Laws of the People's Republic of China

The Ministry of Finance

Order of the Ministry of Finance

No. 22

The Measures for the Administration of the Examination and Approval of Asset Appraisal Institutions, which have been adopted upon deliberation at the executive meeting of this Ministry, are hereby promulgated and shall go into effect as of June 1, 2005.

Minister, Jin Renqing

May 11, 2005

Measures for the Administration of the Examination and Approval of Asset Appraisal Institutions

Chapter I General Provisions

Article 1

For the purpose of strengthening the administration of asset appraisal institutions, promoting the quality of asset appraisal work and ensuring the independence, objectivity and impartiality in practice of the asset appraisal institutions, these measures are formulated.

Article 2

An asset appraisal institution refers to a social intermediary institution which was established in accordance with law, engaging in the asset appraisal business with qualification of assets appraisal.

Article 3

The Ministry of Finance shall be the administrative department for the asset appraisal all over the country. In accordance with law, it shall take charge of the administration of examination and approval of and supervision over the asset appraisal institutions all over the country, and a uniform system for the administration of asset appraisal institutions shall be formulated by it.

The public finance department (bureau) of the provinces, autonomous regions, or municipalities directly under the Central Government (hereinafter referred to as the provincial public finance department) shall take charge of the administration of examination and approval of and supervision over the asset appraisal institutions within the areas under their administration.

The asset appraisal societies shall take charge of the self-disciplinary management of the asset appraisal industry and shall administer, supervise and inspect the asset appraisal institutions as an assistant of the administrative departments for asset appraisal.

Article 4

The range of asset appraisal mainly consists of: all kinds of individual asset appraisals, whole asset appraisals of enterprise, and other asset appraisals or project appraisals according to demands of the market.

Article 5

As to an asset appraisal institution, it shall, in the light of the law, acquire the asset appraisal qualifications and shall comply with the relevant laws, regulations, practicing criteria and norms.

Article 6

The asset appraisal institution shall, in accordance with the law, implement asset appraisal businesses, without any restriction in terms of administrative area or trade or any illegal intervention from any organization or individual.

Article 7

Each asset appraisal institution shall join the China Appraisal Society and become a member thereof.

Chapter II Establishment of Asset Appraisal Institution

Article 8

The organization form of an asset appraisal institution is partnership or limited liability company (hereinafter referred to as "in the form of a company").

Article 9

An asset appraisal institution established in accordance with law shall include such words as "Asset Appraisal" in its name.

Article 10

When establishing a partnership asset appraisal institution, not only the provisions prescribed in the relevant laws and regulations shall be met, but also the requirements shall be met as follows:

(1)

Having not less than 2 partners according with the conditions as prescribed in the present Measures;

(2)

Having not less than 5 certified asset appraisers (including the partners); and

(3)

The actual contributions of the partners are not less than100, 000 Yuan.

Article 11

When establishing an asset appraisal institution in the form of a company, not only the provisions prescribed in the relevant laws and regulations shall be met, but also the requirements shall be met as follows:

(1)

Having not less than 2 shareholders who meet the present requirements as prescribed in the present Measures;

(2)

Having not less than 8 certified asset appraisers (including the shareholders); and

(3)

Having a registered capital of not less than 300, 000 Yuan.

Article 12

Any "partner" or shareholder as mentioned in the present Measures shall meet the requirements as follows, other than the situations prescribed in Article 13 of the present measures:

(1)

Holding a Certified Asset Appraiser Certificate of the People's Republic of China (hereinafter referred to as the CAAC);

(2)

After acquiring a CAAC, he has more than 3-year-asset appraisal experience in an asset appraisal institution and has no bad record;

(3)

Having registered in this asset appraisal institution (including its branches) and takes up asset appraisal business as a full-time job.

Article 13

In accordance with the internal management needs of an asset appraisal institution, and under the precondition of meeting the conditions as mentioned in Articles 10 through 12 of the present Measures a natural person without a certificate of asset appraisal can be added as an administrative management partner or shareholder, for whom the specific requirements shall be separately provided.

Article 14

The position of the chief partner of an asset appraisal institution in the form of partnership or the position of the legal representative of a asset appraisal institution in the form of company shall be taken by one of the partners or shareholders with a CAAC.

Article 15

For the purpose of establishing an asset appraisal institution, all partners or shareholders shall adopt a resolution, and submit an application to the provincial public finance department. The relevant materials as follows shall be handed in:

(1)

An application form established by the asset appraisal institution;

(2)

Notice of the name pre-approval issued by the administrative department for industry and commerce;

(3)

The capital contribution certificate;

(4)

The resumes of the partners or shareholders, and the candidate for the chief partner or legal representative;

(5)

A summary of the information about the certified asset appraisers upon verification of the provincial asset appraisal society, and the evidentiary materials about the partners or shareholders having no record on badŁ»

(6)

The photocopies of the CAAC and the identity card of a certified assets appraiser;

(7)

The application forms of the certified asset appraisers for changing their working institutions;

(8)

The partnership agreement or articles of incorporation;

(9)

The valid certification for the property right or use right of the business office; and

(10)

The system of the internal management.

Article 16

A sound internal management system shall be set up in an asset appraisal institution to strengthen the internal management. The internal management system shall at least consist of the rules as follows:

(1)

A personnel administration system;

(2)

A financial management system;

(3)

A practice control system of the operation; and

(4)

A archives management system of the business.

Article 17

The provincial public finance department shall examine the application materials handed in by an applicant, make a decision of acceptance or rejection and issue a written document sealed by the provincial public finance department as well as dated.

If the application materials are incomplete or their form doesn't meet the relevant requirements, the provincial public finance department shall inform the applicant, once and for all, of the materials that should be made supplementation and correction within 5 workdays. If it fails to do so within the time limit, it shall be considered to have taken cognizance of the application materials as of the date of receiving them.

Article 18

After taking cognizance of an application, the provincial public finance department shall throw daylight on the name of the asset appraisal institution, partners or shareholders, practicing qualifications and time of the certified asset appraisers and other information as specified in the application materials.

Article 19

After taking cognizance of an application for the establishment of an asset appraisal institution, the provincial public finance department shall, within 20 working days examine the application materials in the light of the relevant provisions and make a decision of approval or disapproval. If it can't make a decision within the time limit, the time limit may be appropriately extended upon approval of the person-in-charge of this administrative organ, but the extension shall not be in excess of 10 working days at most.

Article 20

If the provincial public finance department makes a decision of approval about the establishment of an asset appraisal institution, it shall issue to the applicant an approval document, which shall state the items as follows:

(1)

The name and organization form of the asset appraisal institution;

(2)

The basic information about the partners or shareholders of the asset appraisal institution;

(3)

The chief partner or legal representative of the asset appraisal institution;

(4)

The basic information about the certified asset appraisers;

(5)

The time requirements for the applicant to register in the administrative department for industry and commerce; and

(6)

The time requirements for the certified asset appraisers to change their working institutions.

Article 21

After completing the registration formalities in the administrative department for industry and commerce upon the strength of the approval document, the applicant shall hand in an application to the provincial public finance department for a CAAC, and shall simultaneously hand in a photocopy of its business license, as well as the partnership agreement or articles of society that has been archived in the administrative department for industry and commerce, to the provincial public finance department for the purpose of archive.

The CAACs shall be uniformly printed and numbered by the Ministry of Finance, and shall be issued by the provincial public finance departments with the seal of the provincial public finance departments.

Article 22

Where approving the establishment of an asset appraisal institution, the provincial public finance department shall hand in the approval documents and application materials to the Ministry of Finance for the purpose of archive and shall send a copy of the approval documents to the asset appraisal society and China Appraisal Society at the same time .

If any improper examination and approval is found, the Ministry of Finance shall order the provincial public finance department to make a correction.

Article 23

If the provincial public finance department make a decision of disapproval on the establishment of an asset appraisal institution, it shall notify the applicant in a written form to make an explanation and inform the applicant of the right to apply for administrative reconsideration or to bring an administrative lawsuit.

Article 24

An asset appraisal institution may merge or split up in the light of the relevant laws and regulations. The remaining asset appraisal institution after the merger or split-up shall go through alteration formalities in the light of the present Measures. If a new asset appraisal institution is to be established after the merger or split-up, it shall meet the conditions as provided in the present Measures and go through establishment formalities in the light of the procedures of the present Measures.

Chapter III Establishment of Branches of An Asset Appraisal Institution

Article 25

The branches of an asset appraisal institution (hereinafter referred to as the branches) refer to the non-legal-person business institutions set up in accordance with law by an asset appraisal institution in different regions, engaging in the asset appraisal business.

The asset appraisal institution shall undertake the civil liabilities of its branches.

Article 26

The name of a branch shall be in the form of "the name of the asset appraisal institution + the name of the administrative area where the branch is located + the name of the branch (branch company).

Article 27

An asset appraisal institution shall carry out unified management on its branches in such aspects as personnel, finance, practicing standards and quality control.

Article 28

The asset appraisal institution shall issue an asset appraisal report with the seal of itself when its branch does an asset appraisal business. Any branch may not issue any asset appraisal report in its own name.

Article 29

When an asset appraisal institution sets up a branch, it shall meet the conditions as follows:

(1)

It has been more than 3 years since it was established in accordance with law and qualified with assets appraisal, as well as a sound internal management system;

(2)

It has not less than 20 certified asset appraisers, excluding those who shall transfer to the to-be-established branch and those who are practicing in other established branches;

(3)

It's aggregate incomes from appraisal business account for RMB 15 million Yuan during the 3 years before it submits the application; and

(4)

It has not suffered any administrative punishment or criminal punishment during the 3 years before it submits the application.

Article 30

A branch shall meet the conditions as follows:

(1)

The person who takes charge of the branch shall be a partner or shareholder of the asset appraisal institution that sets up the branch, holding a CAAC;

(2)

Having no less than 6 certified asset appraisers; and

(3)

Having a fixed business office.

Article 31

If a qualified asset appraisal institution sets up a branch, it shall hand in the following materials to the provincial public finance department of the place where the to-be-established branch is located:

(1)

A resolution about the establishment of a branch, made by all partners or shareholders of the asset appraisal institution;

(2)

An application form of the asset appraisal institution for setting up of a branch;

(3)

The business range of the branch authorized by the asset appraisal institution;

(4)

The resume of the person who takes charge of the to-be-established asset appraisal institution;

(5)

The annual accounting statements and audit reports during the 3 years before the asset appraisal institution submits the application;

(6)

A summary of the registration information of the certified asset appraisers upon verification of the provincial asset appraisal society of the place where the asset appraisal institution is located, as well as the CAACs and photocopies of the identity cards of the certified asset appraisers;

(7)

A summary of the registration information of the asset appraisers who are to move to this branch upon verification of the provincial asset appraisal society where the branch is located, CAACs, photocopies of the identity cards of the certified asset appraisers, as well as their applications for moving to this branch;

(8)

The valid certification for the property right or use right of the business office of the branches; and

(9)

The measures of the management on the branch carried out by the asset appraisal institution.

If the asset appraisal institution is to set up a branch in different provincial administrative area, it shall submit the consent in written form on setting up the branch issued by the provincial public finance department of the place where the asset appraisal institution is located.

Article 32

The provincial public finance department of the place where the branch is located shall carry out the examination and approval procedures for the establishment of the branch in accordance with the relevant provisions prescribed in Articles 17 through 23 of the present Measures.

Article 33

After completing the formalities for the registration of the branch in the administrative department for industry and commerce, the asset appraisal institution shall, within 10 working days, submit a photocopy of the business license of the branch to both the provincial public departments of the places where the asset appraisal institution and its branch are located.

Article 34

After receiving the photocopy of the business license of the branch, the provincial public finance department of the place where the branch is located shall submit the approval document about the establishment of the branch to the Ministry of Finance for the purpose of archive, as well as the asset appraisal society at the same level and China Appraisal Society thereof.

If the asset appraisal institution set up a branch in different provincial administrative area, the provincial public finance department of the place where the branch is located shall also send a copy of the approval document to the provincial public finance department of the place where the asset appraisal institution, which sets up the branch, is located, as well as the asset appraisal society at the same level .

Chapter IV Alternation and Termination of An Asset Appraisal Institution and Its Branches

Article 35

If there is alternation in an asset appraisal institution or of any of its branches covering the name, the business office, chief partner or legal representative, partner or shareholder, or person-in-charge of a branch, the archival formalities shall be undergone in the provincial public finance department within 20 days as of the day that a resolution is made on the modification, and a copy of the modification resolution shall simultaneously be sent to the asset appraisal society at the same level.

Article 36

If the asset appraisal qualification certificate of an asset appraisal institution is lost or damaged, the asset appraisal institution may submit an application to the original issuing organ for a new one or a replacement.

Article 37

If an asset appraisal institution or its branch, during its existence period, fails to meet the establishment conditions as prescribed in the present Measures, it shall, within 10 working days as of the day that the aforesaid circumstance occurs, submit a report in a written form to the original examination and approval organ and shall meet the relevant requirements within 90 days.

If the asset appraisal institution or its branch fails to meet the prescribed conditions within 90 days, the asset appraisal qualifications or the approval of the establishment of the branch may be withdrawn by the provincial public finance department.

Article 38

If an asset appraisal institution obtains the asset appraisal qualification or sets up a branch by cheating, bribery or other illegal means, its asset appraisal qualification or its branch shall be revoked by the provincial public finance department.

Article 39

The provincial public finance department shall cancel the asset appraisal qualification under any of the circumstances as follows:

(1)

The asset appraisal institution comes to its termination in the light of the law;

(2)

The asset appraisal qualification is revoked or withdrawn, or the asset appraisal qualification certificate is revoked in accordance with law; or

(3)

Other circumstances prescribed in the laws and regulations under which the asset appraisal qualification shall be cancelled.

Article 40

The provincial public finance department shall cancel a branch under any of the circumstances as follows:

(1)

The asset appraisal institution decides to revoke its branch;

(2)

The asset appraisal qualification of the asset appraisal institution is revoked;

(3)

The approval of the establishment of the branch is revoked or withdrawn by the provincial public finance department; or

(4)

Other circumstances prescribed in the laws and regulations under which the branch shall be deregistered.

Article 41

When going through the formalities for the deregistration of an asset appraisal institution or its branch, the asset appraisal institution shall hand back the CAAC, submit a plan to take care of the appraisal business archives and the safe-keeping of the appraisal business archives.

Article 42

If the provincial public finance department goes through the formalities for the deregistration of an asset appraisal institution or its branch, it shall inform the asset appraisal society at the same level and make an announcement of the relevant information to the general public.

Article 43

The provincial public finance department of the place where a branch is located shall inform the provincial public finance department of the place where the asset appraisal institution that set up the branch is located in a timely manner, as well as the asset appraisal society at the same level of the detailed alternation or termination information of the branch

The provincial public finance department shall inform the Ministry of Finance and China Appraisal Society of the alternation and termination of the asset appraisal institutions (including their branches) under its jurisdiction in a timely manner.

Chapter V Supplementary Provisions

Article 44

Where it is actually difficult to meet the requirements prescribed in the present Measures when setting up an asset appraisal institution in minority nationality areas or economically less developed areas, the relevant requirements may be properly relaxed, but the specific requirements shall be separately formulated.

Article 45

If, upon the approval of the people's government of a province, autonomous region or municipality directly under the Central Government, the functions of examination and approval as well as supervision of the asset appraisal institution are carried out by any other department or institution, such department or institution shall strictly implement all the provisions of the present Measures.

Article 46

Of the asset appraisal institutions and their branches set up prior to the implementation of the present Measures, those incompletely meet the conditions as prescribed in the present Measures shall meet the aforesaid conditions before June 30, 2008.

Besides the provision as mentioned in the preceding paragraph, where any asset appraisal institution or its branch which was set up prior to the implementation of the present Measures alters any of its registration items, the registration items after alternation shall meet the requirements of the present Measures.

Article 47

The present Measures shall go into effect as of June 1, 2005. The Interim Measures for the Administration of Asset Appraisal Institutions ([1999] No.118) promulgated by the Ministry of Finance on March 25, 1999 and the Circular about the "Interim Measures for the Intermediary Institutions' Establishment of Asset Appraisal Institutions and Asset Appraisal Institutions' Establishment of Branches" ([1999] No. 564) promulgated by the Ministry of Finance on November 24, 1999 shall be abolished at the same time.