Laws of the People's Republic of China

the Ministry of Commerce, the Ministry of Public Security

Order of the Ministry of Commerce and the Ministry of Public Security

No.8

The Measures for the Administration of Pawning, which were deliberated and adopted at the executive meeting of the Ministry of Commerce and approved by the Ministry of Public Security, are hereby promulgated and shall come into force as of April 1st, 2005.

The Minister of the Ministry of Commerce Bo Xilai

The Minister of the Ministry of Public Security Zhou Yongkang

February 9, 2005

Measures for the Administration of Pawning

Chapter I General Provisions

Article 1

With a view to regulating pawning activities, strengthening supervision and administration, and accelerating the healthy development of the pawn industry, the present Measures are formulated according to the relevant legal provisions.

Article 2

The present Measures shall be applicable to the establishment of pawnshops and the undertaking of pawning activities within the territory of the People's Republic of China.

Article 3

The term "pawning" as mentioned in the present Measures, shall refer to the act that a pawner gives his or her chattel or property rights to a pawnshop as a pledge for pawned item or gives his or her real estate to the pawnshop as a mortgage for the pawned item, pays expenses at a certain rate, obtains pawn money and then, within the agreed period of time, redeems the pawned item by repaying the pawn money and the interest thereof.

The term "pawnshop" as mentioned in the present Measures, shall refer to an enterprise juridical person that is established according to the present Measures and specially engages in the pawning activities. And its organizational form and its institutions shall accord with the relevant provisions of the Company Law of the People's Republic of China.

Article 4

The competent department of commerce shall conduct supervision and administration on the pawn industry. And the public security organ shall carry out public security administration on the pawn industry.

Article 5

The name of a pawnshop shall accord with the relevant provisions on the administration of enterprise name registration with the word "pawn" indicated in the name. No other business organization and institution may include the word "pawn" in their names, nor may they undertake pawn businesses overtly or in any disguised form.

Article 6

When undertaking business activities, a pawnshop shall abide by the laws, regulations and rules, and follow the principles of equality, free will, good faith and mutual benefit.

Chapter II Establishment

Article 7

When applying for the establishment of a pawnshop, one shall meet the following conditions:

1.

having its own articles of association conforming to the provisions of laws and regulations;

2.

having the minimum registered capital as prescribed in the present Measures;

3.

having a business place meeting the requirements and the facilities that are necessary for business operations;

4.

having managers and appraisers who are familiar with the pawn business;

5.

having two or more shareholders with legal person status, and the institutional shares as comparative controlling shares;

6.

complying with the requirements for management of public security as prescribed in Articles 9 and 10 of the present Measures; and

7.

complying with the state requirements for overall planning and reasonable arrangement of pawnshops.

Article 8

The minimum registered capital of a pawnshop shall be RMB 3 million Yuan; for the pawnshop that undertakes the pawn business of mortgage of real estates, the minimum registered capital shall be RMB 5 million Yuan; for the pawnshop that undertakes the pawn business of pledge of property rights, the minimum registered capital shall be RMB 10 million Yuan.

The minimum registered capital of a pawnshop shall be the monetary capital actually paid by shareholders, not including the capital contributed in the form of in-kind, industrial property rights, know-how and the land use right.

Article 9

A pawnshop shall establish and improve the following safety systems:

1.

the system for checking the certificates or licenses for accepting, renewal of a pawn and redeeming any pawned item;

2.

the system for checking and keeping pawned items;

3.

the system for assisting in the investigation and ordering circularly the arrest of a criminal at large;

4.

the system for reporting suspicious instances; and

5.

the system of equipment of security personnel.

Article 10

The building construction and business facilities of a pawnshop shall conform to the relevant security standards and provisions on fire control of the state. The specific safety facilities are as follows:

1.

video equipments set up in the business place (the video materials shall be kept for at least two months);

2.

safeguard facilities shall be set up at the business counters;

3.

warehouses for keeping pawned items and safe boxes (counters or deposits), which meet the safety requirements;

4.

the alarm device;

5.

safeguard facilities for doors and windows; and

6.

necessary fire control facilities and equipments.

Article 11

When establishing a pawnshop, an applicant shall submit the following documents to the competent department of commerce at the level of districted city (prefecture) of the locality where the pawnshop is to be established:

1.

an application for the establishment, which shall specify the name, residence, registered capital, shareholders and their amount of capital contributions, business scope of the pawnshop to be established and etc., and a feasibility study report;

2.

the articles of association of the pawnshop, the agreement on capital contributions and the commitment on capital contributions;

3.

business rules, internal management system and safeguard measures of the pawnshop;

4.

the capital verification certificate issued by a capital verification institution that has legal qualification;

5.

resumes of the individual shareholders, the legal representative to be appointed and other senior managers as issued by the personnel department of the entity where their archives are placed;

6.

the recent financial auditing report of the shareholders with legal person status and the certificate of capability for capital contribution as issued by the accountant firm that has legal qualification, the resolution of the board of directors or the shareholders' meeting of the shareholders with legal person status and a photocopy of the duplicate of the business licenses thereof;

7.

the effective certification documents of ownership or use right of the business place, which meet the requirements; and

8.

the Notice of Approval of Enterprise Names in Advance as issued by the administrative department for industry and commerce.

Article 12

Any pawnshop that meets the following conditions may establish a trans-province (autonomous region or municipalities directly under the Central Government) branches:

1.

having engaged in the pawn business for three years or more with the registered capital of not less than RMB 15 million Yuan;

2.

making profits consecutively in the past two years; and

3.

having no records of violating laws and regulations in its business operations during the past two years.

The branches of any pawnshop shall implement the safety system as prescribed in Article 9 of the present Measures, and shall have the safety facilities as prescribed in Article 10 of the present Measures.

Article 13

A pawnshop shall allocate the working capital of not less than RMB 5 million Yuan to each of its branch.

The total working capital of all the branches of a pawnshop shall not exceed 50% of the registered capital of the pawnshop.

Article 14

When applying for establishing any branch, a pawnshop shallsubmit the following materials to the competent department of commerce at the level of districted city (prefecture) of the locality where the branch is to be established:

1.

the application report for establishment of the branch (which shall specify the name, residence, person-in-charge, amount of working capital and etc. of the branch to be established), a feasibility study report and the resolution of the board of directors (or the shareholders' meeting);

2.

the financial report of the pawnshop in the past two years as issued by a qualified accountant firm;

3.

the resume of the person to be appointed in charge of the branch, which is issued by the personnel department at the locality where his archives are placed;

4.

the effective certification documents of ownership or use right of the business place, which meet the requirements; and

5.

the certificate of having no records of violating any law or regulation in the past two years as issued by the competent department of commerce at the provincial level and the public security organ of the people's government at the level of the county where it is located.

Article 15

After receiving an application for establishing a pawnshop or an application of a pawnshop for establishing a branch, the competent department of commerce at the level of districted city (prefecture) shall report it for examination to the competent department of commerce at the provincial level which shall in turn submit the examination opinions and the application documents to the Ministry of Commerce for approval and issuance of a License for Operation of Pawn Business. The competent department of commerce at the provincial level shall circulate a report on the relevant conditions to the public security organ of the people's government at the same level within 5 days (workdays, the same hereinafter) after receiving the approval documents of the Ministry of Commerce. And the public security organ of the people's government at the provincial level shall notify the public security organ of the people's government at the level of districted city (prefecture) of the report within 5 days.

Article 16

After receiving a License for Operation of Pawn Business, the applicant shall apply for a License of Special Trades for the pawnshop to the public security organ of the people's government at the level of the local county within 10 days, and submit the following materials:

1.

an application report;

2.

the License for Operation of Pawn Business and its photocopy;

3.

the resumes of the legal representative, individual shareholders and other senior managers as well as the photocopies of their effective identity certificates;

4.

the certificate of having no records of intentional crimes as issued by the respective public security organ of the people's government at the level of the county where the registered permanent residences of the legal representative, individual shareholders and other senior managers are placed;

5.

the ichnography and constructional drawing of the business place and the warehouse of the pawnshop;

6.

the video equipments, safeguard facilities, safe boxes (counters, warehouses) and the distribution plan of the sites for the installation and setup of fire control facilities;

7.

various rules on public security safeguarding and fire control; and

8.

basic information of the public security safeguarding organizations and personnel.

Article 17

The public security organ of the people's government at the level of the county where the applicant resides shall, within 10 days after accepting the application, report the application documents and the result of preliminary examination to the public security organ of the people's government at the level of districted city (prefecture) which shall finish the examination and approval within 10 days and issue a License of Special Trades to those to whom approval is granted.

The public security organ of the people's government at the level of districted city (prefecture) shall finish the examination and approval on the applications accepted directly by itself within 20 days. And, upon approval, a License of Special Trades shall be issued

The public security organ of the people's government at the level of districted city (prefecture) shall, within 5 days after issuing a license, report the conditions of examination and approval to the public security organ of the people's government at the provincial level for archival filing; and the public security organ of the people's government at the provincial level shall report the relevant matters to the competent department of commerce at the same level within 5 days.

The applicant shall, within 10 days after receiving the License of Special Trades, apply for checking in and registration at the administrative department for industry and commerce, and shall not conduct business operations until having received the business license.

Chapter III Alteration and Termination

Article 18

Where a pawnshop alters its name and registered capital (excluding those whose registered capital is more than RMB 50 million Yuan after alteration), replaces its legal representative, or changes its residence within the scope of the city (region, prefecture, or league), transfers stocks (excluding those that transfer stocks to anyone else for up to 50% of its total shares accumulatively), it shall be subject to the approval of the competent department of commerce at the provincial level. The competent department of commerce at the provincial level shall report it to the Ministry of Commerce for archival filing within 20 days after approval. The Ministry of Commerce shall change the License for Operation of Pawn Business collectively in June and December each year.

Where any pawnshop is split, merged, or moves its residence to another city (region, prefecture, or league), or transfers its stocks to anyone else for up to 50% of its total shares accumulatively, or the registered capital after alteration is more than RMB 50 Yuan, it shall, upon the approval of the competent department of commerce at the provincial level, report it to the Ministry of Commerce for approval and change the License for Operation of Pawn Business.

The applicant shall, after receiving the License for Operation of Pawn Business, apply for changing the License of Special Trades and the business license according to the relevant provisions of Article 17 of the present Measures.

Article 19

When increasing its registered capital, a pawnshop shall meet the following conditions:

1.

The time interval between the increase of registered capital and the time when it started its business operations or the preceding increase of registered capital shall be one year or more; and

2.

having no record of operation in violation of any law or regulation within one year.

Article 20

If any pawnshop alters its registered capital or adjusts the structure of its capital stocks, the new individual shareholders and the senior managers to be appointed shall accept qualification examination; and the new shareholders with legal-person status and the shareholders with legal person status after capital increase shall have the corresponding capability and qualification for investment.

Article 21

Where anyone fails to obtain the License of Special Trades or the business license as required without justifiable reasons, or fails to start business without justifiable reasons for more than 6 months as of the date of being issued of the business license, or stops the business operation for more than 6 consecutive months after starting business, the competent department of commerce at the provincial level and the public security organ of the people's government at the level of districted city (prefecture) shall take back the License for Operation of Pawn Business and the License of Special Trades respectively, and the original approval documents shall be revoked automatically. The License for Operation of Pawn Business that has bee taken back shall be returned to the Ministry of Commerce.

Where any competent department of commerce at the provincial level takes back the License for Operation of Pawn Business or any public security organ of the people's government at the level of districted city (prefecture) takes back the License of Special Trades, it shall report to each other the relevant matters through the public security organ of the people's government at the provincial level within 10 days.

After its license is taken back, the pawnshop shall apply for writing-off registration to the administrative department for industry and commerce according to law.

Article 22

A pawnshop shall, three months before its dissolution, file an application to the competent department of commerce at the provincial level, and shall stop other business operations except redeeming pawned objects or disposing the absolutely pawned objects upon approval and set up a liquidation group according to law to make liquidation.

Article 23

After the liquidation to a pawnshop is completed, the liquidation group shall submit a liquidation report for confirmation to the competent department of commerce at the provincial levelwhich shall take back the License for Operation of Pawn Business and notify the public security organ of the people's government at the same level within 5 days.

The public security organ of the people's government at the provincial level shall notify the public security organ of the people's government at the level of districted city (prefecture) that has made the original approval decision to take back the License of Special Trades within 5 days.

The pawnshop shall, after the liquidation is completed, apply for writing off registration to the administrative department of industry and commerce according to law.

Article 24

The competent department of commerce at the provincial level shall make a public announcement on any pawnshop that has terminated its business operations, and report it to the Ministry of Commerce for archival filing.

Chapter IV Business Scope

Article 25

A pawnshop may undertake the following business operations upon approval:

1.

the pawn business of pledge of chattel;

2.

the pawn business of pledge of property rights;

3.

the pawn business of mortgage of real estates (excluding the real estates of other provinces, autonomous regions, and municipalities directly under the Central Government or the projects under construction for which the licenses for advance sale of commercial houses has not been obtained);

4.

sale of the absolutely pawned objects within a certain value;

5.

appraisal and counseling consultation; and

6.

other pawn businesses as approved by the Ministry of Commerce according to law.

Article 26

No pawnshops may undertake any of the following businesses:

1.

the sale of non-absolutely pawned objects or the purchase or consignment of old objects;

2.

the business of mortgage of chattel;

3.

raising funds or absorbing deposit overtly or in any disguised form;

4.

granting credit loans; or

5.

other businesses not approved by the Ministry of Commerce.

Article 27

No pawnshop may accept any of the following properties in its pawn business:

1.

property that has been lawfully sealed up, detained or property against which other protective measures have been taken;

2.

ill-gotten goods and items without clear sources;

3.

any item that is inflammable, easily explosive, severely toxic or radioactive and the containers thereof;

4.

knife tools under control, guns, ammunitions, marks used by army or police, uniforms and instruments;

5.

the official documents and seals of the state organs and the properties under its control;

6.

the certificates or licenses except the certificate of real right issued by the state organs and the effective identity certificates;

7.

property over which the pawner has no ownership or fails to obtain the right of disposition according to law; and

8.

natural resources or other property or items that are prohibited from circulating by laws, regulations and the relevant provisions of the state.

Article 28

No pawnshops may have any of the following acts:

1.

borrowing money from entities or individuals except commercial banks;

2.

making inter-bank capital borrowing with other pawnshops overtly or in any disguised form;

3.

getting loans from commercial banks beyond the prescribed limit; or

4.

making foreign investment.

Article 29

To accept those items that are subject to uniform purchase, exclusive sale or monopolistic sale of the state, the pawnshop shall obtain the approval of the relevant departments of the government.

Chapter V Pawn Tickets

Article 30

A pawn ticket is a loan contract between a pawnshop and a pawner, and is the credence for payment of pawn money to the pawner by the pawnshop.

If a pawnshop comes to any agreement with a pawner on any matter beyond the pawn ticket, they shall sign a supplementary written contract. But the contents stipulated in the contract shall not violate the relevant laws, regulations and the provisions of the present Measures.

Article 31

A pawn ticket shall specify the following items:

1.

name and residence of the pawnshop;

2.

name and residence (or address) of the pawner, relevant certificates (licenses) and their numbers thereof;

3.

name, quantity, quality and status of the pawned item;

4.

the estimated value and the amount of pawn money;

5.

the interest rate and comprehensive premium rate;

6.

date and term of the pawn, the term of renewal of the pawn; and

7.

points for attention to the pawners.

Article 32

No pawnshop or pawner may transfer, lend or pledge his/its pawn ticket to any third person.

Article 33

The pawnshop and the pawner shall record their pawn ticket in truth and well keep it.

In case any pawn ticket is lost, the pawner shall in time report the loss to the pawnshop. In case the pawner fails to report the loss of the pawn ticket to the pawnshop, or the pawned item has been redeemed by any other person before the pawner reports the loss to the pawnshop, the pawnshop shall not be regarded as blamable and shall not compensate the loss.

Chapter IV Rules for Business Operation

Article 34

No pawnshop may entrust any other entity or individual to handle the pawn business as an agent, nor may it assign any operating person to any other organization, institution or business place to conduct the pawn business.

Article 35

When a pawner pawns an item or redeems any pawned item, he/it shall show his/its own effective identity certificate. If the pawner is an entity, the pawn handler shall show the certificate of the entity and the effective identity certificate of himself; in the case of a pawn by entrustment, the entrusted person shall show the power of attorney of the pawner, and the effective identity certificates of himself and the client.

Except the certificates as listed in the preceding paragraph, the pawner shall, when pawning any item, provide the source of the pawned item and the relevant certificate documents according to the facts to the pawnshop. When redeeming the pawned item, the pawner shall show the pawn ticket.

The pawnshop shall check the certificate documents as listed in paragraph two of this Article, which are issued by the pawner.

Article 36

Both parties shall determine the estimated value and the amount of pawn money of any pawned item through negotiation.

In case both parties cannot come to an agreement on the pawned value of any real estate through negotiation, they may entrust a real estate price appraisal institution that has the competent qualification to make an appraisal, and the estimated value may be regarded as a reference for determining the pawned value.

The time limit of a pawn shall be stipulated by both parties, and shall not exceed 6 months at the maximum.

Article 37

The interest rate for the pawn value shall apply the six-month legal interest rate of loans to a banking institution as announced by the People's Bank of China after converting the term of pawn.

The interest for the pawn value shall not be deducted in advance.

Article 38

The comprehensive premium of a pawn shall include all kinds of service fees and overhead expenses.

In the case of a pledged pawn of chattel, the monthly comprehensive premium rate shall not exceed 42бы of the pawn value.

In the case of a mortgaged pawn of real estate, the monthly comprehensive premium rate shall not exceed 27бы of the pawn value.

In the case of a pledged pawn of property right, the monthly comprehensive premium rate shall not exceed 24бы of the pawn value.

Where the term of a pawn is less than 5 days, the premium shall be charged as that the term is 5 days.

Article 39

Upon the agreement of both parties during the period of a pawn or within 5 days after the expiration of the pawn term, the pawn may be renewed for 6 months at maximum each time. The renewed term of the pawn shall be calculated from the day when the pawn term expires or when the former renewed term of the pawn expires. To renew a pawn, the pawner shall settle all the interest for the pawn in the form term and the premium in the present term.

Article 40

After a pawn term or a renewed term expires, the pawner shall redeem the pawned item or renew the term within 5 days. In case the pawner fails to redeem the item or renew the term, it shall be deemed as an absolute pawn.

Where a pawner redeems a pawned item during the period between the expiration of the pawn term or the renewed term and the time for absolute pawn, he shall, apart from repaying the pawn value and the interest thereof as well as the comprehensive premium, make up the interest for the pawn value and other relevant expenses in light of the penalty level of interest rate of an overdue loan for banks and other financial institutions as prescribed by the People's Bank of China, and the premium rates for the pawn and the number of days overdue as formulated by the pawnshop.

Article 41

The pawnshop shall not lease, pledge, mortgage or use any pawned item within the term of a pawn.

Where a pledged item of a pawn is lost or damaged during the pawn term or the renewed term, the pawnshop shall make compensation pursuant to the estimated value. Where the pledged item of a pawn is damaged due to force majeure, the pawnshop shall not be responsible for the compensation.

Article 42

Where a pawnshop undertakes the pawn business of real estate mortgage, it shall handle mortgage registration in advance with the pawner at the relevant departments according to law, and then go through the formalities for a mortgaged pawn.

When conducting the pawn business of pledge of motor vehicles, the pawnshop shallgo through the formalities for registration of the pledge at the administrative department of vehicles.

Where any other pawn business managed by the pawnshop is subject to registration according to relevant laws and regulations, the pawnshop shall go through the registration formalities according to law.

Article 43

The pawnshop shall treat with the absolutely pawned items according to the following provisions:

1.

If the estimated value of a pawned item is more than RMB 30,000 Yuan, it may be treated with according to the Guaranty Law of the People's Republic of China or may be publicly auctioned by an entrusted auction house pursuant to the agreement reached upon by both parties concerning absolute pawns. The proceeds from auction shall be returned to the pawner after deducting the expenses of auction as well as the pawn value and the interest thereof; in case the proceeds from auction are lower than the estimated value, the pawnshop may demand the pawner to make up the margin.

2.

If the estimated value of an absolutely pawned item is less than RMB 30,000 Yuan, the pawnshop may sell off it by itself or deal with it by converting it into money, and shall be responsible for the profit or loss thereof.

3.

The absolutely pawned items, which are restricted by the state from circulating, shall be treated with after being reported to and approved by the relevant administrative departments or being handed over to the designated entities for disposal.

4.

When setting up spots for the sale of absolutely pawned items outside its business place, the pawnshop shall report to the competent department of commerce at the provincial level for archival filing, and shall voluntarily accept the supervision and inspection of the local competent department of commerce. And

5.

When disposing of the shares of any listed company belonging to absolutely pawned items, the pawnshop shall win the consent and cooperation of the pawner, and shall not sell off the shares or convert them into money by itself, or entrust any auction house to auction them publicly.

Article 44

The assets of a pawnshop shall be managed pursuant to the proportions below:

1.

Where a pawnshop gets loans from a commercial bank within the time when it starts business operation till it first submits the annual financial reports to the competent department of commerce at the provincial level and the local competent department of commerce, the balance of the loan shall not exceed its registered capital. Where a pawnshop gets loans from a commercial bank after submitting the financial reports for the first time to the competent department of commerce at the provincial level and the local competent department of commerce, the balance of the loan shall not exceed the rights and interests of the owners as stated in the financial reports submitted to the competent department in the previous year. The pawnshop shall not get loans from any commercial bank outside its own city (region, prefecture, or league). No branch of any pawnshop may get loans from any commercial bank.

2.

The balance of a pawn paid to the same legal person or natural person by a pawnshop shall not exceed 25% of its registered capital;

3.

The balance of a pawn paid to a shareholder of a pawnshop shall not exceed the contributions made by the shareholder, and the conditions of pawn shall not be more preferential than common pawners.

4.

In case the net assets of a pawnshop is less than 90% of its registered capital, all shareholders shall make it up pursuant to the proportions or apply for reducing the registered capital. However, the registered capital after reduction shall not violate the provisions on the minimum registered capital of a pawnshop as prescribed in the present Measures. And

5.

The balance of a pledged pawn of property rights of a pawnshop shall not exceed 50% of the registered capital. The balance of a pawn of real estate mortgage shall not exceed the registered capital. If the registered capital is less than RMB 10 million Yuan, the pawn money of a single pawn of real estate mortgage shall not exceed RMB 1 million Yuan. If the registered capital is more than RMB 10 million Yuan, the pawn money of a single pawn of real estate mortgage shall not exceed 10% of the registered capital.

Article 45

The pawnshop shall, according to the relevant laws and the unified accounting system of the state, establish and improve its own financial accounting system and internal auditing system.

The pawnshop shall, according to the relevant provisions of the state, truthfully note down and thoroughly reflect its business activities and financial status, work out monthly financial statements and annual financial reports and submit them to the competent department of commerce at the provincial level and the competent department of commerce at the level of districted city (prefecture) where the pawnshop is situated.

The annual financial reports of a pawnshop shall be subject to the inspection and verification of accountants' firms or other legal institutions.

Chapter VII Supervision and Administration

Article 46

The Ministry of Commerce shall implement centralized and specialized administration over pawnshops and perform the following regulatory functions:

1.

formulating the relevant regulations and policies;

2.

being responsible for the administration of market access and exit on pawnshops;

3.

being responsible for the supervision over routine businesses of pawnshops; and

4.

making business guidance to the self-disciplinary organizations of the pawn industry.

Article 47

The Ministry of Commerce shall make adjustment and control over the total number, overall arrangement and capital scale of the pawnshops all over the country by referring to the annual development plan worked out by the competent department of commerce at the provincial level.

Article 48

The License for Operation of Pawn Business shall be printed uniformly by the Ministry of Commerce. The uniform coding system shall be applied to the administration of Licenses for Operation of Pawn Business; and the measures for the coding administration shall be formulated by the Ministry of Commerce separately.

The pawn tickets shall be designed uniformly by the Ministry of Commerce, and be subject to the supervision of the competent department of commerce at the provincial level which shall report the conditions on printing and use of pawn tickets to the Ministry of Commerce half a year. No entity or individual may forge or alter any pawn ticket.

Article 49

The competent department of commerce at the provincial level shall submit the conditions on the operation of local pawnshops to the Ministry of Commerce on the quarterly basis. The concrete requirements and format of report forms shall be prescribed by the Ministry of Commerce separately.

Article 50

The practicing personnel of a pawnshop shall hold effective identity certificates; if any foreigner or any other oversea personnel is employed in any pawnshop, he shall obtain the license for alien employment according to the relevant provisions of the state.

No pawnshops may employ any person who fails to provide the certificates as listed in the preceding paragraph.

Article 51

The pawnshop shall record down and make statistics on the pledged items of pawn and the information of pawners according to the facts, and submit them for future reference according to the requirements of public security organs of the people's government at or above the level of the county where it is located.

Article 52

Where a pawnshop discovers any person on whom a report has been circulated by the public security organ for assistance in investigation or any ill-gotten goods or any other property as listed in Article 27 of the present Measures, it shall report it to the public security organ immediately.

Article 53

For any ill-gotten goods or any pawned item that is suspected to be ill-gotten goods, the public security organ shall detain it according to law and dispose it according to the relevant provisions of the state.

Article 54

The competent department of commerce at the provincial level and the competent department of commerce at the level of districted city (prefecture) shall establish the system of regular inspection and irregular spot check according to the fact of their local regions so as to discover and solve relevant problems in time. In the case of stealing or robbing, fire disasters, absorbing savings through raising funds or other major cases involving litigation occurred in any pawnshop within its jurisdiction, it shall report the case to the upper level competent department of commerce and the local people's government within 24 hours, and circulate a report to the public security organ of the people's government at the corresponding level.

Article 55

The national association of pawn industry shall be the national self-disciplinary organization of pawn industry, and shall be established upon the approval and registration of the civil affairs department of the State Council, and accept the business guidance of such departments as commerce and public security of the State Council.

The local association of pawn industry shall be the local self-disciplinary organization of pawn industry, and shall be established upon the approval and registration of the local civil affairs department, and accept the business guidance of such departments as commerce and public security at its locality.

Article 56

The Ministry of Commerce shall authorize the competent departments of commerce at the provincial level to make annual examination on pawnshops. The concrete measures shall be formulated by the Ministry of Commerceseparately.

The competent departments of commerce at the provincial level shall, within 10 days after annual examination, circulate a report on the relevant matters to the public security organs and administrative departments of industry and commerce of the people's government at the corresponding level.

Article 57

The state shall implement the system of certification on the level of pawn practicing. The concrete measures shall be formulated by the Ministry of Commerce together with the administrative department of personnel of the State Council.

Chapter VIII Penalties

Article 58

Where anyone establishes any pawnshop or any branch or illegally undertakes any pawn business by other means, he/it shall be subject to punishment according to the Measures for the Investigating and Punishing and Banning License-less Business Operations.

Article 59

Where any pawnshop violates the provisions of item (3) and (4) of Article 26 of the present Measures and constitutes a crime, it shall be subject to criminal responsibilities according to law.

Article 60

Where any pawnshop violates the provisions of item (1), (2) or (3) of Article 28 or the provisions of item (1), (2) or (5) of Article 44 of the present Measures, the competent department of commerce at the provincial level shall charge it to make corrections, and impose a fine of RMB 5000 Yuan up to RMB 30,000 Yuan on it; if a crime is constituted, it shall be subject to criminal responsibilities according to law.

Article 61

Where any pawnshop violates the provisions of item (1) of Article 37 or the provisions of item (2) (3) or (4) of Article 38 of the present Measures, the competent department of commerce at the provincial level shall charge it to make corrections, and impose a fine of RMB 5000 Yuan up to RMB 30,000 Yuan on it; if a crime is constituted, it shall be subject to criminal responsibilities according to law.

Article 62

Where any pawnshop violates the provisions of Article 45 of the present Measures, conceals its real management conditions, provides false financial reports or financial statements or evades taxation and supervision by any other means, the competent department of commerce at the provincial level shall charge it to make corrections, and circulate a report to the relevant departments to make investigation and punishment according to law; if any crime is constituted, it shall be subject to criminal responsibilities according to law.

Article 63

Where any pawnshop violates the provisions of Article 27 of the present Measures, the public security organ of the people's government at or above the county level shall charge it to make corrections, and impose a fine of RMB 5000 Yuan up to RMB 30,000 Yuan on it; if any crime is constituted, it shall be subject to criminal responsibilities according to law.

Article 64

Where any pawnshop violates the provisions of item (1), (2) or (5) of Article 26 , item (4) of Article 28 , or Article 34 of the present Measures, the competent department of commerce at the level of districted city (prefecture) where it is located shall charge it to make corrections, and/or impose a fine of RMB 5000 Yuan up to RMB 30,000 Yuan on it.

Where any pawnshop violates the provisions of Article 29 or item (3) or (5) of Article 43 of the present Measures, accepts pawned items restricted from circulating or disposes any absolutely pawned item without obtaining the corresponding approval or consent, the competent department of commerce at the level of districted city (prefecture) where it is located shall charge it to make corrections, and impose a fine of RMB 1000 Yuan up to RMB 5,000 Yuan concurrently.

Where any pawnshop violates the provisions of item (3) or (4) of Article 44 of the present Measures, has no actual capital and disturbs the order of business operation, the competent department of commerce at the level of the city (prefecture) where it is located shall charge it to make up the amount of capital or reduce its registered capital within a prescribed time limit, and impose a fine of RMB 5000 Yuan up to RMB 30,000 Yuan concurrently.

Article 65

Where any pawnshop violates the provisions of paragraph three of Article 35 or the provisions of Article 51 of the present Measures, the public security organ of the people's government at or above the county level shall charge it to make corrections and impose a fine of RMB 200 Yuan up to RMB 1000 Yuan.

Article 66

Where any pawnshop violates the provisions of Article 52 of the present Measures, the public security organ of the people's government at or above the county level shall charge it to make corrections and impose a fine of RMB 2000 Yuan up to RMB 10,000 Yuan; if serious consequences are resulted in or the pawnshop refuses to make corrections despite of repeated admonitions, it shall be given a fine of RMB 5000 Yuan up to RMB 30,000 Yuan.

Where any pawnshop knowingly shelters, destroys or transfers any ill-gotten goods, it shall be subject to the administrative punishment of public security according to law; if it a crime is constituted, it shall be subject to criminal responsibilities according to law.

Article 67

Where any pawnshop forces any person to pawn any item by means of violence or menace, or infringes the lawful rights and interests of any pawner by any other illegal means, it shall be deemed as violating the public security administration, and shall be subject to administrative punishment of public security by the public security organ according to law; if a crime is constituted, it shall be subject to criminal responsibilities.

Article 68

The competent department of commerce and the public security organ shall cooperate with each other during the process of investigation and spying into any illegal and criminal act of any pawnshop. If any act of pawnshops violating the present Measures is discovered by them, they shall make investigation and verification on it, and circulate a report to each other on the results of investigation and punishment; if a pawnshop is suspected of committing a crime, the competent department of commerce shall transfer it to the public security organ in time for disposal.

Article 69

Where any staff member of the competent department of commerce or the public security organ violates laws, regulations or the provisions of the present Measures during the process of examination and approval for the establishment, alteration and termination of any pawnshop, or abuses its power, seeks private gains or is derelict of duty in the supervision and administration, the person-in-charge who is directly responsible and other personnel directly liable shall be subject to administrative punishment according to law; if a crime is constituted, he shall be subject to criminal responsibilities according to law.

Chapter IX Supplementary Provisions

Article 70

The competent departments of commerce and public security organs of all the provinces, autonomous regions, and municipalities directly under the Central Government may, according to the present Measures, formulate concrete implementation measures or make provisions on the relevant matters relating to the administration of entrustment or authorization, and report them to the Ministry of Commerce and the Ministry of Public Security for archival filing.

Article 71

The measures for the administration of foreign-funded pawnshops and pawnshops invested by Hong Kong, Macao and Taiwan investors shall be formulated by the Ministry of Commerce together with other relevant departments separately.

Article 72

The power to interpret the present Measures shall remain with the Ministry of Commerce and the Ministry of Public Security.

Article 73

The present Measures shall come into force as of April 1st, 2005. The Measures for the Administration of Pawnshops (Order No.22 of the State Economic and Trade Commission) and the Measures for the Public Security Administration of Pawn Industry (Order No.26 of the Ministry of Public Security) shall be abolished simultaneously.