　2. it is a licensed operation but no approval document or certificate of the examination and approval authority is submitted；

　　3. the registered capital fails to reach the minimum amount of registered capital required by laws or administrative regulations for engaging in such operation；

　　4. laws， administrative regulations or the State Council stipulate that enterprises of specific industries may only engage in approved operations， and the enterprise applies for other items； or

　　5. other circumstances specified by laws， administrative regulations or the State Council.

　　Article 14　If an enterprise is in any of the following circumstances， it shall cease the operation in question and apply to the enterprise registration authority for change of registration or deregistration of its scope of business：

　　1. after a general operation in its scope of business has been adjusted as a licensed operation by laws， administrative regulations or State Council decisions， the enterprise fails to apply for examination and approval and obtain approval in accordance with the relevant provisions；

　　2. a licensed operation in its scope of business is required by laws， administrative regulations or State Council decisions to be examined and approved anew， but the enterprise fails to handle the examination and approval procedures and obtain approval in accordance with the relevant provisions；

　　3. the term of operation of a licensed operation in its scope of business as approved by the examination and approval authority has expired， but the enterprise fails to handle the examination and approval procedures again and obtain approval； or

　　4. a licensed operation in its scope of business is cancelled by the examination and approval authority.

　　Article 15　If an enterprise engages in licensed operations without approval or registration or in violation of Article 14 hereof， the enterprise registration authority shall investigate and handle the matter in accordance with the Investigating， Handling and Banning Unlicensed Business Operations Procedures.

　　Article 16　If an enterprise engages in general operations without registration， the enterprise registration authority shall investigate and handle the matter as operation in excess of scope in accordance with the law.

　　Article 17　These Provisions shall be implemented as of 1 July 2004.

　These regulations are formulated in accordance with the Insurance Law of the People’s Republic of China （hereinafter referred to as “Insurance Law”） and the Company Law of the People’s Republic of China （hereinafter referred to as “Company Law”）， for the purpose of strengthening the supervision and administration of insurance companies， maintaining a normal order in the insurance market， protecting the legitimate rights and interests of the insured， and promoting healthy development of the insurance sector.

　　Article 2

　　The China Insurance Regulatory Commission （hereinafter referred to as “CIRC”） is authorized by laws and the State Council to perform general supervision and administration over insurance companies.

　　The local branch offices of CIRC exercise functions and powers within the authorization scope of CIRC.

　　Article 3

　　An insurance company hereof refers to a legally registered commercial insurance company incorporated with the approval of insurance regulators.

　　Branches of an insurance company hereof refer to business operating institutions and marketing service institutions legally established by an insurance company， including branch companies， central sub-branch companies， sub-branch companies， sales departments， and sales service departments.

　　An insurance institution hereof refers to an insurance company or one of its branches.

　　Chapter II

　　Insurance Institutions

　　Section I

　　Establishment of Institutions

　　Article 4

　　Establishment of an insurance institution shall be approved by CIRC.

　　No entity or individual shall directly or indirectly operate commercial insurance business within the territory of People’s Republic of China without CIRC’s approval.

　　Article 5

　　Establishment of an insurance company shall comply with the following principles：

　　（1） Abiding by laws and regulations；

　　（2） In line with State macro-economic policies and insurance sector development strategies；

　　（3） In the interest of fair competition and healthy development of the insurance sector.

　　Article 6

　　Establishment of an insurance company shall satisfy the following requirements：

　　（1） The investors are qualified and the equity structure is reasonable；

　　（2） Articles of association are in accordance with Insurance Law and Company Law；

　　（3） Minimum registered capital is RMB 200 million of paid-up currency；

　　（4） Senior managerial personnel shall satisfy the duty qualifications stipulated by CIRC；

　　（5） The organization structure and governance system are complete and sound；

　　（6） Business sites and office facilities meet the needs of business development.

　　Article 7

　　To establish an insurance company， the applicant shall submit a written application to CIRC with the following documents in triplicate：

　　（1） Application letter for establishment， containing name， registered capital and scope of business of the proposed company， etc；

　　（2） Feasibility study report， including business development plan， draft articles of association， business management strategies， etc；

　　（3） Preparation plan；

　　（4） Investors’ share subscriptions agreement and certificates of the approval of their boards of directors or of their regulatory authorities；

　　（5） Investors’ business licenses or other background materials， balance sheet and profit and loss statements of the previous year audited by certified public accountants；

　　（6） Name list of the head（s） of the preparation team recognized by the investors， the proposed Chairman of the Board， the proposed General Manager， and the recognition certificates of the people in the name list；

　　（7） Other documents and materials required by CIRC.

　　Article 8

　　CIRC shall review the establishment application of an insurance company and decide whether or not to grant approval within 6 months after receiving the complete application documents. If CIRC decides not to approve the application， it shall state reasons in a written document to the applicant.

　　Article 9

　　During the review period CIRC shall remind the investors of the investment risks of insurance business.

　　CIRC shall listen to the proposed chairman of the board and the proposed general manager on the company’s market development strategy， business expansion plan and internal control system， and take these into the consideration of whether or not to approve.

　　Article 10

　　After an approval is granted， the applicant shall complete the preparation of establishing the insurance company within 1 year. If， for a justifiable reason， the deadline fails to be met， the preparation period may be extended by 3 months with the approval of CIRC. The approval document shall automatically become invalid if the extended deadline is still not observed.

　　The institution at the preparation stage shall not conduct any insurance business.

　　In principle， an insurance company shall not change its investors during the preparation period. In the event that　changes are made without the approval of CIRC， the original approval document shall automatically become invalid.

　　Article 11

　　After preparation has been completed， the applicant shall submit to CIRC an application for operation with the following materials in triplicate：

　　（1） Application letter for operation；

　　（2） Memorandum of the general founding meeting；

　　（3） Articles of association；

　　（4） Names of shareholders and the proportion of share they hold respectively， capital verification issued by an institution of sound credit standing， a copy of the original bank receipt voucher evidencing payment of the registered capital；

　　（5） Shareholders’ business licenses or other background materials， and balance sheets and profit and loss statements of the previous year；

　　（6） Resumes or other relevant certifying materials of the proposed senior managerial personnel， setting of company departments and composition of the employees， resumes and other certificating materials of actuaries concerned；

　　（7） Certificates on ownership of or the right of using the business site；

　　（8） 3-year business blueprint and reinsurance plan；

　　（9） Plan of insurance products to be provided；

　　（10） Report on configuration of computing facilities and electronic network construction.

　　Article 12

　　CIRC shall decide whether or not to approve within 60 days after receiving the complete operation application documents. If CIRC decides to approve， it shall issue a license for conducting insurance business. If CIRC decides not to approve the application， it shall state reasons in a written document to the applicant.

　　The approved insurance company shall go through business registration formalities at the Administration for Industry and Commerce by presenting the approval document and license for conducting insurance business and accordingly obtain a business license from the authority before starting business.

　　Article 13

　　An insurance company may apply for establishing branches as needed according to business development.

　　An insurance company must establish a branch office to conduct business in any other province， autonomous region or municipality outside its locality. An insurance company may， in view of its practical needs， apply for establishing central sub-branch companies， sub-branch companies， sales departments or marketing service departments.

　　Article 14

　　An insurance company established with the minimum capital， as stipulated in item （3）， Article6， shall add no less than RMB 20 million to its registered capital when applying for the first branch company in every other province， autonomous region， and municipality outside its locality.

　　When applying for establishment of a branch company， an insurance company need not increase its registered capital if it has already reached the amount stipulated in the preceding paragraph.

　　An insurance company， with a capital of no less than RMB 500 million and adequate solvency， need not increase the registered capital when applying for establishment of a branch company.

　　Article 15

　　An insurance company applying to set up a branch shall satisfy the following requirements：

　　（1） Solvency margin is in accordance with the regulations of CIRC；

　　（2） Internal control system is complete， sound， and without penalty records； no penalty records within the past 2 years for those companies with more than 2 years’ operating history；

　　（3） Senior managerial personnel of a branch shall have the duty qualifications stipulated by CIRC.

　　Article 16

　　To establish a branch， an insurance company shall submit a written application to CIRC with the following documents in triplicate：

　　（1） Application letter for establishment；

　　（2） Audited reports on its solvency status at the end of the previous year and the end of the previous quarter；

　　（3） 3-year business development plan and market analysis for the branch to be established；

　　（4） Resume（s） or other relevant certificates of the person（s） in charge of the preparation for establishing the branch.

　　Article 17

　　CIRC shall review the establishment application of a branch and decide whether or not to grant approval within 20 days after receiving the complete application documents. If CIRC decides not to approve the application， it shall state reasons in a written document to the applicant.

　　After approval is granted， the applicant shall complete the preparation within 6 months. If， for a justifiable reason， the deadline fails to be met， the preparation period of establishing the branch may be extended by 3 months with the approval of CIRC. The approval document shall automatically become invalid if the extended deadline is still not observed.

　　The branch at preparation stage shall not conduct any insurance business.

　　Article 18

　　After the preparation for branch establishment has been completed， the applicant shall submit to CIRC an application for operation with the following materials in triplicate：

　　（1） Application letter for operation；

　　（2） Report on the fulfillment of preparation tasks；

　　（3） Resumes or other relevant certifying materials of the proposed senior managerial personnel；

　　（4） The certifying materials on ownership or the right of using the business site， statement of configuration of computing facilities and electronic network construction， internal organization setting and staff.

　　Article 19

　　CIRC shall decide whether or not to approve within 20 days after receiving the complete operation application documents. If CIRC decides to approve， it shall issue a license of the branch for conducting insurance business. If CIRC decides not to approve the application， it shall state reasons in a written document to the applicant. The approved insurance branch for opening business shall go through business registration formalities at the Administration for Industry and Commerce by presenting the approval document and insurance license and accordingly obtain business license from the authority before opening business.

　　Article 20

　　The review and administration of the qualifications of the senior managerial personnel of an insurance institution shall follow the relevant regulations of CIRC.

　　Article 21

　　An insurance company shall obtain the approval of CIRC to establish representative office（s） within Chinese territory. The representative office shall not conduct insurance operation.

　　Article 22

　　An insurance company shall obtain the approval of CIRC to establish operating institution（s） or representative office（s） outside Chinese territory.

　　Section II Alteration of Institutions

　　Article 23

　　An insurance company shall obtain the approval of CIRC to make the following alterations：

　　（1） Change of organization form；

　　（2） Change of registered capital；

　　（3） Splits and mergers；

　　（4） Change of capital contributors or shareholders holding 10% or more of the shares；

　　（5） Withdrawal of branches.

　　Article 24 An insurance company shall obtain the approval of CIRC to make the following alterations：

　　（1） Change of name；

　　（2） Amendment to the articles of association；

　　（3） Adjustment of business scope；

　　（4） Change of locale.

　　Article 25

　　An insurance company shall file with CIRC the following alterations for records：

　　（1） Change of the shareholders with less than 10% of the whole equity， excluding publicly listed an insurance company；

　　（2） Change of the branches’ business site.

　　Article 26

　　An insurance company shall submit a written report to CIRC within 15 days after performing the following alterations：

　　（1） Change of the names of the insurance company’s shareholders， excluding publicly listed an insurance company；

　　（2） Mergers of insurance company branches or alteration of their names.

　　Article 27

　　An insurance company shall state reasons to CIRC for withdrawing their branches， and submit the follow-up solutions for their business.

　　An insurance company shall bulletin its branches’ consolidating or withdrawing， and inform the policyholders， the insured， or beneficiaries concerned of the details regarding payment of insurance premiums and payment of indemnity or insurance benefits in a written document.

　　The insurance license of withdrawn insurance company branch shall become automatically invalid from the date on which the withdrawal is approved， and be turned back within 15 days.

　　Article 28

　　An insurance company having changed contents recorded in the insurance license shall take the documents concerned and insurance license to change for a new license from the issuing authority within 1 month from the date the changes are approved， confirmed， filed or reported.

　　Section III Insurance License

　　Article 29 An insurance license hereof refers to is an insurance company’s or its branch’s license for conducting insurance business.

　　An insurance license is a legal document issued by CIRC in accordance with related laws， permitting an insurance institution to operate insurance business， and certifying the legitimacy of its operation.

　　Article 30 CIRC designs， prints， issues， confiscates， withdraws or revokes an insurance license exclusively and in accordance with the law.

　　An insurance institution must not forge， alter， lease， lend， or transfer insurance license.

　　Article 31 An insurance institution shall put the insurance license at a prominent position in the business site， ready for examination.

　　Article 32 In the event that the insurance license is lost， an insurance institution shall announce the invalidation of the license in newspapers designated by CIRC and submit a statement to the issuing department and apply for a new one.

　　Section IV Termination and Liquidation

　　Article 33

　　An insurance company must set up a liquidation team to be dissolved. The liquidation team works under the supervision and guidance of CIRC.

　　If the insurance company is closed down according to law， CIRC shall form the liquidation team in time by organizing shareholders， authorities concerned and related professionals.

　　If the insurance company declares bankruptcy according to law， it is the legal responsibility of the People’s Court to form a liquidation team.

　　Article 34

　　The liquidation team shall notify the debtors within 10 days and bulletin 3 times in newspapers designated by CIRC within 60 days after its formation. The content of bulletin must be confirmed by CIRC.

　　The liquidation team shall entrust the accounting firm and law firm of good credit standing to evaluate the assets and liabilities of the company.

　　Article 35

　　An insurance company to be dissolved according to its articles of association or the resolution of the shareholders’ general meeting shall obtain the approval of CIRC and submit following documents in triplicate：

　　（1） Application letter for dissolution；

　　（2） Resolution of the general meeting of shareholders；

　　（3） Liquidation organization and its director；

　　（4） Liquidation procedure；

　　（5） Creditor’s rights and liabilities arrangement scheme；

　　（6） Assets distribution plan and assets disposition scheme；

　　（7） Other documents and materials required by CIRC.

　　Article 36

　　The dissolved or legally closed-down insurance company shall immediately stop receiving new business and shall turn in its insurance license.

　　Article 37

　　The dissolved or legally closed-down insurance company shall dispose of its assets via public auction， contract transfer， or other ways ratified by CIRC.

　　Article 38

　　An insurance company that has been dissolved， legally closed down， or declared bankrupt shall have its insurance contracts transferring scheme approved by CIRC.

　　Article 39

　　The shareholders of the insurance company to be dissolved shall not dispose the assets of the company or obtain any benefits from it until the insurance contracts liabilities have been liquidated.

　　Article 40

　　If the insurance company to be dissolved finds that its assets fail to satisfy its liabilities during the liquidation process， it shall submit a bankruptcy application， and the property liquidation and treatment of its creditor’s rights and liabilities shall follow the legal bankruptcy procedures.

　　Section V Investment in Insurance Company

　　Article 41

　　Corporations or other organizations permitted by laws or administrative regulations are allowed to invest in an insurance company.

　　Article 42

　　Corporations investing in an insurance company shall satisfy the following requirements：

　　（1） In accordance with the stipulations of laws and administrative regulations；

　　（2） Investment funds are legal， and the performance is satisfactory；

　　（3） Other requirements stipulated by CIRC on the principle of prudential supervision.

　　Article 43

　　Except for insurance holding companies and insurance companies approved by CIRC， individual corporation or any other organization （including their affiliates） investing in an insurance company shall not hold more than 20% of the whole equity.

　　Article 44

　　If the shareholders of an insurance company are affiliated， the company shall report the case to CIRC in a written document.

　　Article 45

　　Financial institutions outside Chinese territory， if in accordance with the stipulations of Article 42 hereof， with the approval of CIRC， may invest in an insurance company. The total proportion held by all foreign investors shall be less than 25% of the whole equity of the insurance company. If the total proportion held by all foreign investors is more than 25% of the whole equity of the insurance company， the insurance company shall comply with the relevant rules of the administration of foreign funded insurance companies.

　　Foreign shareholders investing in publicly listed insurance companies shall not be restricted by the stipulation of the previous paragraph.

　　Article 46

　　An insurance company listed on domestic stock exchange shall observe the shareholders’ investment proportion limits as stipulated in Article 43 hereof.

　　Chapter III Insurance Operation

　　Article 47

　　With the confirmation of CIRC， a property insurance company may provide some or all of the following insurance services：

　　（1） Property loss insurance；

　　（2） Liability insurance；

　　（3） Statutory liability insurance；

　　（4） Credit insurance and guarantee insurance；

　　（5） Agriculture insurance；

　　（6） Other property insurance services；

　　（7） Short-term health insurance and accident insurance；

　　（8） Reinsurance for the above insurance services.

　　Article 48

　　With the confirmation of CIRC， a life insurance company may provide some or all of the following insurance services：

　　（1） Accident insurance；

　　（2） Health insurance；

　　（3） Traditional life insurance；

　　（4） Innovative life insurance products；

　　（5） Traditional annuity insurance；

　　（6） New annuity insurance products；

　　（7） Other life insurance services；

　　（8） Reinsurance for the above insurance services.

　　Article 49

　　An insurance company applying for extension of its business scope shall comply with CIRC’s relevant regulations on registered capital， solvency requirement， etc.

　　Article 50

　　An insurance company operating foreign currency insurance business shall comply with the relevant regulations promulgated both by CIRC and by the State Administration of Foreign Exchange.

　　Article 51

　　Except for instances stipulated in Article 52 hereof， the branches of an insurance company shall not conduct business outside the domain of Provinces， Autonomous Regions and Municipalities.

　　Article 52

　　An insurance institution shall comply with CIRC’s regulations on participating in co-insurance， insurance of large scale commercial risks or master policy business， and providing insurance service by Internet outside the domain of Provinces， Autonomous Regions and Municipalities.

　　Article 53

　　An insurance company shall determine the self-retained portion of insurance premium， and the self-retained liability arising from the possible damage caused by each risk unit in accordance with the law. The portion beyond the limits stipulated by laws and regulations shall be reinsured.

　　Article 54

　　An insurance company seeking cession for their business shall give priority to an insurance company located in China， given equal terms and conditions.

　　Article 55

　　An insurance institution shall by no means directly or indirectly compel policyholders to buy insurance.

　　Article 56

　　An insurance institution shall not entrust illegal insurance agents to develop business， shall not accept business introduced by illegal insurance brokers， or pay charges， commissions or other similar fees to any illegal insurance agent or broker.

　　Article 57

　　An insurance institution shall not fabricate or disperse false facts to damage the reputation of other insurance institutions.

　　Article 58

　　An insurance institution shall not induce policyholders or the insured to stop their insurance contracts with other insurance institutions.

　　Article 59

　　An insurance institution shall not utilize the government or its departments， monopoly enterprises or organizations to squeeze out or obstruct other insurance institutions’ business operation.

　　Article 60

　　An insurance institution shall not provide or promise to provide policyholders， the insured， beneficiaries， or other related party with insurance premium rake-offs or any other benefits in violation of laws or regulations.

　　Article 61

　　An insurance institution shall establish special customer service departments or consultation and complaint departments and publicize the hotline number for consultation and complaint.

　　An insurance institution shall seriously deal with the insurance complaints from policyholders， the insured， and beneficiaries， and inform them of the result in time.

　　Article 62

　　An insurance institution’s business propaganda materials shall be objective， complete， and authentic， with its name， address and hotline for consultation and complaint.

　　Article 63

　　Insurance advertisements or business propaganda materials shall not predict uncertain insurance policy benefits such as the company’s profits， policy dividend， or interest surplus refund.

　　An insurance institution shall not utilize advertising or any other propaganda means to provide misleading information on their insurance clauses and service quality， etc.

　　Article 64

　　An insurance institution shall clearly specify the exceptional liability or liability exemption， surrender， other charge deduction， cash value， hesitation period and so on in the insurance contract.

　　An insurance institution shall not partially compare the insurance clauses and premium rates with those of other institutions， or with interest rates on deposits of financial institutions.

　　Article 65

　　An insurance institution shall supervise the behavior of their insurance agents and immediately stop or correct any misconduct or behavior in violation of laws and regulations.

　　An insurance institution shall take the legal responsibility for their insurance agents’ false statement and misleading behavior during business development that are detrimental to the interests of the insured.

　　Article 66

　　An insurance company shall establish such systems as controlling and managing affiliated deals. An insurance company shall report their affiliated deals to CIRC， according to relevant regulations， within 15 days after the transaction.

　　The affiliated deals mentioned in the preceding paragraph are those between an insurance company and their affiliated entities as follows：

　　（1） Reinsurance ceding or assuming business；

　　（2） Asset management， guarantee and agency business；

　　（3） Buying and selling of fixed assets and transfer of creditor’s rights and liabilities.

　　Enterprises in any of the following relations with an insurance company shall be deemed as affiliated to that company：

　　（1） There is a control relationship between the two， in terms of equity and investment；

　　（2） Both are controlled by a third party in terms of equity and investment；

　　（3） The enterprise is directly controlled by senior managerial personnel of the insurance company， or their close family members.

　　Senior managerial personnel of the insurance company or their close family members shall be deemed as affiliated to the insurance company.

　　Article 67

　　An insurance company shall establish and improve corporate governance， strengthen internal management， and set up a strict internal control system.

　　Article 68

　　To be publicly listed， an insurance company shall obtain the Regulatory Comment Letter of CIRC.

　　Chapter IV Insurance Clauses and Premium Rates

　　Article 69

　　The insurance clauses and premium rates that an insurance company adopts shall be approved by CIRC or filed with CIRC for record in accordance with the law.

　　Article 70

　　The clauses and insurance premium rates of the following insurance varieties shall be approved by CIRC.

　　（1） Products for compulsory insurance according to laws and regulations；

　　（2） Newly developed life insurance products；

　　（3） Other insurance products that CIRC deems to be related to the public interests.

　　CIRC compiles and adjusts the catalogue of insurance products subject to approval.

　　Article 71

　　Clauses and premium rates adopted by an insurance company for insurance products except those stipulated in the preceding article shall be filed with CIRC for record.

　　Article 72

　　CIRC shall adhere to the principle of protecting public interests and preventing improper competition when approving or filing the insurance clauses and premium rates.

　　CIRC can require an insurance company to revise or stop using the insurance clauses and premium rates in the following cases：

　　（1） Violation of laws and administrative regulations or CIRC’s prohibition regulations；

　　（2） Violation of relevant state fiscal and financial policies；

　　（3） Damaging the public interests；

　　（4） Content is obviously unfair or causes price monopoly， which infringes upon the legitimate rights and interests of the policyholders， the insured， or the beneficiaries，

　　（5） Improper clause design， premium rate fixing， or assumed interest rate， which may jeopardize the solvency of the insurance company；

　　（6） Other requirements imposed by CIRC on the principle of prudential supervision and administration.

　　Article 73

　　To alter the insurance clauses and premium rates that have been approved by or filed with CIRC， an insurance company shall re-submit them for approval by or filing with CIRC.

　　An insurance company may reach a complementary agreement on special matters with the counter-party when signing a specific insurance contract， but the cases in items （1）-（6） in the second paragraph of the preceding article shall not be allowed.

　　Article 74

　　An insurance company should determine pricing factors including the assumed interest rates of long-term life insurance policies in accordance with CIRC’s relevant regulations.

　　Article 75

　　An insurance company shall actively develop insurance products catering to the social demands and strive to make innovations in products and services.

　　The language of insurance clauses and premium rates of an insurance company shall be clear， definite， and easy to understand.

　　Article 76

　　Insurance associations may issue model texts of property or life insurance clauses.

　　Insurance associations may， in view of practical needs， promulgate guiding insurance premium rates.

　　Chapter V Insurance Funds and Insurance Company’s Solvency

　　Article 77

　　An insurance company shall legally put aside guarantee funds. An insurance company shall not use or dispose of the guarantee funds on their own unless for the purpose of paying off debts during liquidation.

　　Article 78

　　An insurance company shall legally put aside insurance protection funds， which shall be centrally managed and planned as a whole in accordance with CIRC’s relevant regulations.

　　Article 79

　　An insurance company shall put aside， according to relevant regulations of CIRC， insurance liability reserves， which must be authentic and adequate.

　　Article 80

　　The utilization of insurance funds shall be confined to：

　　（1） Bank deposits；

　　（2） Buying and selling of government bonds；

　　（3） Buying and selling of financial bonds；

　　（4） Buying and selling of corporate bonds；

　　（5） Buying and selling of securities investment funds.

　　（6） Other ways stipulated by the State Council.

　　The specific ways that an insurance company invests the insurance funds and the proportions on investing products and ascertained minimum credit ratings of specific investments shall be in accordance with the relevant regulations of CIRC.

　　Article 81

　　Domestic insurance companies’ overseas fund management activities shall comply with relevant prescriptions of the State.

　　Article 82

　　An insurance company may establish insurance assets management companies， and entrust them to manage its insurance funds.

　　Article 83

　　An insurance company shall， on the principle of protecting the interests of the insured and guaranteeing solvency， operate steadily to ensure that the actual solvency margin is no less than the minimum standard margin at any time.

　　Article 84

　　An insurance company’s actual solvency margin shall be the balance of recognized assets minus recognized liabilities.

　　The confirmation， computation， and reporting of recognized assets and liabilities shall comply with the relevant regulations of CIRC.

　　Article 85

　　An insurance company’s minimum solvency margin standard shall be subject to the stipulation and adjustment of CIRC.

　　Article 86

　　An insurance company with actual solvency margin below the minimum standard shall take effective measures to improve its insolvency positions. They shall also report to CIRC on relevant improvement plans， concrete measures， and final results.

　　Article 87

　　An insurance company’s solvency adequacy rate shall be the actual solvency margin divided by the minimum solvency margin. CIRC may rank those companies with solvency adequacy rate below 100% as key objects for regulation， and accordingly take the following regulatory measures：

　　（1） For companies with solvency adequacy rate above 70%， CIRC may require them to bring forward an improvement plan and satisfy the minimum solvency standard within a time limit. If the deadline fails to be met， CIRC may take such regulatory measures as requiring them to increase their capital， charging them to buy reinsurance， and restricting their business scope， dividend distribution to shareholders， fixed asset purchase， operating expense， and growth of branches， etc， until the minimum solvency margin requirement is satisfied；

　　（2） For companies with solvency adequacy rates between 30% and 70%，besides the measures mentioned above， CIRC may take such regulatory measures as charging them to auction the bad assets， transfer insurance business， restrict senior managerial personnel’s salaries and duty consumption level， restrict commercial advertising， adjust funds management， stop developing new business， etc.

　　（3） For companies with solvency adequacy rates below 30%， besides the measures mentioned above， CIRC may legally take over the management of the company.

　　Chapter VI Supervision and Inspection

　　Article 88

　　CIRC bases its supervision and administration of insurance companies on the combination of solvency regulation and market behavior regulation.

　　An insurance company shall be under the supervision and administration-of CIRC in accordance with law.

　　Article 89

　　CIRC shall supervise and administrate an insurance institution by both on-site and off-site means.

　　Article 90

　　CIRC may list those institutions with the following cases as key inspection objects：

　　（1） Serious violation of laws and regulations；

　　（2） Inadequate solvency；

　　（3） Abnormal financial condition；

　　（4） Reports， statements， documents or materials submitted proved to be false；

　　（5） Other situations that CIRC deems necessary to emphatically examine.

　　Article 91

　　CIRC’s on-site inspection of an insurance institution involves some or all of the following issues：

　　（1） Whether the approval or filing procedures regarding the establishment and alteration of the institutions are complete；

　　（2） Whether the contents of presented materials are in line with the facts；

　　（3） Whether the capital and various reserves are authentic and adequate；

　　（4） Whether solvency is adequate；

　　（5） Whether the fund management is legal；

　　（6） Whether business operation and financial conditions are good， and whether the financial statements are complete and authentic；

　　（7） Whether the insurance clauses and premium rates in use have been submitted for approval or filing in accordance with regulations；

　　（8） Whether the business interactions with insurance intermediaries comply with laws and regulations；

　　（9） Whether the formalities of the appointment or alteration of senior managerial personnel are complete；

　　（10） Whether the relevant matters stipulated as reporting after the event have been timely reported；

　　（11） Other matters that CIRC deems necessary to examine.

　　Article 92

　　An insurance institution shall cooperate with CIRC in the on-site inspection， and provide relevant documents and materials as required by CIRC.

　　Article 93

　　CIRC shall dispatch as least 2 inspectors for on-site inspection， and the inspectors shall present their relevant certificates and inspection notification. To entrust such intermediaries as accounting firms to perform inspection， CIRC shall provide a written trust document.

　　Article 94

　　An insurance institution shall timely submit business operation reports， actuarial reports， financial accounting reports， solvency reports， and relevant regulatory reports and statements， according to regulations.

　　Article 95

　　The statements and reports that an insurance institution submits to CIRC shall be complete， authentic and accurate.

　　Article 96

　　An insurance institution’s business operation reports， financial accounting reports， solvency reports and other relevant reports and statements shall be signed by the corporate representative or the general manager. The annual financial report and solvency report shall be audited by certified public accountant. An insurance institution’s actuarial report shall be signed by the actuary recognized by CIRC. The insurance branches’ reports and statements shall bear the signature of the person-in-charge and stamp of the branches.

　　Article 97

　　The material resolutions of the shareholders’ meeting and the board of directors shall be reported to CIRC within 30 days after the conclusion of the resolutions.

　　Article 98

　　CIRC may require an insurance institution to explain the material matters concerning insurance business operation and risk management by speaking to or inquiring the senior managerial personnel， according to the needs of regulation and administration.

　　Article 99

　　Where an insurance institution or their staffs violate these regulations， CIRC shall give the institution or the staffs a warning， order it（them） to make corrections， and impose administrative punishment according to relevant laws and regulations. Those suspicious of crimes shall be handed over to jurisdiction authorities for their criminal responsibilities.

　　Chapter VII Supplementary Provisions

　　Article 100

　　These regulations shall apply to foreign-funded insurance companies and reinsurance companies. The issues otherwise stipulated in laws， administrative regulations or the regulations of CIRC shall be governed by the stipulations therein.

　　Article 101

　　These regulations shall， mutatis mutandis， apply to public-policy-oriented insurance companies such as Export Credit Insurances Company before relevant regulations are promulgated by the State authorities.

　　Article 102

　　The statements and materials that an insurance institution submits to CIRC shall be in Chinese. If the original copy is in a foreign language， a Chinese copy shall be attached. Should any discrepancy in meaning exist between the two copies， the Chinese copy shall be deemed as accurate.

　　Article 103

　　The periods hereof， except those denominated in years or months， are counted in working days， excluding weekends and public holidays.

　　Article 104

　　These regulations are subject to the interpretation of CIRC.

　　Article 105

　　These regulations shall be effective as of June15， 2004， and the Regulations on the Administration of Insurance Companies （CIRC Issue NO.2[2000]） issued by CIRC on January 3rd， 2000 and the Resolution on Amendment to Relevant Articles in Regulations on the Administration of Insurance Companies （CIRC Ordinance NO.3[2002]） issued by CIRC on March 15th， 2002 shall be repealed simultaneously.

Article 1

　　These Rules are formulated in accordance with the Insurance Law of the People’s Republic of China and the Regulations of the People’s Republic of China on Administration of Foreign-funded Insurance Companies （hereinafter referred to as “the Regulations”）。

　　Article 2

　　A foreign insurance company under the Regulations refers to an insurance company registered and conducting insurance business outside the territory of China.

　　Article 3

　　The proportion of foreign equity in an insurance company incorporated within the territory of China by a foreign insurance company with a Chinese company or enterprise that conducts life insurance business （hereinafter referred to as “joint-equity life insurance company”） shall be no more than 50% of the total equity of the company.

　　The shares of a joint-equity life insurance company directly or indirectly held by a foreign insurance company shall not exceed the limit of proportion as stipulated in the preceding paragraph.

　　Article 4

　　For a foreign-funded insurance company established within the territory of China before the Regulations became effective with registered capital or working capital of less than RMB 200 million or an equivalent amount in a freely convertible currency， its registered capital or working capital shall be fully paid within 2 years after these Rules become effective. For those who fail to fully pay the registered capital or working capital， China Insurance Regulatory Commission shall not grant approval to their application for operation of new business.

　　Article 5

　　The registered capital or working capital of a foreign-funded insurance company shall be the actually paid-up currency.

　　Article 6

　　After establishing a branch， the foreign insurance company shall not withdraw the working capital in any form.

　　Article 7

　　The period of operation of insurance business being more than 30 years， which is mentioned in Item 1 of Article 8 of the Regulations， means that the foreign insurance company shall have continuously been running insurance business for more than 30 years， and the foreign insurance company’s acquisition of another institution or merger with another institution to establish a new insurance company， shall not affect the calculation of the business operation period.

　　The business operation period of a subsidiary of a foreign insurance company shall start from the date of establishment of the subsidiary.

　　Article 8

　　The representative office mentioned in Item 2 of Article 8 of the Regulations refers to the following representative offices approved by China Insurance Regulatory Commission （hereinafter referred to as “CIRC”）：

　　（1） The representative office established by a foreign insurance company；

　　（2） The representative office established by a group to which a foreign insurance company belongs.

　　Article 9

　　The representative office established by a foreign insurance company or its group to which the insurance company belongs is only applicable to application for establishing one foreign-funded insurance company.

　　Article 10

　　The end of the year prior to the application for the establishment mentioned in Item 3 of Article 8 of the Regulations refers to the end of the previous fiscal year before the date of application.

　　Article 11

　　The other prudential requirements mentioned in Item 7 of Article 8 of the Regulations shall at least include the following requirements：

　　（1） Reasonable structure for corporate governance；

　　（2） Stable and sound risk control system；

　　（3） Sound internal control system；

　　（4） Effective Management Information System；

　　（5） Good operating performance without records of serious violation of laws and regulations.

　　Article 12

　　Where the applicant fails to provide the business license （duplicate） as stipulated in Item 2 of Article 9 of the Regulations， the applicant may provide a valid copy of the business license or a written certificate issued by the relevant authority evidencing the applicant’s eligibility to conduct insurance business.

　　Article 13

　　The certificate mentioned in Item 2 of Article 9 of the Regulations， which is issued by the relevant authority of the country or region where the foreign applicant is located to evidence the applicant’s solvency， shall include one of the following contents：

　　（1） Certifying that the applicant complies with the regulatory requirements of the country or region on solvency in the previous fiscal year as of the date when the relevant authority issues the certificate；

　　（2） Certifying that the applicant has no record of incompliance with the standard of the country or region on solvency in the previous fiscal year as of the date when the relevant authority issues the certificate.

　　Article 14

　　The Letter of Comments issued by the relevant authority of the country or region where the foreign applicant is located concerning the applicant’s application， which is mentioned in Item 2 of Article 9 of the Regulations， shall include the following contents：

　　（1） Whether the application for the establishment of an insurance institution in China complies with the laws and rules of the applicant’s country or region；

　　（2） Whether the authority approves the applicant’s application；

　　（3） The record of the punishment imposed on the applicant in the last three years prior to the date of issuance of the Letter of Comments by the relevant authority；

　　Article 15

　　The annual report mentioned in Item 3 of Article 9 of the Regulations shall include the Balance Sheets， Statements of Profit and Loss， and Cash Flow Statements of the applicant in the last three fiscal years prior to the date of application.

　　The annual report mentioned in the preceding paragraph shall be attached with the auditor’s report issued by an accounting or auditing firm authorized by the country or region where the applicant is located.

　　Article 16

　　Except otherwise specified by the laws or administrative regulations or approved by the State Council， the Chinese applicant mentioned in Item 4 of Article 9 of the Regulations shall satisfy the following requirements：

　　（1） The companies or enterprises with the capacity of legal person registered at the administration department of industry and commerce， excluding commercial banks， securities organizations and the foreign-funded enterprises specified in the Law of the People’s Republic of China on Foreign-funded Enterprises；

　　（2） Being approved by the administrative authority of the enterprise or its shareholders’ meeting；

　　（3） Good operating performance and in the previous fiscal year as of the application date being profitable；

　　（4） Making the investment with self-owned capital from legitimate sources.

　　Article 17

　　The relevant documents to be submitted by a Chinese applicant for the establishment of a joint-equity insurance company shall include business license （duplicate）， articles of association， business structure， operation history， annual report and punishment record for the last three years.

　　Article 18

　　The person in charge of the preparation of a foreign-funded insurance company shall satisfy the following requirements：

　　（1） Academic degree above junior college level；

　　（2） Insurance or related work experience for over 2 years；

　　（3） No illegal and criminal record.

　　Article 19

　　Where an applicant applies for the extension of the preparation period according to the provisions specified in Article 11 of the Regulations， he shall， within 1 month before expiration of the original preparation period， submit a written application to CIRC and explain the reason.

　　Article 20

　　The preparation report mentioned in Item 1 of Article 11 of the Regulations shall summarize all the issues stated in other paragraphs under this article.

　　Article 21

　　The statutory capital verification organization mentioned in Item 4 of Article 11 of the Regulations refers to an accounting firm complying with the requirements of CIRC.

　　Article 22

　　The capital verification certificate mentioned in Item 4 of Article 11 of the Regulations shall include the following contents：

　　（1） A Capital Verification Report issued by a statutory capital verification organization；

　　（2） A copy of the original bank receipt voucher evidencing payment of the registered capital or working capital.

　　Article 23

　　The main person-in-charge mentioned in Item 5 of Article 11 of the Regulations refers to the general manager of the proposed branch of a foreign insurance company.

　　The letter of attorney issued to the person to be appointed as the main person-in-charge of the proposed branch of the foreign insurance company， refers to the letter of attorney issued to the person to be appointed as the general manager of the proposed branch of the foreign insurance company， which is signed by the Chairman of the Board of Directors or General Manager of the foreign insurance company.

　　The letter of attorney shall explicitly specify the scope of authorization granted to the authorized person.

　　Article 24

　　The senior managerial personnel of the proposed company mentioned in Item 6 of Article 11 of the Regulations shall have the qualifications specified by CIRC.

　　The senior managerial personnel of the branch of a foreign insurance company shall have the qualifications equal to those required for the counterparts in the headquarters of an insurance company.

　　Article 25

　　The materials regarding business place of the proposed company mentioned in Item 9 of Article 11 of the Regulations refers to the supporting documents evidencing the ownership or use-right of the business place.

　　The materials concerning other facilities related to the business mentioned in Item 9 of Article 11 of the Regulations shall include at least information about configuration of computer facilities， network construction and information management system.

　　Article 26

　　The following documents or materials to be provided by a foreign insurance company for an application for the establishment of a foreign-funded insurance company according to the requirements specified in the Regulations and these Rules， shall be notarized by a public notary legally established in the local country or region， or verified by the embassy or consulate of China in that country：

　　（1） The business license （duplicate） or valid copy of the business license；

　　（2） A letter of attorney issued to the proposed person-in-charge of the branch of a foreign insurance company；

　　（3） A letter of guarantee of a foreign insurance company to undertake the obligations of tax and duties payment and debts repayment on behalf of its branch in China.

　　Article 27

　　A foreign-funded insurance company may apply for establishing branches as needed according to business development.

　　The branch of a foreign insurance company can only conduct business within the territory of the province， autonomous region or municipality where the branch is located. Where the joint-equity insurance company or wholly-owned insurance company is prepared to conduct business in any other province， autonomous region or municipality outside its locality， it shall establish a branch in the place concerned.

　　A foreign insurance company may， according to actual circumstances， apply for establishing a central sub-branch or sub-branch， operating office or marketing service office. The establishment and management of marketing service offices shall be subject to other applicable regulations of CIRC， if any.

　　Article 28

　　Where a joint-equity or wholly-owned insurance company which has been established with a minimum registered capital of RMB200 million， applies for the first time for the establishment of a branch in every other province， autonomous region， or municipality outside its locality， it shall increase the registered capital by no less than RMB20 million.

　　By the time of applying for the establishment of a branch， if the registered capital of a joint-equity or wholly-owned insurance company has reached the amount as stipulated in the preceding paragraph， the company will no longer be required to increase its registered capital.

　　Where the registered capital of a joint-equity or wholly-owned insurance company has reached RMB500 million and where the solvency of the company is adequate， no increase of registered capital is required when the company applies for the establishment of a branch.

　　Article 29

　　A foreign-funded insurance company that applies for the establishment of a branch shall satisfy the following requirements：

　　（1） Its solvency margin shall comply with relevant regulations specified by CIRC.

　　（2） Its internal control system is sound and there is no record of punishment； where the operating period exceeds 2 years， there is no record of punishment in the most recent 2 years；

　　（3） It has senior managerial personnel of the branch with the relevant qualifications specified by CIRC.

　　Article 30

　　A foreign-funded insurance company that applies for the establishment of a branch shall submit an application to CIRC and provide the following documents in triplicate：

　　（1） A letter of application for establishment；

　　（2） Audited solvency status reports as of the end of the previous fiscal year and as of the end of the last quarter；

　　（3） A three-year business development plan and market analysis for the proposed branch；

　　（4） Resume（s） of the person（s）-in-charge of the organization preparation and relevant certificates.

　　Article 31

　　CIRC shall examine the application and decide， within 20 days after receiving the complete application documents， whether or not to grant approval； in case no approval is granted， CIRC shall inform the applicant in writing of the decision and explain the reason.

　　After approval is granted， the applicant shall complete the preparation within 6 months. Where the applicant fails to do so within the prescribed time limit， if the reason is justified and subject to approval by CIRC， the period may be extended for 3 months. Where the preparation is still not completed within the extended period， the original approval document issued by CIRC becomes void automatically.

　　The preparing body may not be engaged in any commercial activities concerning insurance.

　　Article 32

　　After the preparation is completed， the applicant shall apply to CIRC for opening business and submit the following documents in triplicate：

　　（1） A letter of application for opening business；

　　（2） A progress report of the preparation work；

　　（3） Resume（s） of senior managerial personnel to be appointed and relevant certificates；

　　（4） Relevant certificates of ownership or use-right of the office for the proposed branch， information regarding the configuration of computer facilities， network construction， and internal structure and staff.

　　Article 33

　　CIRC shall decide， within 20 days after receiving the complete application documents for opening business， whether or not to grant approval； in case the application is approved， a license for conducting insurance business shall be issued to the branch； in case the application is disapproved， CIRC shall inform the applicant in writing of the decision and explain the reason.

　　The branch with approval for opening business shall go through the formalities of business registration at the administration department of industry and commerce by presenting the approval document and the license for conducting insurance business and accordingly obtain business license from the authority before opening business.

　　Article 34

　　Unless otherwise stipulated in these Rules， the examination and administration of the qualifications of the senior managerial personnel of a foreign-funded insurance company and its branches shall be subject to the relevant regulations of CIRC.

　　Article 35

　　Where a joint-equity or wholly-owned property insurance company applies for dissolution when it splits， or merges with another one， or dissolves pursuant to the articles of association， such dissolution must be subject to approval of CIRC and the following documents shall be submitted：

　　（1） A letter of application signed by the Chairman of the Board of Directors of the company；

　　（2） The resolution of the meeting of shareholders；

　　（3） Composition of the proposed liquidation group and a plan for liquidation；

　　（4） A proposal for solving the outstanding liabilities.

　　Article 36

　　The joint-equity or wholly-owned property insurance company whose dissolution has been approved by CIRC shall， from the date of receiving the approval document from CIRC， terminate any new business activities and hand in the license for conducting insurance business to CIRC and form a liquidation group within 15 days.

　　Article 37

　　The liquidation group shall， within 5 days after its establishment， inform the relevant authorities concerning the administration departments of industry and commerce， tax， labor and social security in writing of the liquidation procedure and conditions.

　　Article 38

　　The liquidation group shall， within 1 month from the date of establishment， appoint an accounting firm pursuant to the requirements of CIRC to conduct auditing， and shall deliver an auditor’s report to CIRC within three months from the date of appointment.

　　Article 39

　　The liquidation group shall submit the latest liability liquidation and assets disposal report to CIRC before the tenth date of each month.

　　Article 40

　　The newspaper mentioned in Article 28 of the Regulations refers to the newspaper specified by CIRC.

　　Article 41

　　The foreign property insurance company that applies for cancellation of its branch in China shall submit an application to CIRC for approval and present the following materials：

　　（1） A letter of application signed by the Board of Directors or General Manager of the foreign property insurance company；

　　（2） Composition of the proposed liquidation group and a plan for liquidation；

　　（3） A proposal for solving the outstanding liabilities.

　　The procedures of application for dissolution of a joint-equity or foreign-funded property insurance company specified in the Regulations and these Rules shall be applicable to the specific procedures for the foreign property insurance company to cancel its branch in China.

　　Where the head office of a branch of a foreign property insurance company is dissolved or cancelled or declared bankruptcy according to law， the liquidation and liability disposal of the branch of such foreign property insurance company shall comply with the regulations concerning dissolution of the joint-equity or wholly-owned property insurance company stipulated in Article 30 of the Regulations and these Rules.

　　Article 42

　　The foreign-funded insurance company in violation of the relevant provisions of these Rules shall be subject to punishment by CIRC according to the provisions specified in Insurance Law， the Regulations and other relevant laws and regulations.

　　Article 43

　　The documents， materials and written reports to be submitted or reported under the Regulations and these Rules shall be prepared in Chinese version， and the Chinese version shall prevail in the event of discrepancy between the Chinese version and the foreign language version.

　　Article 44

　　The period specified in the Regulations and these Rules shall start from the date when the relevant materials are delivered to CIRC. If the application documents provided by the applicant is incomplete and further delivery is needed， the period shall start from the date when the supplementary materials are delivered to CIRC.

　　The period concerning approval and report delivery prescribed in these Rules refers to working days.

　　Article 45

　　The issues concerning administration of a foreign-funded insurance company that are not specified in the Regulations or these Rules shall be governed by the applicable laws， administrative rules and relevant regulations of CIRC.

　　The establishment of a foreign-funded reinsurance company shall comply with the Regulations on Establishment of Reinsurance Companies. The issues not specified in the Regulations on Establishment of Reinsurance Companies shall be governed by these Rules.

　　Article 46

　　These Rules shall， mutatis mutandis， apply to insurance companies that are established and operated in Chinese mainland by insurance companies from Hong Kong Special Administrative Region， Macao Special Administrative Region or Taiwan region. The issues otherwise stipulated in the laws， administrative rules or administrative protocols shall be governed by the stipulations therein.

　　Article 47

　　These Rules shall come into effect as of June 15， 2004.

Article 1 ： These Provisions are formulated in accordance with the PRC， Construction Law， the Administration of Construction Survey and Design Regulations， the Administration of the Quality of Construction Works Regulations， the Invitation and Submission of Bids for Survey and Design of Construction Projects Procedures， and other laws， regulations and rules， in order to standardize the administration of foreign enterprises engaging in construction work design activities in the People’s Republic of China.

　　Article 2　For the purpose of these Provisions， a “foreign enterprise” shall mean an enterprise that is established outside the People’s Republic of China and that engages in construction work design activities.

　　Article 3　A foreign enterprise that provides construction work design services such as preparation of preliminary design （fundamental design） and construction drawing design （detailed design） documents for construction work in the People’s Republic of China in the form of cross-border product delivery shall comply with these Provisions.

　　These Provisions shall not apply to the provision of conceptual designs prepared prior to preliminary designs （fundamental designs） for construction work.

　　Article 4　Where a foreign enterprise intends to engage in construction work design in the People’s Republic of China， it must select at least one Chinese design enterprise with construction work design qualification granted by the administrative authority in charge of construction （Chinese Design Enterprise） to engage in Sino-foreign cooperative design （Cooperative Design）， and shall undertake design business within the scope specified in the qualification permit of the selected Chinese Design Enterprise.

　　Article 5　The construction design contract for a Cooperative Design project shall be executed with the developer in the name of the Chinese Design Enterprise as a party to the Cooperative Design， or in the joint name of the Chinese and foreign design enterprises. Such contract shall provide in detail the rights and obligations of all parties， and shall be written in Chinese language.

　　Article 6　The developer shall be responsible for conducting a preliminary qualification examination on whether the foreign enterprise as a party to the Cooperative Design possesses design ability. Only a foreign enterprise that fulfils the criteria of the preliminary qualification examination may participate in the Cooperative Design.

　　Article 7　When conducting preliminary qualification examination of foreign enterprises， the developer may request the foreign enterprise to provide the following valid documentary proofs for its ability to satisfy the needs of the construction project， which shall be prepared in the official language of the home jurisdiction of the foreign enterprise and submitted with Chinese language translation：

　　1. enterprise registration certificate issued by the competent authority of the home jurisdiction；

　　2. proof of creditworthiness and enterprise insurance policy issued by the financial authority of the home jurisdiction；

　　3. certification for the track record for project design of the enterprise issued by the competent authority， or the relevant professional association or notary agency， of the home jurisdiction；

　　4. certification for the design permit issued by the competent authority or professional association of the home jurisdiction；

　　5. certificate for ISO9000 quality standard certification issued by the international organization；

　　6. résumés， identity certificate， certification for the highest academic qualification， and certification for practice registration of all technical personnel participating in the design of the Chinese project；

　　7. the letter of intent for Cooperative Design with the Chinese Design Enterprise； and

　　8. other relevant documents.

　　Article 8　To engage in Cooperative Design with a selected Chinese Design Enterprise， a foreign enterprise must enter into a Cooperative Design agreement pursuant to the relevant laws and regulations of China， which shall provide their respective rights and obligations. The Cooperative Design agreement shall include a Chinese language version.

　　Such Cooperative Design agreement shall include the following particulars：

　　1. enterprise names and place of registration of the parties to the Cooperative Design， as well as the names， nationality， identity certificate numbers， domiciles and contact details of the enterprise legal representatives；

　　2. description， address and scale of the construction project；

　　3. scope， term and mode of the Cooperative Design， as well as the required details， depth， quality and schedule of the design work；

　　4. division of design tasks， rights and obligations between the parties to the Cooperative Design；

　　5. fee structure and distribution of the Cooperative Design， and tax liability；

　　6. liability for breach of agreement， and methods for resolving disputes arising from the agreement；

　　7. conditions precedent to the effectiveness of the agreement， and date and venue of the agreement； and

　　8. other matters stipulated by the parties.

　　Article 9　The construction design contract （copy）， Cooperative Design agreement （copy） and documents （photocopies） specified in Article 7 hereof shall be submitted to the administrative authority in charge of construction of the province where the project is located for record filing.

　　Article 10　To undertake construction work design in China， a foreign enterprise must comply with the compulsory construction work standards and design document preparation requirements issued by the Chinese government.

　　In the absence of such compulsory construction work standards， Article 5 of the Supervision of the Implementation of Compulsory Construction Work Standards Provisions （Ministry of Construction Decree No. 81） shall apply.

　　Article 11 ： Sino-foreign Cooperative Design documents required to be submitted to the relevant authorities of the Chinese government for examination according to the PRC， Construction Law and the PRC， Urban Planning Law shall meet the following requirements：

　　1. to be submitted in Chinese language；

　　2. to comply with the provisions on preparation of construction work design documents of China；

　　3. to be prepared using the statutory measuring units of China；

　　4. the front cover of the preliminary design （fundamental design） documents shall indicate the description of the project and enterprise names of the parties to the Cooperative Design， and the first page shall indicate the enterprise names of the parties to the Cooperative Design， and the names of their respective legal representatives， key responsible technical persons and project managers， and their seals；

　　5. the endorsements entered into construction drawing design documents shall include the enterprise names of the parties to the Cooperative Design， and shall be signed by the relevant designers， with other matters to be handled according to the provisions on issuance of construction design documents of China；

　　6. preliminary design （fundamental design） documents and construction drawing design （detailed design） documents shall， as required by provisions， be examined and verified and affirmed by， and affixed with the signatures and seals of， registered Chinese architects and/or engineers， and further inscribed with the seal of the Chinese Design Enterprise before they may become effective design documents；

　　In respect of a discipline where practice registration system is absent， design documents shall be examined and verified， affirmed and signed by the responsible technical persons in such discipline of the Chinese Design Enterprise， and subsequently inscribed with the seal of the Chinese Design Enterprise， before they may become effective design documents.

　　Article 12　In relation to its construction work design undertaking in China， a foreign design enterprise shall charge design fees with reference to the charging standards for design of China， and shall pay tax to the Chinese government pursuant to the relevant laws of China.

　　Where the Chinese Design Enterprise is required to examine and verify the design documents provided by the foreign enterprise according to the national standards and sign a confirmation opinion， the parties shall determine upon consultation the fees for examination and verification， and confirmation， in line with the international practices or pursuant to the work actually performed.

　　Article 13　These Provisions shall， mutatis mutandis， apply to design entities from the Hong Kong and Macao Special Administrative Regions and the Taiwan region that engage in construction work design activities in mainland China.

　　Article 14　Foreign enterprises that violate these Provisions shall be subject to penalty by the relevant authorities of the Chinese government according to the relevant laws， regulations and rules， with such unfavourable records to be published in relevant media， and notified to the government and professional association of its home jurisdiction.

　　Article 15　A foreign enterprise shall not be permitted to engage in design work for any confidential projects， salvation projects or projects other than those open to foreigners as committed by the Chinese government.

　　Article 16　These Provisions shall be implemented 30 days after the date of promulgation.

Ordinance No.2 issued on 21st April 2004）

　　Reviewed and approved at the China Insurance Regulatory Committee Chairman Meeting on December 8th， 2003， Provisional Regulations on the Administration of Insurance Asset Management Companies is now promulgated and shall come into effect as of June 1st， 2004.

　　Chairman

　　April 21st， 2004

　　Provisional Regulations on the Administration of Insurance Asset Management Companies

　　Chapter I

　　General Provisions

　　Article 1

　　These Regulations are formulated in accordance with the Insurance Law of the People’s Republic of China （hereinafter referred to as the “Insurance Law”） and the Company Law of the People’s Republic of China for the purposes of strengthening the supervision and regulation of insurance asset management companies， preventing insurance fund managing risks， and protecting the legitimate rights and interests of insurance companies and insurance asset management companies.

　　Article 2

　　The China Insurance Regulatory Committee （hereinafter referred to as the “CIRC”） is authorized by the State Council to perform supervisory and regulatory responsibilities over insurance asset management companies.

　　Article 3

　　“Insurance asset management company” refers to a financial institution that is approved by the CIRC in collaboration with other relevant authorities， legally registered， and trusted with the responsibility to manage insurance funds.

　　“Insurance funds” refers to insurance companies’ various insurance reserves， capital， working capital， public reserve， undistributed profit， and other liabilities， as well as various assets generated from the aforementioned funds.

　　Article 4

　　The insurance company that entrusts an asset management company to manage its insurance funds shall abide by the Insurance Law and related regulations made by the CIRC， follow the principles of willingness， fairness， and honesty， and may not infringe upon any national interest or public good.

　　Article 5

　　An insurance asset management company shall， in managing insurance funds， abide by the Insurance Law and related regulations of the CIRC and shoulder the duties of being honest， credible， prudential and diligent.

　　Chapter II

　　Establishment， Alternation and Termination

　　Article 6

　　The establishment of an insurance asset management company shall be subjected to the approval of the CIRC and other relevant authorities.

　　Article 7

　　An insurance asset management company shall take the following organization forms：

　　1. Limited Liability Company

　　2. Company Limited by Shares

　　Article 8

　　To establish an insurance asset company， at least one of the shareholders or founders shall be an insurance company or an insurance holding （group） company， which satisfies the following requirements：

　　1. It has engaged in the insurance business for at least 8 years；

　　2. No record of administrative penalty has been imposed on it in the last 3 years as a result of violating fund management regulations；

　　3. It must have no less than RMB 1 billion as net assets； it must have no less than RMB 5 billion as total assets， and in the case of a holding （group） company and life insurance company， its total assets must not be lower than RMB 10 billion；

　　4. Meeting the CIRC’s solvency requirements；

　　5. It must have a sound corporate governance structure and internal control system；

　　6. It must have established a department for assets and liabilities matching and a risk control department and it must have a complete investment information management system；

　　7. The assets used and managed by its fund management department shall not be lower than 50 percent of its total assets or， in the case of a life insurance company， not less than 80 percent of its total assets；

　　8. Other requirements stipulated by the CIRC.

　　Article 9

　　The total shareholding of domestic insurance companies in an insurance asset management company shall not be less than 75 percent.

　　A domestic insurance company hereof refers to an insurance company or insurance holding （group） company that is set up with approval from the CIRC and is duly registered with legal person status.

　　Article 10

　　The registered capital of an insurance asset management company shall not be less than RMB 30 million or an equivalent amount in a freely convertible currency； its registered capital shall be paid-in currency capital.

　　The registered capital of an insurance asset management company shall not be less than one thousandth of the insurance funds under its management. Those who do not satisfy this minimum registered capital requirement shall increase their capital correspondingly. However， for those whose registered capital is in excess of RMB 500 million， this requirement does not apply.

　　Article 11

　　To establish an insurance asset management company， the applicant shall submit a written application to the CIRC， together with the following documents：

　　1. A letter of application for establishment；

　　2. A feasibility study report and a preparation plan for the company to be established；

　　3. Fundamental materials of the shareholders， including the name or designation of the shareholders， legal representative， form of organization， registered capital， scope of operation， qualification certification documents， the most recent year’s balance sheet， and profit and loss account that has been audited by an accounting firm；

　　4.Certification documents， balance sheet（s）， and profit and loss account（s） of the previous 3 years of the shareholders satisfying the condition set out in Article 8； The balance sheet（s） and the profit and loss account（s） must be audited by accounting firms；

　　5. Name list and resume（s） of the leader（s） of the company to be established；

　　6. Letter（s） of intent on capital contribution or share subscription agreement（s）；

　　7. Other materials required by the CIRC.

　　Article 12

　　Within 3 months after receiving a complete set of application documents， the CIRC and other relevant authorities under the State Council， shall conduct a preliminary review of the application and make a decision as to whether or not to grant approval； in case no approval is granted， the CIRC shall inform the applicant of the decision in writing and explain the reason.

　　Article 13

　　The applicant shall complete the preparation within 6 months after receiving the approval. Where the applicant fails to do so within the prescribed period， the preparatory period can be extended by 3 months by application of the applicant and with the CIRC‘s approval. Where the preparation is still not completed within the extended period， the original approval document issued by the CIRC shall become void automatically.

　　The preparing body may not engage in any commercial activities during the preparation period.

　　Article 14

　　After completion of the preparatory work， the applicant shall submit an application for operation and the following documents to the CIRC：

　　1. An application letter for operation；

　　2. Capital verification issued by a legal capital verifying agency and a photocopy of capital accounting voucher evidencing payment of the registered capital；

　　3. A name list and resumes of the proposed senior managerial personnel and major personnel；

　　4. A Certificate of ownership right or right of use of the business premises；

　　5. Articles of Association and internal management system；

　　6. Materials about information management system， fund management transaction equipment， and security equipment；

　　7. Other documents required by the CIRC.

　　Article 15

　　Within 20 days after receiving a complete set of application documents for an insurance asset management company’s operation， the CIRC shall decide， whether or not to grant approval； in case the application is approved， a license for conducting insurance asset management business shall be issued； in case the application is disapproved， the CIRC shall inform the applicant of the decision in writing and explain the reason.

　　Article 16

　　An insurance asset management company shall apply to the CIRC for establishment of branch offices and submit the following documents to it：

　　1. A letter of application for establishment

　　2. The scope of business of the proposed organization；

　　3. A business plan and market analysis for the next three years；

　　4. Resume（s） and related certification documents of the leader（s） of the preparation of the planned organization；

　　5. Materials about information system， fund management transaction equipment， and security equipment.

　　Article 17

　　The CIRC shall conduct a preliminary review of the insurance asset management company’s application for establishment of branch offices and shall decide within 20 days after receiving the complete application documents， whether or not to grant approval； in case no approval is granted， the CIRC shall inform the applicant in writing of the decision and explain the reason.

　　Article 18

　　The applicant shall complete the preparation within 3 months of its receipt of the approval for establishment of branch offices. Where the applicant fails to do so within the prescribed period， the original approval document issued by the CIRC shall become void automatically.

　　The preparing body may not be engaged in any commercial activities during the preparation period.

　　Article 19

　　Upon completion of the preparatory work of the establishment of branch offices， the applicant shall submit an application for operation to the CIRC， together with the following documents：

　　1. An application for operation；

　　2. A progress report of the preparation work；

　　3. The scope of business；

　　4. Resume（s） and related certification documents of the leader（s） of the planned organization；

　　5. Certificate of right of use or ownership right of the business premises；

　　6. Materials about information management system， fund management transaction equipment， and security equipment；

　　7. Materials about the internal organization structure and the personnel.

　　Article 20

　　Within 20 days after receiving a complete set of application documents for an insurance asset management company’s operation， The CIRC shall decide whether or not to grant approval； in case the application is approved， a license for conducting insurance asset management business shall be issued to the branch office； in case the application is disapproved， the CIRC shall inform the applicant of the decision in writing and explain the reason.

　　Article 21

　　Upon approval of the application for operation， with the approval document and the license for conducting insurance asset management business， the insurance asset management company or the branch offices of the insurance asset management company shall proceed to register at the administration department of industry and commerce and obtain a business license for operation commencement.

　　Article 22

　　The CIRC shall uniformly design， print， issue， withhold， revoke， and withdraw the Permit for Insurance Asset Management Business. Other agencies or individuals are not allowed to design， print， issue， withhold， revoke or withdraw the said Permit.

　　Article 23

　　The senior managerial personnel of an insurance asset management company shall satisfy the following requirements：

　　1. A Bachelor’s degree or above；

　　2. 10 years or more work experience in economic fields or 5 years or more work experience in finance， insurance， or securities；

　　3. No record of criminal conviction or administrative penalty for violation of economic rules or regulations；

　　4. Other requirement specified by the CIRC.

　　The senior managerial personnel of an insurance asset management company may not take a part-time job at any other business， unless specified otherwise by the CIRC.

　　Article 24

　　Under the following circumstances， an insurance asset management company shall report to and seek approval from the CIRC：

　　1. Change of Articles of Association；

　　2. Change of capital contributors or the shareholder who hold 10 percent or more of the company shares；

　　3. Adjustment of the scope of business；

　　4. Termination of branch offices；

　　5. Change of business premises；

　　6. Change of senior managerial personnel.

　　Article 25

　　If an insurance asset management company undergoes legal dissolution， is closed down or terminated by declared bankruptcy， the insurance funds under its management shall not be included as part of the liquidation assets.

　　Article 26

　　Upon legal dissolution of an insurance asset management company， a liquidation team shall be set up. The liquidation shall be supervised and guided by the CIRC.

　　In case that an insurance asset company is closed down according to law， the CIRC shall organize the shareholders， relevant authorities， and other specialists to set up a liquidation team on a timely basis.

　　Upon declared bankruptcy of an insurance asset management company， the people’s court shall organize a liquidation team in accordance with law.

　　Article 27

　　The liquidation team shall notify the creditors within 10 days after setting up， and shall bulletin at least 3 times in the CIRC-specified newspapers within 60 days after setting up. The content of the public notice shall be subjected to the CIRC’s approval.

　　The liquidation team shall entrust specialized intermediaries such as accredited accounting firms to appraise the company’s rights， liabilities， and assets.

　　Article 28

　　In cases of legal dissolution， closedown， or declared bankruptcy of an insurance asset management company， the liquidation of its assets and treatment of its rights and liabilities shall be carried out in accordance with relevant laws and regulations.

　　Chapter III

　　Scope of Business and Rules for Operation

　　Article 29

　　The scope of business of an insurance asset management company includes all or part of the following：

　　1. To manage and utilize the insurance funds entrusted by its shareholders in RMB or foreign currency；

　　2. To manage and utilize the fund entrusted by insurance company controlled by its shareholders；

　　3. To manage and utilize self-possessed funds in RMB or foreign currency；

　　4. Other types of business approved by the CIRC；

　　5. Types of business approved by other authorities of the State Council.

　　Article 30

　　The management and utilization of the insurance funds is limited to bank deposits， buying and selling of governmental bonds， financial bonds， and other fund utilization forms prescribed by the State Council.

　　Article 31

　　An insurance asset management company shall report to and seek approval from the State Administration of Foreign Exchange for foreign exchange fund management and other foreign exchange businesses.

　　Article 32

　　The total investment ratio of the same investment channel and the investment ratio of the single investment target between an insurance asset management company’s self-possessed fund and the entrusted funds shall be calculated separately.

　　The total investment ratio of the same investment channel and the investment ratio of the single investment target between an insurance companies’ funds entrusted to other agencies and the self-managed funds shall be integrated separately.

　　Article 33

　　An insurance company and its entrusted insurance asset management company shall appoint an independent custodian.

　　The custodian shall be a commercial bank or specialized financial institutions meeting the requirements of the CIRC.

　　Article 34

　　The following funds shall be separately managed and accounted by different investment managers of the insurance asset management company：

　　1. Self-possessed funds and the insurance funds entrusted for management；

　　2. Different kinds of insurance funds entrusted for management from the same insurance company.

　　An insurance asset management company shall treat all the different insurance funds under its management equally.

　　Article 35

　　An insurance asset management company shall put any asset generated from the utilization， disposal， or others forms of management of the insurance funds into the insurance funds.

　　Aside from the remuneration specified in the relevant contract， any interests that an insurance asset management company acquired by means of the entrusted insurance funds shall be put into the insurance funds.

　　Article 36

　　A written contract shall be signed when an insurance asset management company is entrusted to manage insurance funds or when a custodian is entrusted to manage insurance funds.

　　The content and format of the written contract shall be included in a separate document issued by the CIRC.

　　Article 37

　　An insurance asset management company collects management fees according to contract and shall report the collection to the CIRC.

　　The rate of management fees shall be decided in accordance with the principles of fairness and rationality.

　　The CIRC may issue standards for the insurance asset management fees rate.

　　Article 38

　　An insurance asset management company shall not have the following behaviors：

　　1. Providing any security；

　　2. Promising a minimal return on the entrusted funds or that the entrusted funds shall not suffer any loss；

　　3. Entrusting another party to manage the insurance funds under its management；

　　4. Using the entrusted insurance funds to seek interests for a third party；

　　5. Conducting fund management transactions with shareholders or the insurance company that entrusts the fund for management， or manipulating entrusted funds from different sources to conduct such transactions；

　　6. Conspiring with the trustor to seek illegal interests in the name of asset management fees or by other means；

　　7. Other conducts forbidden by the relevant State law， regulations， or by regulatory authorities.

　　Article 39

　　Any loss of the insurance funds due to an insurance management company’s violation of the State regulations or contract provisions shall be borne and indemnified by the insurance asset management company. Before the indemnification of the loss is made， no asset management fee may be collected.

　　Article 40

　　The complete record of the insurance asset management company’s management of the insurance funds and the contract of entrusting the insurance funds for management shall be kept for more than 15 years.

　　Article 41

　　An insurance asset management company shall regularly or in accordance with the contract provisions report the management， utilization， disposal， and balance of the entrusted insurance funds.

　　The trustor is entitled to check， take notes， or copy the accounts and other documents related to its entrusted insurance funds and to ask for an explanation from the trustee.

　　Article 42

　　The year-end financial statements for an insurance asset management company’s self-possessed funds and the entrusted insurance funds shall be audited by accounting firms.

　　Article 43

　　An insurance asset management company and the insurance funds custodians have a legal obligation of confidentiality for the information of the trustor and the insurance fund management.

　　Article 44

　　An insurance asset management company must not offset the rights arising from the entrusted funds during the course of management and disposal against the liabilities arising from its self-possessed assets.

　　An insurance asset management company must not offset the rights and liabilities arising from the management and disposal of insurance funds entrusted by different parties against each other.

　　In case of civil disputes between an insurance asset management company and other social organizations or individuals， the entrusted insurance funds shall not be detained， frozen， liquidized， etc.

　　Chapter IV

　　Risk Control and Supervisory Management

　　Article 45

　　An insurance asset management company shall establish a complete corporate governance structure and effective internal control mechanism， set up an investment decision-making department and risk control department， and put into place the restriction mechanism of mutual supervision.

　　Article 46

　　An insurance asset management company shall strengthen its construction of information technology system and set up a complete information management system for investment decision-making， fund management， and financial accounting.

　　An insurance asset management company shall have security measures matching its business operation.

　　Article 47

　　An insurance asset management company shall set up a supervisory committee in accordance with relevant regulations.

　　The trustor may send supervisory personnel to the insurance asset management company entrusted of the insurance funds. On behalf of the trustor， the supervisory personnel supervise（s） the performance of the insurance asset management company on contract implementation， but they may not interfere with the normal operation of the company.

　　Article 48

　　An insurance asset management company is entitled to attend the meetings of associated insurance company’s department of assets and liabilities matching.

　　Article 49

　　Within 20 days after signing the insurance funds management contract and the custodian contract， the insurance asset management company shall submit a photocopy of the said contracts to the CIRC.

　　Article 50

　　An insurance asset management company shall， in accordance with the CIRC’s regulations， submit relevant documents and other materials such as a balance sheet， profit and loss accounts， business statistics， financial analysis report， etc. to the CIRC.

　　The content and format of the aforementioned documents shall be promulgated separately by the CIRC.

　　Article 51

　　The CIRC’s supervision and inspection of an insurance asset management company shall be a combination of on-site and off-site supervision.

　　The CIRC may authorize specialized intermediaries such as an accounting firm to conduct the inspection of the insurance asset management companies.

　　Article 52

　　For insurance companies and insurance asset management companies that are in violation of these Regulations and relevant laws and regulations， the CIRC shall， in accordance with the Insurance Law and relevant administrative laws and regulations， impose administrative penalty on the said companies， their senior managerial personnel， and the directly responsible personnel.

　　Chapter V

　　Supplementary Provision

　　Article 53

　　These Regulations shall come into effect as of 1st June 2004.

Article 1　This Law is formulated in order to further open up to the outside world， develop foreign trade， maintain order in foreign trade activities， protect the lawful rights and interests of foreign trade operators， and promote the healthy development of the socialist market economy.

　　Article 2　This Law shall apply to foreign trade and the protection of intellectual property rights related to foreign trade.

　　For the purposes of this Law， the term “foreign trade” shall refer to the import and export of goods and technology and trade in international services.

　　Article 3　The State Council department in charge of foreign trade shall be in charge of foreign trade throughout the country in accordance with this Law.

　　Article 4　The State shall implement a unified foreign trade system， encourage the development of foreign trade and safeguard fair and free foreign trade order.

　　Article 5　The People’s Republic of China shall promote and develop trade relations with other countries and regions based on the principles of equality and mutual benefit， conclude or accede to regional economic and trade agreements such as agreements on tariff alliance and free trade zone， and participate in regional economic organizations.

　　Article 6　The People’s Republic of China shall， in accordance with international treaties and agreements that it has concluded or acceded to， or based on the principles of mutual benefit and reciprocity， grant other signatories or acceding parties most favoured nation treatment or national treatment and any other treatment in regard to foreign trade.

　　Article 7　If a country or region adopts sanctions， restrictions or other similar measures of a discriminatory nature in regard to trade against the People’s Republic of China， the People’s Republic of China may adopt corresponding measures against such country or region in accordance with actual circumstances.

　　PART TWO　FOREIGN TRADE OPERATORS

　　Article 8　For the purposes of this Law， the term “foreign trade operators” shall refer to legal persons， other organizations or individuals that handle business registration or other practice procedures according to law and engage in foreign trade business activities in accordance with the provisions of this Law and other relevant laws and administrative regulations.

　　Article 9　Foreign trade operators engaged in import and export of goods or technology shall handle registration of record filing with the State Council department in charge of foreign trade or its appointed organizations， except where laws， administrative regulations or the State Council department in charge of foreign trade stipulate（s） that registration of record filing is not necessary. Specific procedures for registration of record filing shall be formulated by the State Council department in charge of foreign trade. Where a foreign trade operator has not handled registration of record filing according to provisions， customs shall not handle customs declaration and inspection and release procedures for the imported and exported goods.

　　Article 10　Engagement in international service trade shall comply with the provisions of this Law and other relevant laws and administrative regulations.

　　Work units that engage in contracting of foreign projects or foreign labour cooperation shall possess the appropriate quality or qualifications. Specific procedures shall be formulated by the State Council.

　　Article 11　The State may implement administration of State trading on the import and export of certain goods. Import and export business of goods subject to administration of State trading may only be operated by authorized enterprises， except where the State permits the import and export business of certain quantity of goods subject to administration of State trading to be operated by non-authorized enterprises. The catalogue of goods subject to administration of State trading and enterprises authorized to operate shall be determined， adjusted and announced by the State Council department in charge of foreign trade in conjunction with other relevant departments of the State Council.

　　Customs shall not release the goods subject to administration of State trading that are imported or exported without authorization in violation of Paragraph One of this Article.

　　Article 12　A foreign trade operator may， upon entrustment of another party， act as an agent on its behalf to conduct foreign trade business within the scope of business.

　　Article 13　A foreign trade operator shall， in accordance with the regulations formulated by the State Council department in charge of foreign trade or other relevant departments of the State Council in accordance with the law， submit documents and information related to its foreign trade business activities to the relevant departments. The relevant departments shall maintain the confidentiality of the trade secrets of providers.

　　PART THREE　IMPORT AND EXPORT OF GOODS AND TECHNOLOGY

　　Article 14　The State permits free import and export of goods and technology， except as otherwise stipulated in laws and administrative regulations.

　　Article 15　The State Council department in charge of foreign trade may， based on the needs for monitoring import and export， implement automatic licensing for import and export on certain free import and export goods and announce the catalogue thereof.

　　In the case of import and export goods subject to automatic licensing， where a consignee or consignor submits an application for automatic licensing before handling customs declaration procedures， the State Council department in charge of foreign trade or its appointed organizations shall grant licensing. Where the procedures for automatic licensing have not been completed， customs shall not release the goods.

　　To import and export free import and export technology， registration for record filing of contracts shall be handled with the State Council department in charge of foreign trade or its appointed organizations.

　　Article 16　The State may restrict or prohibit the import or export of relevant goods and technology for the following reasons：

　　1. it is necessary to restrict or prohibit import or export in order to safeguard State security， public interests or public morals；

　　2. it is necessary to restrict or prohibit import or export in order to protect human health or safety， the lives or health of animals and plants， and the environment；

　　3. it is necessary to restrict or prohibit import or export in order to implement measures related to the import and export of gold and silver；

　　4. it is necessary to restrict or prohibit export due to a shortage of domestic supply or in order to effectively protect natural resources that may be exhausted；

　　5. it is necessary to restrict export due to limited capacity of the markets of importing countries or regions；

　　6. it is necessary to restrict export due to serious chaos in the export operation order；

　　7. it is necessary to restrict import in order to establish， or accelerate the establishment of， specific domestic industries；

　　8. it is necessary to restrict the import of agricultural， animal husbandry and fishery products in any form；

　　9. it is necessary to restrict import in order to safeguard the international financial position and the balance of payments of the country；

　　10. other circumstances in which it is necessary to restrict or prohibit import or export in accordance with the provisions of laws and administrative regulations； and

　　11. other circumstances in which it is necessary to restrict or prohibit import or export in accordance with the provisions of international treaties or agreements that the People’s Republic of China has concluded or acceded to.

　　Article 17　The State may， in order to safeguard State security， adopt any necessary measures on the import and export in relation to fission and fusion substances， and the goods and technology related to the substances from which these types of substances are derived， and the import and export in relation to arms， ammunition or other military materials.

　　During war time or in order to safeguard world peace and security， the State may adopt any necessary measures regarding import and export of goods and technology.

　　Article 18　The State Council department in charge of foreign trade in conjunction with other relevant departments of the State Council shall formulate， adjust and announce catalogues of goods and technology that are restricted or prohibited from import or export in accordance with Articles 16 and 17 hereof.

　　The State Council department in charge of foreign trade may， independently or in conjunction with other relevant departments of the State Council， decide on an interim basis to restrict or prohibit the import or export of specific goods and technology other than those in the catalogues stipulated in the preceding paragraph within the scope stipulated in Articles 16 and 17 hereof， upon approval of the State Council.

　　Article 19　The State shall implement administration in forms such as quota and licensing on goods the import or export of which is restricted. Technology the import or export of which is restricted shall be subject to licensing control.

　　Goods and technology subject to quota or licensing control may only be imported or exported upon the permission of the State Council department in charge of foreign trade， independently or in conjunction with other relevant departments of the State Council， in accordance with the provisions of the State Council.

　　The State may implement tariff quota control on certain import goods.

　　Article 20　Quotas for import and export goods and tariff quotas shall be allocated by the State Council department in charge of foreign trade or other relevant departments of the State Council within their respective scope of authority and on the basis of the principles of openness， fairness， impartiality and efficiency. Specific procedures shall be formulated by the State Council.

　　Article 21　The State shall implement a unified commodity quality evaluation system and carry out certification， inspection and quarantine of imported and exported commodities in accordance with the provisions of the relevant laws and administrative regulations.

　　Article 22　The State shall implement administration of place of origin on imported and exported goods. Specific procedures shall be formulated by the State Council.

　　Article 23　Where there are stipulations in other laws and administrative regulations on the restriction or prohibition of import and export of cultural relics， wild animals and plants and their products， etc.， the stipulations of the relevant laws and administrative regulations shall prevail.

　　PART FOUR　INTERNATIONAL SERVICE TRADE

　　Article 24　The People’s Republic of China shall grant， in accordance with its commitments in regard to international service trade in international treaties or agreements to which it is a signatory or acceding party， market access or national treatment to other signatories or acceding parties in such treaties or agreements.

　　Article 25　The Sate Council department in charge of foreign trade and other relevant departments of the State Council shall administer international service trade in accordance with the provisions of this Law and other relevant laws and administrative regulations.

　　Article 26　The State may restrict or prohibit the relevant international service trade for any of the following reasons：

　　1. restriction or prohibition is necessary in order to safeguard State security， public interests or public morals；

　　2. restriction or prohibition is necessary in order to protect human health or safety， the lives or health of animals and plants， and the environment；

　　3. restriction is necessary in order to establish， or accelerate the establishment of， specific domestic service industries；

　　4. restriction is necessary in order to safeguard the balance of foreign exchange payments of the country；

　　5. other circumstances in which restriction or prohibition is necessary in accordance with the provisions of laws and administrative regulations； and

　　6. other circumstances in which restriction or prohibition is necessary in accordance with the provisions of international treaties or agreements that the People’s Republic of China has concluded or acceded to.

　　Article 27　The State may， in order to safeguard State security， adopt any necessary measures on international service trade in relation to military， and the international service trade in relation to fission and fusion substances， and the substances from which these types of substances are derived.

　　During war time or in order to safeguard world peace and security， the State may adopt any necessary measures regarding international service trade.

　　Article 28　The State Council department in charge of foreign trade in conjunction with other relevant departments of the State Council shall formulate， adjust and announce catalogues of market access to international service trade in accordance with Articles 26 and 27 hereof and the provisions of other relevant laws and administrative regulations.

　　PART FIVE　PRODUCTION OF INTELLECTUAL PROPERTY RIGHTS RELATED TO FOREIGN TRADE

　　Article 29　The State shall protect intellectual property rights related to foreign trade in accordance with the laws and administrative regulations on intellectual property.

　　Where imported goods infringe upon intellectual property rights and harm foreign trade order， the State Council department in charge of foreign trade may adopt measures such as prohibition of the import of goods produced or sold by the infringer within a certain time period.

　　Article 30　Where an owner of intellectual property rights commits any one of the acts such as preventing licensees from inquiring about the validity of intellectual property rights specified in the licensing contract， giving compulsory package licence， stipulating terms of exclusive grant back rights in licensing contracts， thereby harming the order of fair competition in foreign trade， the State Council department in charge of foreign trade may adopt necessary measures to eliminate such harm.

　　Article 31　Where any country or region fails to grant national treatment to the legal persons， other organizations or individuals of the People’s Republic of China in regard to protection of intellectual property rights， or fails to provide sufficient and effective protection of intellectual property rights to goods， technology or services that originate from the People’s Republic of China， the State Council department in charge of foreign trade may， in accordance with the provisions of this Law and other relevant laws and administrative regulations and， based on the international treaties and agreements that the People’s Republic of China has concluded or acceded to， adopt necessary measures on trade with such country or region.

　　PART SIX　FOREIGN TRADE ORDER

　　Article 32　In the course of foreign trade business activities， no act of monopoly that violates the provisions of laws and administrative regulations on anti-monopoly may be implemented.

　　Where an act of monopoly is implemented in foreign trade business activities and the fair competition of the market is harmed thereby， the matter shall be handled in accordance with the provisions of laws and administrative regulations on anti-monopoly. If an illegal act specified in the preceding paragraph is committed and foreign trade order is harmed thereby， the State Council department in charge of foreign trade may adopt necessary measures to eliminate the harm.

　　Article 33　In the course of foreign trade business activities， no acts of unfair competition such as selling commodities at an unfairly low price， colluding in the submission of tenders， publishing false advertisements and engaging in commercial bribery may be implemented.

　　Implementation of acts of unfair competition in foreign trade business activities shall be handled in accordance with the provisions of laws and administrative regulations on unfair competition.

　　Where an illegal act specified in the preceding paragraph has been committed and foreign trade order is harmed thereby， the State Council department in charge of foreign trade may adopt measures such as prohibition of the import and export of the relevant goods and technology by the business operator to eliminate the harm.

　　Article 34　The following acts may not be committed in foreign trade activities：

　　1. forging or altering marks of place of origin of imported and exported goods， or forging， altering or trading certificates of place of origin of imported and exported goods， import or export licences， certificates of import or export quotas， or other import and export supporting documents；

　　2. obtaining export tax refunds by means of deception；

　　3. smuggling；

　　4. evasion of certification， inspection and quarantine stipulated in laws and administrative regulations； and

　　5. other acts in violation of the provisions of laws and administrative regulations.

　　Article 35　In the course of foreign trade business activities， foreign trade operators shall comply with the provisions of the State on foreign exchange control.

　　Article 36　Where foreign trade order is harmed in violation of the provisions hereof， the State Council department in charge of foreign trade may announce to the public thereof.

　　PART SEVEN　FOREIGN TRADE INVESTIGATION

　　Article 37　In order to safeguard foreign trade order， the State Council department in charge of foreign trade may， independently or in conjunction with other relevant departments of the State Council， conduct investigation of the following matters in accordance with the provisions of laws and administrative regulations：

　　1. impact of import and export of goods， technology and international service trade on the domestic industry and its competitiveness；

　　2. trade barriers of the relevant countries or regions；

　　3. issues that require investigation for determining whether foreign trade remedial measures such as anti-dumping， anti-subsidy or safeguard measures shall be adopted according to law；

　　4. acts of evasion of foreign trade remedial measures；

　　5. issues related to the security and interest of the State in foreign trade activities；

　　6. issues that require investigation for implementing Article 7， Paragraph Two of Article 29， Article 30， Article 31， Paragraph Three of Article 32 and Paragraph Three of Article 33 hereof； and

　　7. other matters affecting foreign trade order that require investigation.

　　Article 38　Initiation of foreign trade investigation shall be publicly announced by the State Council department in charge of foreign trade.

　　Investigation may be conducted by means such as written questionnaire， hearings， on-site investigation and investigation through entrustment.

　　The State Council department in charge of foreign trade shall， in accordance with investigation results， issue an investigation report or render a ruling on handling， and publish an announcement thereof.

　　Article 39　Relevant work units and individuals shall provide cooperation and assistance during foreign trade investigation.

　　When conducting foreign trade investigation， the State Council department in charge of foreign trade， other relevant departments of the State Council and their working personnel shall have the obligations of maintaining the confidentiality of the State secrets and trade secrets that come to their knowledge.

　　PART EIGHT　FOREIGN TRADE REMEDIES

　　Article 40　The State may adopt appropriate foreign trade remedial measures in accordance with foreign trade investigation results.

　　Article 41　Where products of another country or region imported into the market of China at prices lower than their normal value by way of dumping result in substantial injury or threat of substantial injury to a related domestic industry that has already been established， or substantially impede the establishment of a related domestic industry， the State may adopt anti-dumping measures to eliminate or mitigate such injury， threat of injury or impediment.

　　Article 42　Where products of another country or region exported to the market of a third country at prices lower than their normal value result in substantial injury or threat of substantial injury to a related domestic industry that has already been established， or substantially impede the establishment of a related domestic industry， the State Council department in charge of foreign trade may， in response to applications by the domestic industries， conduct consultation with the government of the third country and request for its adoption of appropriate measures.

　　Article 43　Where imported products that directly or indirectly accept specific subsidies granted in any form by the exporting countries or regions result in substantial injury or threat of substantial injury to a related domestic industry that has already been established， or substantially impede the establishment of a related domestic industry， the State may adopt anti-subsidy measures to eliminate or mitigate such injury， threat of injury or impediment.

　　Article 44　Where a large increase in the quantity of imported products results in serious injury or threat of serious injury to a related domestic industry that produces similar or directly competitive products， the State may adopt necessary safeguard measures to eliminate or mitigate such injury or threat of injury， and may also provide necessary support to the domestic industry.

　　Article 45　Where an increase in the services provided to China by service providers of another country or region results in injury or threat of injury to a related domestic industry that provides similar or directly competitive services， the State may adopt necessary remedial measures to eliminate or mitigate such injury or threat of injury.

　　Article 46　Where a large increase in the import of certain products into the market of China due to restriction on import of a third country results in injury or threat of injury to a related domestic industry that has already been established， or substantially impede the establishment of a related domestic industry， the State may adopt necessary remedial measures to restrict the import of such products.

　　Article 47　Where a country or region that has concluded or jointly acceded to an economic and trade treaty or agreement with the People’s Republic of China violates the provisions thereof， leading to the loss of or damage to the interests that the People’s Republic of China is entitled to according to such treaty or agreement， or impediment of the realization of goals thereof， the government of the People’s Republic of China shall have the right to request the government of the relevant country or region to adopt appropriate remedial measures， and may suspend or terminate the performance of relevant obligations according to such treaty or agreement.

　　Article 48　The State Council department in charge of foreign trade shall conduct bilateral or multilateral consultation， negotiation and resolution of disputes regarding foreign trade in accordance with the provisions of this Law and other relevant laws.

　　Article 49　The State Council department in charge of foreign trade and other relevant departments of the State Council shall establish an alarm and contingency mechanism for import and export of goods， technology and international service trade， in order to cope with sudden and unusual circumstances in foreign trade activities and safeguard State economic security.

　　Article 50　The State may adopt counter-evasion measures against acts of evasion of the foreign trade remedial measures stipulated herein.

　　PART NINE　PROMOTION OF FOREIGN TRADE

　　Article 51　The State shall formulate foreign trade development strategies and establish and improve the mechanism for promotion of foreign trade.

　　Article 52　The State shall establish and improve financial institutions serving foreign trade operations， and establish foreign trade development funds and risk funds in accordance with the needs of the development of foreign trade.

　　Article 53　The State shall use import and export credits， export credit insurance， export tax refunds and other methods for promoting foreign trade to develop foreign trade.

　　Article 54　The State shall establish foreign trade public information service system to provide information services to foreign trade operators and other public.

　　Article 55　The State shall adopt measures to encourage the exploration of international markets by foreign trade operators， and shall use various means such as overseas investment， contracting of foreign projects and foreign labour cooperation to develop foreign trade.

　　Article 56　Foreign trade operators may establish and join relevant associations and chambers of commerce in accordance with the law.

　　The relevant associations and chambers of commerce shall abide by laws and administrative regulations， provide their members with services related to foreign trade in areas such as production， marketing， information and training according to the articles of association， bring coordination and self-discipline into full play， submit applications for foreign trade remedial measures according to law， safeguard the interests of members and the industry， put forward the suggestions of the members in relation to foreign trade to the relevant departments of the government， and engage in foreign trade promotion activities.

　　Article 57　Chinese organizations for the promotion of international trade shall， in accordance with their articles of association， develop foreign networks， hold exhibitions， provide information and consultancy services and engage in other foreign trade promotion activities.

　　Article 58　The State shall support and promote the engagement in foreign trade by small- and medium-sized enterprises.

　　Article 59　The State shall support and promote the development of foreign trade in autonomous regions of ethnic minorities and in economically underdeveloped areas.

　　PART TEN　LEGAL LIABILITY

　　Article 60　Where， in violation of Article 11 hereof， goods subject to administration of State trading are imported or exported without authorization， the State Council department in charge of foreign trade or other relevant departments of the State Council shall impose a fine of less than Rmb 50，000. Where the circumstances are serious， the department（s） may， within three years from the effective date of the decision on administrative penalty， refuse to accept applications for engaging in import and export business of goods subject to administration of State trading of the perpetrator， or revoke the authorization already granted to such perpetrator for engaging in import and export of other goods subject to administration of State trading.

　　Article 61　Where goods that are prohibited from import and export are imported or exported， or goods under restriction of import and export are imported or exported without authorization， such act shall be handled and penalized by customs according to the provisions of the relevant laws and administrative regulations. Where a criminal offence is constituted， criminal liability shall be pursued according to law.

　　Where technology that is prohibited from import and export is imported or exported， or technology under restriction of import and export is imported or exported without authorization， such act shall be handled and penalized according to the provisions of the relevant laws and administrative regulations. Where there are no stipulations in laws or administrative regulations， the State Council department in charge of foreign trade shall order rectification， confiscate the illegal income， and impose a fine of not less than one time and not more than five times of the illegal income. Where there is no illegal income or the illegal income is less than Rmb 10，000， a fine of not less than Rmb 10，000 and not more than Rmb 50，000 shall be imposed. Where a criminal offence is constituted， criminal liability shall be pursued according to law.

　　Beginning from the effective date of the decision on administrative penalty or the effective date of the decision on criminal penalty specified in the two preceding paragraphs， the State Council department in charge of foreign trade or other relevant departments of the State Council may refuse to accept applications for import and export quota or licence of the perpetrator within three years， or prohibit the perpetrator to engage in import and export business activities related to the relevant goods and technology for a period of not less than one year and not more than three years.

　　Article 62　In the case of engagement in prohibited international service trade or engagement in restricted international service trade without authorization， such act shall be penalized according to the provisions of the relevant laws and administrative regulations. Where there are no stipulations in laws or administrative regulations， the State Council department in charge of foreign trade shall order rectification， confiscate the illegal income， and impose a fine of not less than one time and not more than five times the illegal income. Where there is no illegal income or the illegal income is less than Rmb 10，000， a fine of not less than Rmb 10，000 and not more than Rmb 50，000 shall be imposed. Where a criminal offence is constituted， criminal liability shall be pursued according to law.

　　The State Council department in charge of foreign trade may prohibit perpetrators to engage in the relevant international trade service business activities for a period of not less than one year and not more than three years from the effective date of the decision on administrative penalty or the effective date of the decision on criminal penalty specified in the preceding paragraph.

　　Article 63　Violation of Article 34 hereof shall be penalized according to the provisions of the relevant laws and administrative regulations. Where a criminal offence is constituted， criminal liability shall be pursued according to law.

　　The State Council department in charge of foreign trade may prohibit perpetrators to engage in the relevant foreign trade business activities for a period of not less than one year and not more than three years from the effective date of the decision on administrative penalty or the effective date of the decision on criminal penalty specified in the preceding paragraph.

　　Article 64　Where a foreign exchange operator is prohibited from engaging in the relevant foreign trade business activities according to Articles 61 to 63 hereof， customs shall not handle the procedures for customs declaration and inspection and release for the relevant imported and export goods of such foreign trade operator according to the prohibition decision rendered by the State Council department in charge of foreign trade； and the foreign exchange administrative department or designated foreign exchange banks shall not handle the relevant procedures for settlement and sale of foreign exchange， within the prohibition period.

　　Article 65　Where working personnel responsible for foreign trade administration work according to this Law are derelict in their duties， practise graft or abuse their power， and a criminal offence is constituted thereby， criminal liability shall be pursued according to law. Where it is insufficient to constitute a criminal offence， administrative penalty shall be imposed according to law.

　　Where working personnel responsible for foreign trade administration work according to this Law take advantage of their position to extort property from other parties or illegally accept property from other parties to seek benefits for such parties， and a criminal offence is constituted thereby， criminal liability shall be pursued according to law. Where it is insufficient to constitute a criminal offence， administrative penalty shall be imposed according to law.

　　Article 66　Where a party involved in foreign trade business activities is dissatisfied with a specific administrative act of the department responsible for foreign trade administrative work according to this Law， it may apply for administrative review or institute an administrative action at a people’s court according to law.

　　PART ELEVEN　SUPPLEMENTARY PROVISIONS

　　Article 67　Where there are other stipulations in laws or administrative regulations on the administration of foreign trade relating to military materials， fission and fusion substances or substances that derive from these types of substances， and the administration of import and export of cultural products， such stipulations shall prevail.

　　Article 68　The State shall adopt flexible measures to grant preferential treatment and convenience to promote trade between border regions of China and neighbouring countries and trading between border residents at fairs within each other’s territories. Specific procedures shall be formulated by the State Council.

　　Article 69　This Law shall not apply to separate tariff zones of the People’s Republic of China.

　　Article 70　This Law shall be implemented as of 1 July 2004.