Regulations of Shenzhen Special Economic Zone

on Administration of Construction Supervision

(Adopted at the Second Meeting of the Standing Committee of the Second Shenzhen Municipal People' s Congress on September 15, 1995, and promulgated by Public Notice No. 13 of the Standing Committee of the Shenzhen Municipal People' s Congress)

Chapter I General Provisions

Article 1 In order to establish the supervision system of construction projects, normalize the professional activities of supervisory engineers, promote the scientific and professional administration on the construction project, and enhance the investment benefit and administration level of the construction projects, taking into account with the specific conditions of the Shenzhen Special Economic Zone (hereinafter referred to as the "Special Zone" ), these Regulations hereby are formulated.

Article 2 The term "construction supervision" (hereinafter referred to as "supervision" ) used in these Regulations means the supervision and management of the construction projects performed, according to the laws, statutes, regulations and the other legal binding documents of State concerning construction projects, by the supervisory engineers who are entrusted by the project-owner.

Article 3 The term "supervisory engineer firm" used in these Regulations means the social intermediary organization which are established according to law and entrusted by the project-owner to supervise and manage the construction projects.

The term "project-owner" used in these Regulations means the investor of construction project. If a construction project is financed by government, the construction unit is the project-owner of this construction project.

Article 4 The project contractors and the relevant units shall be subject to the supervision conducted by the supervisory engineer over their activities of constructing projects.

The term "project contractors" used in these Regulations means the unit for reconnaissance and design who contracts to reconnoiter and design a project and the contractor of construction who contracts to construct a project.

Article 5 With respect to such projects, in which the total amount of investment is more than three millions yuan, as newly built project, extension project and reconstruction project, the period of construction preparation, the period of construction and the period of guarantee shall be supervised according to these Regulations.

With respect to the construction projects other than those in the preceding paragraph and to the preliminary period and design period of the construction project in the preceding paragraph, whether the supervision shall be implemented shall be decided by project-owners.

Article 6 The administrative competent department for construction of the Shenzhen Municipal People' s Government (hereinafter referred as to the "Municipal Competent Department" ) is the supervision competent department, and the administrative competent departments for construction of the district people' s governments (hereinafter referred to as the "District Competent Departments" ) shall, under guidance of the Municipal Competent Department, be responsible for supervising and managing the supervision within their respective jurisdiction.

The major responsibilities of the Municipal Competent Department are the following:

(1) to carry out and implement laws, rules and regulations regarding construction supervision, to formulate the detailed administrative circulars on supervision and to make the arrangements for implementing the circulars.

(2) to examine and approve the application for establishing a supervisory engineers firm, and to check and issue the professional permit license;

(3) to be responsible for examining the qualification and managing the registration of the supervision organizations, which are outside the Special Zone or frontier, entering into the Special Zone for supervision business;

(4) to be responsible for the affairs of primary examination, submission and management on the aptitude grades of supervisory engineers firms;

(5) to be responsible for the affairs of primary examination, submission and management on the qualification of supervisory engineers;

(6) to examine and approve the application for registration made by the supervisory engineers and to check and issue the professional license.

(7) to harmonize the relationships among the supervisory engineer firms, the project-owners and the parties who are joining the construction project, and to implement the supervision and management activities of the project construction thereof;

(8) to supervise, manage and direct the task both of the supervisory engineer firms and the Supervisory Engineers Association of Shenzhen Municipality (hereinafter referred to as the Municipal Supervisory Engineers Association);

(9) to impose a sanction, according to these Regulations, for the behavior in violation of law;

(10) to perform other responsibilities provided by the Shenzhen Municipal People' s Government.

Article 7 Supervisory engineer firms and supervisory engineers must comply with the laws and rules, comply with the professional disciplines and moral rules, and scrupulously abide by the principle of science, fairness and bona fides;

The professional activities made by the supervisory engineer firms and the supervisory engineers according to law shall be protected by law.

Chapter II Contents of Supervision

Article 8 Supervision may be divided into the supervision in construction preliminary period, the supervision in design period, the supervision in construction preparation period, the supervision in construction period and the supervision in guarantee period.

Article 9 Contents of the supervision in construction preliminary period :

(1) to give advice on the strategic decision of investment project;

(2) to do researches on the feasibility of construction project;

to draw up the design instrument;

Article 10 Contents of the supervision in the design period:

(1)to assist the project-owner in proposing the design requirements, and to participate in the choice of design plan;

(2)to participate in choosing the units for reconnaissance and design, assist the project-owner in concluding the contract of reconnaissance and design, and to supervise the implementation of the contract;

(3) to urge the design unit to make a norm design and a high-class design;

(4) to examine and check whether the design conforms to the main points of planning design and satisfies the functional requirements proposed by project-owners;

(5) to examine and check the reasonableness of the technical and economic target in the design program;

(6) to examine and check whether the design satisfies both the detailed requirements and the design standards provided by the State;

(7) to analyse the construction feasibility and economy of the design.

Article 11 Contents of the supervision in the construction preparation period

(1) to be entrusted by the project-owner to make an arrangement for inviting tenders and working out and dispatching the bid documents, to make an arrangement for evaluating and examining the tender documents, and to express the opinions on deciding tender; .

(2) to check and examine the budget of the working drawing;

(3) to assist the project-owner for concluding the contract concerning project.

Article 12 Contents of the supervision in the construction period

(1) to assist the project-owner and the contractor of construction to draw out the report of starting construction and to assist the project-owner to go through the formalities of starting construction;

(2) to affirm the subcontractor chose by the contractor of construction;

(3) to make an arrangement to jointly check up on the blue-prints for a project;

(4) to examine and check the program of organizational designation on construction, the program of technological on construction, the progress plan of construction and the ensuring system of construction quality and the ensuring system of construction safety, which are supposed by the contractor of construction;

(5) to urge the contractor of construction to perform strictly the contract on contracting construction and the technological standards and criterion on project of the State, check the performance and harmonize the relationship between the project-owner and the contractor of construction;

(6) to examine and check the quantity and quality of the materials, components, fittings and facilities supplied by the contractor of construction or the project-owner;

(7) to control the progress, quality and investment of project, urge the contractor of construction to fulfill the guaranty measures on construction safety and check the fulfillment.

(8) to make the arrangements to check, examine and accept the separate project and the covert project, and to sign and issue the project payment receipt.

(9) to be responsible for signing the certificate of construction site;

(10) to supervise the earmark of payment for pre-selling real estate, and to inform in writing the supervisory institution of transferring money to the transferor of real estate;

(11) to urge the contractor of construction to sort out the contractual documents and the archives concerning technique.

(12) to make the arrangements for the project-owner and the construction contractor to carry out the primary examination and acceptance of the completed project;

(13) to make an application report for the examination and acceptance of the completed project;

(14) to participate in examination and acceptance of the completed project and to examine the settlement of accounts on the project.

Article 13 The major contents of the supervision in the guarantee period include taking a responsibility for checking of construction situation, participating in the identification of quality responsibility, urging the contractor of construction to pay a return visit, and supervising the guarantee work till the quality standards have been reached.

Chapter III Supervisory Engineers

Article 14 "Supervisory engineers" in these Regulations mean those professionals who are holding the professional license of supervisory engineer and entrusted by the project-owner to engage in supervising construction project.

Those persons who fail to register shall be prohibited to engage in the business of supervising construction project in the name of supervisory engineer.

Article 15 Supervisory engineers who are to be engaged in professional activities must join the supervisory engineers firm.

Article 16 Applicants who apply for being engaged in the profession of supervisory engineer shall submit the following materials to the Municipal Supervisory Engineers Association:

(1) the individual application report;

(2) the certificate of supervisory engineer qualification;

(3) the certificate of that the term of engaging supervision work full-time is more than two years;

(4) the employment contract concluded by the supervisory engineer firm and the applicant or the certificate of moving work;

(5) the recommendations written by two supervisory engineers;

(6) the catalogue of major supervisory projects which have been participated in before;

(7) the residential identification.

Article 17 The Municipal Supervisory Engineers Association shall propose its views of check and examination within 20 days after receipt of applicant' s application for registration and shall submit the application to the competent department for examination and approval.

The Municipal Competent Department shall, within 30 days after receipt of the views on check and examination and the application materials, decide whether the application shall be approved or not. Where the application is approved, the applicant shall be issued a professional license; where the application is not approved, the applicant shall be informed within 15 days of making such a decision and the reasons shall be instructed in writing.

Article 18 For an applicant who falls into any one of the following circumstances, the Municipal Competent Department shall not register; where the applicant has been registered, the registration shall be canceled and the professional license shall be withdrawn.

(1) Having no or limited civil capacity;

(2) Having been sentenced to a set term of imprisonment or more severe punishment and released after the expiration of imprisonment for not more than 3 years, with the exception of unpremeditated crime;

(3) Being given disciplinary penalty, or a dismissal or more severe disciplinary sanction within 3 years on economic behaviors of violation of laws;

(4) Having received a penalty of canceling the supervisory engineer' s professional license within last 5 years;

(5) Disabled acquittal capacity;

(6) Having provided false registration and application material;

(7) Other situations under which the registration shall not be allowed or shall be canceled.

The persons who are deregistered may reapply for registration, but they must be subject to the relevant provisions in these Regulations.

Article 19 The Municipal Competent Department shall put the supervisory engineers under an annual examination each year. The supervisory engineers may continue to be engaged in profession only by passing the annual examination.

Article 20 The supervisory engineer shall apply to the Municipal Supervisory Engineers Association for registration within one month after receipt of the professional license.

The Municipal Supervisory Engineers Association shall set up a supervisory engineers list and shall submit it to the Municipal Competent Department for file.

The Municipal Supervisory Engineers Association shall publish the supervisory engineers list each year on the paper and journal which are specified by the Municipal Competent Department.

Article 21 The supervisory engineer shall not alter, let, loan, transfer or sell his professional license, and shall not hold his post simultaneously in two or more supervisory engineer firms.

Chapter V Supervisory Engineer Firm

Article 22 The supervisory engineer firm is a professional institution of supervisory engineer in which the forms of structure are divided into the corporation supervisory engineer firm, the partnership supervisory engineer firm and the individual supervisory engineer firm.

Article 23 The following conditions shall be met for establishing a corporation supervisory engineer firm:

(1) there are more than ten full-time professional members who possess the supervisory engineer qualification, and among them there are at least 5 members who hold the professional license of supervisory engineer.

(2) the responsible person and the person in chare of technology must have credentials of senior engineer or senior architect, hold the professional license of supervisory engineer and have Shenzhen domiciliary registration;

(3) the full-time members engaging in supervision shall be arranged properly according to their professions, among them at least there are three senior engineers, one senior architect and one senior economist;

(4) the amount of registered capital shall be more than two millions yuan;

(5) there are fixed office place and necessary facilities;

The corporation supervisory engineer firm shall be liable for its debts with all of its assets.

Article 24 The following conditions shall be met for establishing a partner supervisory engineer firm:

(1) there are more than three partners and among them at least two partners have Shenzhen domiciliary registrations;

(2) the partners must hold the professional license of supervisory engineer, have been engaged in full-time supervision profession more than 5 years during which the period of being engaged in supervisory profession for construction in Shenzhen municipality shall be more than 2 years, and have not evil professional records.

(3) among the partners there are at least two ones who have credentials of senior engineer or senior architect;

(4) there are more than ten full-time professional members who possess the supervisory engineer qualification. Those members shall be arranged properly according to their professions, among them there are at least three senior engineers, one senior architect and one senior economist;

(5) the amount of registered capital shall be more than one million yuan;

(6) there are fixed office place and necessary facilities.

The partners shall bear joint liability for the debts of the partner supervisory engineer firm.

Article 25 The applicant shall meet the following conditions for establishing an individual supervisory engineer firm:

(1) having the Shenzhen domiciliary registration;

(2) holding the professional license of supervisory engineer, having been engaged in full-time supervisory profession for construction more than 10 years during which the period of being engaged in supervisory profession for construction in Shenzhen municipality is more than 5 years, and having not evil professional records;

(3) possessing credential of senior engineer or senior architect;

(4) having the amount of registered capital that is more than 100 millions yuan;

(5) having fixed office place and necessary facilities;

(6) engaging more than ten full-time profession members who have supervisory engineer qualification, arranging those members properly according their professions, among them there are at least three senior engineers, one senior architect and one senior economist.

The name of individual supervisory engineer firm shall be marked the name of the applicant. The applicant shall bear unlimited liability for the debts of the individual supervisory engineer firm.

Article 26 Applying for establishing a supervisory engineer firm, besides that the conditions provided in Article 23, Article 24 or Article 25 shall be met, an applicant shall submit the following documents to the Municipal Competent Department:

(1) the application for establishment;

(2) the personnel list, resumes, certificates of supervisory engineer qualification and professional license of supervisory engineer of the members being engaged in supervisory profession;

(3) the residential identifications of the members being engaged in supervisory profession;

(4) the Articles of supervisory engineer firm.

Article 27 The Municipal Competent Department shall, within 45 days after receipt of the application for setting up a supervisory engineer firm, decide whether the application should be approved. Where the application is approved, the professional license of supervisory engineer firm shall be issued; where the application is not approved, the applicant shall be informed within 15 days of making such a decision and the reasons shall be instructed in writing.

The applicant shall apply to the Municipal Supervisory Engineers Association for registration after receiving a professional license of supervisory engineer firm. The applicant may be engaged in profession only by being registered.

Article 28 The annual examination system on the professional limit license of supervisory engineer firm shall be implemented. The supervisory engineer firm can continue to be engaged in profession only the annual examination is passed.

Article 29 If the supervisory engineer firm losses its conditions for establishment because of different causes after it has been set up, the Municipal Competent Department shall order it to suspend its operation; if it could not reach the conditions provided within 60 days of delaying the time limit, it shall be revoked.

Article 30 The establishment of a branch under the supervisory engineer firm shall be subject to the approval by the Municipal Competent Department.

Article 31 Where the supervisory engineer firm outside Shenzhen Municipality enters into the Special Zone to be engaged in supervisory profession, it could accept supervision business, only it apply to the Municipal Competent Department, obtain the professional permit license and register with the Municipal Supervisory Engineers Association.

The qualifications and procedures of examining and approving the supervisory engineer firm, which enters into Special Zone to be engaged in supervision business, outside Shenzhen Municipality, are promulgated separately by the Municipal Competent Department.

Article 32 The unit of construction project supervision outside frontier, which enters into the Special Zone to be engaged in the supervisory profession temporarily, shall be subject to the relevant provisions of State and to the approval by the Municipal Competent Department.

Article 33 The aptitude grade of the supervisory engineer firm shall not be temporarily checked and decided within 1 year after the firm receives the professional permit license, and during the period the firm shall be engaged in supervision profession within the scope of temporary supervision business having been checked and decided.

The supervisory engineer firm whose aptitude grade has not be checked and decided shall only be engaged in such supervision business as the general industrial and civil construction whose floors are less than 18 and span is less than 24 meters, the towering structures construction whose height is less than 50 meters, and other constructions in which the amount of investment is less than 10 millions yuan.

The supervisory engineer firm may apply to the Municipal Competent Department for the primary examination of aptitude grade after the expiration of one year from obtaining the professional permit license, and the Municipal Competent Department shall, after the primary examination is passed, submit the application to the administrative department for aptitude grade stipulated by State for re-examination and apply for checking and issuing the certificate of aptitude grade.

Article 34 The supervisory engineer firm must be engaged in their supervision business,

within their respective business scope after obtaining the certificate of aptitude grade, in accordance with the following provisions.

(1) The supervisory engineer firm with Grade A may accept various supervision businesses of construction projects;

(2) The supervisory engineer firm with Grade B may accept such supervision business as the general industrial and civil construction project whose floors are less than 35 and span is less than 36 meters, the towering structures project whose height is less than 150 meters and the constructive installation project which belongs to the other types of second grade or the other types below second grade regulated by the administration competent department for construction of State;

(3) The supervisory engineer firm with Grade B may accept such supervision business as the general industrial and civil construction project whose floors are less than 25 and span is less than 27 meters, the towering structures projects whose height is less than 100 meters and the constructive installation project which belongs to the other types of third grade regulated by the administration competent department for construction of State.

Article 35 The supervisory engineer firm may apply to the Municipal Competent Department for the primary examination of going up grade after expiration of one year from obtaining the certificate of aptitude grade, and the Municipal Competent Department shall submit the application, after the primary examination is passed, to the administration department stipulated by State for re-examination .

Article 36 The supervisory engineer firm shall not forge, alter, let, lend, transfer or sell the professional permit license and the certificate of aptitude grade.

Article 37 The supervisory engineer firm shall draw 5% from the business benefits as the risk funds.

The risk funds shall be specially used for compensating damages caused by the professional activities of the supervisory engineer firm.

Chapter Supervisory Engineers Association

Article 38 The Municipal Supervisory Engineers Association is a social group which is registered and set up according to law and carries out a professional management of the supervisory engineer and the supervisory engineer firm.

The Articles of the Municipal Supervisory Engineers Association shall be passed by the general memberships meeting and shall be submitted to the Municipal Competent Department for approval.

Article 39 The responsibilities of the Municipal Supervisory Engineers Association:

(1) to ensure that the supervisory engineer the supervision profession according to law, to preserve legal rights of the supervisory engineer and to report the views and demands of the supervisory engineer profession;

(2) to handle the registration and announcement of both the supervisory engineer and the supervisory engineer firm;

(3) to handle the primary examination of the application for being engaged in the profession of supervisory engineer;

(4) to draw up the rules and regulations on the profession of supervisory engineers

(5) to propose a penal views against supervisory engineer and supervisory engineer firm who violate law or rules;

(6) to make the arrangements for its memberships to carry out the research activities on the theory and practice of supervisory engineer, summarize and exchange the business experience, propagate the regulations on supervisory engineers and promote the development of supervision business;

(7) to make the professional training and the education of professional discipline and occupational morals among the supervisory engineers;

(8) to mediate the disputes between supervisory engineer firm and project-owner;

(9) to develop the relationship with the craft brother of construction supervision outside frontier .

Article 40 The memberships of the Municipal Supervisory Engineers Association are divided into group membership and individual membership.

The supervisory engineer firm registered in the Special Zone shall join the Municipal Engineers Association and become a group membership.

The supervisory engineer who is engaged in profession in a supervisory engineer firm of the Special Zone shall join the Municipal Engineers Association and become an individual membership.

Article 41 The Municipal Engineers Association set up a disciplinary committee which is responsible for proposing the discipline views against the activities of supervisory engineer and supervisory engineer firm in violation of laws, rules, occupational morals and professional disciplines and for submitting the discipline views to the Municipal Competent Department for examination and approval. The disciplinary committee consists of 7 to 9 people who are the member of Municipal Supervisory Engineers Association, the member of Municipal Competent Department, the supervisory engineer and the social well-known personages from.

Chapter VI Implementation of Supervision Business

Article 42 The project-owner may freely choose supervisory engineer firm, but with respect to the construction projects invested by government, administrative institutions through raising money oneself and State-owned enterprises, the supervisory engineer firm shall be chose by way of inviting bids.

The project-owner may entrust one supervisory engineer firm to undertake the supervision task in the various periods of the construction projects invested by them, and also may entrust more than two supervisory engineer firms to respectively undertake the supervision task in different periods.

Article 43 The supervision contract shall be concluded in writing between the project-owner and the supervisory engineer firm, stipulating explicitly the rights and obligations of both parties.

The supervision contract used shall be the standard text drawn up by the Municipal Competent Department.

The supervision contract shall be submitted to the Municipal Competent Department for file within 15 days after the date of it being formally concluded.

Article 44 The supervisory engineer firm shall not transfer its supervision business.

Article 45 The supervisory engineer firm shall not have a operating relationship or a subordination relationship with such persons as the project contractor, facilities manufacturer and materials supplier whose activities concern the project supervised by this supervisory engineer firm, and shall not be the investor or partner operator of such persons.

Article 46 The supervisory engineer firm shall not supervise the project which is financed by this supervisory engineer firm itself or by the investor investing in this supervisory engineer firm.

Article 47 The personnel of supervisory engineer firm shall not contract and operate the business of construction and the business of selling construction materials, and also shall not hold a post in the State organs, the contractor of construction, the facilities manufacturer and the materials supplier, etc.

Article 48 The supervisory engineer firm shall, based on the supervisory business undertaken by itself, set a supervisory institution for the project, which consists of general supervisory engineer or his representative, supervisor engineer and other supervisory personnel.

The supervisory institution for project implements a responsible system of the general supervisory engineer or of his representative.

The supervisory institution in charge of the supervision in the construction period shall be stationed in the project site, and its supervisory engineer accredited to the project site shall be one who is fit to the supervisory business in this period.

Article 49 Before supervision, the project-owner shall inform in writing the project contractor and the relevant units of the name of the supervisory engineer firm, the content of supervision, the name and authority of the general supervisory engineer or his representative, etc.

The general supervisory engineer or his representative shall also inform in writing the above relevant units of the names and the authority of the persons whom the supervisory institution for project consists of .

Article 50 In the process of supervision, any orders given by the project-owner to the project contactor and the relevant units shall be issued by the general engineer or his representative.

If the general supervisory engineer or his representative consider that the order given by the project-owner violates law, regulation, rules and provisions concerned, it has a power to reject a implementation of this order and to inform the project-owner in writing; if the project-owner disagrees with the above rejection, it may report to the municipal or district competent department for handling.

Article 51 In the process of supervision, the certificate that the project materials entered in a site are examined and accepted, the certificate that the handing over procedure is examined and accepted, the payment notice of project money, the notice of stopping working and the notice of restarting working shall issued by the chief supervisory engineer or his representative.

Article 52 The project contractor and relevant units shall, according to the requirements of supervisory engineers firm, supply such essential technological and economic materials as design materials, original construction records and test records, etc.

Article 53 The supervisory engineer firm shall strictly perform its supervision duties. The items, which shall be implemented according to the supervision contract but the supervisory engineer fail to introduce in advance and implement in time, shall be regarded as those which have been approved by the supervisory engineer.

If the supervisory engineer fails to perform his duties or commits a fault in his supervision work, which causes economic losses, the supervisory engineer firm shall bear the corresponding compensation liability; if a defect of project quality is caused therefrom, the provisions of the relevant laws and statutes shall be applied.

Article 54 If the supervision personnel fail to perform the duties or is not competent at a job, the project-owner has a right to require the supervisory engineer firm to replace the personnel.

Article 55 The chief supervisory engineer or his representative has no right to alter by oneself the contract concluded between the project-owner and the contractor or other relevant units; if altering contract is indeed necessary, he shall propose a suggestion to the project-owner in time and assist both parties to alter the contract.

Article 56 The project-owner and supervisory engineer firm may alter or rescind the supervisory contract where one of the following circumstances exists:

(1) the consensus is agreed by both parties and will not damage national interests and other' s legal rights and interests;

(2) the supervisory contract could not be implemented or wholly implemented due to irresistibility;

(3) it is unnecessary for implementing the supervisory contract because of one party' s breach of contract;

(4) the supervisory engineer firm is dissolved or losses its supervision qualification or the acts of the supervisory engineer firm and its personnel damage the project-owner' s interests;

(5) the project-owner compels the supervisory engineer firm and its personnel to implement the order in violation of law, regulation, rules or relevant provisions and disregards the exhortation and persuasion��

(6) the conditions for altering or rescinding the supervisory contract arises.

Both parties shall conclude the agreement in writing where they agree to alter or rescind the contract.

One party shall inform another party in writing where it requests alteration or rescission of the contract according to Items 2, 3, 4, 5 and 6 of Section 1 of this Article.

Article 57 Where one party suffers losses caused by alteration or rescission of contract, the other party in fault shall be responsible for compensation.

Article 58 The supervision fee for different supervisory periods shall be respectively accounted and collected in accordance with the certain proportions of the estimate investment or the budgetary estimate from designation, the budget from working drawing and the total cost from settling account of project.

The collecting standards of supervision fee are promulgated separately by the Municipal Competent Department in conjunction with the municipal administration competent department for prices.

Article 59 The supervision fee provided in the supervisory contract shall not be less than the lowest standard provided by the Municipal Competent Department.

The supervisory engineer firm shall not reduce its collection fee as a competitive means.

Chapter VII Supervision of the Construction Projects Financed by Foreign Investment, Sino-Foreign Join Venture and Foreign Loans

Article 60 As regards the construction projects in the Special Zone, invested independently by enterprises outside frontier, other economic organizations or individuals, if their supervision need to be entrusted to the supervisory institutions outside frontier, the supervision engineer firm inside frontier shall be invited to participate in the supervision and a cooperative supervision shall be conducted.

As regards the construction project financed by Sino-foreign joint venture, if the supervision engineer firm inside frontier is able to undertake the supervision profession, the supervision engineer firm shall be entrusted to supervise. If the supervision engineer firm is not able to undertake the supervision profession, the supervisory engineer firm outside frontier may be invited to conduct a cooperative supervision with the supervisory engineer firm inside frontier upon approval by the Municipal Competent Department.

As regards the construction project financed by foreign loans, the supervision shall be undertaken by the supervisory engineer firm inside frontier. If the lender requests the supervisory institution outside frontier to participate in the supervision, the supervision institution outside frontier shall conduct the supervision in cooperation with the supervisory engineer firm inside frontier.

Article 61 If the supervisory institution outside frontier conducts a cooperative supervision with the supervisory engineer firm inside frontier, it may be engaged in profession only by being guaranteed by the bank which has a business intercourse with it and obtaining the professional limit license by approval of the Municipal Competent Department.

Article 62 If the supervisory institution outside frontier applies for a professional permit license, it shall submit the following materials to the Municipal Competent Department:

(1) the certificate of registration issued by the government of the registration country (area);

(2) the certificate of aptitude grades on construction supervision issued by the country where the supervisory institution outside frontier is located;

(3) the certifying papers of professional technology level;

(4) the certifying papers in undertaking supervisory professions;

(5) the list of current assets and liabilities, and the credit certificate issued by the bank opening an account or by the other financial institutions;

(6) the letter of authorization, the name, the nationality, the resume and the technological credential instrument of the supervisory engineer who will be dispatched;

(7) the name and address of the guarantor bank, and the certifying document in agreeing to provide a surety.

If the above materials are written in foreign language, the applicant shall submit currently the Chinese translation. The Municipal Competent Department shall take Chinese translation as the test while examining and approving the application.

Article 63 For Sino-foreign cooperative supervision, the cooperative supervisory contract shall be concluded.

The cooperative supervisory contract shall include the following contents:

(1) the supervisory objects and contents ;

(2) the formal standards as basis of supervision;

(3) the rights and obligations of both parties;

(4) the allocation of supervision fees;

(5) the allocation of risk;

(6) the liability for breach of contract;

(7) the clause of dispute settlement.

Article 64 The Sino-foreign cooperative supervisory unit undertaking supervisory business in the Special Zone shall be subject to Chinese technological norms. If the foreign technological norms are indeed necessary to be applied due to special circumstances, they may be applied only upon the approval by the Municipal Competent Department.

Article 65 As regards construction projects financed by foreign investment, Sino-foreign join venture and foreign loans, the collection standards and payment methods on the supervision fee may be established by reference to international customs and may not be limited to the collection standards on supervision fee of the Special Zone.

Article 66 The construction projects in the Special Zone which are financed by enterprises, other economic organizations or individuals from Hong Kong, Macao and Taiwan areas shall be supervised according the provisions of this Chapter. If the supervisory institutions of the above areas are invited to conduct the supervision in cooperation with the supervisory engineer firm inside frontier, the provisions of this Chapter shall be referred to for implementation.

Chapter VIII Penalty Provisions

Article 67 If project-owners fail to entrust the supervisory engineer firm to be engaged in supervision over the construction which shall be supervised, in violation of Section 1, Article 5 of these Regulations, the certificate of construction permit and the certificate of starting construction project shall not be issued; where the construction project has been started, a order to stop project shall be made and a fine, 2% of the total construction cost of the project, shall be imposed in addition. The economic losses caused therefrom shall be bore by the project-owners.

Article 68 With respect to such activities as violating Section 2 of Article 14 and Article 15 of these Regulations, the Municipal Competent Department shall make an order to stop professional activity and stop registration for 3 years, impose a fine of not less than 5,000 yuan but not more than 10,000 yuan and confiscate the illegal income in addition.

Article 69 If a supervisory engineer alters, lets, lends, transfers or sells the professional license or works concurrently in two or more than two supervisory engineer firms, in violation of Article 21 of these Regulations, his professional license shall be suspended for not less than 6 months but not more than 1 year and a fine of not less than 5,000 yuan but not more than 10,000 yuan shall be imposed in addition by the Municipal Competent Department.

Article 70 With respect to such activities as accepting supervisory business without authorization in violation of Section 2 of Article 27, Section 1 of Article 31 and Article 32 of these Regulations, an order to stop the illegal operating activities shall be made, the illegal income shall be confiscated and a fine of not less than one time but not more than two times the amount of illegal income shall be imposed in addition by the Municipal Competent Department.

Article 71 With respect to such activities as continuing to be engaged in profession in violation of Article 29 of these Regulations, the illegal income shall be confiscated and a fine of not less than one time but not more than two times the amount of illegal income shall be imposed by the Municipal Competent Department.

Article 72 With respect to such activities as violating Article 30 of these Regulations, the Municipal Competent Department shall order the supervisory engineers firm to revoke its branch; if the case is serious, the Municipal Competent Department shall impose a fine of not less than 30,000 yuan but not more than 50,000 yuan and shall revoke its professional permit license in addition.

Article 73 With respect to such activities as accepting supervision business beyond the business scope in violation Section 1 and Section 2 of Article 33 and Article 34 of these Regulations, an order to stop supervision over the project shall be made, the professional permit license shall be suspended for not less than 2 months but not more than 6 months and a fine of not less than 30,000 yuan but not more than 50,000 yuan shall be imposed by the Municipal Competent Department; if the case is serious, the professional permit license shall be revoked.

Article 74 With respect to such activities as violating Article 36 of these Regulations, the illegal income shall be confiscated, and a fine of not less than 70,000 yuan but not more than 100,000 yuan shall be imposed and the professional permit license shall be suspended in addition by the Municipal Competent Department; if the case is serious, the professional permit license shall be revoked.

Article 75 With respect to such activities as violating Section 3 of Article 43 of these Regulations, a fine of not less than 5,000 yuan but not more than 10,000 yuan shall be imposed; if the case is serious, the professional permit license shall be suspended for not less than 2 months but not more than 6 months.

Article 76 With respect to such activities as violating Article 44, Article 45 and Article 46 of these Regulations, a warning or an order to suspend and rectify business shall be made and the illegal income shall be confiscated by the Municipal Competent Department, and the economic losses caused by suspending business shall be bore by the supervision engineer firm; if the case is serious, the professional permit license shall be revoked.

Article 77 With respect to such activities as violating Article 47 of these Regulations, a warning or an order to suspend and rectify business shall be made and a fine of not less than 5,000 yuan but not more than 10,000 yuan shall be imposed on the supervisor by the Municipal Competent Department; if the supervisor is a supervision engineer, his professional license shall be revoked.

Article 78 The supervision engineer firm, supervision engineer and other professional person ,who fail to perform their duty, bend the law for self-seeking or cause the accident and personal hurt or dead due to their fault, shall bear the corresponding compensation liability, and in addition with respect to the supervision engineer firm, a fine of not less than 70,000 yuan but not more than 100,000 yuan shall be imposed and the professional permit license shall be suspended for not less than 2 months but not more than 6 months by the Municipal Competent Department; if the case is serious, the professional permit license shall be revoked; with respect to the relevant supervision engineer, his professional license shall be suspended for not less than 2 months but not more than 6 months, and if the case is serious, his professional license may be revoked; if the case constitutes a crime, the criminal liability shall be bore according to law.

Article 79 If the working personnel of the Municipal Supervision Engineers Association violate the provisions of these Regulations, neglect their duty, abuse their power, bend the law for self-seeking or accept bribe, a disciplinary sanction shall be imposed by the Municipal Supervision Engineers Association; if the case constitutes a crime, the criminal liability shall be bore according to law.

Article 80 The working personnel of the Municipal Competent Department who violate the provisions of these Regulations, neglect their duty, abuse their power, bend the law for self-seeking or accept bribe shall be prosecuted administration liability by the municipal administration supervisory department; if the case constitutes a crime, shall be bore criminal liability according to law.

Article 81 The party who refuses to obey the punishment decision made by the Municipal Competent Department shall apply to the administrative reconsideration organ of the Shenzhen Municipal People' s Government for reconsideration within 15 days after the day of receiving the punishment decision; the party who refuses to obey the decision reached after reconsideration may file a suit in the people' s court within 15 days after the day of receiving the decision of reconsideration.

If the party fails to file a suit or apply for reconsideration and refuses to carry out the punishment decision within the prescribed time limit, the organ making the punishment decision is responsible for applying to the people' s court for enforcement.

Chapter�� Supplementary Provisions

Article 82 The supervisory units established in the Special Zone before implementation of these Regulations shall be reorganized according to these Regulations and shall complete the reorganization before December 31, 1996.

The detailed circulars on reorganization are promulgated separately by the Shenzhen Municipal People' s Government.

Article 83 The Shenzhen Municipal People' s Government may promulgate the implementation rules according to these Regulations.

Article 84 These Regulations shall become effective on January 1, 1996.

If the relevant provisions, adopted in the Special Zone before these Regulations become effective, conflict with these Regulations, they shall be subject to these Regulations.

Laws of the Guangdong Province