Identifier
Created
Classification
Origin
07BEIJING3884
2007-06-08 07:48:00
CONFIDENTIAL
Embassy Beijing
Cable title:  

CHINA'S DRAFT CHARITY LAW

Tags:  PGOV PHUM KOLY ELAB CH 
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VZCZCXRO0902
PP RUEHC
DE RUEHBJ #3884/01 1590748
ZNY CCCCC ZZH
P 080748Z JUN 07 ZDK
FM AMEMBASSY BEIJING
TO RUEHC/SECSTATE WASHDC PRIORITY 8773
INFO RUEHOO/CHINA POSTS COLLECTIVE
RUEHC/DEPT OF LABOR WASHDC
RUEATRS/DEPT OF TREASURY WASHINGTON DC
RUCPDOC/DEPT OF COMMERCE WASHDC
RUEHGV/USMISSION GENEVA 1869
C O N F I D E N T I A L SECTION 01 OF 12 BEIJING 003884 

SIPDIS

SIPDIS

DEPT PASS USTR FOR KARESH, ROSENBERG, CELICO, STRATFORD
LABOR FOR ILAB-LI, SCHEOPFLE AND OSEC-OWEN, HUI
TREAS FOR OASIA/ISA-CUSHMAN
USDOC FOR 4420/ITA/MAC/MCQUEEN AND DAS KASOFF
GENEVA FOR CHAMBERLIN

E.O. 12958: DECL: 06/08/2027
TAGS: PGOV PHUM KOLY ELAB CH
SUBJECT: CHINA'S DRAFT CHARITY LAW

REF: A. A) BEIJING 3518


B. B) BEIJING 3532

Classified By: Acting Econmincouns Christopher Beede, reason 1.4(b/d)

C O N F I D E N T I A L SECTION 01 OF 12 BEIJING 003884

SIPDIS

SIPDIS

DEPT PASS USTR FOR KARESH, ROSENBERG, CELICO, STRATFORD
LABOR FOR ILAB-LI, SCHEOPFLE AND OSEC-OWEN, HUI
TREAS FOR OASIA/ISA-CUSHMAN
USDOC FOR 4420/ITA/MAC/MCQUEEN AND DAS KASOFF
GENEVA FOR CHAMBERLIN

E.O. 12958: DECL: 06/08/2027
TAGS: PGOV PHUM KOLY ELAB CH
SUBJECT: CHINA'S DRAFT CHARITY LAW

REF: A. A) BEIJING 3518


B. B) BEIJING 3532

Classified By: Acting Econmincouns Christopher Beede, reason 1.4(b/d)


1. (C) Summary: Embassy has obtained a copy of China's
draft "Charity Law" (para. 5). The Law would create a legal
means to register non-profit organizations in China for the
first time, but whether it will serve as a stimulus to the
development of Chinese civil society, or as a means for the
Chinese Government to restrict or control independent
organizations will depend on details yet to be decided. Some
American business representatives will participate in a June
12-14 Government symposium on the Law. Embassy will follow
up and report on further developments after that event. End
summary.


2. (C) Embassy has obtained from the American Chamber of
Commmerce in China (Amcham - strictly protect) a copy of
China's draft "Charity Law," described as a "manuscript
framework." The Charity Law would, for the first time,
create a means to legally register non-profit organizations
in China, allow them to engage in fund-raising activities,
and extend tax benefits to them and their donors. Currently,
charities, non-government organizations (NGOs) and other
non-profit organizations must either register under the
auspices of a supervisory body (e.g. a government agency or
university),or as commercial entities. In meetings with
Deputy Assistant Secretary of State Jeffrey Krilla in late
May, Chinese labor NGOs, and American businesses that work
with them separately repeated the oft-heard complaint that
the absence of a legal way to register non-profits seriously
stunts the development of civil society in China (refs).
NGOs said they have difficulty raising money, must pay tax on
their income, and operate in a legal gray area which puts
them in an uncertain position with respect to the Chinese
central and local governments.



3. (C) On June 12-14, the Chinese Government will hold a
closed symposium with relevant government agencies,
hand-picked academics and selected representatives from the
private sector, including several members of the Amcham
Corporate Social Responsibility Committee (although not in
their capacity as Amcham members). Symposium organizers told
Amcham that this will be the first time the government has
consulted with the private sector on the Charity Law. The
Canadian Government has provided some assistance to the
Chinese Ministry of Civil Affairs (MoCA) on the law, but
drafters told Amcham contacts that they specifically do not
want the United States Government to see the draft or
participate in the symposium. There are rumors that the
Chinese Government intends to promulgate the law prior to the
Summer 2008 Olympic Games. However, one Amcham member
familiar with the draft told Embassy this is unlikely, given
the high level of sensitivity about the draft within the
Chinese Government (government involvement extends far above
MoCA),and the fact that many of the most important details
have yet to be settled.


4. (C) The text of the draft law appears below in paragraph

5. The draft is very general, and it is not clear whether
details about issues such as what qualifies as charitable
activity, procedures for registration, permitted methods and
sources of fundraising, and government supervision will be
written into later drafts of the Law, or included in future
implementing regulations. Some NGOs are concerned that the
Law will result in less independence, giving the government
more direct supervision and control over their activities.
Embassy will report further on the evolution of the Charity
Law after the June 12-14 symposium.


5. (C) Following is the text of the draft Charity Law:

BEGIN TEXT.
CHARITY LAW
THE PEOPLE,S REPUBLIC OF CHINA
(Manuscript on the Draft,s Framework)
2006.9.15

- Chapter One General Principles

Article 1 Aims of Legislation


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This law is enacted to protect the legal rights of parties in
charge of charitable activities, enhance healthy development
of charitable business and promote charitable culture.

Article 2 Scope of applicability

This law is applicable for all charitable activities that are
conducted within the territory of the People,s Republic of
China.

Article 3 Definition of charitable activities

Charitable activities referred to in this law refer to
activities that are conducted voluntarily and without any
intention for personal gains and solely for the purposes of
charity by natural persons, legal persons or other
organizations and include the following:

(1) That helps to prevent and minimize the loss and impact of
any sudden unforeseen incidents;

(2) That helps to improve basic living and development
conditions of poor areas, social groups and individuals or
that provides spiritual support or legal assistance for those
social groups or individuals with special difficulties;

(3) That helps social groups or individuals to equitably
exercise the rights to enjoy achievements accomplished in
education, science, culture, hygiene, sports and social
welfare,s development;

(4) That promotes rural and urban development and protects
the environment;

(5) Any other charitable activities.

Under no circumstances shall any organization or individuals
carry out any activities that are profit making and unrelated
to charitable aims in the name of charity.

Article 4 Charitable assets

Assets and their added value provided by natural persons,
legal persons or other organizations for use by charitable
business are public assets that belong to society and may not
be illegally sized, misappropriated or damaged by any
organizations or individuals.

Article 5 Duties of the government

The State Council and local People,s Government at all
levels have the duties to foster and regulate the development
of charitable business and improve the environment for the
development of charitable business.

The Ministry of Civil Affairs (hereinafter referred to as
MoCA) of the State Council is responsible for the planning,
management, organization, coordination, guidance and
supervision of the development of charitable business.

The MoCA of local People,s Government above county level are
responsible for the planning, management, organization,
coordination, guidance and supervision of the development of
charitable business in their respective administrative
regions.

Relevant functional departments of the State Council and
local People,s Government at all levels should perform their
duties to promote and regulate the development of charitable
business.

- Chapter Two Charitable Organizations

Article 6 Definition

Charitable organizations referred to in this law refers to
non-profit organizations as established by law solely for the
purpose of conducting charitable activities stipulated under
Article 3 of this law.

Article 7 Forms

Charitable organizations can take the form of a foundation,

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social organization or privately-run non-enterprise unit.

Article 8 Voluntary application for approval

Charitable organizations can voluntarily apply to the
Ministry of Taxation or MoCA of the People,s Government
above county level for approval.

Approved charitable organizations shall enjoy relevant rights
and perform corresponding obligations.

Article 9 Requirements for approving an application

Charitable organizations applying for approval should comply
with the following requirements:

(1) Non-profit organization established by law;

(2) Complies with the charitable purposes and scope of
business provided by this law;

(3) Has in place an internal management structure as required
by Article 12 of this law;

(4) Qualifies to conduct charitable activities;

(5) Other qualifications required by laws, rules and
regulations.

Article 10 Materials and procedures for applying for approval

Charitable organizations applying for approval should submit
an application, materials on proof of establishment, bylaws
and other materials required by laws, rules and regulations.

The government agency in charge of approval shall proceed
with public display within seven days of receipt of all
application materials. The duration of public display is
fifteen days.

Article 11 Validity period of approval certificate

When a charitable organization revokes, terminates or
undergoes changes, the &Charitable Organization,s Approval
Certificate8 shall be invalidated simultaneously.

Article 12 Internal management of approved charitable
organizations

Approved charitable organizations shall adopt an operational
mechanism which practices collective decisions by the Board
of Directors, supervision by the Supervisory committee and
execution by full-time personnel. The Chairman of the Board
of Directors is the legal representative.

The number of personnel receiving remuneration among members
of the Board of Directors and Supervisory Committee of
approved charitable organizations shall not exceed one third
of the total number of their members.

Approved charitable organizations should provide members of
their Board of Directors and Supervisory Committee with the
necessary conditions to perform their duties.

Article 13 Bylaws of charitable organizations

The bylaws of charitable organizations should clearly define
the following:

(1) Name of the charitable organization, purposes and scope
of business;

(2) Qualifications, rights and obligations of its members;

(3) Top organizational structure, its creation and duties;

(4) Creation of the person responsible, his appointment and
dismissal procedure;

(5) Decision-making procedure and rules of procedure;

(6) Supervisory structure and its duties;


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(7) Winding up procedures and disposal of assets after
winding up;

(8) Procedures for the amendments of the bylaws;

(9) Other business required by the bylaws.

Article 14 Income of charitable organizations

Income of charitable organizations includes:

(1) Endowment fund from the founder;

(2) Membership fees;

(3) Donation and assistance from society;

(4) Government subsidies;

(5) Other legal income.

Article 15 Use of charitable organizations, income

Income of charitable organizations should be used on
activities and businesses that are compatible with their
purposes.

Except for the payment of staff,s salaries and benefits and
other necessary administrative expenditure, income of
charitable organizations shall not be shared out among
members of the charitable organization in any forms;

Charitable organizations should respect the wishes of
donor(s) when making use of income from donation.

Article 16 Financial management of charitable organizations

Charitable organizations should set up books of accounts in
accordance with the State,s accounting system, carry out
independent accounting audit and set up a healthy financial
management system.

Article 17 Administrative expenditure of charitable
organizations

Administrative expenditure of charitable organizations should
not exceed ten percent of their total annual expenditure.

Specific types of charitable organizations provided under
different laws and regulations should comply with those laws
and regulations.

Article 18 Remuneration of charitable organizations, paid
staff

Salaries and fringe benefits of charitable organizations,
paid staff should in general commensurate with the average
local standard.

Charitable organizations should enter into employment
contracts with their paid staff and to pay, on their behalf,
their social security insurance according to law to safeguard
their salaries and fringe benefits.

Salaries and fringe benefits of the paid staff of approved
charitable organizations shall be collectively decided by the
Board of Directors taking into consideration standards for
staff of similar level of job in compatible business units
and contribution by the staff himself.

Article 19 Public announcement of charitable organizations,
information

Charitable organizations should, on a regular basis, publicly
announce the following information:

(1) Lists of members of the Board of Directors, Supervisory
Committee and full-time staff:

(2) State and condition of charitable assets;

(3) State and condition on the collection and management of
the use of money and goods donated;

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(4) Annual work report, financial report and audit report;

(5) Information on major activities;

(6) Other information required by laws, regulations, rules
and bylaws.

Charitable organization should not reject enquiries on the
above information raised by natural persons, legal persons or
other social organizations.

Article 20 Staff,s avoidance

Internal management staff of charitable organizations, while
carrying out charitable activities, should avoid
circumstances where he has direct interests or other
relationship with the benefactor.

Article 21 Disposal of property upon winding up of charitable
organizations

Charitable organizations should carry out liquidation when
they are winding up. Property left after liquidation should
be used on charitable purpose according o their bylaws;
property that cannot be disposed of according to their bylaws
shall be donated by MoCA to charitable organizations with
purposes compatible to the said organizations and this should
be publicly announced to society.

Article 22 Supervision by management departments

MoCA, Ministry of Taxation and relevant management
departments shall supervise and manage the internal
governance, financial management and development of
activities etc. of charitable organizations according to law.

Article 23 Self regulation of the industry of charitable
organizations

Charitable organizations can voluntarily initiate, register
and establish an organization for the industry according to
law.

The organization for the industry of charitable organizations
can set up regulations and standards for it industry,
establish professional evaluation mechanism, protect the
legal rights of its member organizations, strengthen
self-regulation of the sector and enhance cooperation as well
as division of labour among its member organizations.

- Chapter Three Charity Fund-raising

Article 24 Charity fund-raising

Charity fund-raising referred to in this law refers to
fund-raising activities carried out publicly in society for
charitable purposes.

A &Charity Fund-raising Permit8 is required to conduct
charity fund-raising activities, except where otherwise
provided by law or administrative rules.

Article 25 Principals of charity fund-raising

Organizations approved under law or administrative rules may
conduct charitable fund-raising activities that are
compatible with their purposes and scope of business.

Approved charitable organizations, after having obtained the
permission, may conduct charitable fund-raising activities
that are compatible with their purposes and scope of business
at designated time and within the designated territory.

In the event of sudden unforeseen circumstances, MoCA of the
People,s Government above the county level can conduct
charitable fund-raising activities.

Article 26 Application for permissions.

Approved charitable organizations when conducting charitable
fund-raising, shall apply for permission from MoCA of the
People,s Government in the district where the said

BEIJING 00003884 006 OF 012


charitable fund-raising is proposed to be held. When
conducting charitable fund-raising activities that straddle
two or more administrative regions, they shall apply for
permission from MoCA of the People,s Government which is one
level higher than their common level.

The following materials shall be submitted when applying for
permission:

(1) Application for charitable fund-raising activities;

(2) Charitable Organization,s Approval Certificate;

(3) Activity plans on charity fund-raising;

(4) Description on the use of money, materials and goods
received by charity fund-raising activities;

(5) Other materials as required by rules and regulations.

When launching charity fund-raising activities such as
charity performance, charity competition, charity sale and
charity auction etc., an agreement on the use of the proposed
venue for the conduct of activities should be submitted with
the application for permission.

Article 27 Decisions on permissions

The government agency in charge of permission should, within
15 days upon receipt of all valid application materials, make
a decision whether permission will be granted. In cases
where application for permission of charity fund-raising are
made in view of natural disaster or other sudden unforeseen
incidents, the government agency in charge of permission
should, within 3 days upon receipt of all valid application
materials, make a decision whether permission will be granted.

&Charity Fund-raising Permit8 should be issued to
applicants who have been permitted to conduct charity
fund-raising activities. If the applications denied, the
applicant should be so notified in writing as to the reasons
for the decision.

Duration for conducting the charity fund-raising activities
shall be determined by the government agency in charge of
permission.

Article 28 Legal principles of charity fund-raising

Charity fund-raising should abide by laws and regulations, it
should not obstruct social public order, violate social
ethics, harm public interests nor citizen,s legal rights and
interests.

Article 29 Donors, rights and obligations

Natural persons, legal persons or other organizations have
the rights to refuse charity fund-raising that is mandatory
specified amount of contribution or other forms of specified
amount of contribution in disguise.

Natural persons, legal persons or other organizations can
report to MoCA or take up litigation at the People,s court
if they had found out that the charitable organization is not
making use of the assets they had donated according to their
wishes.

Any intention expressed by the natural persons, legal persons
or other organizations when donating legal assets is legally
binding and shall not be revoked except required by law.

Article 30 Principals of public supervision on charity
fund-raising

Charity fund-raising activities should be supervised by
society.

Fund raiser should publicly display to society the purpose,
method, procedures and the use of money and goods donated
after obtaining permission and prior to commencing
fund-raising activities.

Fund raiser should publicly display to society the state and

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circumstances of the fund-raising activities within 30 days
after the termination of the fund-raising activities.

Article 31 Charity performance, charity competition, charity
sale and charity auction

Except for necessary production expenditure, all income
raised from charitable fund-raising activities such as
charity performance, charity competition, charity sale and
charity auction etc. shall be transferred to the
beneficiaries after audit, notarization and public display.

Article 32 Donations in kind

Goods and materials donated by donors should have useable
value and complies with safety, hygiene and environmental
standards.

Relevant certificates should be provided for donation of
intangible assets such as intellectual property rights etc.

Article 33 Valuations of donations in kind

Professional valuation agencies should be used to conduct
valuations if the value of goods and materials donated has to
be assessed.

- Chapter Four Charitable Trust

Article 34 Definition of charitable trust

Charitable trust referred to in this law refers to public
trusts established for charitable purposes.

The State encourages the development of charitable trusts.

The State encourages the setting up of perpetual/surplus
charitable trust in civil, business trusts and other public
trusts and to utilize part of the income from these trusts on
charitable business.

Article 35 Special requirements on trustees

The setting up of charitable trusts and the appointment of
trustees should be approved by MoCA of the People,s
Government above county level.

No activities can be carried out in the name of charitable
trust without authorization.

Trustees of charitable trusts may not resign without the
agreement of the government agency in charge of the approval
of trusts.

Article 36 Supervisors of charitable trusts

Charitable trusts should set up supervisors of the charitable
trusts in their trust documents.

For trust documents that have not made provisions for a
supervisor of the charitable trust, this will be appointed by
the government agency in charge of the approval of trusts.

Article 37 Winding up of charitable trusts and disposal of
leftover assets

When a charitable trust is winding up, its trustees should
prepare a liquidation report on the affairs of the trust.
The report should be publicly displayed by the trustees after
having been approved by the supervisor of the trust and
submitted for ratification by the government agency in charge
of approval.

After the winding up of the charitable trust, the trustee,
with the agreement of the government agency in charge of
approval of trusts, shall transfer the property of the trust
for use by other charitable organizations with compatible
purposes or other charitable trusts.

Article 38 Legal applicability

This law is applicable for the commencement of charitable
trust activities. Trust Law and other relevant laws are

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applicable for provisions not covered in this law.

- Chapter 5 Charitable Volunteers

Article 39 Concept of charitable volunteers

Charitable volunteers refer to natural persons who, out of
sacrifice, mutual aid and social responsibilities, carry out
charitable business voluntarily and freely.

Article 40 Organizations of charitable volunteers

Organizations of charitable volunteers refer to charitable
organizations which are registered according to law and
specializing in the management and service activities of
charitable volunteers.

Article 41 Registration of charitable volunteers

Charitable volunteers can apply to a charitable volunteers,
organization or an approved charitable organization for
registration to become registered charitable volunteers if
they fulfill the following criteria:

(1) Over the age of 16;

(2) Voluntarily carry out charitable activities, and possess
the relevant skills;

(3) Possess local household registration or other valid
residency identification;

(4) Comply with other conditions stipulated by the charitable
volunteers, organization or charitable organization.

Article 42 Rights of registered charitable volunteers

Registered charitable volunteers shall enjoy the following
rights:

(1) To receive relevant education and training from the
charitable volunteers, organization or charitable
organization;

(2) Tor request the charitable volunteers, organization or
charitable organization to resolve actual difficulties and
problems encountered during charitable activities, and to
receive necessary protection for conducting charitable
activities;

(3) To bring forward proposals, make criticisms and supervise
the work of the charitable volunteers, organization or
charitable organization;

(4) To resign from the charitable volunteers, organization
or charitable organization where they are registered.

Article 43 Obligations of charitable volunteers

Charitable volunteers should abide by the rules of equality,
good will, sincerity and frugality and keep service
recipients, personal information confidential while
conducting charitable activities.

Charitable volunteers should not make use of charitable
activities for personal gains, conduct activities unrelated
to charitable purposes and conduct activities that violate
the service principles of charitable volunteers.

Article 44 Duties of organizations of charitable volunteers
or charitable organizations

Organizations of charitable volunteers or charitable
organizations can, accordingly to the needs of their
charitable service activities or for the implementation of
their charitable projects, recruit, train and make use of
charitable volunteers and be responsible for the following:

(1) Set up by laws and systems for charitable service
activities;

(2) Organize and develop charitable service activities and
provide necessary protective measures;

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(3) Set up records on charitable volunteers and their
charitable service activities;

(4) Carry out evaluation and commendation on charitable
volunteers according to accumulated services hours and
performance evaluations etc.

Article 45 Records on charitable volunteers

Organizations or charitable volunteers or approved charitable
organizations should produce true and reliable service
records on charitable volunteers based on information
contained on record.

Service records of registered charitable volunteers should
include basic information on the registered charitable
volunteers, charitable service projects, accumulated service
hours, service performance evaluations, assessments and
commendations etc.

Charitable organizations or other organizations or
individuals receiving charitable services should objectively
and fairly reflect the service quality of the volunteers to
the organizations of charitable volunteers or approved
charitable organizations.

Article 46 Measures of encouragement

Reference shall be made to the service record of registered
charitable volunteers in the recruitment, promotion and
advancement of civil servants.

For applicants with similar qualifications, preference shall
be given to charitable volunteers with service records during
the recruitment of staff by units and recruitment of students
by schools.

- Chapter Six Social Responsibilities

Article 47 Social environment

Supporting the development of charitable business is the
joint responsibilities of the whole society>

An enterprise should perform its social responsibilities by
vigorously participating in charitable activities; other
social organizations and individuals should vigorously
publicize the merits of socialistic charitable mutual aid and
actively participate in charitable activities in order to
create a positive social atmosphere to enhance the
development of charitable business.

Article 48 Education on charity

All schools and other educational institutions should include
elements of charitable culture into relevant curriculum,
combine classroom teaching with guiding and organizing those
who are being educated to participate in charitable
activities and foster those who are being educated with the
notion of charity and social responsibilities.

Article 49 Publicity on charity

Organizations such as news and publishing, movies, radio and
television broadcasting, culture etc. and social bodies
should develop their advantages to best carry out publicity
work on charitable business, popularize knowledge on charity
and promote charitable culture.

News units such as newspapers, radio stations and televisions
stations should provide facilities and reduce or waive
relevant charges for charitable organizations, publicity and
public announcement activities.

Article 50 Responsibilities of grassroots organizations

Urban residents, committees and rural villages, committees
should vigorously develop charitable mutual help activities
among residents or villagers and support and assist other
organizations or individuals to carry out charitable
activities.


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Article 51 Responsibilities of public service venues

All public service venues such as parks, shopping malls,
public transport stations, ferry piers and airport terminals
should provide facilities for the development of charitable
activities and publicize charitable business.

- Chapter Seven Support and Commendations

Article 52 State,s advocacy policies

The State encourages natural persons, legal persons or other
organizations to set up charitable organizations according to
law, provide charitable resources and voluntary service,
perform social responsibilities and conduct charitable
activities.

Article 53 Encourage the development of charitable
organizations

MoCA can assume the duties of the business supervising unit
for charitable organizations which are unable to decide on
the business supervising unit.

Article 54 Salaries tax privileges for donors

Natural persons, legal persons or other organizations who
donate property for use by charitable business shall enjoy
tax privileges according to laws and administrative rules.

Article 55 Tax privileges for charitable organizations

Charitable organizations shall enjoy tax privileges according
to laws and administrative rules.

Article 56 Tax privileges related to imports

For goods and materials donated for use by charitable
business from outside the country, import tax and value added
tax related to imports shall be reduced or waived according
to laws and administrative rules.

Article 57 Relevant preferential policies

Construction costs of charitable organizations, basic
facilities should be reduced, waived, or given preferential
treatment by relevant government agencies according to laws
and administrative rules.

Article 58 Government Subsidies

For charitable donation projects, People,s Government above
the county level can give appropriate subsidies or other
support or preferential treatments.

Article 59 Government,s purchase of services

For organizations with similar qualifications, preference
should be given to approved charitable organizations in the
purchase of social services by People,s Government above the
county level.

Article 60 Publicity and commendations

The State shall set up China Charity Awards to publicize
natural persons, legal persons or other organizations with
significant contributions for the development of charitable
business.

People,s Government at all levels should establish a system
to publicize, commend and guide citizens to vigorously
participate in charitable business.

Donors should be consulted prior to public commendations.

- Chapter Eight Legal Liabilities

Article 61 Liabilities for violating the use of assets and
failure to perform the obligations to publicize information

Relevant management department shall warn or demand
rectifications according to registration, approval and
management power for charitable organizations found with one

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of the following:

(1) Failure to use the assets according to requirements;

(2) Failure to perform the obligations to publicly announce
information to the public or public announcement of false
information.

Approved charitable organizations found with situation
stipulated in the above provisions shall have their approval
revoked if the situation is serious.

Article 62 Liabilities for defrauding approval, defrauding
tax revenue and failure to launch activities

Approved charitable organization shall have its approval
revoked according to the power of approval if found with one
of the following:

(1) Gaining approval by fraud;

(2) Gaining the State,s preferential treatment, such as tax
revenue etc. by fraud;

(3) Failure to launch charitable activities according to its
bylaws within 12 months since obtaining the &Charitable
Organization,s Confirmation Certificate.8

If found with situation provided under (1) or (2) of this
Article, shall be liable to criminal liabilities according to
law if the situation is serious and an offence can be
constituted.

Article 63 Liabilities for private division, seizure and
misappropriation of assets

Staff of charitable organizations who had privately divided,
seized and misappropriated the assets of the charitable
organizations should return the assets which had been
misappropriated and shall be liable to criminal liabilities
according to law if an offence can be constituted.

Article 64 Liabilities on the arbitrary commencement of
unapproved charity fund-raising

Arbitrary commencement of unauthorized charity fund-raising
activities shall be stopped by MoCA in conjunction with the
Public Security Bureau; money, goods and materials donated
shall be confiscated and a penalty of 1-3 times the value of
donation received shall be imposed; and shall be liable to
criminal liabilities according to law if an offence can be
constituted.

Article 65 Liabilities of fund raisers who have failed to
launch charity fund-raising according to requirements

MoCA shall warn, impose a penalty or oder the termination of
activities and confiscate money, goods and materials raised
illegally for fund raisers with one of the following:

(1) Exceeded the time or territorial boundary permitted in
conducting fund-raising activities;

(2) Conducted fund-raising activities that are unrelated to
its purpose or business scope;

(3) Failed to publicly display to society according to law
the purposes, methods, procedures or utilization of money,
goods and materials etc. of the fund-raising;

(4) Failed to publicly display to society actual money, goods
and materials raised and the income and expenditure of
activities when conducting charitable fund-raising activities
such as charity performance, charity competition, charity
sale and charity auction etc.

Article 66 Liabilities of donors who violated the law on
donation in kinds

Donors who have violated the rules required under Article 32
of this law shall be warned or fined by MoCA.

- Chapter 9 Supplementary Provisions

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Article 67 Rules for implementation

The State Council can enact concrete rules and regulations
according to this law.

Provinces, Autonomous Regions and Directly Administered
Municipalities can enact implementation measures according to
this law.

Article 68 Effective Date

This law is effective commencing year month day.

END TEXT OF DRAFT CHARITY LAW.
PICCUTA