State Administration for Industry and Commerce

the People's Republic of China

Approved at the bureau affairs meeting of the State Administration for Industry and Commerce and are hereby promulgated. These Interim Provisions shall go into effect on the day of their promulgation on November 15, 1996.

Article 1

With a view to prohibiting commercial bribery and safeguarding fair competition, these Interim Provisions have been formulated 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 Anti-Unfair Competition Law).

Article 2

An operator shall not adopt commercial bribery as a means to sell or purchase commodities in violation of the provisions of Article 8 of the Anti-Unfair Competition Law.

Commercial bribery mentioned in these Interim Provisions refers to an operator’s behavior of bribing another unit or individual with property or in other means in order to sell or purchase commodities.

The property mentioned in the previous item refers to cash and material objects including property paid by an operator to another unit or individual in the name of fees for promoting sales, publicity fees, support fees, scientific research fees, service fees, consultation fees commissions, or various expenses reimbursed by the operator to the other unit and individual so as to sell or purchase commodities.

The other means mentioned in Item 2 of Article 2 refers to means other than paying in property, such as offering domestic or international tours.

Article 3

Commercial bribery committed by employees of an operator for selling or purchasing commodities for the operator shall be regarded as the operator's act.

Article 4

No unit or individual should accept or ask for bribes when selling or purchasing commodities.

Article 5

An operator giving another unit or individual an off-the-books kickback shall be regarded as offering a bribe; the unit or individual receiving an off-the-books kickback shall be regarded as accepting a bribe.

The kickback mentioned in these Provisions refers to which an operator returns in secret as a certain proportion of payment for commodities with off-the-books cash, material objects or other means to the opposite unit or individual.

“Off-the-books” mentioned in these Provisions refers to being not be recorded accurately in the financial accounts which reflect the production and operation activities or the revenue and expenditure of administrative funds according to the relevant financial and accounting rules, including not be recorded in the financial accounts, transferred to other financial accounts or recorded in false accounts.

Article 6

When selling commodities, an operator may offer in an express way a discount to another party. The discount offered by the operator must be entered in the accounts strictly according to the facts; The discount accepted by an operator or another unit must be recorded in the acceptor's accounts as things really are.

The discount mentioned in these Provisions or a concessive interest, refers to a price which, when selling commodities, an operator may offer expressly at a preferential rate, and which shall be clearly entered into the accounts strictly according to the facts. The discount shall be carried out in the following two ways: When a buyer pays for the commodities, a certain proportion of the total payment shall be deducted, or after the payment is made, the operator shall return a certain proportion of the payment to the buyer.

“In an express way” and “entering into the accounts” mentioned in these Provisions refer to recording accurately according to the amount and the form of payment prescribed by the contract into the legally established accounts which reflect the production and operation activities or revenues and expenditures of administrative affairs in accordance with financial and accounting rules.

Article 7

An operator may give commissions to an intermediary when sells or purchases commodities. The commissions given by an operator to an intermediary must be entered into the account books strictly according to the facts; and the commissions received by an intermediary must be recorded in his or her account books accurately.

The commission mentioned in these Provisions refers to the remuneration paid by an operator during market trading to an intermediate person with legal operation qualifications who has provided services to the operator.

Article 8

During commodity trading, an operator shall not give cash or objects to another unit or individual, except for advertising gifts of small amounts based on common commercial practice.

Anyone who violates the provisions of the previous clause shall be regarded as engaging in commercial bribery.

Article 9

If an operator violates these Provisions to sell or purchase commodities by means of bribery, the administrative authorities for industry and commerce shall base on the provisions of Article 22 of the Anti-Unfair Competition Law to impose a fine on the operator of more than 10,000 yuan and less than 200,000 yuan depending on the seriousness of the case, and shall confiscate the illegal income if occurs. If the action constitutes a crime, the case shall be transferred to the relevant judicial organ for investigation of the operator's criminal responsibility.

Any unit or individual that accepts bribes when purchasing or selling commodities shall be penalized by the relevant administrative authority for industry and commerce in accordance with the provisions of the previous clause; if the action constitutes a crime, the case shall be transferred to the relevant judicial organ for investigation of the operator's criminal responsibility.

Article 10

The administrative authorities for industry and commerce at or above county level shall supervise and examine cases of commercial bribery.

The administrative authorities for industry and commerce may handle the bribe-offering and bribe-accepting acts simultaneously during investigating cases of commercial bribery.

Article 11

If there are other behaviors of an operator in violation of the laws and regulations of administration for industry and commerce during selling or purchasing commodities by means of bribery, the behaviors shall be penalized together with the acts of commercial bribery.

Article 12

These Interim Provisions shall go into effect on the day of their promulgation.