SECURITIES by alicejenny


									SEPTEMBER 2001                                   NEWSLETTER                                               ISSUE NO.5

                                       TABLE OF CONTENTS
    Dispute                                         1         Intellectual Property ---------------------------- 7
    Investment-------------------------------------- 2        Taxation & Accounting------------------------- 7
    Securities                                      3         Real Estate---------------------------------------- 8
    International               Trade          and 5          Recent              Important               New 10
    Maritime-------------                                     Regulations-----------

                                                              3. The defendant enjoys no rights to such domain
    Substantial Rules for Adjudicating Domain                   name or any element thereof, nor has it any
     Name Disputes Clarified                                     reasonable ground for registration or use of such
                                                                 domain name; and
On July 24, 2001, the Supreme People’s Court
issued a circular on Interpretation of the Laws               4. The defendant maliciously registered and used
Applicable to Adjudication of Domain Name                        the domain name.
Disputes (the “Interpretation”).
                                                              “Maliciously” is deemed proved in any of the
Pursuant to this Interpretation, domain name                  following events:
dispute shall fall within the jurisdiction of the
intermediate court where the defendant is domiciled           1. Registration of any other party’s well-known
or the infringement is committed. Any registration               trademark as its own domain name for the
or use of a domain name will constitute an                       commercial end;
infringement or an instance of unfair competition if:
                                                              2. Registration and use for commercial purposes of
1. The civil rights and interests that the plaintiff             the domain name identical or similar to the
   seeks to protect are lawful and effective;                    plaintiff's trademark or domain name, with the
                                                                 intention to solicit website users to visit its
2. The defendant’s domain name or its major                      websites or other on-line sites by confusing the
   elements are the copy, translation or                         public with the products, services rendered or
   transliteration of the plaintiff’s well-known                 websites owned by the plaintiff;
   trademark or identical or similar to the plaintiff’s
   registered trademark or domain name and so on,             3. Offer once made to sell, lease, or otherwise
   which suffices to mislead the public. If an issue             transfer the domain name at a high price to
   of well-known trademark emerges, the court can                acquire unjust interests;
   determine whether the registered trademark is a
   well-known one;                                            4. No actual or contemplated use of the domain

SEPTEMBER 2001                                     NEWSLETTER                                             ISSUE NO.5

    name after its registration, within the intention to
    prevent the obligee from registering the domain
    name; or                                                     INVESTMENT

5. Other malicious instances.                                       Regulations on Foreign Invested Leasing
                                                                     Company Promulgated
In case the registration and use of the domain name
constitutes an infringement or an instance of unfair             Tentative     Provisions     on      Approval   and
competition, the court is empowered to render such               Administration of Foreign Invested Leasing
judicial remedies as injunction, cancellation of the             Company (“the Provisions”) were promulgated by
domain name, grant of order to entitle the plaintiff             Ministry of Foreign Trade and Economic
to register and use the domain name upon petition                Cooperation (“MOFTEC”) on August 14, 2001.
by the plaintiff, and/or payment of damages as                   Whether it be a financing lease or other forms of
afflicted with the plaintiff.                                    lease, the Provisions apply to the equity or
                                                                 cooperative leasing joint ventures set up by the
    Rules of Judicial Assistance in terms of                    Chinese and foreign investors. The Provisions
     Service of Writs and Procurement of                         detail the requirements as to the eligibility of the
     Evidence between Mainland China and                         investors, the requisite standards that the leasing
     Macao Finalized                                             joint venture shall satisfy as well as the allowed
                                                                 scope of business to be conducted by the leasing
On August 7, 2001, the Supreme People's Court                    joint venture. The Provisions form the first
promulgated the Arrangements for Service of Writs                operative legal basis for the establishment and
and Procurement of Evidence in Civil and                         operation of leasing joint ventures.
Commercial Cases between the Mainland and the
Macao Special Administration Area (the                              Foreign Investment Policies Adjusted
"Arrangements"), which took effect as of
September 15, 2001.                                              Mr. Wu Bangguo, the vice-premier of the State
                                                                 Council, recently remarked on the adjustment of the
The Arrangements are the first judicial assistance               foreign investment policies in line with the
arrangement between the Mainland and the Macao                   changing domestic economy in China. The
Special Administration Area ("MSAA") since the                   economy, according to Mr. Wu, has been featured
return of MSAA to China in 1999.                     The         by the oversupply of most commodities, the surplus
Arrangements identify the types of writs to be                   in the processing capacities, the mounting function
serviced and the evidences to be procured through                of the market in the flow and distribution of
judicial assistance. The Arrangements also stress                resources and the closer integration of domestic
exception that “the entrusted court may refuse to                economy with the global economy. Faced with
render the judicial assistance if, at its sole discretion,       such changes, the foreign investment policy shall be
the assistance requested is contrary to the basic                adjusted to the effect that:
legal principles, public interests or public order”.
                                                                 1. Foreign investment shall be directed to shift
                                                                    from normal processing industries to sectors or
                                                                    services incorporating high and new technology
                                                                    or the advanced and applicable technology;

SEPTEMBER 2001                                  NEWSLETTER                                               ISSUE NO.5

                                                                 Regulations on Establishing Foreign
2. Transnational enterprises is encouraged to                     Invested Venture Capital Company
   participate in the strategic restructure and
   re-organization of the state-owned enterprises;           On August 28, 2001, the State Ministry of Foreign
                                                             Trade and Commerce, the State Ministry of Science
3. Foreign-invested Enterprises has the incentive            and Technology and the State Administration of
   to expand their export volumes and develop a              Industry and Commerce jointly promulgated the
   chain of local suppliers;                                 Interim Provisions on Establishing Foreign
                                                             Invested Venture Capital Company (the "Interim
4. The preferential treatment for foreign                    Provisions"), which came into effect on September
   investment in the mid-west region shall be                1, 2001.
   enhanced; and
                                                             In accordance with the Interim Provisions ,the
5. The foreign investment environment is to be               foreign investors are allowed to establish by itself
   improved in terms of laws and policies and the            or jointly with Chinese companies, enterprises or
   infrastructure.                                           other economic entities the foreign invested limited
                                                             liability company, or the sino-foreign contractual
   Three Barriers Abolished upon China’s                    company which has not the qualification of legal
    Entry into WTO                                           entity in mainland. Besides, the Interim Provisions
                                                             also expressly provide the minimum requirement
Mr. Hu Jingyan, the head of Foreign Investment               for the Chinese and foreign investors, the procedure
Department of MOFTEC, recently submitted that                of establishing the above company and the
upon its entry into WTO, China will abolish the              withdrawal system for venture capital, etc. Upon
three compulsory requirements as to local                    the Interim Provisions, the following actions of the
ingredients, foreign exchange balance and export             said company are prohibited: "Investing directly or
ratio. As a result, foreign investors will not be            indirectly in securities, options, futures or any other
obligated to allow capital participation by Chinese          financial derived instruments, in real estates which
investors, the Chinese government will not control           are not for its own use. Loaning for investment.
the use of the foreign exchange by the                       Using the capital which is not owned by itself to
foreign-invested enterprises (FIEs), and the FIEs            invest.    Supplying security or loan to other
will be required to meet any compulsory export               companies".
ratio of its outputs. Such abolishment is a measure
to be taken in line with the relevant provisions of          The Interim Provisions make very good condition
WTO agreements.                                              for foreign investment companies to enter domestic
                                                             market, which are also a great innovation for
Mr. Hu also pointed out the China will adopt the             attracting foreign capital come-in mainland.
policy of making the service industries open to
foreign investors including such fields as finance,
insurance, telecommunication, retail commerce and            SECURITIES
so on. However, he related that industries relating to
national defense and ideology should never be open               New Stock Trading Rules Formulated in
to foreign investors.                                             Shanghai and Shenzhen Stock Exchanges

SEPTEMBER 2001                                 NEWSLETTER                                            ISSUE NO.5

New Trading Rules of Shanghai and Shenzhen                  3. Stricter risk control in terms of sticking to
Stock Exchanges (“New Trading Rules”) is jointly               fluctuation margin limit, imposing restraints on
promulgated by Shanghai Stock Exchanges and                    trading offer and bidding, and put a ceiling on
Shenzhen Stock Exchanges on August 31, 2001                    the maximum quantity per deal;
after ratified by CSRC. The New Trading Rules
will come into force three months after the                 4. New mode of on-line trading is adopted;
                                                            5. Abnormality: The remedy and the rights and
The two Exchanges for the first time jointly                   duties of all the parties concerned under
prescribe comprehensive provisions in the form of              abnormal circumstances are clarified.
Trading Rules regarding the main principles, mode
and rules of stock trading, as well as the rights and
obligations of the participating parties in the stock
market. The New Trading Rules provide in details
for the stock trading and the parties, activities and          Trial Implementation of Over-allotment
the procedure thereto or thereof, which cover all               Option Regulated
varieties of securities traded on Shanghai or
Shenzhen Stock Exchanges in terms of share A and            On September 3, 2001, CSRC issued the Opinions
B, investment fund, enterprise bond, corporate bond,        on the Trial Implementation of Over-allotment
convertible corporate bond, financing bond,                 Option, the main provisions of which are as
government bond and re-purchase of bond and so              follows:
                                                            1. “Over-allotment Option” refers to an option
The following improvement is manifested under the              vested in the lead underwriter by the issuer to
New Trading Rules:                                             offer, at the same issue price, shares additional
                                                               to the underwritten amount of the new issue but
1. Significant changes to the closing price on                 not exceeding fifteen percent of the amount
   Shanghai Stock Exchanges: Rather than the                   underwritten. Within thirty days from the listing
   price of the last deal, the closing price is                date of the stock by new issue (“the
   equivalent to the weighted average of the                   Over-allotment Option Period”) , the lead
   turnover within one minute prior to the last deal           underwriter shall have the right either to
   of a particular stock;                                      purchase the issuer’s shares in the centralized
                                                               bidding transaction market, or to request the
2. Adjustment of B share trading rules: Intact as              issuer to make additional share issue, and allot
   trading offer quoted in US dollars and trading              the additional stock to those investors applying
   through different securities companies remain in            to subscribe. Such subscribing investors are
   Shanghai, other aspects of B share trading rules            only limited to those institute investors who
   in Shanghai Stock Exchanges has been unified                subscribe to but bear no special interest in the
   with those of A share. Illustration includes the            new issue;
   opening rate generated by centralized
   competitive bidding and the bought securities            2. Within the Over-allotment Option Period, (a)
   cannot be sold on the same day;                             in case of the market transaction price of the
                                                               shares falling lower than the issue price, the

SEPTEMBER 2001                                   NEWSLETTER                                             ISSUE NO.5

     lead underwriter shall purchase from the central         INT’L TRADE & MARITIME
     auction and transaction market the issuer’s
     shares by the proceeds raised from offering the             Management Rules for the Safe Operation
     additional shares at a price not high than the               of Ships and for Pollution Prevention
     issue price, which shall be allotted to the                  promulgated
     investors applying for the subscription; or (b) in
     case of the market transaction price of the              Circular on ‘Administration Rules for the Safe
     shares higher than the issue price, the lead             Operation of Ships and for Pollution Prevention
     underwriter shall upon authorization request the         Ship Safety Operation and Anti-pollution
     issuer for additional issuing which shall be             Management Regulations’ (Trial Implementation)
     allotted to the investors applying for the               (the “Rules”) was promulgated by the Ministry of
     subscription and the issuer shall be entitled to         Communications of the People’s Republic of China
     the proceeds from this new share issue;                  on July 12, 2001.

3. After the Over-allotment Option Period, the
   new shares of this new issue as a whole shall be           The Rules were enacted in order to safeguard the
   computed in accordance with the following                  water transport safety, protect water environment
   formula:                                                   and resources, prevent pollution damage and
                                                              maintain ecological balance in accordance with
     The number of new shares = the number of                 International Management Code for the Safe
     underwritten shares + accumulative number of             Operation of Ships and for Pollution Prevention
     shares issued by issuing additional shares –             (the “ISM CODE”) and pollution prevention
     the number of the shares purchased by the lead           practice in China. The purpose of the Rules is to
     underwriter through exercising Stabilization             provide a standard for the safe operation of ships
     Re-purchase option;                                      and for pollution prevention.

4.   The lead underwriter shall, within five (5)              As was pointed out by MOC at the time of
     working days after closing of the Stabilization          promulgation, the Rules will take effect as from
     Issue, notify the relevant banks to pay the              January1, 2003 and shall be applicable to
     funds payable to the issuer (if any), computed           inter-province    passenger     ships     (including
     on the basis of the following formula:                   roll-and-roll ships, tourism ships and express
                                                              passenger ships with capacity of over 50 persons),
     The proceeds of the issuer resulting from the            gas ships and bulk chemical ships of no less than
     exercise of the over-allotment option = the issue        150 tons gross tonnage and shall be applicable to oil
     price×(the accumulative number of additionally           tankers as from July 1, 2003. However, the
     issued shares-the number of the issuer’s shares          application to other ships is subject to further
     purchased by the lead underwriter from the               notice.
     central auction and transaction market)–the
     underwriting expenses of the Over-allotment                 New Judicial Interpretation on Scope of
     Option.                                                      Case-acceptance of Maritime Courts Issued

                                                              Certain Rules on Scope of Case-acceptance of
                                                              Maritime Courts (the “Rules”) was issued by the

SEPTEMBER 2001                                 NEWSLETTER                                              ISSUE NO.5

Supreme Court of the People’s Republic of China             the cases contained therein are more than before.
on September 11, 2001. This Rules will come into            For example, disputes arising out of oil dumpage,
force as from September 18, 2001, and Regulations           collision with terminal equipment on shore,
of Scope of Case-acceptance of Maritime Courts              pollution to waters and beaches caused by ship
(Supreme Court, May 13, 1989) and Further                   building and repair, damage to fishing and breeding
Implementation and Execution of Scope of                    industry by ships, and damage to sea-routes by
Case-acceptance of Maritime Courts (Supreme                 ships’ remains and wreckage are newly included
Court, December 23, 1989) (“Two Regulations”)               into the jurisdiction of maritime courts in terms of
shall cease to be effective therefrom.                      admiralty cases. Secondly, disputes arising from
                                                            or in connection with contracts of ship financing,
From the beginning of this year, Chinese                    port warehousing, fishing boat contracting
government is dedicatedly striving to build China           management, ship trusteeship, maritime securities
into the maritime judicial center of the Asia-Pacific       and ship operation and management are included
region. And China will hopefully joint World Trade          into maritime jurisdiction. Moreover, for the
Organization late this year. In order to keep pace          purpose of bettering maritime trials and avoiding
with these new situations, the Supreme Court, in            ambiguity the new Rules also absorbed another 13
accordance with Civil Procedure Law and Maritime            classes of cases of maritime nature including
Procedure Law and Administrative Procedure Law              maritime injunction, preservation of maritime
and with reference to international practice and in         evidence, maritime security, and public exigency,
the light of maritime judicial experience,                  exigency of maritime liens, hastening debt recovery
formulated the present Rules after making relevant          and cancellation of arbitral awards, etc. These said
adjustments, revisions and supplements to the               new classes of cases, which become usual in
previous scope of case-acceptance of maritime               today’s maritime judicial practice, have been
courts.                                                     introduced into Maritime Procedure Law and their
                                                            incorporation makes this new Rules perfect and will
Compared with the above-mentioned Two                       surely facilitate Chinese maritime trials.
Regulations of the Supreme Court, there are
significant developments in the present Rules, inter        Aside from the increase in terms of classes of cases,
alias, 1) more kinds of cases will be subject to the        the new Rules also makes necessary revisions to the
jurisdiction of maritime courts; 2) the articles are        wording of the previous regulations. For instance,
substantiated and enlarged with new provisions; 3)          in order to cover cases arising out of river transport
administrative cases of maritime nature are brought         in respect of jurisdiction of maritime courts, the
into the scope of acceptance of maritime courts,            new Rules introduces the term of “navigable waters
which abandons the firmly-upheld principle that             adjacent to the sea”; in avoidance of inconsistency
special courts shall not accept and hear                    with Contract Law and administrative regulations
administrative cases.                                       governing wrecking salvage, the new Rules
                                                            modifies “contract of debit and credit” into “loan
Under the new Rules, maritime courts will exercise          contract”; and changes “sunk ships and wastes in
jurisdiction over totally 4 categories and 63 classes       navigating routes” into “sunk ships, objects and
of cases, instead only 5 categories and 42 classes          their wrecks ”, which is comparatively accurate and
under the original regulations. Although the number         transpicuous.
of classes of lawsuits brought against maritime tort
remains 10 according to the new Rules, however,             The new Rules also delete some provisions in

SEPTEMBER 2001                                   NEWSLETTER                                             ISSUE NO.5

original regulation, including those in respect of            incurred in relation to the infringement suit. The
parties to a maritime action and certain special              protection will extend to collective trademarks and
actions. Original regulations contained mentions of           certification trademarks. A trademark under the
parties to maritime actions and procedural                    draft amendment may mean any word, device, letter,
preservation, which are of no practical significance.         number, three-dimensional logo, color or any
Under the new Rules maritime courts shall no                  combination thereof.
longer exercise jurisdiction over disputes in
connection with exploitation of marine resources
and application for recognition and execution of              TAXATION & ACCOUNTING
maritime arbitral awards because these cases bear
no maritime nature.                                              Circular    on     the    Adjustment of
                                                                  Advertisement Costs as Taxable Income
Maritime courts’ competence of hearing maritime                   deductions in Certain Sectors
administrative cases symbolizes the specialization
of trial of such types of cases. As elaborated by             On August 5, 2001, the State Taxation Bureau
some government official, exercise of jurisdiction            issued the Circular on the Adjustment of
over administrative cases by maritime courts                  Advertisement Costs as Taxable Income deductions
conveys quite important changes in stand. Firstly,            in Certain Sectors(the “Circular”).
specialization of maritime trials will contribute a lot
to improve trial quality and speed up the court               It is provided in the Circular that, such sectors as
proceedings. Secondly, this change in law will also           pharmaceutics,      food,     electrical   household
reduce and further avoid interference from                    appliances, communications, sports etc., are
administrative bodies and ensures the independence            permitted to deduct the advertisement costs as
of maritime trial and decision. As for the scope of           actually incurred with 8% of its sales (business)
administrative case subject to maritime courts, the           income as the maximum. For hi-tech enterprises,
Supreme Court is currently in process of                      venture capital enterprises and other newly-born
formulating a detailed regulation to specify such             growing enterprises that need to enhance their
issue.                                                        positions, advertisement costs may after verification
                                                              be deducted on an actual expenditure basis during 5
                                                              taxation years from the date of its incorporating
INTELLECTUAL PROPERTY                                         registration, and the advertisement costs thereof
                                                              may after approval be deducted with a higher ratio
    PRC Trademark Law To Be Amended                          during the special time of the market exploration.
                                                              With respect to other enterprises, the advertisement
PRC Trademark Law will be amended. As the                     costs deduction shall still be handled in conformity
draft amendment shows, the applicant will enjoy               with "guoshuifa [2000] No. 84" issued by the State
the priority in registration of the trademark first           Taxation Bureau, which means taxpayers may
used on the commodity exhibited on the                        deduct the advertisement costs actually incurred in
international shows organized or recognized by the            each taxation year with no more than 2 % of the
Chinese government. The draft provides that the               sales (business) income; the excess may be carried
remedies for trademark infringement shall be                  forward without any timeline to the succeeding
awarded not only for direct losses but also for               taxation years.
indirect losses including reasonable expenses

SEPTEMBER 2001                                  NEWSLETTER                                               ISSUE NO.5

The new regulation, conducive to controlling the             refund, the interest being subject to the relevant
improper deductions in some enterprises as well as           regulations of the People's Bank of China.
in conformity with the state industry priorities, will
surely help the healthy development of key                   With the cost of interest, such escrow account loan
industries and the media.                                    is viewed as an interim measure in a long run, with
                                                             the export tax refund expected to be finally resolved
   Circular on Loans Secured by way of                      by removing export tax refund quota.
    Export Tax Refund Escrow Account
                                                                 Tax Reimbursement for Re-investment by
Tax refund for exports has always been the concern                Foreign Investors Clarified
of the export enterprises. On the one hand, it
promotes the exportation; on the other hand, it takes        On July 30 2001, the State Administration of Tax
too long to procure such refund which may result in          promulgated the Circular on the Issues Concerning
the unavailability of large amount of operating fund,        Tax Reimbursement for Re-investment by Foreign
the reasons being the compulsory involvement of              Investors (the “Circular”).
the Customs, taxation bureaus, banks and so on in
the tax refund process, as well as the quota imposed         The Circular addresses the issue of whether the
on such refund.                                              foreign investor can enjoy the tax reimbursement
                                                             treatment under Article 10 of the Income Tax Law
To address this problem, on August 24, 2001, the             on Foreign Investment Enterprises and Foreign
People's Bank of China, the Ministry of Foreign              Enterprises of the People’s Republic of China (the
Trade and Economic Commission, the State Tax                 “Tax Law”) and in other relevant regulations if the
Bureau jointly issued the Circular on Loans                  foreign investor of an FIE makes further investment
Secured by way of Export Tax Refund Escrow                   in China using such portion of profit as may be
Account.                                                     increased as a result of tax audit on transactions
                                                             between associated enterprises (“the Audited Profit
Loans secured by way of export tax refund escrow             Margin”)
account means the short-term operating fund loan to
export enterprises which is granted by the                   According to the Circular, Article 10 of Tax Law as
commercial banks upon imposing a security on the             well as Article 80 of the implementing rules thereof
escrow account of export tax refund of the same              shall not apply to any form of re-investment using
export enterprises. Such loans are designed to               the Audited Profit Margin if the same has been
resolve the cash flow problem due to the deferred            transferred out of the FIE before distribution of
tax refund.                                                  profit by way of transactions between associated
                                                             companies, no matter whether such Audited Profit
Such loans, according to the Circular, will only be          has been subsequently remitted back to China.
available to those export enterprises with good              Under Article 10 of the Tax Law and Article 80 of
credit standing, stable export turnover in the recent        the implementing rules, reinvestment by foreign
years, sound accounting system and no record of              investors only refers to the direct use of the profit
evasion or illegal purchase of foreign exchanges or          from a FIE, before distribution, to increase the
taxes fraud or evasion. The term of such loan will           registered capital of the FIE, or after distribution, to
not exceed one year and the amount of such loan              subscribe to any registered capital of any other FIE.
will not be more than 70% of the deferred tax

SEPTEMBER 2001                                NEWSLETTER                                             ISSUE NO.5

                                                           declared that the policies of domestic and overseas
REAL ESTATE                                                sales of commercial building and the land-supply
                                                           means merged and unified from the date of Aug 1,
   Measures for Administration of Urban                   2001 in Shanghai. The granting of land use right
    Pre-sale of Commercial Building Revised                for commerce, tourism, entertainment, finance,
                                                           service industry and commercial building will be
The Decision of the Ministry of Construction on            granted by way of bidding and auction.
Revising the Measures for Administration of Urban
Pre-sale of Commercial Building (the “Measures”),          The policies aforesaid focus on two aspects: 1) The
which put into effect on Aug 15, 2001, will further        unification of the land supply means. The original
improve the present system of urban pre-sale of            disparity in price of land-use right granting between
commercial building in China.                              domestic and overseas sales of commercial building
                                                           project is cancelled. The ways of both bidding and
As to the documents required for real estate               auction will be carried out throughout the land-use
development enterprises in applying for the                right granting procedures. 2) The merging of the
commercial building pre-sale permit, the Measures          business operations of commercial building. To be
add both qualification certificate and project             specific, a commercial building, whether obtaining
construction contract on the basis of the original         the land-use right before or after such merging, is
provisions. In case of overseas sale of the                allowed to be purchased and rented by any
commercial buildings, the original requirement for         enterprises, organizations and persons home or
indicating the overseas ratio in the commercial            aboard; The sample contract and relevant
building pre-sale permit has been cancelled.               formalities are unified; The transaction fees for
                                                           purchase of commercial building will be charged
According to the Measures, the real estate                 for RMB500 per set, with a preferential charge (by
development enterprises must use the pre-sale              half) in case the purchase price is below
proceeds for prescribed purposes. Any misuse of            RMB300,000; The municipal network of
the pre-sale proceeds will result in such punishment       commercial building, including the transaction
as rectification within a specified time, with a           information, registration and ownership registry etc.
possible fine of less than 3 times the illegal gains       will be unified in the whole city.
but no more chan RMB30,000.

Measures will further regulate the pre-sale of
commercial building and will be helpful to protect
the lawful rights and interests of both parties.

   Policies of Domestic and Overseas Sales of
    Commercial Building Merged

Recently, Shanghai People’s Government approved
Several Opinions Regarding Merging the Policies
on Domestic and Overseas Sales of Commercial
Building and Tentative Measures on Bidding and
Auction of the Land-use Right Granting, which


SEPTEMBER 2001                               NEWSLETTER                                           ISSUE NO.5


   Circular on Registration for External Debt
    Regarding     the    Usance     Credit    of              Guidelines on Supervision over Overseas
    Domestic-capital     Designated     Foreign                Institutions of Commercial Banks (Aug 20,
    Exchange Bank (People’s Bank of China, State               2001)
    Administration of Foreign Exchange, July 24,
    2001)                                                     Circular on Relevant Questions Regarding Tax
                                                               Reimbursement     for Foreign Investors’
   Circular on Practical Strengthening the                    Reinvestment (State Taxation Bureau, July 30,
    Management of Acceptance, Discount and                     2001)
    Rediscount of Commercial Drafts (People’s
    Bank of China, July 24, 2001)                             Second Amendment to the Criminal Law of the
                                                               People’s Republic of China (Aug 31, 2001)
   Circular on Issuing the Guidelines Regarding
    the Establishment of Independent Director                 Circular on the Issues Including Interbanks
    System in the Listed Companies (China                      Remitting and Transferring the Payments in
    Securities Regulatory Commission, Aug 16,                  Large Sum among Certain Commercial Banks
    2001)                                                      (People’s Bank of China, Aug 22, 2001)

   Circular on Releasing the Guideline No. 1                 Reply to the Questions Regarding the Validity
    Regarding the Standard Operations of the                   of the Shareholders’ Meeting Resolutions of
    Stocks Investment Funds-Guidelines Regarding               Companies Limited by Shares (State
    Formulating the Articles of Associations of the            Administration For Industry and Commerce,
    Fund Management          Companies      (China             Aug 6, 2001)
    Securities Regulatory Commission, Aug 21,
    2001)                                                     Reply Concerning Relevant Questions on
                                                               Capital    Verification   Reports   (State
   Circular on Relative Issues Regarding the Lead             Administration For Industry and Commerce,
    Sponsors Applying for Fund-affiliated                      Aug 16, 2001)
    Companies (China Securities Regulatory
    Commission, Sep 11, 2001)


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