**Unofficial Translation**
Interim Regulations on Prohibiting Commercial Bribery
(Decree No. 60 of the State Administration for Industry and Commerce promulgated on November 15 of 1996) Article 1 With a view to prohibiting commercial bribery and promoting and ensuring fair competition, these Interim Regulations have been formulated in accordance with the relevant provisions of the Law of the People's Republic of China for Anti-Unfair Competition (hereinafter referred to as the Anti-Unfair Competition Law). Article 2 A business operator shall not engage in commercial bribery as a means of facilitating the sale or purchase of goods or services in violation of the provisions of Article 8 of the Anti-Unfair Competition Law. The term ‘commercial bribery’ as used in these Interim Regulations refers to a business operator bribing another organization or individual with property or in any other way in order to facilitate the sale or purchase of goods or services. The word ‘property’ as used in these Interim Regulations refers to cash and material objects including property paid by a business operator to another organization or individual under the guise of fees for promotion sales, publicity fees, support fees, scientific research fees, service fees, consultation fees, commissions, or expenses reimbursed by the business operator to the other organization or individual so as to facilitate the sale or purchase of
goods or services. The term ‘other means’ as used in Item 2 of Article 2 refers to means other than paying in property, such as, but not limited to, offering domestic or international travel. Article 3 Commercial bribery engaged in by employees of a business operator in order to facilitate the sale or purchase of goods or services for the business operator shall be regarded as an act of the business operator. Article 4 No organization or individual should accept or ask for bribes when selling or purchasing goods or services. Article 5 Where an individual or entity covertly pays an off-the-record rebate or kickback or similar to another party, be it an entity or individual, a penalty for offering a bribe shall be imposed; where an individual or entity covertly accepts an off-the-record rebate or kickback or similar from another party, be it an entity or individual, a penalty for taking a bribe shall be imposed. The word ‘kickback’ as used in these Interim Regulations refers to off-the-record cash, material objects or other things of value that a business operator surreptitiously gives to the other organization or individual as a certain proportion of payment for goods or services. The term ‘off-the-record’ as used in these Interim Regulations refers to any such dealing as described in the previous section not being recorded accurately in the financial accounts which reflect the production and operational activities or the revenue and expenditure of administrative funds in accordance with the relevant financial and accounting rules, including failure to record in the financial accounts, transferring to other financial accounts or recording in bogus accounts.
Article 6 When selling goods or services, a business operator is at liberty to offer, in an express way, a discount to another party. The discount offered by the business operator must be entered into the books of account strictly in accordance with the facts; the discount accepted by a business operator or other organization must be recorded in the books of account of that business operator or other organization strictly in accordance with the facts. The word ‘discount’ as used in these Interim Regulations refers to a price which a business operator, when selling goods or services, may offer expressly at a preferential rate, and which shall be clearly entered into the books of account strictly in accordance with the facts. Any such discount shall be given in either of the following two ways: 1) when a buyer pays for the goods or services, a certain proportion of the total payment shall be deducted, or 2) after the payment is made, the business operator shall refund a certain proportion of the payment to the buyer. The terms ‘in an express way’ and ‘entered into the books of account’ as used in these Interim Regulations refer to the accurate recording of any amounts and the form of payment prescribed in the contract into the legally constituted books of account which reflect the production and operational activities or revenues and expenditures of administrative affairs in accordance with financial and accounting rules. Article 7 A business operator may expressly pay commissions to an intermediary when selling or purchasing goods or services. The commissions paid by a business operator to an intermediary must be entered into the books of account strictly in accordance with the facts; and the commissions received by an intermediary must be recorded in his or her books of account accurately. The word ‘commission’ as used in these Interim Regulations refers to any amount paid by a
business operator during market trading to an intermediate agent who holds legal operation qualifications and who has provided services to the business operator. Article 8 During the trading of goods and services, a business operator shall not give cash or material objects to another organization or individual, except for advertising gifts of small value within the norms of common commercial practice. Any violation of the provisions of the previous clause shall be regarded as commercial bribery. Article 9 If a business operator violates these Interim Regulations by means of bribery in order to facilitate the sale or purchase of goods or services, the administrative authorities for industry and commerce shall, based on the provisions of Article 22 of the Anti-Unfair Competition Law, impose a fine of more than 10,000 yuan and lower than 200,000 yuan depending on the seriousness of the violation, and shall confiscate the unlawful income derived, if any. If such violation as articulated in the previous section constitutes a crime, the matter shall be referred to the relevant judicial organ for investigation for criminal liability. Any organization or individual who accepts bribes when selling or purchasing goods or services shall incur a penalty imposed by the relevant administrative authority for industry and commerce and in consideration of the provisions of the previous clause; If such violation as articulated in the previous section constitutes a crime, the matter shall be referred to the relevant judicial organ for investigation for criminal liability. Article 10 The administrative authorities for industry and commerce at or above county level shall supervise and examine cases of commercial bribery.
The administrative authorities for industry and commerce may deal with the offering and acceptance of bribes simultaneously during investigating cases of commercial bribery. Article 11 If a business operator violates in any other way the laws and regulations of the administration for industry and commerce during the selling or purchasing of goods or services by means of bribery, a further penalty shall be imposed together with any legal consequences for the acts of commercial bribery. Article 12 These Interim Regulations shall go into effect on the day of promulgation.