Laws of the People's Republic of China

Reply of the Supreme People's Court on Whether or Not Shall the People's Court Accept the Disputes Concerning the Agreement on the Transfer of Policy Financial Assets between Financial Asset Management Companies and State-owned Commercial Banks

Min Er Ta Zi [2004] No. 25 February 4, 2004

The higher People's Court of Hubei Province,

We have received your Request for Instructions on the Law Application to the Appeal of Disputes Concerning the Credit Transfer Contract between Hankou Sub-branch Wuhan City of the Agricultural Bank of China and Wuhan Office of China Great Wall Asset Management Company (E Gao Fa [2004] No. 378). Upon deliberation, we hereby render our reply as follows:

The takeover of non-performing assets of state-owned commercial banks by the financial asset management company is done according to the related state policies, and is of the nature of the appropriation of sate-owned assets in light of the instructions of the government. The people's court may not accept the cases concerning the dispute between financial asset management companies and state-owned commercial banks over the alienation of policy financial assets. We agree to the second opinion of the judicial committee of your court.