Interim Provisions on the Prohibition Against Commercial Bribery Acts
Promulgated by Order No. 60 of the State Administration
of Industry and Commerce on November 15,1996

Article 1

With a view to preventing commercial bribery acts and preserving fair competition order, and in accordance with the relevant provisions of the Law of the People's Republic of China for Countering Unfair Competition (hereinafter referred to as the Law for Countering Unfair Competition), the Provisions are formulated.

Article 2

An operator shall not apply means of commercial bribery to sell or buy goods in violation of the provision of Article 8 of the Law for Countering Unfair Competition.

"Commercial bribery" in the Provisions refers to the acts committed by an operator to bribe the other party, either unit or individual with money, valuables or other means for selling or buying goods.

"Money and valuables" in the previous paragraph refers to the cash or other property in kind, including money and valuables given by an operator to the other party, either unit or individual for selling or buying goods in false names of expenses for marketing promotion, advertising, assistance, scientific research, labor costs, consultancy or commission, etc., or in ways such as reimbursing various expenses bill.

"Other means" in the second paragraph refers to means of offering interests other than money and valuables, such as tour or investigation in or outside China in various names.

Article 3

The acts committed by an employee of an operator for selling or buying goods for the operator by means of commercial bribery shall be deemed as the acts committed by the operator.

Article 4

When selling or buying goods, no unit or individual may take or ask for bribes.

Article 5

Where an operator secretly pays a rebate to the other party, either unit or individual, off the book, it or he shall be punished for offering a bribe. Where the other party, either unit or individual secretly accepts a rebate off the book, it or he shall be punished for taking a bribe.

"The rebate" in the Provisions refers to a certain portion of the price of the goods returned secretly off the book to the other party, either unit or individual in the course of selling or buying goods by an operator in the form of cash or in kind or in other forms.

"Secretly off the Book" in the Provisions means that no clear and factual recording has been made in accordance with the existing financial accounting system in the financial account legally established for the reflection of its productive operation or the income and expenses of its administrative or institutional financial budget, including no entry in the financial account, shifting to other financial account or forging account, etc.

Article 6

In the selling of goods, an operator may explicitly offer discount to the other party. Where an operator gives a discount to the other party, it or he must enter the items in the book factually. An operator or other unit accepting a discount must enter it in the book factually.

"The discount" in the Provisions is a type of profit-concession in selling and buying goods, which refers to the preference of price extended to the other party by an operator in selling or buying goods in an express way and with a factual entry in the book, including two ways, i.e. the deduction on the spot in a fixed proportion to the total price when paying the price, and the reimbursement in a fixed proportion after paying the total price.

"Explicitly" and "enter in the book" in the Provisions means that, in accordance with the value and the way of payment agreed upon in the contract and in accordance with existing financial accounting system, a clear and factual record has been made in the financial account legally established for the reflection of its productive operation activities or the income and expenses of its administrative or institutional financial budget.

Article 7

In selling or buying of goods, an operator may explicitly offer commissions to the middleman. Where an operator gives commissions to the other party, it or he must enter the items in the book factually. The middleman accepting a discount must enter it in the book factually.

"The commission" referred to in the Provisions refers to the labour service remuneration given by the operator to the legally qualified middleman for the labour service supplied by it in the market trade.

Article 8

An operator shall not offer supplementary cash or articles as gifts to the other unit or its individuals in goods transactions, with the exception of the advertising gifts of small value given in accordance with commercial practices.

Acts in violation of the provision in the previous paragraph shall be deemed as acts of commercial bribery.

Article 9

Where an operator violates the Provisions to sell or buy goods by means of bribery, the authorities for the administration of industry and commerce shall, in accordance with the provision of Article 22 of the Law for Countering Unfair Competition, impose a fine of more than RMB���10,000 and less than RMB���200,000, and confiscate, if any, its or his illegal income. If the case constitutes a crime, it shall be transferred to the judicial organ for the prosecution of its criminal liabilities according to law.

Where the units or individuals concerned take bribes in selling or buying goods, the authorities for the administration of industry and commerce shall punish it/him in accordance with the provision of the previous paragraph; If the case constitutes a crime, it shall be transferred to the judicial organ for the prosecution of its/his criminal liabilities according to law.

Article 10

The authorities for the administration of industry and commerce at the county level or above shall monitor and inspect commercial bribery activities.

When monitoring and inspecting commercial bribery activities, the authorities for the administration of industry and commerce may investigate and handle the acts of giving bribes and the acts of taking bribes conjunctionally.

Article11

Where an operator sells or buys goods by means of bribery and simultaneously commits other acts in violation of the regulations on the administration of industry and commerce, the bribery act and other illegal acts shall be prosecuted conjunctionally .

Article 12

The Provisions shall enter into force as of the date of promulgation.

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