REGULATIONS CONCERNING JURISDICTION AND PROCEDURES TO DEAL OUTPUNISHMENT FOR VIOLATIONS OF REGISTRATION ADMINISTRATIVE DECREES BYFOREIGN INVESTMENT ENTERPRISES

REGULATIONS CONCERNING JURISDICTION AND PROCEDURES TO DEAL OUTPUNISHMENT FOR VIOLATIONS OF REGISTRATION ADMINISTRATIVE DECREES BYFOREIGN INVESTMENT ENTERPRISES (Promulgated by the State Administration for Industry and Commerceon February 1, 1989) Whole Doc.

With a view to strengthening supervision and control over the Chinese-foreign joint ventures and Chinese-foreign contractual joint ventures and wholly foreign-owned enterprises (hereinafter referred to as foreign investment enterprises), protecting legal management and dealing out punishment for violations of registration administrative decrees according to the law, the jurisdiction and procedures for such punishment, in accordance with "Rules of the People's Republic of China on Administration of Registration on Enterprise Legal Persons" and the "Detailed Regulation" for its implementation, are defined as follows: Article 1 The administrations for industry and commerce at the county (district) level or above all have the right to supervise and examine the foreign investment enterprises in the areas that come under their jurisdiction.

Article 2 The State Administration for Industry and Commerce and the local administrations that are empowered by the former to directly check and approve the registration of foreign investment enterprises (hereinafter referred to as empowered local administrations) all have the right, in accordance with relevant regulations and limits of authority, to deal out punishment for violations of registration administrative decrees by the foreign investment enterprises.

Administration for industry and commerce at higher level have the right to rectify the improper decisions of punishment by administrations for industry and commerce at lower level.

Article 3 The State Administration for Industry and Commerce examines and deals accordingly with the following foreign investment enterprises that violate the registration administrative decrees: (1) The foreign investment enterprises that are directly registered at the State Administration for Industry and Commerce; (2) The foreign investment enterprises that the State Administration for Industry and Commerce deems it necessary to exercise direct examination and punishment.

Article 4 The empowered local administrations examine and deal accordingly with the foreign investment enterprises that violate the registration administrative decrees in the areas under their jurisdiction.

Provided that the empowered provincial, autonomous regional and municipal administrations expropriate over CNY 200000 yuan of the illegal gains by the foreign investment enterprises, or mete out a fine of over CNY 20000 yuan, or withdraw the business license, they have to report to the State Administration for Industry and Commerce for examination and approval.

The limits of authority of the empowered city (prefectural) administrations for industry and commerce over punishment of foreign investment enterprises that violate the registration administrative decrees are defined by their respective empowered provincial, autonomous regional and municipal administration in the light of specific conditions and in accordance with these Regulations and should be reported to the State Administration for Industry and Commerce for approval.

Provided that the empowered city (prefectural) administration make decisions of punishment beyond the limits of their authority, they have to report to their respective provincial, autonomous regional and municipal administrations or the State Administration for Industry and Commerce for examination and approval.

Article 5 The empowered local administrations have to report their decisions of punishment of foreign investment enterprises to the State Administration for Industry and Commerce or relevant administrations for records.

Article 6 If empowered local administrations deal with violations of foreign investment enterprises that are not approved and registered in the locality under their jurisdiction, they have to inform in time the concerned administrations of their decisions.

Article 7 If county (district) administrations or above that are not empowered with the authority over such punishment detect violations of registration administrative decrees by foreign investment enterprises, they should carry out conscientious investigation, propose a decision of prosecution and defer to administrations at higher level empowered with such authority. The latter must reply within 1 month as of the date of receipt of the report. If the decision of punishment go beyond their competence, they should report to the next superior administration.

Article 8 The foreign investment enterprises must not reject the supervision, examination and prosecution by administrations for industry and commerce according to the law and should implement the decisions of punishment within 15 days as of the date of receipt of the notice. If they do not accept the decisions, they should appeal for re- examination to administrations at higher level empowered with such authority within 15 days as of the date of the receipt of the notice. The latter should make its decision of re-examination within 30 days as of the date of receipt of the appeal. Pending the decision of re-examination, the fines and confiscations should be executed as has been originally decided upon.

Article 9 If the foreign investment enterprises refuse to accept the decisions of re-examination by local administrations or decisions of punishment or decisions of re-examination by the State Administration for Industry and Commerce, they may bring the suit to the People's Court within 30 days as of the date of receipt of the decision of re-examination or decision of punishment. If they do not appeal nor hand in the fine and the confiscated amount of money, the administrations for industry and commerce can, in accordance with stipulated procedures, inform the banks where they open an account and ask them to transfer the amount.

Article 10 When the administrations for industry and commerce are examining and dealing with the foreign investment enterprises that violate the registration administrative decrees they should appoint special persons to be in charge and establish relevant records. The evidence provided by the litigants should be signed and sealed by the litigants. The persons from the administrations for industry and commerce who are in charge should strictly observe relevant decrees and the disciplines guiding the handling of foreign affairs. Investigation or examination of foreign investment enterprises should be conducted by 2 persons or more who have to show their "Special ID Cards of the PRC Administration for Industry and Commerce".

Article 11 The supervision, administration, jurisdiction over punishment and its procedures concerning joint or contractual ventures and the wholly foreign-owned enterprises established by the Hong Kong, Macao and Taiwan enterprises, or by overseas Chinese, Hong Kong, Macao and Taiwan compatriots, the projects and businesses contracted by foreign (regional) enterprises and their cooperative development of domestic natural resources, their permanent office, branches of foreign (regional) banks and business branches established by foreign investment enterprises are executed in accordance with these Regulations.

Article 12 These Regulations shall go into effect on the day of their promulgation.

hority over such punishment detect violations of registration administrative decrees by foreign investment enterprises, they should carry out conscientious investigation, propose a decision of prosecution and defer to administrations at higher level empowered with such authority. The latter must reply within 1 month as of the date of receipt of the report. If the decision of punishment go beyond their competence, they should report to the next superior administration.

Article 8 The foreign investment enterprises must not reject the supervision, examination and prosecution by administrations for industry and commerce according to the law and should implement the decisions of punishment within 15 days as of the date of receipt of the notice. If they do not accept the decisions, they should appeal for re- examination to administrations at higher level empowered with such authority within 15 days as of the date of the receipt of the notice. The latter should make its decision of re-examination within 30 days as of the date of receipt of the appeal. Pending the decision of re-examination, the fines and confiscations should be executed as has been originally decided upon.

Article 9 If the foreign investment enterprises refuse to accept the decisions of re-examination by local administrations or decisions of punishment or decisions of re-examination by the State Administration for Industry and Commerce, they may bring the suit to the People's Court within 30 days as of the date of receipt of the decision of re-examination or decision of punishment. If they do not appeal nor hand in the fine and the confiscated amount of money, the administrations for industry and commerce can, in accordance with stipulated procedures, inform the banks where they open an account and ask them to transfer the amount.

Article 10 When the administrations for industry and commerce are examining and dealing with the foreign investment enterprises that violate the registration administrative decrees they should appoint special persons to be in charge and establish relevant records. The evidence provided by the litigants should be signed and sealed by the litigants. The persons from the administrations for industry and commerce who are in charge should strictly observe relevant decrees and the disciplines guiding the handling of foreign affairs. Investigation or examination of foreign investment enterprises should be conducted by 2 persons or more who have to show their "Special ID Cards of the PRC Administration for Industry and Commerce".

Article 11 The supervision, administration, jurisdiction over punishment and its procedures concerning joint or contractual ventures and the wholly foreign-owned enterprises established by the Hong Kong, Macao and Taiwan enterprises, or by overseas Chinese, Hong Kong, Macao and Taiwan compatriots, the projects and businesses contracted by foreign (regional) enterprises and their cooperative development of domestic natural resources, their permanent office, branches of foreign (regional) banks and business branches established by foreign investment enterprises are executed in accordance with these Regulations.

Article 12 These Regulations shall go into effect on the day of their promulgation.