Laws of the Shanghai Province

Article 1 (Purpose and Basis)

With the purpose of strengthening the use, supervision and administration of the funds for compensation for the demolition, relocation and resettlement, safeguarding the legitimate rights and interests of the parties concerned in the demolition and relocation, ensuring the accomplishment of the work of demolition and relocation and the handing over of the land for China 2010 Shanghai World Expo as scheduled before the end of the year 2006, these "Provisions" are formulated in accordance with the "Regulations on the Administration of the Demolition and Relocation of Urban Houses" , the "Detailed Implementation Rules of Shanghai Municipality on the Administration of the Demolition and Relocation of Urban Houses" , the "Procedures of Shanghai Municipality on Land Reserve" and the relevant provisions of the State and this Municipality.

Article 2 (Scope of Application)

These Provisions apply to the demolishers and relocators in the coverage of the red line of the World Expo planning and the enterprises and institutions whose houses are to be demolished and relocated (hereinafter referred to as "the parties of the houses to be demolished and relocated" ).

Article 3 (Principle of the Use of the Funds for the Compensation for the Demolition, Relocation and Resettlement)

The use of the funds for the compensation for the demolition, relocation and resettlement shall follow the principle of earmarking the money for special purpose, safeguarding stability and ensuring the demolition and relocation and handing over of land in time.

The "earmarking the money for special purpose" mentioned in this Article means that the parties of the houses to be demolished and relocated must, prior to the completion of the demolition and relocation and handing over of land, give the priority of the funds for the compensation for the demolition, relocation and resettlement to the resettlement of employees and discharge of other rights of land and houses, etc. After the parties of the houses to be demolished and relocated have completed the demolition and relocation and handing over of land, the remainder of the funds for the compensation for the demolition, relocation and resettlement shall not be bound to the restrictions of being earmarked money for special purpose set in these Provisions.

Article 4 (Agreement on Demolition and Relocation)

The demolishers and relocators and the parties of the houses to be demolished and relocated shall, in accordance with the related provisions of the State and this Municipality, sign the agreement on demolition and relocation to ensure the normalized use of the funds for the compensation for the demolition, relocation and resettlement. Such agreement shall cover the following contents:

1. The parties of the houses to be demolished and relocated perform the obligation of the demolition and relocation and the handing over of land as agreed upon; the demolishers and relocators pay the advance money as agreed upon, and in the light of the schedule for the parties of the houses to be demolished and relocated to relocate and hand over the land, pay other items of compensation money;

2. The parties of the houses to be demolished and relocated set up a special account for the funds for the compensation for the demolition, relocation and resettlement, and use the money specifically for demolition and relocation and resettlement;

3.The demolishers and relocators are entitled to supervise the use of the earmarked funds by the parties of the houses to be demolished and relocated, and the parties of the houses to be demolished and relocated file the vouchers related to the main use of the funds for the compensation for the demolition, relocation and resettlement to the demolishers and relocators for the record;

4. Where the parties of the houses to be demolished and relocated violate the agreement governing earmarking money for special use, the demolishers and relocators are entitled to refuse the payment of the unpaid remainder till the parties of the houses to be demolished and relocated rectify their improper use of money, but the parties of the houses to be demolished and relocated must still perform their obligation to relocate and hand over the land as agreed upon.

Article 5 (Compensation for the Demolition and Relocation and Resettlement of the Mortgaged Property)

In the case of the demolition and relocation of the mortgaged houses, the mortgagor and mortgagee shall, in accordance with the provisions of the "Procedures of Shanghai Municipality on the Mortgage of Real Estate" , conduct consultation on how to deal with the mortgage and the claim it guarantees, to ensure the discharge of other rights of land and houses, and only after they provide the demolishers and relocators with related written agreement can the parties of the houses to be demolished and relocated obtain the funds for the compensation for the demolition, relocation and resettlement.

Where no agreement can be reached between the mortgagor and the mortgagee, the demolishers and relocators shall give compensation in currency to the parties of the houses to be demolished and relocated and go through the formalities of tender of the funds for the compensation for the demolition, relocation and resettlement with the notary organs.

This Municipality' s real estate registration agencies shall provide the demolishers and relocators in time with the consultation of the materials related to the mortgage and guarantee of the real estate of the enterprises and institutions in the site of the Shanghai World Expo. The Shanghai Municipal Finance Service Office shall give necessary coordination and support in time to the handling of related obligatory right.

Article 6 (Compensation for the Demolition, Relocation and Resettlement of the Sealed-up Real Estate)

The demolishers and relocators and the parties of the houses to be demolished and relocated shall actively cooperate with the court and the related creditors to go through the formalities of releasing the sealing up of the real estate that has been sealed up by court in the limits of the red line of the World Expo planning. Where the funds for the compensation for the demolition, relocation and resettlement discharges other rights of land and houses in the form tender, etc., priority shall be given to the expense for resettling the personnel.

Article 7 (Compensation for the Demolition, Relocation and Resettlement of the Real Estate Whose Ownership Is in Dispute)

In time of demolishing and relocating the houses whose ownership is not clear, the demolishers and relocators shall put forward the scheme for compensation and resettlement, make record of survey for the houses to be demolished and relocated, go through the formalities of tender of the compensation money and preservation of evidences with the notary organ, and perform demolition and relocation after submitting a report to the district/county houses and land bureaus for examination and approval and obtaining their approval therefor.

Article 8 (Compensation for the Demolition, Relocation and Resettlement of Insolvent Enterprises)

The insolvent State-owned enterprises (the parties of the houses to be demolished) shall be given priority to be incorporated into this Municipality' s enterprise bankruptcy plan to begin bankruptcy procedure and obtain compensation for the demolition, relocation and resettlement according to law.

The demolishers and relocators shall sign a agreement of demolition and relocation with the parties of the houses to be demolished and relocated and the State-holder companies of the rest of the aforesaid enterprises that are not incorporated into bankruptcy plan, the State-holder companies of the rest of the aforesaid enterprises that are not incorporated into bankruptcy plan use the funds for compensation for the demolition, relocation and resettlement in an overall manner, close down, stop the business of, merge or transform the enterprises in time, and are responsible for resettling employees and deal with liabilities.

The relevant municipal competent administrative departments shall, according to their respective functions and duties, provide policy support for the resettlement of the employees, split-flow of employees and the dealing with related debts of the aforesaid enterprises.

Article 9 (Supervision and Administration of the Funds for the Compensation for the Demolition, Relocation and Resettlement)

The representatives of the State-owned funds providers of the enterprises (the parties of the houses to be demolished) and the superior State-owned assets administrative departments are responsible for supervising and administrating the use of the funds for compensation for the demolition, relocation and resettlement.

The Shanghai Municipal Houses, Land and Resources Administration and the district/county houses and land departments shall strengthen the use of the funds for the compensation for demolition, relocation and resettlement, and the banks providing the certificate for the deposit of the funds for compensation for the demolition, relocation and resettlement shall furnish assistance in supervision.

Article 10 (Auditing and Inspection of the Funds for Compensation for the Demolition, Relocation and Resettlement)

Special auditing and inspection shall be implemented for the funds for the compensation for the demolition, relocation and resettlement. The parties concerned in demolition and relocation shall, in accordance with the agreement on demolition and relocation, draw up the fund-use plan, and strictly observe the fund-use procedure. The related departments of supervision and administration shall strengthen supervision and inspection to ensure the money is used for the special purpose. The municipal and district auditing departments shall, in accordance with related regulations, audit, supervise and inspect the use of the funds for the compensation for demolition, relocation and resettlement.

Article 11(Supplementary Provisions)

The use of the funds for the bases of the relocation and rebuilding of the enterprises and institutions related to Shanghai World Expo shall be implemented in the light of these "Provisions" .

These "Provisions" shall become effective on October 1, 2004.