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Laws of the People's Republic of China |
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| Category | BANKING | Organ of Promulgation | The State Council | Status of Effect | In Force |
| Date of Promulgation | 1998-07-13 | Effective Date | 1998-07-13 |
|
Measures for the Banning of Illegal Financial Institutions and Illegal Financial Business Operations |
|---|
Article 1 These Measures are formulated for the purposes of banning
illegal financial institutions and illegal financial business operations,
maintaining financial order and protecting public interest of society.
Article 2 All illegal financial institutions and illegal financial
business operations must be banned.
Article 3 The illegal financial instituions referred to in these
Measures mean those institutions established on their own without the
approval of the People's Bank of China for engaging in or mainly engaging
in such financial business operations as attraction of deposits, granting
of loans, handling of settlements, note discount, call loans, trust
investment, financial leasing, financing guaranty and foreign exchange
buying and selling.
The preparatory organization of an illegal financial institution
shall be construed as an illegal financial institution.
Article 4 The illegal financial business operations referred to in
these Measures mean the engagement on their own without the approval of the People's Bank of China in the following operations:
(1)illegal attraction of public deposits or attraction in disguised
forms of public deposits;
(2)illegal fund-raising from non-specified objects of society in
any name without approval in accordance with law;
(3)illegal granting of loans, handling of settlements, note discount,
fund calling, trust investment, financial leasing, fund accomodation
guaranty and foreign exchange buying and selling; and
(4)other illegal financial business operations determined by the
People's Bank of China.
Illegal attraction of public deposits referred to in the preceding
paragraph means operations without the approval of the People's Bank of China of attraction of funds from non-specified objects of
society,
issuance of vouchers and commitment to pay the principal and interest
within a specified time period; attraction of public deposits in disguised
forms referred to means operations without the approval of the People's
Bank of China of attraction of funds from non-soecified objects of society
not in the name of attraction of public deposits however with the
commitment to the fulfilment of obligations identical in nature to
those of attraction of public deposits.
Article 5 No unit or individual shall, without the approval of the
People's Bank of China in accordance with law, establish on its/his/her own
a financial institution or engage on its/his/her own in financial business
operations.
Organs of industry and commerce administration shall not process the
registration of illegal financial institutions and illegal financial business
operations.
Financial institutions shall not open accounts, handle settlements
and provide loans for illegal financial institutions and illegal financial
business operations.
Article 6 Illegal financial institutions and illegal financial business
operations shall be banned by the People's Bank of China.
Local people's governments of the localities wherein the illegal
financial institutions have been established or wherein illegal financial
business operations have taken place shall be responsible for the work
related to organization, coordination, supervision and banning.
Article 7 No unit or individual shall interfere with, reject and
obstruct the banning by the People's Bank of China in accordance with
law of illegal financial institutions and illegal financial business
operations.
Article 8 Functionaries of the People's Bank of China should, in Article 9 The People's Bank of China should, upon uncovering, Article 10 The People's Bank of China and public security organ should Article 11 The public security organ shall take compulsory measures Article 12 The People's Bank of China shall, upon determination through Article 13 The People's Bank of China should, upon uncovering of a The organ of industry and commerce administration should, upon Article 14 During the investigation conducted by the People's Bank of China on an illegal financial institution and illegal financial
business Article 15 The People's Bank of China may, during investigation on The People's Bank of China may, under circumstances that the evidences Article 16 The institution engaging in illegal financial business Article 17 For an illegal financial institution that has the approval Article 18 The participant(s) shall bear by himself/herself(themselves) Article 19 The debts and risks formed by illegal financial business Article 20 Any remaining illegal property(properties) after the Article 21 Dispute(s) arising from consolidation and settlement Article 22 Criminal liability shall be investigated in accordance Article 23 For the approval without authorization of the establishment Article 24 Any financial institution that opens an account, handles Article 25 Whoever refuses or obstructs the People's Bank of China Article 26 Any functionary of the People's Bank of China who divulges Article 27 Functionaries of the People's Bank of China, public security Any functionary of the People's Bank of China who should have transferred Article 28 Reference shall be made to these Measures in banning illegal Reference shall be made to these Measures in banning illegal commercial Article 29 All kinds of foundations, mutual aid societies, savings Article 30 These Measures shall come into force as of the date of promulgation.
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the fulfilment of duties and responsibilities in banning illegal financial
institutions and illegal financial business operations, keep secrets
in accordance with law.
Chapter II Procedures for the Imposition of Ban
investigate and verify forthwith an illegal financial institution, illegal
attraction of public deposits or attraction of public deposits in disguised
forms as well as illegal fund-raising; and should, upon preliminary
determination, ask the public security organ in time to establish a case for
detection and investigation in accordance with law.
cooperate with each other in the process of investigation and detection of illegal financial institutions and illegal financial business
operations.
against the criminal suspect(s), funds and assets involved in the case of the illegal financial institution and illegal financial
business operations
to guard against the escape of criminal suspect(s) and transfer of funds
and assets.
investigation, take a decision on the banning of the illegal financial
institution and illegal financial business operations and declare the
said financial institution and financial business operations illegal,
order it to stop all business operations, and make a public announcement.
financial institution opening an account, handling settlements and providing
loans for an illegal financial institution or illegal financial business
operations, order the said financial institution to stop forthwith the
business operations concerned. No unit or individual shall take down the
funds concerned on its/his/her own.
uncovering, nullify the registration or effect a change in the registration
forthwith of the registration of the organ of industry and commerce
administration for the establishemnt of the illegal financial institution
or engagement in illegal financial business operations obtained through
deceit.
operations, the unit or individual under investigation must accept the
investigation conducted by the People's Bank of China in accordance with
law, report on the situation truthfully and provide relevant materials,
and must not refuse or conceal.
an illegal financial institution and illegal financial business operations,
employ such means as taking notes, copying and tape recording of the
information and materials related to the case to obtain evidences.
may be destroyed or lost or difficult to obtain later, enter into
registration and put it(them) in safekeeping beforehand, the interested
party and persons concerned shall not destroy or transfer the evidence(s).
Chapter III Consolidation and Settlement of Financial Claims and Debts
operations shall be responsible for the consolidation and settlement of the
financial clamis and debts formed as a result of illegal financial business
operations.
department, competent unit or founding unit, once declared banned by the
People's Bank of China, the approval department, competent unit or founding
unit shall be responsible for the organization of consolidation and
settlement of financial claims and debts; for an institution that has no
approval department, competent unit or founding unit, the local people's
government of the locality wherein it is located shall be responsible for
the organization of consolidation and settlement of financial claims and
debts.
the loss suffered as a result of participating in illegal financial business
operations.
operations shall not be passed onto state-owned banks and other financial
institutions as well as any other units that have not participated in
illegal financial business operations.
consolidation and settlement of financial claims and debts shall be
confisticated and delivered to the central treasury on the spot.
shall be resolved by the parties interested through consultation;
in the event of failure of consultation, resolution shall be sought
through judicial procedures.
Chapter IV Penalty Provisions
with law for the establishment of an illegal financial institution or
engagement in illegal financial business operations constituting a
crime; where a crime has not been constituted, the People's Bank of China shall confisticate its illegal gains and concurrently impose
a
fine of more than 100% less than five times of the amount of illegal
gains; where there are no illegal gains, a fine of more than RMB 100000
Yuan less than RMB 500000 Yuan shall be imposed.
of an illegal financial institution or the approval without authorization
of engagement in illegal financial business operations, the person-in-charge
held directly responsible and other personnel directly respsonsible shall
be imposed administrative sanctions in accordance with law; where a crime
has been constituted, criminal liability shall be investigated.
settlements and provides loans for illegal financial institutions or illegal
financial business operations in contravention of provisions, shall be
ordered by the People's Bank of China to make a rectification, confisticated
of the illegal gains, and concurrently imposed a fine of more than 100%
less than five times of the amount of the illegal gains; where there are
no illegal gains, a fine of more than RMB 100000 Yuan less than RMB 500000
Yuan shall be imposed; disciplinary sanctions shall be imposed on the
person-in-charge held directly responsible and other personnel directly
responsible; where a crime has been constituted, criminal liability shall
be investigated in accordance with law.
in the implementation of its functions constituting a crime shall be
investigated of criminal liability in accordance with law; where a crime
has not been constituted, penalty for public security administration
shall be imposed by the public security organ in accordance with law.
secrets in fulfilling responsibilities of banning the illegal financial
institution and illegal financial business operations shall be imposed
administrative sanctions in accordance with law; where a crime has been
constituted, criminal liability shall be investigated in accordance with
law.
organs and organs of industry and commerce administration whose neglect of
duty, abuse of power and malpractises for selfish gains constitute a crime
shall be investigated of criminal liability in accordance with law; where
a crime has not been constituted, administrative sanctions shall be imposed
in accordance with law.
the case of the illegal financial institution and illegal financial business
operations to the public security organ but has failed to do so constituting
a crime shall be investigated of criminal liability in accordance with law;
where a crime has not been constituted, administrative sanctions shall be
imposed in accordance with law.
Chapter V Supplementary Provisions
securities agencies and illegal securities business operations. China
Securitites Supervision and Control Commission shall be responsible for
the implementation thereof and may formulate specific measures for
implementation in accordance with the principles of these Measures.
insurance agencies and illegal commercial insurance business operations.
The department of commercial insurance supervision and control under the
State Council shall be responsible for the implementation thereof and may
formulate specific measures for implementation in accordance with the
principles of these Measures.
societies, capital service departments, share service departments, settlement
centers and investment corporations that engage in illegal financial business
operations exceeding the scope of the state policy prior to the coming into
effect of these Measures should be sorted out and consolidated within the
specified time period pursuant to the provisions of the State Council.
Any institution that continues to engage in illegal financial business
operations beyond the specified time period shall be banned pursuant to
these Measures; where the circumstances are serious and a crime has been
constituted, criminal liability shall be investigated in accordance with
law.
URL: http://www.asianlii.org/cn/legis/cen/laws/mftboifiaifbo869